Court Opinion

ID: 1037464
Source: CourtListenerOpinion
Date Created: 2013-08-12 23:54:14.40055+00
Date Added: 2024-06-11T15:27:46.627405
License: Public Domain

FILED
                                                           AUG 12 2013
 1
                                                       SUSAN M SPRAUL, CLERK
                                                         U.S. BKCY. APP. PANEL
 2                                                       OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )        BAP No.   NC-12-1425-JuTaPa
                                   )
 6   ADALBERTO PEREZ JIMENEZ,      )        Bk. No.   12-42231-WJL
                                   )
 7                  Debtor.        )
     ______________________________)
 8   OLIVIA PEREZ,                 )
                                   )
 9                  Appellant,     )
                                   )
10   v.                            )        M E M O R A N D U M*
                                   )
11   ADALBERTO PEREZ JIMENEZ,      )
                                   )
12                  Appellee.      )
                                   )
13   ______________________________)
14             Submitted Without Oral Argument on July 25, 2013
15                          Filed - August 12, 2013
16              Appeal from the United States Bankruptcy Court
                    for the Northern District of California
17
        Honorable William J. Lafferty, Bankruptcy Judge, Presiding
18                        _______________________
19   Appearances:     Appellant Olivia Perez pro se on brief; Peter
                      Christopher Pappas, Esq., on brief for appellee
20                    Adalberto Perez Jimenez.
                           _________________________
21
     Before:   JURY, TAYLOR, and PAPPAS, Bankruptcy Judges.
22
23
24
25
26        *
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.

                                      -1-
 1            Appellant, Olivia Perez, filed a proof of claim (POC) in
 2   the chapter 131 case of her former husband, Adalberto Perez
 3   Jimenez (Adalberto or debtor).       Olivia’s POC asserted a domestic
 4   support obligation for $245,000 entitled to priority under
 5   § 507(a)(1)(A).     Debtor objected to her claim on the ground that
 6   it represented an equalizing payment rather than a claim for
 7   support.     The bankruptcy court sustained debtor’s objection,
 8   finding that Olivia’s claim was a general unsecured claim.       This
 9   appeal followed.     We AFFIRM.
10                                  I.   FACTS
11            Adalberto was married to Olivia for approximately ten
12   years.     In December 2012, they divorced and entered into a
13   martial settlement agreement (MSA).         Both parties were
14   represented by counsel.     Under the MSA, each party gave up the
15   right to receive spousal support from the other.        The MSA also
16   contained an equalizing payment of $245,000 whereby Adalberto
17   would pay Olivia that amount by making monthly payments ranging
18   from $750 to $1,300 until the amount was paid.        Adalberto made
19   some payments under the agreement.
20            On March 12, 2012, Adalberto filed his chapter 13 petition.
21   He listed Olivia on Schedule E as a creditor holding a domestic
22   support obligation and asserted that he was current on the
23   payments.
24            Debtor’s chapter 13 plan was a stepped-up five-year plan
25
26        1
            Unless otherwise indicated, all chapter and section
27   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532 and
     “Rule” references are to the Federal Rules of Bankruptcy
28   Procedure.

                                         -2-
 1   with a 4% dividend to general unsecured claims.      It also paid
 2   priority claimants under § 507 in full.      The chapter 13 trustee
 3   objected to debtor’s plan because he could not complete it
 4   within sixty months if Olivia’s $245,000 claim was entitled to
 5   priority.2
 6            Debtor then objected to Olivia’s POC on the grounds that it
 7   failed to take into consideration the amounts he had paid and
 8   that the MSA made clear that (1) no spousal support payments
 9   were due and (2) the $245,000 amount was an equalizing payment.
10   In response, Olivia argued that although the MSA indicated there
11   were no further spousal obligations, that provision was not
12   determinative on the issue under the holding in Friedkin v.
13   Sternberg (In re Sternberg), 85 F.3d 1400 (9th Cir. 1996),
14   overruled on other grounds by Murray v. Bammer (In re Bammer),
15   131 F.3d 788, 792 (9th Cir. 1997) (en banc).      Olivia also
16   submitted a declaration stating that at the time of her
17   separation from debtor, she had not worked for three years and
18   that debtor’s payments to her pursuant to the MSA were intended
19   to assist her in getting back on her feet.
20            On July 18, 2012, the bankruptcy court heard the matter
21   and sustained debtor’s objection.       Olivia filed her notice of
22   appeal on August 14, 2012.     On November 29, 2012, the bankruptcy
23   court entered the order sustaining debtor’s objection to
24
25        2
            Section 1322(a)(2) requires that the plan “provide for the
26   full payment . . . of all claims entitled to priority under
     section 507 of [title 11]. . . .” Thus, if an equalizing payment
27   is a “domestic support obligation,” it must be paid in full
     through the debtor’s chapter 13 plan, unless the former spouse
28   agrees otherwise.

