Court Opinion

ID: 9650007
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:19:14.589006+00
Date Added: 2024-06-11T18:12:16.833849
License: Public Domain

BERGER, Bankruptcy Judge,
concurring in part and dissenting in part.
I concur with the majority’s conclusion that the bankruptcy court did not abuse its discretion when it determined that the payment of the second mortgage obligation was in the nature of nondischargeable support. I respectfully disagree with the majority’s conclusion that the bankruptcy court is imparted with jurisdiction to award attorney’s fees attendant to § 523(a)(5) proceedings.
Generally, bankruptcy courts have refused to award attorney’s fees to § 523(a)(5) prevailing parties for fees incurred in connection with litigating the issue of dischargeability. The primary reason has been lack of a specific provision under the Bankruptcy Code authorizing fee awards to prevailing creditors in § 523 dischargeability actions.1 Colbert v. Colbert (In re Colbert), 185 B.R. 247, 248 (Bankr.M.D.Tenn.1995). Such rationale is compelling. Congress knows how to provide for the award of attorney’s fees in bankruptcy proceedings. As eloquently stated by the court in In re Colbert:
Under the well-established principle of statutory interpretation expressio unius est exdusio alterius [the expression of one thing is to the exclusion of the other], the inclusion of § 523(d) indicates a congressional intent that each party bear his or her own litigation costs in all other dischargeability actions.
*628Id. (footnote omitted). As further explained by the Colbert court, the foregoing principle has been recognized by the Supreme Court. Id. at 248 n. 1.
Importantly, the “domestic relations exception” to federal jurisdiction strips the federal courts of authority to grant or modify a divorce or alimony decree. Ankenbrandt v. Richards, 504 U.S. 689, 701-02, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992). A bankruptcy court lacks jurisdiction to issue divorce and alimony decrees, or even to entertain claims for alimony. Id. The domestic relations exception also prohibits consideration of child custody cases. Id.
The domestic relations exception emanates from Barber v. Barber, 62 U.S. 582, 21 How. 582, 16 L.Ed. 226 (1859), in which the Supreme Court allowed the federal district court to enforce an alimony decree. However, and most importantly, the Supreme Court issued a limitation on federal jurisdiction in the area of domestic relations:
Our first remark is — and we wish it to be remembered — that this is not a suit asking the court for the allowance of alimony. That has been done by a court of competent jurisdiction. The court in Wisconsin was asked to interfere to prevent that decree from being defeated by fraud.
We disclaim altogether any jurisdiction in the courts of the United States upon the subject of .divorce, or for the allowance of alimony, either as an original proceeding in chancery or as an incident to divorce a vinculo, or to one from bed and board.
Barber, 62 U.S.(21 How.) at 584, quoted by the Court in Ankenbrandt, 504 U.S. at 694, 112 S.Ct. 2206. The Court in Ex Parte Burrus stated that “The whole subject of the domestic relations of husband and wife, parent and child, belongs to the laws of the states, and not to the laws of the United States.” 136 U.S. 586, 593-94, 10 S.Ct. 850, 34 L.Ed. 500 (1890). In McIntyre v. McIntyre, 771 F.2d 1316 (9th Cir. 1985) (opinion of Kennedy, J.), the court stated that, “[T]he exception to jurisdiction arises in those cases where a federal court is asked to grant a decree of divorce or annulment, or to grant custody or fix payments for support....” Id. at 1317-18 (cited with approval in Ankenbrandt, 504 U.S. at 703 n. 6, 112 S.Ct. 2206).
Federal courts have jurisdiction to enforce state court orders of support. However, the federal courts lack jurisdiction to award support. In the case below, the bankruptcy court was without jurisdiction to award attorney’s fees, which frequently is tantamount to the award of support,2 whether such arose prior to or after the filing of the debtor’s bankruptcy petition. Since none of the prepetition attorney’s fees were reduced to judgment, the bankruptcy court cannot either grant or determine as nondischargeable such prepetition fees. In contrast, if the attorney’s fees had been reduced to judgment by a state court of competent jurisdiction prior to the filing of the debtor’s bankruptcy petition, then the bankruptcy court would have jurisdiction to determine the dischargeability of such fees under § 523(a)(5).
