Robert E. Grant Judge, United States Bankruptcy Court
NOT INTENDED FOR PUBLICATION
DECISION AND ORDER DENYING MOTION FOR JUDGMENT ON THE PLEADINGS
Robert E. Grant Judge, United States Bankruptcy Court
By this adversary proceeding, the plaintiff/trustee seeks to have the debtors' discharge revoked as a result of their refusal to comply with the court's order of July 6, 2022. See, 11 U.S.C. § 727(a)(6)(A), (d)(3). That order required the debtors to turnover to the trustee the sum of $4,343.47. The matter is before the court on the trustee's motion for judgment on the pleadings and the defendants' response thereto.
Rule 12(c) of the Federal Rules of Civil Procedure, which is made applicable to bankruptcy proceedings by Bankruptcy Rule 7012(b), allows a party to move for judgment on the pleadings. Disposition of the motion is much the same as a motion for summary judgment, except that the facts the court may consider are limited to the contents of the pleadings. The court is required to view the facts presented in the pleadings and the reasonable inferences drawn from them in the light most favorable to the non-moving party. Upon doing so, the motion may only be granted if there are no material issues of fact and one party is clearly entitled to judgment as a matter of law. See, Alexander v. City of Chicago, 994 F.2d 333, 335-36 (7th Cir. 1993); Flora v. Home Federal Savings and Loan Ass'n, 685 F.2d 209, 211 (7th Cir.1982); Dyson v. Brennan, 2016 WL 4884173 *4 (D. N.D. Ind. 2016); In re Borst, 1992 WL 315999 *1-2 (Bankr. N.D.Ill. 1992).
"Effective administration of bankruptcy cases requires debtors to comply completely with lawful orders of the Court entered in their cases." In re Faber, 330 B.R. 235, 240 (Bankr. N.D. Ind. 2005) (Klingeberger, J.). For this reason, § 727(a)(6) allows a discharge to be denied or revoked where "the debtor has refused . . . to obey any lawful order of the court . . .." 11 U.S.C. §§ 727(a)6), 727(d)(3). The operative concept here is "refused;" not "failed." This requires a degree of willfulness or intentionality on the part of the debtor. In re Jordan, 521 F.3d 430, 433 (4th Cir. 2008). See also, In re Eckert, 375 B.R. 474, 480 (Bankr. N.D.Ill. 2007). The process begins with the party objecting to discharge demonstrating that the debtor received the order in question and did not comply with it. Once this has been done, the debtor then has the obligation to explain the non-compliance. Jordan, 521 F.3d at 433; Eckert, 375 B.R. at 480. These are essentially the same demonstrations and the same allocation of burdens that apply in civil contempt proceedings, where, once the movant has shown non-compliance, the contemnor can escape sanction by demonstrating that they had taken all reasonable steps within their power in attempting to comply with the court's order, but were still unable to do so. In re Freeman, 293 B.R. 413, 415-16 (Bankr N.D. Ohio 2002); In re Magack, 247 B.R. 406, 410-11 (Bankr.N.D.Ohio 1999). See also, Matter of Berryhill, 127 B.R. 427, 429 (Bankr. N.D. Ind. 1991) (discussing contempt).
With these standards in mind, the court can turn its attention to the facts as they appear in the pleadings. There is no dispute that the court entered a lawful order, which required the debtors to turnover to the trustee the sum of $4,343.47, or that the debtors were aware of that order. Neither is there any dispute that the order has not been complied with. The question is whether the facts alleged in the pleadings also demonstrate that the debtors' non-compliance constitutes a refusal to obey or whether the allegations are reasonably susceptible to a more innocent interpretation. They are.
Paragraph 16 of the complaint contains the operative allegation concerning the debtors' non-compliance. It alleges that "the Debtors have refused to provide the Trustee with the $4,343.47 as ordered by the court." Defendants' answer not only denies this particular allegation, it goes on to explain that the debtors "have simply been unable to obtain such funds for such turnover" and "will indeed turnover such funds if received." See, Answer, ¶ 15. Taken as true, this allegation offers a sufficiently innocent explanation for debtors' non-compliance to defeat the motion.
Count 2 of the complaint seeks a money judgment in the amount of the turnover order. Why it has been included in this proceeding is not readily apparent. The trustee already has a final order requiring the debtor to "turn over funds in the amount of $4,343.27" - the order of July 6, 2022 that is the basis for count I. Although that order was issued in connection with a contested matter, such orders have the status of money judgments, In re White, 389 B.R. 693, 699 (9th Cir. BAP 2008), and they can be enforced just like a judgment in an adversary proceeding. See, Fed.R.Bankr.P. Rule 9014(c) (Rule 7069 applies to contested matters); Rule 7069 (execution) (Rule 69 of the Federal Rules of Civil Procedure applies to adversary proceedings); Fed R. Civ P. Rule 69. What more is there to be gained by prosecuting this claim again?
Plaintiff's motion for judgment on the pleadings is, therefore, DENIED.
SO ORDERED.