Matter of Evans

• Decision Date: 18 December 1979
• Docket Number: Bankruptcy No. 78-00410-B-W-4.
• Citation: 2 BR 85
• Parties: In the Matter of James Larry EVANS, Bankrupt. Barbara L. FISHER, Plaintiff, v. James Larry EVANS, Defendant.
• Court: U.S. Bankruptcy Court — Western District of Missouri

2 B.R. 85 (1979)

In the Matter of James Larry EVANS, Bankrupt.

Barbara L. FISHER, Plaintiff, v. James Larry EVANS, Defendant.

Bankruptcy No. 78-00410-B-W-4.

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

December 18, 1979.

Michael W. Manners, Independence, Mo., for plaintiff.

John S. Newhouse, Independence, Mo., for defendant bankrupt.

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND DECREE OF NONDISCHARGEABILITY OF DEFENDANT'S INDEBTEDNESS TO PLAINTIFF AND JUDGMENT THAT PLAINTIFF SHOULD HAVE AND RECOVER THE SUM OF $2500 FROM THE DEFENDANT

DENNIS J. STEWART, Bankruptcy Judge.

The action at bar was previously submitted to the Honorable Jack C. Jones on the basis of a stipulation of facts filed herein on October 6, 1978. Before he could render the decision, Judge Jones died in November of 1979. Because the stipulation did not contain the express provision that it constituted the whole record of facts upon which the decision might be rendered,¹ the undersigned, on having the action reassigned to him subsequent to Judge Jones' final illness, entered his order on December 3, 1979, directing the parties hereto to "show cause in writing within 15 days why the undersigned transferee judge should not render a decision based on the hearing before the transferor judge or else consent in writing to his doing so." The written consent of the plaintiff was filed herein on December 5, 1979.² The defendant appeared in the chambers of the court during the week of December 10, 1979, and orally consented to the undersigned's disposition of the matter.³

The question before the court, presented by the pleadings and by the stipulation of the parties, which the parties now plainly agree to make the basis of decision,⁴ is whether an award of attorney's fees by a state dissolution court to the plaintiff, in proceedings concerning the dissolution of her marriage to the defendant,⁵ is dischargeable in bankruptcy. The stipulation of the parties, which is adopted as the findings of fact and hence incorporated herein as fully and with such force and effect as if set out herein verbatim, leaves no doubt that the sum of $2,500.00 was thus awarded as attorney's fees and is a debt due the plaintiff from the defendant.

Plaintiff contends that the indebtedness is nondischargeable under the exception to discharge contained in section 17a(7) of the Bankruptcy Act for liabilities "for alimony due or to become due, or for maintenance or support of wife or child . . ." For case authority, the plaintiff appears chiefly to rely upon In re Hargrove, 361 F.Supp. 851, 853 (W.D.Mo.1973), wherein, in reliance on governing state law, the court held that "attorney's fees" awards were nondischargeable under the provisions of section 17a(7), supra. The reasoning in that case was as follows:

"The rationale for including attorney\'s fees and suit money within the term `alimony\' has been stated by the Missouri Court of Appeals as `being alimony in the sense that it is allowed for the purpose of defraying the ordinary and necessary expenses of the wife in respect to her prosecution or defense of the action of divorce.\' Knebel v. Knebel, 189 S.W.2d 464, 466 (Mo.Ct.App.1945). This rationale would, of course, apply to any action which is incident to the original divorce."

The Hargrove case, supra, however, was decided on the basis of a divorce decree rendered prior to the effective date of the Dissolution of Marriage Act, sections 452.300-452.415 RSMo, January 1, 1974. In the action at bar, however, the awards sub judice were made in connection with Missouri proceedings for modification of a decree under Section 452.410 RSMo as it pertained to the custody of a child.⁶ Under the new Dissolution of Marriage Act, it has been determined by the governing state court decisions that awards of attorney's fees cannot, as a matter of definition, be regarded as a form of maintenance and support. In Dyche v. Dyche, 570 S.W.2d 293, 295-6 (Mo. en banc 1978), the Supreme Court of Missouri, sitting en banc, stated the reasoning behind that holding as follows:

"Prior to the enactment of the Dissolution of Marriage Act there was no express statutory authorization for the award of attorney fees in a divorce proceeding or in proceedings incidental thereto. However, the authority to make such an award was found as the result of judicial interpretation that the allowance of attorney fees was a form of and was included within the term `alimony\' which was authorized by what was then section 452.070. See Rutlader v. Rutlader, 411 S.W.2d 826 (Mo.App.1967), and the cases there cited. Regardless of the judicially determined basis for making the award, it was only indirectly an award for the support of the wife. It was an award of an amount to be paid to the wife which in turn was to be paid by her to another person who was not a party to the action. At most it relieved the wife of a financial obligation to a third party, and permitted her to litigate her claims in the divorce proceeding.

