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IN RE EDEN

April 12, 2004.

LARRY EDEN, Debtor; LARRY EDEN Plaintiff-Appellant
v.
ROBERT A. CHAPSKI, LTD. and JEAN EDEN n/k/a JEAN EAKINS Defendant-Appellees



The opinion of the court was delivered by: JAMES HOLDERMAN, District Judge

On appeal from the United States Bankruptcy Court for the Northern District of Illinois — Chapter 13

MEMORANDUM OPINION AND ORDER

Larry N. Eden ("Eden") appeals from an order of the Bankruptcy Court that dismissed his Amended Complaint in an adversary proceeding against Robert A. Chapski ("Chapski") and Jean Eakins ("Eakins"). Eakins is Eden's former wife, and Chapski was Eakins's attorney during the dissolution of Eden and Eakins's marriage. For the following reasons, the decision of the Bankruptcy Court is affirmed.

  BACKGROUND

  Eden petitioned for relief under Chapter 13 of the Bankruptcy Code on February 20, 1996.*fn1 Chapski was included in the list of unsecured creditors in Eden's Schedule F as the holder of a disputed claim. Divorce proceedings between Eden and Eakins continued during the pendency of Eden's bankruptcy proceeding. Eden's Chapter 13 Plan was confirmed on August 2, 1996. Under the terms of this plan, Eden was to make payments of $1,088 a month over a term of 60 months to the Chapter 13 Trustee to he disbursed to the benefit of Eden's creditors.

  On August 6, 1997 a State Court entered a judgment dissolving Eden and Eakins's marriage ("Judgment of Dissolution") This judgment ordered Eden to pay his now ex-wife Eakins's attorney's fees in he amount of $17,500. This payment was payable jointly to Eakins and Chapski. Eden appealed this judgment. On December 18, 1997, the State Court entered an order awarding to Eakins her prospective attorney's fees in connection with her defense of Eden's appeal ("the Prospective Fee older"). (In re Larry N. Eden, No. 98 A. 01990, slip op. at 4 (N.D. Ill. Bankr. Nov. 26, 2002) (Ginsberg, Bankr. J.), Ex. C to Dkt. # 9) [hereinafter "Nov. 26 Order"]. Five months later, on May 21, 1998, the State Court entered a rule to show cause why Eden should not be held in contempt of court for failure to comply with the Prospective Fee Order. (Id. 4-5.) On September 22, 1998, the State Court entered a rule to show cause on account of Eden's alleged failure to pay the amounts due under the terms of the Judgment of Dissolution, (Id. at 5.)

  On October 5, 1998, the attorney's fee amount increased when Chapski filed a petition in State Court in the amount of $8,964.24 for fees accrued in connection with Eden's appeal of the Judgment of Dissolution. Shortly thereafter, Eden made two filings in the Bankruptcy Court. Both of these came before Bankruptcy Judge Ginsberg. Neither of these filings are in the record before this court, but both are described in Judge Ginsberg's Nov. 26 Order, which ruled upon matters relating to these two filings and is present in the record before this court. On October 8, 1998, Eden filed a Motion to Enforce the Automatic Stay ("Oct 8, 1998 Motion to Enforce Automatic Stay"). Shortly after this motion was filed, the State Court found Eden in indirect civil contempt for failure to pay the Prospective Fee Order. On November 16, 1998, Eden filed a Verified Complaint for Injunction and Emergency Motion against Chapski ("Nov. 16, 1998 Complaint for Injunction"). On December 8, 1998, the State Court entered an agreed order ("Agreed Order") that stayed execution of a sentence for the finding that Eden was in indirect civil contempt. (Nov. 26 Order at 8.) This order between Eden, Eakins and Chapski required Eden to deposit funds into a trust account to satisfy the Prospective Fee Order pending the Bankruptcy Court's decision on Eden's two motions. (Id. at 9.)

  On July 29, 1999, Judge Ginsberg entered an order ("July 29 Order"). This order forms the basis of nearly all of Eden's arguments on flu's instant appeal. It stated, in pertinent part:

  THIS CAUSE coming on to be heard pursuant to Debtor's Motion to Enforce the Automatic Stay and Verified Complaint for Injunction. . . .

