United States Bankruptcy Appellate Panel of the Sixth Circuit
In re Sherri J. NICODEMUS, Debtor.
Sherri J. Nicodemus, Defendant-Appellant. Laverne K. Lowry, Plaintiff-Appellee,
Submitted: Aug. 20, 2013.
[Copyrighted Material Omitted]
Michael J. Moran, Gibson & Lowry, Cuyahoga Falls, OH, for Appellant.
Walter R. Lawrence, Tallmadge, OH, for Appellee.
Before: HUMPHREY, LLOYD, and PRESTON, Bankruptcy Appellate Panel Judges.
C. KATHRYN PRESTON, Bankruptcy Judge.
Sherri J. Nicodemus (" Debtor" or " Defendant" ) appeals the order of the bankruptcy court determining that the entire debt owed to Laverne K. Lowry (" Plaintiff" ) in the amount of $32,186.90 plus interest pursuant to a state court judgment, is nondischargeable under § 523(a)(2)(A). The total sum consists of $9,386.90 in damages for failure to comply with a settlement agreement and $22,800.00 in sanctions for contemptuous failure to comply with a court order. Debtor argues that only the portion resulting from breach of the settlement agreement, or $9,386.90, should be held nondischargeable. For the reasons set forth below, the Panel AFFIRMS the decision of the bankruptcy court holding that the entire debt, in the amount of $32,186.90 plus interest, is nondischargeable under § 523(a)(2)(A).
STATEMENT OF ISSUES
There are two issues presented in this appeal. The primary issue is whether the bankruptcy court erred in determining that the $22,800.00 awarded as a sanction for contemptuous failure to comply with a court order is nondischargeable under § 523(a)(2)(A). The second issue is whether the bankruptcy court erred in denying Debtor's motion to amend or make additional findings of fact pursuant to Fed. R. Bankr.P. 7052.
JURISDICTION AND STANDARD OF REVIEW
The Bankruptcy Appellate Panel of the Sixth Circuit (" BAP" ) has jurisdiction to decide this appeal. The United States District Court for the Northern District of Ohio has authorized appeals to the BAP, and no party has timely elected to have this appeal heard by the district court. 28 U.S.C. § 158(b)(6), (c)(1). A " final" order of a bankruptcy court may be appealed by right under 28 U.S.C. § 158(a)(1). For purposes of appeal, an order is final if it " ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Midland Asphalt Corp. v. United States, 489 U.S. 794, 797, 109 S.Ct. 1494, 1497, 103 L.Ed.2d 879 (1989) (internal quotations and citations omitted). Determinations of dischargeability are final orders for purposes of appeal. Cash Am. Fin. Servs., Inc. v. Fox (In re Fox), 370 B.R. 104, 109 (6th Cir. BAP
(quoting Hertzel v. Educ. Credit Mgmt. Corp. (In re Hertzel), 329 B.R. 221, 224-25 (6th Cir. BAP 2005)).
Dischargeability determinations are conclusions of law reviewed de novo. Hogan v. George (In re George), 485 B.R. 478 (6th Cir. BAP 2013) (table). Under a de novo standard of review, the appellate court determines the law at issue " independently of, and without deference to, the trial court's determination." Palmer v. Washington Mut. Bank (In re Ritchie), 416 B.R. 638, 641 (6th Cir. BAP 2009) (citing Gen. Elec. Credit Equities, Inc. v. Brice Rd. Devs., L.L.C. (In re Brice Rd. Devs., L.L.C.), 392 B.R. 274, 278 (6th Cir. BAP 2008)). However, " [t]he Panel must affirm the underlying factual determinations unless they are clearly erroneous." Hart v. Molino (In re Molino), 225 B.R. 904, 906 (6th Cir. BAP 1998). " [A] finding is clearly erroneous when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (citation omitted) (internal quotation marks omitted).
The bankruptcy court's denial of Debtor's motion to amend or make additional findings of fact pursuant to Fed. R. Bankr.P. 7052 is reviewed for abuse of discretion. Besser v. Sepanak, 478 Fed.Appx. 1001 (6th Cir.2012). Abuse of discretion exists when the court " ‘ relies upon clearly erroneous findings of fact or when it improperly applies the law or uses an erroneous legal standard.’ " Corzin v. Fordu (In re Fordu), 209 B.R. 854, 858 (6th Cir. BAP 1997) (citation omitted). If a trial court's decision determining dischargeability is based on the correct law and facts, the court has not abused its discretion in denying a party's motion to amend or make additional findings of fact.
On July 29, 2011, Debtor filed a voluntary petition for relief under Chapter 13 (Case No. 11-52963). In Debtor's schedules, she listed Plaintiff as the holder of an unsecured non-priority claim in the amount of $32,736.79 based on a civil judgment. On December 1, 2011, Plaintiff filed a proof of claim in the amount of $32,186.90.
Prior to the petition date, Debtor was married to Plaintiff's son, John Lowry. Plaintiff and John Lowry had an extensive collection of model trains. On April 27, 2007, John Lowry died. Following John Lowry's death, a dispute arose between Plaintiff and Debtor over the train collection. On July 18, 2007, Plaintiff filed suit against Defendant in the Portage County, Ohio, Court of Common Pleas (" Court of Common Pleas" ) seeking more than $25,000 in damages resulting from the Debtor's alleged conversion of the train collection, which he asserted belonged to him (" state court litigation" ).
On July 31, 2007, the Court of Common Pleas entered an agreed order tendered by Plaintiff and Defendant, restraining and enjoining certain actions with respect to the train collection. The order provided that Debtor was " restrained and enjoined from selling, transferring, removing, moving, encumbering, or otherwise disposing of any trains, accessories, train memorabilia, displays or other personal property ...