Shannon Q Sturm

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AUTHENTICATED /
U.S. GOVERNMENT
INFORMATION

GPO

a)
QO)

UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF OHIO

In Re: )
) JUDGE RICHARD L. SPEER
Shannon Q. Sturm )
) Case No. 10-34829
Debtor(s) )
)
DECISION AND ORDER

On January 7, 2011, this Court entered a Decision and Order, granting the Motion filed by
the United States Trustee to Dismiss this case under 11 U.S.C. § 707(b)(2).' (Doc. No. 20). The
Debtor filed an appeal of this Order. (Doc. No. 21). The appeal was assigned to the Honorable Jack
Zouhary, United States District Court, Northern District of Ohio, Western Division, Case No. 3:11-

cv-00199, captioned Sturm v. United States Trustee.

On July 14, 2011, Judge Zouhary entered a Memorandum Opinion and Order in which he
remanded to this Court certain matters for determination, including whether the Debtor was entitled
to make a marital adjustment against her ‘current monthly income’ of $1,300.00 per month.
Regarding this adjustment, Judge Zouhary set forth in his Memorandum Opinion and Order that “the
record evidence (consisting of Mr. Sturm’s vague, unsubstantiated, and seeming extemporaneous
recital of his credit card debts, and Lowman’s conclusion based entirely on a theory of how Mr.
Sturm’s credit cards were used) does not allow this Court to determine the proper adjustment.” (Doc.

No. 47, at pg. 16). Based upon this, Judge Zouhary stated: “On remand, [the Debtor] is direct to

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The United States Trustee also predicated its Motion to Dismiss on § 707(b)(3), which provides
for the dismissal of a debtor’s case when the totality of the debtor’s financial circumstances
demonstrate abuse. The Court has yet to rule on this portion of the United States Trustee’s
Motion.

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)

In re: Shannon Q. Sturm
Case No. 10-34829

supply the bankruptcy court with detailed written information regarding the sources of Mr. Sturm’s

credit card obligations, such as Mr. Sturm’s credit card statements.” /d. at pg. 17.

Consistent with Judge Zouhary’s directives, this Court entered an Order on July 29, 2011,

providing, inter alia:

the Debtor file with the Court detailed information regarding the source of

Mr. Sturm’s credit card obligations. Such information shall include past

credit-card statements, and explanations regarding the statements so as to

enable the Court to make a determination regarding the nature of such

obligations for purposes of 11 U.S.C. § 101010A)(B).
(Doc. No. 45, at pg. 2). On September 9, 2011, the Debtor submitted to the Court credit-card
statements belonging to her husband, together with a short explanation of the statements. (Doc. No.
53). Thereafter, the UST filed a response to this evidentiary material, arguing that it should be

discounted because the “credit card statements filed appear to be selective and self-serving.” (Doc.

No. 55, at pg. 4).

The Court, after having reviewed the evidentiary materials submitted by the Debtor, agrees
with the UST, and finds the credit-card statements and the cursory explanations thereof, to be
deficient for the purpose of making a finding regarding the ‘marital adjustment’ under 11 U.S.C.

§ 101(10A)(B).

DISCUSSION

Under § 707(b), a debtor’s bankruptcy case may be dismissed if it is found that the granting
of relief would be an abuse of the provisions of Chapter 7 of the Bankruptcy Code. Pursuant to
§ 707(b)(2), a presumption of abuse may arise, based upon a ‘means test’ formulation, ifa debtor’s

disposable income exceeds certain statutory thresholds. A debtor’s disposable income is determined

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In re: Shannon Q. Sturm
Case No. 10-34829

by first ascertaining the debtor’s ‘current monthly income’ and then reducing that sum by amounts

set by statute.

When determining ‘current monthly income,’ a debtor may exclude income received by a
nondebtor spouse when that income is not contributed “on a regular basis for the household expenses
of the debtor or the debtor’s dependents (and in a joint case the debtor’s spouse if not otherwise a
dependent)... .” 11 U.S.C. § 101(10A)(B). This is commonly referred to as the ‘marital

adjustment.’

In this matter, it is the Debtor’s contention that absolutely none of the charges her husband
incurred on his credit cards during their marriage were regularly used for household expenses.
Instead, based upon testimony provided by Mr. Sturm, it is the Debtor’s position that her husband’s
outstanding credit-card debt represents obligations incurred for purely personal matters, including
attorneys’ fees, doctors, car repair and operation, the purchase of memorabilia on the internet, and

expenses associated with two nonresidential properties titled solely in her husband’s name.

