1 FOR PUBLICATION 2 UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF CALIFORNIA

3 4 In re: ) ) 5 CORINA DRAGNEA, ) Case No. 2010-34418 Debtor. ) 6 _______________________________ ) ) 7 ) Adv. Pro. No. 17-02248-C

DUMITRU DRAGNEA, )

8 Plaintiff, ) v. ) 9 )

CORINA DRAGNEA, )

10 ____________________D_e_f_e_n_d_a_n_t_.___) 11 OPINION 12 Before: Christopher M. Klein, Bankruptcy Judge 13 _________________ 14 David M. Sternberg, Jacob M Barlev, Walnut Creek, CA, for Plaintiff. 15 Stephen T. Cammack, Sacramento, CA, for Defendant. 16 _______________ 17 18 CHRISTOPHER M. KLEIN, Bankruptcy Judge: 19 The key issue in this declaratory judgment action is whether 20 an individual’s Chapter 11 plan can extinguish nondischargeable 21 debt. The answer is yes, if the creditor agrees to the plan. 22 This cross-border marital dissolution, featuring property 23 divisions in California and Romania and an attempted collateral 24 attack on Romanian judgments, illustrates the utility of the 25 Declaratory Judgment Act, 28 U.S.C. §§ 2201-02, as a procedure to 26 address disputes regarding contractual aspects of Chapter 11 27 plans that are ill-suited to contempt proceedings. 28 The debtor contends that her confirmed chapter 11 plan 1 extinguished her equalizing payment obligation under a marital 2 settlement agreement (MSA) incorporated into a California 3 dissolution judgment. Disagreeing, her former spouse argues that 4 it is impossible as a matter of law for an individual’s chapter 5 11 plan to lead to discharge of an 11 U.S.C. § 523(a)(15) debt. 6 The reality is that the chapter 11 plan, as permitted by 11 7 U.S.C. § 1123(b), was the vehicle the parties used bilaterally to 8 compromise the MSA debt under nonbankruptcy law. This settlement 9 operated as an accord and satisfaction that extinguished the 10 original obligation as a matter of state law, thereby leaving 11 zero to eliminate by virtue of the bankruptcy discharge. 12 13 Findings of Fact 14 Dumitru and Corina Dragnea fled Communist Romania, gained 15 political asylum in the United States in 1985, settled in 16 California, and are now United States citizens. 17 Dumitru, a university graduate and machinist, opened an auto 18 repair business. Corina was employed as a lab technician. 19 Since 1993, they have also operated board and care homes 20 under the name Corina Care Homes. They still separately own and 21 operate board and care homes in Sacramento County. 22 They accumulated other California real estate before 2005, 23 including five residences and various interests in land. 24 In Romania, they acquired at least five parcels of real 25 estate and interests in two Romanian corporations. 26 Beginning in 2002, Dumitru acted as manager (Administrator) 27 of Metalotex Corporation in Romania, a business in which they had 28 acquired a minority interest. 1 All of the properties purchased in California and in Romania 2 before 2005 were purchased jointly with community property funds. 3 Both California and Romania are community property regimes. 4 In March 2005, Corina filed two divorce actions after 34 5 years of marriage, one in California and one in Romania. 6 The Romanian divorce became final as to marital status in 7 April 2006, leaving property division to future determination. 8 The final California divorce judgment incorporated the MSA 9 agreed by the parties and was entered September 13, 2007.1 10 Dumitru and Corina, who were self-represented, used sample 11 MSA forms without tailoring them to reflect their actual 12 situation and without eliminating internal inconsistencies. 13 Their MSA divided California, but not Romanian, property. 14 Dumitru received: six real estate parcels (including one board 15 and care home); all personal property associated with his auto 16 repair business; and seven vehicles. Corina received: five real 17 estate parcels (including two board and care homes); and two 18 vehicles. They jointly retained five real estate parcels. 19 The MSA required Dumitru to pay $15,000 of a $30,000 loan 20 from Corina’s mother and half of a $100,000 equity line of credit 21 on the residence retained by Corina.2 And, to equalize the 22 property division, Corina agreed to pay Dumitru $150,000. All 23 payments were due within two years, with interest thereafter. 24 The payments achieved the status of judgment debts by virtue of 25 incorporation into the California divorce judgment. 26 27 1Cal. Super. Ct., County of Sacramento, No. 05FL02058. 28 2The MSA is ambiguous about whether Dumitru would pay half of the accrued interest on the equity line of credit. 1 The MSA included a term sheet signed August 18, 2006, which 2 states “Corina and Dumitru agreed [sic] to equally divide the 3 community property in Romania.” 4 Dumitru obtained recognition in Romania of the 2007 5 California divorce judgment under Romania’s civil law exequatur 6 procedure (recognition of foreign judgments).3 Corina then asked 7 a Romanian court to divide Romanian marital property. 8 The Deva Court of Law, applying Romanian Law to Romanian 9 assets, determined on March 4, 2008, which Romanian assets were 10 community property, valued them, allocated them between Corina 11 and Dumitru, and ordered Dumitru to make an equalizing 12 (“balancing”) payment to Corina. 13 Dumitru appealed. The Hunedoara Tribunal Civil Court 14 decision rendered December 2, 2009, affirmed the Deva court 15 except that it reduced Dumitru’s equalizing payment from about 16 $84,365.89 to $56,870.97.4 Further appeals have been unavailing. 17 Corina collected the Romanian equalizing payment from 18 Dumitru’s bank accounts in Romania. 19 Corina also flexed economic muscle in Romania. Using her 20 21 3The Bucharest Tribunal ruled that it “Acknowledges full 22 legal effects on Romania’s territory of the court decision pronounced in the USA by the High Court of California, Sacramento 23 Court, on 25th April 2007 in file no. 05FL02058, regarding the divorce, and the court decision of 13th September 2007 regarding 24 the partition, pronounced in the same file by the same court.” (Official Translation, Plaintiff’s Ex. 8). 25 4Plaintiff’s Ex. 9. This was a reduction by 77,603.50 lei 26 to 156,131.50 lei, plus 10,289 Euros. The Romanian currency unit 27 is the Leu (plural, Lei). Some values are in Euros as Romania is a European Union member state. On 12/02/2009, mid-market 28 exchange rates were: 1 Leu = $.3543; 1 Euro = $1.5098. www.xe.com/currencytables/?from=USD&date=2009-12-02. 1 separate property funds to purchase another block of Metalotex 2 shares, she gained control of Metalotex and fired Dumitru. 3 His trial testimony lamenting how he had made Metalotex 4 profitable reveals bitterness that animates the present dispute. 5 Dumitru did not pay the sums he owed under the MSA. Corina 6 paid her mother Dumitru’s $15,000 share of the $30,000 loan and 7 paid his $55,214 half of the $100,000 equity loan, which cost 8 $110,427.11 to extinguish when refinancing her residence.5 9 Corina, having succeeded to the right to receive $70,214 10 from Dumitru, did not pay him the $150,000 equalizing payment. 11 As of June 2010, the net California obligation of Corina to 12 Dumitru was $79,786. Dumitru was still pursuing vindication in 13 Romania. Corina threatened litigation over MSA real property 14 transfers to Dumitru that exposed her to personal liability to 15 undersecured creditors on Dumitru’s property. 