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When Laws Don’t Matter to Judges

My nightmare in the Texas state and federal judicial system is almost comical.  My nightmare began with this simple exchange in open court between the attorney representing a chapter 7 bankruptcy trustee and an appointed federal bankruptcy judge:

page-17-transcript-january-8-2015-hearing-bankruputcy-court-trustee-counsel-admitting-to-fear-of-state-court

Call my side naive, but at first we were not worried about this open exchange between a judge and a frustrated and greedy attorney.  The plain meaning of the law is clear as to what assets can be held liable for any of a debtor’s debts in a community property state like Texas.  The federal law clearly states:

All interests of the debtor and the debtor’s spouse in community property as of the commencement of the case that is—

(A) under the sole, equal, or joint management and control of the debtor; or

(B) liable for an allowable claim against the debtor, or for both an allowable claim against the debtor and an allowable claim against the debtor’s spouse, to the extent that such interest is so liable.

11 U.S.C. 541(a)(2) (emphasis added)

So the factual test should have been very simple to determine what interest are liable, right?

In bankruptcy the debtor’s creditors file what is known as a proof of claim.  In my case there were a total of 11 claims filed by creditors.  Two of the eleven creditors filed claims for non-dischargeable law school loans that I took out about six (6) years before my 2001 marriage.  Texas law is very clear that one spouse is not liable for the debts that the other spouse had before marriage. Under Tex. Fam. Code Sec. 3.202(b), the Texas Legislature has affirmatively provided that:

Unless both spouses are personally liable as provided by this subchapter, the community property subject to a spouse’s sole management, control, and disposition is not subject to:

(1)  any liabilities that the other spouse incurred before marriage;  or

(2)  any nontortious liabilities that the other spouse incurs during marriage.

Tex. Fam. Code Sec. 3.202(b).

So, it should be clear that under Texas law, any property under my estranged husband’s sole management and control would not be liable for the two proof of claim for student loans incurred during marriage… right?!??!   Under federal bankruptcy law, 11 U.S.C. 541(a)(2)(B) clearly states that property under the debtor’s spouse’s sole management and control only comes into to the bankruptcy estate to the “to the extent that such interest is so liable.”  Under Texas law, Tex. Fam. Code Sec. 3.202(b)(1) clearly state that property under a spouse’s sole management and control is NOT LIABLE for “any liabilities that the other spouse incurred before marriage.”

The federal bankruptcy trustee had even prepared an affidavit for MY estranged husband in which my estranged husband swore under oath that all real estate and income from the real estate were under his sole management and control. A certified copy of the affidavit that the federal chapter 7 trustee’s office prepared can be viewed below:

https://drive.google.com/file/d/0B1e_XAuP_K77NG5SWmNKcHpUNjQ/view?usp=sharing

So, if the law is clear and the facts about the student loan being incurred before marriage are not in dispute…what is the problem?!?!?!

The Chapter 7 Bankruptcy Trustee gets paid only on a commission from the debts that she can actually pay to the creditors. If she can’t find a way around Texas law pay the $150,000.00 in student loans incurred before marriage, she won’t get paid very much at all for this case.  The other nine claims on file total less than $30,000.00 and are mostly for unpaid federal income taxes and Tarrant County Property taxes on the family homestead and one family business.  A certified copy of the Claim Registry clearly shows less than $30,000 in claims on file –excluding claim #9 and Claim #11 for student loans incurred before marriage. Just so that you can understand how a federal chapter 7 trustee gets paid:

a) In a case under chapter 7 or 11, the court may allow reasonable compensation under section 330 of this title of the trustee for the trustee’s services, payable after the trustee renders such services, not to exceed 25 percent on the first $5,000 or less, 10 percent on any amount in excess of $5,000 but not in excess of $50,000, 5 percent on any amount in excess of $50,000 but not in excess of $1,000,000, and reasonable compensation not to exceed 3 percent of such moneys in excess of $1,000,000, upon all moneys disbursed or turned over in the case by the trustee to parties in interest, excluding the debtor, but including holders of secured claims.

11 U.S. Code § 326(a)

So the math based on 11 U.S. Code § 326(a) and the facts of this case look like this:

$30,000.00 x 10%=$3,000.00     $180,000 x 5% = $9,000.00

But why would anyone think that if the judge has ignored 11 U.S.C. 541(a)(2)(B) and Tex. Fam. Code Sec. 3.202(b)(1), he would pay attention to 11 U.S. Code § 326(a)?

