445 B.R. 50
Bankr. D. Mass.2011Background
- Thatcher, former spouse of the Debtor, was awarded $138,720.41 in attorney's fees by the Probate Court in a 2009 modification proceeding.
- The Probate Court found the Debtor underemployed, purposefully sought to reduce child support, and awarded Thatcher fees incurred defending the modification action.
- A clarifying Probate order (Nov. 19, 2010) recharacterized the fee award as in the nature of child support and a debt owed to Thatcher, not to Altman as counsel.
- Thatcher paid substantial sums to Altman; the Debtor was attached for $113,720.41 but ultimately sought bankruptcy protection.
- The Plaintiff (Altman) seeks to have the fee award nondischargeable under 11 U.S.C. § 523(a)(5), (a)(15), or (a)(6), and to enforce a nonavoidable judicial lien.
- The Court applies collateral estoppel to resolve these issues, and also considers the Debtor's motion to avoid a judicial lien on his homestead.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| DSO or 15(a) applicability | Altman argues the fee award constitutes a DSO under §523(a)(5) or a §523(a)(15) debt. | Johnson contends the award is a sanction and not a DSO or 15(a) obligation. | DSO/15(a) status affirmed; fee award nondischargeable. |
| Collateral estoppel effect | Altman asserts final Probate Court judgment precludes contrary defenses. | Johnson contends the issues are not identical or essential to the prior judgment. | Collateral estoppel applies; issues resolved in debtor's favor are barred. |
| Whether attorney's fees were incurred in the course of divorce | Altman contends fees relate to Thatcher's enforcement of child support. | Johnson asserts the fees relate to sanctioning frivolous litigation and are not support-based. | Fees incurred in defense of modification are in the nature of support; nondischargeable. |
| Section 523(a)(6) willful and malicious | Altman argues Johnson acted willfully to injure Thatcher requiring nondischargeability. | Johnson disputes willfulness or malice. | Obligation may be nondischargeable under 523(a)(6) based on the Clarified Judgment's findings. |
| Lien avoidance under 11 U.S.C. § 522(f) | Altman contends the lien on debtor's homestead should be preserved as a DSO lien. | Johnson seeks to avoid the judicial lien. | Lien avoidance denied; lien remains impairing exemption and is nonavoidance under §522(f). |
Key Cases Cited
- In re Werthen, 329 F.3d 269 (1st Cir. 2003) (support nature of awards depends on intent of divorce court)
- Macy v. Macy, 114 F.3d 1 (1st Cir. 1997) (alimony/child support enforcement costs treated as support)
- In re Smith, 398 B.R. 715 (B.A.P. 1st Cir. 2008) (DSO analysis for support-type obligations in divorce)
- In re Tarone, 434 B.R. 41 (Bankr. E.D.N.Y. 2010) (attorney's fees incurred in divorce context treated as nondischargeable)
- In re Golio, 393 B.R. 56 (Bankr. E.D.N.Y. 2008) (pre-BAPCPA analysis of 523(a)(5)/(a)(15) for third-party fees)