Court Opinion

ID: 44349
Source: CourtListenerOpinion
Date Created: 2010-04-25 22:11:51+00
Date Added: 2024-06-11T14:58:11.763809
License: Public Domain

United States Court of Appeals
                                                          Fifth Circuit
                                                       F I L E D
                   In the                               June 20, 2006
United States Court of Appeals                     Charles R. Fulbruge III
         for the Fifth Circuit                             Clerk
              _______________

                m 05-41854
              Summary Calendar
              _______________

              IN THE MATTER OF:
         BRYAN L. LITTLETON, JR

                                  Debtor.

        ***************

         BRYAN L. LITTLETON, JR

                                  Appellant,

                  VERSUS

           DEBRA L. LITTLETON,

                                  Appellee.

  ____________________________________

  Appeal from the United States District Court
       for the Eastern District of Texas
               m 4:04-CV-211
 _____________________________________
Before SMITH, GARZA, and PRADO,                            either party dies before the contractual ter-
  Circuit Judges.                                          mination date.

PER CURIAM:*                                                   Bryan adhered to the terms of the agree-
                                                           ment until July 2003, when he stopped making
   Bryan Littleton appeals the district court’s            the required payments. In November 2003 he
ruling that a debt he owes his ex-wife, Debra              filed for chapter 7 bankruptcy, listing
Littleton, is in the nature of alimony, mainte-            $167,439 he owed to Debra as a dischargeable
nance, or support, and accordingly is nondis-              general unsecured debt. Debra challenges that
chargeable in bankruptcy proceedings under                 characterization, arguing that Bryan’s indebt-
11 U.S.C. § 523(a)(5). We affirm.                          edness to her is in the nature of “alimony to,
                                                           maintenance for, or support of” a former
                        I.                                 spouse and accordingly, pursuant to 11 U.S.C.
    The Littletons were divorced in March                  § 523(a)(5), is nondischargeable.
2001 and negotiated a settlement agreement
that was incorporated by the state court into                 Bryan counters that although the payments
its final decree of divorce. Under the heading             underlying the debt are labeled as alimony in
of “Alimony,” the agreement states that                    the agreement, they are more accurately con-
                                                           sidered as part of the couple’s property settle-
   [i]t is the mutual desire of the parties to             ment. He bases this argument on the fact that
   provide a continuing measure of support                 under the terms of the agreement governing
   for Debra L. Littleton, Respondent, after               property division, Debra was to receive only
   the divorce. These payments undertaken                  $140,000 from a business of Bryan’s that had
   by Petitioner, Bryan Littleton, are intended            an appraised value of $500,000. Bryan claims
   to qualify as contractual alimony as that               that Debra was entitled to half of the value of
   term is defined in section 71(a) of the In-             the business ($250,000) and that he agreed to
   ternal Revenue Code of 1986 (“the code”),               categorize $110,000 of that amount as alimo-
   as amended . . . . All provisions of this               ny, instead of as a portion of the property set-
   article will be interpreted in a manner con-            tlement, to get her to sign the agreement.1
   sistent with this intention.
                                                              After considering the terms of the settle-
The agreement goes on to specify that “Bryan               ment agreement and hearing the testimony of
Littleton will pay to Debra L. Littleton                   both Bryan and Debra, the bankruptcy court
$1,100.00 per month as and for alimony.” Be-               found that $101,200 of the debt Bryan owes
ginning on March 1, 2001, and ending on Feb-               Debra is in the nature of alimony, maintenance,
ruary 1, 2011, payments under the agreement
are to be made on the first day of every month.
                                                              1
The obligation lapses immediately, however, if                  Bryan testified that “[Debra’s] attorney want-
                                                           ed in the event that [the business] went broke or we
                                                           didn’t make it or something, you know, that there
                                                           would still be a factor of $110,000” available to
   *
     Pursuant to 5TH CIR. R. 47.5, the court has de-       Debra. The alimony provision in the settlement
termined that this opinion should not be published         agreement actually calls for Bryan to pay Debra
and is not precedent except under the limited              $1,100 per month for ten years, a total of
circumstances set forth in 5TH CIR. R. 47.5.4.             $132,000.

