Taylor v. Taylor
737 F.3d 670
10th Cir.2013Background
- Eloisa and Matthew Taylor divorced in 2005; their Marital Settlement Agreement (MSA) and the Virginia divorce decree required Matthew to pay spousal support ($2,500/month) with the Virginia court retaining jurisdiction.
- Matthew moved in 2009 to terminate support under Va. Code § 20-109 based on Eloisa’s alleged cohabitation; the Virginia court retroactively terminated support and entered judgment against Eloisa for $50,660.59 (including $10,000 attorney fees) as repayment of overpaid spousal support.
- Eloisa filed Chapter 7 bankruptcy in November 2010; Matthew filed an adversary complaint seeking nondischargeability of the judgment under 11 U.S.C. §§ 523(a)(15), 523(a)(5), and 523(a)(2)(A).
- The bankruptcy court dismissed Matthew’s § 523(a)(5) and § 523(a)(2)(A) claims for failure to state a claim, but denied dismissal of the § 523(a)(15) claim and later granted Matthew summary judgment that the overpayment debt was nondischargeable under § 523(a)(15).
- The Bankruptcy Appellate Panel (BAP) affirmed the § 523(a)(15) ruling, affirmed dismissal of § 523(a)(5), and held neither it nor the bankruptcy court could award attorney fees under the MSA; the Tenth Circuit reviews and affirms the bankruptcy court on all points.
Issues
| Issue | Plaintiff's Argument (Matthew) | Defendant's Argument (Eloisa) | Held |
|---|---|---|---|
| Whether the overpayment judgment is a "domestic support obligation" under § 523(a)(5) | The debt is nondischargeable as a domestic support obligation; BAPCPA’s definition expands scope and precludes analyzing nature at time debt arose | The debt is not in the nature of support for Matthew; complaint lacks facts showing debt was actually support | Dismissal of § 523(a)(5) claim affirmed: debt is not a domestic support obligation |
| Whether the overpayment judgment is nondischargeable under § 523(a)(15) | The debt arises "in connection with" the divorce/separation and thus is excepted from discharge | Applying § 523(a)(15) here produces an unfair result against debtor and conflicts with congressional intent to protect dependents | Affirmed: debt is nondischargeable under § 523(a)(15) because it arose in connection with the divorce decree/separation agreement |
| Whether the court should depart from the statute’s plain meaning based on legislative intent/absurdity | N/A (argument mainly by Eloisa) | Statutory text should yield to congressional purpose to avoid harsh result | Rejected: plain statutory language controls; absurdity doctrine not met |
| Whether bankruptcy courts / BAP could award attorney fees under the MSA for fees incurred in the adversary proceeding | Matthew sought fee-shifting under MSA | Eloisa and courts asserted lack of authority to award those fees | Affirmed: neither BAP nor bankruptcy court had authority under the MSA to award those attorney fees |
Key Cases Cited
- Grogan v. Garner, 498 U.S. 279 (recognition of bankruptcy fresh start and limited exceptions)
- Ron Pair Enters., Inc. v. First Nat’l Bank, 489 U.S. 235 (statutory text controls when unambiguous)
- Sampson v. Sampson (In re Sampson), 997 F.2d 717 (Tenth Circuit two-part test for whether obligation is in nature of support)
- Miller v. Deutsche Bank Nat’l Trust Co. (In re Miller), 666 F.3d 1255 (standard of review for BAP decisions)
- Ransom v. FIA Card Servs., N.A., 131 S. Ct. 716 (interpretation principle: give effect to every word of statute)