In re Singer, Bankruptcy No. 2-81-02700
| Decision Date | 12 February 1982 |
| Docket Number | Adv. No. 2-81-0422.,Bankruptcy No. 2-81-02700 |
| Citation | 18 BR 782 |
| Parties | In re Robert F. SINGER, Debtor. Lethia A. SINGER, Plaintiff, v. Robert F. SINGER, et al., Defendants. |
| Court | U.S. Bankruptcy Court — Southern District of Ohio |
Milton A. Puckett, Columbus, Ohio, for plaintiff.
Alphonse P. Cincione, Columbus, Ohio, for defendant, Robert F. Singer.
Roland T. Gilbert, Columbus, Ohio, for defendant, BancOhio Nat. Bank.
Frederick M. Luper, Columbus, Ohio, Trustee.
On July 10, 1981, Robert F. Singer filed a voluntary petition in this Court under the provisions of Chapter 7 of the Bankruptcy Code. Among his listed creditors was Lethia A. Singer, his ex-spouse, for an amount of $47,200.00, representing the balance owed under a separation agreement previously entered into by the Singers. Lethia Singer has filed a complaint requesting that this Court declare that this debt is not dischargeable under the provisions of § 523(a)(5) of the Bankruptcy Code because it is a debt for or in the nature of alimony, maintenance or support of a former spouse. Lethia Singer had also requested denial of Robert Singer's discharge under the provisions of § 727(a)(2)(e), but has subsequently abandoned pursuit of that remedy. Lethia Singer has also apparently abandoned any claim for relief she may have had against BancOhio National Bank, a defendant named in her original complaint. This case was tried to the Court on its merits, and the Court makes the following findings of fact.
Robert and Lethia Singer were married in Columbus, Ohio, on January 8, 1970. The marriage was terminated by an entry of the Court of Common Pleas of Franklin County, Ohio, on July 26, 1978, which entry dissolved the marriage of the parties by consent and incorporated a previously executed separation agreement signed by Lethia and Robert Singer. There were no children of the marriage.
Pursuant to the separation agreement which was signed on June 6, 1978, (and which was subsequently incorporated into the decree of dissolution), Lethia and Robert Singer purported to settle all questions of property rights, maintenance, alimony, dower, descent, distribution, and all other rights or claims that may have arisen or accrued by virtue of their marriage. In pursuit of this objective, Robert Singer agreed to pay to Lethia Singer the sum of Eight Hundred Dollars ($800.00) per month for a total of sixty (60) months, and thereafter the sum of Four Hundred Dollars ($400.00) per month for the following sixty (60) months "as a full and complete settlement of all property claims of the wife." In order to secure payment of that amount in the event Robert Singer died before the entire amount was paid, Robert Singer agreed to maintain a life insurance policy in the amount of Forty Thousand Dollars ($40,000.00) until the terms of the separation agreement were completed, and the parties additionally agreed that any amounts unpaid over and above the $40,000.00 proceeds of the life insurance policy would constitute a claim against the estate of Robert Singer. Further, in the event Lethia Singer died prior to the payment of the entire amount due during the ten (10) year period, the balance was due and payable to her estate. In addition to these periodic payments, the marriage residence was granted to Lethia Singer, Robert Singer relinquished any claims to household furniture and appliances, Robert Singer was to provide Lethia Singer with an automobile and provide certain insurance coverage and gasoline for the operation of the automobile, pay the attorneys' fees of Lethia Singer, and pay her hospitalization, all during the course of a ten (10) year period as provided for in the separation agreement. Lethia Singer released any and all interest she may have had in the business of Robert Singer, then known as Bob Singer Ford, Inc. and Bob Singer Leasing.
Robert Singer made the periodic payments called for in the separation agreement from the date of its execution through the payment due in January, 1981. He has failed to make payments since that time, and the amount owed for the periodic payments due under the agreement from February, 1981, to conclusion is Forty-Seven Thousand Two Hundred Dollars ($47,200.00). There may be other defaults under the terms of the separation agreement, specifically the failure of Robert Singer to provide an automobile, gasoline and insurance, but those defaults are not directly relevant to the issues in this case and to the relief sought by Lethia Singer. It should be noted that when Robert Singer and Lethia Singer separated in the fall of 1977, Robert Singer provided Lethia Singer with a $200.00 per week payment from that time up to the time of the execution of the separation agreement. In that regard, the separation agreement largely continued that payment for the ensuing five (5) years.
Lethia Singer, at the time of the dissolution of her marriage to Robert Singer, was sixty (60) years of age. She was fully qualified, given the attainment of the statutory minimum age, for receipt of Social Security benefits by virtue of her previous employment. Such benefits could have been taken at age 62 at a reduced level, or at age 65 at a maximum level. Lethia Singer did not work to any significant degree outside the home during the course of her marriage to Robert Singer, apparently because of a lack of a need to work and also because of some health problems. She had had lengthy work experience outside the home prior to her marriage to Robert Singer, although it appears that her earning capacity was significantly lower than the earning capacity, and actual earnings, of Robert Singer during the course of their marriage. Federal income tax returns for the years 1975, 1976, and 1977, as filed jointly by Robert and Lethia Singer, and 1978 as filed individually by Robert Singer, reveal adjusted gross income of $70,347.44, $27,507.72, $35,490.54, and $118,832.98, respectively. None of this income appears to have been earned by Lethia Singer.
This Court is asked to find that the sum of Forty-seven Thousand Two Hundred Dollars ($47,200.00) (a portion of which is owed by virtue of non-payment of $800.00 installments from February of 1981, and the remainder to become due during the remaining term of the separation agreement) is a nondischargeable debt under the relevant provisions of § 523(a)(5) of the Bankruptcy Code.
The legislative history of this particular section of the Bankruptcy Code makes it clear that what constitutes alimony, maintenance or support will be determined under the bankruptcy laws, not state law. See H.R.Rep. No. 595, 95th Cong., 1st Sess. 363 (1977) and S.Rep.No.989, 95th Cong., 2d Sess. 77-79 (1978), U.S.Code Cong. & Admin. News 1978, p. 5787. This Court is called upon to decide the question as to whether or not the periodic payments called for in the separation agreement between Lethia and Robert Singer are in the nature of alimony, maintenance, or support of a former spouse, and thus nondischargeable under the provisions of § 523(a)(5) of the Bankruptcy Code, or whether such payments are in the nature of a property settlement and thus dischargeable. While the intrusion of federal courts into the area of domestic relations law has been historically limited, the economic aspects of domestic relations clearly come into play in a bankruptcy case and call for the intervention of the bankruptcy court to pass upon the dischargeability of marital-related obligations. See Ridgway v. Ridgway, ___ U.S. ___, 102 S.Ct. 49, 70 L.Ed.2d 39 (1981).
It is clear that congressional intent on the question of the alimony/property settlement dichotomy was to permit, and even mandate, that the Bankruptcy Court look behind the designation assigned by a state court, or by the parties themselves, as to whether or not a particular obligation was in the nature of alimony, or a property settlement, and to determine the true nature of such an obligation. In other words, it is not what the obligation is labeled that is significant, but what the obligation actually is. While that proposition may be easily stated, its application to the present circumstances is somewhat more difficult.
The face of the separation agreement seems, in many respects, to clearly designate the periodic payments due under its terms as a property settlement. Paragraph 3 of the agreement states that such payments are "as a full and complete settlement of all property claims of the wife." Paragraph 15 of the agreement clearly states that "This Agreement shall be a full...
To continue reading
Request your trial