16 On June 1, 2010, Corina filed chapter 11 case No. 2010-34418 17 as a health care business operating two elder care homes. She 18 scheduled assets of $1,251,450 and liabilities $2,094,843. Much 19 of the debt reflects leveraged real estate squeezed by the 20 plummet in values in the Great Recession of 2008. 21 She scheduled Dumitru as a creditor owed an undisputed net 22 debt of $85,000 based on her MSA obligations. 23 Dumitru filed proof of claim #3 for $150,000, attaching 24 materially misleading snippets from the MSA that omitted mention 25 of his countervailing obligation to pay Corina $70,214. 26 Corina operated in Chapter 11 for nearly two years monitored 27 28 5Corina Dragnea Dep. Ex. 13. 1 by a patient care ombudsman appointed under 11 U.S.C. § 333, who 2 regularly reported “outstanding” operation of the facilities. 3 Corina proposed a Chapter 11 plan on December 15, 2011, to 4 be financed by operating profits and sale of real estate.6 An 5 iterative process of four plan amendments placated various 6 partially-secured creditors and yielded a consensual plan 7 reducing unsecured debt by more than $885,000. Unsecured claims 8 (mostly unsecured portions of secured claims) estimated at 9 $1,062,350 would be paid $176,710 (16.6%) over 60 months.7 10 Dumitru’s $150,000 claim became the final obstacle to plan 11 confirmation. 12 The proposed plan treated Dumitru’s claim as unsecured to be 13 paid by sharing in the 60 monthly distributions to unsecured 14 creditors, with the unpaid balance to remain as excepted from 15 discharge by virtue of § 523(a)(15) and the Article IX that had 16 been in the plan since first proposed in December 2011.8 17 But, Dumitru forced a different course. He objected to plan 18 confirmation and hired a veteran Chapter 11 lawyer, who appeared 19 at a hearing on June 11, 2012, persuading the court to decline to 20 21 22 6Dkt. 154. 23 7Dkt. ## 170, 204, 233, & 264. 24 8The discharge provision is: 25 9.01 Discharge. Confirmation of this plan does not discharge any debt provided for in this Plan until the court grants a 26 discharge on completion of all payments under this Plan, or 27 as otherwise provided in Section 1141(d)(5). The Debtor will not be discharged from any debt excepted from discharge 28 under Section 523 of the Code, except as provided in Rule 4007(c) of the Federal Rules of Bankruptcy Procedure. 1 confirm the plan over Dumitru’s pending objection.9 2 Negotiations ensued. Communications among counsel noted the 3 various issues, including Corina’s offsets and potential property 4 liability litigation, and focused on a “global” settlement. The 5 outcome was a final plan amendment filed July 12, 2012. 6 The negotiated amendment created a separate Class 11 for 7 Dumitru, who would receive a prompt $45,000 one-time payment to 8 satisfy his claim “in full” in exchange for which he “waived” 9 further claims “of any kind.”10 10 Dumitru’s separate Class 11, designated as impaired, 11 described the class and treatment: 12 The special unsecured claim of Dumitru Dragnea created by a marital settlement agreement or judgment of divorce and not 13 in the nature of support. Estimated claim: $100,000. *The treatment set for[th] in this class also settles any 14 current of [or?] potential litigation concerning the ownership of 1465 Thunderbird Drive, South Lake Tahoe, CA 15 96150. 16 Claim shall receive a one-time lump sum payment of $45,000 within 60 days of the effective date of the plan. This 17 claim satisfies Claimant’s claim in full. Any further claims by claimant, of any kind, are waived. Payment is 18 made possible by the funds accumulated in Debtor’s DIP account. 19 Finally, Debtor agrees to surrender her interest in 1465 20 Thunderbird Drive, South Lake Tahoe, CA 96150 as provided in class 8 of the plan. As such claimant, Dumitru Dragnea 21 shall be the remaining owner of the property. The treatment set for in this class also settles any current or potential 22 litigation concerning the ownership of 1465 Thunderbird Drive, South Lake Tahoe, CA 96150.11 23 24 9Dkt. ## 247, 256, & 259. 25 10Dkt. #264. 26 11Ex. A to Order Confirming Plan (7/26/2012); Dkt. #268. One 27 dispute was Corina’s liability for Lake Tahoe property allocated to Dumitru by the MSA. Plan Class 8 would surrender her interest 28 and discharge the unsecured deficiency. The lump-sum payment in plan Class 11 also settled that dispute with Dumitru. 1 Dumitru signed and filed a ballot accepting the plan 2 containing the global settlement, in which he stated: 3 The undersigned, the holder of a Class [blank] claim against the Debtor in the unpaid amount of $45,000.$ [sum entered in 4 Dumitru’s handwriting] Accepts the plan. /s/ Dumitru Dragnea12 5 The next day, Dumitru filed a withdrawal of his objection to 6 confirmation.13 7 The court confirmed the plan on July 23, 2012, in open court 8 with oral findings of fact and conclusions of law and entered a 9 confirmation order on July 26, 2012.14 10 Corina paid Dumitru the “one-time” $45,000 payment as 11 required by the plan Class 11. 12 The Chapter 11 case was closed on March 21, 2013, subject to 13 reopening for entry of discharge after completion of payments. 14 Four years later, in April 2016, Dumitru asked the state 15 family law court to order Corina to pay him $105,000. He argued 16 that the $45,000 lump sum under the plan was merely on account 17 and ignored his own $70,214 unpaid MSA obligation to Corina. 18 Corina defended on the basis of the Chapter 11 plan, 19 whereupon the California court held its proceeding in abeyance 20 pending resolution of the issue by the bankruptcy court. 21 The Chapter 11 case was reopened October 20, 2017, for 22 Corina’s motion for discharge after plan payments were completed. 23 Dumitru conditionally opposed discharge, asking for a 24 clarification that the MSA equalizing payment was not discharged 25 26 12Plaintiff’s Ex. 23, Dkt. #265 (July 18, 2012). 27 13Dkt. #266 (July 19, 2012). 28 14Dkt. ##267 & 268. 1 because of § 523(a)(15). Declining to issue an advisory opinion 2 without an adversary proceeding, the court entered discharge. 3 Dumitru filed this adversary proceeding for declarations 4 under the Declaratory Judgment Act: (1) that the discharge in 5 Corina’s case does not excuse her from paying him $105,000 of the 6 MSA equalizing payment; (2) that the $105,000 debt is excepted 7 from discharge by virtue of § 523(a)(15); and (3) that Dumitru 8 owns 50 percent of all their Romanian property.15 9 This decision contains findings of fact and conclusions of 10 law rendered following the trial of that adversary proceeding. 11 12 Jurisdiction 13 Jurisdiction is founded on 28 U.S.C. § 1334(b). Disputes 14 regarding terms of Chapter 11 plans and the discharge status of 15 particular debts are core proceedings arising “in” and “under” 16 title 11 that a bankruptcy judge may hear and determine. 28 17 U.S.C. §§ 157(b)(2)(B), (I), (J), (L), and (O) & 1334(b). 18 A state-law contract included in a Chapter 11 plan that is 19 integral to confirmation of that plan and permitted by 11 U.S.C. 20 § 1123(b) arises “in” or is “related to” the title 11 case. 21 A state-law contract in a Chapter 11 plan is so related to 22 the claims that are in the court’s original jurisdiction under 23 15Paragraph 2 of Dumitru’s demand is: 24 2. for a declaration by this Court that the discharge in 25 the above-captioned Chapter 11 case has no effect on the Marriage Settlement Agreement entered into by the parties as 26 herein alleged, and that Plaintiff is the owner of 50 27 percent of all of the Romanian property set forth in the Marriage Settlement Agreement. 