In re Waller, 73-1609.

• Decision Date: 10 April 1974
• Docket Number: No. 73-1609.,73-1609.
• Citation: 494 F.2d 447
• Parties: In the Matter of Kenneth Leroy WALLER, Bankrupt, Madeline R. WALLER, Appellant, v. Kenneth Leroy WALLER, Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

494 F.2d 447 (1974)

In the Matter of Kenneth Leroy WALLER, Bankrupt,

Madeline R. WALLER, Appellant, v. Kenneth Leroy WALLER, Appellee.

No. 73-1609.

United States Court of Appeals, Sixth Circuit.

Argued February 4, 1974.

Decided April 10, 1974.

Edward J. Maher, Maher & Widder Co., Cleveland, Ohio, for Madeline R. Waller.

David J. Richards, Jr., Dworken & Bernstein Co., Painesville, Ohio, for Kenneth L. Waller.

Before WEICK, EDWARDS and PECK, Circuit Judges.

WEICK, Circuit Judge.

The controvery in this case arose in the Bankruptcy Court, where the bankrupt, Kenneth Leroy Waller, a ex-husband of appellant, Madeline R. Waller, petitioned the Bankruptcy Court to reopen his previously-closed bankruptcy case, and to enjoin his ex-wife from enforcing a decree of the Common Pleas Court of Cuyahoga County, Ohio, Domestic Relations Division, which decree granted to her a divorce and custody of their six and one-half year old son and adopted and made a part of the decree a separation agreement previously entered into by the parties providing for alimony, maintenance, support and division of property.

The part of the separation agreement (now an order of the Common Pleas Court) of which the bankrupt sought to enjoin enforcement, provides in paragraph (6), under the heading "Prior Debts", the following:

. . . The husband shall pay and indemnify and hold the wife absolutely harmless from all existing obligations.

Among the marital debts which the Common Pleas Court had ordered Waller to pay was an open account owing to King Furniture Company of Cleveland, Ohio, for household furniture which was awarded by the Court to the wife in the division of property and which was in her possession and was being used by her for herself and for her minor son in the household which she maintained.

Waller had neglected to pay the furniture bill and when he voluntarily went into bankruptcy less than three months after the divorce, he listed in his schedules as an unsecured creditor, the King Furniture Company, in the amount of $1,951.72. He did not list his ex-wife as a creditor, and there was no proof offered and no claim was made that she knew of his bankruptcy.¹

Waller received a discharge in the bankruptcy proceeding and the case was closed.

King Furniture Company then sued Mrs. Waller in the Municipal Court of Cleveland, to recover the balance owing for the furniture in the amount of $2,273.84. Mrs. Waller filed a third party complaint in the Municipal Court of Cleveland against Waller, seeking to compel him to pay the bill. She also filed in the Common Pleas Court of Cuyahoga County a motion to require Waller to show cause why he should not be punished for contempt for violation of the Court's decree.

The Bankruptcy Judge, in an ex parte order, reopened the bankruptcy case and granted a temporary injunction restraining the enforcement of the decree. Thereafter he made the injunction permanent. On review, the District Court affirmed. We reverse.

It was the theory of the bankrupt, adopted by the Bankruptcy Judge, that the award of the household furniture to the wife and the order requiring him to pay all marital debts and indemnifying his ex-wife therefrom, was merely division of property and did not constitute alimony, maintenance or support under Ohio law, and therefore it was dischargeable in bankruptcy.

Mrs. Waller contended that the division of property and the order requiring her husband to pay the marital bills was ". . . alimony due or to become due, or for maintenance or support of wife or child." 11 U.S.C. § 35(a)(7) (1970).

The law of Ohio must be resorted to in order to determine what constitutes alimony, maintenance or support. Desjardins v. Desjardins, 193 F.Supp. 210, 213 (E.D.Ky.1961), modified and aff'd, 308 F.2d 111, 115-116 (6th Cir. 1962).

It is significant that no Ohio case has been cited to us holding that such an award and indemnity did not constitute alimony.

The case closest in point to the present case is Collins v. Smith, 26 Ohio Misc. 231, 270 N.E.2d 377 (C.P.Scioto 1971), where the personal property awarded to the wife was mortgaged and the husband had agreed to hold harmless his wife from any debts or obligations outstanding. The Court held:

We concur with the Seventh District Court of Appeals which took the position that a nearly identical provision constituted an award of alimony, and the obligation to save harmless cannot be discharged in bankruptcy. Fredericks v. Fredericks, Ohio App., 146 N.E.2d 153, 76 Ohio Law Abst. 296. (Id. at 378)

In Collins the divorce decree specifically characterized the award of furniture as alimony, but did not so characterize the indemnity agreement.

