In re Amy CHANG, Debtor.
Aleta Beaupied; George O. Ting, Plaintiffs-Appellants,
v.
Amy Chang, Defendant-Appellee.
No. 97-16760.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted Oct. 8, 1998.
Decided Dec. 30, 1998.
Kenneth R. Wachtel, Leland, Parachini, Steinberg, Matzger & Melnick, San Francisco, CA, for Plaintiff-Appellant Ting.
Briаn J. McCaffrey, San Francisco, CA, for Plaintiff-Appellant Beaupied.
Michael Willemsen, Palo Alto, CA, for Defendant-Appellee Chang.
Appeal from the Ninth Circuit Bankruptcy Appellate Panel Ryan, Meyers, and Russell, Judges, Presiding. BAP No. NC-96-01296-RmRu.
Before: HUG, Chief Judge, FLETCHER, and TROTT, Circuit Judges.
TROTT, Circuit Judge:
George O. Ting and Aleta Beaupied appeal a judgment of the Bankruptcy Appellate Panеl ("BAP"), reversing a bankruptcy court judgment in Ting and Beaupied's favor. The BAP concluded that Chang's debts to Ting and Beaupied arising from a child custody proceeding were not owed to a "sрouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child," 11 U.S.C. § 523(a)(5) (1994 & Supp. IV 1998), and that Chang's debts to Ting and Beaupied werе therefore dischargeable and not entitled to priority. We have jurisdiction under 28 U.S.C. § 158(d) (1994), and we reverse and remand.
* Background
Ting and Chang, respectively the out-of-wedlock father and mother of minor child Lindsay Chang, were embroiled in a bitter custody dispute over Lindsay, in which Beaupied was a court-appointed guardian ad litem to Lindsay. Chang accused Ting, falsely as it turned out, of sexually abusing Lindsay, requiring the expenditure of thousands of dollars in neutral experts' fees and health professionals' expenses to sort out the charges in court and for Lindsay's mentаl well-being. Under the California Family Code, Ting and Chang became responsible in the custody proceedings for these expenses and for Beaupied's guardian ad litem fees. At the conclusion of the custody proceedings, the court apportioned between Chang and Ting responsibility for nearly $100,000 in total expenses.
Because Ting had already paid much of the expense for the health professionals and neutral experts, the court order required Chang to reimburse Ting for the amounts paid in excess of his share. Chang was responsible to pay her share of the guardian ad litem fees directly to Beaupied.
Chang then filed for Chapter 13 bankruptcy and proposed a plan, which provided zero pаyment to unsecured creditors including Ting and Beaupied. Ting and Beaupied objected to the plan on the basis that Chang's debts were nondischargeable under § 523(a)(5). Ting and Beaupied аlso argued that the debts were entitled to priority under 11 U.S.C. § 507(a)(7) (Supp. IV 1998).
II
Standard of Review
We review the bankruptcy court's decision independently, without deference to the BAP. In re Saylor,
III
Dischargeability
The § 523(a)(5) exсeption to discharge strikes a balance between competing policies. On the one hand, the goal of providing a "fresh start" to the bankrupt debtor requires that excеptions to discharge be confined to those plainly expressed. In re Klapp,
When determining whether a particular debt is within the § 523(a)(5) exception to discharge, a court considers whether the debt is "actually in the naturе of ... support." Id. at 1316. This question is a factual determination made by the bankruptcy court as a matter of federal bankruptcy law. In re Sternberg,
California law pеrmits the state court to appoint and provide for the compensation of a guardian ad litem, neutral experts, and mental health professionals, in consideration of Lindsay's best interests. Cal. Fam.Code §§ 3150, 3153, 3190, 4062 (West 1994 & Supp.1998). The bankruptcy court considered the California law creating the debt and independently held that it created an obligation of supрort. In re Doe,
The bankruptcy court's well-reasoned conclusion finds support in this court's Catlow opinion, decided under the former 11 U.S.C. § 35(a)(7) (1976). In Catlow, attorney's fees awarded to thе bankrupt's former spouse, incurred in a child custody proceeding, were nondischargeable as spousal support.
We next consider whether the identity of the payee requires affirming the BAP. The § 523(a)(5) exception to dischargeability applies on its face only to debts owed "to" a child or former spouse. In the instant case, the BAP held that because Beaupied's, the nеutral experts', and the health professionals' fees were owed to individuals other than Lindsay, § 523(a)(5) did not apply. In re Chang,
Fees paid to third parties on behalf of a child or formеr spouse can be "as much for ... support as payments made directly to [the former spouse or child]." Catlow,
Every circuit to consider this precise issue has held likewise. The Eighth Circuit,1 in In re Kline,
In In re Miller,
In In re Dvorak,
The Second Circuit, the first to consider this issue under the current Bankruptcy Code, looked to the legislative history of § 523(a)(5) to determine that the naturе of the debt was more important than the identity of the payee. In re Spong,
IV
Priority Nature of the Debts
The Bankruptcy Code also grants priority to "allowed claims for debts to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child." § 507(a)(7) (Supp. IV 1998). This language is identical to that in § 523(a)(5), which creates the exception to discharge. We agree with the bankruptcy court's holding that application оf § 507(a)(7) should be coincidental with application of § 523(a)(5). In re Doe,
REVERSED and REMANDED.
Notes
The Eighth Circuit's Adams v. Zentz,