                                       -3-
 1   Olivia’s POC.     Accordingly, Olivia’s appeal was timely.       See
 2   Rule 8002(a) (providing that a notice of appeal filed after
 3   announcement of bankruptcy court’s decision, but before entry of
 4   an order, is to be treated as filed after such entry).
 5                                 II.    JURISDICTION
 6            The bankruptcy court had jurisdiction over this proceeding
 7   under 28 U.S.C. §§ 1334 and 157(b)(2)(A) and (B).          We have
 8   jurisdiction under 28 U.S.C. § 158.
 9                                       III.    ISSUE
10            Whether the bankruptcy court erred when it determined that
11   the equalizing payment was not a domestic support obligation
12   entitled to priority status under § 507(a)(1)(A).3
13                           IV.    STANDARDS OF REVIEW
14            We review mixed questions of law and fact de novo.
15   Wechsler v. Macke Int’l Trade, Inc. (In re Macke Int’l Trade,
16   Inc.), 370 B.R. 236, 245 (9th Cir. BAP 2007).          A mixed question
17   exists when the facts are established, the rule of law is
18   undisputed, and the issue is whether the facts satisfy the legal
19   standard.     In re Bammer, 131 F.3d at 792.        Thus, whether a claim
20   is entitled to priority status is a mixed question of law and
21
22        3
            Olivia has framed the issue on appeal as whether
23   equalization payments between spouses are dischargeable. While a
     debt of the kind described in § 523(a)(15) is nondischargeable in
24   chapters 7, 11 and 12, the expanded discharge provided for in
     chapter 13 cases covers debts such as this. Therefore, if the
25   equalization payment is not a domestic support obligation, it
26   would constitute a debt under § 523(a)(15), and could be
     discharged in debtor’s chapter 13, even if not paid. However, to
27   obtain a discharge, a chapter 13 debtor must complete all
     payments under the plan unless certain exceptions are found to
28   apply. See § 1328.

                                                -4-
 1   fact that we review de novo.
 2        Our review of a mixed question begins by ascertaining
 3   whether the bankruptcy court committed clear error in its
 4   findings of fact.   In the context of this appeal, we review the
 5   bankruptcy court’s factual determination that the debt was not
 6   based on spousal support for clear error.    Beaupied v. Chang
 7   (In re Chang), 163 F.3d 1138, 1140 (9th Cir. 2000) (Whether a
 8   debt is actually in the nature of support is a “factual
 9   determination made by the bankruptcy court as a matter of
10   federal bankruptcy law.”).   “A finding is ‘clearly erroneous’
11   when although there is evidence to support it, the reviewing
12   court on the entire evidence is left with the definite and firm
13   conviction that a mistake has been committed.”    United States v.
14   U.S. Gypsum Co., 333 U.S. 364, 395 (1948).    “A court’s factual
15   determination is clearly erroneous if it is illogical,
16   implausible, or without support in the record.”   Retz v. Samson
17   (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010) (citing United
18   States v. Hinkson, 585 F.3d 1247, 1261–62 & n.21 (9th Cir. 2009)
19   (en banc)).
20        The next step in our review of a mixed question is
21   determining whether the facts satisfy a legal rule.   This is a
22   matter of statutory construction.    We review a bankruptcy
23   court’s statutory construction and conclusions of law, including
24   interpretation of provisions of the Bankruptcy Code, de novo.
25   Einstein/Noah Bagel Corp. v. Smith (In re BCE W., L.P.),
26   319 F.3d 1166, 1170 (9th Cir. 2003).   We therefore review de
27   novo the bankruptcy court’s determination that a debt does not
28   constitute a domestic support obligation within the meaning of

