Bendetti v. Gunness (In re Gunness)

Summarized by Mark Hudson , Schian Walker, PLC
12 years 1 month ago

Citation:

cc-13-1099-KuBaPa

Tag(s):

Ruling:

Affirmed bankruptcy court ruling that granted summary judgment to the debtor; ruling that attorney's fees owed jointly and severally by the debtor and her husband to the husband's ex-wife and the ex-wife's attorney were not excepted from discharge by either 11 USC § 523(a)(5) or (15) because the debtor is not the spouse, ex-spouse or child of the creditor(s). The BAP declined to expand the plain meaning of either provision to include the debtor; rejecting arguments that the status of an ex-spouse should be imputed to her because she had been joined as a party in the dissolution proceeding or that she was a participant in the fraudulent transfer scheme (she was the transferee).

Procedural context:

Appeal to BAP for the Ninth Circuit of the bankruptcy court's grant of summary judgment and a judgment dismissing the adversary. Debtor had filed voluntary chapter 7 case. Creditor and her attorney (also a creditor) filed adversary action claiming debt (attorney's fees in a fraudulent transfer action) should be excepted from discharge pursuant to either §523(a)(5) or 523(a)(15). Debtor moved for, and was granted, summary judgment in the bankruptcy court. Creditor and her attorney appealed to the BAP, which affirmed.

Facts:

Creditors were the ex-wife of the debtor and the ex-wife's attorney. Creditor had previously joined the debtor as a party to the California state court dissolution proceeding. In that action, creditor proved a fraudulent transfer of community assets by her ex-husband to the debtor (the current wife of the creditor's ex-husband). Creditor obtained award of about $280,000 in attorney's fees against both the debtor and the creditor's ex-husband, jointly and severally. Creditor's attorney also a party because some fees were owed directly to him. State Court awarded about $280,000 in attorney's fees to creditor.

Judge(s):

Kurtz, Ballinger, Pappas

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