The federal bankruptcy judge decided that he would listen to the federal chapter 7 trustee’s plea for help to get around the bankruptcy code and Texas community property laws… after all the federal judge explained in one of his two Orders to the Texas Family Court the problems the trustee had had:

[T]he trustee filed this adversary proceeding on May 22, 2014, seeking a declaratory judgment that the Real Property is property of this bankruptcy estate and not property of Carlos Foster or his company, 1st Aid Accident Injury & Pain Center, Inc. . . .

[T]he trustee has already incurred professional fees well in excess of $100,000 in an effort to administer the Real Property.

So, let’s get this straight…..the Federal Chapter 7 Trustee now says that the property under MY ESTRANGED HUSBAND’S SOLE MANAGEMENT and CONTROL belongs to her?!?!

I am the wife.But the Trustee argue that the property doesn’t belong to either me or my estranged husband… it all belongs to the bankruptcy estate to pay her legal fees?!?!

How much property is at issue….over $1 million. The Federal Bankruptcy Trustee’s Interim Report clearly shows over $1 million.

So what law does the trustee say entitles her to over $1 million in income producing property to pay the $30,000.00 in debts that are payable from community property under Texas law ….. the properties are not in Southlake or Park Cities:

properties-not-in-southlake

Yes….she actually argues that the shopping center is not in the affluent White sections of town….so hey….let’s apply a different analysis and a different set of laws…right

My side will quote  federal bankruptcy cases like:

Nor can the trustee be considered the Debtor’s privy, for two parties are said to be in privity when they share an “identity of interests in the basic legal right that is the subject of litigation.” The interests of the Debtor in the divorce proceeding and of the Trustee in the instant case are, however, quite distinct.

In re Erlewine, 349 F.3d 205, 211 (5th Cir. 2003). (Emphasis added)

We quote the Texas Supreme Court cases like:

“Marriage itself does not create joint and several liability.” These and other commentators agree that one spouse’s liability for debts incurred by or for the other  [11] is determined by statute. We agree.

[Tex. Fam. Code]Section 3.201(a) states:

A person is personally liable for the acts of the person’s spouse only if:

1) the spouse acts as an agent for the person; or

(2) the spouse incurs a debt for necessaries as provided by [Section 2.501].

[Tex. Fam. Code] Section 2.501 states:

(a) Each spouse has the duty to support the other spouse.

(b) A spouse who fails to discharge the duty of support is liable to any person who provides necessaries to the spouse to whom support is owed.

Thus, one spouse is not liable for the other’s debt unless the other incurred it as the one’s agent or the one failed to support the other and the debt is for necessaries.

Tedder v. Gardner Aldrich, LLP, 421 S.W.3d 651, 654-655 (Tex. 2013). (Emphasis added).

But, hey ….why should a Texas Family Judge pay attention to the law if the attorney for the Chapter 7 bankruptcy trustee argues:

everything-belongs-to-the-trustee-from-hearing-on-trustee-intervention-part-1

Did anyone here the any law argued?   No…But it gets even funnier…The federal bankruptcy trustee begins to argue that they could have filed the divorce themselves:

we-could-have-brought-the-claims-motion-to-intervene

Yes…the Texas Family Judge actually bought the base less argument.  You may click the link to the Transcript from the Hearing on the Federal Chapter 7 Trustee Motion to Intervene in the Texas Divorce as the “owner of the Divorce claim”:

https://drive.google.com/file/d/0B1e_XAuP_K77cUEzOGJVQUpuTEk/view?usp=sharing

Oh did I mention that the bankruptcy court sent over two order ….The 2nd Order asks the Texas Family Court to decide if rental income is separate or community property in Texas:

https://drive.google.com/file/d/0B1e_XAuP_K77ekVleHlSYWszS0k/view?usp=sharing

We have repeatedly argued that Texas courts are not allowed to simply answer a question for a federal court.  We have argued that a Texas Court cannot just be asked to read the Texas Family Code Statues, as follows:

Under Tex. Fam. Code 3.102 all property acquired by either spouse during marriage is community property.  Pursuant to Tex. Fam. Code 3.102(a)(2), revenue from separate property is community property. And, pursuant to Tex. Fam. Code 3.102(a)(4), community property is expressly defined as “revenue from, all property subject to the spouse’s sole management, control, and disposition.” As the Texas Supreme Court has held, “[i]t is fundamental that any property or rights acquired by one of the spouses after marriage by toil, talent, industry or other productive faculty belongs to the community estate.” Vallone v. Vallone, 644 SW 2d 455, 458 (Tex. 1982).