The pertinent Utah statute that allows the award of costs and attorney’s fees is limited to a “domestic case.” The parties do not provide, and I have been unable to ascertain by independent research, what exactly constitutes a domestic case under the laws of the State of Utah. However, it is difficult to envision that dischargeability *629proceedings filed in a United States bankruptcy court constitute a “domestic case” as contemplated under the Utah statutes. In Condie v. Condie, 139 P.3d 271 (Utah Ct.App.2006), the debtor’s ex-spouse (Seals) filed an adversary proceeding under § 523(a)(15) to determine the dis-chargeability of debtor’s hold harmless obligations to Seals under their decree of divorce. The bankruptcy court ultimately entered judgment in Seals’ favor under § 523(a)(15). Upon conclusion of such adversary proceedings, Seals then asked for and was awarded attorney’s fees by the state divorce court for the filing of the adversary proceeding in Condie’s bankruptcy case. Condie asserted that Seals should have sought such attorney’s fees in the bankruptcy court proceeding. However, the Utah court of appeals agreed with Seals’ argument that such a request to the bankruptcy court would have been futile “because, as a general rule, attorney fees are not awardable under federal bankruptcy law for enforcement of obligations contained in a divorce decree.” Condie 139 P.3d at 275. Section 523(a)(15), like § 523(a)(5), pertains to domestic relations obligations and neither contains a provision that allows the award of attorney’s fees and costs by the bankruptcy court incurred incidental to the filing of an adversary proceeding to determine dis-chargeability. Agreeing with the court in Dennison v. Hammond (In re Hammond), 236 B.R. 751 (Bankr.D.Utah 1998), the Utah Court of Appeals stated that “Seals did not have a basis for receiving attorney fees in federal bankruptcy court.” Condie, 139 P.3d at 276. The court went on to state that “We are convinced that it would have been futile for Seals to have asked for attorney fees in the bankruptcy proceedings.” Id. The Condie court also relies upon Colbert to reach its conclusion. Id.
“[I]t is clear that [i]n the absence of a state supreme court ruling, a federal court must follow an intermediate state court decision unless other authority convinces the federal court that the state supreme court would decide otherwise.” Jordan v. Shattuck Nat’l Bank, 868 F.2d 383, 386 (10th Cir.1989) (internal quotation marks omitted). See also In re Reed, 147 B.R. 571, 573 (D.Kan.1992) (“Fundamental to our system of federalism is the notion that state courts are the final arbiters of the State’s own law. Federal courts are bound by the state court’s interpretations of their laws, absent such extreme circumstances as those involving federal constitutional issues.” (internal quotation marks omitted) (citation omitted)). A non-debtor ex-spouse may not seek attorney’s fees in an action under § 523(a)(15); I believe that the same prohibition applies to a proceeding initiated under § 523(a)(5). However, although the bankruptcy court is bound by substantive state law, it is not bound by a state court’s determination that a bankruptcy court does not have jurisdiction to hear a particular matter.3
Additionally, with regard to certain facets of domestic relations and federal jurisdiction, the law pertaining to abstention by the bankruptcy court demonstrates the policy that federal courts should limit their intrusion into domestic relations. See 28 U.S.C. § 1334(c)(2) and Ankenbrandt v. Richards, 504 U.S. 689, 704-05, 112 S.Ct. 2206, 119 L.Ed.2d 468.
[W]hen an issue exists, such as child custody, which could arguably be related *630to the bankruptcy case due to its impact on the debtor’s finances, or perhaps modification of a state court support order payable from property other than property of the estate, mandatory abstention may be appropriate.
Collier Family Law and the Bankruptcy Code ¶ 5.01[2][e], at 5-21 (Henry J. Som-mer, Margaret Dee McGarity, & Alan N. Resnick eds., 2006).
The bankruptcy courts should generally defer to the special expertise held by the state courts in domestic proceedings. As stated in Ankenbrandt when it confirmed the continued vitality of the domestic relations exception:
Not only is our conclusion rooted in respect for this long-held understanding, it is also supported by sound policy considerations. Issuance of decrees of this type not infrequently involves retention of jurisdiction by the court and deployment of social workers to monitor compliance. As a matter of judicial economy, state courts are more eminently suited to work of this type than are federal courts, which lack the close association with state and local government organizations dedicated to handling issues that arise out of conflicts over divorce, alimony, and child custody decrees. Moreover, as a matter of judicial expertise, it makes far more sense to retain the rule that federal courts lack power to issue these types of decrees because of the special proficiency developed by state tribunals over the past century and a half in handling issues that arise in the granting of such decrees.
Ankenbrandt, 504 U.S. at 703-04, 112 S.Ct. 2206.
The Supreme Court’s decision in Travelers does not change the foregoing analysis. The Travelers decision is easily distinguishable. Travelers emanated from the debtor’s breach of a negotiated commercial contract within the confines of complex Chapter 11 proceedings and a confirmed plan of reorganization. The holding in Travelers is narrow:
Accordingly, we express no opinion with regard to whether, following the demise of the Fobian rule, other principles of bankruptcy law might provide an independent basis for disallowing Travelers’ claim for attorney’s fees. We conclude only that the Court of Appeals erred in disallowing that claim based on the fact that the fees at issue were incurred litigating issues of bankruptcy law.
