Appeal from the United States Bankruptcy Court for the Southern District of Ohio at Cincinnati. Case No. 97-13200; Adv. No. 97-1159.
Before: Baxter, Lundin, and Rhodes, Bankruptcy Appellate Panel Judges.
The Appellee obtained a judgment in bankruptcy court determining that a debt owed to him by the Debtor for attorney fees in their divorce action is non-dischargeable under 11 U.S.C. § 523(a)(5). Although the Debtor raises numerous issues on appeal, this appeal is controlled by the issue of standing. The Panel concludes that the Appellee lacks standing to bring this claim. Accordingly, the Panel vacates the bankruptcy court's judgment with instructions to dismiss the complaint.
II. JURISDICTION AND STANDARD OF REVIEW
The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal. The United States District Court for the Southern District of Ohio has authorized appeals to the BAP. A "final order" of a bankruptcy court may be appealed by right under 28 U.S.C. §158(a)(1). For purposes of appeal, an order is final if it "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S. Ct. 1484, 1497, 103 L.Ed.2d 879 (1989) (citations and internal quotations omitted). A judgment that determines dischargeability is a final appealable order. See, e.g., National City Bank v. Plechaty (In re Plechaty), 213 B.R. 119, 121 (B.A.P. 6th Cir. 1997).
"Whether a party has standing is a legal question reviewed de novo." Ohio Ass'n of Independent Schools v. Goff, 92 F.3d 419, 421 (6th Cir. 1996) (citing Greater Cincinnati Coalition for the Homeless v. City of Cincinnati, 56 F.3d 710,715 (6th Cir. 1995)). See also United States v. $515,060 in United States Currency, 152 F.3d 491, 497 (6th Cir. 1998) (citing United States v. 37.29 Pounds of Semi-Precious Stones, 7 F.3d 480, 483 (6th Cir. 1993)); Southern California Permanente Medical Group v. Ehrenberg, 215 B.R. 27 (B.A.P. 9th Cir. 1997). "De novo review requires the Panel to review questions of law independent of the bankruptcy court's determination." First Union Mortgage Corp. v. Eubanks (In re Eubanks), 219 B.R. 468, 469 (B.A.P. 6th Cir. 1998) (citing In re Schaffrath, 214 B.R. 153, 154 (B.A.P. 6th Cir. 1997)).
The Debtor, Janna W. Cundiff, a.k.a. Janna Boggs ("Boggs"), and Joseph Cundiff ("Cundiff") are former spouses. The Lawrence County, Ohio Court of Common Pleas issued an Order ("the Order") which required Boggs to pay $10,000 to Cundiff toward his accrued attorney fees in their pending domestic relations case. Pursuant to the Order, Boggs was to pay this amount directly to Cundiff. Prior to paying the attorney fees, Cundiff filed a Chapter 7 bankruptcy petition. His bankruptcy schedules omitted both the $10,000 debt to his attorneys and the $10,000 owed him by the debtor. Cundiff received a discharge on July 14, 1997.
In June 1997, Boggs filed a Chapter 7 bankruptcy petition. She scheduled the $10,000 debt as owing to Cundiff's attorneys and listed Cundiff as a codebtor.
Within Boggs' bankruptcy, Cundiff filed a complaint to determine dischargeability pursuant to § 523(a)(5). Boggs filed an answer denying that the debt was non-dischargeable. She contends that Cundiff does not have standing to object to the dischargeability in her bankruptcy case because the judgment was an asset of Cundiff's bankruptcy estate, and must be pursued, if at all, by the Chapter 7 trustee in Cundiff's case.
The bankruptcy court relied on Mallin v. Mallin, 657 N.E.2d 856 (Ohio Ct. App. 1995) in rejecting Boggs' challenge to Cundiff's standing to pursue the dischargeability action. The court found that Mallin supported the Conclusion that Cundiff was a proper party to bring this action. The bankruptcy court found that if the trustee collected the judgment, the proceeds would not be distributed to the general creditors of Cundiff's estate, but rather, would be distributed only to Cundiff's ...