Baldwin v. Phillips

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
TAMARA L. PHILLIPS, 	No. 7-13-11987 TA
Debtor.
JEFF BALDWIN,
Plaintiff,
v. 	Adv. No. 13-1079 T
TAMARA L. PHILLIPS,
Defendant.
MEMORANDUM OPINION
This matter is before the Court on the Plaintiff’s Motion for Summary Judgment.1 The
Defendant responded2 and the Plaintiff filed a supporting reply.3 For the reasons set forth herein,
the Motion will be granted in part and denied in part.
I. 	FACTS
The following facts are established through admissible evidence and are not in genuine
dispute:
Plaintiff and Defendant were married on May 8, 1994. 	They have two children. 	They
were divorced effective September 8, 2004, as set out in a Final Decree of Dissolution of
Marriage entered by the New Mexico district court in no. DM-2003-478 (the “Divorce Case”).
Ten years later, the battle between the parties continues.
1 Docket No. 16 (the “Motion”).
2 Docket No. 18 (the “Response”).
3 Docket No. 20 (the “Reply”).
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Custody, visitation, and child support rights were hotly contested in Divorce Case. One
issue was the right to claim the children as dependents on the parties’ income tax returns. In an
order dated June 23, 2005, the state court allowed each party to claim one child on his or her
income tax return. The Defendant did not comply with this order, instead listing social security
numbers of both children on her 2008 and 2009 returns.
On November 18, 2005, the state court entered an order (the “2005 Order”) sanctioning
the Defendant a total of $850. 	$500 of this amount was for Defendant’s failure to file an
amended tax return, while $350 was for Defendant’s refusal to allow an inventory of personal
property.4
On July 27, 2009, the state court set Defendant’s monthly child support obligation to
Plaintiff at $55 per month (the “2009 Order”). In the same order, the court found that Defendant
owed Plaintiff $860 for her share of the children’s uninsured medical expenses that Plaintiff had
paid. The court ordered Defendant to pay this amount over time.
Finally, in an order entered September 1, 2010 (the “2010 Order”), the state court entered
judgment against the Defendant and in favor of Plaintiff for $9,997.40. 	Of this amount,
$9,108.40 was to compensate Plaintiff for Defendant’s wrongful use of both children’s social
security number on her 2008 and 2009 tax returns. The remaining $889.00 was for Defendant’s
share of the children’s uninsured medical expenses that Plaintiff had paid.5
4 There is no dispute that the $350 sanction was purged. It is disputed whether the $500 sanction
also was purged.
5 It is disputed whether this $860 is a portion of, or in addition to, the $889 awarded in the 2010
Order. -2-
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II. 	PROCEDURAL POSTURE
The only relief Plaintiff requested in this adversary proceeding is for the Court to declare
that “Defendant’s obligations to Plaintiff are not dischargeable in bankruptcy.” Complaint, filed
September 13, 2013, doc. 1, p. 2. 	Although the Plaintiff cites both 11 U.S.C. §§523(a)(5) and
(a)(15) in the Complaint, he does not ask the Court to determine whether the debts at issue fall
into § 523(a)(5) or § 523(a)(15). Accordingly, the Court will not make such a determination.6
III. 	SUMMARY JUDGMENT STANDARDS
Summary 	judgment 	is 	appropriate 	if 	the 	pleadings, 	depositions, 	answers 	to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to judgment as a matter
of law. 	Fed.R.Civ.P. 56, made applicable to bankruptcy proceedings by Fed.R.Bankr.P. 7056.
“[A] party seeking summary judgment always bears the initial responsibility of informing the
district court of the basis for its motion, and … [must] demonstrate the absence of a genuine
issue of material fact.” 	Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 	In determining
whether summary judgment should be granted, the Court will view the record in the light most
favorable to the party opposing summary judgment. Harris v. Beneficial Oklahoma, Inc. (In re
Harris), 209 B.R. 990, 995 (10th Cir. BAP 1997).