Travelers Cas. & Sur. Co. v. Pac. Gas & Elec. Co., — U.S.-,---, 127 S.Ct. 1199, 1207-08, 167 L.Ed.2d 178 (2007). In Travelers, the respondent, for the first time and before the Supreme Court, attempted to argue that other provisions of the Bankruptcy Code established a basis upon which to disallow Travelers’ claim for attorney’s fees. Although these arguments may or may not have been viable, the Travelers Court refused to consider these new arguments that had not been raised or addressed. Hence, the holding in Travelers is so narrow as not to be of much utility in determining whether the bankruptcy court properly awarded attorney’s fees attendant to a § 523(a) proceeding to determine dischargeability. The Travelers holding does not compel the conclusion that the bankruptcy court had jurisdiction to award attorney’s fees. Here, the state court would be permitted to award Ex-Wife attorney’s fees pursuant to Utah Code Ann. § 30-3-3(2).
The majority also cites to the Supreme Court case of Cohen v. de la Cruz, 523 U.S. 213, 118 S.Ct. 1212, 140 L.Ed.2d 341 (1998), as support. Again, the Cohen decision is distinguishable from the case below. The proceedings did not emanate from domestic relations and, hence, the domes*631tic relations exception would not impair the award of attorney’s fees or treble damages. Although the Cohen decision does not reflect whether the issue of jurisdiction was raised, even if the bankruptcy court in Cohen held such jurisdiction, it was not constrained by the domestic relations exception.
As recently as 2006, the Supreme Court recognized the domestic relations exception to federal jurisdiction.4 Although the Marshall Court emphasized that the exception applies to a narrow range of domestic relations issues, the Court reaffirmed the existence of the exception and that it applies to divorce, alimony, and child custody decrees.5 Since the determination of the dischargeability of an obligation under § 523(a)(5) is in the nature of enforcement of a domestic relations obligation, the bankruptcy court has jurisdiction to adjudicate the matter. However, the bankruptcy court lacks jurisdiction to award attorney’s fees attendant to such proceedings. This is particularly the case when the attorney’s fee award does not have a statutory basis under the Code and is predicated on a state attorney fee statute limited to a “domestic case.” The award of such attorney’s fees are in the nature of support and the bankruptcy court is specifically deprived of jurisdiction to award such fees; in the alternative, the award of attorney’s fees is without the bankruptcy court’s jurisdiction in that it constitutes a defacto divorce or support decree.
The attorney’s fees Ex-Wife incurred in state court relating to Debtor’s motion to clarify the divorce decree and its ensuing appeal were not reduced to judgment in state court. The bankruptcy court is accordingly without authority to award those fees or determine them to be nondis-chargeable debts in this proceeding.6 Ex-Wife must seek an award of prepetition and postpetition attorney’s fees and costs from the state court, whether such were incurred in state court or bankruptcy court proceedings. To the extent necessary to accomplish this task, the bankruptcy court can modify the automatic stay or discharge injunction to allow Ex-Wife to seek those fees. Additionally, should the state court award attorney’s fees, it can exercise its concurrent jurisdiction to determine whether Debtor’s obligation is in the nature of support and nondischargeable under § 532(a)(5). The bankruptcy court’s intrusion into state domestic relations law by awarding attorney’s fees is an act that the Supreme Court has warned off the federal courts for almost 150 years. The Supreme Court’s decisions in Travelers and Cohen do not affect 150 years of jurisprudence that underpin the domestic relations exception to federal jurisdiction.
For the foregoing reasons, I concur in part and respectfully dissent in part.

. For example, § 523(d) allows for the award of attorney's fees to a prevailing debtor arising out of a proceeding to determine the dischargeability of a debt under the fraud exception set out in § 523(a)(2), and § 506(b) allows an oversecured creditor to recover reasonable attorney's fees and costs under certain circumstances. No such attorney’s fees provisions are found in either § 523(a)(5) or § 523(a)(15).

. See, e.g., Jones v. Jones (In re Jones), 9 F.3d 878 (10th Cir.1993), wherein the court found that court-ordered attorney’s fees arising from postdivorce custody actions are in the nature of support.

. See Marshall v. Marshall, 547 U.S. 293, 126 S.Ct. 1735, 1749-50, 164 L.Ed.2d 480 (2006). See also Ankenbrandt v. Richards, 504 U.S. 689, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992), wherein the Supreme Court did not determine that the domestic relations exception deprived the federal courts of jurisdiction over a state law tort claim between ex-spouses.

. Marshall v. Marshall, 547 U.S. 293, 126 S.Ct. 1735, 1746, 164 L.Ed.2d 480 (2006).

. Id.

.See majority Opinion at n. 14.