Falk v. Falk (In re Falk)
- Citation:
- BAP No. NC-12-1385-DJuPa (B.A.P. 9th Cir. Sept. 26, 2013)
- Tag(s):
-
- Ruling:
- The Bankruptcy Appellate Panel of the Ninth Circuit AFFIRMED the bankruptcy court, holding that the bankruptcy court (I) did not abuse its discretion in applying section 502(c)(1) to estimate a claim "for property division, [and] undisclosed property," where such claim was contingent and unliquidated; (II) did not abuse its discretion by estimating the claim at zero because it thought it was inappropriate for it to decide how community property assets should be divided; and (III) did not abuse its discretion in permissively abstaining from resolving state-law issues concerned with a personal marital dissolution dispute.
- Procedural context:
- Debtor's ex-spouse appealed the bankruptcy court's order (I) estimating one of her proofs of claim at zero for distribution purposes in the debtor's chapter 7 bankruptcy case and (II) abstaining from adjudicating her claim under 28 U.S.C. § 1334(c)(1) and (2).
- Facts:
- Two years after debtor and spouse separated in 2005, the state court entered an order dissolving their marriage. Although it entered an order requiring debtor to pay spouse a certain sum per month in spousal support, it did not make any determinations as to the division of property or any other domestic support obligations.
Debtor filed a chapter 7 case and scheduled real property, partnership interests, and a life insurance policy as part of his bankruptcy estate. He also scheduled a "claim for reimbursement against [his] ex-wife[,] . . . for separate property contribution and for [the] value of contribution of all separate property that was subsequently transmuted at [the] time of transmutation . . .," listing the value of this claim as "unknown," the ex-spouse's spousal support claim, and a judgment in her favor. The ex-spouse filed a proof of claim in the nature of "support, property division, [and] undisclosed property." (Claim #21.)
The bankruptcy court decided to abstain from adjudicating Claim #21 and estimated the claim at zero for purposes of distribution. In abstaining, the court explained that it did not "deem it appropriate . . . to decide how marital property ought to be divided after creditors [were] paid."
- Judge(s):
- DUNN, JURY and PAPPAS
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