"At the time the order was entered in this case allowing Elizabeth attorney fees the Dissolution of Marriage Act, sections 452.300-452.415 was in effect. Section 452.335 of that act grants authority to the court to award maintenance to either spouse under certain conditions and in such amounts and for such periods of time as it deems just after considering specified relevant factors. Section 452.340 authorizes the court to order either or both parents owing a duty of support to a child of the marriage to pay a reasonable amount for his support after considering specified relevant factors. In recognition of the need to assure payment, if possible, of these awards the court is authorized by section 452.345 to require that such maintenance or support payments be made to the circuit clerk for remittance to the person entitled to receive them, and by section 452.350 the court is authorized to order the person obligated to pay support or maintenance to make an assignment of a part of his periodic earnings or other income. It is reasonably clear it was the legislative intent that any award for the support of a spouse or for the support of a child should be made pursuant to these two statutory provisions.

"In section 452.355 separate provision is made for the court to award a spouse litigation costs and attorney fees `after considering all relevant factors including the financial resources of both parties,\' and the court is authorized to order the attorney fee to be paid directly to the attorney who may enforce the order in his own name. This award is not subject to the provisions of section 452.345 or section 452.335. The separate treatment of maintenance and child support, as one type of an award, and litigation costs and attorney fees as another type of an award, demonstrates a legislative intent not to continue the authority to award attorney fees as an incident to alimony or the present substitute for alimony which is designated as maintenance. The authority to award attorney fees is no longer premised on the authority of the court to award alimony, and it is not premised on the authority to award maintenance or child support. For example, attorney fees may be awarded to a party in a dissolution of marriage proceeding when there is no issue pertaining to maintenance or child support, but when the only issue is the proper division of the marital property, or the designation of what is or is not marital property. The authority to award attorney fees now results from an independent and separate statute, and as such is not an `Order * * for the support of any person.\' It is just what the statute says it is; an `Order * * * to pay a reasonable amount * * * for attorney\'s fees.\'"

The question in the Dyche case, supra, was one which is slightly different from that in the action at bar. There, the court purported only to make a determination that awards of attorney's fees could not constitute "support" within the meaning of the state provisions for permitting garnishment or sequestration unlimited by the 25% limit imposed by the Federal Consumer Credit Protection Act. In so doing, it expressly declined to determine whether awards of attorney's fees under section 452.355 RSMo could constitute nondischargeable maintenance or support in bankruptcy proceedings. Decisions holding that awards of attorney's fees in divorce proceedings are nondischargeable as maintenance or support are distinguished in Dyche, supra, as cases which "pertain to the existence or preservation of a debt; not to the manner or means of collecting it, which is a matter governed by State procedures when those procedures do not purport to provide for less limitation on garnishments than the federal Consumer Credit Protection Act." 570 S.W.2d at 297.

Subsequently, in Hallums v. Hallums, 585 S.W.2d 226 (Mo.App.1979), the St. Louis Court of Appeals, following Dyche v. Dyche, supra, squarely held that an award of attorney's fees on a motion to modify a child custody order "is distinct from a child support award, and the authority of a court to award attorney's fees is not an incident of a child support award." 585 S.W.2d at 229.

In these decisions, however, the Missouri courts were primarily concerned with whether an award of attorney's fees was so directly connected with the maintenance or support function that it could definitionally be characterized as "support"⁷ and, further, be regarded as so vital to those functions as to justify garnishing and sequestering the spouse's entire income, rather than only 25% of it.⁸

In considering whether a debt is to be preserved as nondischargeable within the meaning of section 17a(7) of the Bankruptcy Act, however, the court of bankruptcy must answer the broader question of whether the award, however indirectly, may have been intended to serve the maintenance or support function. It is quite true, as a fundamental principle, that "what claims of creditors are valid and subsisting obligations...