Court Opinion

ID: 2964695
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:29:48.288944+00
Date Added: 2024-06-11T12:03:23.539521
License: Public Domain

USCA1 Opinion

	

                           UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                ____________________
          No. 96-2185
                                   ROBERT D. MACY,
                               Plaintiff - Appellant,
                                         v.
                                  ANNA LOWELL MACY,
                                Defendant - Appellee.
                                ____________________
                    APPEAL FROM THE UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF MASSACHUSETTS
                  [Hon. Edward F. Harrington, U.S. District Judge]
                                ____________________
                                       Before
                               Torruella, Chief Judge,
                                Selya, Circuit Judge,
                             and Saris,* District Judge.
                                _____________________
               James F. Coffey, with whom Carolyn A. Bankowski and Coffey &
          Shea were on brief for appellant.
               Mark G. DeGiacomo,  with whom Barbara J. Kroncke and  Roche,
          Carens & DeGiacomo, P.C. were on brief for appellee.
                                ____________________
                                    May 23, 1997
                                ____________________
          *  Of the District of Massachusetts, sitting by designation.

                    TORRUELLA, Chief  Judge.
          R
          Anna Lowell Macy, the debtor's ex-spouse, brought an action under
                                   and (a)(15),2 seeking a ruling that  the
          7 of the Bankruptcy Code on October 31, 1994.  On March 17, 1995,
             U.S.C. SS 523(a)(5)1
                          A discharge under  section 727 . .  .
                                                The debtor  in  this  case,
           obert 
                D. 
                   Macy, 
                        filed 
                              a 
                                voluntary bankruptcy petition under Chapter
          11
          1  Section 523(a)(5) provides, in relevant part: 
                           not  discharge an individual  debtor
                      from any debt--
                         . . .
                      does
                      (a)
                         (5) to a spouse, former spouse,  or
                         child 
                              of 
                                 the 
                                     debtor, for alimony to,
                         maintenance for, or support of such
                         spouse or child, in connection with
                         a  separation  agreement,   divorce
                         decree or other order of a court of
                         record,   determination   made   in
                         accordance 
                                   with State or territorial
                         law  by  a  governmental  unit,  or
                         property settlement agreement,  but
                         not to the extent that --
                         . . . 
                         (B) such debt includes a  liability
                         designated as alimony, maintenance,
                         or 
                           support, 
                                    unless such liability is
                         actually in the nature of  alimony,
                         maintenance, or support.
          11 U.S.C. S 523(a)(5).
          2  Section 523(a)(15) provides, in relevant part:
                      (a) A discharge under  section 727 . .  .
                      does not  discharge an individual  debtor
                      from any debt -- 
                      . . .
                         (15) not of  the kind described  in
                         paragraph (5)  that is incurred  by
                         the  debtor  in  the  course  of  a
                         divorce   or   separation   or   in
                         connection   with   a    separation
                         agreement, divorce decree or  other
                         order of a court of record. . . .
          11 U.S.C. S 523(a)(15).
                                         -2-

          payments  required by  the  parties'  separation  agreement  were
          nondischargeable.  At trial it was agreed "that no issues of fact
          remain in  dispute and  the only issue  before the  court is  the
          dischargeabil
                      ity of $33,706.98 in pre-petition attorneys' fees and
          disbursements."  In re Macy,  192 B.R. 802, 803 (Bankr. D.  Mass.
          1996).  The plaintiff filed her action within the time prescribed
          for 11 U.S.C. S 523(a)(5), but beyond the somewhat shorter period
          prescribed for 11 U.S.C.  S 523(a)(15).  The parties have  agreed
          throughout the litigation, therefore, that if the debt is not  of
          the kind  described in 11 U.S.C.  S 523(a)(5), but falls  instead
          under section 523(a)(15), then it is dischargeable.
                    The bankruptcy court held that the attorneys' fees  and
          disbursements incurred in connection with the plaintiff's efforts
          to collect alimony, maintenance, or child support are governed by
          section 
                 523(a)(5) of the Bankruptcy Code and, on the facts of this
          case, 
               are 
                   not dischargeable.  Macy, 192 B.R. at 806.  On appeal to
          the 
             United 
                   States 
                          District Court for the District of Massachusetts,
          the decision was  affirmed.  The debtor-appellant now appeals  to
          this 
              court. 
                      