The fact that in Collins the personal property was mortgaged, whereas in the present case the debt was an open account, would seem to be immaterial. It is a distinction without a difference.

The Bankruptcy Judge was of the view that under Ohio law the order to pay the marital debts and to indemnify the wife therefrom, could be considered as alimony only in two situations:

. . . Where (1) the hold harmless agreement is directed specifically to the payment of liens upon property, which property itself has been awarded as alimony, or (2) where certain debts have been designated specifically as alimony within the decree, and these debts are themselves directed to the support of the wife or child.

We have found no case in Ohio holding that only in these two situations can the award be considered as alimony.

The Bankruptcy Court stated that in Ohio,

Alimony may comprise property where that property is set aside for the specific and definate sic purpose of supporting and maintaining the wife.

The Bankruptcy Court cited Desjardins v. Desjardins, 193 F.Supp. 210 (E.D. Ky.1961), as authority for this proposition.

The Bankruptcy Court then focused on this "specific and definite purpose" designation as the criteria for distinguishing "alimony" from "property settlement." The Court felt that unless an award of property in a divorce decree, or the division of property in a separation agreement later incorporated into a divorce decree, specifically designated such award or division of property as "alimony," it was just a "property settlement," and therefore it was not within the exception to discharge under Section 17(a) of the Bankruptcy Act. (11 U.S.C. § 35(a)(7).)

The Court then went on to find that in this case—

. . . It seems clear that such phrase Paragraph (6) applies not as alimony but merely as property settlement.

Thus the Court found the bankrupt's obligation to the appellant was dischargeable.

In our opinion it is not necessary for a divorce court in Ohio to state specifically whether an award which it makes to a wife is alimony. We are of the view that this is too narrow an interpretation of the Ohio law, and is erroneous. Suppose, for example, the divorce court had ordered Waller to provide household furniture in the living quarters of his wife and child; is there any doubt about the fact that this would constitute "alimony . . . or for maintenance or support of wife or child" within the meaning of 11 U.S.C. § 35(a)(7) (1970)?

This being true, we submit there is no difference between such an order and one requiring the husband to pay for furniture which he had already purchased for his family, but for which he had not paid.

Ohio Revised Code § 3105.18 provides for alimony as follows:

The court of common pleas may allow alimony as it deems reasonable to either party, having due regard to property which came to either by their marriage, the earning capacity of either and the value of real and personal estate of either, at the time of the decree.

Such alimony may be allowed in real or personal property, or both, or by decreeing a sum of money, payable either in gross or by installments, as the court deems equitable.

The statutory definition of alimony is indeed very broad and includes an allowance in real or personal property, or both, as well as in money. There is no provision in the statute that an award of property must be designated specifically as "alimony", or that otherwise it will be considered "merely property settlement," and not alimony. In fact, just the opposite is true. The intent of the separation agreement which became an order of the Court was clear that the wife was to receive the personal property awarded to her without having it attached thereto, and without having it taken away from her by her husband's marital creditors, which debts he agreed to pay and against which he indemnified her.

In Fickel v. Granger, 83 Ohio St. 101, 93 N.E. 527 (1910), the Supreme Court of Ohio held:

Alimony . . . is an award by the court upon consideration of equity and public policy and is founded upon the obligation, which grows out of the marriage relation, that the husband must support his wife, which obligation continues after legal separation without her fault. (Syl. 1)

In Durham v. Durham, 104 Ohio St. 7, 135 N.E. 280 (1922), the Supreme Court of Ohio stated in regard to alimony:

It must be confessed that the Legislature has used the term in a more extensive sense than defined by the lexicographers or the courts. (p. 10, 135 N.E. at p. 280)

Later the Court stated:

In divorce the trial court is given a wide latitude of discretion in the allowance of what the statute terms alimony . . . . (p. 11, 135 N.E. at p. 281)

In Popp v. Popp, 85 Ohio St. 470, 471, 98 N.E. 1131 (1911), the Supreme Court of Ohio by order reversed the Court of Appeals for "holding that such division of property was not alimony." See also Kadel v. Kadel, 21 Ohio Misc. 232, 250 N.E.2d 420, 49 Ohio Op.2d 179 (C.P. Clark 1969); Reed v. Reed, 20 Ohio Law Abst. 491 (Ct.App. Franklin 1935); Collins v. Smith, 26 Ohio Misc. 231, 270 N. E.2d 377 (C.P. Scioto 1971); Fredericks v. Fredericks, 76 Ohio Law Abst. 296, 146 N.E.2d 153 (Ct. App. Columbiana 1956).

In Desjardins v. Desjardins, supra, the case relied on by the Bankruptcy...