Keith Michael Corson
MEMORANDUM OPINION AND ORDER SUSTAINING CLAIM OBJECTION
I. INTRODUCTION
This dispute involves the question of whether a claim by a guardian ad litem against a debtor is entitled to priority treatment under
II. BACKGROUND
Before filing for bankruptcy relief in 2018, the Debtor and his then-wife were involved in a divorce action in the New Hampshire State Court.2 In December of 2015, the state court appointed Ms. McBeath as a guardian ad litem for the Debtor‘s minor children under New Hampshire law and ordered her to investigate and make recommendations about any issues that she deemed relevant to the children‘s best interests, including the Debtor and his wife‘s residential responsibilities for them; the Debtor and his wife‘s physiological conditions; and the influence of any companions of the Debtor and his wife on their children.3 See Appointment Order, at 31-34. The Appointment Order also required the Debtor to pay 75% of the total guardian ad litem fees accrued during the proceeding. The Debtor owes Ms. McBeath $4,076.25 for her services.
Initially, the Debtor challenged the Claim, scheduling it as a disputed, unsecured, priority claim. (D.E. 19; D.E. 35-3). However, by May of 2018, he filed a proof
Approximately one year later, the Trustee filed a one-page objection to the Claim. (D.E. 139). While the Trustee took no issue with the amount of the Claim, she asserted that it was not entitled to priority treatment and should be treated as a general, unsecured claim. She did not cite any legal authority or provide any evidence supporting her position. Ms. McBeath disagreed, maintaining that her Claim is entitled to priority treatment because it arises from legal services that she provided while serving as the state court-appointed guardian ad litem in the Debtor‘s divorce proceeding. She further argued that the Appointment Order approved the payment obligation of $4,076.25. In support, Ms. McBeath cited Kassicieh v. Battisti (In re Kassicieh), 482 B.R. 190 (B.A.P 6th Cir. 2012) for the proposition that guardian ad litem fees constitute domestic support obligations that are entitled to priority treatment under the Code. See 482 B.R. at 191 (affirming the bankruptcy court‘s finding that the guardian ad litem fees owed were nondischargeable domestic support obligations).
III. DISCUSSION
Under the Code, a claim filed pursuant to
Here, there is no dispute that the Claim was properly filed and that the Trustee filed an objection to it. Her objection, however, is essentially limited to one conclusory sentence: “As grounds for this objection, the Trustee states that the claim is not entitled to priority and should be allowed as a general unsecured claim.” (D.E 139). Though the Trustee did not provide any evidence or substantive law supporting her position and consequently has not done enough to divest the Claim of its presumptive validity, Ms. McBeath, as the party seeking priority treatment of the Claim, carries the ultimate burden of establishing that she is so entitled. See Mason v. Official Comm. of Unsecured Creditors (In re FBI Distribution Corp.), 330 F.3d 36, 41-42 (1st Cir. 2003) (stating that the granting of priority status to a claim “is contrary to the fundamental principle of bankruptcy law that the debtor‘s limited resources are to be distributed equally among similarly situated creditors . . . . [T]hus, statutory priorities are narrowly construed, and the burden of proving entitlement rests with the party seeking it.“) (citations omitted); Woburn Assocs. v. Kahn (In re Hemingway Transp., Inc.), 954 F.2d 1, 5 (1st Cir. 1992) (“The burden of proving entitlement to priority payment
Determining whether a claim is a domestic support obligation entitled to priority treatment is a question of federal law. See Smith v. Pritchett (In re Smith), 586 F.3d 69, 73 (1st Cir. 2009).5 Since the enactment of BAPCPA, two sections of the Code establish the framework through which courts evaluate these claims. Section 507(a)(1)(A) grants priority treatment to certain allowed unsecured claims for “domestic support obligations” if, “as of the date of the
filing of the petition in a case under [the Code], [they] are owed to or recoverable by a spouse, former spouse, or child of the debtor, or such child‘s parent, legal guardian, or responsible relative, without regard to whether the claim is filed by such person . . . .”
(A) owed to or recoverable by – (i) a spouse, former spouse, or child of the debtor or such child‘s parent, legal guardian, or responsible relative; or (ii) a governmental unit;
(B) in the nature of alimony, maintenance, or support . . . of such spouse, former spouse, or child of the debtor or such child‘s parent . . . ;
(C) established . . . [by] a separation agreement, divorce decree, or property settlement agreement; [or] an order of the court of record; . . . and
(D) not assigned to a nongovernmental entity, unless that obligation is assigned voluntarily by the spouse, former spouse, child of the debtor, or such child‘s parent, legal guardian, or responsible relative for the purpose of collecting the debt.
