Mansfield v. Swiger (In re Swiger)

617 B.R. 537

IN RE: Bradley S. SWIGER, Debtor.

Vicky L. Mansfield, Plaintiff,

v.Bradley S. Swiger and Ronda J. Winnecour, Chapter 13 Trustee, Defendants.

In re: Bradley S. Swiger, Debtor.

Bradley S. Swiger, Plaintiff,

v.Vicky L. Mansfield, Defendant.

Bankruptcy No. 18-24109-JAD

Adversary No. 19-02015-JAD

Adversary No. 19-02009-JAD

Adversary Nos. 19-2009-JAD

19-2015-JAD are consolidated at Adversary No. 19-2009-JAD

United States Bankruptcy Court, W.D. Pennsylvania.

Signed July 24, 2020

Rodney D. Shepherd, River Park Commons, Pittsburgh, PA, for Plaintiff.

MEMORANDUM OPINION

Jeffery A. Deller, United States Bankruptcy Judge The above-captioned matter concerns a motion for summary judgment filed by the Debtor, Bradley S. Swiger (the "Debtor") seeking a determination of dischargeability for a debt owed to his ex-wife, Vicky L. Mansfield ("Ms. Mansfield"). For the reasons set forth below, the Court will enter an order denying the Debtor's Motion for Summary Judgment (the "Motion for Summary Judgment", ECF No. 33).¹

I.Factual & Procedural History

The Debtor filed for relief under chapter 13 of the Bankruptcy Code ( 11 U.S.C. § 101 et seq. ) on October 23, 2018. In his schedule of unsecured creditors, the Debtor lists Ms. Mansfield as being owed a debt in the amount of $78,000. See Schedule E/F: Creditors Who Have Unsecured Claims , 18-24109-JAD, ECF No. 14, p. 15. The Debtor further identifies the debt to Ms. Mansfield as being incurred on May 16, 2016 for "Marital Settlement Agreement (Parent Plus Student Loan[.] )" The parties now dispute whether this debt (the "Mansfield Debt") is dischargeable.

By way of background, the Debtor and Ms. Mansfield (together, the "Parties") are former spouses who married on March 7, 1993, and divorced in 2016. See Motion for Summary Judgment, p. 3. The Parties have two children, Cassandra and Amanda. During the course of the Parties' marriage and prior to the commencement of divorce proceedings on May 11, 2015, certain loans were taken out to finance Amanda's college education (the "Student Loans"). The circumstances surrounding the application for the Student Loans are contested and form the basis of the nondischargeability dispute sub judice.

In short, Ms. Mansfield alleges that the Debtor fraudulently signed her name to the Student Loan applications because any permission given to the Debtor to sign Ms. Mansfield's name was conditioned on the Debtor's alleged representation that the Student Loans would be applied for jointly in both Parties' names. See Defendant's Answer to Plaintiff's Complaint to Determine Dischargeability (the "Mansfield Answer"), 19-02009-JAD, ECF No. 4, ¶¶ 7-12. The Debtor, for his part, alleges that he never applied for any Student Loans in Ms. Mansfield's name. See Motion for Summary Judgment, p. 10. Nonetheless, what is not contested is that the Student Loans were ultimately borrowed under the name of Ms. Mansfield alone.

Also disputed is whether and at what point Ms. Mansfield became aware that she was the sole obligor on the Student Loans, as opposed to a co-obligor with the Debtor. Ms. Mansfield alleges she only became aware of her sole obligor status during the course of her divorce proceedings from the Debtor, while the Debtor alleges that Ms. Mansfield knew of her status at all times. See Mansfield Answer at ¶ 17; Motion for Summary Judgment, pp. 10-11.

On May 16, 2016, the Parties executed a Consent Order of Court in their state court divorce proceedings (the "Consent Order"). See Complaint to Determine Dischargeability of Marital Property Settlement Agreement Pursuant to [§]523(a)(15) and [§]1328(a) (the "Debtor's Complaint"), 19-02009-JAD, ECF No. 1, Ex. A. Pursuant to the Consent Order, the Parties agreed in-part, as follows:

7. The parties agree to be responsible for [s]tudent [l]oans for their children as follows; a) Husband shall be solely responsible for the child[']s Amanda's [l]oan which are currently in Wife[']s name. He will assume the entire balance, hold Wife harmless of this obligation and make monthly payments directly to Fed Loans. Wife shall ensure that Husband has all account numbers, bills, addresses, payment coupons etc. so he can make his payments directly.

...

