FILED AUG 12 2013 1 SUSAN M SPRAUL, CLERK U.S. BKCY. APP. PANEL 2 OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. NC-12-1425-JuTaPa ) 6 ADALBERTO PEREZ JIMENEZ, ) Bk. No. 12-42231-WJL ) 7 Debtor. ) ______________________________) 8 OLIVIA PEREZ, ) ) 9 Appellant, ) ) 10 v. ) M E M O R A N D U M* ) 11 ADALBERTO PEREZ JIMENEZ, ) ) 12 Appellee. ) ) 13 ______________________________) 14 Submitted Without Oral Argument on July 25, 2013 15 Filed - August 12, 2013 16 Appeal from the United States Bankruptcy Court for the Northern District of California 17 Honorable William J. Lafferty, Bankruptcy Judge, Presiding 18 _______________________ 19 Appearances: Appellant Olivia Perez pro se on brief; Peter Christopher Pappas, Esq., on brief for appellee 20 Adalberto Perez Jimenez. _________________________ 21 Before: JURY, TAYLOR, and PAPPAS, Bankruptcy Judges. 22 23 24 25 26 * This disposition is not appropriate for publication. 27 Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. 28 See 9th Cir. BAP Rule 8013-1.
-1- 1 Appellant, Olivia Perez, filed a proof of claim (POC) in 2 the chapter 131 case of her former husband, Adalberto Perez 3 Jimenez (Adalberto or debtor). Olivia’s POC asserted a domestic 4 support obligation for $245,000 entitled to priority under 5 § 507(a)(1)(A). Debtor objected to her claim on the ground that 6 it represented an equalizing payment rather than a claim for 7 support. The bankruptcy court sustained debtor’s objection, 8 finding that Olivia’s claim was a general unsecured claim. This 9 appeal followed. We AFFIRM. 10 I. FACTS 11 Adalberto was married to Olivia for approximately ten 12 years. In December 2012, they divorced and entered into a 13 martial settlement agreement (MSA). Both parties were 14 represented by counsel. Under the MSA, each party gave up the 15 right to receive spousal support from the other. The MSA also 16 contained an equalizing payment of $245,000 whereby Adalberto 17 would pay Olivia that amount by making monthly payments ranging 18 from $750 to $1,300 until the amount was paid. Adalberto made 19 some payments under the agreement. 20 On March 12, 2012, Adalberto filed his chapter 13 petition. 21 He listed Olivia on Schedule E as a creditor holding a domestic 22 support obligation and asserted that he was current on the 23 payments. 24 Debtor’s chapter 13 plan was a stepped-up five-year plan 25 26 1 Unless otherwise indicated, all chapter and section 27 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532 and “Rule” references are to the Federal Rules of Bankruptcy 28 Procedure.
-2- 1 with a 4% dividend to general unsecured claims. It also paid 2 priority claimants under § 507 in full. The chapter 13 trustee 3 objected to debtor’s plan because he could not complete it 4 within sixty months if Olivia’s $245,000 claim was entitled to 5 priority.2 6 Debtor then objected to Olivia’s POC on the grounds that it 7 failed to take into consideration the amounts he had paid and 8 that the MSA made clear that (1) no spousal support payments 9 were due and (2) the $245,000 amount was an equalizing payment. 10 In response, Olivia argued that although the MSA indicated there 11 were no further spousal obligations, that provision was not 12 determinative on the issue under the holding in Friedkin v. 13 Sternberg (In re Sternberg), 85 F.3d 1400 (9th Cir. 1996), 14 overruled on other grounds by Murray v. Bammer (In re Bammer), 15 131 F.3d 788, 792 (9th Cir. 1997) (en banc). Olivia also 16 submitted a declaration stating that at the time of her 17 separation from debtor, she had not worked for three years and 18 that debtor’s payments to her pursuant to the MSA were intended 19 to assist her in getting back on her feet. 20 On July 18, 2012, the bankruptcy court heard the matter 21 and sustained debtor’s objection. Olivia filed her notice of 22 appeal on August 14, 2012. On November 29, 2012, the bankruptcy 23 court entered the order sustaining debtor’s objection to 24 25 2 Section 1322(a)(2) requires that the plan “provide for the 26 full payment . . . of all claims entitled to priority under section 507 of [title 11]. . . .” Thus, if an equalizing payment 27 is a “domestic support obligation,” it must be paid in full through the debtor’s chapter 13 plan, unless the former spouse 28 agrees otherwise.
