Brown v. Felsen

LOCATION: US Department of State

DOCKET NO.: 78-58
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 442 US 127 (1979)
ARGUED: Feb 21, 1979
DECIDED: Jun 04, 1979

Alex Stephen Keller - for respondent
Craig A. Christensen - for petitioner

Facts of the case


Media for Brown v. Felsen

Audio Transcription for Oral Argument - February 21, 1979 in Brown v. Felsen

Warren E. Burger:

We'll hear arguments next Brown against Felsen.

Mr. Christensen, I think you may proceed whenever you're ready.

Craig A. Christensen:

Mr. Chief Justice and may it please the Court.

This is a suit filed by the petitioner in the bankruptcy court seeking a determination that a debt owed him the respondent and evidenced by a Decree Bankruptcy State Court Judgment was not dischargeable base upon Section 17a (2) and 17a (4) of the Bankruptcy Act.

The bankruptcy court grant summary judgment for the respondent determining the debt to be dischargeable and that order was affirmed by the District Court for the District of Colorado and by the Court of Appeals for the Tenth Circuit.

This Court granted certiorari.

The facts upon which that summary judgment was entered are as follows.

In June 1975, Jefferson Bank and Trust Company began an action against the respondent, Mr. Felsen, his company, Le Mans Motors and the petitioner, Garvin Brown.

The bank's claim against the respondent was premised upon a promissory note he had executed.

The bank's claim against Mr. Brown, the petitioner, was premised upon a guarantee of that note he had executed in favor of the bank.

Mr. Brown filed a cross-claim against Mr. Felsen based upon indemnity.

No claims of fraud were pled in the state court action by Mr. Brown against the respondent.

Shortly after the respondent's deposition, the parties all stipulated to judgment.

Mr. Brown stipulated the entry of judgment in favor of the bank and against him.

The respondent stipulated to the entry of judgment in a like amount in favor of Mr. Brown and against the respondent.

The state court entered judgment based upon that stipulation.

No evidentiary record was made.

Thereafter, the respondent filed his petition in bankruptcy and Mr. Brown commenced an adversary proceeding to have it determined that the debt owed him by the respondent was not dischargeable.

Mr. Felsen moved for summary judgment contending that despite the obligation of the bankruptcy court to determine dischargeability since no fraud had been pled in the state court action, the bankruptcy court could not go beyond that record.

It been res judicata and the debt would have to be termed dischargeable in the absence of that fraud finding.

Harry A. Blackmun:

Did he file the claim?

Craig A. Christensen:

In the state court, Your Honor?

Harry A. Blackmun:

No, in the bankruptcy court?

Craig A. Christensen:

Mr. Brown, I don't believe that he had filed a claim.

Byron R. White:

Would he have too?

Craig A. Christensen:

No, I don't believe he have to by virtue of the adversary proceeding because the court is bound there to enter judgment.

The claim would only go into his rights to distribution from the state --

Byron R. White:

I see.

Craig A. Christensen:

-- that was eventual rights to collect it.

William H. Rehnquist:

Well, if the bankrupt list him as a debtor, he's going to be included anyway?