In Re Andrews

434 B.R. 541, 2010 Bankr. LEXIS 2071, 2010 WL 2772680
CourtUnited States Bankruptcy Court, W.D. Arkansas
DecidedJuly 12, 2010
Docket4:09-bk-72051M
StatusPublished
Cited by15 cases

This text of 434 B.R. 541 (In Re Andrews) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Andrews, 434 B.R. 541, 2010 Bankr. LEXIS 2071, 2010 WL 2772680 (Ark. 2010).

Opinion

ORDER

JAMES G. MIXON, Bankruptcy Judge.

Before the Court are three matters: An objection to the claim of creditor Terry L. Mock filed by Kurt Darren Andrews, the Debtor in this case; an objection to confirmation of plan filed by Mock; and a Motion for Judgment on the Pleadings filed by Mock. The identical issue raised by each pleading is whether Mock’s claim is entitled to priority treatment.

This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B) & (L), and the Court has jurisdiction to enter a final judgment in this case.

FACTS

On April 27, 2009, the Debtor filed a voluntary petition for relief under the provisions of Chapter 13 of the United States Bankruptcy Code. The Debtor filed a plan of reorganization on April 28, 2009, and an amended plan of reorganization on July 14, 2009. The amended plan asserted that there were no priority creditors to be paid through the plan and proposed a pro rata distribution to unsecured creditors and a monthly plan payment of $320.00 to the Chapter 13 Trustee for a period of sixty months.

On August 10, 2009, Mock, the attorney who represented the Debtor’s former wife in divorce proceedings prior to the bankruptcy filing, filed an objection to confirmation. Her objection was that the plan failed to propose to pay in full a debt to her for attorney’s fees despite the fact that the debt entitled her to a priority claim purshant to Section 507(a)(l)(A)-(B) of the Bankruptcy Code.

On July 16, 2009, the Debtor filed an objection to Mock’s claim of $4500.00 on the grounds that the claim was owed by the Debtor to Mock for attorney fees and not to Deborah Ann Andrews, the Debtor’s former wife. Therefore, the Debtor argued, Mock’s claim does not qualify as a domestic support obligation entitled to priority under Section 507(a)(1)(A).

A hearing on the two objections was held on December 8, 2009, in Texarkana, Arkansas, and the Debtor appeared in person and through his counsel, Tony L. Yo-cum. Mock and her client, Mrs. Andrews, failed to appear. On the day before the hearing date, Mock filed the Motion for Judgment on the Pleadings, in which she stated that she would be unable to attend the hearing in Texarkana because of prior obligations. The motion arrived too late to be considered at the December 8 hearing.

At the December 8 hearing, the Court received into evidence the testimony of the Debtor and two exhibits. Plaintiffs Ex- *544 Mbit 1 is a copy of Mock’s proof of claim, attached to which was a certified copy of the order (“divorce decree”) of the Circuit Court of Lauderdale County (“circuit court”) filed January 25, 2008, regarding the divorce proceedings of the Debtor and Mrs. Andrews. Plaintiffs Exhibit 2 is a copy of an order of the circuit court filed on December 2, 2009, that purports to clarify the January 25, 2008 order.

At the first hearing, the Debtor testified that he was formerly married to Deborah Ann Andrews and that he was divorced from her in Alabama on January 25, 2008. He stated that the divorce decree gives Mock, his former wife’s attorney, a judgment for attorney’s fees in the sum of $50oo.oo. 1

The divorce decree included in Plaintiffs Exhibit 1 grants the parties a divorce, divides property, allocates debt, determines child custody, and grants child support and alimony to Mrs. Andrews. The circuit court made the following finding: “The Husband has been the primary provider for the family during the marriage. The Wife has limited education or work experience. It will be necessary for the Husband to provide spousal support for the Wife.” (Plaintiffs Exhibit 1 at 2.) The court also made a finding that “[t]he Husband has the ability to earn income of approximately $100,000 to $120,000 annually. The Mother has the ability to earn income of approximately $17,000 annually.” (Plaintiffs Exhibit 1 at 3.)

At the conclusion of the order, the following paragraph deals with attorney fees: “14. ATTORNEY FEES: The Husband shall pay $5000 as attorney fees on behalf of the Wife. This award shall constitute a judgment for which execution shall issue.” (Plaintiffs Ex. 1 at 7.)

In the subsequent clarification order, the circuit court specifically characterized the attorney fee award as a support obligation:

the Decree of January 24, 2008, is clarified to provide that the attorney’s fees awarded in this Court’s Decree were awarded to be paid on behalf of the Wife as a consequence of the attorney’s efforts in establishing an award to the Wife for her support and maintenance as well as the support and maintenance of the minor children. That due to the parties’ disparate income status as found and indicated by this Court’s findings, it would not be possible for the Wife to satisfy the reasonable attorney’s fees incurred during the litigation of this matter and that it would be necessary for the Husband to pay the same on the Wife’s behalf. That the Court intended for said award to be in the nature of support for the Wife due to her inability to pay the same.

Plaintiffs Exhibit 2.

The Debtor testified that the clarification order was issued without a prior hearing and without notice to the Debtor. (Tr. at 8, December 8, 2009.)

After the hearing on December 8, the matter was taken under advisement. Thereafter, a hearing was scheduled on March 2, 2010, on Mock’s Motion for Judgment on the Pleadings, at which time further argument ensued on the issue of whether the claim was for a domestic support obligation entitled to priority status in the Chapter 13 plan. Present were counsel for the Debtor and Mock, who appeared pro se. The Court again took the matter under advisement.

*545 ARGUMENT

The Debtor objects to the priority claim of Mock on the basis that the attorney fee obligation is not support “owed to or recoverable by” a payee listed in the statute, and thus is not a domestic support obligation entitled to priority treatment.

Mock argues that the Alabama circuit court awarded her a judgment for attorney’s fees for the sum of $5000.00, that the award was intended to be in the nature of support, and that her claim should therefore be treated as a priority claim. She cites the Pre-BAPCPA 2 case of Holliday v. Kline (In re Kline), 65 F.3d 749 (8th Cir.1995) as authority that an award for attorney’s fees payable to an attorney is nondischargeable in a Chapter 7 case pursuant to Section 523(a)(5) of the Bankruptcy Code if the award was intended as support. She also objected to the plan and schedules on two other grounds, but she did not support either with evidence during the course of these proceedings.

DISCUSSION

Claims that are domestic support obligations are accorded special treatment under the Chapter 13 provisions of the Bankruptcy Code. First, they are excepted from discharge. See 11 U.S.C.

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Cite This Page — Counsel Stack

Bluebook (online)
434 B.R. 541, 2010 Bankr. LEXIS 2071, 2010 WL 2772680, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-andrews-arwb-2010.