-3- 1 Olivia’s POC. Accordingly, Olivia’s appeal was timely. See 2 Rule 8002(a) (providing that a notice of appeal filed after 3 announcement of bankruptcy court’s decision, but before entry of 4 an order, is to be treated as filed after such entry). 5 II. JURISDICTION 6 The bankruptcy court had jurisdiction over this proceeding 7 under 28 U.S.C. §§ 1334 and 157(b)(2)(A) and (B). We have 8 jurisdiction under 28 U.S.C. § 158. 9 III. ISSUE 10 Whether the bankruptcy court erred when it determined that 11 the equalizing payment was not a domestic support obligation 12 entitled to priority status under § 507(a)(1)(A).3 13 IV. STANDARDS OF REVIEW 14 We review mixed questions of law and fact de novo. 15 Wechsler v. Macke Int’l Trade, Inc. (In re Macke Int’l Trade, 16 Inc.), 370 B.R. 236, 245 (9th Cir. BAP 2007). A mixed question 17 exists when the facts are established, the rule of law is 18 undisputed, and the issue is whether the facts satisfy the legal 19 standard. In re Bammer, 131 F.3d at 792. Thus, whether a claim 20 is entitled to priority status is a mixed question of law and 21 22 3 Olivia has framed the issue on appeal as whether 23 equalization payments between spouses are dischargeable. While a debt of the kind described in § 523(a)(15) is nondischargeable in 24 chapters 7, 11 and 12, the expanded discharge provided for in chapter 13 cases covers debts such as this. Therefore, if the 25 equalization payment is not a domestic support obligation, it 26 would constitute a debt under § 523(a)(15), and could be discharged in debtor’s chapter 13, even if not paid. However, to 27 obtain a discharge, a chapter 13 debtor must complete all payments under the plan unless certain exceptions are found to 28 apply. See § 1328.
-4- 1 fact that we review de novo. 2 Our review of a mixed question begins by ascertaining 3 whether the bankruptcy court committed clear error in its 4 findings of fact. In the context of this appeal, we review the 5 bankruptcy court’s factual determination that the debt was not 6 based on spousal support for clear error. Beaupied v. Chang 7 (In re Chang), 163 F.3d 1138, 1140 (9th Cir. 2000) (Whether a 8 debt is actually in the nature of support is a “factual 9 determination made by the bankruptcy court as a matter of 10 federal bankruptcy law.”). “A finding is ‘clearly erroneous’ 11 when although there is evidence to support it, the reviewing 12 court on the entire evidence is left with the definite and firm 13 conviction that a mistake has been committed.” United States v. 14 U.S. Gypsum Co., 333 U.S. 364, 395 (1948).
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FILED AUG 12 2013 1 SUSAN M SPRAUL, CLERK U.S. BKCY. APP. PANEL 2 OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. NC-12-1425-JuTaPa ) 6 ADALBERTO PEREZ JIMENEZ, ) Bk. No. 12-42231-WJL ) 7 Debtor. ) ______________________________) 8 OLIVIA PEREZ, ) ) 9 Appellant, ) ) 10 v. ) M E M O R A N D U M* ) 11 ADALBERTO PEREZ JIMENEZ, ) ) 12 Appellee. ) ) 13 ______________________________) 14 Submitted Without Oral Argument on July 25, 2013 15 Filed - August 12, 2013 16 Appeal from the United States Bankruptcy Court for the Northern District of California 17 Honorable William J. Lafferty, Bankruptcy Judge, Presiding 18 _______________________ 19 Appearances: Appellant Olivia Perez pro se on brief; Peter Christopher Pappas, Esq., on brief for appellee 20 Adalberto Perez Jimenez. _________________________ 21 Before: JURY, TAYLOR, and PAPPAS, Bankruptcy Judges. 22 23 24 25 26 * This disposition is not appropriate for publication. 27 Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. 28 See 9th Cir. BAP Rule 8013-1.