28 Amended Complaint, Demand, ¶ 2. 1 § 1334 that they form part of the same case or controversy under 2 Article III of the United States Constitution for which there is 3 supplemental jurisdiction pursuant to 28 U.S.C. § 1367. Sassoon 4 v. Sokoloff (In re Sassoon), 424 F.3d 864, 869 (9th Cir. 2005); 5 Bahrampour v. Lampert, 356 F.3d 969, 978 (9th Cir. 2004). 6 The Declaratory Judgment Act applies in title 11 cases, 7 perhaps except as to tax disputes under 11 U.S.C. §§ 505 and 8 1146. 28 U.S.C. § 2201(a). 9 In case of doubt about this court’s authority, the parties 10 have consented to entry of judgment by a bankruptcy judge. 11 Nor does the so-called “family law” exception to federal 12 jurisdiction militate against entertaining a dispute regarding a 13 MSA. The Supreme Court in Ankenbrandt v. Richards, 504 U.S. 689, 14 703-04 (1992), cabined that exception to granting a divorce, 15 alimony, and child custody, but not to such ancillary questions 16 as property distribution. 17 While federal bankruptcy courts are naturally reluctant to 18 become embroiled in domestic disputes and have broad authority 19 under 28 U.S.C. § 1334(c)(1) to abstain in favor of state courts, 20 some such matters need to be confronted. This is one of them. 21 22 Conclusions of Law 23 Plaintiff’s theory misses the mark. The fact that 24 § 523(a)(15) excepts from bankruptcy discharge a divorce-related 25 MSA debt does not prevent use of a Chapter 11 plan to accomplish 26 a bilateral amendment of a MSA by way of accord and satisfaction 27 that leads to a contractual discharge of the debt under 28 nonbankruptcy law. Nor can plaintiff plausibly collaterally 1 attack the Romanian property division in this court. The 2 relevant law relates to contract law and the law relating to 3 finality of judgments, not bankruptcy law. 4 5 I 6 Basic contract doctrines control the analysis relating to 7 the MSA. 8 A 9 The MSA is a contract controlled by California law: made in 10 California by California residents to be performed in California. 11 12 1 13 A MSA that is incorporated into a dissolution judgment is 14 construed under the rules governing interpretation of contracts 15 generally. State Farm Life Ins. Co. v. Brockett, 737 F. Supp. 2d 16 1146, 1152 (E.D. Cal. 2010); In re Marriage of Iberti, 55 Cal. 17 App. 4th 1434, 64 Cal. Rptr. 2d 766, 769 (Cal. Ct. App. 2 1997). 18 California contract rules are prescribed by statute in its 19 Civil Code. Topics relevant to this case include interpretation 20 of contracts governed by Civil Code §§ 1635-1663, modification of 21 contracts per Civil Code § 1698; accord and satisfaction per 22 Civil Code §§ 1521-1526; and novation per Civil Code §§ 1530-32. 23 CAL. CIV. CODE § 1521-26, 1530-32, 1635-63 and 1698. 24 25 a 26 Like any other contract, a MSA may be amended by agreement 27 in a contract in writing. CAL. CIV. CODE § 1698(a). 28 1 b 2 California contracts are interpreted according to the mutual 3 intent of the parties at the time of contracting. CAL. CIV. CODE 4 § 1636. 5 The language of a written contract is the sole source for 6 discerning the intention of the parties, if possible. CAL. CIV. 7 CODE § 1639. 8 The whole of a contract is taken together, giving effect to 9 each part, if reasonably practicable. CAL. CIV. CODE § 1641. 10 Words are construed in their ordinary and popular sense, 11 rather than their strict legal meaning. CAL. CIV. CODE § 1644. 12 Ambiguous or uncertain terms must be interpreted in the 13 sense in which the promisor believed, at the time of making it, 14 that the promisee understood it. CAL. CIV. CODE § 1649. 15 Clauses written by special direction of the parties prevail 16 over language originally prepared without special reference to 17 the particular parties. CAL. CIV. CODE § 1651. 18 If one is nevertheless uncertain after application of the 19 preceding rules, then the language is construed against the party 20 who caused the uncertainty to exist. CAL. CIV. CODE § 1654. 21 22 c 23 The “Accord and Satisfaction” Chapter is in the Civil Code’s 24 “Extinction of Obligations” title. CAL. CIV. CODE §§ 1521-26. 25 An “accord” is an agreement to accept, in extinction of an 26 obligation, something different from or less than that which the 27 person agreeing to accept is entitled. CAL. CIV. CODE § 1521. 28 Acceptance of consideration for an accord is “satisfaction” 1 that “extinguishes” the obligation. CAL. CIV. CODE § 1523. 2 Part performance of a duty, when expressly accepted by the 3 creditor in writing in satisfaction or in pursuance of an 4 agreement in writing for that purpose, without any new 5 consideration, “extinguishes” the duty. CAL. CIV. CODE § 1524. 6 Thus, an agreement providing that the obligee will accept a 7 stated performance in satisfaction of an obligor’s existing duty, 8 even without consideration, is an “accord and satisfaction.” 3 9 ANN TAYLOR SCHWING, CAL. AFFIRMATIVE DEFENSES § 63:6 (2d ed. 2019) 10 (“SCHWING”); 1 BERNARD WITKIN, SUMMARY OF CALIFORNIA LAW: CONTRACTS § 981 11 (11th ed. 2019). 12 13 d 14 The “accord’s” cousin, the “novation” (or “substituted 15 contract”), is the substitution of a new contract for an existing 16 one. CAL. CIV. CODE § 1530. 17 As between the same parties, “novation” is the substitution 18 of a new obligation with the intent to extinguish the old 19 obligation. CAL. CIV. CODE § 1531(1). 20 As a new contract, and unlike an “accord,” a “novation” 21 requires consideration because it is subject to all the rules 22 concerning contracts in general. CAL. CIV. CODE § 1532. 23 24 e 25 Finally, an obligation is extinguished by a release in 26 writing, with or without new consideration. CAL. CIV. CODE § 1541. 27 28 1 2 2 Although Corina alleges “novation” in the Amended Answer, it 3 is not necessary to discern the element of consideration as it is 4 beyond cavil that the plan Class 11 settlement constitutes an 5 “accord and satisfaction” that, under California law, 6 “extinguished” the debt without necessity for consideration.16 7 Corina promised in plan Class 11 to pay $45,000 as “full” 8 payment of Dumitru’s claim, in exchange for which Dumitru agreed 9 that “Any further claims by claimant [Dumitru], of any kind, are 10 waived.” Dumitru thereupon withdrew his objection to plan 11 confirmation and affirmatively accepted the plan. She 12 subsequently paid the $45,000 when and as promised. 13 These facts square with Civil Code § 1524, which provides 14 that part performance of an obligation, when expressly accepted 15 by the creditor in writing in satisfaction, or rendered in 16 pursuance of a written agreement, although unsupported by new 17 consideration, “extinguishes” the obligation. CAL. CIV. CODE 18 § 1524;17 Schwartz v. Cal. Claim Serv., 52 Cal. App. 2d 47, 54- 19 55, 125 P.2d 883, 887-88 (Cal. Dist. Ct. App. 2 1942). 20 21 16The issue was tried by implied consent. Fed. R. Civ. P. 15(b)(2), incorporated by Fed. R. Bankr. P. 7015. The Amended 22 Answer asserting “novation” satisfies the pleading requirement for “accord and satisfaction.” Fed. R. Civ. P. 8(c)(1), 23 incorporated by Fed. R. Bankr. P. 7008. 24 17The text of Civil Code § 1524 is: 25 Part performance of an obligation, either before or after a breach thereof, when expressly accepted by the creditor in a 26 writing, in satisfaction, or rendered in pursuance of an 27 agreement in writing for that purpose, though without any new consideration, extinguishes the obligation. 28

