In re Lineberry

• Decision Date: 25 February 1981
• Docket Number: Bankruptcy No. 80-01393-C,Adv. No. 80-0300-C.
• Court: United States Bankruptcy Courts. Eighth Circuit. U.S. Bankruptcy Court — Western District of Missouri
• Parties: In re George Leander LINEBERRY and Jeanne Glenda Lineberry, Debtors. Carolyn S. LINEBERRY, Plaintiff, v. George Leander LINEBERRY, Defendant.

9 B.R. 700 (1981)

In re George Leander LINEBERRY and Jeanne Glenda Lineberry, Debtors Carolyn S. LINEBERRY, Plaintiff, v. George Leander LINEBERRY, Defendant.

Bankruptcy No. 80-01393-C, Adv. No. 80-0300-C.

United States Bankruptcy Court, W.D. Missouri, C.D.

February 25, 1981.

Thomas H. Reppell, Grandview, Mo., for debtors and defendant.

R. L. Veit, Jefferson City, Mo., for plaintiff.

MEMORANDUM OPINION AND ORDER

FRANK P. BARKER, Jr., Bankruptcy Judge.

This is a complaint filed by Carolyn S. Lineberry, the former spouse of debtor, George Leander Lineberry, seeking to have declared non-dischargeable via § 523(a)(5) of the Bankruptcy Code, certain debts agreed to by the parties in a Separation Agreement which was later incorporated into their Decree of Dissolution of Marriage. Trial was held before this Court September 11, 1980, all parties being represented by counsel. Both parties subsequent to trial have filed suggestions.

FINDINGS OF FACT/CONCLUSIONS OF LAW

The marriage of nearly 17 years between Carolyn and George Lineberry was dissolved on March 14, 1978, pursuant to the provisions of the Missouri Dissolution of Marriage Act, Ch. 452, R.S.Mo.1978. On February 10, 1978 the parties had entered into a separation agreement (entitled "Agreement") which was incorporated into the parties Decree of Dissolution.

At the time the separation agreement was executed the couple had two children, Glen Marvin Lineberry, age 16 and David Carl Lineberry, age 11. Carolyn Lineberry testified that at the time of the "Agreement's" execution she worked at the Missouri House of Representatives (as she had for the previous 7 years) at a salary of $680-$690 per month. She has not remarried and currently works for the Missouri Secretary of State at a salary of $850 per month.

George Lineberry in his Voluntary Petition in Bankruptcy, filed May 5, 1980, lists his occupation as Planner III, Division of Budget and Planning, Missouri State Office of Administration. He indicates he has been employed there 11 years, at a salary of $18,894 ($1,575 per month) in 1978 and $20,088 ($1,674 per month) in 1979. At the time of both the separation agreement and dissolution the parties were represented by the same attorney.

The "Agreement" entered into provided the wife with the custody of the children. The property division gave the wife:

(1) the home of the parties subject to any encumbrances including taxes and special assessments for 1978, and all the household contents;

(2) a 1977 Ford Stationwagon subject to loan or mortgage existing on such;

(3) all personal clothing, jewelry and effects;

(4) $300.00 cash paid by the husband prior to signing the agreement;

(5) all monies held in a checking or savings account in her name; and

(6) all the clothing and personal items of the children.

The property division gave the husband:

(1) all personal clothing and effects;

(2) all monies held in a checking or savings account in his name; and

(3) some itemized personal effects in the home of the parties.

The "Agreement" further stated:

6. Husband agrees that he will pay Wife as maintenance the sum of $100.00 per month commencing on the first day of March, 1978, and continuing on the first of each month thereafter following so long as the Wife remains married to him, or if in the event their marriage is dissolved, until such time as she becomes remarried.

7. Husband will pay to Wife as support for said children born of the marriage, to-wit: Glen Marvin Lineberry and David Carl Lineberry, the sum of $200.00 per month for each child commencing on the first day of March, 1978, and continuing on the first of each and every month thereafter following until such child reaches the age of 21, obtains his bachelors degree from college or enters full employment, whichever event first happens.

(8) Husband further agrees that at such time as he is no longer obligated under Paragraph 7 above to pay child support to Wife for one of the children to automatically pay to Wife as increased or additional maintenance the additional sum of $50.00 per month. No additional, automatic increase in maintenance payable to Wife shall be owing upon the sessation of Husband\'s obligation to pay child support for the last child receiving the same.

