In re Peters
| Citation | 133 BR 291 |
| Decision Date | 15 November 1991 |
| Docket Number | No. 91 Civ. 2583 (GLG).,91 Civ. 2583 (GLG). |
| Parties | In re Bernard J. PETERS, Debtor. Bernard J. PETERS, Appellant, v. James A. HENNENHOEFFER, Appellee. |
| Court | U.S. District Court — Southern District of New York |
Bernard J. Peters, pro se.
Fink Weinberger P.C. (by Richard L. Koral, Joseph L. Fox, of counsel), White Plains, N.Y., for appellee.
The issue raised by this appeal is whether the fees which a state court has directed the debtor to pay to the attorney appointed by the court to represent the debtor's son during a custody dispute are a nondischargeable debt within the meaning of 11 U.S.C. § 523(a)(5).
Bernard Peters and his wife were legally separated in Virginia in 1982. They had one son, Brendan. The court decree ordered Peters to pay $450 per month for Brendan's support. Thereafter, Mrs. Peters moved to California with her son and initiated child custody proceedings which almost immediately turned acrimonious. See In re Brendan P., 184 Cal.App.3d 910, 230 Cal.Rptr. 720, 721 (1986) (). In March 1983, James Hennenhoeffer, an attorney, was appointed by the Superior Court to represent the interests of Brendan. In October 1983, after a nine day hearing, joint legal custody was ordered and Mr. Peters was allowed two days per week for visitation.
The record indicates that the parents did not cooperate: Mrs. Peters impeded visitation and Peters would attempt, in apparently unacceptable ways, to have it. In April 1984, a new visitation order was issued.1 On May 9, 1984, in light of the fact that Peters was investing so much time in pursuing his visitation rights, the court reduced his child support obligations to zero. That same day, the court ordered Peters to pay Hennenhoeffer $6,372.75 as "additional child support." During the following years, there were apparently many hearings during which the fees owed to Hennenhoeffer rapidly accrued. Though it does not appear that any support order for Brendan's direct benefit was ever entered, the court would periodically assess Hennenhoeffer's fees against Peters and his wife, labelling them "additional child support."2
On May 19, 1988, the California court issued its final order awarding physical custody of Brendan to Peters with limited visitation granted to Mrs. Peters. The court at that time stated that it In re The Marriage of Peters, No. N 21462, Statement of Decision (May 19, 1988), at 11. Review of the issue of Brendan's maintenance was set for June 13, 1988. The court further stated that it "finds the attorney's fees and costs incurred on behalf of the minor child by James A. Hennenhoeffer, in addition to all prior orders of this Court, are in the sum of $46,817.44" and ordered each party to pay one-half of those costs as "additional child support" pursuant to California Civil Code § 4606. Id. at 12. The record does not indicate whether the scheduled support review ever took place.
In August 1988, while Mrs. Peters had Brendan for a visit, they both disappeared. They are still missing. Peters claims to have expended all of his resources in attempting to locate his son.
On September 11, 1990, Peters filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. Hennenhoeffer commenced an adversary proceeding in December, seeking a decree that his claim was nondischargeable as child support pursuant to § 523(a)(5) of the Bankruptcy Code. After a trial on this matter on February 27, 1991, Judge Schwartzberg held that the debt owed to Hennenhoeffer was nondischargeable. This appeal followed.
At the outset, we must address appellant's contention that he was deprived of due process in the bankruptcy proceedings because the lower court permitted Hennenhoeffer's attorney to submit a memorandum of law and exhibits after the hearing had begun on February 27, 1991 and that Peters did not therefore have an opportunity to read it or respond prior to the hearing. Peters contends that the memorandum of law was a responsive pleading because it was a response to his counterclaim.
This argument is premised upon Peters' misunderstanding of the bankruptcy procedural rules. His answer asserted no counterclaim and therefore no responsive pleading was permitted under the Bankruptcy Rules of Procedure. Thus, the memorandum could not have been a responsive pleading. Furthermore, a memorandum of law, though it may make reference to the answer, is not a responsive pleading by definition. In addition, during the trial of an adversary proceeding, there is no requirement that memoranda of law be submitted and there is not provision in the procedural rules for responses to trial memoranda. Thus, appellant's argument that he had been deprived of due process must fail because appellant was not entitled to make any response to the brief.
