In re Dewey
| Decision Date | 03 September 1998 |
| Docket Number | BAP No. WY-97-095,Bankruptcy No. 97-21166. |
| Citation | 223 BR 559 |
| Parties | In re Curtis Dale DEWEY, also known as Curtis D. Dewey, Debtor. Curtis Dale DEWEY, Appellant, v. Doris DEWEY, Appellee. |
| Court | U.S. Bankruptcy Appellate Panel, Tenth Circuit |
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Georg Jensen, Cheyenne, WY, for Appellant.
Franklin D. Bayless, Bayless & Slater Law Firm, P.C., Cheyenne, WY, for Appellee.
Before McFEELEY, Chief Judge, BOHANON, and BOULDEN, Bankruptcy Judges.
Curtis Dale Dewey (Debtor) appeals an order in which the bankruptcy court sustained an objection filed by Doris Dewey, the Debtor's former spouse (Dewey), to the confirmation of the Debtor's Chapter 13 plan. The bankruptcy court determined that certain cosigned debts the Debtor was ordered to pay under the parties' divorce decree created a contingent claim on Dewey's behalf that was entitled to priority, and that the Debtor's Chapter 13 plan failed to provide payment of Dewey's priority claim under 11 U.S.C. § 507(a)(7)1 as required by § 1322(a)(2). For the reasons set forth herein, the bankruptcy court is AFFIRMED.
On February 19, 1997, the Debtor and Dewey filed a Property Settlement Agreement (Agreement) in Wyoming state court. The Agreement states, in relevant part, that:
Exhibit A to the Agreement, titled "Husband's Liabilities," itemizes seventeen debts for which the Debtor is responsible under ¶ 5 of the Agreement, exceeding $119,000 (Husband's Debts).2 Exhibit B to the Agreement, titled "Wife's Liabilities," itemizes one credit card debt for $50 for which Dewey is responsible under ¶ 6 of the Agreement. The Agreement does not provide for monthly alimony or support payments to Dewey. On March 14, 1997, the state court entered a Decree of Divorce that essentially copies the terms of the above-described Agreement.
After the Decree of Divorce was entered in the state court, the Debtor filed for protection under Chapter 13. The Debtor listed Dewey in Schedule H of his bankruptcy schedules as a codebtor on seven debts, six of which are listed as Husband's Debts in the Agreement and Decree of Divorce. The Debtor thereafter submitted a Chapter 13 plan to which Dewey objected, among other reasons, because it did not propose to pay her contingent claim arising under ¶ 5 of the Agreement as a priority claim as required under § 1322(a)(2).
The bankruptcy court heard extensive testimony from the Debtor and Dewey regarding the nature of the Husband's Debts at the hearing on the confirmation of the Debtor's proposed plan.3 Dewey testified that she agreed to the Debtor's payment of the Husband's Debts in lieu of support because she did not have the means to pay them. If she had known that the Debtor would not pay the Husband's Debts, she would have asked for maintenance payments. The bankruptcy court also stated in its ruling that the evidence showed that Dewey suffered a stroke before the parties were divorced. Dewey is retired and receives $560 per month for retirement pay and $100 income from investments. Her early retirement money will end when she turns 62 (at the time of the hearing she was 60). The Debtor, on the other hand, has consistently earned about $2,700 per month. It was uncontroverted that a large portion of the Husband's Debts attributable to credit card debt were purchases and cash advances made by the Debtor for his benefit. The Debtor still owns portions of the property purchased with the credit cards.
After the confirmation hearing, the bankruptcy court issued an "Order on Objection to Confirmation of Chapter 13 Plan" (Order) sustaining Dewey's objection and denying confirmation of the Debtor's plan without prejudice. In the Order, the bankruptcy court determined that Dewey's claim against the Debtor was entitled to priority under § 507(a)(7),4 and that the Debtor's plan was not adequate under § 1322(a)(2) because it did not provide for the priority claim. This appeal followed. The only issue on appeal is whether the bankruptcy court erred in determining that the Husband's Debts were support and thus entitled to priority under § 507(a)(7).