-1- 1 Appellant, Olivia Perez, filed a proof of claim (POC) in 2 the chapter 131 case of her former husband, Adalberto Perez 3 Jimenez (Adalberto or debtor). Olivia’s POC asserted a domestic 4 support obligation for $245,000 entitled to priority under 5 § 507(a)(1)(A). Debtor objected to her claim on the ground that 6 it represented an equalizing payment rather than a claim for 7 support. The bankruptcy court sustained debtor’s objection, 8 finding that Olivia’s claim was a general unsecured claim. This 9 appeal followed. We AFFIRM. 10 I. FACTS 11 Adalberto was married to Olivia for approximately ten 12 years. In December 2012, they divorced and entered into a 13 martial settlement agreement (MSA). Both parties were 14 represented by counsel. Under the MSA, each party gave up the 15 right to receive spousal support from the other. The MSA also 16 contained an equalizing payment of $245,000 whereby Adalberto 17 would pay Olivia that amount by making monthly payments ranging 18 from $750 to $1,300 until the amount was paid. Adalberto made 19 some payments under the agreement. 20 On March 12, 2012, Adalberto filed his chapter 13 petition. 21 He listed Olivia on Schedule E as a creditor holding a domestic 22 support obligation and asserted that he was current on the 23 payments. 24 Debtor’s chapter 13 plan was a stepped-up five-year plan 25 26 1 Unless otherwise indicated, all chapter and section 27 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532 and “Rule” references are to the Federal Rules of Bankruptcy 28 Procedure.
-2- 1 with a 4% dividend to general unsecured claims. It also paid 2 priority claimants under § 507 in full. The chapter 13 trustee 3 objected to debtor’s plan because he could not complete it 4 within sixty months if Olivia’s $245,000 claim was entitled to 5 priority.2 6 Debtor then objected to Olivia’s POC on the grounds that it 7 failed to take into consideration the amounts he had paid and 8 that the MSA made clear that (1) no spousal support payments 9 were due and (2) the $245,000 amount was an equalizing payment. 10 In response, Olivia argued that although the MSA indicated there 11 were no further spousal obligations, that provision was not 12 determinative on the issue under the holding in Friedkin v. 13 Sternberg (In re Sternberg), 85 F.3d 1400 (9th Cir. 1996), 14 overruled on other grounds by Murray v. Bammer (In re Bammer), 15 131 F.3d 788, 792 (9th Cir. 1997) (en banc). Olivia also 16 submitted a declaration stating that at the time of her 17 separation from debtor, she had not worked for three years and 18 that debtor’s payments to her pursuant to the MSA were intended 19 to assist her in getting back on her feet. 20 On July 18, 2012, the bankruptcy court heard the matter 21 and sustained debtor’s objection. Olivia filed her notice of 22 appeal on August 14, 2012. On November 29, 2012, the bankruptcy 23 court entered the order sustaining debtor’s objection to 24 25 2 Section 1322(a)(2) requires that the plan “provide for the 26 full payment . . . of all claims entitled to priority under section 507 of [title 11]. . . .” Thus, if an equalizing payment 27 is a “domestic support obligation,” it must be paid in full through the debtor’s chapter 13 plan, unless the former spouse 28 agrees otherwise.
