473 B.R. 185
Bankr. E.D. Ky.2012Background
- Debtor Timothy Micek owes Dodd & Dodd Attorneys, PLLC $28,969.06 for ex-wife Lisbeth Micek’s divorce fees; Dodd seeks priority Domestic Support Obligation (DSO).
- Trustee objects to DSO classification, arguing Dodd is not an eligible payee, the fees are not support, and priority is improper due to ongoing Dodd Adversary and levy actions.
- Divorce Court ordered Micek to pay Dodd $39,000 in fees based on debtor’s “position of financial superiority”; a later order denied relief from that obligation.
- Lisbeth Micek filed a Chapter 7, listed Dodd’s claim as unsecured non-priority, and did not schedule Dodd’s claim; her case proceeded to discharge.
- Dodd filed an adversary proceeding to determine that Lisbeth Micek’s discharge did not bar Dodd’s fee lien in maintenance payments; the matters are intertwined with the Dodd Adversary.
- The Amended Opinion concludes all attorney fees are prepetition and resolves the Section 507(a)(1) objection; the Dodd Adversary is reassigned for related proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Dodd debt a Domestic Support Obligation under §101(14A)? | Dodd argues fees are DSO because they are support-like and payable in connection with divorce. | Trustee contends the fees are to a third party, not to a listed payee, and thus not a DSO. | Debt can be in the nature of support under federal bankruptcy law. |
| Is Dodd an eligible DSO recipient/payee under §101(14A)? | Dodd maintains qualified as a former-spouse recipient; pre-BAPCPA law supports eligibility. | Trustee argues ineligibility since payee is a third party (attorney). | Court agrees approach focusing on nature of debt applies; Dodd can be an eligible recipient under the governing framework. |
| Are the attorney fees in the nature of support? | Attorney fees in divorce actions inherently provide support due to financial disparity. | Fees are not labeled as support in the Divorce Court orders; may not be support. | Fees can be treated as the nature of support under the controlling framework. |
| Should Dodd receive priority given ex-wife’s bankruptcy and Dodd Adversary actions? | Priority is warranted to protect Dodd’s claim and prevent prejudice to former spouse’s creditors. | Priority disputed due to potential levy on maintenance and conflicts of interest. | Court resolves the Section 507(a)(1) objection in favor of priority for prepetition fees; reassignment of Dodd Adversary proceedings. |
| Does joint liability alter the analysis? | Joint liability is not essential if the debt is in the nature of support. | Some analyses require joint liability to maintain priority. | Joint-liability issue is irrelevant to this decision; focus on the debt’s nature as support. |
Key Cases Cited
- In re Kassicieh, 425 B.R. 467 (Bankr.S.D.Ohio 2010) (three views on third-party fees in DSO context; supports nature-of-debt approach)
- In re Kassicieh, 425 B.R. 474 (Bankr.S.D.Ohio 2010) (collecting authorities; supports pre-BAPCPA view of debt’s nature)
- In re Gentilini, 365 B.R. 251 (Bankr.S.D.S. Fla. 2007) (joint-liability approach and nature-of-debt approach in determining DSO)
- In re Johnson, 384 B.R. 763 (Bankr.E.D.Mich. 2008) (debt’s nature controls dischargeability for third-party payees)
- In re Calhoun, 715 F.2d 1103 (6th Cir. 1983) (payments in the nature of support need not be to the spouse/dependent for nondischargeability)
- In re White, 851 F.2d 170 (6th Cir. 1988) (example of collusion concerns in bankruptcy matters involving domestic relations)
- Reissig v. Gruber, 436 B.R. 39 (Bankr.N.D.Ohio 2010) (commentary on federal-law approach to DSOs)
- In re Clark, 441 B.R. 752 (Bankr.M.D.N.C. 2011) (pre-BAPCPA analyses of DSOs and third-party payees)
- In re Johnson, 397 B.R. 289 (Bankr.M.D.N.C. 2008) (discusses whether the debtor’s spouse remains liable for debt)