Billingsley-Hogue v. Myatt

1
UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF KENTUCKY
BOWLING GREEN DIVISION
IN RE:
)
DAVY RAY MYATT 	) 	Chapter 7 Bankruptcy
DEBTOR 	) 	Case No. 25-10552-jal
)
_________________________________________ )
)
)
TERESA BILLINGSLEY-HOGUE 	)
Plaintiff 	)
)
v. 	)
) ADVERSARY PROCEEDING NO.:
DAVY RAY MYATT 	)
Defendant 	) 	25-01012-jal
MEMORANDUM AND OPINION
(Electronically filed)
This matter came before the Court on motion of Creditor, Teresa Billingsley-Hogue
(“Teresa”), for the entry of a Summary Judgment determining the debt owed her by Debtor,
Davy Ray Myatt (“Davy”) is non-dischargeable and granting a Monetary Judgment for the
amount due. 	Davy concedes that Teresa is entitled to a Summary Judgment solely based
upon the fact that the subject debt arises out of divorce proceedings, and Teresa cites
additional authority she contends supports the entry of the requested Judgment. The Court
having reviewed the pleadings, having heard argument of counsel, and being otherwise
sufficiently advised, finds that Teresa is entitled to the relief sought.
FACTS
The Court finds relevant facts are as follows:
1. 	The parties hereto were married on January 8, 1976, and a Final Divorce
Decree was entered in Warren Circuit Court, Action No. 12-CI-00510, on May 16, 2012.
Case 25-01012-jal Doc 22 Filed 10/08/26 Entered 10/08/26 14:25:30 Page 1 of 9

2
2. 	On April 4, 2012, the parties entered into a Separation Agreement which was
adopted and incorporated into the Final Decree.
3. 	After hearing approximately two (2) days of evidence in 2025, the Warren
Circuit Court found the following undisputed facts:
A. 	With respect to the parties’ Separation Agreement:
1) 	The Agreement was prepared by Davy’s attorney;
2) 	Teresa was unrepresented by counsel;
3) 	Davy drove Teresa to the office of his attorney in Scottsville,
Kentucky, to sign the Separation Agreement;
4) 	Teresa obtained no legal advice before signing the Separation
Agreement, and she signed it without any extended review or opportunity to
seek counsel;
5) 	There 	was 	no 	negotiation 	or 	modification 	of 	the 	Separation
Agreement prepared by Davy’s attorney and presented to Teresa for her
signature;
6) 	Before, and at the time, Teresa signed the Separation Agreement,
there was no disclosure of the following, nor were the following included in
the Agreement itself:
a) 	Valuations of the parties’ real estate;
b) 	Itemization of the parties’ personal property assets and their values;
c) 	Itemization of creditors owed by either party and the amounts due on
any loans or lines of credit;
Case 25-01012-jal Doc 22 Filed 10/08/26 Entered 10/08/26 14:25:30 Page 2 of 9

3
d) 	Existence of other corporate entities, including American Health
Alliance, LLC, owned by Davy and which held insurance accounts;
e) 	Davy’s ownership of insurance accounts in his individual name;
f) 	The fact that Davy had only a few weeks earlier organized American
Seniors Financial Group, LLC, shortly before he told Teresa he wanted a
divorce;
g) 	Valuation of Davy’s business interests; and
h) 	The amount owed by the parties, or Davy’s business, in past due
taxes.
B. 	Davy organized National Brokerage Alliance, LLC, on April 12, 2013, in
anticipation of selling all assets of American Seniors Financial Group, Inc.;
C. 	In the latter part of 2013, Davy sold all assets of American Seniors Financial
Group, Inc., and American Health Alliance, LLC, along with insurance policy
accounts in his individual name for the gross sum of $1,000,000.00, receiving net
proceeds of $730,337.54;
D. 	After Davy sold all assets of American Seniors Financial Group, Inc.,
American Health Alliance, LLC, and certain insurance policy accounts in his
individual name, he operated under National Brokerage Alliance, LLC, which had
been organized in anticipation of selling the assets of American Seniors Financial
Group, Inc.;
E. 	In 2020, Davy sold insurance policy accounts owned by National Brokerage
Alliance, LLC, a successor corporation to American Seniors Financial Group, Inc.,
and received net proceeds in the amount of $431,895.00;
Case 25-01012-jal Doc 22 Filed 10/08/26 Entered 10/08/26 14:25:30 Page 3 of 9

