541 B.R. 906
Bankr. M.D. Fla.2015Background
- In 2007 Vanessa Brown (Debtor) opened a Florida Prepaid college account for her daughter OFH; Brown was the named owner and both parents contributed to the account through 2013.
- On November 25, 2013 Brown closed the account and received a refund of $6,358.71 (Principal Balance).
- Jason Hanson (the father) sued in Florida county court on behalf of himself and OFH; the county court found Brown acted improperly and entered a default final judgment ordering Brown to pay $7,508.71 (principal plus $1,150 fees), later increased for contempt to $9,572.44 total.
- Brown filed Chapter 7 bankruptcy; Hanson timely commenced an adversary proceeding seeking a ruling that the state-court judgment debt is nondischargeable under 11 U.S.C. §§ 523(a)(2), (4), (6), and (15).
- The bankruptcy court held the debt nondischargeable under § 523(a)(15) (debt to child arising from a court determination) and, alternatively, under § 523(a)(6) (willful and malicious injury), and therefore also ruled associated fees, costs, and interest nondischargeable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the state-court judgment debt to the minor child is nondischargeable under § 523(a)(15) | Hanson: debt to child established by state court fits § 523(a)(15) and is nondischargeable | Brown: debt arose from breach of contract or purportedly used for daughter's medical care (implying dischargeability) | Held: § 523(a)(15) applies; judgment debt to child is nondischargeable |
| Whether attorney fees, costs, and interest tied to the judgment are dischargeable | Hanson: ancillary fees/costs follow nondischargeable primary obligation | Brown: (implicit) fees are dischargeable if principal debt is dischargeable | Held: fees, costs, and interest are nondischargeable as they flow from nondischargeable obligation |
| Whether the debt is nondischargeable under § 523(a)(6) for willful and malicious injury | Hanson: unilateral closing and retention of funds intentionally and wrongfully injured the child | Brown: she had justification for closing/using funds (credibility disputed) | Held: alternatively nondischargeable under § 523(a)(6); acts were willful and malicious |
| Whether § 523(a)(15) requires marital status or divorce-related proceedings | Hanson: § 523(a)(15) is broad and covers debts to a child determined by a court regardless of marital status | Brown: implied challenge that provision is inapplicable absent divorce/separation context | Held: marital status or divorce proceeding not required; statute applies to debts to child established by court order |
Key Cases Cited
- Grogan v. Garner, 498 U.S. 279 (1991) (plaintiff must prove nondischargeability by a preponderance of the evidence)
- Perez v. Campbell, 402 U.S. 637 (1971) (bankruptcy fresh-start policy and limits on discharge)
- Jennings v. Maxfield (In re Jennings), 533 F.3d 1333 (11th Cir. 2008) (treatment of discharge exceptions in circuit precedent)
- Kane v. Stewart Tilghman Fox & Bianchi P.A., 755 F.3d 1285 (11th Cir. 2014) (definition and standards for willful and malicious injury under § 523(a)(6))