453 B.R. 782
Bankr. D.N.J.2011Background
- Debtor Timothy Anthony and Creditor Michel Parillo-Anthony are divorced under a FJOD entered April 4, 2008, which includes alimony, child support, daycare costs, and a Property Settlement Agreement allocating 50% of condo fees until sale with Debtor liable for any shortfall.
- Debtor filed a Chapter 13 petition July 21, 2010 and proposed plan; Creditor filed a priority claim for domestic support obligations totaling $27,599.53.
- Debtor moved May 17, 2011 to reclassify condominium maintenance fees as general unsecured rather than domestic support; Creditor opposed June 7, 2011 asserting condo fees are domestic support and requesting post-petition interest.
- Court must decide (i) whether condo fees are a domestic support obligation under § 507, and (ii) whether Creditor is entitled to post-petition interest on pre-petition child support arrears.
- Court rules condo fees are not in the nature of domestic support and grants reclassification to general unsecured; Creditor is entitled to post-petition interest on pre-petition child support arrears at state-law judgment rate, but not on alimony; confirms the two-part result sought by Debtor.
- Debtor is directed to submit a proposed order consistent with the opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are condominium fees a domestic support obligation for priority under § 507? | Parillo-Anthony contends condo fees are in the nature of support. | Anthony argues condo fees are not support and should be non-priority. | Condo fees not a domestic support obligation; reclassified as general unsecured. |
| Whether Creditor is entitled to post-petition interest on pre-petition child support arrears | Parillo-Anthony seeks post-petition interest on pre-petition arrears. | Anthony argues no post-petition interest unless state court so awards. | Creditor entitled to post-petition interest on pre-petition child support arrears; alimony not interest-bearing absent state action. |
Key Cases Cited
- In re Gianakas, 917 F.2d 759 (3d Cir.1990) (test for whether a debt is in the nature of support and non-dischargeable)
- In re Sampson, 997 F.2d 717 (10th Cir.1993) (balancing eligibility of debt as in the nature of support; substance over form)
- In re Loper, 329 B.R. 704 (10th Cir. BAP 2005) (test for determining if a debt is in the nature of support under pre-BAPCPA standard)
- In re Graboyes, 371 B.R. 113 (Bankr.E.D.Pa.2007) (burden-shifting framework for claims on objection to proofs of claim)
- In re Gianakas, 917 F.2d 759 (3d Cir.1990) (emphasizes that inquiry into present need cannot modify state matrimonial decrees)