This Court, with the consent of the parties, has jurisdiction to hear timely-filed appeals from "final judgments, orders, and decrees" of bankruptcy courts within the Tenth Circuit. 28 U.S.C. § 158(a)(1), (b)(1), and (c)(1); Fed. R. Bankr.P. 8002. Upon leave of court, the Court also has jurisdiction to hear appeals from interlocutory orders. 28 U.S.C. § 158(a)(3), (b)(1), and (c)(1).
The Debtor timely filed a notice of appeal from the bankruptcy court's Order, and the parties have consented to this Court's jurisdiction in that they have not opted to have the appeal heard by the United States District Court for the District of Wyoming. Id. at § 158(c); Fed. R. Bankr.P. 8001; 10th Cir. BAP L.R. 8001-1.
The only issue concerning our jurisdiction is whether the Order appealed denying confirmation of a Chapter 13 plan is "final."5 Typically, such orders are considered to be nonreviewable interlocutory orders. See Simons v. FDIC (In re Simons), 908 F.2d 643 (10th Cir.1990) (per curiam). However, we have been informed by the parties that subsequent to the entry of the Order the Debtor amended his plan to provide for Dewey's priority claim, to the extent that such claim is a held to be a priority claim on appeal, and the bankruptcy court has entered an order confirming the Debtor's amended chapter 13 plan. This subsequent confirmation order renders the Order "final" for purposes of § 158(a)(1). See, e.g., Lewis v. B.F. Goodrich Co., 850 F.2d 641 (10th Cir.1988) (en banc) (); In re Hatcher, 208 B.R. 959, 966 (10th Cir. BAP 1997), aff'd without opinion, 133 F.3d 932 (10th Cir.1998). Thus, the bankruptcy court's Order ends the dispute between the parties on the merits and is a "final" judgment, subject to appeal under § 158(a)(1). See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996).
Section 507(a)(7) of the Bankruptcy Code provides:
11 U.S.C. § 507(a)(7). There are no published Tenth Circuit opinions interpreting this provision, which was added to the Bankruptcy Code in 1994. However, the language in § 507(a)(7) mirrors that of § 523(a)(5), which governs the dischargeability of spousal support debts.6 "Support" under § 523(a)(5) has been defined by the Tenth Circuit in numerous decisions and, given the similarity of the language of §§ 507(a)(7) and 523(a)(5) and their purpose, the definition developed under § 523(a)(5) should have equal effect under § 507(a)(7). See Cohen v. de la Cruz, ___ U.S. ___, ___, 118 S.Ct. 1212, 1217, 140 L.Ed.2d 341 (1998) (); U.S. Nat'l Bank v. Independent Ins. Agents of Am., Inc., 508 U.S. 439, 460, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993) ().
It is well-settled that the issue of whether an obligation is support is a factual question subject to the clearly erroneous standard of review. Young v. Young (In re Young), 35 F.3d 499, 500 (10th Cir.1994); Sampson v. Sampson (In re Sampson), 997 F.2d 717, 721 (10th Cir.1993); Goin v. Rives (In re Goin), 808 F.2d 1391, 1393 (10th Cir. 1987) (per curiam); Yeates v. Yeates (In re Yeates), 807 F.2d 874, 877 (10th Cir.1986); White v. Bell (In re White), 212 B.R. 979, 984 (10th Cir.BAP1997). Whether a debt is support is an issue of federal law. Jones v. Jones (In re Jones), 9 F.3d 878, 880 (10th Cir.1993); Sampson, 997 F.2d at 721; Sylvester v. Sylvester, 865 F.2d 1164, 1166 (10th Cir.1989) (per curiam); Goin, 808 F.2d at 1392; Yeates, 807 F.2d at 877. "State law does not provide guidance as to whether a debt is to be considered in the `nature of support.'" Jones, 9 F.3d at 880 (quoting Yeates, 807 F.2d at...
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