  IT IS HEREBY ORDERED

 
1. That any allowed pre-petition claim owed to Robert A. Chapski, Ltd. (hereinafter "Chapski") may only be paid, pursuant to the confirmed plan, through the Chapter 13 bankruptcy. That this Court will not make a finding that this pre-petition debt is determined to be non-dischargeable unless Chapski prevails in an adversary proceeding regarding that issue.
2. That any collection effort as to the aforesaid pre-petition debt is subject to the automatic stay 11 U.S.C. § 362.
3. That any post-petition debt owed to Chapski is not dischargeable in this Chapter 13 bankruptcy.
4. That any collection efforts as to the post-petition or pre-petition debt is subject to the 11 U.S.C. § 1306(a), and the Debtor's wages are property of the estate and are subject to the protection of the automatic stay of 11 U.S.C. § 3 62, unless the stay is modified by this Court after proper notice and motion.
(In Re Eden. 98 A. 01990 (N.D. Ill. Bankr. July 29, 2002), Ex. D to Dkt # 7), On November 30, 1999, Chapski and Eakins moved to modify the automatic stay, but according to Eden's Amended Complaint this motion was never granted and was eventually declared moot upon Eden's discharge from bankruptcy.

  The July 29 Order, however, did not resolve all the issues raised in Eden's Nov. 16, 1998 Complaint for Injunction. On November 26, 2002 Judge Ginsberg again addressed the adversary proceeding begun by Eden's Nov. 16, 1998 Complaint for Injunction. (Nov. 26 Order at 1.) In the Nov. 26 Order, Judge Ginsberg specifically addressed a Motion for Turnover of Funds filed by Eden On November 12, 1999 in connection with his Nov. 16, 1998 Complaint for Injunction. (Id.) Judge Ginsberg rejected Eden's argument that the amounts tendered pursuant to the Agreed Order should be returned to Eden. (Id. at 13-17.) In doing so, Judge Ginsberg refused to find that the amounts tendered in the Agreed Order were wages protected by the automatic stay. (Id.) Judge Ginsberg also specifically addressed the July 29 Order. (Id. at 9-10.) Judge Ginsberg stated: "This Court's order of July 29, 1999 was intended to resolve all issues under 11 U.S.C. § 362 that had been properly noticed and presented in the Debtor's bankruptcy case." (Id. at 10.) Shortly before Judge Ginsberg's Nov. 26 Order, on October 25, 2002, Eden was granted a discharge from bankruptcy.

  On August 14, 2003 Eden filed an Amended Complaint in Adversary Proceeding No. 03 A. 02204, which forms the basis of this appeal, requesting (1) the discharge of that Chapski's attorney's fees and (2) the recovery of the involuntary payments made by Eden to Eakins via a wage deduction State Court order.*fn2 Chapski and Eakins moved to dismiss the Amended Complaint, arguing that the issue of dischargeability had already been litigated in State Court, and that a hearing on the matter was heard in State Court on July 9, 2003.*fn3 (Dkt #8.) Eden's response to Chapski and Eakins's Motion To Dismiss admitted that the State Court had entered an order determining that the debt owed to Eden was nondischargeable, but argued that his adversary complaint presented a "purely Bankruptcy code issue regarding [Chapski and Eakins's] failure to" comply with the July 29 Order. (Dkt # 9.) Eden, throughout his materials submitted before this court, admits that the State Court judgment determined that Chapski's claim was nondischargeable.

  On October 9, 2003, Bankruptcy Judge Barbosa granted the Motion to Dismiss. In doing so, Judge Barbosa ruled that the July 29 Order's provisions requiring relief from the stay "obviously speak[] to the pendency of the case" and that "[o]nce the case is concluded and a discharge granted, the stay is terminated." (Dkt #13.) Judge Barbosa next responded to Eden's argument that the My 29 Order discharged Chapski's debt because it required Chapski to resolve his claim exclusively through the Bankruptcy Court. Judge Barbosa ruled "that such was not the intent of Judge Ginsberg" in the July 29 Order. (Id. at 6.) Judge Barbosa concluded that Judge Ginsberg would not "have intended a ...


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