Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Budorick v. Budorick

United States District Court, N.D. Illinois, Eastern Division

October 22, 2019

DANIEL E. BUDORICK, Appellant,
v.
HEATHER BUDORICK, MARLIYN MANERI, VINCENT MANERI and HOLLISTER INCORPORATED, Appellees.

          MEMORANDUM OPINION AND ORDER

          Harry D. Leinenweber, United States District Judge.

         This is an appeal of three Orders the Bankruptcy Court issued in the course of Daniel Burdock's Chapter 13 bankruptcy proceedings. For the reasons stated herein, the judgment of the Bankruptcy Court is affirmed.

         I. FACTUAL BACKGROUND

         Daniel Budorick (“Daniel”) appeals three Orders issued in his bankruptcy proceedings, with an Illinois divorce court decree regarding the disposition of non-transferrable stock at the heart of Daniel's appeal. (See Judgment of Dissolution of Marriage (“Dissolution J.”), Ex. 1 to Mot. to Stay, Dkt. No. 4.) Heather Budorick (“Heather”) filed for divorce from Daniel in Cook County in March 2014. (Dissolution J. at 2.) Heather works for Hollister Incorporated (“Hollister”). (Id. at 3.) Heather owns common stock in Hollister's parent company, John Dickinson Schneider, Inc. (“JDS”) (Id. at 8.) Heather can purchase JDS stock as a benefit of her employment. (See Daniel's Resp. to Heather's Obj. to Daniel's Exemption Claim at 26, Ex. 6 to Suppl. to Bankruptcy Appeal, Dkt. No. 6.) JDS's articles of incorporation set restrictions on who can own JDS common stock and whether and when that stock can be transferred: absent JDS's express consent, the shares cannot be transferred to any other person or entity other than JDS under any circumstances. (Id.) JDS repurchases its stock from the employee once the employee leaves Hollister. (Id.)

         In its judgment dissolving Heather and Daniel's marriage, issued on November 28, 2018, the divorce court found that 2/7 of Heather's JDS stock was traceable to funds from her parents' bank accounts; because those shares were purchased with gift funds, they were not marital property. (Dissolution J. at 8.) The court held that the other 5/7 of JDS stock, valued at $105, 268, was marital property to be split between Heather and Daniel. (Id.) The Dissolution Judgment provides:

JDS stock - The Court finds that HEATHER traced the funds from her parents to separate back accounts on which DANIEL was not named, and checks were written by HEATHER from those accounts to the company to purchase the JDS stock. HEATHER traced by clear and convincing evidence the use of these gifted funds to purchase the stock in 2013 and 2014. . .HEATHER's JDS stock is therefore 2/7 non-marital property and 5/7 marital. The value provided by the company was as of May 18, 2018 indicating that the stock was worth $147, 375 as of December 31, 2017, the latest valuation date. Accordingly, 2/7 of that amount ($42, 107) shall be assigned to HEATHER as her non-marital property and 5/7 ($105, 268) shall be deemed marital property to be divided equally between HEATHER and DANIEL.

(Id. (internal citations omitted).) The Dissolution Judgment also awarded Daniel half of Heather's 401(k) account and half of the value of Heather's “Hollishares” account. (Dissolution J. at 14- 15.) Hollishares is a “non-contributory, tax qualified defined contribution profit sharing plan designed to provide retirement benefits to Hollister's non-union employees in the United States.” See DeFazio v. Hollister, Inc., 854 F.Supp.2d 770, 776 (E.D. Cal. 2012).

         On January 7, 2018-after Heather filed for divorce but before the state court issued the Dissolution Judgment-Daniel filed a petition for Chapter 13 bankruptcy in the Northern District of Illinois. (See In re Daniel E. Budorick, No. 18 B 426, Dkt. No. 1.) In Bankruptcy Court, Daniel argued that the Dissolution Judgment requires that Heather transfer to him half of the marital JDS shares, and prohibits Heather from compensating Daniel by giving him the cash value of his portion of the shares. Daniel also claimed his JDS shares were an exemption from the bankruptcy estate because they are a retirement plan under 735 ILCS 5/12-1006. Daniel issued subpoenas to Hollister, demanding a broad range of information, including reports to shareholders and year-end reports that Hollister claimed were confidential and unrelated to the bankruptcy litigation.

         The Bankruptcy Court subsequently ruled that: (1) Daniel received a money judgment from the state court rather than the JDS shares; (2) regardless, the JDS stocks were not part of a qualified retirement plan and thus not exempt from the bankruptcy estate; and (3) the subpoenas to Hollister were irrelevant given the court's other rulings and must be quashed. (See Order on Mot. to Vacate, Dkt. No. 1-5; Order on Obj. to Debtor's Claim of Exemption Dkt. No. 1-6; Order on Mot. to Quash, Dkt. No. 1-4 (collectively, the “Orders”).) Daniel now appeals the Orders.

         II. DISCUSSION

         On appeal, a bankruptcy court's legal conclusions are reviewed de novo. In re Airadigm Communications, Inc., 616 F.3d 642, 652 (7th Cir. 2010).

         Daniel raises the following arguments on appeal: (1) the Bankruptcy Court violated the Rooker-Feldman doctrine and erred when it held that Daniel had a money judgment rather than a right to have JDS shares transferred to him; (2) the Bankruptcy Court erred in granting Hollister's Motion to Quash Daniel's subpoenas; (3) the Bankruptcy Court erred in granting Heather's objection to Daniel's Claim of Exemption and ruling that the JDS shares were not a qualified retirement plan and therefore an asset exempt from the bankruptcy estate; and (4) the Bankruptcy Court erred in issuing the Orders because the state court order was stayed and unenforceable under 735 ILCS 5/2-1203.

         A. Rooker-Feldman Doctrine

         Daniel contends that the Bankruptcy Court violated the Rooker-Feldman doctrine in holding that the Dissolution Judgment was a money judgment because that finding contradicted the state court judgment. The Rooker-Feldman doctrine is a subject matter jurisdictional bar on federal court claims that seek to set aside a state court judgment in any forum other than the United States Supreme Court. See e.g., Jakupovic v. Curran, 850 F.3d 898, 902 (7th Cir. 2017). Federal court claims “that directly seek to set aside a state court judgment are de facto appeals that are barred without further analysis.” Id. A claim is also barred if it is “inextricably intertwined with a state court judgment.” Id. (citing Sykes v. Cook Cty. Cir. Ct. Prob. Div., 837 F.3d 736, 741- 42 (7th Cir. 2016)). The ultimate question is whether the district court is “essentially being called upon to review the state court decision.” Id. The determination of whether a federal claim is inextricably intertwined with a state court judgment “hinges on whether the federal claim alleges that the injury was caused by the state court judgment, or alternatively, whether the federal claim alleges an independent prior injury that the state court failed to remedy.” Id. If a federal claim is inextricably intertwined with a state court judgment and indirectly seeks to set that state court judgment aside, the federal court must determine “whether the plaintiff had a reasonable opportunity to raise the issue in state court proceedings.” Id. If a plaintiff had a reasonable opportunity to raise the claims in state court and ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.