CAL. CIV. CODE § 1524.

1 Similarly, Dumitru’s promise that “Any further claims by 2 claimant, of any kind, are waived” functions as a release that 3 extinguishes the obligation under Civil Code § 1541. 4 Hence, California’s accord and satisfaction law applies to 5 judgment debt, including MSA debt in a dissolution judgment. The 6 parties remain able contractually to modify such debt in a manner 7 that amounts to accord and satisfaction and to execute releases. 8 9 B 10 This “accord” analysis is not peculiar to California. The 11 Restatement(Second) of Contracts yields the same conclusion. 12 The Restatement speaks of “Discharge by Assent or 13 Alteration” in which two overlapping concepts — “accord” and 14 “substituted contract” — are pertinent. 15 An “accord” is a contract under which an obligee promises to 16 accept a stated performance in satisfaction of the obligor’s 17 existing duty, the performance of which discharges the original 18 duty. Until performance, the original duty is suspended. 19 Breach by the obligor entitles the obligee to enforce either 20 the original duty or any duty under the accord. Breach by the 21 obligee entitles the obligor to specific performance requiring 22 acceptance of delivery of the stated performance and concomitant 23 discharge of the obligation, plus damages for partial breach. 24 RESTATEMENT(SECOND) OF CONTRACTS § 281 (1981) (“RESTATEMENT”).18 25 18The statement of § 281 (Accord and Satisfaction) is: 26 27 (1) An accord is a contract under which an obligee promises to accept a stated performance in satisfaction of 28 the obligor’s existing duty. Performance of the accord discharges the original duty. 1 A “substituted contract,” or a “novation” in California law, 2 is a contract accepted by an obligee in satisfaction of an 3 obligor’s existing duty. It suspends and, upon performance, 4 discharges an obligor’s original duty. Breach does not entitle 5 an obligee to enforce the original duty. RESTATEMENT § 279.19 6 The nature of the original duty helps distinguish accord 7 from substituted contract under both the Restatement and 8 California law.20 A court is less likely to find accord than 9 substituted contract if the original duty was to pay money, 10 undisputed, liquidated, and matured.21 11 (2) Until performance of the accord, the original duty is 12 suspended unless there is such a breach of the accord by the 13 obligor that discharges the new duty of the obligee to accept the performance in satisfaction. If there is such a 14 breach, the obligee may enforce either the original duty or any duty under the accord. 15 (3) Breach of the accord by the obligee does not discharge the original duty, but the obligor may maintain a 16 suit for specific performance of the accord, in addition to any claim for damages for partial breach. 17

RESTATEMENT § 281 (1981).

18 19The statement of § 279 (Substituted Contract) is: 19 20 (1) A substituted contract is a contract that is itself accepted by the obligee in satisfaction of the obligor’s 21 original duty. (2) The substituted contract discharges the original duty 22 and breach of the substituted contract by the obligor does not give the obligee a right to enforce the original duty. 23

RESTATEMENT § 279.

24 20California’s analog to substituted contract is “novation,” 25 which, unlike accord, requires consideration. 3 SCHWING § 64:6. 26 21Substantially identical comments are in § 279 and § 281: 27 c. Accord distinguished. Because the original duty is 28 discharged regardless of whether the substituted contract is performed, a substituted contract differs from an accord, 1 Common law compositions are classic exercises of accord and 2 satisfaction. RESTATEMENT § 281, comment b, illus. 3 (1981).22 3 It follows that the MSA modification accomplished by way of 4 Corina’s Chapter 11 plan qualifies as an accord because it was 5 treated as an undisputed obligation to pay a liquidated sum. 6 Even if it is a substituted contract, Corina’s actual performance 7 of the payment obligation prescribed in her Chapter 11 plan would 8 function to satisfy and discharge the original debt. 9 10 II 11 Confirmed Chapter 11 plans are construed as contracts in the 12 same manner as consent decrees, which have elements of both 13 judgment and contract. Hillis Motors, Inc. v. Hawaii Auto 14 15 under which the original duty is discharged only if the 16 accord is performed. See § 281. Whether a contract is a substituted contract or an accord is a question of 17 interpretation, subject to the general rules stated in Chapter 9. In resolving doubts in this regard, a court is 18 less likely to conclude that an obligee was willing to accept a mere promise in satisfaction of an original duty 19 that was clear than in satisfaction of one that was 20 doubtful. It is therefore less likely to find a substituted contract and more likely to find an accord if the original 21 duty was one to pay money, if it was undisputed, if it was liquidated and if it was matured. Compare Illustration 1 to 22 Illustration 1 to § 281. 23 RESTATEMENT § 279 comment c.; id. § 281 comment e (same). 24 22Common law composition is the subject of illustration 3 to Restatement(Second) § 281: 25 A, B and C, who are creditors of D, enter into a voluntary composition with D under which D promises to pay 26 and A, B and C promise to accept 50% of their debts in full 27 satisfaction. The composition is an accord. D’s debts are suspended and are discharged if D pays the 50%. 28 RESTATEMENT § 281, comment b, illus. 3. 1 Dealers’ Ass’n, 997 F.2d 581, 588 (9th Cir. 1993). 2 3 A 4 The debtor and creditors are Chapter 11 contract parties. 5 Miller v. United States, 363 F.3d 999, 1004 (9th Cir. 2004). 6 The federal rule of decision for construing contract terms 7 in Chapter 11 plans is to rely on state law where, as here, 8 there is no need for uniform national law on the question. 9 Hillis Motors, 997 F.3d at 588; Utd. Comm. Ins. Serv. Inc. v. 10 Paymaster Corp., 962 F.2d 853, 856 (9th Cir. 1992). 11 The nature of confirmed Chapter 11 plans that have elements 12 both of judgment and of contract enables their use as a vehicle 13 contractually to modify otherwise nondischargeable debt. 14 Plan terms, for example, releasing third persons from their 15 guarantees may be enforceable under principles of contract law if 16 the affected guaranteed persons actually accept the plan. 17 Likewise, an accord and satisfaction of nondischargeable 18 debt, coupled with a contract never to sue to enforce the debt, 19 that are in an obligor’s Chapter 11 plan that the obligee 20 actually accepts and which the obligor actually performs, is a 21 bilateral contract that discharges the obligation as a matter of 22 nonbankruptcy law independent of the bankruptcy discharge. 23 Nothing is remarkable about an agreement compromising 24 nondischargeable debt. Nondischargeability litigation in 25 bankruptcy is routinely resolved by settlement that extinguishes 26 or discharges the obligation as a matter of nonbankruptcy law. 27 Such a settlement creating a nonbankruptcy discharge is a 28 matter of basic contract law under doctrines in the Restatement 1 (Second) of Contracts § 281 and as recognized in state law. 2 Nor is there anything untoward about including a settlement 3 in a Chapter 11 plan. The Bankruptcy Code provides that a plan 4 may “settle or adjust” any claim or interest belonging to the 5 debtor or to the estate and may “modify the rights of” holders of 6 unsecured claims. 11 U.S.C. §§ 1123(b)(3)(A) & (5). 7 One may enforce a Chapter 11 plan provision providing for 8 accord and satisfaction that is justifiable only as a matter of 9 contract law in the same manner as enforcement outside bankruptcy 10 — by way of an action for specific performance, plus damages. 11 RESTATEMENT § 281(3). No impairment of contract is involved. 12 Neither the bankruptcy discharge injunction nor the injunctive 13 authority of a bankruptcy court applies. It is purely a matter 14 of the contractual element of Chapter 11 plan confirmations. 15 16 B 17 Consensual releases in Chapter 11 must be distinguished from 18 more controversial nonconsensual third-party Chapter 11 releases. 19 Nonconsensual releases of the liability of nondebtors by way 20 of permanent injunction premised on 11 U.S.C. § 105 as an 21 exercise of equitable power are forbidden by the law of this 22 circuit. Resorts Int’l v. Lowenschuss (In re Lowenschuss), 67 23 F.3d 1394, 1401-02 (9th Cir. 1995); Am. Hardwoods, Inc. v. 24 Deutsche Credit Corp. (In re Am. Hardwoods, Inc.), 885 F.2d 621, 25 624-27 (9th Cir. 1989); accord In re W. Real Estate Fund, Inc., 26 922 F.2d 592, 601 (10th Cir. 1990). 27 To be sure, the circuits are divided. Some approve third- 28 party releases in Chapter 11 plans. E.g., SE Prop. Holdings, LLC 1 v. Seaside Engr’g & Surveying, Inc. (In re Seaside Engr’g & 2 Surveying, Inc.), 780 F.3d 1070, 1076-79 (11th Cir. 2015); SEC v. 3 In re Drexel Burnham Lambert Grp, Inc. (In re Drexel Burnham 4 Lambert Grp, Inc.), 960 F.2d 285, 293 (2d Cir. 1992); Menard- 5 Sanford v. Mabey (In re A.H. Robins Co.), 880 F.2d 694, 700-02 6 (4th Cir. 1989). The Supreme Court has not spoken. 7 But these concerns do not apply here where there is neither 8 a § 105 injunction, nor a debt that would be discharged pursuant 9 to 11 U.S.C. §§ 524 and 1141. No exercise of Bankruptcy Code 10 authority to impair contract, discharge debts, or issue is 11 implicated in this case. 12 13 III 14 Back to California law and the Dragneas. 15 16 A 17 The Dragnea MSA that is incorporated into the state court’s 18 dissolution judgment provides a method for amending it by 19 agreement: 20 The provisions of this Agreement may only be waived, altered, amended, modified, revoked, or terminated, in whole 21 or in part, in a subsequent written agreement specifically referring to this Agreement and signed by both the parties. 22

