Champion v. Champion (In Re Champion)

189 B.R. 516, 1995 Bankr. LEXIS 1759, 1995 WL 736319
CourtUnited States Bankruptcy Court, D. New Mexico
DecidedNovember 3, 1995
Docket19-10257
StatusPublished

This text of 189 B.R. 516 (Champion v. Champion (In Re Champion)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Champion v. Champion (In Re Champion), 189 B.R. 516, 1995 Bankr. LEXIS 1759, 1995 WL 736319 (N.M. 1995).

Opinion

MEMORANDUM OPINION

MARK B. McFEELEY, Bankruptcy Judge.

This matter came before the Court on August 1, 1995, for trial on the merits. The former wife of the debtor seeks a determination that an award of attorney’s fees from a Texas divorce decree is nondischargeable as *518 alimony, maintenance, or support under 11 U.S.C. § 523(a)(5). Having considered the arguments and legal memoranda of counsel, reviewed the exhibits, and being otherwise fully informed, the Court grants judgment in favor of the plaintiff.

FACTS

In August of 1993, Mary Champion filed a petition for divorce in Kendall County, Texas, seeking a dissolution of her marriage to Thomas Champion, appointment as managing conservator of the couple’s three minor children, and for child support and division of the marital estate. On February 6, 1994, while the divorce was still pending, Thomas Champion shot Mary Champion in the head with a handgun. The three Champion children witnessed this act. Mary Champion sustained severe injuries to her jaw, vocal chords and throat which left her unable to attend the divorce trial in March, 1994, and unable to work. A final decree of divorce was filed on April 13, 1994, which awarded Mary Champion sole custody of the children, lump sum child support in the form of a one-half interest in certain lease agreements, virtually all of the marital property, the remaining one-half interest in the lease agreements, and attorney’s fees in the amount of $34,-000.00. Also in April, 1994, Thomas Champion pled guilty to a felony charge and was sentenced to fifteen years in prison. On September 7,1994, Thomas Champion filed a petition for relief under chapter 7 of the bankruptcy code.

DISCUSSION

Federal law governs the characterization of debts to former spouses for purposes of nondischargeability under § 523. In re Young, 35 F.3d 499 (10th Cir.1994); In re Jones, 9 F.3d 878 (10th Cir.1993); In re Dirks, 15 B.R. 775 (Bkrtcy.D.N.M.1981). Courts may also look to underlying state law for guidance. In re Hicks, 65 B.R. 227 (Bkrtcy.D.N.M.1986); In re Cowley, 35 B.R. 520 (Bkrtcy.D.Kansas 1983).

The law is well settled that attorney’s fees awarded to a spouse may be non-dischargeable when they are in the nature of support or maintenance. In re Sposa, 31 B.R. 307 (Bkrtcy.E.D.Va.1983). See also In re Daumit, 25 B.R. 371 (Bkrtcy.D.Md.1982); In re Painter, 21 B.R. 846 (Bkrtcy.D.Ga. 1982). In In re Sampson, 997 F.2d 717 (10th Cir.1993), the Tenth Circuit has articulated a rule for determining the actual nature of post-marital obligations. This rule squares the standard announced in In re Yeates, 807 F.2d 874 (10th Cir.1986) with the seemingly inconsistent standard which followed in In re Goin, 808 F.2d 1391 (10th Cir.1987). The Yeates opinion stated that the “intention of the parties” is the initial inquiry on the question of dischargeability and any characterization contained in “a written agreement between the parties” will normally control on the issue of intent. Yeates, 807 F.2d at 878. The Goin case, a few weeks later, required a bankruptcy court to “look beyond the language of the agreement to the intent of the parties and to the substance of the obligation.” Goin, 808 F.2d at 1392. The Sampson court, reconciling the two cases, held that whether an obligation is nondis-chargeable under § 523(a)(5) is a “dual inquiry into both the parties’ intent and the substance of the obligation.” Sampson, 997 F.2d at 723.

The facts of the Champion case do not permit an initial inquiry into the intent of the parties, as prescribed by Sampson. In the present instance, disputed matters were fully litigated rather than privately agreed upon, and the document under scrutiny is the Texas divorce decree rather than a written agreement between the parties. The Tenth Circuit has provided additional direction for this situation. According to the holding in In re Young, 35 F.3d 499 (10th Cir.1994), the basic inquiries for the purpose of deciding whether an obligation imposed pursuant to a decree constitutes nondischargeable support, are (1) what did the court intend? and (2) does the evidence adduced in support of the decree justify that intention? This standard from Young is simply the Sampson dual inquiry into intent and substance transferred to the context of a contested divorce.

Investigation into the intent of the divorce court begins with the decree. Before analyzing the decree’s language and structure, however, the Court notes that Texas *519 law does not permit an award of alimony. For an alimony provision to be enforceable in Texas, it must have its genesis in a contractual agreement between the parties which is incorporated by reference into the final decree. Mackey v. Mackey, 721 S.W.2d 575, 578 (Tex.App.1986); In re Robinson, 122 B.R. 502 (Bkrtcy.W.D.Texas 1990). The Champion divorce decree could not on its face reflect an award of alimony, even if the Texas court intended the award to be in the nature of support. Conversely, the presence of the label “Division of Marital Estate,” which appears in the Champion divorce decree, is not dispositive of the question of the court’s intent. In Texas, what appears to be a division of property may contain a substantial element of alimony-substitute, support or maintenance, however termed. In re Joseph, 16 F.3d 86 (5th Cir.1994).

Included in the record is Plaintiffs Exhibit # 2, the transcript of the divorce court’s ruling from the bench, which includes the following:

In regard to division of property, I am taking into consideration a great deal of specific instances of harm that Mrs. Champion has suffered in the past and will suffer in the future in order to come up with what I think will be an unequal division of the property, such as cost of the children’s therapy in the past and in the future, the mother’s cost of therapy for the physical and emotional harm in the past and future, the attorney’s fees that have been incurred, experts’ fees, loss of earning capacity by the mother, and there are probably others if that’s not enough.

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189 B.R. 516, 1995 Bankr. LEXIS 1759, 1995 WL 736319, Counsel Stack Legal Research, https://law.counselstack.com/opinion/champion-v-champion-in-re-champion-nmb-1995.