Lowry v. Nicodemus (In re Nicodemus)

Summarized by Robert Hillyer , Butler Snow LLP
12 years 5 months ago

Citation:

___F3d. ___(6th Cir. 2013); Case No. 12-8050 (October 7, 2013)

Tag(s):

Ruling:

The Bankruptcy Appellate Panel affirms the bankruptcy court's decision that the total amount of a state court judgment taken against the Debtor which contained both damages for actual loss and contempt sanctions is nondischargeable under § 523(a)(2)(A). The contempt sanction portion of the state court judgment is nondischargeable under § 523(a)(2)(A) as the debt in question arose out of the debtor’s fraud, false pretenses, or false representation.

Procedural context:

Plaintiff filed suit against the Defendant/Debtor on July 18, 2007 in the Court of Common Pleas in Portage County, Ohio. On August 5, 2009, the state court entered an order dismissing the state court litigation pursuant to settlement agreement reached by the parties. The Plaintiff was then later forced to file a motion to enforce the settlement agreement. On April 21,2010 and after several prior orders and an evidentiary hearing, the state court entered a judgment against the Defendant/Debtor which contained actual damages of $9,386 and $22,800 in contempt sanctions for willful contempt of the state court's prior orders. On July 29, 2011, the Debtor filed a voluntary petition for relief under Chapter 13. The Plaintiff then filed a complaint seeking to except from discharge the entire debt owed to him by Debtor under 11 U.S.C. §523(a)(2)(A). On August 2, 2012, the bankruptcy court issued a memorandum opinion holding that the entire debt in the amount of $32,186.90 plus interest is nondischargeable under § 523(a)(2)(A). The Debtor filed a motion to amend or make additional findings of fact pursuant to Federal Rule of Bankruptcy Procedure 7052 which was denied by the Court on November 29, 2012. On December 13, 2012 the Debtor filed a timely notice of appeal.

Facts:

The Debtor was married to the Plaintiff's son and they had an extensive collection of model trains. The Plaintiff's son died and following his death a dispute arose between the Plaintiff and Debtor over the train collection. The Plaintiff filed suit against the Debtor in in the Court of Common Pleas in Portage County, Ohio which which resulted in a judgment being taken against the Defendant/Debtor containing a portion for actual losses and a portion for contempt sanctions for the Defendants willful failure to comply with the state court's prior orders which directed the Plaintiff to turn over portions of the train collection. The Debtor filed a Chapter 13 bankruptcy and the Plaintiff filed a complaint seeking to except from discharge the entire debt owed to him by Debtor under 11 U.S.C. §523(a)(2)(A). The Debtor contended that Plaintiff is only entitled to recover “actual losses” under § 523(a)(2)(A) and not punitive damages or sanctions which were contained in the state court judgment. The bankruptcy court determined that the entire judgment owed to Plaintiff was nondischargeable under § 523(a)(2)(A).

Judge(s):

C. KATHRYN PRESTON, Bankruptcy Appellate Panel Judge GUY R. HUMPHREY, Bankruptcy Appellate Panel Judge JOAN A. LLOYD, Bankruptcy Appellate Panel Judge

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