In re McGee, Bankr. No. 15-40093
Decision Date | 06 October 2015 |
Docket Number | Bankr. No. 15-40093 |
Parties | In re: JODI KAY McGEE fka Jodi Kay Jansen fka Jodi Kay Lindberg SSN/ITIN xxx-xx-2631 Debtor. |
Court | U.S. Bankruptcy Court — District of South Dakota |
The matter before the Court is Trustee Lee Ann Pierce's Objection to Claimed Exemptions and Motion for Turnover. This is a core proceeding under 28 U.S.C. § 157(b)(2). The Court enters these findings and conclusions pursuant to Fed.Rs.Bankr.P. 7052 and 9014(c). For the reasons discussed below, the Court will order Debtor to turn over the alimony awarded to her pre-petition but not yet received as of the petition date, less an allowed exemption of $3,130.00 under S.D.C.L. § 43-45-4.
Trustee Lee Ann Pierce and Debtor Jodi Kay McGee stipulated to the following facts (doc. 30):
The parties further stipulated the issue presented is whether Debtor's alimony award may be claimed exempt under S.D.C.L. § 43-45-2(9). This statute provides:
The property mentioned in this section is absolutely exempt from all suchprocess, levy, or sale, except as otherwise provided by law:
. . . .
(9) Any court ordered domestic support award of alimony, maintenance, or support of the debtor which is not a gross or lump sum and does not exceed seven hundred fifty dollars per month.
The parties filed briefs in support of their respective positions. The matter was then taken under advisement.
In her brief (doc. 33), Trustee Pierce relies on three opinions by the South Dakota Supreme Court that refer to "gross alimony" as alimony ordered for a set dollar amount that is payable either in a lump sum or in installments: Saxvik v. Saxvik, 544 N.W.2d 177, 180 (S.D. 1996), Blare v. Blare, 302 N.W.2d 787, 790 (S.D. 1981), and Holt v. Holt, 176 N.W.2d 51, 53 (S.D. 1970). She also argues:
The terms "alimony in gross" and "gross alimony" are applied to an amount agreed upon or determined in full or in lieu of all alimony, and such amount is frequently payable in installments. Black's Law Dictionary, page 632, 5th ed., 1979.
Based on these cases and the cited provisions from BLACK'S, she argues the $18,000.00 awarded to Debtor pre-petition was a gross sum not eligible for exemption under S.D.C.L. § 43-45-2(9).
Debtor, in her brief (doc. 34), correctly notes the issue in Blare and Holt, with Blare citing Holt, was whether a gross sum awarded to one spouse in a divorce proceeding, paid in installments for a designated time, constituted a final judgment that could not be modified. Blare, 302 N.W.2d at 788-90; Holt, 176 N.W.2d at 53. Debtor also correctly notes both Blare and Holt were decided before S.D.C.L. § 43-45-2(9) was adopted. She provided a definition of "lump sum alimony": a BLACK'S LAW DICTIONARY (5th ed. 1979). Debtor argues § 43-45-2(9) would be rendered meaningless unless asupport award were "permanent in nature." Debtor then argues this would be contrary to the legislative intent and the "debtors' bankruptcy bar['s] grass roots effort" to amend the state's exemption statutes to protect a reasonable amount of spousal support.
There is no dispute the $18,000.00 awarded to Debtor in her divorce was a "court ordered domestic support award"-the state court's decree describes it as such, and neither party has argued to the contrary. See In re Koryn Michele Steen, Bankr. No. 10-10206, 2012 WL 1252668, at *4 n.11 (Bankr. D.S.D. April 13, 2012) (citing Peterson v. Peterson, 434 N.W.2d 732, 735 (S.D. 1989)) (labels in a divorce-related order or stipulation are not determinative in distinguishing a support award from a property division award). Thus, the first requirement for the award to fall under the exemption at § 43-45-2(9) is met.
The second requirement is that the award not be "a gross or lump sum." This element is more problematic: The South Dakota legislature did not define these terms within S.D.C.L. § 2-14-2 ( ), § 43-45-2 itself, or chapter 43-45.
Save Our Neighborhood-Sioux Falls v. City of Sioux Falls, 849 N.W.2d 265, 268 (S.D. 2014). Accord Paul Nelson Farm v. South Dakota Dept. of Revenue, 847 N.W.2d 550, 554 (S.D. 2014); In re Certification of a Question of Law from United States Dist. Court, Dist. of S.D., 779 N.W.2d 158, 162 (S.D. 2010); Whalen v. Whalen, 490 N.W.2d 276, 280 (S.D. 1992) ( ).
"Gross" is used numerous times in the state code in different chapters, often referring to a total or original quantity. See, e.g., S.D.C.L. §§ 10-39-44 and 55-12-4. The term "alimony in gross" or "gross alimony" has also seen frequent use in South Dakota case law. Early case law indicates alimony in gross was considered a single payment award from one divorcing spouse to the other, with some measure of finality attaching to that award. See Narregang v. Narregang, 139 N.W. 341, 342 (S.D. 1913). The Holt decision followed, where the South Dakota Supreme Court attached the same finality to a gross award from one spouse to the other, regardless of whether the award was related to property division or support. Holt, 176 N.W.2d at 53.
Adopting the reasoning of the Nebraska Supreme Court, the South Dakota Supreme Court in Holt further held "an unqualified allowance in gross, in a divorce decree [may be either] payable immediately in full or periodically in instalments [sic][.]" Id. at 53 (emphasis added) (quoting Ziegenbein v. Damme, 292 N.W. 921, 923 (Neb. 1940)). The South Dakota Supreme Court followed suit in Blare. Blare, 302 N.W.2d at 788-91.
Since Blare, when considering the finality of a divorce-related award, the South Dakota Supreme Court has more clearly drawn a distinction between a fixed sum for support payable over a certain time, which may be modified, and a fixed sum payableover time awarded in lieu of a division of property, which usually may not be modified, thus apparently narrowing the finality holding in Blare. Foley v. Foley, 429 N.W.2d 42 (...
To continue reading
Request your trial