Bean v. Bean

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In re
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF WYOMING
CHARLES WELDON BEAN
Debtor.
)
)
) 	Case No. 	12-20359
) 	Chapter 7
)
)
KERRY LEE BEAN, 	)
)
Plaintiff, 	)
)
v. 	) 	Adv. No. 	12-2025
)
CHARLES WELDON BEAN, 	)
)
Defendant. 	)
DECISION ON MOTION FOR SUMMARY JUDGMENT
On Apri14, 2013, the Motion for Summary Judgment filed by Kerry Lee Bean
("Plaintiff') and the response filed by Charles Weldon Bean ("Defendant") came before
the court for hearing. The court has considered the arguments of the parties, admissible
evidence, applicable law and is prepared to rule.
Jurisdiction
The court has jurisdiction over this adversary proceeding under 28 U.S.C. §§ 1557
and 1334. This is a core proceeding within the definition of28 U.S.C. § 157(b)(I). The
motion for summary judgment is brought under Fed. R. Civ. P. 56, made applicable in
adversary proceedings by Fed. R. Bankr. P. 7056.
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Undisputed Facts
Plaintiff and Defendant were divorced on June 28, 2007. The District Court for
the Second Judicial District of Wyoming entered the Decree of Divorce ("Decree"). The
Decree incorporates the parties' Separation, Property Settlement and Child Support
Agreement ("Agreement"). 1
Relevant to the division of property and debts at issue in this adversary
proceeding, the Agreement provides that:
• 	Mesquite Lane. Plaintiff "shall have and retain ... all interest, including that
of Husband in the real property located at 4850 Mesquite Lane, Laramie ... "
("Residence"). It is Plaintiffs responsibility to pay the first mortgage on
the Residence. Defendant was responsible for payment of the second and
third mortgages.
• 	Bullseye. Defendant was granted ownership of the Bullseye Laramie
building ("Bullseye"). Plaintiff retained her legal interest in Bullseye until
Defendant paid the second and third mortgages on the Residence and
released her from any liability in connection with the Bullseye business.
• 	Bullseye. Defendant was ordered to "pay all real and personal property
taxes with regard to this property (Bullseye) and his business
thereon ... along with all mortgage indebtedness in full," ... holding Plaintiff
"harmless from the same in all respects." Defendant agreed to refinance
Bullseye within 120 days of the entry of the Decree.
• 	Bullseye line of credit. Defendant was ordered to pay Bullseye's business
debts specifically, "including but not limited to, the revolving line of credit
for inventory, original loan number 7200007328.
1 For clarity sake, Plaintiff is the "Wife" in the Decree and Agreement. Defendant is identified as
"Husband."
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• 	Building Specialties, Inc. Defendant was awarded "All interest in Building
Specialties, Inc." He agreed to "assume and pay all liabilities and debts
connected with said business and to indemnifY and hold Wife harmless ... "
• 	Lincoln Street Properties The parties listed this property for sale. The
mortgages owed to First National Bank of Torrington, were to be paid,
"from the rental proceeds on this property." "Any remaining
proceeds shall be divided equally between the two parties.
Upon sale of said property, all legitimate costs of closing and
the payoffs for any indebtedness attached to said property
shall be made, the sum of $20,000 shall be paid to Husband
and all remaining net proceeds thereafter shall be divided
equally between the two parties hereto."
• 	Capital One credit card. The Agreement stated, as relevant to the credit
card,
"Husband agrees to sell the 335 four-wheeler within
60 days of the entry of the Decree herein and apply the
proceeds to the Capital One credit card. Whatever balance as
of May 1, 2007, is then left on the Capital One account shall
be assumed equally one-half by each of the parties. Each
party also agrees to assume and pay the above-identified
debts and to indemnifY and hold the other party harmless
therefrom."
Discussion
Plaintiff filed a complaint to determine the non-dischargeability of debt under 11
U.S.C. § 523(a)(5) and (15). 2 Defendant asserts that the following debts are not
dischargeable:
• 	Payoff of Second Mortgage on 4850 Mesquite Lane 	.............. $44,024.25
• 	Interest paid on Second Mortgage on 4850 Mesquite
Lane 	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $650.00
2 Unless otherwise noted, all statutory references are to Title 11 of the United States Code.
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• 	Payments to Points West on Loan Nos. 1110141 &
7200007328 	............................................... $5,200.00
• 	Settlement to SAFE 	........................................ $20,000.00
• 	Property Taxes Paid by Kerry Bean on 9/4/2007 and 9/4/2009 ........ $3,512.08
• 	One-half of Capital One Credit Card ............................ $4,185.39
• 	Personal Guaranty to Points West Community Bank .............. unliquidated
• 	One-half of the parties' daughter's medical bills ................... $1,814.87
• 	Plaintiffs attorney's fees 	................................. 	Undetermined
Defendant argued that the court has to look to the intent of the parties and apply
Wyoming contract law.
