781 F. Supp. 2d 363
W.D. La.2011Background
- Mary Salard, as natural tutrix, sued Greg Salard for alleged sexual abuse of their children L.A.S. and S.S. prior to his bankruptcy.
- Greg Salard filed a voluntary bankruptcy in Alaska; discharge was granted on May 10, 2010.
- No timely complaint objecting to discharge was filed by Mary on behalf of the children; debts were discharged.
- Louisiana law vested Mary with tutorship, and after joint custody ended on Aug. 6, 2008, she became sole natural tutrix of L.A.S. and S.S.
- Mary had notice of the abuse allegations (summer 2007) and of Greg’s bankruptcy; the court must determine if that notice suffices to bar discharge of the children’s claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 523(a)(3)(B) notice/knowledge bars discharge | L.A.S. and S.S. had notice/actual knowledge via their tutrix. | No timely notice by creditors; discharge applies. | Yes; notice/actual knowledge suffices to bar discharge. |
| Whether Mary’s notice as tutrix qualifies as notice for the minor claims | Mary’s awareness equates to notice for the minors’ claims. | No authority that a parent’s notice automatically translates to the minor’s claims. | Yes; tutrix notice satisfies § 523(a)(3)(B) notice requirement. |
| Whether the claims are automatically discharged under § 523(a)(6) or § 523(a)(3)(B) | Potentially § 523(a)(6) willful and malicious injury could preserve claims if not discharged. | Because § 523(a)(3)(B) applies, the court need not reach § 523(a)(6). | Court need not decide § 523(a)(6); § 523(a)(3)(B) discharge applies. |
| Whether failure to schedule L.A.S. and S.S. defeats discharge protections | Failure to schedule could defeat discharge under § 523(a)(3)(B). | Notice/actual knowledge suffices regardless of scheduling. | Discharge applies due to Mary’s notice/knowledge. |
Key Cases Cited
- In re Sam, 894 F.2d 778 (5th Cir. 1990) (notice timing and due process in dischargeability proceedings; inquiry notice when debtor’s case pending)
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (S. Ct. 1950) (due process requires reasonably calculated notice to inform interested parties)
- Neeley v. Murchison, 815 F.2d 345 (5th Cir. 1987) (§ 523(a)(3)(B) notice framework; creditor duty to protect rights)
- In re Chicago Rock Island and Pacific Railroad Co., 788 F.2d 1280 (7th Cir. 1986) (actual notice to parent may suffice for notice to a minor)
- In re Harbaugh, 301 B.R. 317 (Bankr. E.D. Mo. 2003) (notice issues under § 523(a)(3)(B) cases; notice to next friend/guardian)