Berse v. Langman (In re Langnam)
465 B.R. 395
Bankr. D.N.J.2012Background
- Langman joint Chapter 7 petition; Berse seeks nondischargeability of an attorney’s charging lien under §523(a)(5) and (a)(15).
- Judge Sivilli issued an April 19, 2010 lien order directing lien proceeds from the marital residence to fund Berse’s fee lien.
- Marital Settlement Agreement (April 26, 2010) states fees shall not be discharged in bankruptcy and parties’ fees are separate; includes a handwritten clause limiting each party’s counsel fees.
- The Langmans’ property at 35 Hampton Terrace is in foreclosure with substantial encumbrances; trustee reported no distribution.
- Berse filed an adversary proceeding on September 8, 2010; Debtors moved to dismiss on September 29, 2010; hearings held June 27, 2011; decision reserved.
- Court grants Debtors’ motion to dismiss the adversary proceeding in its entirety.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Berse’s lien qualifies as nondischargeable under §523(a)(5). | Berse’s lien is in the nature of support; lien attached pre-petition and was to be paid from proceeds. | Lien to pay Berse is not to a spouse/child and does not fall under §523(a)(5); no court order required Ronald’s payment. | Section 523(a)(5) not satisfied; claim dismissed. |
| Whether Berse’s lien qualifies under §523(a)(15). | Debt incurred in divorce proceedings and payable to a former spouse’s attorney is nondischargeable. | Lien is a pre-petition debt owed to Berse by Ethel, not to a spouse/child; not within (a)(15) standing. | §523(a)(15) not satisfied; claim dismissed. |
| Whether Berse’s other allegations (fraudulent concealment/collusion) survive; scope limited to specified sections. | Allegations show collusion and concealment affecting dischargeability. | These claims not brought under §523(a)(2),(a)(4),(a)(6) or §727; not within scope. | Court declines ruling on those claims; not addressed. |
Key Cases Cited
- In re Maddigan, 312 F.3d 589 (2d Cir.2002) (nondischargeable fees to a third party under §523(a)(5))
- In re Crosswhite, 148 F.3d 879 (7th Cir.1998) (broad application of §523(a)(5) to protect ex-spouses/children)
- Gianakas v. Gianakas (In re Gianakas), 917 F.2d 759 (3d Cir.1990) (intent and factors to determine whether obligation is in the nature of support)
- In re Cohn, 54 F.3d 1108 (3d Cir.1995) (general framework for dischargeability; strict construction against creditors)