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In re Frawley - 112 B.R. 32 (D. Colo. 1990)

Rule:

The scope of a district court's review of a bankruptcy court judgment is defined in Fed. R. Bankr. P. 8013. Under this rule, findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the bankruptcy court to judge the credibility of witnesses. 

Facts:

Debtors Jack and Judy Frawley were married in 1979. After approximately five years of marriage, the Frawleys obtained a civil divorce on March 22, 1984. Judy obtained court permission to resume using her maiden name, although she did not immediately begin doing so. The couple continued to cohabitate for approximately six months after the divorce, and again for another approximate six months during the summer of 1985 to January 1986. They filed separate state and federal tax returns for tax years 1984 and 1985. Following the divorce, Jack continued to submit claim forms to the creditor, Colorado Contractors Trust, for the payment of medical claims for Judy. The Trust approved payments in excess of $17,353.52 on behalf of Judy. The debtors did not inform the Trust of their divorce, believing that Judy's coverage continued as Jack's common-law wife. The Trust contacted the Frawleys when it learned through independent medical records that they had divorced, and the Frawleys acknowledged this fact. The Trust then made demand for reimbursement of Judy's medical expenses, which Jack refused. Thus, the Trust , as creditor, instituted a state court action to recover these funds, which was stayed by the Chapter 7 bankruptcy filing by the Frawleys. The Trust sought a determination that the Frawleys' debt to it was nondischargeable. The bankruptcy court denied dischargeability as to the debt because the Frawleys had not established a new marital relationship. The debtors appealed, contending that the bankruptcy court erred in excepting the debt because, even though they obtained a civil divorce, they continued to have a common-law marriage.

Issue:

Was the debt dischargeable?

Answer:

No

Conclusion:

The federal district court affirmed the judgment of the bankruptcy court holding that even given the relaxed standard for common law remarriage, the bankruptcy court's ruling that no remarriage existed was not clearly erroneous. It found that the bankruptcy court's finding that there was a relationship between the parties but that the relationship did not amount to a common-law remarriage was an appropriate assessment.

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