2003 # 21        Waddell 10-17-03

IN RE WILLIAM H. AND MELISSA WADDELL, Chapter 7; Bankr. No. 03-10189

    The matter before the Court is the Motion for Order Directing Clerk of Court to Discharge Judgment Discharged in Bankruptcy filed by Debtors pro se. As set forth below, Debtors’ Motion will be dismissed because this Court does not have jurisdiction over the issues raised.

    Summary. William H. Waddell and Melissa Waddell filed a Chapter 7 petition pro se on May 22, 2003. Among the creditors that they listed on their schedules and included on their mailing list of creditors was State Farm Insurance Company (“State Farm”) holding an unsecured claim for $4,149.00. The case trustee did not find any nonexempt assets to liquidate to pay creditors’ claims. Debtors received their discharge of debts on August 26, 2003.

    According to Debtor, their daughter Melissa Madrazo was involved in an auto accident while she was a minor and before Debtors filed bankruptcy. Debtors stated that State Farm had insured Barry Eske, who had been injured in the accident. Debtors stated that from the time of the accident until they filed bankruptcy, State Farm and Eske had treated Debtor William Waddell as the responsible party. About 11 months after the accident and shortly after Debtors filed bankruptcy, Barry Eske sued Melissa Madrazo in state court. Debtor William Waddell answered Eske’s state court complaint on his step-daughter’s behalf. He argued that he was the responsible party, that the debt against him had been discharged, and that his step-daughter Melissa Madrazo should not now be held responsible. The state court apparently ruled in Eske’s favor.

    On October 7, 2003, Debtors filed a Motion for Order Directing Clerk of Court to Discharge Judgment Discharged before this Court. Therein, Debtors again argued that Eske could not now seek collection of any accident-related debt from Melissa Madrazo because the debt had been discharged in their bankruptcy. They requested an order from this Court declaring the same.

    Discussion. A discharge in a Chapter 7 case alleviates a debtor from his personal liability on most claims that existed before the debtor filed his bankruptcy petition. 11 U.S.C. § 727(b). Further, if a debt has been discharged, any judgment arising from that debt is also discharged, 11 U.S.C. § 524(a)(1), but only as to the personal liability of the debtor. That means that if the judgment is against another party other than the debtor or in conjunction with the debtor, the debtor’s discharge has no effect on the other party’s liability on the judgment.

    That is the situation presented here. In this bankruptcy case, the only debts that were discharged were pre-petition claims against Debtors William Waddell and Debtor Melissa Waddell. Their discharge had no effect on any claim that Eske may have against Melissa Madrazo. The litigation between Eske and Melissa Madrazo is a state court matter over which this Court has no jurisdiction. 28 U.S.C. § 157. Accordingly, Debtors’ Motion for Order Directing Clerk of Court to Discharge Judgment Discharged in Bankruptcy shall be denied without prejudice to the state court’s resolution of the legal action between Eske and Melissa Madrazo.