The party opposing a motion for summary judgment must “set forth specific facts
showing that there is a genuine issue for trial as to those dispositive matters for which it carries
6 Unlike liens securing § 523(a)(15) claims, judicial liens securing § 523(a)(5) claims expressly
cannot be avoided. See § 522(f)(1)(A). Because of that distinction, ruling whether some of the
debts at issue come within § 523(a)(5) could narrow the issues raised in the Defendant’s Motion
to Avoid Judicial Liens on Property, filed by Defendant in the main bankruptcy case on October
1, 2013, doc. 20. Nevertheless, because the Plaintiff did not ask for such a ruling, none will be
made at this time. -3-
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the burden of proof.” 	Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238,
1241 (10th Cir.1990). 	See also Vitkus v. Beatrice Co., 11 F.3d 1535, 1539 (10th Cir.1993)
(“[T]he nonmoving party may not rest on its pleadings but must set forth specific facts showing
that there is a genuine issue for trial as to those dispositive matters for which it carries the burden
of proof.”); Otteson v. United States, 622 F.2d 516, 519 (10th Cir.1980) (once a properly
supported summary judgment motion is made, the opposing party must respond with specific
facts showing the existence of a genuine factual issue to be tried); Lazaron v. Lucas (In re
Lucas), 386 B.R. 332, 335 (Bankr. D.N.M. 2008) (same).
To deny a motion for summary judgment, genuine fact issues must exist that “can be
resolved only by a finder of fact because they may reasonably be resolved in favor of either
party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). “[T]here is no evidence for
trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict
for that party. 	If the evidence is merely colorable . . . or is not significantly probative . . .
summary judgment may be granted.” Anderson, 477 U.S. at 249. Where a rational trier of fact,
considering the record as a whole, could not find for the non-moving party, there is no genuine
issue for trial. 	See Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986).
IV. 	DISCUSSION
A. 	Issues Finally Determined by the State Court Will Not Be Relitigated.
Bankruptcy court may not be used by parties to relitigate issues previously decided in
state court. 	The Full Faith and Credit Act, 28 U.S.C. § 1738, requires this Court to “give the
same preclusive effect to a state-court judgment that the judgment would be given in the courts
of the state in which the judgment was rendered.” Jarrett v. Gramling, 841 F.2d 354, 356 (10th
-4-
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Cir. 1988).7 Issue preclusion and claim preclusion prevent relitigation of issues and claims,
respectively, that were previously determined by a court of competent jurisdiction. 	See
Strickland v. City of Albuquerque, 130 F.3d 1408, 1411 (10th Cir. 1997), citing Kremer v. Chem.
Constr. Corp., 456 U.S. 461, 466 (1982) (federal courts give the same preclusive effect to state
court judgments as those judgments are given by the state court).
New Mexico recognizes both issue and claim preclusion. 	See Shovelin v. Cent. N.M.
Elec. Co–op., Inc., 850 P.2d 996, 1000 (N.M. 1993) (setting forth elements of issue preclusion in
New Mexico); Strickland, 130 F.3d at 1411 (discussing application of claim preclusion under
New Mexico law). As set forth in Strickland, federal courts must use the law of the state court
that issued the judgment when applying the preclusion doctrines.
1. 	Claim Preclusion. Claim preclusion requires proof of four elements: “(1)
the same party or parties in privity; (2) the identity of capacity or character of persons for or
against whom the claim is made; (3) the same subject matter; and (4) the same cause of action in
both suits.” Strickland, 130 F.3d at 1411, citing Myers v. Olson, 676 P.2d 822, 824 (N.M. 1984).
While the first two elements are met, the third and fourth elements have not been established. In
the Divorce Case, the state court ruled that the Defendant owed money to the Plaintiff for three
reasons: unreimbursed healthcare expenses for the children; sanctions for failing to comply with
court orders; and reimbursement for improperly claiming (or listing) children on tax returns.
7 This should not be confused with the Rooker-Feldman doctrine, a much narrower rule that
prevents “state-court losers” from using lower federal courts as courts of appeal from final state
court judgments. 	Lance v. Dennis, 546 U.S. 459, 465 (2006). 	Pursuant to 28 U.S.C. § 1257,
exclusive federal jurisdiction over appeals from final state court judgments is vested in the
United States Supreme Court. Lance v. Dennis, 546 U.S. at 463, citing Dist. of Columbia Court
of Appeals v. Feldman, 460 U.S. 462 (1983). 	See also In re Miller, 666 F.3d 1255 (10 th Cir.
2012) (citing Lance v. Dennis and acknowledging the limited scope of the Rooker-Feldman
doctrine). -5-
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There 	is 	no 	evidence 	that 	the 	state 	court 	determined 	whether 	the 	amounts 	owed 	were
nondischargeable under § 523. 	It is clear that the subject matter and causes of action in the
Divorce Case and this adversary proceeding are different. Claim preclusion therefore cannot be
used to determine or narrow the claim asserted in this adversary proceeding.
