522 B.R. 357
Bankr. M.D. Ala.2014Background
- Divorce between Angela Henderson and Charles Coon finalized Oct 15, 2009 in Coffee County, Alabama; settlement incorporated into divorce decree.
- Section IV of settlement provides periodic alimony totaling $2,000/month for 6 months then $3,000/month for 54 months.
- Section VIII provides a retirement-benefit split: Coon to pay Henderson $40,895.30 (half of his TRS account)
- 2011: Alabama court reduces Section IV to $1,500/month upon open cohabitation finding; income withholding for alimony is voided.
- 2013: Alabama court denies termination of Section IV; treats Section VIII as part of property settlement; Coon files Chapter 13 bankruptcy and Henderson files priority claim for alimony/retirement-related amounts; adversary proceeding ensues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Section IV is a priority domestic-support obligation. | Coon argues IV is a property settlement, not alimony. | Henderson contends IV is alimony and thus priority. | Section IV is in the nature of alimony; priority applies. |
| Whether Section IV debt is non-dischargeable in Chapter 13. | If IV is alimony, it is non-dischargeable. | IV should be dischargeable if not priority. | IV debt is non-dischargeable under 1328(a)(2) and 523(a)(5) due to its alimony nature. |
| Whether Section VIII is a priority claim or a property settlement. | Section VIII could be alimony and priority. | Section VIII is property settlement, not priority. | Section VIII is property settlement; not entitled to priority. |
| Whether Henderson’s bad-faith bankruptcy dismissal claim should be dismissed. | Coon filed to hinder Henderson; case dismissal warranted. | Bad-faith claim merits dismissal. | Bad-faith dismissal request denied without prejudice. |
Key Cases Cited
- Cummings v. Cummings, 244 F.3d 1263 (11th Cir.2001) (federal-law test to determine if obligation is support, not bound by labels)
- Benson v. Benson (In re Benson), 441 Fed.Appx. 650 (11th Cir.2011) (eight Benson factors to classify obligations)
- Harrell v. Sharp (In re Harrell), 754 F.2d 902 (11th Cir.1985) (limits state-court domestic-relations proceedings; role of bankruptcy court)
- Cook v. Wal-Mart Stores, Inc., 795 F.Supp.2d 1269 (M.D.Ala.2011) (conclusory assertions insufficient for summary judgment)
- In re Hutchens, 480 B.R. 374 (Bankr.M.D.Fla.2012) (discusses priority vs non-priority alimony in bankruptcy)