4
F. 	Davy filed joint tax returns, as married, for him and Teresa for 2015, although
Teresa’s sole income at the time was comprised of disability benefits and the parties
had been divorced for three (3) years. Davy testified that filing jointly reduced his
tax obligation;
G. 	Davy filed joint tax returns, as married, for him and Teresa for 2016, although
Teresa’s sole income at the time was comprised of disability benefits and the parties
had been divorced for four (4) years. 	Davy testified that filing jointly reduced his
tax obligation; and
H. 	Teresa received notices for years thereafter that she owed approximately
$26,000.00 in past due taxes as a result of Davy’s joint tax return filed for 2016.
Davy did not pay this tax obligation until the issue was raised at his deposition on
April 21, 2022.
4. 	Warren Circuit Court entered a Judgment against Davy on January 29, 2025,
in the amount of $581,116.27, plus interest and attorney fees.
5. 	On March 11, 2025, the Judgment was amended, nunc pro tunc, to include
an award of attorney fees in the amount of $145,250.00.
6. 	Warren Circuit Court found that Davy committed fraud, constituting “fraud
affecting the proceedings,” and justifying the division of the parties’ marital assets in equal
shares (see Exhibit P1 to Teresa’s Complaint, p.11-12).
7. 	The Judgment amount constitutes Teresa’s share of the parties’ marital assets
Davy wrongfully converted during the years between the parties’ divorce and the subject
Judgment.
Case 25-01012-jal Doc 22 Filed 10/08/26 Entered 10/08/26 14:25:30 Page 4 of 9

5
8. 	Warren Circuit Court found that Davy improperly disposed of assets to which
Teresa was entitled upon Davy’s death, amounting to a breach of the parties’ contract. (See
Exhibit P1 to Teresa’s Complaint, p.12)
9. 	Warren Circuit Court found that Davy willfully violated the Court’s Orders
by transferring company assets in violation of the Final Divorce Decree. (see Exhibit P1 to
Teresa’s Complaint, p.15).
10. 	As a part of its Judgment in favor of Teresa and against Davy, Warren Circuit
Court granted Teresa a Lien and Constructive Trust on all assets in which Davy owned an
interest, and this Lien and Constructive Trust was perfected by timely recording Notice of
same with the Warren County Clerk and the Allen County Clerk. (See Exhibit P1 to Teresa’s
Complaint, p. 15; see also copies of recorded Notices of Judgment Lien attached to Teresa’s
Proof of Claim)
11. 	Davy filed a Petition for Relief under the provisions of Chapter 13 of the U.S.
Bankruptcy Code on June 27, 2025. Thereafter, Davy’s Bankruptcy case was voluntarily
converted to a Chapter 7 Proceeding.
LEGAL ANALYSIS
Bankruptcy Rule 7056(a), which incorporates Federal Rule of Civil Procedure 56,
authorizes the Court to “grant Summary Judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to Judgment as a matter of
law.” 	When considering a motion for Summary Judgment, the court is not to weigh the
evidence for purposes of determining the truth of the matter but to determine whether there
is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct.
2505, 2511, 91 L. Ed. 2d 202 (1986) All facts and related inferences are to be viewed in the
Case 25-01012-jal Doc 22 Filed 10/08/26 Entered 10/08/26 14:25:30 Page 5 of 9

6
light most favorable to the non-moving party. Id. Teresa respectfully submits that there are
no genuine issues of material fact, and she is entitled to a Judgment as a matter of law.
This matter was tried before the Warren Circuit Court in what amounted to a 2-day
trial over a number of months, at which Davy was given the opportunity to cross-examine
Teresa’s witnesses and to present his own evidence. All issues presented in this Adversary
Proceeding were thoroughly and exhaustively litigated in the prior state court Action and
were determined in the subject state court Judgment. After the entry of the Judgment, and a
subsequent Order awarding attorney fees which amended the prior Judgment (see Exhibit
P2 to Teresa’s Complaint), nunc pro tunc, Davy filed a Motion to Alter, Amend, or Vacate
the Judgment, and this motion was denied. Teresa asserts that the Warren Circuit Court
Judgment is entitled to preclusive effect in this proceeding under the doctrines of collateral
estoppel or res judicata. See, e.g., New Hampshire v. Maine, 532 U.S. 742, 121 S. Ct. 1808,
149 L. Ed. 2d 968 (2001)
When determining the preclusive effect of a prior Judgment in a subsequent
Dischargeability proceeding, the court may consider the Dischargeability Action as being
comprised of two (2) separate but related determinations. The first question addresses the
existence, validity, and amount of the debt, and the second question is whether the debt is
dischargeable. Sill v. Sweeney (In Re: Sweeney), 276 B.R. 186 (6th Cir. BAP 2002) When
the prior Judgment has already established the amount of the debt, the Bankruptcy Court
may not be required to make the first determination as to the existence, validity, and amount
of the debt, as this determination has already been made. In Re: Wigger, 595 B.R. 236 (W.D.
Michigan 2018) (internal citations omitted) As a result, the determination as to the existence,
Case 25-01012-jal Doc 22 Filed 10/08/26 Entered 10/08/26 14:25:30 Page 6 of 9

