In re Packer, 558 B.R. 842

Background

Debtor filed Chapter 13; ex-spouse Sandra Dieter filed Claim 7-1 for $25,000 in attorney fees awarded by Ingham County Circuit Court (Family Division) related to child custody/visitation litigation.
State court entered a Uniform Child Support Order on Oct 30, 2015 and then held a hearing on attorney fees on Nov 10, 2015, awarding Dieter $25,000.
Debtor objected in bankruptcy, arguing the fee award was not a domestic support obligation (DSO). Parties stipulated facts and admitted six exhibits (including the divorce judgment, the Uniform Child Support Order, the state court transcript, and the state court fee order); no witnesses were called.
Bankruptcy Court issued a telephonic bench opinion overruling the Debtor’s objection and allowed Dieter’s claim as a DSO. Debtor moved for reconsideration under Fed. R. Bankr. P. 3008 (and Fed. R. Civ. P. 52/59 analogues) within 14 days.
Debtor argued the court erred by (1) giving evidentiary weight to the Uniform Child Support Order (Creditor’s Exh. 5) and (2) failing to find he was denied an evidentiary hearing in state court. He also sought additional findings under Rule 52(b).
Bankruptcy Court denied reconsideration, finding (a) the state court transcript showed the state judge considered income disparities, fees incurred, and fault; (b) Debtor presented no evidence in bankruptcy to rebut reasonableness of the award; and (c) Rule 59(e)/52(b) relief was not warranted because Debtor failed to show clear error, newly discovered evidence, or manifest injustice.

Issues

Issue	Plaintiff's Argument (Debtor)	Defendant's Argument (Dieter)	Held
Whether the $25,000 attorney-fee award qualifies as a domestic support obligation (DSO)	Fee award is not a DSO; improperly classified	State court awarded fees tied to child-related litigation and fault; constitutes DSO	Allowed as a DSO (bankruptcy court deferred to state-court findings)
Whether timely reconsideration under Rule 3008/59(e) and amendment under Rule 52(b) is warranted	Court erred as a matter of law and should make additional findings	No clear error; no new evidence; Debtor re-argues matters already decided	Motion for reconsideration denied under Rule 59(e) and Rule 52(b)
Whether the Uniform Child Support Order (Creditor’s Exh. 5) was improperly given weight	Court improperly relied on that order without it being explicitly used at state hearing	Order entered 11 days before fee hearing, includes income findings consistent with state transcript; relevant to what state judge considered	Court did not give great weight to the order itself but permissibly inferred the state judge considered it; reliance was not error
Whether Debtor was denied an evidentiary hearing in state court such that bankruptcy should reject the fee award	State court refused an evidentiary hearing; Debtor lacked opportunity to contest fees on evidence	State court was not required to hold an evidentiary hearing; transcript shows the judge found sufficient facts to award fees	Denied — state court acted within discretion; bankruptcy court will not re-litigate the state-court factual determination absent evidence showing unreasonableness

Key Cases Cited

GenCorp. Inc. v. American Int’l Underwriters, 178 F.3d 804 (6th Cir. 1999) (standards for Rule 59(e) relief)
In re SCBA Liquidation, Inc., 485 B.R. 153 (Bankr. W.D. Mich. 2012) (timing and standards for Rule 3008 motions)
In re Aguilar, 861 F.2d 873 (5th Cir. 1988) (analogizing timely Rule 3008 motions to Rule 59 motions)
Sorah v. Sorah (In re Sorah), 163 F.3d 397 (6th Cir. 1998) (burden on debtor to show DSO amount unreasonable)
Borowsky v. Borowsky, 273 Mich. App. 666 (Mich. Ct. App. 2007) (standards for awarding attorney fees in domestic relations cases)
Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367 (6th Cir. 1998) (Rule 59(e) is not for re-argument of issues)
FDIC v. World Univ., Inc., 978 F.2d 10 (1st Cir. 1992) (motions for reconsideration should not re-raise previously decided arguments)