                                                       2
or support, and accordingly is nondischarge-                  [u]nder bankruptcy law, the intent of the
able. The court found that the remaining                      parties at the time a separation agreement is
$66,239 is a dischargeable general unsecured                  executed determines whether a payment
debt. The district court affirmed the bank-                   pursuant to the agreement is alimony, sup-
ruptcy court’s findings, and Bryan appeals.                   port or maintenance within the meaning of
                                                              section 523(a)(5). See generally In re Da-
                       II.                                    vidson, 947 F.2d 1294, 1296-97 (5th Cir.
   The district court’s “[f]indings of fact are               1991); In re Gianakas, 917 F.2d 759, 762
reviewed under the ‘clearly erroneous’ stan-                  (3d Cir. 1990). A written agreement be-
dard; conclusions of law are subject to de novo               tween the parties is persuasive evidence of
review.” In re Evert, 342 F.3d 358, 363 (5th                  their intent. Tilley v. Jessee, 789 F.2d
Cir. 2003).                                                   1074, 1077 (4th Cir. 1986). Thus, if the
                                                              agreement between the parties clearly
                      III.                                    shows that the parties intended the particu-
    Bryan contends that the district court erred              lar debt in question to reflect either support
in resting its findings exclusively on the lan-               or a property settlement, then that charac-
guage of the settlement agreement and by                      terization will normally control. In re
foregoing an evaluation of the factors articu-                Yeates, 807 F.2d 874 (10th Cir. 1986). On
lated in In re Nunnally, 506 F.2d 1024 (5th                   the other hand, if the agreement is ambigu-
Cir. 1994), as a means for determining wheth-                 ous, then the court must determine the par-
er a divorce-related obligation constitutes ali-              ties’ intentions by looking to extrinsic evi-
mony, maintenance, or support, or is more                     dence. Id.
appropriately considered as part of a property
settlement.2 He further asserts that “consider-            Evert, 342 F.3d at 368.
ation of the Nunnally factors would show that
Debra failed to introduce any evidence that the               We found no ambiguity in the agreement at
[relevant] payments were actually necessary                issue in Evert, and thus no need to consider
for her support,” and accordingly that the dis-            extrinsic evidence such as the Nunnally fac-
trict court should have found that his monthly             tors, because “both the labels given to the ob-
obligation under the settlement agreement                  ligation at issue in the agreement and the sub-
could not be characterized as alimony.                     stantive characteristics of the obligation clearly
                                                           reflect it is part of a property settlement.” Id.
   We do not agree that consideration of the               The presence of an “explicit, separate pro-
Nunnally factors is necessary in this case. We             vision for nontrivial alimony in the agreement”
held in Evert that                                         further established that “there is no basis for
                                                           judiciallyrefashioning the note contained in the
                                                           property settlement portion of the agreement
   2
     The Nunnally factors “include the disparity of        as alimony.” Id. at 368-69.
the earning power of the parties, as well as their
business opportunities, the physical condition of             Similarly, the settlement agreement in this
the parties, probable future need for support, . . .
                                                           case unambiguously categorizes the relevant
educational background, the fault in breaking up
                                                           payments as alimony and contains an explicit,
the marriage and the benefits [the] innocent spouse
would have received from a continuation of the
                                                           separate provision for the division of property.
marriage.” Nunnally, 506 F.2d at 1026-27.                  As the district court asserted, the statements in

                                                       3
the agreement “demonstrate that both the label
and the substantive characteristics of the pay-
ments underlying Bryan’s $101,200.00 debt
are indisputably in the nature of alimony as
opposed to a property settlement . . . .” Ac-
cordingly, the district court did not err in
deciding, without looking to extrinsic evi-
dence, “that Bryan and Debra did in fact intend
for the payments underlying the debt to oper-
ate as such.”

   AFFIRMED.

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