11. This is a full and final settlement of all claims and there are no other outstanding claims between these parties.

See Consent Order at ¶¶ 7 & 11.

The Debtor subsequently fell behind on payment of the Student Loans and Ms. Mansfield commenced contempt proceedings against the Debtor for failure to abide by the Consent Order. A contempt hearing was held on September 11, 2018 before Master Melanie Shannon Rothey, Esq. Master Rothey issued a Master's Report and Recommendation on October 3, 2018. See Defendant's Appendix to Defendant's Answer to the Plaintiff's Concise Statement of Material Facts Pursuant to L.B.R. 7056-1(b)(C)(3) ("Defendant's Appendix"), 19-02009-JAD ECF No. 44-1, pp. 101-109. Master Rothey recommended that the state court enter an order finding the Debtor in contempt. Master's Report and Recommendation, ECF No. 44-1 at pp. 108-109. Before the state court could enter a final order, the Debtor filed for bankruptcy relief.

On January 21, 2019, the Debtor filed his Debtor's Complaint at adversary proceeding 19-02009-JAD seeking a determination that the Mansfield Debt is dischargeable as a debt arising under a marital property settlement agreement pursuant to 11 U.S.C. § 523(a)(15) and § 1328(a). In response, Ms. Mansfield commenced her own adversary proceeding (19-02015-JAD) by which she seeks a determination that the Mansfield Debt is nondischargeable under 11 U.S.C. § 523(a)(2)(A). The adversary proceedings have since been consolidated at adversary proceeding 19-02009-JAD.

The Debtor now requests that summary judgment be entered in his favor in the consolidated proceedings by way of his Debtor's Motion for Summary Judgment .

II.Summary Judgment Standard

Federal Rule of Civil Procedure 56, made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7056, provides, in part, that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." See Fed. R. Civ. P. 56(a).

"Summary judgment is appropriate only where ... there is no genuine issue as to any material fact ... and the moving party is entitled to judgment as a matter of law." Melrose, Inc. v. Pittsburgh, 613 F.3d 380, 387 (3d Cir. 2010) (quoting Ruehl v. Viacom, Inc., 500 F.3d 375, 380 n.6 (3d Cir. 2007) ); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Fed. R. Civ. P. 56(a). Issues of fact are genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; see also McGreevy v. Stroup, 413 F.3d 359, 363 (3d Cir. 2005). Material facts are those that will affect the outcome of the trial under governing law. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The Court's role is "not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmoving party." Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009). "In making this determination, ‘a court must view the facts in the light most favorable to the nonmoving party and draw all inferences in that party's favor.’ " Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000) (quoting Armbruster v. Unisys Corp., 32 F.3d 768, 777 (3d Cir. 1994) ).

The moving party bears the initial responsibility of stating the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. If the moving party meets this burden, the party opposing summary judgment "may not rest upon the mere allegations or denials" of the pleading, but "must set forth specific facts showing that there is a genuine issue for trial." Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 n.11, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). "For an issue to be genuine, the nonmovant needs to supply more than a scintilla of evidence in support of its position—there must be sufficient evidence (not mere allegations) for a reasonable jury to find for the nonmovant." Coolspring Stone Supply v. Am. States Life Ins. Co., 10 F.3d 144, 148 (3d Cir. 1993) ; see alsoPodobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005) (noting that a party opposing summary judgment "must present more than just bare assertions, conclusory allegations or suspicions to show the existence of a genuine issue") (internal quotation marks omitted).

Hadeed v. Advanced Vascular Res. of Johnstown, LLC, No. 3:15-CV-22, 2017 WL 4998663, at *4 (W.D. Pa. Oct. 30, 2017).

III.Analysis

In his Motion for Summary Judgment, the Debtor posits four questions for resolution:

1. Whether an equitable distribution award that arises from a divorce action is nondischargeable, as determined by 11 U.S.C. § 523(a)(15) ?

2. Whether an equitable distribution award that arises from a divorce action is dischargeable under 11 U.S.C. § 1328(a) ?

3. Whether an equitable distribution award in a divorce action could be considered to be in the nature of alimony, maintenance or support, and therefore, non-dischargeable pursuant to 11 U.S.C. § 523(a)(5) ?

4. Whether the equitable distribution award runs afoul of § 523(a)(2) and is considered to be excepted from discharge if the debt was obtained by false pretenses, a false representation, or actual fraud?

See Motion for Summary Judgment, p. 5.

First, the Court notes that the manner in which the first three questions are phrased—in that they seek a determination of whether "an" equitable...