MSA § 12.4.

23 The MSA requires an amendment be: (1) a writing; (2) 24 specifically referring to the MSA; and (3) signed by each party. 25 No particular format is specified. 26 The treatment of Dumitru in Class 11 of Corina’s Chapter 11 27 plan satisfies all of the MSA’s criteria for amendment. First, 28 the plan itself is a writing. Second, plan Class 11 specifically 1 refers to the MSA as the source of the provisions being 2 modified.23 Third, both parties signed; Corina signed the plan, 3 and Dumitru signed the ballot accepting the plan, as well as the 4 withdrawal of his objection to confirmation. 5 Thus, Dumitru and Corina amended their MSA using the MSA’s 6 amendment rule in a writing specifically referring to the MSA 7 signed by both parties executed in the course of resolving 8 Dumitru’s objection to plan confirmation. 9 The amended MSA provided for a one-time payment of $45,000 10 by Corina to resolve Dumitru’s “claim in full.” And, Dumitru 11 “waived” any further claim “of any kind.” These terms replaced 12 the reciprocal payment requirements of $65,000 from Dumitru and 13 $150,000 from Corina to Dumitru, and resolved a performance- 14 related dispute regarding a South Lake Tahoe property. 15 Dumitru’s waiver of “any further claims of any kind” 16 operated as confirmation that he was accepting the payment in 17 satisfaction of the MSA debt. 18 When Corina actually paid Dumitru the $45,000, the MSA 19 payment obligations were fully performed. No debt remained. 20 21 B 22 As a matter of applicable California law, the MSA debt to 23 Dumitru was “extinguished” upon Corina’s payment of the $45,000 24 “one-time” payment agreed to by way of the plan’s Class 11: 25 Part performance of an obligation, either before or after a breach thereof, when expressly accepted by the creditor in 26 27 23Class 11 is described as: “The special unsecured claim of 28 Dimitru Dragnea created by a marital settlement agreement or judgment of divorce and not in the nature of support.” 1 writing, in satisfaction, or rendered in pursuance of an agreement in writing for that purpose, though without any 2 new consideration, extinguishes the obligation. 3 CAL. CIVIL CODE § 1524 (emphasis supplied).24 4 Civil Code § 1524 is a facet of California’s rejection of 5 the old rule holding invalid for lack of consideration an accord 6 and satisfaction based on partial performance by an obligor of a 7 judgment debt. It validated common business practice. Schwartz 8 v. Cal. Claims Serv., 52 Cal. App. 2d 47, 54, 125 P.2d 883, 888 9 (Cal. Ct. App. 2 1942) (judgment debt);25 3 SCHWING § 63:6. 10 11 12 24California Civil Code § 1524 is consistent with 13 Restatement § 275, which explains that: 14 If a party before he has performed his duty under a 15 contract, manifests to the other party his assent to discharge the other party’s duty to render all or part of 16 the agreed exchange, the duty is to that extent discharged without consideration. 17 RESTATEMENT § 275 (illustration 2). 18 25The Schwartz court’s statement warrants repetition: 19 Section 1524 Civil Code does away with a rule which has long 20 been regarded by the courts as supported by scarcely more 21 than a superstition, and it gives recognition and validity to business practices that are of common occurrence. The 22 satisfaction of judgments for less than their face value is of everyday occurrence, and since every such settlement 23 represents an agreement mutually satisfactory to the parties and fraught with some benefit to each, it should not be the 24 policy of the law to discourage such sensible arrangements under which a creditor can satisfy a judgment for what he 25 thinks it is worth and a debtor can settle it for what he can afford to pay. A judgment debtor should not have to go 26 into bankruptcy to rid himself of a judgment where he and 27 his creditor are ready, able and willing to adjust and settle the debt. 28 Schwartz, 52 Cal. App. 2d at 55, 125 P.2d at 888. 1 2 The nature of accord and satisfaction as an affirmative 3 || defense means that Corina, as the proponent of the defense, has burden of proof. BII Finance Co. v. U-States Forwarding 5} Servs. Corp., 95 Cal. App. 4th 111, 126, 115 Cal. Rptr. 2d 312, 61 323 (Cal. Ct. App. 2 2002); 3 ScHWING § 63:11. 7 Whether an agreement is an accord and satisfaction is a question of the intent of the parties and is a question of fact for the trier of fact. Conderback, Inc. v. Standard Oil Co. Of Cal., 239 Cal. App. 2d 664, 680-81, 48 Cal. Rptr. 901, 912-13 11] (Cal. Ct. App. 1 1966). 12 The parties’ intent is inferred, if possible, solely from 13} the contract’s written terms. CAL. Civ. CoDE § 1639; Santisas v. 14 |} Goodin, 17 Cal.4th 599, 608; 951 P.2d 399, 405 (1998). 15 Words are interpreted in their ordinary and popular sense, 16] rather than according to their strict legal meaning. CAL. CIV. 17 |} Cope § 1644; Santisas, 17 Cal.4th at 608; 951 P.2d at 405. 18 In other words, intent is based on the objective 19 || manifestation of the words in their ordinary sense as affected by 20 surrounding conduct, rather than the subjective beliefs of the parties. United Comm. Ins. Serv., Inc., 962 F.2d at 856. 22 A party’s true intent is irrelevant if not expressed. Id., 23 | 962 F.2d at 856. 24 The written terms of the treatment in Dumitru’s special Class 11 in Corina’s Chapter 11 plan are not ambiguous. Corina’s 26 || one-time payment of $45,000 satisfies in full Dumitru’s claim 27 |) based on the MSA. Dumitru waives any further claims of any 28

