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In re Skinner

United States District Court, E.D. Pennsylvania

May 27, 2015

IN RE: THOMAS SKINNER, Debtor; WILLIAM SKINNER, Appellant-Plaintiff,
v.
THOMAS SKINNER and ANNA SKINNER, Appellees-Defendants Bankruptcy No. 13-13318 Adversary No. 13-405

Page 600

For WILLIAM SKINNER, Plaintiff, Appellant: ALAN KANE, LEAD ATTORNEY, THE LAW OFFICE OF ALAN B. KANE, NORRISTOWN, PA.

For THOMAS SKINNER, Defendant, Debtor-in-Possess: CAROL B. MCCULLOUGH, CAROL B. MCCULLOUGH, LEAD ATTORNEYS, MCCULLOUGH EISENBERG LLC, WARMINISTER, PA; MICHAEL SETH SCHWARTZ, LEAD ATTORNEY, SOUTHAMPTON, PA.

For ANNA SKINNER, Defendant: CAROL B. MCCULLOUGH, STUART A. EISENBERG, LEAD ATTORNEYS, MCCULLOUGH EISENBERG LLC, WARMINISTER, PA; MICHAEL SETH SCHWARTZ, LEAD ATTORNEY, SOUTHAMPTON, PA.

WILLIAM C. MILLER, CHAPTER 13 TRUSTEE, Trustee, Pro se, PHILA., PA.

FREDERIC J. BAKER, Trustee, Pro se, PHILADELPHIA, PA.

Page 601

MEMORANDUM

MICHAEL M. BAYLSON, UNITED STATES DISTRICT JUDGE.

I. Introduction

Appellant-Plaintiff William Skinner appeals from the Bankruptcy Court's decision and order dismissing with prejudice his amended adversary complaint against his brother and sister-in-law, Appellee-Defendants Thomas and Anna Skinner.

In his amended adversary complaint, William Skinner alleges that Thomas Skinner embezzled the financial assets of their mother, Dorothy Skinner, leaving her unable to pay outstanding bills for assisted living care at Saint Joseph's Manor. Under the Pennsylvania Support Law, William and Thomas Skinner may be liable to pay for their mother's care. Saint Joseph's Manor has obtained a default judgment against Thomas Skinner under the Support Law, which he sought to discharge in bankruptcy. William Skinner, whose liability under the Support Law has not yet been adjudicated, alleges that to the extent he is required to pay for Dorothy Skinner's care at Saint Joseph's Manor, Thomas Skinner has a non-dischargeable obligation to reimburse him because the debt to Saint Joseph's Manor was caused by Thomas Skinner's embezzlement and diversion of their mother's assets.

The Bankruptcy Court, Judge Magdeline Coleman, held that William Skinner failed to show that he has any cognizable claim against Thomas Skinner. Therefore, William Skinner was not a creditor of Thomas Skinner and lacked standing to challenge the dischargeability of Thomas Skinner's debts. For the reasons set forth below, the Bankruptcy Court's decision will be affirmed.

II. Factual Background

The facts summarized here are as alleged in Appellant-Plaintiff William Skinner's Amended Adversary Complaint and its attachments. Adversary No. 13-405, ECF 23 (Bankr. E.D. Pa.) (hereinafter " Compl." or " Amended Complaint" ).

William Skinner and Thomas Skinner are brothers. Compl. ¶ 6. Their mother, Dorothy Skinner, is widowed. Compl. ¶ 6. Thomas Skinner is married to Anna Skinner. Compl. ¶ 8. In 2004, Thomas and Anna Skinner moved in with Dorothy Skinner at her condominium in Southampton,

Page 602

Pennsylvania. Compl. ¶ 8. In April 2005, Dorothy Skinner signed a Power of Attorney, giving Thomas Skinner authority over her account at Wachovia Bank. Compl. ¶ 13. As of early 2007, Dorothy Skinner had assets totaling about $400,000, which included her condominium, a brokerage account, a bank account, and a retirement account. Compl. ¶ 14. In addition, Dorothy Skinner received a monthly pension benefit and a social security benefit that total about $1,400 and a monthly long-term care insurance benefit. Compl. ¶ 15.