According to the Texas Supreme Court:

The distinctive feature of an advisory opinion is that it decides an abstract question of law without binding the parties. An opinion issued in a case brought by a party without standing is advisory because rather than remedying an actual or imminent harm, the judgment addresses only a hypothetical injury. Texas courts, like federal courts, have no jurisdiction to render such opinions.

Tex. Ass’n of Business v. Air Control Bd., 852 S.W.2d 440, 441(Tex. 1993) (internal citations omitted).

The Texas Supreme Court has also held regarding attempts by federal courts, such as evident by the Order of Abstention, the federal bankruptcy court asks the Family District Court to issue advisory opinions as the bankruptcy orders when the federal bankruptcy Court’s Order of Abstention “[calls] upon [the Family District Court] to answer a question and not render a judgment.” United Services Life Insurance Company v. Delaney, 396 S.W.2d 855, 863 (Tex. 1965). As the Texas Supreme Court has clearly held in Delaney:

Since the rendition of advisory opinions by courts is unauthorized by our constitution, it is undoubtedly sound law to say that the directive of a federal court could no more operate to vest this Court with jurisdiction to render an advisory opinion than it could empower the Family District Court to try and determine a criminal case contrary to the peculiar provisions of the Texas Constitution which vest that jurisdiction in the Court of Criminal Appeals.

United Services Life Insurance Company v. Delaney, 396 S.W.2d 855, 863 (Tex. 1965).

But who cares about the law or Texas Supreme Court cases…right? it’s all about the Order from the bankruptcy court…setting out the law and the fact . . .right:

judge-nelms-testimony-of-what-happend-in-first-order-to-state-court

 

But what if I can prove that the federal bankruptcy judge DID NOT TELL THE TRUTH in the ORDER?

The bankruptcy judge clearly says that “Mr. Foster entered into a settlement agreement with the trustee . . .but then BACKED OUT OF THE SETTLEMENT.” What if I told you that Carlos Foster, my estranged husband NEVER signed a settlement agreement:

no-signature-on-settlement-agreement

Yes…you read it correctly…. at a hearing before the bankruptcy judge, the  Chapter 7 Trustee’s ADMITS that they “didn’t have the signature of Carlos Foster.” Maybe you’re thinking that the Bankruptcy Court did not know that Carlos Foster did not ever sign a Settlement Agreement…WRONG:

order-to-sign-settlement

The bankruptcy judge KNEW that Carlos Foster had NEVER signed the Settlement Agreement with the Federal Bankruptcy Trustee to settle the divorce claims…even after the bankruptcy court issued the Order for Carlos Foster to sign the Settlement Agreement. The bankruptcy judge actually knew that Carlos Foster never even saw the terms of the trustee’s Settlement Agreement to settle my divorce claims, because the federal bankruptcy court discussed it in open court as follows:

carlos-did-not-agree-to-settle

So….there you have it….at a hearing the bankruptcy judge was told that no Settlement Agreement was EVER signed to or agreed to by Carlos Foster….

So this is what happens when Judges just ignore the law completely.

If these judges have blatantly ignored the LAW and the UNDISPUTED FACTS to support their own agenda in my case…..how many others lives have these judges ruined with their failures to follow the LAW and the UNDISPUTED FACTS . . .I can’t say that the judges are all corrupt…but I can saw that the Texas Supreme Court  actually dealt with a federal trustee attempting to intervene in a Texas Divorce…:

cockerham-v-cockerham-photo

But, why would a Texas Family Court not apply Cockerham v. Cockerham …..the law in Texas has changed in the thirty years between a Trustee intervening in Dorthy Cockerham’s case …NOPE . . .:

cockerham-case-law-photot-of-marital-liability

No…the law in Texas has not changed … just the demands of the Judges to actually conduct their courtrooms in a manner that applies the law. I will continue to fight both in court and in the political spectrum for those that are unable to fight. Feel free to join me by sharing this post and contract the Attorney General…asks what type of precedent is being set by allowing a bankruptcy attorney to order a Texas Judge to issue an advisory opinion:

Lauren Downey
Public Information Coordinator
Office of the Attorney General
P.O. Box 12548
Austin, TX 78711 2548

By facsimile: (512) 494-8017

By electronic mail: publicrecords@texasattorneygeneral.gov

The late actions of the Attorney General’s Office when a federal judge Order a Texas Judge to violate the Texas Constitution should be brought to the agency that is responsible for defending the laws of the State of Texas.

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