Daughter's medical expenses
Defendant concedes, both in his written response and through his counsel's oral
argument that the parties' daughter's medical bills are not dischargeable. Therefore, the
court will enter a judgment for the Plaintiff and against the Debtor holding that the
amount of$1,814.87 is not dischargeable.
Summary Judgment Analysis
A party claiming relief may move, with or without supporting affidavits, for
summary judgment on all or part of the claim. The judgment sought should be rendered if
the pleadings, the discovery and disclosure materials on file and any affidavits show that
there is not a genuine issue as to any material fact and that the movant is entitled to
judgment as a matter of law. The Court should determine what facts are not genuinely at
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issue by examining the pleadings and evidence before it. The Court should issue an order
specifying what facts, including items of damages or other relief, are not genuinely at
issue. 3 Summary judgment is appropriate when there is no disputed issue of material fact,
and the moving party is entitled to judgment as a matter of law .4 Under Rule 56( c)
summary judgment is proper only if the evidence, reviewed in the light most favorable to
the party opposing the motion, demonstrates no genuine issue of any material fact. 5 A
material fact is one that could affect the outcome of the suit, and a genuine issue is one
where the evidence is such that a reasonable jury could return a verdict for the nonmoving
party. 6 The court views the evidence in light most favorable to the nonmoving party, but
that party cannot rest on the mere allegations in its pleadings and must come forward with
evidence to raise a genuine issue. 7 In cases requiring the interpretation of a contract, a
summary judgment is appropriate only if the contract is clear and unambiguous. 8
Mesquite Lane Payoff of Second Mortgage and Interest.
This court reviewed the Decree, Agreement and supporting documents submitted
to the court in a light most favorable to the nonmoving part. The court finds that the
3 Fed. R. Civ. P. 56, made applicable by Fed. R. Bankr. P. 7056.
4 Hardy v. S. F. Phosphates Ltd. Co., 185 F.3d 1076, 1079 (10th Cir. 1999).
5 Frandsen v. Westinghouse Corp., 46 F.3d 975, 976 (lOth Cir. 1995).
6 Farthing v. City of Shawnee, Kan., 39 F.3d 1131, 1134 (lOth Cir. 1994).
7 Supra.
8 Comet Energy Services, LLC v. Powder River Oil & Gas Ventures LLC, 2008 WY 69, 185 P.3d 1259
(Wyo. 2008).
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evidence is unambiguous as to the Defendant's responsibility for payment of the second
mortgage on the Residence. Upon reviewing the Plaintiffs admissible evidence, she had
to pay the balance and unpaid interest of the second mortgage in the amounts $44,024.25
and $650.00, respectively. Defendant, under the Agreement, is to indemnify and hold
the Plaintiff harmless for those debts.
Bullseye expenses
The court finds that upon a review of the Decree and Agreement, Defendant was
responsible to pay Bullseye's mortgage and line of credit loan. As Defendant failed to
pay those debts in the amount of $5,200.00, Plaintiff, as a party responsible on the debt,
paid the amounts owed. 	The Agreement provides that Defendant is to indemnify
Plaintiff and hold her harmless for these debts.
Capital One Credit Card
The court having reviewed the admissible evidence in a light most favorable to the
Defendant finds that credit card statement for the period of April3, 2007- May 1, 2007
reflects that the amount owed was $8,370.78. The court finds that Plaintiff paid the debt.
The Agreement is clear and unambiguous stating Defendant was to pay one-half of the
balance as of May 1, 2007. Pursuant to the Agreement, Defendant was to indemnify
Plaintiff for one-half of the amount of this debt, or $4,185.39.
Lincoln Street Properties
The court's review of the Agreement regarding Lincoln Street Properties shows
that the parties jointly owned the Lincoln Street property at the time the Agreement was
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executed and the Decree approved by the Wyoming District Court. The Agreement is
not clear and is ambiguous regarding the responsibility for payment of taxes or
responsibility for settlement of litigation. Therefore, reviewing the admissible evidence
presented by the Plaintiff, in light most favorable to the Defendant, the court finds there
are genuine issues as to material facts which require litigation on the allocation of
financial responsibility for the settlement regarding SAFE and responsibility to pay the
taxes on this property.