As support for her position, the Debtor submitted to the Court credit-card statements from
three accounts maintained by her husband: Bank of America, New York Life, and the Toledo Police
Federal Credit Union. These statements cover the following periods:

Bank of America

August 2007 to April 2009, but missing statements from October
through December of 2008.

New York Life
May 2008 to May 2010.

Toledo Police Federal Credit Union

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In re: Shannon Q. Sturm
Case No. 10-34829

November 2009 to April 2010, but missing the February 2010

statement.
From an evidentiary standpoint, however, these statements do not sufficiently corroborate the
Debtor’s position that none of her husband’s credit-card debt was incurred for the regular benefit of

the Debtor’s household.

First, the scope of the credit-card statements is temporally incomplete. The Debtor and her
husband were married in April 2006. The Debtor filed for bankruptcy on July 15, 2010. As set forth
above, however, the credit-card statements provided by the Debtor do not come close to covering
this time period. To the contrary, the Debtor fully acknowledges that the “credit card statements

admittedly represent only a limited period of time... .” (Doc. No. 53).

Moreover, the Debtor does not provide a sufficient explanation for the incompleteness of the
credit-card statements. In her statement to the Court, the Debtor only set forth that “these are the
statements the creditors provided to date upon Mr. Sturm’s request.” However, the Debtor did not
show that any further efforts were made to obtain the required information. For example, there is
nothing on the record to show that the Debtor attempted to subpoena the records from her husband’s

credit-card accounts. See FED.R.BANKR.P. 9016.

It is also troubling that gaps exist in some of the records provided. Particularly, concerning
the periods of time covered by the credit-card statements filed with the Court, four statements are
missing. This, along with the Debtor’s failure to make further efforts to obtain the required
information, necessarily raises negative inferences. See Bishop v. Lucent Technologies, Inc., 520
F.3d 516, 522 fn.1 (6 Cir. 2008) (general rule is that where relevant information “is in the
possession of one party and not provided, then an adverse inference may be drawn that such

information would be harmful to the party who fails to provide it).

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In re: Shannon Q. Sturm
Case No. 10-34829

Finally, it cannot be ignored that some of the entries in the credit-card statements provided
to the Court belie the Debtor’s contention that her husband’s credit-card debt should be entirely
excluded from the scope of the Debtor’s ‘current monthly income’ for purposes of § 101(10A)(B).
That is, certain expenditures contained in the credit-card statements lend themselves to the
conclusion that such debts were incurred on a regular basis for the household expenses of the Debtor.
By way of example, the statements provided to the Court show multiples charges to retailers such
as Walmart, Bed Bath & Beyond, Big Lots, Target, Meijer and BestBuy. The explanation of the
Debtor’s husband, — that he ““cannot remember what the purchases were” — is entirely self serving,
and thus cannot be viewed as corroborating the Debtor’s position that such expenses were not

incurred for the Debtor’s household.

As set forth above, Judge Zouhary directed this Court to base the marital adjustment made
by the Debtor for her husband’s credit-card obligations on solid evidence, and not on “Mr. Sturm’s
vague, unsubstantiated and seemingly extemporaneous recital of his credit card debts.” For the
reasons set forth herein, the Court does not have such evidence. However, pursuant to 11 U.S.C. |
§ 105(a), and so as to afford the Debtor a full and fair opportunity to provide the necessary
information, the Court will allow the Debtor a further opportunity to provide a complete accounting

of her husband’s credit-card debt.

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In re: Shannon Q. Sturm
Case No. 10-34829

Accordingly, it is

ORDERED that by Monday, January 2, 2012, the Debtor file with the Court a complete
accounting, including all discoverable statements of her husband’s credit-card obligations. This
accounting shall cover the period commencing from the date of the Debtor’s marriage up until the
time the Debtor sought relief in this Court. The United States Trustee is thereafter afforded 14 days

to file a response to the accounting provided by the Debtor.

Dated: November 2, 2011

7
Richard L. Speer
United States
Bankruptcy Judge

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CERTIFICATE OF SERVICE

Copies were mailed this 2"! day of November, 2011 to:

Shannon Q Sturm
4405 283rd St.
Toledo, OH 43611

Gary E Horn
4325 Willys Pkwy
Toledo, OH 43612

Douglas A Dymarkowski
5431 Main Street
Sylvania, OH 43560

Amy Good
201 Superior Ave, #441
Cleveland, OH 44114

Derrick Rippy
201 Superior Ave, #441
Cleveland, OH 44114

Chase Auto Finance
201 N. Central Ave, 11" Fl
Phoenix, AZ 85004

/s/Diana Hernandez
Deputy Clerk, U.S. Bankruptcy Court

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