Sandler et al v. Aguilar et al

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
ESTEBAN ANGEL AGUILAR
and DENA DENISE ROBINSON,
Debtors. 	Case No. 7-08-13642 SA
RUBEN SANDLER
and AARON COHEN,
Plaintiffs,
v.
ESTEBAN ANGEL AGUILAR
and DENA DENISE ROBINSON,
Defendants. 	Adversary No. 08-1144 S
MEMORANDUM OPINION ON DEFENDANT DENA ROBINSON’S
MOTION FOR JUDGMENT ON THE PLEADINGS
This matter is before the Court on Defendant Dena Robinson’s
Motion for Judgment on the Pleadings (Doc. 5) (“Motion”) filed
December 9, 2008. 	Plaintiffs did not respond. 	The Court has
reviewed the Motion and the applicable law and finds that the
Motion is well taken and should be granted. 	This is a core
proceeding. 	28 U.S.C. § 157(b)(2)(I).
For the purposes of this Motion only, the Court took as true
all allegations in the complaint and deemed admissible all
exhibits on file. 	The complaint contains the following
allegations:
...
3. 	Defendant, Esteban (Steve) Angel Aguilar, Sr. is an
attorney licensed to practice law in the state of New Mexico
who resides in Albuquerque, Bernalillo County, State of New
Mexico. 	Steve Aguilar is the principal and owner of a
professional corporation, Aguilar law Offices, P.C., through
which he conducts his law practice. 	Defendant Dena Denise
Robinson is the spouse of Steven Aguilar. 	At all material
times relevant to this proceeding Defendant Steve Aguilar
Case 08-01144-s Doc 10 Filed 01/20/09 Entered 01/20/09 11:03:29 Page 1 of 5

1The term “innocent spouse” in this opinion will mean a
spouse that did not personally participate in the creation of the
community debt in question.
Page -2-
was acting on behalf of the marital community. 	The debt
alleged herein is a community debt.
...
14. 	Defendant Steve Aguilar unlawfully converted to himself
or his corporation, and to his clients money belonging to
Plaintiffs and delivered to Defendant solely for investment
in Fuel Reduction Associates.
...
24. 	Defendant Steve Aguilar had a fiduciary duty to
safeguard money it [sic] received on behalf of a client or
from a client.
...
28. 	Defendant Steve Aguilar willfully intended to convert
and misappropriate Plaintiff’s funds to his own use or the
use of his clients.
and prays for the following relief:
WHEREFORE Plaintiffs request the Order of this Court
determining that defendant Steve Aguilar is indebted to
plaintiffs in the amount of $75,000, that such debt is
a community debt, and that such debt is not
dischargeable in this bankruptcy proceeding by reason
of Defendant’s larceny, embezzlement, defalcation while
action as a fiduciary, and/or willful and malicious
injury to the property of the Plaintiffs.
There are no allegations that defendant Dena Robinson
committed any of the bad acts alleged in the complaint.
Plaintiffs’ only theory of her liability is that the debt is a
community debt. 	A review of the cases shows that marriage alone
is not a basis to declare a debt dischargeable as to an innocent
spouse 1
. 	For example, Judge McFeeley granted summary judgment to
an innocent spouse in Markey v. Sanchez (In re Sanchez),
Memorandum Opinion, Adv. No. 03-1222 M (Bankr. D. N.M. August 3,
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2004). 	“Plaintiff’s cause of action is necessarily based on a
theory of imputed liability based on the alleged wrongdoing of
[Debtor’s non-filing spouse].” 	Id. at 4. 	“Courts have uniformly
held that fraud cannot be imputed to a spouse based solely on the
marital relationship.” 	Id. at 4-6 (collecting cases.)
Similarly, in Wilson v. Bursh (In re Bursh) the Court
granted the defendant’s motion for summary judgment, stating:
Plaintiff's assertion that the marital community
benefitted from defendant's husband's acts and
therefore that the defendant should be barred from
discharging the resulting debt amounts to fraud implied
by law and it is the opinion of the court that such a
result is not within the purview or contemplation of
section 523(a). 	This court will not impute the fraud
of the husband to the bankrupt wife on the sole
argument that the state's community property law
permits the assessment of punitive damages against the
community property if the tort of the husband is
committed in the interest of the community.
14 B.R. 702, 706 (Bankr. D. Ariz. 1981).
Plaintiffs did not allege that Dena Robinson committed any
actions prohibited by 11 U.S.C. § 523(a). 	Therefore, the Court
finds that the Motion should be granted.
But, unless Plaintiffs are seeking to collect from Dena
Robinson’s separate after-acquired property, the Court is not
sure that it matters whether Plaintiffs obtain a judgment against
her. 	If Plaintiffs’ claim is a community claim, it would appear
that under § 524(a)(3) the after-acquired community property will
remain liable for Angel Aguilar’s non-dischargeable debt as long
as there is a community generating community property. 	See
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Page -4-
Federal Deposit Ins. Corp. v. Soderling (In re Soderling), 998
F.2d 730, 734 (9th Cir. 1993)(Under California law, husband’s
crime was community claim and all community property will be
potentially liable for the debt.); Midi Music Center, Inc. v.
Smith (In re Smith), 140 B.R. 904, 909 (Bankr. D. N.M. 1992)
(“Once the Court has determined that only one spouse has
committed acts which make the debts nondischargeable, the
community property is liable. 	Only the separate property of the
innocent spouse will not be available to satisfy creditors.”);
Arcadia Farms Ltd. v. Rollinson (In re Rollinson), 332 B.R. 879,
883 (Bankr. D. Ariz. 2005):
Normally, the discharge causes community property
acquired post-petition to be free from pre-petition
community claims. Code § 524(a)(3). 	But, if either
the community debt is excepted from discharge under §
523, or if the other spouse was denied or would be
denied a discharge, the discharge does not immunize
such post-petition community property from the
community debt. 	This happens automatically by
operation of Code §§ 524(a)(3) and (b), without the
necessity for any determination as to the knowledge or
participation of the “innocent” spouse, so long as the
debt is community debt.
See also Joann Henderson, For Better or Worse: Liability of
Community Property after Bankruptcy, 29 Idaho L. Rev. 893, 898
(1992)(Both spouses must be innocent in order to gain a community
discharge.) 	If the parties were to divorce, however, there would
be no more new community property to pay the debt. 	Dena
Robinson’s after acquired property would then all be separate
property and not liable for the debt. 	Angel Aguilar’s after-
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Page -5-
acquired separate property would be liable for the debt.
The Court will enter an Order granting Dena Robinson’s
Motion for Judgment on the Pleadings.
Honorable James S. Starzynski
United States Bankruptcy Judge
date filed on docket: January 20, 2009
copies to:
Michael K. Daniels
Attorney for Defendants
PO Box 1640
Albuquerque, NM 87103
Daniel J. Behles
Andrew M. Sanchez
Attorney for Plaintiffs
7770 Jefferson NE #305
Albuquerque, NM 87109
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