                      The only issue on appeal is whether section 523(a)(5)
          or section 525(a)(15)  furnishes a vehicle  for testing the  non-
          dischargeabil
                      ity of attorneys' fees incurred by a former spouse in
          an effort  to  enforce payments  required  by a  divorce  decree.
          Holding that attorneys' fees  incurred by a former spouse in  the
          course of seeking to enforce support-related payments required by
          a divorce  decree are properly  nondischargeable under 11  U.S.C.
          S 523(a)(5), we affirm.
                                         -3-

                    We find that  the reasoning of  the decisions below  is
          sound, 
                and 
                    affirm for substantially the reasons put forth therein.
          See Macy v. Macy, 200 B.R. 467, 468-69 (Bankr. D. Mass. 1996); In
          re Macy, 192 B.R. at 802-03.  See generally Lawton v. State  Mut.
          Life Assurance Co., 101 F.3d 218, 220 (1st Cir. 1996) ("[W]hen  a
          lower court produces a comprehensive, well-reasoned decision,  an
          appellate court should refrain from writing at length to no other
          end than  to hear  its own  words resonate").   We  add only  the
          following brief discussion.
                    The  foundation of  appellant's  argument is  that  the
          Bankruptcy 
                    Reform Act of 1994, Pub. L. No. 103-394, 108 Stat. 4106
          (1994), by adding section  523(a)(15), has impliedly amended  the
          appropriate interpretation of section 523(a)(5), changing the way
          in  which attorneys' fees  should be classified.   By its  terms,
          section 523(a)(15)  includes only debt that  is "not of the  kind
          described 
                   in 
                     [section 
                              523(a)](5)."  Furthermore, it is not disputed
          that prior to the enactment of the Bankruptcy Reform Act, fees of
          the sort at issue were nondischargeable under section  523(a)(5).
          See
            , 
              e.g.
                  , 
                    In 
                      re 
                         Coleman,
                                  37 B.R. 120, 123 (Bankr. W.D. Wisc. 1984)
          ("There has  been virtual unanimity  among bankruptcy courts  and
          appellate courts . . . that attorney's fees incurred by a  spouse
          are nondischargeable so long as the primary debt is excepted from
          discharge.")  The question, therefore, is whether the  Bankruptcy
          Reform Act had the effect of removing attorneys' fees of the sort
          at issue here from the reach of section 523(a)(5).
                                         -4-

                    A 
                     review 
                            of 
                              existing 
                                       case law and the legislative history
          of section 523(a)(15) leads us to the conclusion that  attorneys'
          fees continue to  be governed by section  523(a)(5).  There is  a
          strong policy interest in protecting ex-spouses and children from
          the loss of alimony, support and maintenance owed by a debtor who
          has 
             filed 
                  for 
                      bankruptcy.  See Shine v. Shine, 802 F.2d 583, 585-88
          (1st Cir.  1986).  This policy  is emphasized in the  legislative
          history of section 523(a)(15), which reads:
                         This section  is intended  to  provide
                      greater    protection    for     alimony,
                      maintenance, 
                                  and support obligations owing
                      to a spouse, former spouse, or child of a
                      debtor in bankruptcy. . . .
                         [Section  523(a)(15)]   adds   a   new
                      exception 
                               to 
                                  discharge for some debts that
                      are  not  in   the  nature  of   alimony,
                      maintenance   or  support.      In   some
                      instances, divorcing spouses have  agreed
                      to 
                        make 
                             payments of marital debts, holding
                      the  other  spouse  harmless  from  those
                      debts, in  exchange  for a  reduction  in
                      alimony 
                             payments.  In other cases, spouses
                      have agreed to  lower alimony based on  a
                      larger 
                            property settlement.  If such "hold
                      harmless"   and    property    settlement
                      obligations are not  found to  be in  the
                      nature  of   alimony,   maintenance,   or
                      support,  they  are  dischargeable  under
                      current 
                             law. 
                                   The non-debtor spouse may be
                      saddled with substantial debt and  little
                      or no alimony  or support.  This  section
                      will      make      such      obligations
                      nondischargeable. . . .
          H.R. Rep. No. 103-835 at S 304 (1994).  This legislative  history
          demonstrates that Congress sought to apply section 523(a)(15)  to
          debts that had previously been construed as property obligations.
          See, e.g., In re  Kritt, 190 B.R. 382,  385 n.4 (9th Cir.  B.A.P.
          1995) ("Section  523 has subsequently been  amended to add a  new
                                         -5-

          section 523(a)(15), which provides that property settlements  are
          now generally  nondischargeable  in bankruptcy.")   There  is  no
          indication  that  Congress   intended  to   affect  the   liberal
          interpretation of  section  523(a)(5).   It follows,  then,  that
          Congress did not intend to apply section 523(a)(15) to debts that
          were, prior to the  Bankruptcy Reform Act, considered to be  non-
          dischargeable under section 523(a)(5).
                    Affirmed.
                                         -6-