IN RE: BENJAMIN EARNEST DOCK DOROTHY ANN DOCK CASE NO. 88-01164
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF KENTUCKY
BENJAMIN EARNEST DOCK
DOROTHY ANN DOCK CASE NO. 88-01164
DISCOVERCARD SERVICES, INC. PLAINTIFF
V. ADV. NO. 88-0241
BENJAMIN DOCK AND DOROTHY DOCK DEFENDANTS
This matter is before the court on the motion of plaintiff, Discovercard Services, Inc., for summary judgment.
The debtors filed a petition for relief under chapter 7, title 11 United States Code on August 11, 1988.
On December 13, 1988, plaintiff filed a complaint to determine the dischargeability of a debt owed by the debtors to plaintiff as a result of the debtors' use of a Discovercard credit card issued by the plaintiff to the debtors. The complaint alleges that on July 29, 1988, within 40 days before the order for relief, the debtors charged the sum of $1,115.74 on the Discovercard as payment to Precision Transmission and that the debt constitutes a debt for luxury goods or services which is excepted from discharge pursuant to 11 U.S.C. § 523(a)(2)(C).
The complaint also alleges that the debt is excepted from discharge pursuant to 11 U.S.C. § 523(a)(2)(A) as a debt for money, property, services, or an extension, renewal, or refinancing of credit obtained by false pretenses, a false representation, or actual fraud, because the debtors incurred the debt without the intention or ability to pay the indebtedness.
The complaint further alleges that on August 1, 1988, the debtors obtained a cash advance on their Discovercard account in the amount of $500 and did not have the intention or ability to repay the indebtedness, and that the debt is therefore one for money, property, services, or an extension, renewal, or refinancing of credit obtained by false pretenses, a false representation, or actual fraud which is excepted from discharge pursuant to 11 U.S.C. § 523(a)(2)(A).
The debtors timely filed an answer on January 6, 1989, denying the allegations of the complaint and affirmatively stating that "all charges made on the credit card account with Plaintiff were not made in contemplation of discharge in bankruptcy and that all debts incurred were expenses reasonably necessary for support of Debtors and Debtors' dependants [sic]."
On February 20, 1990, plaintiff filed a motion for summary judgment. The facts recited and arguments made in the motion are substantially identical to the allegations set forth in the complaint. Plaintiff argues that because the debt incurred on July 29, 1988 in the amount of $1,115.74 and the debt incurred on August 1, 1988 in the amount of $500 were incurred within a matter of days before the petition was filed on August 11, 1988, the court should infer the debtors incurred the debt "under false pretenses, i.e., that they would be able to repay the Plaintiff." The plaintiff also asserts the debt in the amount of $1,115.74 is a nondischargeable debt for luxury goods or services.
On March 6, 1990, debtors filed a response to the motion for summary judgment along with an affidavit of the debtor Benjamin Dock. Mr. Dock stated that he charged the sum of $1,115.74 on the Discovercard issued by plaintiff for the purpose of paying charges incurred for the rebuilding of the transmission in his 1983 Ford, and that the repairs were necessary because the car was his means of transportation to and from work.
Mr. Dock also stated in his affidavit that he obtained a cash advance of $500 on August 1, 1988, from his Discovercard in order to pay living expenses, and that he did not contemplate bankruptcy until August 2, 1988, when he and his attorney met with his wife (the codebtor in this case), from whom he was separated, and his wife's attorney to discuss a property settlement in their pending divorce action.
The motion for summary judgment was heard on April 11, 1990.
The function of the court when considering a motion for summary judgment is not to resolve issues of fact but rather is to determine, based on the record before the court, whether the moving party has established an absence of any genuine issue regarding all material facts which would entitle the movant to judgment as a matter of law.
The court is of the opinion that there are genuine issues of material fact to be resolved. The resolution of an issue of intent depends on the credibility of witnesses, which can best be determined by observing the demeanor of the witnesses at trial. Summary judgment is inappropriate in this proceeding, and the plaintiff's motion should be overruled.
By the court -
Michael R. Brinkman
Ronald E. Butler