23

1 kind.26 The provisions satisfy the MSA’s requirements for an 2 amendment and an accord and satisfaction. 3 This court finds as fact that the parties intended that the 4 one-time $45,000 payment would be a complete resolution of 5 Corina’s MSA obligation in the nature of an accord and 6 satisfaction.27 Nobody expressed a contrary intent. 7 8 IV 9 Dumitru levels three challenges in an effort to elude the 10 logical consequences of the claim-waiver terms of plan Class 11. 11 12 A 13 First, Dumitru sees ambiguity in the plan’s discharge 14 provision at Article IX stating that no nondischargeable debt 15 will be discharged. He contends that this sufficiently clouds 16 the terms of Class 11 so as to reduce the clarity of his waiver 17 of all further claims of any kind and says that he always 18 intended to be able to collect the full $150,000 equalizing 19 payment. In doing so, he urges that the plan be construed 20 against Corina. These points are not persuasive. 21 22 1 23 Dumitru’s position offends several California rules of 24 26The class 11 treatment is: “Claim shall receive a one-time 25 lump sum payment of $45,000 within 60 days of the effective date 26 of the plan. This claim satisfies Claimant’s claim in full. Any further claims by claimant, of any kind, are waived.” 27 27This court need not, and does not, rule whether there is 28 consideration for “novation” under California law or a “substituted contract” under the Restatement. 3 SCHWING § 64:6. 1 construction. It requires that express provisions in the class 2 11 terms not be given effect contrary to Civil Code § 1641. 3 Dumitru’s secret intent to renege on his waiver of further 4 claims of any kind is contrary to Corina’s belief that Dumitru 5 understood, at the time the Class 11 terms were negotiated and 6 accepted by Dumitru, that he was waiving all further claims. 7 That would violate Civil Code § 1649. 8 Contrary to Civil Code § 1651, it would require preferring 9 terms of Article IX that were prepared without reference to the 10 particular parties and contract over the negotiated Class 11 11 terms prepared at the special direction of the parties. 12 As trier of fact, this court disbelieves Dumitru’s testimony 13 about his intent. Too many objective facts are to the contrary. 14 15 2 16 The drafting history of the plan belies Dumitru’s position. 17 Article IX’s generic statement about the effect of discharge was 18 in all previous plan versions in the preceding six months. 19 His position also implies that he was victimized by superior 20 lawyering on Corina’s behalf. The truth is to the contrary. 21 Dumitru forced the issue. His counsel in the negotiating Class 22 11 was a wily veteran Chapter 11 lawyer, while Corina’s counsel 23 at the time of proposing and negotiating the plan were 24 comparative novices.28 Dumitru’s old pro was sly enough to let 25 plan Article IX linger as potential ambiguity; Corina’s rookies 26 did not recognize the risk of ambiguity. 27 28 28Corina’s counsel at the inception of the Chapter 11 case ceased practice of law before the plan was proposed. 1 The discharge provision does not create a cognizable 2 ambiguity between reasonable constructions. The unreasonableness 3 of Dumitru’s view is evidenced by his present claim of $105,000 4 without mention of the need to offset the $70,214 that he owed 5 under the MSA. His hands in that respect are not clean. 6 In California, the intent manifested in the agreement and by 7 surrounding conduct, rather than the subjective beliefs of the 8 parties, are what matters. Utd. Comm. Ins. Serv., 962 F.2d at 9 856. Intent “is to be inferred, if possible, solely from the 10 written provisions of the contract.” CAL. CIV. CODE § 1639; 11 Santisas, 17 Cal. 4th at 608, 951 P.2d at 405. 12 The reasonable construction is to prefer Class 11 over 13 Article IX so as to give full effect to the Class 11 terms, which 14 extinguished the debt as a matter of nonbankruptcy law, leaving 15 nothing to be discharged by the bankruptcy discharge.29 16 17 B 18 Dumitru next complains about the omission in the disclosure 19 statement of discussion of the value of Romanian assets, 20 including the value of Metalotex Corporation. Since adequacy of 21 disclosure is an essential element of plan confirmation, 11 22 U.S.C. § 1129(a)(2), this amounts to an attack on confirmation. 23 Principles of finality preclude at this late revisiting 24 confirmation. Dumitru did not appeal the confirmation order. 25 The deadline for seeking to revoke confirmation was 180 days 26 27 29Dumitru complains of self-inflicted harm. If he had not 28 objected to confirmation and prompted the global settlement, then Article IX and § 523(a)(15) would have preserved his MSA claim. 1 after entry of the order on July 26, 2012. 11 U.S.C. § 1144. 2 Nor was Dumitru, as former manager of Metalotex, misled 3 about its value in a manner that could have affected his decision 4 to enter into the Class 11 global settlement. 5 6 C 7 Finally, Dumitru attempts to use this Declaratory Judgment 8 Action as a vehicle for collateral attack on the decisions of the 9 courts of Romania dividing Romanian community property. 10 His prayer for a declaration by this court he is “owner of 11 50 percent of all the Romanian property set forth in the [MSA],” 12 assumes that the California judgment that was recognized at his 13 request in Romania operated to compel Romanian courts to have all 14 Romanian community property shifted to a status of 50-50 co- 15 ownership. That argument collapses of its own weight. 16 First, he is asking this court to review the validity of 17 decisions of courts of Romania regarding property in Romania. 18 Fundamental considerations of basic rules of sovereignty cast 19 doubt on such a power reposing in this court. 20 Even if this court could act as Dumitru requests, his sole 21 basis for his argument is the statement in the MSA that “Corina 22 and Dumitru agreed to equally divide the community property in 23 Romania.” That statement does not form a foundation sufficient 24 to support a property division different than the standard 25 marital property division in Romania. 26 The ordinary meaning of that language does not mandate 50-50 27 co-ownership contrary to ordinary rules of equal division of 28 marital property division in community property jurisdictions. 1 The usual method is to value and allocate property to the parties 2 and to adjust unequal values by way of an equalizing payment. 3 The detailed analysis by the Romanian courts in the property 4 division indicates that they did not regard the recognition of 5 the California MSA as directing nonstandard analysis. When the 6 courts of Romania rendered their decisions dividing community 7 property in Romania, they were “equally” dividing property under 8 Romania’s version of community property law. 9 Corina’s actions in proceeding in Romania in the usual 10 manner indicate she did not understand the MSA reference to equal 11 division of community property in Romania to mean something 12 different than conventional community property division. 13 Dumitru is arguing that the statement “Corina and Dumitru 14 agreed to equally divide the community property in Romania” had a 15 secret meaning that he did not disclose. The ordinary meaning of 16 the language is consistent with how Corina and Romanian courts 17 understood it. Dumitru’s secret meaning is of no consequence. 18 Dumitru lost in the trial and appellate courts of Romania in 19 his effort to retain 50 percent ownership of Romanian assets, 20 especially Metalotex Corporation. 21 It is not appropriate for this court to entertain an appeal 22 from the courts of Romania. 23 24 V 25 The Declaratory Judgment Act, which is invoked by the 26 parties, is a more efficient procedural vehicle for addressing 27 28 1 this dispute than a contempt proceeding.30 2 3 A 4 The facts involve the rights and legal relations of the 5 parties in connection with contractual aspects of the confirmed 6 Chapter 11 plan that are within the jurisdiction of this court, 7 but no discharged debt is implicated. 