In re Bailey, BAP No. 00-8034.
Decision Date | 20 November 2000 |
Docket Number | BAP No. 00-8034. |
Citation | 254 BR 901 |
Parties | In re Bryant BAILEY, Debtor. Kimberly Bailey, Plaintiff-Appellee, v. Bryant Bailey, Defendant-Appellant. |
Court | U.S. Bankruptcy Appellate Panel, Sixth Circuit |
David W. Camp, Dowden, Zdancewicz & Camp, Jackson, Tennessee, Claire D. Reno, Dowden, Zdancewicz & Camp, Memphis, Tennessee, for Appellant.
Harold F. Johnson, Jackson, Tennessee, for Appellee.
Before AUG, MORGENSTERNCLARREN, and RHODES, Bankruptcy Appellate Panel Judges.
The bankruptcy court entered a judgment that obligations in the amount of $20,000 that the debtor, Bryant Bailey, owes to Kimberly Bailey are in the nature of support and are thus nondischargeable pursuant to 11 U.S.C. § 523(a)(5). The Panel agrees with the bankruptcy court that the obligations identified in the bankruptcy court's judgment are in the nature of support and therefore nondischargeable. Accordingly, that aspect of the bankruptcy court's judgment is AFFIRMED. However, the record is insufficient to establish the basis on which the bankruptcy court determined that the amount of the nondischargeable debt should be $20,000. Accordingly, that aspect of the judgment is VACATED and the case is REMANDED for additional factual findings. In the alternative, the bankruptcy court may conduct any further proceedings that it deems necessary to determine an appropriate judgment.
The issues on appeal are whether the obligations that Bryant Bailey owes to Kimberly Bailey pursuant to their divorce proceedings are in the nature of support under 11 U.S.C. § 523(a)(5) and whether the record supports that bankruptcy court's award of a nondischargeable judgment in the amount of $20,000.
The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this appeal. The United States District Court for the Western District of Tennessee has authorized appeals to the BAP. A final order of a bankruptcy court may be appealed by right under 28 U.S.C. § 158(a)(1). For purposes of appeal, an order is final if it "`ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.'" Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S.Ct. 1494, 1497, 103 L.Ed.2d 879 (1989) (citations omitted).
Conclusions of law are reviewed de novo. See Nicholson v. Isaacman (In re Isaacman), 26 F.3d 629, 631 (6th Cir. 1994). "De novo review requires the Panel to review questions of law independent of the bankruptcy court's determination." First Union Mortgage Corp. v. Eubanks (In re Eubanks), 219 B.R. 468, 469 (6th Cir. BAP 1998) (citation omitted). Determinations of dischargeability under 11 U.S.C. § 523 are conclusions of law reviewed de novo. Hart v. Molino (In re Molino), 225 B.R. 904, 906 (6th Cir. BAP 1998). However, "the Panel must affirm the underlying factual determinations unless they are clearly erroneous." Id. (citing National City Bank v. Plechaty (In re Plechaty), 213 B.R. 119, 121 (6th Cir. BAP 1997)). See also Sorah v. Sorah (In re Sorah), 163 F.3d 397, 400 (6th Cir.1998). "A finding of fact is clearly erroneous `when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'" R.D.F. Developments Inc. v. Sysco Corp. (In re R.D.F. Developments Inc.), 239 B.R. 336, 338-39 (6th Cir. BAP 1999) (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948))).
On December 23, 1997, Kimberly Bailey filed for a divorce from Bryant Bailey in the Tennessee Chancery Court. The divorce proceeding was acrimonious, resulting in many orders from the Chancery Court. On May 11, 1998, the Chancery Court entered an Agreed Temporary Support Order, which required Bryant Bailey to pay the first and second mortgage payment on the family home. On October 5, 1998, the Chancery Court entered a second order requiring Bryant Bailey to pay clothing expenses for the children, as well as vehicle repairs and other expenses, and to sell certain items, including a ski boat and accessories, a riding lawnmower, bicycles, guns, and tools. The October 5, 1998 order also required the parties to place the home up for sale. Bryant Bailey filed bankruptcy on April 30, 1999.
The Chancery Court entered a third order on May 10, 1999, noting that the parties had not complied with previous court orders. The Chancery Court also noted that damage had occurred to the home and that Bryant Bailey had erroneously received an insurance check in the amount of $19,000.
On June 7, 1999, the Chancery Court entered its Findings of Fact awarding Kimberly Bailey an absolute divorce. This order awarded Kimberly Bailey $852 per month in child support as well as costs and attorney fees as alimony in solido.
On September 20, 1999, the Chancery Court entered another order setting the amount of child support at $855 per month and awarding Kimberly Bailey costs and fees in lieu of additional alimony.
On December 9, 1999, the Chancery Court entered yet another order to clarify its Findings of Fact. This order noted the previous order for the sale of the ski boat including all accessories, two new bicycles, guns, rowing machine, weight bench, and tools having a value of approximately $5,000. The Chancery Court then held that the proceeds of the sale of these items were for the care and maintenance of Kimberly Bailey and the children or in the alternative as alimony in solido. The Chancery Court also specifically held that the assumption of indebtedness of the home mortgages and credit card debt by Bryant Bailey was necessary for the support and maintenance of Kimberly Bailey and the children. Finally, the Chancery Court awarded Kimberly Bailey an amount necessary to reimburse her expenses in lieu of additional alimony and child support.
On August 6, 1999, Kimberly Bailey filed a complaint in the bankruptcy court asserting that the debt that Bryant Bailey owed to her was nondischargeable pursuant to 11 U.S.C. § 523(a)(5). On May 8, 2000, the bankruptcy court entered its opinion and order holding that Bryant Bailey's obligation to Kimberly Bailey was nondischargeable in the amount of $20,000. The bankruptcy court also ordered the parties to sell the ski boat and accessories, bicycles, guns rowing machine and tools as partial satisfaction of the judgment. The bankruptcy court also awarded Kimberly Bailey attorney's fees and expenses.
Bryant Bailey filed this timely appeal. He argues that the amount of $20,000 is not supported by the record or evidence and is not in the nature of support.
Section 523(a)(5) provides:
Bryant Bailey's first argument is that the debt is not in the nature of support as required for nondischargeability under § 523(a)(5). In Sorah, the Sixth Circuit stated:
Id., 163 F.3d at 401(citation omitted).
Hayes v. Hayes (In re Hayes), 235 B.R. 885, 891 (Bankr.W.D.Tenn.1999) (internal citations omitted).
In the present case, the Chancery Court repeatedly identified that the award to Kimberly Bailey was for maintenance,...
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