-3- 1 Olivia’s POC. Accordingly, Olivia’s appeal was timely. See 2 Rule 8002(a) (providing that a notice of appeal filed after 3 announcement of bankruptcy court’s decision, but before entry of 4 an order, is to be treated as filed after such entry). 5 II. JURISDICTION 6 The bankruptcy court had jurisdiction over this proceeding 7 under 28 U.S.C. §§ 1334 and 157(b)(2)(A) and (B). We have 8 jurisdiction under 28 U.S.C. § 158. 9 III. ISSUE 10 Whether the bankruptcy court erred when it determined that 11 the equalizing payment was not a domestic support obligation 12 entitled to priority status under § 507(a)(1)(A).3 13 IV. STANDARDS OF REVIEW 14 We review mixed questions of law and fact de novo. 15 Wechsler v. Macke Int’l Trade, Inc. (In re Macke Int’l Trade, 16 Inc.), 370 B.R. 236, 245 (9th Cir. BAP 2007). A mixed question 17 exists when the facts are established, the rule of law is 18 undisputed, and the issue is whether the facts satisfy the legal 19 standard. In re Bammer, 131 F.3d at 792. Thus, whether a claim 20 is entitled to priority status is a mixed question of law and 21 22 3 Olivia has framed the issue on appeal as whether 23 equalization payments between spouses are dischargeable. While a debt of the kind described in § 523(a)(15) is nondischargeable in 24 chapters 7, 11 and 12, the expanded discharge provided for in chapter 13 cases covers debts such as this. Therefore, if the 25 equalization payment is not a domestic support obligation, it 26 would constitute a debt under § 523(a)(15), and could be discharged in debtor’s chapter 13, even if not paid. However, to 27 obtain a discharge, a chapter 13 debtor must complete all payments under the plan unless certain exceptions are found to 28 apply. See § 1328.
-4- 1 fact that we review de novo. 2 Our review of a mixed question begins by ascertaining 3 whether the bankruptcy court committed clear error in its 4 findings of fact. In the context of this appeal, we review the 5 bankruptcy court’s factual determination that the debt was not 6 based on spousal support for clear error. Beaupied v. Chang 7 (In re Chang), 163 F.3d 1138, 1140 (9th Cir. 2000) (Whether a 8 debt is actually in the nature of support is a “factual 9 determination made by the bankruptcy court as a matter of 10 federal bankruptcy law.”). “A finding is ‘clearly erroneous’ 11 when although there is evidence to support it, the reviewing 12 court on the entire evidence is left with the definite and firm 13 conviction that a mistake has been committed.” United States v. 14 U.S. Gypsum Co., 333 U.S. 364, 395 (1948). “A court’s factual 15 determination is clearly erroneous if it is illogical, 16 implausible, or without support in the record.” Retz v. Samson 17 (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010) (citing United 18 States v. Hinkson, 585 F.3d 1247, 1261–62 & n.21 (9th Cir. 2009) 19 (en banc)). 20 The next step in our review of a mixed question is 21 determining whether the facts satisfy a legal rule. This is a 22 matter of statutory construction. We review a bankruptcy 23 court’s statutory construction and conclusions of law, including 24 interpretation of provisions of the Bankruptcy Code, de novo. 25 Einstein/Noah Bagel Corp. v. Smith (In re BCE W., L.P.), 26 319 F.3d 1166, 1170 (9th Cir. 2003). We therefore review de 27 novo the bankruptcy court’s determination that a debt does not 28 constitute a domestic support obligation within the meaning of
-5- 1 § 507(a)(1)(A). De novo means review is independent, with no 2 deference given to the trial court’s conclusion. See Rule 8013. 3 V. DISCUSSION 4 Section 507(a)(1), enacted as part of the Bankruptcy Abuse 5 Prevention and Consumer Protection Act of 2005 (“BAPCPA”), 6 provides first priority status for a debt which is a domestic 7 support obligation. Section 507(a)(1)(A) provides: “The 8 following expenses and claims have priority in the following 9 order: (1) First: (A) Allowed unsecured claims for domestic 10 support obligations that, as of the date of the filing of the 11 petition in a case under this title, are owed to or recoverable 12 by a . . . former spouse. . . .” 