2. 	Issue Preclusion. 	Issue preclusion also requires proof of four elements:
“(1) the party to be estopped was a party to the prior proceeding, (2) the cause of action in the
case presently before the court is different from the cause of action in the prior adjudication, (3)
the issue was actually litigated in the prior adjudication, and (4) the issue was necessarily
determined in the prior litigation.” 	Shovelin, 850 P.2d at 100 (citation omitted). 	Here, all four
elements are satisfied with respect to determining whether a debt exists and, except as provided
below, the amount of the debt. 	First, the Defendant was a party to the Divorce Case, and there
has been no suggestion that Defendant did not have a full and fair opportunity to litigate these
issues in that action. Second, as set forth above, the cause of action in the case at bar is different
from the matters determined in the Divorce Action. 	Third, the state court actually determined
that the following debts were owed to the Plaintiff:
Basis for Debt 	Amount of Debt 	Genuine Dispute
2005 Order. 	$850 ($500 and $350) 	Yes. 	Defendant alleges that
$500 	was 	purged. 	Plaintiff
agrees that $350 was purged.
2009 Order 	$860 	Yes, 	in 	part. 	Defendant
alleges 	that 	this 	debt 	was
rolled into the $889 due under
the 2010 Order.
2010 Order 	$9,997.40 	($889 	and
$9,108.40)
Yes, 	in 	part. 	Defendant
alleges that the $889 consisted
primarily of previously owed
amounts and is not a new debt.
No 	dispute 	regarding
remainder.
-6-
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Finally, the debts were necessarily determined in the Divorce Case. 	Issue preclusion,
therefore, prevents the relitigation of the existence of these debts.
B. 	The Debts are Nondischargeable.
Section 523(a)(5) excepts from discharge “any debt for a domestic support obligation.”
In turn, § 523(a)(15) excepts from discharge
any debt to a spouse, former spouse, or child of the debtor and not of the kind
described in paragraph (5) that is incurred by the debtor in the course of a
divorce or separation or in connection with a separation agreement, divorce
decree or other order of a court of record, or a determination made in accordance
with State or territorial law by a governmental unit.
Although the term “domestic support obligation” has a limited definition in this context, see e.g.
In re Parra, 2014 WL 3616209 (Bankr. D.N.M. 2014) (describing determination of whether a
debt is a domestic support obligation), no such limitations have been applied to § 523(a)(15). In
In re Taylor, 737 F.3d 670 (10th Cir. 2013), the Tenth Circuit rejected a challenge to an
application of the plain statutory language of § 523(a)(15) and held:
‘[W]e cannot reject an application of the plain meaning of the words in a statute
on the ground that we are confident that Congress would have wanted a different
result.’ It is not unthinkable that Congress would place importance on all marital
obligations, regardless of whether the debt was owed to or by the dependent
spouse—even above the need for the debtor's fresh start.
Id., at 682, citing Robbins v. Chronister, 435 F.3d 1238, 1241 (10 th Cir. 2006).
Applying the plain language of § 523(a), the Court holds that all the debts established in
the Divorce Case, including those addressed in this adversary proceeding, are nondischargeable
under either § 523(a)(5) or (a)(15).
-7-
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C. 	There are Questions of Fact Regarding the Amounts Owed.
As set forth in the table above, there are genuine issues of material fact regarding the
amount of the two debts:
-- Sanctions Amount. 	The Plaintiff alleges that $500 is still due from the 2005
Order. 	Affidavit of Jeff Baldwin, ¶ 15. 	The Defendant alleges that this $500 has been purged
according to the terms of the order. Affidavit of Tamara L. Phillips, ¶ 8. This creates a genuine
issue of material fact, and the Court will take evidence on this issue at trial.
-- Uninsured Medical Expense Reimbursement. 	The Plaintiff alleges, correctly,
that the state court awarded him $860 in the 2009 Order and $889 in the 2010 Order. Both sums
are for reimbursement for the children’s uninsured medical expenses paid for by the Plaintiff.
The Defendant makes two arguments that the amounts are not owed. 	First, she argues that the
$860 is not owed Plaintiff because she is paying it to the State of New Mexico as child support
arrears. 	This argument fails; any amounts collected by the state are owed to Plaintiff and
collected on Plaintiff’s behalf. While care must be taken to ensure no double payment, the debt,
if owed, is owed to Plaintiff. 	Second, Defendant argues that the $860 is part of the $889
awarded in the 2010 Order. Affidavit of Tamara L. Phillips, ¶ 12. That creates a fact issue. At
trial, the Court will take evidence on whether the $860 and $889 reimbursement payments are for
separate and distinct expenses, or if they overlap.
