Taylor v. Taylor (In re Taylor)
- Summarized by Daniel Glasser , Chipman Glasser LLC
- 12 years 4 months ago
- Citation:
- Taylor v. Taylor (In re Taylor), No. NM-11-103, NM-11-107 (B.A.P. 10th Cir. Sept. 5, 2012)
- Tag(s):
-
- Ruling:
- Affirming the bankruptcy court, the Tenth Circuit BAP found that the obligation to refund an overpayment of spousal support is not dischargeable under 11 U.S.C. § 523(a)(15). The plain and unambiguous language of the bankruptcy code exempts from discharge obligations arising “in connection with a separation agreement, divorce decree or other order of a court of record.” In addition, Congress clearly intended to exempt from discharge all marital and domestic relations obligations. The Tenth Circuit BAP also affirmed that an obligation to refund spousal support is not exempt from discharge under 11 U.S.C. § 523(a)(5). That section requires that the obligation itself be in the nature of spousal support. And an overpayment refund does constitute support. Although the bankruptcy court ignored the ex-husband’s claim for attorneys’ fees, the Tenth Circuit BAP examined the language of the Marital Support Agreement and found no authority for granting such fees for successfully exempting the overpayment of spousal support from discharge.
- Procedural context:
- Appeal and cross-appeal from the United States Bankruptcy Court for the District of New Mexico to the Tenth Circuit BAP.
- Facts:
- The parties’ Marital Settlement Agreement required Matthew Taylor to pay spousal support to Eloisa Taylor for 10 years or until she remarried. When Matthew learned that Eloisa was cohabiting with another man, Matthew asked the Virginia domestic court to terminate his support obligation and to order Eloisa to refund any overpayments she had received. Matthew also sought to recover his attorneys’ fees. The domestic court terminated the support obligation, ordered Eloisa to repay Matthew $40,660.59 and awarded $10,000 in attorneys’ fees.
Eloisa filed for bankruptcy and Matthew commenced an adversary proceeding to exempt the underlying obligation from discharge. The bankruptcy court held that the overpayment obligation was excepted from discharge under 11 U.S.C. § 523(a)(15) because it arose in connection “with a separation agreement, divorce decree or other order of a court of record.” Nevertheless, the bankruptcy court rejected Matthew’s argument for nondischargeability under 11 U.S.C. §523(a)(5), holding that because the obligation to refund a support overpayment was not in the nature of a support obligation owed to Matthew, it did not fall within the ambit of 11 U.S.C. § 523(a)(5).
The bankruptcy court did not address Matthew’s request for attorneys’ fees.
Eloisa appealed the bankruptcy court’s decision exempting her overpayment obligation from discharge under 11 U.S.C. § 523(a)(15). Matthew appealed the dismissal of his claim under 11 U.S.C. 523(a)(5) and he asked the Tenth Circuit BAP to award attorneys’ fees.
- Judge(s):
- Nugent, Karlin and Hall
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!