Beginning in about 2007, Thomas Skinner used his Power of Attorney to access Dorothy Skinner's assets to pay for his and his wife's personal expenses. Compl. ¶ ¶ 16-17. Thomas and Anna Skinner also convinced Dorothy Skinner to deed her property to them, and Thomas Skinner took advances totaling about $35,000 from a line of credit with Wachovia Bank that Dorothy Skinner had secured with the property. Compl. ¶ ¶ 18-20.

In February 2009, Thomas and Anna Skinner placed Dorothy Skinner in an assisted living home at Saint Joseph's Manor. Compl. ¶ 21. While residing there, Dorothy Skinner received long-term care insurance payments that should have covered most or all of her expenses. Compl. ¶ 22. However, the long-term care payments were diverted by Thomas and Anna Skinner for their personal use and Dorothy Skinner was evicted from Saint Joseph's Manor for non-payment in June 2012, with an outstanding balance of $25,094.69 plus interest and fees. Compl. ¶ ¶ 23-26. As a result of Thomas and Anna Skinner's dissipation of her assets, Dorothy Skinner was unable to pay this outstanding balance. Compl. ¶ 30.

In late July or early August 2012, William Skinner filed a petition in the Orphans' Court of Bucks County, Pennsylvania, for appointment of a guardian over the estate and person of Dorothy Skinner. Compl. ¶ 31 & Ex. C (Doc. No. 23-3). On March 20, 2013, the Orphans' Court appointed a guardian. Compl. ¶ 32 & Ex. D. (Doc. No. 23-4). The Orphans' Court concluded that Dorothy Skinner " suffers from dementia and depressive disorder which has significantly impaired her executive functioning" and leaves her " vulnerable to exploitation, both financial and otherwise." Compl. Ex. D ¶ ¶ 24-25. The Orphans' Court further concluded that Thomas Skinner had mismanaged his mother's financial affairs, that Thomas Skinner facilitated the transfer of substantial sums of his mother's monies to himself and to other family members including William Skinner, and that neither Thomas Skinner nor William Skinner was an appropriate guardian for their mother. Compl. Ex. D ¶ ¶ 4, 7, 16-18, 20-21. The Orphans' Court also noted that Thomas and William Skinner blame each other for dissipating their mother's assets. Compl. Ex. D ¶ 8.

In September 2012, Saint Joseph's Manor filed a lawsuit in the Court of Common Pleas of Montgomery County, Pennsylvania, against Dorothy Skinner, William Skinner, and Thomas Skinner, seeking to recover the outstanding balance for Dorothy Skinner's care. Compl. ¶ 33 & Ex. E (Doc. No. 23-5). Saint Joseph's Manor contended that William and Thomas Skinner were liable to pay Dorothy Skinner's bills under a theory of unjust enrichment and under the Pennsylvania Support Law, 23 Pa. Cons. Stat. § 4601 et seq., which obligates children of an indigent person to pay for or contribute to the cost of the care for the indigent person. Compl. ¶ ¶ 33-34; Bankr. Ct. Memo. at 3, Adversary No. 13-405, ECF 30 (Bankr. E.D. Pa.). On February 15, 2013, a default judgment was entered in favor of Saint Joseph's Manor and against Thomas Skinner in the amount of $32,225.56. Bankr. Ct. Memo. at

Page 603

3. As of May 2015, there was no judgment entered against William Skinner or Dorothy Skinner and the state court docket reflected no activity since September 2014. Docket for Holy Redeemer Health Systems v. Skinner, No. 2012-25014, available at http://webapp.montcopa.org/psi/v/search/case (last accessed May 14, 2015).[1]

III. Procedural Background

Thomas Skinner filed a voluntary petition for Chapter 7 bankruptcy on April 16, 2013, two months after the default judgment was entered in favor of Saint Joseph's Manor. Bankr. No. 13-13318, ECF 1 (Bankr. E.D. Pa.). The case was converted to a Chapter 13 bankruptcy in July 2013, and then converted back to a Chapter 7 bankruptcy in February 2015. Id. ECF 34 & 88. The default judgment owed to Saint Joseph's Manor was the largest debt listed in Thomas Skinner's amended bankruptcy filings, although he also ...


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