Points West Community Bank Personal Guaranty
The court having reviewed the admissible evidence presented by the Plaintiff, IS
not able to determine whether this issue has been resolved between the parties. The court
finds that there are material facts requiring litigation as Plaintiff has not provided
evidence to support a summary judgment.
Plaintiffs attorney's fees
Plaintiff requests that she be allowed to submit her attorney's fees up to the entry
of the Motion for Summary Judgement. The court finds that there are material facts
requiring litigation regarding the matters listed above that may affect any attorney fee
request. The court determines that this matter shall be set for hearing.
In conclusion the court finds that there are no genuine issues of material facts that
Defendant was to indemnify and hold Plaintiff harmless for (1) Mesquite Lane payoff of
second mortgage and interest payments; (2) Bullseye expenses; and, (3) Capital One
Credit Card debt. The court finds that there are genuine issues of material fact regarding
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Defendant's responsibilities to pay or indemnify Plaintiff regarding issues involving the
Lincoln Street Properties, (2) Points West Community Bank personal guaranty; and, (3)
Plaintifrs attorney's fees.
Dischargeability
The court having determined that pursuant to the Agreement and Decree,
Defendant was to indemnify and hold Plaintiff harmless for: ( 1) Mesquite Lane payoff of
second mortgage and interest payments; (2) Bullseye expenses; and, (3) Capital One
Credit Card debt, must determine if these debts are non-dischargeable in Defendant's
bankruptcy case.
The Bankruptcy Code states, as relevant,
"(a) A Discharge under section 727 ... ofthis title does not discharge
an individual debtor from any debt -
(5) 	for a domestic support obligation ...
(15) 	to a spouse, former spouse, or child of the debtor and not of
the kind described in paragraph (5) that is incurred by the
debtor in the course of a divorce or separation or in
connection with a separation agreement, divorce decree or
other order of a court of record, or a determination made in
accordance with State or territorial law by a government
unit."
Section 523(a)(5) involves the exception to discharge for a domestic support
obligation which is defined in§ 101(14A), and includes support debts that are owed to or
recoverable by and spouse and established in a separation agreement. Generally, the
unusual circumstances exception to § 523(a)(5) is very narrow. This rule is fashioned
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around the best interest of the child. 9 Defendant concedes that the debt for the parties'
daughter's medical expenses is non-dischargeable.
For§ 523(a)(15) debts to be excepted, all that is required is that the obligations
be: (1) to a former spouse; (2) that are not (a)(5) support; and, (3) are incurred in
connection with a divorce decree or an order of a court of record. 	Where state law or a
fee-shifting agreement so provides, the party in a§ 523(a)(5) or (a)(15) action, who
prevails, may be awarded fees and costs. 10
The Tenth Circuit Bankruptcy Panel stated,
"Essentially, the combination of amended§ 523 (a)(5) and (15)
exclude from discharge all marital and domestic relations obligations,
whether support in nature, property division, or hold-harmless, provided
that they were incurred in the course of a divorce of separation or
established in connection with a separation agreement, divorce decree or
other order of a court of record ... " 11
The court finds that the Mesquite Lane payoff of second mortgage and interest
payments; Bullseye expenses; and Capital One Credit Card debt are obligations to
Plaintiff, a former spouse, are not support or alimony claims and were incurred in
connection with the Decree and Agreement entered in the state court. Therefore, the
court finds the ( 1) Mesquite Lane payoff of second mortgage and interest payments in
the amounts of $44,024.25 and 650,00, respectively; (2) Bullseye expenses in the amount
9 In re Lowther, 321 F.3d 946 (lOth Cir. 2002).
10 In re Taylor, 478 B.R. 419 (lOth Cir. BAP, 2012).
II Idat428.
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of$5,200.00; and, (3) Capital One Credit Card debt in the amount of$4,185.39 are not
dischargeable in Defendant's bankruptcy case.
The court finds that there are genuine issues of material fact regarding the debts
involving the (1) Lincoln Street Properties, (2) Points West Community Bank personal
guaranty; and, (3) Plaintiffs attorney's fees. 	These matters shall be heard by the court at
the trial currently scheduled for June 5, 2013.
This opinion constitutes the Court's findings of fact and conclusions oflaw. A
separate order shall be entered pursuant to Fed. R. Bankr. P. 9021.
DATED thidfday of April, 2013.
Service to:
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Stephen Winship
Janet Tyler
By the Court
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