State of Florida, Dept. of Revenue v. Davis (In re Davis)

Summarized by Walter Kelley , Kelley, Lovett, Blakey & Sanders, P.C.
13 years 8 months ago

Citation:

Case No. 11-15040 (11th Cir. June 6, 2012) (unpublished)(per curiam).

Tag(s):

Ruling:

The 11th Circuit affirmed the district court's reversal of an order entered by the bankruptcy court that enjoined the Florida Department of Revenue from attempting to collect a past due child support claim that had been disallowed in the bankruptcy proceeding. Held: The Department of Revenue is not barred from pursuing post-confirmation collection of debtor's non-dischargeable child support obligations. Res judicata and collateral estoppel do not apply.

Procedural context:

Appeal from the United States District Court for the Middle District of Florida reversing the bankruptcy court's ruling that enjoined the Florida Department of Revenue from collecting on a child support claim that had been disallowed pursuant to a Chapter 11 Order of Confirmation. Reviewed de novo. Affirmed by the 11th Circuit.

Facts:

Pursuant to a divorce, debtor was obligated to make child support payments to former spouse. An involuntary Chapter 11 was commenced against debtor. Under his plan, a bar date was set for filing claims. The bar date passed and neither the former spouse nor the Florida Department of Revenue filed a timely claim. Post-confirmation, the Dept. filed a proof of claim. Debtor objected. Bankruptcy Court disallowed claim as being barred by res judicata and collateral estoppel. Court enjoined Department from further collection actions. Dept. attempted collection in state court. Injunctive relief sought in bankruptcy court that again prohibited enforcement. Court enjoined enforcement of the child support obligation. District Court reversed. Citing In re Diaz 647 F 3d. 1073 (11th Cir. 2011), the court reasoned that since a domestic support obligation cannot be discharged in bankruptcy and because the discharge injunction only applies to dischargeable debts, it was not a violation of the bankruptcy court's injunction for the Dept.to pursue collection in state court post-confirmation. Although the bankruptcy court may disallow a claim for payment under the plan, the Dept. is not barred by collateral estoppel or res judicata and may pursue collection of non-dischargeable child support obligations post-bankruptcy. 11th Circuit affirmed per curium.

Judge(s):

Hull, Martin and Jordan.

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