543 B.R. 780
Bankr. E.D. Va.2016Background
- Lawrence sued Debtor Combs seeking a bankruptcy determination that obligations from their Virginia divorce (a July 31, 2012 Divorce Decree and a May 30, 2014 Equitable Distribution Order) are domestic support obligations (DSOs) and therefore nondischargeable under 11 U.S.C. § 523(a)(5).
- The state court Orders include multiple items: support arrearages, tax refund division, division of retirement accounts, reimbursement of the child education fund, foreclosure-avoidance reimbursement, Lytle Title reimbursement, equity equalization between two properties, imputed rental income balancing, medical expense reimbursement, and a small garnishment balance. Lawrence claimed $167,728.60 total.
- Debtor filed Chapter 13 on Sept. 26, 2014, scheduled many of the state-court obligations as dischargeable property settlements, and had a confirmed Chapter 13 plan that treated some amounts as priority DSOs.
- At trial the Debtor conceded four items as nondischargeable DSOs (three support arrearages and medical expense reimbursement) totaling $15,780.36; parties disputed the nature of the remaining items.
- The court applied Fourth Circuit factors (Catron test): intent/overbearing, language/substance of orders, parties’ financial situations, and the function served by each obligation, to determine whether contested items were in the nature of support or property division.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether each contested post-divorce obligation is a domestic support obligation under § 101(14A)/§ 523(a)(5) | Lawrence: all items in the Equitable Distribution Order are in the nature of support and needed for her and the child’s subsistence | Combs: many items are equitable distribution/property divisions and therefore dischargeable (§ 523(a)(15) or dischargeable in Chapter 13) | Court: split — some items are DSOs, others are property divisions. Nondischargeable total = $41,454.12 (conceded $15,780.36 + $12,750.00 education fund + $12,923.76 foreclosure-avoidance). Remaining items discharged on plan completion. |
| Whether the division of retirement accounts, equity equalization, imputed rental balancing, tax refund division, Lytle Title item, and garnishment are support or property division | Lawrence: these awards were necessary for her support | Combs: language/evidence shows these are equitable/property allocations | Court: these are property divisions and dischargeable (Retirement $56,500; Equity Difference $58,000; Rental $1,600; Tax $2,330; Lytle $7,500; Garnishment $344.48). |
| Whether reimbursement of the child’s education fund is in the nature of support | Lawrence: repayment of amounts withdrawn from child’s education fund was intended to support the minor child and thus is nondischargeable | Combs: characterized some withdrawals as misused and other defenses; generally treated as property/complicated | Court: Education Fund reimbursement ($12,750) is intended to fund the child’s post‑secondary education and is a DSO — nondischargeable. |
| Whether attorney’s fees (state-court fees and fees incurred in bankruptcy) are nondischargeable or awardable here | Lawrence sought attorney fees (Norment $3,500 and unspecified bankruptcy fees) as nondischargeable/support or otherwise recoverable | Combs opposed; and court observed pleading and proof defects | Court: denied — pleading inadequate to adjudicate Norment claim; no evidence or contractual/state-order basis to award bankruptcy litigation fees; attorney‑fee request denied and not declared nondischargeable. |
Key Cases Cited
- Grogan v. Garner, 498 U.S. 279 (1991) (plaintiff bears preponderance burden to prove nondischargeability)
- Tilley v. Jessee, 789 F.2d 1074 (4th Cir. 1986) (parties’ mutual intent is threshold inquiry for classifying obligations as support)
- In re Long, 794 F.2d 928 (4th Cir. 1986) (intent of trier of fact controls where support/property issues were submitted for judicial determination)
- Brunson v. Austin (In re Austin), 271 B.R. 97 (Bankr. E.D. Va. 2001) (use of multifactor test to classify obligations as support or property)
- Silansky v. Brodsky, Greenblatt & Renehan (In re Silansky), 897 F.2d 743 (4th Cir. 1990) (attorney fees awarded in divorce contexts can be nondischargeable if tied to support)