8 The confirmed plan “binds” the parties. 11 U.S.C. 9 § 1141(a). But the discharge injunction focuses on efforts to 10 collect debts as a personal liability of the debtor with respect 11 to discharged debt. 11 U.S.C. § 524(a). 12 Dumitru is “bound” by the confirmed plan, but is not 13 pursuing a debt shielded from collection by the bankruptcy 14 discharge. Rather, he is trying to collect a debt that he caused 15 to be extinguished under nonbankruptcy contract law by virtue of 16 a plan provision that was negotiated at his insistence and that 17 he affirmatively accepted. 18 Perhaps a refusal to honor the § 1141(a) “binding” effect of 19 confirmation would qualify as a contempt and could be addressed 20 by a contempt proceeding. But, a bankruptcy court has the 21 authority to entertain a declaratory judgment action to determine 22 the scope of the bankruptcy discharge. Hong Kong & Shanghai 23 Banking Corp. v. Simon (In re Simon), 153 F.3d 991, 994-95 (9th 24 Cir. 1998). 25 Breach of a plan provision regarding rights and duties of 26 parties that do not implicate a discharged debt is ill-suited to 27 28 30Dumitru invokes 28 U.S.C. § 2201-02. Amended Complaint, ¶ 9, Dkt 40. Corina agrees. Amended Answer, ¶ 9, Dkt 43. 1 the contempt proceeding that is the usual response to a putative 2 discharge violation. Contempt, by its very nature, is heavy- 3 handed and portends punishment over correction. 4 5 B 6 The utility of the Declaratory Judgment is that the court 7 merely declares the rights and other legal relations of 8 interested parties, which declaration has the force and effect of 9 a final judgment. 28 U.S.C. § 2201. 10 Further relief, which may include damages and attorney’s 11 fees, may be awarded on motion made subsequent to the final 12 declaration, subject only to laches. 28 U.S.C. § 2202; Horn & 13 Hardart Co. v. Nat’l RR Passenger Corp., 843 F.2d 546, 548-49 14 (D.C. Cir. 1988), aff’g, 659 F. Supp. 1258, 1262 (D.D.C. 1987). 15 16 1 17 The operative language of the Declaratory Judgment Act 18 provides: 19 § 2201. Creation of Remedy (a). In a case of actual controversy within its 20 jurisdiction, except with respect to ... a proceeding under section 505 or 1146 of title 11, ..., any court of the 21 United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any 22 interested party seeking such declaration, whether or not further relief is or could be sought. 23 § 2202. Further Relief 24 Further necessary or proper relief based on a declaratory judgment or decree may be granted, after reasonable notice 25 and hearing, against any adverse party whose rights have been determined by such judgment. 26 28 U.S.C. §§ 2201(a) & 2202 (omitting exceptions not relevant). 27 The corollary to the specification Declaratory Judgment Act 28 of two title 11 provisions is that other Bankruptcy Code issues 1 are within the ambit of the Declaratory Judgment Act. See 12 2 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE § 57.25[1][b] (2018).31 3 Federal Rule of Bankruptcy Procedure 7001(9) contemplates 4 declaratory judgments in bankruptcy litigation. Fed. R. Bankr. 5 P. 7001(9); 10 COLLIER ON BANKRUPTCY ¶ 7001.10 (Richard Levin & 6 Henry J. Sommer, eds. 2019) (“COLLIER”). 7 8 a 9 The controversy must be within the jurisdiction of the 10 bankruptcy court. 11 12 i 13 Here, the “binding” effect of terms of a confirmed Chapter 14 11 plan pursuant to § 1141(a) is within bankruptcy subject-matter 15 jurisdiction as “arising in,” “arising under,” or “related to” 16 the title 11 case. 28 U.S.C. § 1334(b). It is a core 17 proceeding. E.g., 28 U.S.C. § 157(b)(2)(L) & (O). 18 The subject Chapter 11 plan would not have been confirmed 19 over Dumitru’s objection without an expensive contested 20 confirmation hearing. The negotiated resolution prompted him to 21 withdraw his objection to confirmation and to sign a ballot 22 accepting the plan, at which point confirmation of the 23 uncontested plan became a matter of routine. 24 25 31The Moore’s authors note that a 1988 amendment to § 2201 created linguistic confusion about the references to §§ 505 and 26 1146: whether they are excluded from general authorization of 27 declaratory relief, or excluded from the exception for tax cases. The authors argue that §§ 505 and 1146 are excluded from the 28 exception for tax cases, not excluded from general declaratory judgment authority. 12 MOORE’S FEDERAL PRACTICE §§ 57.25[1][a]-[b]. 1 ii 2 The integral nature of the state-law accord in plan Class 11 3 to confirmation also warrants exercise of § 1367 supplemental 4 jurisdiction. 28 U.S.C. § 1367; Sassoon, 424 F.3d at 869. It is 5 part of the same case or controversy. Id. § 1367(a). The state- 6 law accord raises no novel or complex issue of state law. Id. 7 § 1367(c)(1). The state-law accord does not predominate over 8 issues within original bankruptcy subject-matter jurisdiction 9 including the § 1141(a) “binding” effect of the confirmed plan. 10 Id. § 1367(c)(2). The Chapter 11 case is not being dismissed. 11 Id. § 1367(c)(3). There are no other compelling reasons for 12 declining jurisdiction. 28 U.S.C. § 1367(c)(4). 13 14 b 15 The reference in § 2201 to “any court of the United States” 16 could be a procedural pothole. Whether a bankruptcy judge may 17 render a final decision or must make a report and recommendation 18 to the district court may depend upon the position of the 19 cognizant judicial circuit regarding whether a bankruptcy court 20 is a “court of the United States” for purposes of the Judicial 21 Code. 28 U.S.C. § 451. 22 Bankruptcy judges may render final decisions under the 23 Declaratory Judgment Act in the Second, Third, Seventh, and 24 Eighth Circuits because they construe the term “court of the 25 United States” to include the bankruptcy court as a “unit” of the 26 District Court. See 10 COLLIER ¶ 7001.10. 27 The Third Circuit focused on that precise § 451 “court of 28 the United States” question in concluding that a bankruptcy judge 1] has authority to hold an attorney liable for excessive costs 2|/under 28 U.S.C. § 1927. Appeal of Segal (In re Schaefer Salt 3} Recovery, Inc.), 542 F.3d 90, 105 (3d Cir. 2008). 4 And, the Eighth Circuit has explicitly held that a 5 || bankruptcy judge has the power to issue declaratory judgments 6]}/under § 2201 on a matter in actual controversy within bankruptcy jurisdiction. Sears, Roebuck & Co. v. O’Brien, 178 F.3d 962, 964 8 |} (8th Cir. 1999), cited with approval, 1 COLLIER 7 3.09[3].* 9 Although no circuit has held that bankruptcy judges may not 10} render final judgment under the Declaratory Judgment Act, the Ninth, Tenth, and Eleventh Circuit have held that a bankruptcy 12 || court is not a “court of the United States” for certain other 13] Title 28 purposes. E.g., Perroton v. Gray (In re Perroton), 958 F.2d 889, 893-96 (9th Cir. 1992) (§ 1915).*' 15 In circuits that do not regard bankruptcy judges as judges 16] of a “court of the United States” for purposes of § 2201, a 17} bankruptcy judge in a declaratory judgment action will make a 18 19 Schaefer Salt squarely holds that a bankruptcy court is a “court of the United States.” The Second, Seventh, and Eighth 20 || Circuits appear to agree: Adair v. Sherman, 230 F.3d 890, 895 n.8 (7th Cir. 2000); Baker v. Sparrowbush Assoc. (In re Cohoes 21) Indus. Terminal, Inc.), 931 F.2d 222, 230 (2d Cir. 1991); Volpert v. Ellis (In re Volpert), 177 B.R. 81, 88-89 (Bankr. N.D. 22" Tll. 1995), aff'd, 186 B.R. 240 (N.D. Ill 1995), aff’d on other grounds, 110 F.3d 494, (7th Cir. 1997); see also, Walton v. 23 | LaBarge (In re Clark), 223 F.3d 859, 864 (8th Cir. 2000). 24 And, Nat’l Union Fire Ins. Co. v. Titan Energy, Inc. (In 25 re Titan Energy, Inc.), 837 F.2d 325, 329-30 (8th Cir. 1988); accord, Rex-Tech Int’l LLC v. Rollings (In re Rollings), 451 F. 26 || Appx. 340, 345 (Sth Cir. 2011) (non-precedential). 27 “And, Jones v. Bank of Santa Fe (In re Courtesy Inns, Ltd.), 40 F.3d 1084, 1086 (10th Cir. 1994) (§ 1927); Gower v. 28 || Farmers Home Admin. (In re Davis), 899 F.2d 1136, 1138-40 (11th Cir. 1990) (§ 1927). 33

