DOUGLAS O. TICE, JR., Chief Bankruptcy Judge.
Hearing was held May 10, 2001, on defendant-debtor Paula Jo Piper's motion for summary judgment in this adversary proceeding to determine the dischargeability of a debt pursuant to 11 U.S.C. § 523. At conclusion of the hearing, the court took the matter under advisement. For the reasons stated herein, the court will deny debtor's motion for summary judgment.
I. Procedural History and Findings of Fact.
The parties were married in 1988, and they resided at plaintiff's family home in West Point, Virginia. The property is titled in plaintiff's name only. In 1994 and 1998, plaintiff's home was used as collateral for two loans. Debtor was the sole signatory and obligor on both loans.
The 1998 loan, in the amount of $99,000.00, was obtained through Chase Manhattan and is the subject of this adversary proceeding.
Shortly after obtaining the Chase Manhattan loan, the parties separated and debtor moved out of the West Point property.
In August 1998, debtor received a letter from plaintiff's divorce attorney stating that plaintiff would not continue to make the payments to Chase Manhattan. As a result, on October 26, 1998, debtor filed this chapter 7 case.
On January 25, 1999, plaintiff filed a motion to extend time for objection to discharge and to determine dischargeability of debts and to defer granting of discharge to debtor.
Plaintiff's motion was granted, and an order was entered on May 6, 1999 extending the date to object to discharge or determine dischargeability of debt from February 20, 1999 to April 20, 1999. That order also stated that debtor's discharge was stayed and deferred from January 25, 1999 until after April 25, 1999.
Debtor received her discharge on May 21, 1999.
On April 1, 1999, plaintiff filed an adversary proceeding to delay discharge, grant relief from stay and declare debts nondischargeable pursuant to 11 U.S.C. § 523.
The pre-trial conference in this adversary was continued seven times while the parties waited for the state court divorce proceedings to conclude. Finally, at the pre-trial conference held February 14, 2001, the trial was set for May 10, 2001.
On April 1, 1999, plaintiff also filed a motion for relief from the automatic stay to proceed with the divorce and equitable distribution issues in state court. By order entered May 28, 1999, the automatic stay was modified to allow plaintiff to "prosecute the divorce case and related issues in State Court, including, but not limited to issues of `support,' `equitable distribution,' and `debt allocation.'"
In April 2000, the state court judge issued a letter opinion regarding the equitable distribution of marital debt. In that letter, the court advised the parties that the Chase Manhattan debt was marital debt and ordered debtor to pay plaintiff one-half the amount of the outstanding balance.
The letter opinion was incorporated by reference into the final divorce decree. Pursuant to Virginia Code § 20-107.3(C), the state court ordered debtor to pay plaintiff $796.41 per month for eighty-four months, commencing February 1, 2001.
II. Positions of the Parties.
A. Debtor
The thrust of debtor's argument is that the Chase Manhattan debt was discharged by the bankruptcy court on May 21, 1999, and the state court violated 11 U.S.C. § 524(a) by subsequently ordering debtor to pay one-half of the balance remaining on that debt.
Debtor also asserts that plaintiff lacks standing to challenge the discharge of the Chase Manhattan debt because plaintiff is not the creditor to whom the debt is owed. See 11 U.S.C. § 523(c)(1). Finally, the Chase Manhattan debt is not child support or alimony and is not part of a property settlement agreement between the parties.
B. Plaintiff
Plaintiff's complaint states that debtor filed for bankruptcy on the day a final hearing was set in state court to determine the equitable distribution of the marital estate. This conduct, plaintiff alleges, suggests the Chase Manhattan debt was incurred under false pretenses in violation of § 523(a)(2) and resulted in a willful and malicious injury pursuant to § 523(a)(6).
The timing of the bankruptcy filing also suggests that the Chase Manhattan debt should be nondischargeable pursuant to § 523(a)(5) and § 523(a)(15).
In his response to debtor's motion for summary judgment, plaintiff asserts that the clerk's office erroneously issued debtor's discharge despite the pending complaint to delay discharge. Moreover, plaintiff obtained relief from stay so that the state court could proceed with equitable distribution of the marital estate. Since plaintiff obtained "permission" from the bankruptcy court to go forward with equitable distribution, the state court properly exercised its jurisdiction and discretion in ordering debtor to pay half of the Chase Manhattan debt.
In his prayer for relief, plaintiff seeks to have debtor's discharge withdrawn nunc pro tunc.
III. Conclusions of Law.
A motion for summary judgment is governed by Bankruptcy Rule 7056, which incorporates Federal Rule of Civil Procedure 56 in adversary proceedings. See Fed.R.Bankr.P. 7056. If there is "no genuine issue as to any material fact" then plaintiff is entitled to summary judgment as a matter of law. Fed.R.Civ.P. 56(c). At the summary judgment stage, the court does not "weigh the evidence and determine the truth of the matter." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Rather, the court's function is to "determine whether there is a genuine issue for trial." Id.
In this case, debtor, as the moving party, bears the initial burden of proving the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If debtor demonstrates an absence of evidence to support plaintiff's case, then the burden shifts to plaintiff. Plaintiff must then prove the existence of a genuine issue of material fact. See id. at 322. All evidence is viewed in the light most favorable to plaintiff. See Figgie Int'l Inc. v. Detileria Serrales, Inc., 190 F.3d 252, 255 (4th Cir. 1999).
Plaintiff was granted relief from the automatic stay to proceed with equitable distribution in state court. Also, plaintiff timely filed his complaint to determine the dischargeability of the marital debt/equitable distribution award.
Debtor's discharge was granted in May 1999; however, "[t]he granting of a discharge in bankruptcy does not affect a pending complaint to determine dischargeability of debt, because the relief requested in the complaint is that one or more debtors be excepted from discharge." Wright v. Asbury (In re Asbury), 250 B.R. 59, 65 (Bankr.D.Md. 2000); see also Fed.R.Bankr.P. 4007. Therefore, the state court did not violate 11 U.S.C. § 524(a) by entering an order concerning equitable distribution of martial debt, and plaintiff's complaint to determine the dischargeability of that debt is not affected by debtor's discharge.
Based on the evidence, and considering it in the light most favorable to plaintiff, the court finds that there is a genuine issue of material fact. Accordingly, IT IS ORDERED that debtor's motion for summary judgment is denied.