D. 	Defendant’s Request for Additional Time For Discovery is Not Well Taken.
-8-
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In her Response, Defendant asks for more time to conduct discovery, pursuant to
Fed.R.Civ.P. 56(d).8 The request lacks merit and will be denied.
To be granted relief under Fed.R.Civ.P. 56(d), the party opposing summary judgment
must file “an affidavit explaining why he cannot present specific facts in response to the
motion.” Weir v. Anaconda Co., 773 F.2d 1073, 1082 (10th Cir. 1985) (setting forth requirement
under former Fed.R.Civ.P. 56(f)).9 This affidavit must state “with specificity how ‘the desired
time would enable [the nonmoving party] to meet its burden in opposing summary judgment.’”
Guthrie v. Sawyer, 970 F.2d 733, 738 (10th Cir. 1992), citing Pasternak v. Lear Petroleum
Exploration, Inc., 790 F.2d 828, 833 (10 th Cir. 1986). 	Additionally, “a mere assertion that the
evidence supporting a [party’s] allegation is in the hands of the [opposing party] is insufficient to
justify a denial of a motion for summary judgment under Rule 56(f).” 	Weir, 773 F.2d at 1083,
citing Patty Precision v. Brown & Sharpe Mfg. Co., 742 F.2d 1260, 1264 (10th Cir. 1984).
In her affidavit, the Defendant asserts that “Plaintiff has not produced a signed copy of
his 2007 income tax return nor the schedules and Earned Income Credit statements which are
part of his 2008 and 2009 income tax returns.” 	Affidavit of Tamara L. Phillips, ¶ 2. 	This is
insufficient to invoke the protections of Fed.R.Civ.P. 56(d). First, the affidavit fails to state what
these tax returns would reveal and why the information might be relevant. Second, the affidavit
does not indicate whether the tax returns were sought in discovery. 	If they were, the proper
motion would be one to compel. 	If not, it is too late to be commencing discovery and the
8 Fed.R.Civ.P. 56(d) provides: If a nonmovant shows by affidavit or declaration that, for
specified reasons, it cannot present facts essential to justify its opposition, the court may: (1)
defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to
take discovery, or (3) issue any other appropriate order.
9 The Commentary to the 2010 Amendments to Fed.R.Civ.P. 56(d) states: “Subdivision (d)
carries forward without substantial change the provisions of former subdivision (f).”
-9-
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documents should have been requested long ago.10 Third, there is no allegation regarding how
the information would help rebut the factual assertions made in the Motion. A bare assertion that
the information is needed is insufficient.
Additionally, as set forth above relitigation of issues determined in the state court is not
allowed. It appears that the only relevance of the requested information would be to collaterally
attack or relitigate one or more of the state court’s rulings. Because such attack or relitigation is
not permitted, the discovery would not be needed or relevant.
In sum, the Defendant has not adequately specified reasons why she cannot present facts
essential to justify her position in opposition to the Motion. 	Defendant’s Fed.R.Civ.P. 56(d)
request will be denied.
V. 	CONCLUSION
There is no dispute that the state court awarded money to Plaintiff in the Divorce Case.
There are (potentially) three separate debts that are owed and were clearly incurred by the
Defendant in the course of the Divorce Case. At this point it is appropriate to enter a judgment
in favor of the Plaintiff and against the Defendant that the amount of $9,968.40 is non-
dischargeable under § 523(a)(5) or (a)(15). 	This consists of $9,108.40 owed under the 2010
Order and $860.00 owed under the 2009 Order.
There are genuine disputes of fact regarding the remaining amounts owed, but there is no
dispute that, to the extent any additional sums are owed, they also would be nondischargeable.
The Court will enter an appropriate judgment and order.
Defendant’s Rule 56(d) request will be denied.
10 The discovery deadline, originally scheduled to end March 4, 2014, was extended to March
31, 2014. See order entered March 5, 2014, doc. 14. This gave the parties almost five months of
discovery, an ample amount of time. -10-
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_____________________________________
Hon. David T. Thuma
United States Bankruptcy Judge
Entered: July 29, 2014.
Copies to:
Michael K Daniels
P.O. Box 1640
Albuquerque, NM 87103-1640
Walter L Reardon, Jr.
3733 Eubank Blvd NE
Albuquerque, NM 87111-3536
-11-
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