Hutchins v. Hutchins (In Re Hutchins)

113 B.R. 1, 1990 Bankr. LEXIS 693, 1990 WL 42631
CourtUnited States Bankruptcy Court, C.D. California
DecidedApril 10, 1990
DocketBankruptcy No. SB 89-06418 DN, Adv. No. SB 89-0419 DN
StatusPublished
Cited by2 cases

This text of 113 B.R. 1 (Hutchins v. Hutchins (In Re Hutchins)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hutchins v. Hutchins (In Re Hutchins), 113 B.R. 1, 1990 Bankr. LEXIS 693, 1990 WL 42631 (Cal. 1990).

Opinion

MEMORANDUM OF DECISION

DAVID N. NAUGLE, Bankruptcy Judge.

Donna Hutchins (“Plaintiff”) and David Hutchins (“Debtor”) were formerly married. The Debtor has received his discharge in bankruptcy; the trustee has filed a no asset report in the Debtor’s case. Section 523(a)(5) of 11 U.S.Code excepts from discharge debts owed “to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree or other order of a court of record ... or property settlement agreement, but not to the extent that — (A) such debt is assigned to another entity, voluntarily, by operation of law, or otherwise ...; or (B) such debt includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance, or support....”

With commendable consideration for the nature of the dispute between the parties and the exigencies of time, the parties have submitted the above-captioned adversary proceeding on the documentary evidence admitted by stipulation at the time of trial. Essentially, the judgment(s) (Superior Court of California, County of San Diego, Case No. DN 42453) dissolving the marriage of the parties and settling their property divisions and support obligations first provide that the Debtor shall pay spousal support and child support in fixed amounts over indefinite periods of time subject to future adjustments. A second item the Debtor is ordered to pay is the attorneys fees of about $20,000 for James A. Hennen-hoefer, attorney for the Plaintiff in her dissolution case. The complete nondis-chargeability of the attorneys fee award was determined in Adversary Proceeding No. SB 89-0423 DN, Hennenhoefer v. Hutchins, based on the authority of In re Spong, 661 F.2d 6, 9 (2d Cir.1981); Jones v. Tyson, 518 F.2d 678 (9th Cir.1975); and Matter of Gwinin, 20 B.R. 233, 235 (9th Cir. *2 BAP 1982). Thus, the Debtor’s “fresh start” after bankruptcy will be limited in any event by his continuing obligation to pay the judgment in A.P. No. SB89-0423DN and the periodic payments for spousal, family and child support ordered by the Superior Court.

Remaining in dispute is the allocation of various debts between nondis-chargeable support and dischargeable division of property categories. Federal standards are applied to determine whether any debt arising out of a judgment of dissolution of marriage is a nondischargeable support obligation. See Shaver v. Shaver, 736 F.2d 1314, 1316 (9th Cir.1984); Stout v. Prussel, 691 F.2d 859, 861 (9th Cir.1982). On the other hand, “It is appropriate for bankruptcy courts to avoid incursions into family law matters ‘out of consideration of court economy, judicial restraint, and deference to our state court brethren and their established expertise in such matters.’ [citations omitted]” In re MacDonald, 755 F.2d 715, 717 (9th Cir.1985). Where, as here, the state court judgment specifically allocates various debts to the respective categories, considerable deference is due to that determination; periodic payment support coupled with imposition of requirements of payment of individual debts by each spouse leads to the logical inference that the nature and dimension of the support awarded was liquidated and that the debt payments were part of property division.

The appellate courts likewise grant a good deal of deference to the bankruptcy judge in the exercise of his or her discretion in determining the proper characterization of such obligations under the tests established by 11 U.S.C. Section 523(a)(5). See Shaver v. Shaver, supra, 736 F.2d, at 1316; Stout v. Prussel, supra, 691 F.2d, at 861; In re Williams, 703 F.2d 1055, 1057-58 (8th Cir.1983). The Court of Appeals for the Ninth Circuit directs in Shaver (736 F.2d, at 1316-17):

Factors indicating that support is necessary include the presence of minor children and an imbalance in the relative income of the parties, [citation omitted]. Similarly, if an obligation terminates on the death or remarriage of the recipient spouse, a court may be inclined to classify the agreement as one for support, [citations omitted], A property settlement would not be affected by the personal circumstances of the recipient spouse; thus, a change in those circumstances would not affect a true property settlement, although it would affect the need for support. The court will look also to nature and duration of the obligation to determine whether it is intended as support. Support payments tend to mirror the recipient spouse’s need for support. Thus, such payments are generally made directly to the recipient spouse and are paid in installments over a substantial period of time. Matter of Albin, 591 F.2d 94, 97 (9 Cir.1979); In re Smith, 436 F.Supp. 469 (N.D.Ga.1977).

It is important to note that there was no provision made for support of the recipient spouse in the divorce decree before the court in the Shaver case (736 F.2d, at 1317); unlike the case at bar, the Shaver court had to determine whether the provisions of the decree at issue therein could be interpreted consistent with any support obligation. Here, the judgment(s) are replete with periodic support payment requirements imposed on the Debtor, but the Plaintiff seeks to augment those nondis-chargeable debts by reclassifying certain specific debts that the Debtor was ordered to pay.

Thus, the classic confrontation exists here between the overriding public policy favoring the enforcement of familial obligations (embodied in 11 U.S.C. Section 523(a)(5)) and the objectives of federal bankruptcy policy; namely, that debtors, regardless of misfortune or folly, must have fresh starts to be productive members of society. The state court maintains continuing jurisdiction to modify spousal and child support payments so that the earning power and financial wherewithal of the supporting and supported individuals can be reevaluated with changes in circumstances. A rock star or sports celebrity may have an astronomical income at the time of the dissolution of marriage, but the *3 time dimension of such success can be limited. The domestic relations court maintains flexibility in determining the appropriate levels of support during the time the former spouse is supported and/or the children of the marriage are minors. No such flexibility exists concerning the obligation of the supporting spouse to pay various debts incurred during coverture.

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Bluebook (online)
113 B.R. 1, 1990 Bankr. LEXIS 693, 1990 WL 42631, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hutchins-v-hutchins-in-re-hutchins-cacb-1990.