13 The term “domestic support obligation” is defined in 14 § 101(14A): 15 a debt that accrues before, on, or after the date of the order for relief in a case under this title, 16 including interest that accrues on that debt as provided under applicable nonbankruptcy law 17 notwithstanding any other provision of this title, that is— 18 (A) owed to or recoverable by— 19 (i) a spouse, former spouse, or child of the debtor or 20 such child’s parent, legal guardian, or responsible relative; or 21 . . . 22 (B) in the nature of alimony, maintenance, or support 23 (including assistance provided by a governmental unit) of such spouse, former spouse, or child of the debtor 24 or such child’s parent, without regard to whether such debt is expressly so designated; 25 (C) established or subject to establishment before, 26 on, or after the date of the order for relief in a case under this title, by reason of applicable 27 provisions of— 28 (i) a separation agreement, divorce decree, or
-6- 1 property settlement agreement; [or] 2 (ii) an order of a court of record; or 3 (iii) a determination made in accordance with applicable non-bankruptcy law by a governmental unit; 4 and 5 (D) not assigned to a nongovernmental entity, unless that obligation is assigned voluntarily by the spouse, 6 former spouse, child of the debtor, or such child's parent, legal guardian, or responsible relative for 7 the purpose of collecting the debt. 8 Our review of the MSA shows that the equalizing payment at 9 issue here is a debt (1) that accrued before the order for 10 relief in debtor’s chapter 13 case, (2) that is owed to his 11 former spouse, Olivia, (3) that was established prepetition by 12 reason of applicable provisions of a “divorce decree . . . or 13 property settlement agreement,” and (4) that has not been 14 assigned to a nongovernmental entity. The only issue in dispute 15 is whether the equalizing payment is “in the nature of alimony, 16 maintenance, or support.” 17 Whether a debt is actually in the nature of support is a 18 “factual determination made by the bankruptcy court as a matter 19 of federal bankruptcy law.” In re Chang, 163 F.3d at 1140. “In 20 determining whether a debtor’s obligation is in the nature of 21 support, the intent of the parties at the time the settlement 22 agreement is executed is dispositive.” In re Sternberg, 85 F.3d 23 at 1405. 24 A trial court should consider several factors in determining how the parties intended to characterize 25 the obligation. Foremost, the trial court should consider whether the recipient spouse actually needed 26 spousal support at the time of the divorce. In determining whether spousal support was necessary, the 27 trial court should examine if there was an ‘imbalance in the relative income of the parties’ at the time of 28 the divorce decree. The trial court should also
-7- 1 consider whether the obligation terminates upon the death or remarriage of the recipient spouse and 2 whether the payments are ‘made directly to the recipient spouse and are paid in installments over a 3 substantial period of time.’ Finally, the labels given to the payments by the parties may be looked at 4 as evidence of the parties’ intent. 5 Id. 6 Here, we can proceed no further with our review because 7 Olivia failed to provide the transcript of the July 28, 2012 8 hearing, where the bankruptcy court announced its oral findings 9 and conclusions. Rule 8009(b) requires an appellant to file an 10 appendix to her brief with excerpts of the record, including a 11 transcript of the opinion, findings of fact, or conclusions of 12 law delivered orally by the court. On November 23, 2012, the 13 Panel issued an Order re Prosecution of Appeal which warned 14 Olivia of the consequences of her failure to provide a 15 transcript. Despite this notice, Olivia failed to respond. 16 Olivia had the burden of showing the bankruptcy court’s 17 findings of fact were clearly erroneous. See Massoud v. Ernie 18 Goldberger & Co. (In re Massoud), 248 B.R. 160, 163 (9th Cir. 19 BAP 2000). We may affirm where the record is inadequate to show 20 clear error, see Friedman v. Sheila Plotsky Brokers, Inc. 21 (In re Friedman), 126 B.R. 63, 68 (9th Cir. BAP 1991), and we do 22 so here. 23 VI. CONCLUSION 24 For the reasons stated, we AFFIRM. 25 26 27 28
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