In re Johnson

• Decision Date: 21 March 2011
• Docket Number: Adversary No. 09–1387.,Bankruptcy No. 09–19214–JNF.
• Citation: 445 B.R. 50
• Parties: In re Steven G. JOHNSON, Debtor.The Law Offices of Miriam G. Altman, P.C., Plaintiffv.Steven G. Johnson, Defendant.
• Court: U.S. Bankruptcy Court — District of Massachusetts

445 B.R. 50

In re Steven G. JOHNSON, Debtor.The Law Offices of Miriam G. Altman, P.C., Plaintiff

v.Steven G. Johnson, Defendant.

Bankruptcy No. 09–19214–JNF.

Adversary No. 09–1387.

United States Bankruptcy Court, D. Massachusetts.

March 21, 2011.

Barry Michael Altman, Altman & Altman, Wilmington, MA, for Plaintiff.Mark L. Nestor, Mark L. Nestor, Esq., Gloucester, MA, for Defendant.

MEMORANDUM

JOAN N. FEENEY, Bankruptcy Judge.I. INTRODUCTION

This adversary proceeding presents the issue of whether a debtor's obligation, pursuant to a probate court judgment, to pay to his former spouse's attorney fees for defending a complaint for modification of child support is excepted from discharge under 11 U.S.C. § 523(a)(5), (a)(15) or (a)(6). The issue arises in the context of the following matters which are before the Court: 1) the Plaintiff's Supplemental Motion for Summary Judgment as to Counts I and II of Its Amended Adversary Complaint (# 39); 2) the Plaintiff's Second Supplemental Motion for Partial Summary Judgment as to Counts I, II and VI of Its Second Amended Adversary Complaint (# 121); 3) the Defendant's Opposition and Motion to Strike Plaintiff's Supplemental Motion for Partial Summary Judgment as to Counts I and II of Its First Amended Adversary Complaint (# 43); and 4) the Defendant's Supplemental Memorandum of Law in Support of His Opposition to the Plaintiff's Motion for Partial Summary Judgment as to Counts I & II of Its First Amended Complaint and Motion for Partial Summary Judgment as to Counts I, III and IV [sic] of Its Second Amended Complaint (# 141).¹ The Court consolidated resolution of two additional matters with the matters pending in the adversary proceeding: 1) the Debtor's “Motion to Avoid Judicial Lien on Debtor's Homestead Created by Judicial Lien by Creditor Suzanne Thatcher;” and 2) “Creditor the Law Offices of Miriam G. Altman, P.C.'s Motion for Ruling Concerning Its Status and Rights as a Domestic Support Obligation Creditor with a Judicial Lien.” The Plaintiff's Second Supplemental Motion for Partial Summary Judgment as to Counts I, II and IV of Its Second Amended Complaint (the “Summary Judgment Motion”) and the Defendant's Opposition to that Motion are the dispositive documents to resolve the specific issue of whether the Plaintiff, the Law offices of Miriam G. Altman, P.C. (the “Plaintiff”), has satisfied its burden of establishing the absence of any genuine issues of material fact with respect to the nondischargeability of the claims set forth in Counts I, II and VI of its Second Amended Complaint. The parties incorporated by reference the various affidavits and memoranda submitted in conjunction with the Plaintiff's original Motion for Partial Summary Judgment as to Count I and the Plaintiff's Supplemental Motion for Partial Summary Judgment as to Counts I and II of its Amended Complaint.

The Plaintiff's claims arise out of an award of legal fees to the Plaintiff in the amount of $138,720.41, which were set forth in a Judgment entered by the Middlesex Probate and Family Court, Department of the Trial Court (the “Probate Court”), on February 17, 2009. The award of attorney's fees followed a trial on the merits of a Complaint for Modification filed by Steven G. Johnson (the “Debtor”), in which he sought a reduction of his weekly child support which is payable to his ex-spouse. The Plaintiff claims that the fees awarded to it are nondischargeable pursuant to 11 U.S.C. § 523(a)(5) (Count I); 11 U.S.C. § 523(a)(6) (Count II); and 11 U.S.C. § 523(a)(15) (Count VI).

The Court finds that, despite the assertions of the Defendant to the contrary, the material facts necessary to resolve the Summary Judgment Motion are not in dispute, and the matter is ripe for summary judgment. See Fed.R.Civ.P. 56(c), made applicable to this adversary proceeding by Fed. R. Bankr.P. 7056. The Court has core jurisdiction to decide the Summary Judgment Motion pursuant to 28 U.S.C. § 1334 and § 157(b)(2)(I).

II. FACTS

Suzanne Thatcher, f/k/a/ Suzanne Thatcher–Johnson (“Thatcher”), is the former spouse of the Debtor. The background relating to the couple's divorce is set forth in an 18–page decision, captioned “Procedural History, Findings of Fact, Rationale, and Conclusions of Law,” issued by the Probate Court on February 17, 2009 in conjunction with the Judgment pursuant to which the Plaintiff was awarded fees. Miriam G. Altman Esq., the principal attorney at the Law Offices of Miriam G. Altman, P.C. and an attorney specializing in family law, attached a copy of the decision to her Affidavit filed with this Court on April 7, 2010. Both parties attached numerous documents from the Probate Court proceeding, the authenticity of which is not in dispute.

