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Date: 08-23-2023
Case Style:
Case Number: 2:22-cv-00267
Judge: Jamar K. Walker
Court: United States District Court for the Eastern District of Virginia (Norfolk County)
Plaintiff's Attorney: Tom Plofchan and Jacqueline Kramer
Defendant's Attorney: Clark James Belote and Lisa Kim
Description: Norfolk, Virginia bankruptcy lawyers represented appellant who appealed from a judgment of the United States Bankruptcy Court for the Eastern District of Virginia in Norfolk.
Creditor Yvette Nonte and Debtor Kent David Burstein are former spouses. On or about April 27, 2011, they entered into a property settlement agreement (“separation agreement”) that was subsequently incorporated but not merged into their divorce. ECF No. 22-1 at 20.[1] Section 6 of the separation agreement, in relevant part, required the debtor to pay the creditor a portion of any cash distributions he received from his companies and to provide her with access to related accounting documentation. Id. at 22-25.
In March 2014, the creditor filed a lawsuit in Maryland state court seeking damages and declaratory relief for breach of fiduciary duty and breach of contract. ECF No. 22-1 at 33-39. The complaint alleged that the debtor breached Section 6 of the separation agreement. Id. The parties entered a May 2015 settlement agreement (“settlement agreement”), in which the debtor agreed to pay the creditor a sum in exchange for dismissal of the lawsuit with prejudice. Id. at 40-43. In addition, the parties agreed to “mutually release each other from any claims they have arising out of the events addressed by the pending litigation and under Section 6.A of the [separation agreement] regarding marital property.” Id. at 40.
On June 27, 2019, the debtor filed a voluntary petition under Chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia. ECF 22-1 at 209. The creditor filed an adversary complaint against the debtor in May 2020, alleging that the debt to her is nondischargeable pursuant to 11 U.S.C § 523(a)(15). Id. In March 2022, the Bankruptcy Court, having determined that the debt at issue was nondischargeable, entered summary judgment for the creditor. Id. at 223.
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Creditor Yvette Nonte and Debtor Kent David Burstein are former spouses. On or about April 27, 2011, they entered into a property settlement agreement (“separation agreement”) that was subsequently incorporated but not merged into their divorce. ECF No. 22-1 at 20.[1] Section 6 of the separation agreement, in relevant part, required the debtor to pay the creditor a portion of any cash distributions he received from his companies and to provide her with access to related accounting documentation. Id. at 22-25.
In March 2014, the creditor filed a lawsuit in Maryland state court seeking damages and declaratory relief for breach of fiduciary duty and breach of contract. ECF No. 22-1 at 33-39. The complaint alleged that the debtor breached Section 6 of the separation agreement. Id. The parties entered a May 2015 settlement agreement (“settlement agreement”), in which the debtor agreed to pay the creditor a sum in exchange for dismissal of the lawsuit with prejudice. Id. at 40-43. In addition, the parties agreed to “mutually release each other from any claims they have arising out of the events addressed by the pending litigation and under Section 6.A of the [separation agreement] regarding marital property.” Id. at 40.
On June 27, 2019, the debtor filed a voluntary petition under Chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia. ECF 22-1 at 209. The creditor filed an adversary complaint against the debtor in May 2020, alleging that the debt to her is nondischargeable pursuant to 11 U.S.C § 523(a)(15). Id. In March 2022, the Bankruptcy Court, having determined that the debt at issue was nondischargeable, entered summary judgment for the creditor. Id. at 223.
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The parties agree that the debt at issue is owed to a former spouse and does not qualify as a domestic support obligation. Thus, the sole question before the Court is whether the debt at issue was “incurred . . . in connection with a separation agreement.” 11 U.S.C. § 523(a)(15). The Bankruptcy Code does not define “in connection with” as it relates to § 523(a)(15), and there is no binding case law directly addressing the meaning of this statutory language.
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The parties agree that the debt at issue is owed to a former spouse and does not qualify as a domestic support obligation. Thus, the sole question before the Court is whether the debt at issue was “incurred . . . in connection with a separation agreement.” 11 U.S.C. § 523(a)(15). The Bankruptcy Code does not define “in connection with” as it relates to § 523(a)(15), and there is no binding case law directly addressing the meaning of this statutory language.
Outcome: For the reasons explained above, it is hereby ORDERED that the judgment of the Bankruptcy Court as to the dischargeability of the Creditor/Appellee's debt incurred in the May 2015 settlement agreement is AFFIRMED.
Plaintiff's Experts:
Defendant's Experts:
Comments: