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Collins v. Collins

Supreme Court of Maine

April 12, 2016

SUZAN M. COLLINS
v.
RICHARD W. COLLINS

Argued: February 9, 2016

Reporter of Decisions

On the briefs and at oral argument:

Thaddeus V. Day, Esq., Law Offices of Thaddeus V. Day, P.L.L.C., Cumberland Center, for appellant Richard W. Collins

Matthew C. Garascia, Esq., Auburn, for appellee Suzan M. Collins

Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.

HJELM, J.

[¶1] This case calls for us to consider the extent to which a discharge in bankruptcy relieves one former spouse from making payments ordered in a divorce judgment toward debts owed to the other former spouse and toward joint debts owed to a third party.

[¶2] Richard W. Collins appeals from a judgment of the District Court (West Bath, Dobson, J.) concluding that he failed to show cause why he should not be found in contempt for failing to make payments on certain debts pursuant to a divorce judgment. Richard contends that because he was granted a discharge in bankruptcy after the divorce judgment was issued, the court erred by ordering him to pay debts to his former spouse, Suzan M. Collins, and to a third party in accordance with the divorce judgment. The Bankruptcy Code, however, explicitly excludes from discharge one spouse's debt to the other spouse when that debt was incurred in the course of a divorce proceeding. Additionally, we conclude that pursuant to the Code, a discharge in bankruptcy does not relieve a spouse from a requirement created by a divorce judgment to make payments to a third party on a debt owed jointly by both spouses. Accordingly, we affirm.

I. BACKGROUND

[¶3] The facts are not in dispute. In July 2008, the parties were divorced through a judgment (Kidman, M.) that, among other things, required Richard to pay to a credit union several joint business debts as well as personal debts that arose from the purchase of a truck and camper. The judgment required Richard to hold Suzan harmless on those debts. Just over a year later, in August 2009, the court (Tucker, J.) issued an amended judgment that contained an order of enforcement. By then, the truck and camper had been repossessed, and Suzan had made some payments toward a deficiency even though the judgment made Richard responsible for the debt. The August 2009 order required Richard to reimburse Suzan for fifty percent of the payments she made to the credit union on the personal loan or to pay that amount directly to the credit union. Additionally, the court ordered Richard to pay a different personal loan associated with personal property awarded to him in the original judgment, and, as was already provided in the original judgment, to pay the credit union on the business loan. The court also awarded Suzan costs of $353.44. Neither party appealed from the order, and in February 2010 Suzan obtained a writ of execution against Richard in the principal amount of $7, 038.32, reflecting the amount that Richard owed her based on the August 2009 order.

[¶4] On motions filed by Suzan, the court issued contempt orders against Richard in October 2010 and in May 2011. Suzan filed another contempt motion in January 2013 but was unable to serve Richard until January 2014, when he appeared in court for a different motion. After holding a hearing on the contempt motion, the court (Mulhern, J.) held Richard in contempt for failing to comply with the payment obligations created by the August 2009 order. The court found that Richard owed child support of $4, 851.32 with ongoing amounts coming due; that he owed the credit union $3, 619.87, plus interest, on the business loan; that he owed the credit union $10, 000 for his half of the personal loan on the truck and camper; and that he owed Suzan a balance of $4, 689.70, plus statutory interest, on Suzan's writ of execution and $353.44 for costs that she incurred in bringing the motion for contempt. The court set a schedule for Richard to pay these amounts and imposed a remedial sanction of a sixty-day jail sentence, which was stayed conditioned on Richard making timely payments. See M.R. Civ. P. 66(d), 120(a). The court ordered that if Richard did not make payments as required, Suzan could request the court to schedule a hearing, where Richard would be required to show cause why he should not be incarcerated. No appeals were taken from this order.

[¶5] Two months after the court issued that contempt order, Richard filed a petition for Chapter 7 bankruptcy, and on October 15, 2014, the U.S. Bankruptcy Court issued a discharge in bankruptcy. See 11 U.S.C.S. § 727 (LEXIS through Pub. L. No. 114-119).

[¶6] On October 17, 2014, Suzan filed a request for a show cause hearing, asserting that Richard had not made payments as required by the May 2014 contempt order. In response, Richard filed a motion to dismiss her request for the show cause hearing, asserting that aside from his child support debt, all of his financial obligations had been discharged in the bankruptcy action.[1] In November 2014, the court held a show cause hearing in order to determine the effect of the bankruptcy ...


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