Wellman v. Wellman (In re Wellman)

32 B.R. 974, 1983 Bankr. LEXIS 5390
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedSeptember 19, 1983
DocketBankruptcy No. 83 B 10923; Adv. No. 83 A 0981
StatusPublished
Cited by1 cases

This text of 32 B.R. 974 (Wellman v. Wellman (In re Wellman)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wellman v. Wellman (In re Wellman), 32 B.R. 974, 1983 Bankr. LEXIS 5390 (Ill. 1983).

Opinion

MEMORANDUM OPINION

FREDERICK J. HERTZ, Bankruptcy Judge.

This matter concerns a plaintiff’s complaint to determine the dischargeability of certain debts. Specifically, Judith Wellman (hereinafter referred to as plaintiff) and Glenn Wellman (hereinafter referred to as debtor) entered into a marital settlement agreement on December 1, 1979. The plaintiff claims that the debtor incurred [975]*975certain obligations under the agreement which are nondischargeable pursuant to 11 U.S.C. § 523(a)(5) (Supp. V 1981).

The marital settlement agreement provided that custody of the parties’ three children was to remain with the plaintiff. Additionally, the agreement provided that the debtor was to provide certain payments to the plaintiff for alimony and child support. The relevant provisions pertaining to the debtor’s child support and alimony obligations are as follows:

ARTICLE IV

MEDICAL, DENTAL, OPTICAL AND RELATED EXPENSES OF THE CHILDREN

1. The [debtor] shall pay and be solely responsible for all extraordinary medical, hospital, surgical, optical and extraordinary dental care for the minor children of the parties ...

ARTICLE VIII

PERIODIC ALLOWANCE FOR SPOUSE

2. The [debtor] shall pay to the [plaintiff] as and for her support and maintenance an amount equal to the first mortgage (principal, interest, taxes and insurance), assessments (on the condominium in which the plaintiff and the parties’ three children currently reside, and charges for one parking space per month.

ARTICLE IX

INSURANCE

3. The [debtor] shall obtain and maintain life insurance on his life in the amount of $100,000.00. Said insurance shall be maintained for the benefit of the minor children of the parties .

ARTICLE X

CHILD SUPPORT

4. The [debtor] shall pay to the [plaintiff] as and for child support of the three minor children of the parties, the sum of $800.00 per month, ..., commencing December 1, 1979, ...

Subsequently, on February 28, 1980, the Circuit Court of Cook County, Illinois, County Department — Domestic Relations Division, entered a judgment for the dissolution of the parties’ marriage (79 D 845). The debtor thereafter began falling behind on his alimony and child support payments due to the plaintiff. Eventually, on August 19, 1982, the debtor filed a petition for relief under Chapter 7 of the Bankruptcy Code.

The plaintiff then brought the aforementioned complaint against the debtor (83 A 0981). The thrust of the complaint contends that Section 523 operates so as to render the child support and alimony payments as nondischargeable debts. The plaintiff contends that all attorney fees that may be incurred by her relative to her support and maintenance are similarly non-dischargeable.

The debtor admitted all of the relevant facts. However, the debtor denied that his obligations under the marital settlement agreement are in the nature of “alimony” or “support.” The debtor offered no further proof in support of his position. Thereafter, the plaintiff brought a motion for summary judgment and submitted a memorandum of law in support of her position relative to the nondischarge-ability issues. Thus, this court must determine whether Section 523 exempts the aforementioned obligations from the normal discharge provisions provided under the Bankruptcy Code.

Section 523 provides in relevant part that:

(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 property settlement agreement, but not to the extent that ...
[976]*976(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; ...

11 U.S.C. § 523 (Supp. V 1981). It is well settled in this Circuit that if an obligation is a debt for alimony, maintenance, or support of a spouse or a child in connection with a divorce decree, it is nondischargeable in bankruptcy. Matter of Woods, 561 F.2d 27, 30 (7th Cir.1977). However, if the divorce decree merely divides the marital property, the ensuing indebtedness is dischargeable in bankruptcy. Matter of Coil, 680 F.2d 1170, 1171 (7th Cir.1982).

The debtor denied plaintiff’s allegations relative to the characterization of the child support and alimony obligations. ■ This court necessarily assumes, since the debtor offered no further explanation, that the debtor’s position is that the settlement agreement merely constituted a division of property and thus is dischargeable in bankruptcy. Thus, an examination of the pertinent factors and circumstances is in order to determine the true nature of the child support and alimony payments.

Such an examination revolves around the interpretation of what “alimony” is. In making this determination, this court must look to the relevant federal standards. See In re Renzulli, 28 B.R. 41, 43 (Bkrtcy.N.D.Ill.1982) (In determining what constitutes alimony, maintenance, or support for purposes of dischargeability, this court is not bound by the label which the state courts place upon such a decree, but must make the determination in accordance with the federal standards.); See also H.R.Rep. No. 595, 95th Cong., 1st Sess. 364 (1977), reprinted in (1978) U.S.Code Cong. & Ad.News pp. 5963, 6320. The relevant case law which has interpreted the alimony issue provides that payments are to be considered as alimony if they are actually in the nature of support for a former spouse. In re Wells, 8 B.R. 189, 192 (Bkrtcy.N.D.Ill.1981), citing Nichols v. Hensler, 528 F.2d 304, 307 (7th Cir.1976); See also In re Tilmon, 9 B.R. 979, 987 (Bkrtcy.N.D.Ill.1981)

Turning to the instant case, the agreement states that several conditions must be fulfilled by the plaintiff as a predicate to receiving the alimony and child support payments. The relevant restrictions and conditions relative to the receipt of the alimony and child support payments are as follows:

MEDICAL, DENTAL, OPTICAL AND RELATED EXPENSES OF THE CHILDREN

... 2. The [debtor’s] obligation with respect to said minor children shall terminate upon each child’s attaining the age of majority or finishing college, whichever shall last occur.

... 5. The payments to the [plaintiff] of maintenance shall continue with the first to happen of the following events:

(a) The death of the [plaintiff];

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Bluebook (online)
32 B.R. 974, 1983 Bankr. LEXIS 5390, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wellman-v-wellman-in-re-wellman-ilnb-1983.