Sherwood v. Sherwood

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In Re
RICHARD G. SHERWOOD
TERI B. SHERWOOD
Debtors
SUSAN E. SHERWOOD
Plaintiff
vs.
RICHARD G. SHERWOOD
Defendant
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Case No. 05-18001
Chapter 7
Judge Hopkins
Adversary Case No. 06-1071
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: May 02, 2007
____________________________________________________________
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Case No. 05-18001
Adv. Case No. 06-1071
1 Rule 36(b) provides in relevant part:
Any matter admitted under this rule is conclusively established unless the court
on motion permits withdrawal or amendment of the admission. Subject to the provisions
of Rule 16 governing amendment of a pre-trial order, the court may permit withdrawal or
amendment when the presentation of the merits of the action will be subserved thereby
and the party who obtained the admission fails to satisfy the court that withdrawal or
amendment will prejudice that party in maintaining the action or defense on the merits.
2
MEMORANDUM OF DECISION ON ORDER
GRANTING MOTION TO WITHDRAW ADMISSIONS
AND DENYING MOTION FOR SUMMARY JUDGMENT
The Plaintiff, Susan E. Sherwood, commenced this adversary proceeding
seeking a determination that certain debts are nondischargeable pursuant to 11 U.S.C.
§ 523(a)(5) and/or (15). Presently before the Court are two motions. The Plaintiff has
filed a summary judgment motion. 	See Doc. 20. 	The Defendant, Richard G.
Sherwood, has filed a motion to withdraw admissions. See Doc. 21.
MOTION TO W ITHDRAW ADMISSIONS
In support of her summary judgment motion, the Plaintiff relies upon certain
requests for admission that the Defendant did not timely deny. The Defendant now
seeks to withdraw the admissions pursuant to Fed. R. Civ. P. 36(b). 1
Rule 36(b) sets forth a two-prong test. 	The first prong looks to whether
disposition on the merits will be served by allowing the withdrawal or amendment.
This prong “is satisfied ‘when upholding the admission would practically eliminate
any presentation on the merits of the case.’” Riley v. Kurtz, No. 98-1077, 1999 WL
801560, at *3 (6 th Cir. Sept. 28, 1999) (quoting Hadley v. United States, 45 F.3d 1345,
1348 (9 th Cir. 1995)). The second prong of the test, whether the party who obtained
the admission has satisfied the court that withdrawal or amendment will prejudice that
party, “‘relates to special difficulties a party may face caused by a sudden need to
obtain evidence upon withdrawal or amendment[.]’” 	Kerry Steel, Inc. v. Paragon
Indus., Inc., 106 F.3d 147, 154 (6 th Cir. 1997) (quoting American Auto Ass'n v. AAA
Legal Clinic of Jefferson Crooke, P.C., 930 F.2d 1117, 1120 (5 th Cir. 1991)). “‘[T]he
prejudice contemplated by Rule 36(b) is not simply that the party who initially
obtained the admission will now have to convince the fact finder of its truth.’” Kerry
Steel, 106 F.3d at 154 (quoting Brook Village North Assoc. v. General Elec. Co., 686
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F.2d 66, 70 (1 st Cir. 1982)). Under the second prong, the non-movant bears the burden
of proof. 	Riley, 1999 WL 801560, at *3. 	When deciding whether to permit
withdrawal or amendment of admissions, trial courts are vested with considerable
discretion. See Kerry Steel, 106 F.3d at 154.
In this case, the Plaintiff asked the Defendant to admit that: (1) certain of the
debts at issue "are nondischargeable obligations covered by Section 523(a)(5)"; (2)
the Defendant has the ability to pay the debts; and (3) discharge of the debts "will not
result in a benefit to [Defendant] that outweighs the detrimental consequences to the
Plaintiff."
The first prong under Rule 36(b) is satisfied because upholding the admissions
would eliminate any presentation of the merits of the case. The first of the foregoing
admissions would render certain debts nondischargeable under § 523(a)(5). The latter
admissions would render the remaining debts nondischargeable under § 523(a)(15).
The second prong under Rule 36(b) is satisfied because the Plaintiff has not identified
any prejudice she would suffer if the admissions were withdrawn. Accordingly, the
motion to withdraw is well-taken.
MOTION F OR S UMMARY J UDGMENT
Summary judgment is appropriate when there is no genuine issue of material
fact and the movant is entitled to judgment as a matter of law. 	See Fed. R. Civ. P.
56(c). When reviewing the record on summary judgment, the evidence of the non-
movant is to be taken as true and all justifiable inferences are to be drawn in favor of
the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986).
To resolve the Plaintiff's summary judgment motion, the Court must first
determine whether the debts at issue constitute alimony, maintenance or support under
§ 523(a)(5).
When a debt assumption is not expressly designated as alimony, maintenance
or support, as is the case in this proceeding, courts within the Sixth Circuit must apply
a four-part test set forth in Long v. Calhoun (In re Calhoun), 715 F.2d 1103 (6 th Cir.
1983) to determine whether the debt constitutes alimony, maintenance or support.
The first prong of the Calhoun test requires a determination of whether the parties or
the state court issuing the divorce decree intended to create an alimony, maintenance
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or support obligation. Id. at 1109. When making this determination, courts often look
to factors considered by state courts. Id. at 1109. Such factors include: (1) the nature
of the obligation; (2) the structure and language of the divorce decree; (3) whether
lump sum or periodic payments were also provided; (4) the length of the marriage; (5)
the existence of children from the marriage; (6) the relative earning powers of the
parties; (7) the age, health and work skills of the parties; (8) the adequacy of support
absent the debt; and (9) evidence of negotiation or other understandings as to the
intended purpose of the assumption. Id. at 1108 n.7.
Given the withdrawal of the Defendant's admissions, the only remaining
evidence in the record is the divorce decree and the Plaintiff's affidavit. The divorce
decree sheds light on the second, third, fourth and fifth Calhoun factors referenced
above. 	However, the affidavit does not address any of the remaining factors.
Therefore, the Court finds that a genuine issue of material fact exists, particularly in
relation to the sixth, seventh, eighth and ninth Calhoun factors. See Goans v. Goans
(In re Goans), 271 B.R. 528 (Bankr. E.D. Mich. 2001)(finding genuine issue of
material fact under first prong of Calhoun notwithstanding more complete record of
state law factors).
CONCLUSION
Based upon the foregoing, the Defendant's motion to withdraw (Doc. 21) will
be GRANTED and the Plaintiff's summary judgment motion (Doc. 20) will be
DENIED. An order to this effect will be entered.
If the Plaintiff needs additional discovery to prepare for trial, given the late
withdrawal of the admissions, the Court will entertain a motion by the Plaintiff to
continue the trial and grant a reasonable extension of discovery.
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Copies to:
Richard L. Goettke
goettkelaw@fuse.net
L. Joshua Davidson
josh@cincy-lawyer.com
U.S. Trustee
ustpregion09.ci.ecf@usdoj.gov
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