The plaintiff contends that Paragraphs 9 through 14¹ of the "Agreement" are in the nature of alimony, maintenance or support under § 523(a)(5) and thus non-dischargeable. Defendant contends that the parties in Paragraphs 6 through 8 disposed of all their support and maintenance obligations and that these three paragraphs (paragraphs 6-8) are not listed in the bankruptcy schedules as dischargeable debts. Thus, the defendant contends that Paragraphs 9 through 14 are in the nature of a property settlement and thus dischargeable.

§ 523(a)(5) of the Bankruptcy Code provides:

"A discharge under section 727, 1141 or 1328(b) of this title does not discharge an individual debtor from any debt —

(5) to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of both spouse or child, in connection with a separation agreement, divorce decree, or property settlement agreement, but not to the extent that — (A) such debt is assigned to another entity, voluntarily, by operation of law, or otherwise; or

(B) such debt includes a liability designed as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance, or support;"

Thus, even though a debt is designated as one for alimony, maintenance or support, this exception to discharge will not operate unless the liability is actually in the nature of alimony, maintenance or support. § 523(a)(5)(B) H.R.Rep.No.95-595, 95th Cong., 1st Sess. 364, U.S.Code Cong. & Admin.News 1978, 5963 (1977) S.Rep.No.95-989, 95th Cong., 2nd Sess. 77-79, U.S.Code Cong. & Admin.News 1978, 5787 (1978).

The legislative history makes it clear that what constitutes alimony, maintenance or support is to be determined under bankruptcy laws, not State Law. H.R.Rep.No. 95-595, 95th Cong., 1st Sess. 363 (1977); S.Rep.No.95-989, 95th Cong., 2nd Sess. 77-79 (1978). See also Collier on Bankruptcy, ¶ 523.15, p. 523-109 (15th Ed. 1980).

The statement that federal law controls what constitutes, alimony, maintenance or support actually begs the question, since the area of domestic relations is one quintessentially reserved to the control and regulation of the states. There is no federal common law of domestic relations. The point is that bankruptcy courts are not bound by state law where it defines an item as alimony, maintenance or support, as they are not bound to accept the characterization of an award as support or maintenance, which is contained in the decree itself. However, recourse must be had to state law for principal criteria by which to determine whether the obligations imposed by the decree are one or the other.

"While the legislative history indicates that the determination whether an award constitutes alimony shall be made with reference to a federal standard, nothing in the legislative history suggests that state law shall play no part in making that determination." In re Pelikant, 5 B.R. 404, 406 (N.D.Ill.1980).

A judgment of divorce decree incorporating a marital settlement agreement is not res judicata in proceeding to determine dischargeability of spousal support; the doctrine of collateral estoppel does not shield inquiry into marital dissolution judgment and marital settlement agreement incorporated therein as to character of spousal support provided in agreement. Re Chin, 4 B.C.D. 924, 17 C.B.C. 790 (D.C.Cal.1978).

Since the nature of the claim underlying the debt determines the extent of the dischargeability, it is necessary to examine the agreement and all the circumstances surrounding the creation of the liability to determine if the debt is in nature of alimony, maintenance or support. It has long been settled that in determining this the Court may look behind the recitations of the divorce decree to the substance of the situation. Warner v. Warner, 5 B.R. 434, 439-440 (Utah 1980) stated:

"The nature of the debt whether it was imposed to discharge the obligation of support, cannot be determined from the "four corners" of the divorce decree and attendant settlement stipulations without impairing the federal character of the nondischargeability provisions and their underlying policies..." Warner, supra, at 440.

"Furthermore, it cannot routinely be argued that the divorce decree, like a contract, evidences the intent of the parties in discharging support, for often the effect of the filing of bankruptcy is not in contemplation when the decree is drafted... Therefore, it cannot be said from that recitation that the intent of the parties was or was not to provide support... To hold the parties to the terms of a decree as one would to the terms of a contract might often ignore the true nature of the debt... Warner, supra at 441.

In the case at bar the state court's findings of fact, if any, has not been made a part of this Court's record. The only evidence before the Court from the proceedings below is the Judgment Entry and "Agreement" incorporated therein.

Although beyond the language itself, some inference might be drawn from the placement of specific provisions within the document (i.e. since the specific division of property provisions appear in paragraphs 3 through 5, and paragraphs 6 through 8 provide for specific payments of support and maintenance, the fact that the paragraphs disputed are 9 through 14 could lead one to argue that they were intended as a continuation of the support and maintenance provisions), an examination of the documents alone does not produce an unambiguous or clear view. As such the parties ought to be able to produce extrinsic evidence to prove the underlying nature of the debts in question. Melichar v. Ost, 445 F.Supp. 1162 (D.C.Md.1977).

In addition to the parties testimony as to their...