7
validity, and amount of the debt owed Teresa is entitled to preclusive effect in this
proceeding. Id. (internal citations omitted)
The second determination as to whether a particular debt should be excepted from
discharge is a legal conclusion within the jurisdiction of the Bankruptcy Courts. Id. (internal
citations omitted) The Bankruptcy Court’s Dischargeability determination will be governed
by any factual issues that were actually and necessarily decided by the state court in
rendering its Judgment. Id. (internal citations omitted)
In this case, Warren Circuit Court determined Davy acquired money and/or property
through false pretenses, false representation, or actual fraud, and as a result, it is non-
dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A). In Re: Morris, 579 B.R. 422 (W.D. Ky.
2017)
Similarly, the Court found the amount owed Teresa arose out of Davy’s use of a
statement in writing (the parties’ Settlement Agreement prepared by his attorney) that was
materially false, involved his financial condition, upon which Teresa relied, and which was
used with the intention of deceiving Teresa. Accordingly, the subject debt is non-
dischargeable pursuant to 11 U.S.C. § 523(a)(2)(B).
In addition, the Court found that Davy defrauded Teresa out of funds to which she
was entitled, and exercised dominion and control over these assets. 	This constitutes
conversion as recognized in In Re: Morris, supra, and these actions represent a willful and
malicious injury, and the subject debt is non-dischargeable pursuant to 11 U.S.C. §
523(a)(6).
Case 25-01012-jal Doc 22 Filed 10/08/26 Entered 10/08/26 14:25:30 Page 7 of 9

8
Finally, it is unquestionable that the subject debt arises out of a divorce or in
connection with a Separation Agreement, Divorce Decree, or other Order of a court of
record, and as a result, it is non-dischargeable pursuant to 11 U.S.C. § 523(a)(15).
MONEY JUDGMENT
This Court has the authority not only to determine the Dischargeability of the debt
owed Teresa, but also to enter a Final Monetary Judgment establishing the amount due. In
Re: Hart, 564 Fed. Appx. 773 (6th Cir. 2014), citing Waldman v. Stone, 698 F3d 910 (6th
Cir. 2010)
This case involves not only the marital debt owed Teresa, but also a Constructive
Trust upon all of Davy’s assets, including his interest in any accounts he has, or has had,
through his insurance business. As a result, Teresa requests not only a determination of non-
Dischargeability, but also a Judgment establishing the amount due, and the Court finds that
Teresa is entitled to the relief sought.
CONCLUSION
The Court finds that the debt owed Teresa Billingsley-Hogue by the Debtor, Davy
Ray Myatt, is non-dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A) and (B), (a)(6), and
(a)(15). The Court, further, finds that Teresa is entitled to the entry of a monetary Judgment
establishing the amount due. For all reasons set forth herein, the Court will grant Teresa’s
request for entry of a Judgment, and a Judgment incorporating the findings herein
accompanies this Memorandum and Opinion.
______________________________
Hon. Joan A. Lloyd
United States Bankruptcy Judge
Case 25-01012-jal Doc 22 Filed 10/08/26 Entered 10/08/26 14:25:30 Page 8 of 9

9
TENDERED BY:
/s/ James R. Laramore
Hon. James R. Laramore
400 E. Main Avenue, Suite 304
P.O. Box 1926
Bowling Green, KY 42102
jrlaramore@jameslaramorelaw.com
Counsel for Teresa Billingsley-Hogue
Case 25-01012-jal Doc 22 Filed 10/08/26 Entered 10/08/26 14:25:30 Page 9 of 9