Lake County Department of Public Welfare v. Burton (In Re Burton)

132 B.R. 575, 1988 Bankr. LEXIS 2703, 1988 WL 242554
CourtUnited States Bankruptcy Court, N.D. Indiana
DecidedMay 26, 1988
Docket17-12289
StatusPublished
Cited by6 cases

This text of 132 B.R. 575 (Lake County Department of Public Welfare v. Burton (In Re Burton)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lake County Department of Public Welfare v. Burton (In Re Burton), 132 B.R. 575, 1988 Bankr. LEXIS 2703, 1988 WL 242554 (Ind. 1988).

Opinion

MEMORANDUM OPINION AND JUDGMENT 1

KENT LINDQUIST, Chief Judge.

I

Statement of Proceedings

The Debtor commenced this Chapter 7 case on April 29, 1986. On December 3, 1986, the Lake County Department of Public Welfare (hereinafter: “County”) as Plaintiff filed this adversary proceeding versus the Debtor alleging that a certain indebtedness to it by the Debtor in the sum of $27,948.50 is nondischargeable pursuant to § 523(a)(5).

A pretrial conference was held on May 7, 1987, and the parties stipulated as to the relevant and material facts as follows:

(a) That on or about the 12th day of April, 1984, the Lake County Department of Public Welfare took temporary custody, control and wardship of the child of the Defendant/Debtor, to wit: James Michael Burton, b. 1-17-75, pursuant to an order of the Lake Superior Court, Juvenile Division, under Cause No. J83-3099.
(b) That pursuant to Plaintiffs wardship and with the approval of the juvenile court, the child was placed by Plaintiff at Christian Haven, a residential treatment center, located in Gaston, Indiana, on April 6, 1984.
(c) That pursuant to the juvenile court’s placement order and I.C. 31-6-4-18, the Plaintiff made payments on the monies expended on behalf of the child while in the care and custody of the Department of Public Welfare.
(d) That the mother was ordered to reimburse the Lake County Department of Public Welfare for the monies it expended for the child at the rate of $25.00 per month beginning September 9, 1984.

The parties further stipulated to argue the threshold issue of whether the County has the legal standing under § 523(a)(5) to have the indebtedness to it be determined as nondischargeable as being in the nature of support, reserving the issue of damages for a later date if the County has the requisite standing.

A briefing schedule was established and the issue has been fully briefed by the parties.

II

Conclusions of Law and Discussion

In determining whether such debt is an exception to discharge, the Court must determine two issues: first, did Congress intend to include Juvenile Court orders within the purview of § 523(a)(5) as amended, and secondly, does the order requiring the debtor to pay $27,948.50 at the rate of $25.00 dollars a week to the county constitutes support within the meaning of § 523(a)(5)? The court has found in the affirmative as to both these questions, concluding that such debt is excepted from discharge.

Section 523(a)(5) as presently constituted provides as follows:

(a) a discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt—
*578 (5) 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, determination made in accordance with state or territorial law by a governmental unit, 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 (other than debts assigned pursuant to section 402(a)(26) of the Social Security Act, or any such debt which has been assigned to the Federal Government or to a State or any political subdivision of such State); 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; (Emphasis added).

Section 523(a)(5) was amended by the Bankruptcy Judges, United States Trustees, and Family Farmer Act of 1986, P.L. 99-554, October 27, 1986, (“U.S. Trustee Act”) or after the filing of the Debtors case, and added those words and phrases as emphasized above.

Section 523(a)(5) was also previously amended by the Bankruptcy Amendments and Federal Judgeship Act of 1984, P.L. 98-353, July 10, 1984 (“BAFJA”), which added the phrases, “or other court of record” and “or any such debt which has been assigned by the Federal Government or to a State or any political subdivision of such State”.

The Debtor filed her petition commencing this on April 29, 1986 and thus, § 523(a)(5) as in effect subsequent to the BAFJA Amendments effective October 1, 1984, Pub. L. 98-353 Title III, Sect. 553, 98 Stat. 392, and prior to the US. Trustee Amendments effective 30 days after enactment [October 27, 1986], shall control.

Section § 523(a)(5) as it read at the time the Debtor filed her case and which is applicable to this adversary proceeding read as follows:

(A) A discharge under Section 727, 1141 or 1328(b) of this title does not discharge an individual debtor from any debt—
(5) 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 (other than debts assigned pursuant to section 402(a)(26) of the Social Security Act, or any such debt which has been assigned to the Federal Government or to a State or any political subdivision of such State); 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; (Emphasis added).

The county asserts it is under the control of the Indiana State Department of Public Welfare, and thus a political subdivision of this state, and that the monies expended by it for the care of the Debtor’s child are nondischargeable as support pursuant to § 523(a)(5).

In support thereof, the County cites the case of In re Marino, 29 B.R. 797 (Bankr.N.D.Ind.1983), a case decided prior to the enactment of BAFJA. There the debtor’s minor son was made a ward of the Department of Public Welfare and the debtor was ordered to reimburse the Department for all monies expended by it in support of the debtor’s son. The debtor filed bankruptcy and the Department filed its complaint objecting to the discharge of the debt. The Bankruptcy Court entered an order holding the debt nondischargeable pursuant to § 523(a)(5). On appeal the District Court reversed, and held that § 523(a)(5), as then constituted, provided that the support obligation must be “in connection with a divorce decree, separation or property settlement agreement”, and therefore the debt to the Department did not meet the re *579 quirements of § 523(a)(5) and was dis-chargeable.

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Cite This Page — Counsel Stack

Bluebook (online)
132 B.R. 575, 1988 Bankr. LEXIS 2703, 1988 WL 242554, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lake-county-department-of-public-welfare-v-burton-in-re-burton-innb-1988.