                                    -5-
 1   § 507(a)(1)(A).   De novo means review is independent, with no
 2   deference given to the trial court’s conclusion.   See Rule 8013.
 3                              V.   DISCUSSION
 4        Section 507(a)(1), enacted as part of the Bankruptcy Abuse
 5   Prevention and Consumer Protection Act of 2005 (“BAPCPA”),
 6   provides first priority status for a debt which is a domestic
 7   support obligation.   Section 507(a)(1)(A) provides:   “The
 8   following expenses and claims have priority in the following
 9   order:   (1) First:   (A) Allowed unsecured claims for domestic
10   support obligations that, as of the date of the filing of the
11   petition in a case under this title, are owed to or recoverable
12   by a . . . former spouse. . . .”
13        The term “domestic support obligation” is defined in
14   § 101(14A):
15        a debt that accrues before, on, or after the date of
          the order for relief in a case under this title,
16        including interest that accrues on that debt as
          provided under applicable nonbankruptcy law
17        notwithstanding any other provision of this title,
          that is—
18
          (A) owed to or recoverable by—
19
          (i) a spouse, former spouse, or child of the debtor or
20        such child’s parent, legal guardian, or responsible
          relative; or
21
          . . .
22
          (B) in the nature of alimony, maintenance, or support
23        (including assistance provided by a governmental unit)
          of such spouse, former spouse, or child of the debtor
24        or such child’s parent, without regard to whether such
          debt is expressly so designated;
25
          (C) established or subject to establishment before,
26        on, or after the date of the order for relief in a
          case under this title, by reason of applicable
27        provisions of—
28        (i) a separation agreement, divorce decree, or

                                      -6-
 1        property settlement agreement; [or]
 2        (ii) an order of a court of record; or
 3        (iii) a determination made in accordance with
          applicable non-bankruptcy law by a governmental unit;
 4        and
 5        (D) not assigned to a nongovernmental entity, unless
          that obligation is assigned voluntarily by the spouse,
 6        former spouse, child of the debtor, or such child's
          parent, legal guardian, or responsible relative for
 7        the purpose of collecting the debt.
 8        Our review of the MSA shows that the equalizing payment at
 9   issue here is a debt (1) that accrued before the order for
10   relief in debtor’s chapter 13 case, (2) that is owed to his
11   former spouse, Olivia, (3) that was established prepetition by
12   reason of applicable provisions of a “divorce decree . . . or
13   property settlement agreement,” and (4) that has not been
14   assigned to a nongovernmental entity.    The only issue in dispute
15   is whether the equalizing payment is “in the nature of alimony,
16   maintenance, or support.”
17        Whether a debt is actually in the nature of support is a
18   “factual determination made by the bankruptcy court as a matter
19   of federal bankruptcy law.”   In re Chang, 163 F.3d at 1140.    “In
20   determining whether a debtor’s obligation is in the nature of
21   support, the intent of the parties at the time the settlement
22   agreement is executed is dispositive.”   In re Sternberg, 85 F.3d
23   at 1405.
24        A trial court should consider several factors in
          determining how the parties intended to characterize
25        the obligation. Foremost, the trial court should
          consider whether the recipient spouse actually needed
26        spousal support at the time of the divorce. In
          determining whether spousal support was necessary, the
27        trial court should examine if there was an ‘imbalance
          in the relative income of the parties’ at the time of
28        the divorce decree. The trial court should also

                                    -7-
 1         consider whether the obligation terminates upon the
           death or remarriage of the recipient spouse and
 2         whether the payments are ‘made directly to the
           recipient spouse and are paid in installments over a
 3         substantial period of time.’ Finally, the labels
           given to the payments by the parties may be looked at
 4         as evidence of the parties’ intent.
 5   Id.
 6         Here, we can proceed no further with our review because
 7   Olivia failed to provide the transcript of the July 28, 2012
 8   hearing, where the bankruptcy court announced its oral findings
 9   and conclusions.   Rule 8009(b) requires an appellant to file an
10   appendix to her brief with excerpts of the record, including a
11   transcript of the opinion, findings of fact, or conclusions of
12   law delivered orally by the court.     On November 23, 2012, the
13   Panel issued an Order re Prosecution of Appeal which warned
14   Olivia of the consequences of her failure to provide a
15   transcript.   Despite this notice, Olivia failed to respond.
16         Olivia had the burden of showing the bankruptcy court’s
17   findings of fact were clearly erroneous.     See Massoud v. Ernie
18   Goldberger & Co. (In re Massoud), 248 B.R. 160, 163 (9th Cir.
19   BAP 2000).    We may affirm where the record is inadequate to show
20   clear error, see Friedman v. Sheila Plotsky Brokers, Inc.
21   (In re Friedman), 126 B.R. 63, 68 (9th Cir. BAP 1991), and we do
22   so here.
23                             VI.   CONCLUSION
24         For the reasons stated, we AFFIRM.
25
26
27
28

                                      -8-