Not all courts agree on how to best analyze
A review of both pre-and post-BAPCPA case law interpreting former and current
§ 523(a)(5) reveals that three lines of authority have emerged on the question of whether a debt that is in the nature of support and owed directly to a third party not listed among the entities identified in§ 101(14A) (or former§ 523(a)(5) ) is excepted from discharge.
Kassicieh v. Battisti (In re Kassicieh), 425 B.R. 467, 472 (Bankr. S.D. Ohio 2010). The first line of authority follows the “plain meaning” approach. Id. This approach maintains “that the dischargeability of the debt turns on whether it is owed to a person/entity described in
I am uncomfortable with the second approach because it reads subsection (A), the list of people to whom the obligation is payable, out of the statute notwithstanding the conjunctive structure of
Section 101(14A) is part of a coherent and consistent statutory scheme which is not unclear or vague. As a result, I am tasked with applying the plain language of
The Claim easily satisfies two of the four requirements. The Trustee does not dispute that the underlying debt arises from fees for services that were established by a court order; nor does she allege that the obligation was assigned to a nongovernmental entity. See
A. Is the Claim “in the nature of support“?
Support is “what is given to provide for the upkeep of the recipient spouse and children.” In re Gambale, 512 B.R. 117, 123 (Bankr. D.N.H. 2014) (quoting Werthen v. Werthen (In re Werthen), 329 F.3d 269, 273 (1st Cir. 2003)). While “[t]he First Circuit Court of Appeals ‘has not adopted a specific multi-factor test’ . . . to discern . . . whether a particular obligation [was intended to be] in the nature of support[,]” it “has stated that it is a ‘fact intensive’ inquiry that depends on ‘the totality of the circumstances of a particular case.‘” Id. (quoting Smith, 586 F.3d at 74). “[F]actors considered by other courts may inform [the Court‘s analysis of] the totality of the circumstances [in this case] . . . .” Id. Other courts consider:
(1)[the] language and substance of the state court‘s order and thus the characterization of the payment in the decree and the context in which the disputed provisions appear; (2) the parties’ financial circumstances at the time of the order and thus whether the recipient spouse actually needed spousal support at the time of the divorce; (3) whether an assumption of a debt or creation of an obligation has the effect of providing the support necessary to ensure that the daily needs of the former spouse and any children of the marriage are met and to ensure a home for the former spouse and any minor children; (4) whether the parties intended to create an obligation of support; (5) the function served by the obligation at the time of such order; (6) whether the labels given to the payments of the parties may be looked at as evidence of the parties’ intent; (7) whether there was an imbalance in the relative income of the parties at the time of the divorce decree and thus whether the payment appears to balance disparate income; (8) whether the obligation terminates on the death or remarriage of either spouse; (9) whether the payments are made directly to the recipient spouse in a lump sum [or] are paid in installments over a substantial period of time; [and ] (10) whether the payments are to be made directly to the former spouse or to a third party.
In re Efron, 495 B.R. 166, 176 (Bankr. D.P.R. 2013) (collecting cases).
The uncontroverted facts presented by Ms. McBeath leave no question that the guardian ad litem fees that the Debtor owes to her are in the nature of support. Divorces often put children in the center of a maelstrom, requiring that their treatment and well-being be in the forefront throughout the proceeding. In New Hampshire, a divorce court is authorized to “appoint a guardian ad litem for a minor child when [it] has reason for special concern regarding the welfare of the child.”
A review of the Divorce Order in this case cements the conclusion that Ms. McBeath‘s services supported the Debtor‘s children during the divorce and custody proceeding. That order incorporates, in detail, Ms. McBeath‘s observations, concerns and conclusions about what is best for the Debtor‘s children. See Divorce Order, at 2-6. In addition, the state court underscored its reliance on Ms. McBeath‘s guardian ad litem work noting:
“[t]he court was asked to meet the [children] . . . in camera, but it respectfully declines to do so. The [guardian ad litem] . . . has interviewed them, and articulated their preferences. An in camera meeting is not necessary, and may make the [children] . . . feel they are more in the middle and they already are.”