A. The Probate Court's Decision

As determined by the Probate Court, Thatcher and the Debtor have two minor children. They were divorced pursuant to a Judgment of Divorce Nisi entered on December 4, 2006. The judgment incorporated a Separation Agreement, which obligated the Debtor to pay child support in the weekly amount of $485 to Thatcher. At the time of the divorce, Thatcher was employed as a Manager/Buyer for Russell's Garden Center with gross weekly income of approximately $1,000. The Debtor, while he was employed at Alpine Contractors, Inc., earned gross weekly income of $1,320 or $40.00 per hour.

In its decision, the Probate Court indicated that, following the divorce, the Debtor filed a Complaint for Modification of his child support obligation in which he alleged that he lacked the income and ability to pay child support at the current level. The Plaintiff represented Thatcher in the defense of the action.

On November 27, 2007, Thatcher, following the filing of an Answer to the Debtor's Complaint for Modification, filed a Complaint for Contempt of Judgment in which she alleged the Debtor was in arrears with respect to his child support obligations and had failed to comply with other provisions of the parties' Separation Agreement. The Debtor reciprocated on December 28, 2007 by filing a Complaint for Contempt of Judgment in which he alleged that Thatcher had failed to live up to her obligations respecting the Judgment of Divorce Nisi. The Probate Court noted that the Debtor's Complaint was dismissed on January 16, 2009 with prejudice.

According to the Probate Court, on July 1, 2008, Thatcher filed a Motion for Attorney[']s Fees pursuant to Mass. Gen. Laws ch. 208, § 38 in conjunction with her Complaint for Contempt regarding child support arrears. On July 10, 2008, the Probate Court allowed the Motion and awarded Thatcher attorney's fees in the sum of $25,000, payable by August 1, 2008. The Debtor failed to pay those fees by that date, and, on August 5, 2008, Thatcher filed another Complaint for Civil Contempt. That Complaint for Civil Contempt was consolidated with the Debtor's Complaint for Modification.

The Probate Court conducted a four-day trial, commencing in late September 2008 and concluding on January 8, 2009, issuing its decision and Judgment on February 17, 2009. As part of the rationale for its decision, the Probate Court determined that the Debtor, who was the majority owner of, and had been employed by, Alpine Contractors, Inc., “divested himself of a majority interest in what appears to have been a lucrative and viable company for no consideration” within approximately two months of the entry of the Divorce Judgment which incorporated the Separation Agreement; that the Debtor accepted employment at Lowe's Home Center, Inc. voluntarily and not in good faith; that the Debtor deliberately was underemployed; that the Debtor, deliberately and with premeditation, caused his termination from Lowe's; that the Debtor's reasons for the termination of his employment at Lowe's were not credible; that the Debtor purchased a 2003 Mini Cooper for cash after being fired from Lowe's and after filing the Complaint for Modification, thus demonstrating “flagrant disregard for the Divorce Judgment, Separation Agreement, and child support Order, as well as manipulation of the court process;” that the Debtor depleted his assets in a short period of time and not “solely or even principally to fulfill his child support obligation;” and that the Debtor's testimony during the trial was evasive. In refusing to modify the Debtor's child support obligation, the Probate Court found that the Debtor “disregard [ed] ... his support obligation to the children” and that there were no material changes in his financial circumstances that would warrant a reduction in his child support obligation.

B. The Probate Court Judgment and Post–Judgment Events

On February 17, 2009, the same day the Probate Court issued its decision, it entered a judgment in which it ordered: “Husband shall pay counsel fees in the amount of $138,720.41 to Wife's counsel within one hundred eighty (180) days of the date of this judgment.” It also endorsed Thatcher's “Motion for Attorney [']s Fees and Costs Pursuant to M.G.L.C. 208, § 38,” in which Thatcher requested attorney's fees in the sum of $113,720.41, stating:

I find Husband's Complaint was frivolous and an effort to undermine the terms of the parties['] divorce agreement executed approximately 6 months before filing [the] complaint for modification. Wife has incurred significant counsel fees in defense of a baseless modification. Fees are allowed in the amount of $138,720.41.

I find based on the affidavit filed by Atty[.] Altman, the fees sought are fair & reasonable under all of the circumstances.

The Debtor filed a notice of appeal of the Modification Judgment, but the appeal has not been adjudicated.

Thatcher filed a Complaint in Equity in the Probate Court for post-judgment security. The Probate Court issued a writ of attachment and preliminary injunction restraining the Debtor from dissipating his assets. The sheriff recorded the attachment in the amount of $113,720.41 Middlesex South Registry of Deeds on February 24, 2009...