1] report and recommendation to the district court unless the parties agree the bankruptcy judge may hear and determine it. 3] See, e.g., In re City of Central Falls, R.I., 468 B.R. 36, 48-49 (Bankr. D.R.I. 2012).*° 5 6 7 The Ninth Circuit situation regarding the declaratory judgment authority of a bankruptcy judge is unclear. The fact that the Ninth Circuit has, despite Perroton, affirmed 10 | declaratory judgment decisions by bankruptcy judges without questioning their authority to render § 2201 declaratory 121 judgments suggests that Perroton is limited to § 1915 in forma 13 |} pauperis rulings and has otherwise lost vitality.*® Simon, 153 14] F.3d at 994-95; Bear Valley Mutual Water Co. v. Prestige Point 15 (In re Prestige Point), 985 F.2d 573 (9th Cir. 1993) (mem.). 16 Any Ninth Circuit inconsistency, however, is irrelevant here 17 || because the parties have agreed that this bankruptcy court may 18 || hear and determine this declaratory judgment action. Hence, this 19! court is authorized to render a final declaratory judgment under 2201, regardless of whether Perroton has vitality in the 21 context of declaratory judgments. 22 23 24, 25 *Consent toa declaratory judgment may be attractive as more benign than the alternative of a formal contempt proceeding. 26 °°Tn bankruptcy cases, the § 1915 in forma pauperis issue 27 || has been rendered of little significance by the enactment of 28 U.S.C. § 1915(f£) permitting waiver of certain filing fees for 28 | low-income individuals, following a pilot program first enacted in 1993. Pub. L. 103-121, § 111(d). 34

1 2 2 Further relief is another feature of the Declaratory 3 Judgment Act. 4 5 A 6 The court may grant further necessary or proper relief 7 against any adverse party whose rights have been determined by 8 the declaratory judgment. 28 U.S.C. § 2202. 9 Declaratory judgments may be supplemented by further relief 10 in the form of damages or equitable relief, so long as the movant 11 is not barred by laches. 12 MOORE’S FEDERAL PRACTICE § 57.65; 10B 12 CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE & 13 PROCEDURE § 2771 (2016). 14 A prevailing party may obtain damages and attorneys’ fees as 15 § 2202 further relief. Horn & Hardart Co., 843 F.2d at 548-49; 16 id., 659 F. Supp. at 1262 (“both proper and efficient for 17 [prevailing defendant] to prosecute its claims in a petition for 18 further relief”). 19 20 B 21 The standard remedy for breach of an accord and satisfaction 22 is specific performance, plus damages. RESTATEMENT § 281(3). 23 Specific performance means requiring the breaching party to 24 accept the accord by declining to render any relief to that 25 party. Damages typically include professional fees and related 26 litigation expenses. 27 Corina’s answer to the amended complaint requests attorney’s 28 fees, costs of suit, and other relief deemed just. No record, as 1 of yet, has been made regarding these matters. 2 Whether Corina, as prevailing defendant, chooses to seek 3 § 2202 further relief is up to her. 4 5 Conclusion 6 The plaintiff is correct that Bankruptcy Code October 24, 7 2019§ 523(a)(15) excepts his equalizing payment claim under the 8 marital settlement agreement from discharge in bankruptcy. All 9 he had to do to preserve that status at the time of confirmation 10 of his former spouse’s Chapter 11 plan was nothing. But, he 11 chose to force the issue by objecting to confirmation, hiring 12 seasoned Chapter 11 counsel, and insisting that his claim be 13 dealt with in the plan. 14 The ensuing “global settlement” created plan Class 11 for 15 him alone that provided for a lump-sum payment to resolve all 16 issues between the parties (not merely the MSA) in exchange for 17 his waiver of all future claims of any nature. He withdrew his 18 objection to confirmation and voted to accept the plan. 19 The form and substance of the agreement embedded in his 20 Class 11 operated as an amendment of the MSA and an accord and 21 satisfaction under applicable state law that, upon performance, 22 extinguished the debt that would otherwise have been excepted 23 from discharge. The debt having been extinguished, nothing 24 remained of it to be discharged in bankruptcy. 25 This court has no authority over the rulings of the courts 26 of Romania regarding division of community property in Romania. 27 An appropriate judgment will be entered declaring the rights 28 of the parties pursuant to the Declaratory Judgment Act. The 1 debtor’s bankruptcy discharge under § 1141, by virtue of 2 § 523(a)(15), does not operate to discharge debts established by 3 the marital settlement agreement incorporated in the parties’ 4 divorce decree. However, although the plaintiff at the outset of 5 the Chapter 11 case held a claim potentially excepted from 6 discharge under § 523(a)(15), he and the debtor agreed during the 7 course of the case to settle the debt in a form of agreement that 8 modified the MSA and qualified as an accord and satisfaction 9 under applicable nonbankruptcy law. As a matter of state law, 10 the debt was extinguished during the case. Having been 11 extinguished, no debt remains to be excepted from discharge. 12 This decision will be without prejudice to further relief under 13 28 U.S.C. § 2202. 14 15 October 28, 2019 16 ______________________________

UNITED STATES BANKRUPTCY JUDGE

17 18 19 20 21 22 23 24 25 26 27 28 Instructions to Clerk of Court Service List – Not Part of Order/Judgment The Clerk of Court is instructed to send the Order/Judgment or other court generated document transmitted herewith to the parties below. The Clerk of Court will send the Order via the BNC. Corina Dragnea David M. Sternberg Jacob Barlev 9411 Skydome Ct 540 Lennon Ln 100 Smith Ranch Rd #306 Elk Grove CA 95624 Walnut Creek CA 94598 San Rafael CA 94903 Stephen T. Cammack Dumitru Dragnea 915 University Ave 8801 Williamson Dr Sacramento CA 95825 Elk Grove CA 95624