Doerflein v. Doerflein, 96-2940.
| Decision Date | 11 December 1998 |
| Docket Number | No. 96-2940.,96-2940. |
| Citation | 724 So.2d 153 |
| Court | Florida District Court of Appeals |
| Parties | Michael DOERFLEIN, Appellant/Cross-Appellee, v. Anne DOERFLEIN, Appellee/Cross-Appellant. |
Jason M. Gordon, Cocoa Beach, for Appellant/Cross-Appellee.
Walter T. Rose, Jr., of Rose & Weller, P.A., Cocoa Beach, for Appellee/Cross-Appellant.
Michael Doerflein ("former husband") appeals and Ann Doerflein ("former wife") cross appeals a final order of modification rendered 11 April 1996. We affirm in part and reverse in part.
The order on appeal modified a 1989 amended final judgment of dissolution, which incorporated the parties' settlement agreement ("Agreement"). The Agreement listed assets to be distributed to each party, resolved the issues of alimony, child custody, and child support, and apportioned the debt between the parties. The Agreement required that the former husband pay $2,500 monthly child support. The former husband, a physician who previously earned $500,000 a year, filed a supplemental complaint for modification seeking a reduction in child support because of severe business reversals, and a 68 percent involuntary and permanent reduction in his income. The former husband had filed for voluntary bankruptcy but was still obligated to pay an IRS debt of at least $45,000. In the bankruptcy proceedings, the former husband listed the former wife as an unsecured creditor under the Agreement.
The former wife counterclaimed for damages because of the financial obligations that she would incur as a result of the bankruptcy. She alleged that the Agreement provisions wherein the former husband agreed to assume certain debts and hold her harmless from claims were in the nature of support and maintenance, and were therefore nondischargeable in bankruptcy pursuant to 11 U.S.C. § 523(a)(5).1 Further, after the former husband's discharge in bankruptcy, First Union sued the former wife for repayment of $70,000 from a prime equity loan. She alleged the loan related to the former husband's business known as Anchorage Marina. The former wife also alleged that when the parties' Satellite Beach residence was sold, the IRS had a lien against the property in the amount of $116,581.54, and all proceeds from the sale, $78,703.61, were withheld. Because the former husband had assumed responsibility for the IRS debt, the former wife sought repayment of $39,351.80, her half of the sale proceeds. In addition, the former wife sought an award of attorney's fees and costs pursuant to section 61.16, Florida Statutes, for defending the modification petition and prosecuting her counterclaim.
In its final order of modification the court reduced the former husband's monthly child support obligation to $1,229. The court found the $70,000 First Union debt was incurred by the husband's corporation and assumed by the former husband pursuant to the Agreement. Further, the order states "Said debt is in the nature of alimony or support and accordingly was not discharged by the Husband's Discharge in Bankruptcy...." Accordingly, the court awarded the former wife $40,000 less $22,962 the former husband overpaid for child support prior to modification. The court denied the former wife's claim for half the proceeds of the sale of the parties' Satellite Beach property. The court determined that the former wife waived her right to claim any of the proceeds when she signed the closing statement. The court also ruled that by a subsequent agreement the parties had effected a novation which modified their obligations regarding the IRS debt. In addition, the former wife's request for attorney's fees was denied. We find two errors in the judgment: the trial court erred in ruling that the hold harmless provision was in the nature of alimony or support, and in denying the former wife's request for attorney's fees.
The former husband claims that his assumption of the debt was not intended to be alimony or support and, citing In re Fitzsimmons, 110 B.R. 912 (Bankr.E.D.Mo.1990), he asserts that it was the intent of the parties at the time the agreement was entered that is decisive. He notes the former wife received $100,000 as lump sum alimony and $2,500 monthly child support. He argues this militates against the former wife's contention. Further, he argues this was part of a property settlement and not meant to be support. Relying on In Matter of Campbell, 74 B.R. 805 (Bnkr.M.D.Fla.1987), the former wife argues that there were sufficient factors in the record to support the trial court's ruling.
The former wife presented no evidence that at the time the Agreement was executed the parties considered the debt assumption and hold harmless agreement to be support. Indeed, Mark Peters, the attorney who represented the former wife during the negotiation and preparation of the Agreement, gave no testimony in that regard. Rather, the reaffirmation provision of the addendum indicates that the parties did not consider these obligations to be nondischargeable support obligations. The parties, who were both represented by counsel, agreed that the former husband would reaffirm any of the debts he assumed "if he shall file voluntary bankruptcy or be subject to involuntary bankruptcy and there are claims against the Wife for the debts set forth in paragraph 17...." Furthermore, the parties were married for only 5½ years, and the former wife was trained and employed as a registered nurse.2
In In re Montgomery, 169 B.R. 442 (Bankr.M.D.Fla.1994), the court enumerated ten factors to consider in determining whether an obligation is in the nature of alimony, maintenance or support. Applying the Montgomery factors, it is evident that the debt assumption and hold harmless obligations were not designed to provide support to the former wife. They are not modifiable or subject to any contingencies, and thus lack the characteristics of alimony. They are part of the parties' equitable distribution scheme and were not intended to compensate for disparate incomes. See In re Montgomery, 169 B.R. at 444-45 (); In re Campbell (hold harmless provision in settlement agreement not in nature of support where not subject to...
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