Lance Invest. Corp. v. Burkhalter , 2022 Ohio 2675 ( 2022 )

[Cite as Lance Invest. Corp. v. Burkhalter, 2022-Ohio-2675.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
LANCE INVESTMENT CORP., :
Plaintiff-Appellee, :
No. 111033
v. :
MINNYAWN BURKHALTER, ET AL., :
Defendant-Appellant. :
JOURNAL ENTRY AND OPINION
JUDGMENT: VACATED AND REMANDED
RELEASED AND JOURNALIZED: August 4, 2022
Civil Appeal from Cleveland Municipal Court
Case No. 2020 CVF 010048
Appearances:
Cardenas Ruple Kurt, LLC, and Russell D. Kornblut, for
appellee.
Minnyawn Burkhalter, pro se.
CORNELIUS J. O’SULLIVAN, JR., J.:
Defendant-appellant, Minnyawn Burkhalter, appeals the trial court’s
award of summary judgment in favor of plaintiff-appellee, Lance Investment
Corporation. After a thorough review of the law and the facts, we vacate the order
of the trial court.
The record below reflects that appellant executed an automobile rental
agreement with appellee on September 24, 2019. On or about September 26, 2019,
the vehicle was damaged. Appellant returned the vehicle on October 3, 2019.
On September 30, 2019, appellant filed for bankruptcy. On January 8,
2020, the United States Bankruptcy Court for Northern District of Ohio entered an
order discharging appellant’s debts under 11 U.S.C. 727 (Chapter 7). See In re:
Minnyawn Betrail Burkhalter, Debtor, N.D. Ohio No. 19-16039-jps.
On November 4, 2020, appellee filed this instant suit against appellant
to recover funds owed under the rental obligation in Cleveland Municipal Court. On
October 4, 2021, appellee moved for summary judgment, which appellant opposed.
On November 19, 2021, the trial court granted summary judgment in favor of
appellee and against appellant and another party (not involved in this case), jointly
and severally, for $5,435.08 plus interest and costs.
Appellant filed a pro se notice of appeal, arguing that the trial court
erred in granting summary judgment. After the filing of the notice of appeal,
appellee filed a notice of suggestion of bankruptcy and appellant filed a notice that
the bankruptcy had been discharged. This court sua sponte ordered the parties to
brief why the appeal should not be dismissed pursuant to appellant’s bankruptcy
discharge. The parties filed their respective briefs.
11 U.S.C. 727(b) grants to the debtor who is discharged under
11 U.S.C. 727(a), a discharge from all debts that arose before the date of the order for
relief under Chapter 7, except those debts that are excepted from discharge by
exceptions not applicable here. The discharge relieves a debtor of personal liability
for all pre-petition debt and enjoins any action to collect, recover, or offset a
discharged obligation. McClung v. McClung, 10th Dist. Franklin No. 03AP-156,
2004-Ohio-240, ¶ 12, citing 11 U.S.C. 524(a). Specifically, a discharge in a
case
(1) voids any judgment at any time obtained, to the extent that such
judgment is a determination of the personal liability of the debtor
with respect to any debt discharged under section 727 * * * whether
or not discharge of such debt is waived;
(2) operates as an injunction against the commencement or
continuation of an action, the employment of process, or an act, to
collect, recover or offset any such debt as a personal liability of the
debtor, whether or not discharge of such debt is waived;
***.
11 U.S.C. 524(a).
By the express terms of 11 U.S.C. 524(a)(1), any judgment entered after
entry of the discharge is void to the extent that the judgment purports to establish
personal liability of the debtor with respect to a discharged debt. See Riley v.
AmTrust Mortg. Corp. (In re Riley), Bankr.M.D.N.C. Nos. 05-80548 and 14-09037,
2014 Bankr. LEXIS 4923, 5 (Dec. 4, 2014).
The record reveals that the issue of appellant’s bankruptcy discharge
was not raised before the trial court. “Section 524(a) is meant to operate
automatically * * * with no need for the debtor to assert the discharge to render the
judgment void.” Riley at 7, citing 4 Collier on Bankruptcy ¶ 524.02[1] (Alan Resnick
& Henry Sommer eds., 16th Ed.). Because appellant’s pre-bankruptcy petition debt
was discharged by bankruptcy, the judgment rendered against her in municipal
court is void.
The judgment of the Cleveland Municipal Court is hereby vacated, and
the court is ordered to dismiss appellee’s complaint. Case is remanded for
proceedings consistent with this opinion.
It is ordered that appellant recover from appellee costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the municipal court to carry
this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
______________________________
CORNELIUS J. O’SULLIVAN, JR., JUDGE
LISA B. FORBES, P.J., and
EILEEN T. GALLAGHER, J., CONCUR