In addition, Peters was not prejudiced by the submission of the memorandum. The transcript of the hearing reveals that after Hennenhoeffer's attorney handed up a memorandum of law early in the hearing, the following colloquy ensued:
Peters then referred the court to summary judgment papers he had submitted a month earlier which had not been calendared because of improper notice. In addition, he put into evidence transcripts of the California proceedings to support his contention that the fees owed to Hennenhoeffer were not in the nature of child support. He also made a legal argument which echoed the law and cases relied upon in his summary judgment papers. Although the bankruptcy court's decision issued the next day, it referenced arguments raised by Peters during the hearing and analyzed cases cited in his motion papers. Thus, it is clear that Peters was able to adequately present his case to the bankruptcy court. We must conclude therefore that appellant was not deprived of due process in the bankruptcy proceedings.
Appellant's other challenge to the decision of the bankruptcy court is more thorny. Peters contends that attorneys' fees owed to Hennenhoeffer were not child support and are therefore dischargeable under 11 U.S.C. § 727. He argues therefore that the bankruptcy court's conclusion that "the above-mentioned obligation owed by the debtor to the plaintiff is nondischargeable as a debt in the nature of maintenance or support within the meaning of 11 U.S.C. § 523(a)(5)(B)", In re Peters, 124 B.R. 433, 436 (Bankr.S.D.N.Y.1991), is in error. On appeal, conclusions of law are reviewed de novo.3 Fed.Rules Bankr.Rule 8013; see Brunner v. New York State Higher Educ. Services Corp., 831 F.2d 395 (2d Cir.1987).
"The general purpose of the bankruptcy code is `to provide the bankrupt with comprehensive, much needed relief from the burden of his indebtedness by releasing him from virtually all his debts.'" Forsdick v. Turgeon, 812 F.2d 801, 802 (2d Cir.1987) (quoting Murphy & Robinson Investment Co. v. Cross, 666 F.2d 873, 879 (5th Cir.1982)). However, the bankruptcy code also codifies a competing federal interest in ensuring that spouses and children have the financial support necessary to safeguard their welfare. Section 523(a)(5) of Title 11 provides that a discharge under the code does not discharge an individual debtor from any debt:
11 U.S.C. § 523(a)(5) (1988).
James Hennenhoeffer claims the $44,000 owed to him by debtor Peters is not dischargeable because various California Superior Court orders state that his fees, incurred in his representation of Brendan in the custody proceedings, were additional child support. Hennenhoeffer argues that as his fees are an award of child support in connection with a court order they may not be discharged.
It is important to note that § 523(a)(5) discharges a debt designated as support which is not actually in the nature of support. 11 U.S.C. § 523(a)(5)(B); see Forsdick, 812 F.2d at 802-803. "Dischargeability must be determined by the substance of the liability rather than its form." In re Spong, 661 F.2d 6, 9 (2d Cir.1981). Thus, the labelling of a debt as child support is not dispositive of the issue of whether a debt is dischargeable or not. See In re Ridgway, 108 B.R. 154, 156 (Bankr.N.D.Ohio 1989). What constitutes support is determined under the federal bankruptcy laws, not state law, although reference to the well-established laws of the state is prudent. In re Calhoun, 715 F.2d 1103, 1107 (6th Cir.1983) (quoting S.Rep. No. 95-989, 95th Cong., 2d Sess., 79, reprinted in 1978 U.S.Code Cong. & Admin.News 5787, 5865). See In re Spong, 661 F.2d at 9. The code requires therefore that to determine dischargeability the court examine the actual nature of the obligation which has been designated as child support.
Courts are in general agreement that obligations in the nature of alimony, maintenance and support may include the duty to pay attorneys' fees incurred by the former spouse in connection with a divorce proceeding, the obtaining and enforcement of alimony and/or support awards, or for custody disputes. See, e.g., id. (...
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In re Papi, Bankruptcy Case No. 09 B 12379 (Bankr. N.D. Ill. 5/4/2010), Bankruptcy Case No. 09 B 12379.
...attorney's fees have been deemed by courts to be in the nature of support. Spong, 661 F.2d at 9; Peters v. Hennenhoeffer (In re Peters), 133 B.R. 291, 295-96 (S.D.N.Y. 1991). Although the Seventh Circuit has not addressed the issue at bar, it has stated, in dicta, that "awards of attorneys'......
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In the Matter of Ross v. Sperow
...F3d 589, 594 [2d Cir 2002], quoting In re Spong, 661 F2d 6, 9 [2d Cir 1981]; see In re Peters, 964 F2d 166, 167 [2d Cir 1992], affg 133 BR 291 [SD NY 1991]). Here, while the award of counsel fees was not explicitly characterized as a support obligation in Family Court's order, "family court......