Macys v. Macys (In re Macys)

115 B.R. 883, 1990 Bankr. LEXIS 1460
CourtDistrict Court, E.D. Virginia
DecidedJune 22, 1990
DocketBankruptcy No. 88-01180-RT; Adv. Nos. 88-0288-RT, 88-0289-RT
StatusPublished
Cited by3 cases

This text of 115 B.R. 883 (Macys v. Macys (In re Macys)) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Macys v. Macys (In re Macys), 115 B.R. 883, 1990 Bankr. LEXIS 1460 (E.D. Va. 1990).

Opinion

MEMORANDUM OPINION

DOUGLAS O. TICE, Jr., Bankruptcy Judge.

Summary

These adversary proceedings involve the dischargeability under 11 U.S.C. § 523(a)(5) of two monetary judgments awarded in divorce litigation against the debtor in favor of Bonnie Macys, his former spouse: (1)an award in the amount of $112,270.00 under the equitable distribution statute of Virginia,1 and (2) an award for Ms. Macys’ attorney fees in the amount of $5,120.85.

Two dischargeability complaints were filed, one by Ms. Macys as to both debts and one by her attorney for the attorney fee. In his answer, the debtor asserted a counterclaim against Ms. Macys which sought an offset against the equitable distribution indebtedness. Consolidated trial was held on the two complaints and counterclaim.

Based upon the findings and conclusions stated in this opinion, the Court makes the following rulings:

(1) The monetary award judgment for equitable distribution represents payment for property and is therefore not excepted from discharge.

(2) The attorney fee award in favor of Bonnie S. Macys is in the nature of support and is excepted from discharge. However, since this award was to the spouse and not to her attorney, the plaintiff attorney’s complaint will be dismissed.

(3)The court’s ruling on the monetary award precludes the necessity for the court to consider the debtor’s counterclaim, and for this reason the counterclaim will be denied.

Facts

INTRODUCTION.

The facts in these adversary proceedings have been substantially stipulated and are based upon the record of a divorce suit filed by Ms. Macys in the Circuit Court of Henrico County, Virginia, in May 1985. By a decree of reference the circuit court initially referred the issues raised in this suit to a commissioner in chancery to conduct necessary evidentiary hearings and report recommended findings of fact and conclusions of law to the circuit court.2 The report of the commissioner in the Macys divorce suit was filed with the Circuit Court on October 3, 1986; the report was adopted by final decree of the circuit court entered April 3, 1987, which awarded the judgments at issue here. The circuit court’s decree was affirmed on appeal by the Virginia Court of Appeals. Joseph Ma-cys filed his chapter 7 bankruptcy petition on May 27, 1988.

The commissioner’s report, which responded to twelve inquiries set out in the decree of reference, provided the circuit court all findings necessary under Virginia law for the court to enter a divorce decree and to provide appropriate monetary awards of child and spousal support (or alimony), and an equitable distribution with respect to the parties’ property and attorney fees.3

The report of the commissioner in chancery also contains the evidence necessary [886]*886for a ruling on the bankruptcy discharge-ability issues. Accordingly, my findings of fact include the commissioner’s report and the decree of the circuit court.4

At trial of the consolidated adversary proceedings before this court, the only evidence received aside from the stipulated divorce case record was related to the counterclaim asserted by the debtor against Ms. Macys. My ruling on the principal issue avoids the necessity to consider the counterclaim, and no findings of fact on this issue are included.

CIRCUIT COURT FINDINGS — BACKGROUND.

Joseph and Bonnie Macys were married on March 25, 1969, in Cleveland, Ohio; they have two children who were both minors in 1986. Bonnie Macys holds college degrees in nursing and in English. Joseph Macys, a medical doctor, graduated from the medical school of Ohio State University in 1961. The parties moved to Richmond, Virginia, in 1973 or 1974, and Dr. Macys became a successful specialist in orthopaedic surgery.

In June 1982, Dr. Macys was hospitalized with chest pain, and it was discovered that he had a 95 percent blockage of an artery. This problem was not alleviated by treatment, and subsequently Dr. Macys suffered congestive heart failure and underwent emergency bypass heart surgery. However, the surgery did not resolve his cardiac problems, and he again suffered heart failure in March 1983. Dr. Macys’ heart condition seriously restricted his ability to practice medicine. At the time of the hearings before the commissioner, Dr. Ma-cys was engaged in a limited medical practice but could no longer practice in his surgical specialty.

The parties’ financial history reveals that Ms. Macys worked as a nurse early in the marriage and during the residency and training of Dr. Macys. After starting his orthopaedic practice in Richmond, Dr. Ma-cys enjoyed an excellent annual income through 1982. After Dr. Macys achieved financial success, Ms. Macys’ activities were primarily in maintaining their home and raising the children. In this respect she made significant non-financial contributions to the Macys family.

The following schedule reveals how Dr. Macys’ professional income was reduced after the onset of his heart condition:

1982 $200,607.34
1983 $ 84,806.50
1984 $ 15,760.00
1985 $ 13,050.00

During these years of reduced income, Dr. Macys also received income from two disability insurance policies.

The parties experienced marital difficulties and separated in 1985, after which their children lived with Ms. Macys.

CIRCUIT COURT FINDINGS — PROPERTY OF THE PARTIES.

The first inquiry of the circuit court’s reference required the commissioner in chancery to make detailed findings concerning all property of the parties, including determinations of value. In his report on this inquiry the commissioner first noted that “much” of the parties’ property had been sold and the proceeds divided by them prior to the hearings before the commissioner. This included the sale of the Ma-cys’ marital residence along with an extra lot for a total price of $480,000.00. (Subsequent to the parties’ separation Ms. Macys had purchased her own separate residence for a price of $118,000.00.) The commissioner’s report listed and placed values on all remaining marital property which consisted primarily of interests in real property (including a partnership interest of Dr. Macys), racehorses and Dr. Macys’ pension and profit sharing plan. Most of these assets were held in the name of Dr. Macys, and in some instances there was significant disagreement as to value. The commissioner determined a total value of the parties’ marital property in the amount of $319,292.00.5

[887]*887CIRCUIT COURT FINDINGS — EQUITABLE DISTRIBUTION AWARD.

Inquiry number 2 of the decree of reference related to the equitable distribution award and stated as follows:

2. Based on the equities and rights and interests of each party in the marital property, and based upon consideration of the factors set forth in § 20-107.3(E), what amount, if any, should either party pay the other as a monetary award, and whether such award shall be payable in a lump sum or over a period of time in fixed amounts.

(Joint Appendix, Vol. I, p. 8)

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Cite This Page — Counsel Stack

Bluebook (online)
115 B.R. 883, 1990 Bankr. LEXIS 1460, Counsel Stack Legal Research, https://law.counselstack.com/opinion/macys-v-macys-in-re-macys-vaed-1990.