In re: Wallace Eugene Francis, Tracy Danielle Francis, 505 B.R. 914

Debtor Wallace Eugene Francis and ex-spouse Debra Lyn Wallace stipulated to a marital dissolution judgment that assigned certain credit-card debts to Francis and stated he would "pay and hold Wife harmless" from those liabilities.
The Judgment, governed by California law, incorporated the parties’ agreement and reserved the family court’s enforcement powers under the California Family Code.
Francis stopped paying the credit-card debts; Wallace sued in state court and then Francis filed Chapter 7 bankruptcy shortly after.
Wallace sued in the bankruptcy adversary proceeding seeking a determination that Francis’s obligation was nondischargeable under 11 U.S.C. § 523(a)(15); she moved for summary judgment.
Francis argued the Judgment’s "hold harmless" language did not create an indemnity or a "debt" (liability on a claim) under California law and thus could not be nondischargeable under § 523(a)(15).
The bankruptcy court granted summary judgment for Wallace; the BAP affirmed, holding the obligation arose from the dissolution judgment (including implied indemnity and state enforcement remedies) and thus is a nondischargeable debt under § 523(a)(15).

Issue	Plaintiff's Argument (Wallace)	Defendant's Argument (Francis)	Held
Whether Francis’s obligation to "pay and hold harmless" is a "debt" nondischargeable under § 523(a)(15)	The covenant in the dissolution judgment gives Wallace an enforceable right to payment via state-court enforcement and thus is nondischargeable under § 523(a)(15).	The phrase "hold harmless" is not clear indemnity; absent explicit indemnification language there is no right to payment under California law, so no "debt" under § 101(12)/§ 101(5).	Held for Wallace: the Judgment created an enforceable right (including implied indemnity and remedies under Cal. Fam. Code § 290), so the obligation is a "debt" and is nondischargeable under § 523(a)(15).

Short v. Short, 232 F.3d 1018 (9th Cir. 2000) (§ 523(a)(15) applies to debts incurred as part of property division in dissolution)
Crosswhite v. Crosswhite, 148 F.3d 879 (7th Cir. 1998) (§ 523(a)(15) nondischargeability scope includes marital debts other than support)
Gamble v. Gamble, 143 F.3d 223 (5th Cir. 1998) (§ 523(a)(15) covers obligations incurred in divorce/separation)
McCafferty v. McCafferty, 96 F.3d 192 (6th Cir. 1996) (Congressional intent to except divorce-related obligations from discharge)
Johnson v. Home State Bank, 501 U.S. 78 (U.S. 1991) (a "right to payment" is an enforceable obligation)
Butner v. United States, 440 U.S. 48 (U.S. 1979) (property and related rights are determined by state law unless federal law provides otherwise)
E.L. White, Inc. v. City of Huntington Beach, 21 Cal.3d 497 (Cal. 1978) (indemnity obligations may arise from equitable considerations or implied contractual duties)
Prince v. Pacific Gas & Elec. Co., 45 Cal.4th 1151 (Cal. 2009) (clarifies strict construction of express indemnity language while recognizing implied indemnity principles)
Garlock Sealing Tech., LLC v. NAK Sealing Tech. Corp., 148 Cal.App.4th 937 (Cal. Ct. App. 2007) (discusses implied contractual indemnity where promise to perform implies responsibility for foreseeable damages)