In re Miller
501 B.R. 266
Bankr. E.D. Pa.2013Background
- Debtor John R. Miller filed Chapter 13 on July 15, 2013; ex‑spouse Joanne Miller moved for relief from the automatic stay to pursue state‑court enforcement of their Marital Settlement Agreement (MSA).
- MSA (Sept. 2009) included: $680/month labeled "child support" (deferred until sale of marital residence), division of sale proceeds, $8,000 repayment to son Calvin for college, and a fee‑shifting clause; parties divorced July 2010.
- State Court found Debtor in contempt (Jan. 9, 2013), ordered payment of $18,360 in past‑due child support, $8,000 to Calvin, and $3,500 in attorney fees; further contempt proceedings were pending when bankruptcy filed.
- Debtor listed a Single Premium Structured Settlement Annuity (periodic payments) on schedules and claimed exemptions; the §341 meeting had not concluded so exemptions were not yet effective.
- Bankruptcy plan contemplated sale of the residence and proposed small plan payments; Debtor’s schedules showed monthly income less than expenses, raising feasibility concerns.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the obligations (monthly $680 and $8,000 to son) are domestic support obligations (DSOs) | Miller: obligations are in nature of support and therefore DSOs | Miller counters characterization; Debtor: obligations are property‑division or separate debts, not DSOs (deferral tied to sale shows property nature) | Court: $680/month and $8,000 to Calvin are DSOs based on MSA labels, termination terms, and purpose (support/education) |
| Whether § 362(b)(2) permits state‑court collection from Annuity without stay relief | Miller: she may collect because the debts are DSOs and exempted Annuity is not estate property | Debtor: Annuity is estate property (exemption not yet effective), so §362(b)(2)(B) does not apply | Court: §362(b)(2) inapplicable to the Annuity because the Annuity remains property of the estate (exemption deadline not passed) |
| Whether relief from the automatic stay under § 362(d) should be granted to enforce DSOs (ongoing and prepetition arrears) | Miller: need enforcement; ongoing support and arrears should be collectible; stay relief appropriate | Debtor: plan provides for full payment of priority DSO arrears; stay relief unnecessary and would subvert Chapter 13 plan | Court: granted stay relief — allowed Miller to pursue state remedies (including against estate property) for both ongoing post‑petition DSO and pre‑petition arrears because Debtor failed to show plan feasibility/objective good faith |
| Whether attorney's fees awards are DSOs and collectible against Annuity | Miller: fees incurred enforcing support are part of support and thus DSOs | Debtor: fees are contractual/equitable distribution-related and not support | Court: attorney's fees were ambiguous — denied automatic determination as DSO; modified stay to permit Miller to seek clarification from State Court (to determine later whether fees are DSO and collectible) |
Key Cases Cited
- In re Gianakas, 917 F.2d 759 (3d Cir. 1990) (framework for determining whether marital obligations are in nature of support)
- In re Krystal Cadillac Oldsmobile GMC Truck, Inc., 142 F.3d 631 (3d Cir. 1998) (automatic stay is a fundamental debtor protection)
- Constitution Bank v. Tubbs, 68 F.3d 685 (3d Cir. 1995) (stay protects the bankruptcy process and creditors from individual remedies)
- In re Bell, 476 B.R. 168 (Bankr. E.D. Pa. 2012) (balancing equities and totality of circumstances in stay relief for unsecured creditors)
- In re Jacobson, 231 B.R. 763 (Bankr. D. Ariz. 1999) (stay relief to enforce DSO in Chapter 13 should be the exception where plan is filed in good faith)