Divorce Order, at 4. “[P]rotecting [a] child‘s interests in a custody battle is in the nature of support because of the obvious impact that the outcome will have on the emotional health and overall well-being of the child.” In re Rackley, 502 B.R. 615, 626 (Bankr. N.D. Ga. 2013) (citing In re Ramirez, 2000 WL 356314, at *7 (Bankr. N.D. Ill. 2000) (explaining that “support for purposes of
B. Is Ms. McBeath an enumerated payee under § 101(14A)(A)(i) ?
Turning now to the final question, is Ms. McBeath a person listed under
The Code does not define the term “legal guardian,” nor does
Courts are also guided by rules of statutory construction. “In the absence of an express definition, a term contained in a statute should be given ‘its ordinary meaning.‘” Raridon v. Carlson (In re Carlson), 545 B.R. 229, 234 (Bankr. N.D. Ill. 2016) (quoting Clark v. Rameker, 537 U.S. 122, 127 (2014)). See also 2A Norman Singer & Shambie Singer, Sutherland Statutory Construction §47:30 (7th ed.) available on Westlaw (updated Nov. 2020) (stating “[l]egal terms in a statute have their legal meaning,[] absent legislative intent to the contrary,[] or other evidence of a different meaning, such as context or a statutory definition.[]“) (footnotes omitted)); In re Greco, 397 B.R. 102, 110 (Bankr. N.D. Ill. 2008) (stating that “[i]n § 101(14A)(A), the words associated with ‘legal guardian’ are ‘parents’ and ‘responsible relatives,’ both of whom have custody and general responsibility for the children under their care. ‘Legal guardian,’ then, should be similarly interpreted.“) rev‘d sub nom. Levin v. Greco, 415 B.R. 663 (N.D. Ill. 2009).
A “legal guardian” or “guardian” is different than a guardian ad litem. The term “legal” means “[o]f, relating to, or involving law generally; falling within the province of law[,] [e]tablished, required, or permitted by law; lawful . . . [or o]f, relating to, or involving law as opposed to equity.” Legal, Black‘s Law Dictionary (11th ed. 2019). A “guardian” is “someone who has the legal authority and duty to care for another‘s person or property, esp. because of the other‘s infancy, incapacity, or disability [and may be] appointed either for all purposes or for a specific purpose.” Guardian, Black‘s Law Dictionary (11th ed. 2019) (emphasis added). A “guardian ad litem” is a “guardian, usu. a lawyer, appointed by the court to appear in a lawsuit on behalf of an incompetent or minor party.” Id. Unlike a guardian or legal guardian, a guardian ad litem‘s role and authority is limited to the legal proceeding necessitating its appointment. See Uniform Guardianship, Conservatorship & Other Protective Arrangement. Act, § 102(9)-(10) (2017) (defining “guardian” as “a person appointed by the court to make decisions with respect to the personal affairs of an individual. The term includes a co-guardian but does not include a guardian ad litem[,]” and a “guardian ad litem” as “a person appointed to inform the court about, and to represent, the needs and best interest of an individual.“). Under New Hampshire law, a “guardian ad litem” is appointed by a court for the limited purpose of protecting the interest of a minor or an incompetent person in a case involving the termination of parental rights or when the court has reason for special concern regarding the welfare of the child. See
Thus, based upon the commonly accepted legal meanings of the terms legal guardian/guardian and guardian ad litem, as well as the distinctions between those terms under New Hampshire law, I conclude that Ms. McBeath is not a “legal guardian” as contemplated by
A minority of other courts have reached similar conclusions. See Wischmeyer v. Bobinski (In re Bobinski), 517 B.R. 900, 904 (Bankr. N.D. Ind. 2014) (concluding that a guardian ad litem was a “legal representative/attorney” for a child and “[beyond] the scope of persons/entities defined by
guardian ad litem, was dischargeable, concluding that nature of guardian ad litem fees should be emphasized over the claimant‘s treatment as an enumerated payee)). Indeed, most courts favor a broader reading of the statute.9 However, there is no such controlling authority in the First Circuit. As explained above,
IV. CONCLUSION
For the reasons stated herein, the Trustee‘s objection is sustained. The Claim is allowed in the amount of $4,076.25 as an unsecured nonpriority claim.
ENTERED at Concord, New Hampshire.
Date: May 21, 2021
/s/ Peter G. Cary
Peter G. Cary
United States Bankruptcy Judge
District of New Hampshire (by designation)