Koch v. Olsson
Filing
9
OPINION AND ORDER. The decision of the Bankruptcy Court is AFFIRMED. See formal OPINION AND ORDER. Signed on 6/17/2015 by Chief Judge Ann L. Aiken. (rh)
UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
Case No. 6:14-cv-01686-AA
Bankr. Case. No. 13-62080-tmr-7
Adv. Pro. No. 13-06132-tmr
In re:
NELS E G OLSSON
MAURA HELENA OLSSON
OPINION AND ORDER
Debtor.
BRIAN S. KOCH,
Plaintiff-Appellant,
v.
MAURA H. OLSSON,
Defendant-Appellee.
AIKEN, Chief Judge:
Plaintiff-Appellant
Brian
Koch
appeals
a
decision
of
the
United States Bankruptcy Court that ruled an attorney fee award
entered against the defendant-appellee was not in the nature of
child support and dischargeable.
1
- OPINION AND ORDER
After review of the Bankruptcy
Court's
decision
and
the
parties'
I
arguments,
affirm
the
decision.
BACKGROUND
Prior to 2010,
of
her
father.
minor
defendant-appellee Maura Olsson had custody
child;
plaintiff-appellant
Koch
is
Koch was obligated to pay monthly child support,
fell behind in his payments.
the minor
child,
to
pay
support.
support
arrearage,
awarded
However,
Olsson's
the
and he
In 2010, Koch filed for custody of
and Koch was
ordered
~set
Brian
due
monthly
custody and Olsson was
to
his
payments
previous
were
child-
applied
as
offs" against the amount of child support Koch owed Olsson.
Pl.'s Suppl. Excerpt of Record at 33-34 (doc. 8).
In or around December 2011, Olsson filed a Motion for Order
to
Show Cause why the
operative parenting plan
modified.
Olsson's motion was denied,
that
motion
the
and
supporting
should not
and the state court found
affidavit
were
meritless
misleading. Def. 's Suppl. Excerpt of Record at 12-14
Subsequently,
the
finding
fees
that
state
court
should
be
awarded
awarded
bringing similar motions to show cause.
attorney
to
deter
Notably,
against the amount of child support owed by Koch.
- OPINION AND ORDER
and
(doc. 5-1).
fees
to
others
Koch,
from
the court did
not order that the attorney fee award be applied as a
2
be
~set
off"
On
under
May
30,
Chapter
2013,
Olsson
filed
for
7
of
the
Bankruptcy Code.
dischargeability
of
the
attorney
bankruptcy
attorney· fees
fell
within
the
fee
Koch
award,
ndomestic
protection
objected
arguing
support
to
the
that
the
obligations"
exception to dischargeability. 11 U.S.C. § 523(a) (5)
Bankruptcy Judge Renn entered judgment in favor of Olsson,
finding
that
discharge.
the
debt
Judge Renn
was
a
general
unsecured debt
reasoned that the
attorney-fee
subject
to
award was
entered for the purpose of penalizing Olsson and was not issued
not for purposes of domestic or child support obligations.
Koch
now appeals to this court.
DISCUSSION
Section
discharge
U.S. C.
523 (a) (5)
any
debt
523 (a) ( 5) .
§
of
nfor
the
a
Bankruptcy
domestic
Code
support
excepts
from
obligation."
11
Koch argues that the bankruptcy court erred
in determining that the attorney fee judgment was not a support
obligation and dischargeable.
As he did before the Bankruptcy Court,
disputed
because
child
attorney
it
was
would
discharge
be
this
fee
debt
incurred in a
adversely
debt.
is
a
domestic
support
obligation
custody proceeding and the minor
affected
Olsson
Koch argues that the
argues
if
Olsson
that
the
was
permitted
Bankruptcy
to
Court
correctly found that the disputed debt is not in the nature of
3
- OPINION AND ORDER
support
not
maintains
a
domestic
that
the
support
debt
does
obligation.
not
fall
Therefore,
within
the
Olsson
"domestic
support obligation" exception to discharge and is dischargable
in the bankruptcy proceeding.
"Domestic support obligation" is defined as a debt:
(A) owed to or recoverable by .
a spouse, former
spouse, or child of the debtor or such child's parent,
legal guardian, or responsible relative.
(B)
in the nature of alimony, maintenance, or support
of such spouse, former spouse, or child of the
debtor or such child's parent, without regard to
whether such debt is expressly so designated;
(C) established or subject to establishment before, on
or after the date of the order for relief in a case
under this title, by reason of applicable provisions
of .
an order of a court of record;
. and
(D) not assigned to a nongovernmental entity, unless
that obligation is assigned voluntarily by the spouse,
former spouse, child of the debtor or such child's
parent, legal guardian, or responsible relative for
the purpose of collecting the debt.
11
U.S.C.
§
101(14A).
The
parties
dispute
only
the
requirement, that the debt be "in the nature of
second
support."
To determine whether a debt is in the "nature of support,"
courts
may
consider
the
following
factors:
1)
intent that the debt be in the nature of support;
given to the payments; 3)
the
parties'
2)
the label
the recipient's need for the support,
generally determined by an imbalance of income; 4) the manner in
which the payments are
4
- OPINION AND ORDER
to be made;
and 5)
the ability of the
payments to terminate when the recipient dies or remarries.
re Nelson,
451 B.R.
Leppaluoto v.
Combs
B.A.P.
918,
Upon
1989).
(In
921-22
re
review
(Bankr.
Combs),
of
D.
101
Judge
Or.
B.R.
Renn's
2011);
609,
see also
615-16
ruling,
In
I
(9th
find
no
error.
I agree that the attorney fee award is not in the nature of
support
under
reflect
that
the
above
either
factors.
Olsson
or
award to be considered support.
testimony,
the
attorneys.
Pl.'s
(describing
award
was
Suppl.
financial
First,
Koch
intended
Rather,
intended
Excerpt
the
to
of
the
does
not
attorney-fee
as reflected by Koch's
pay
the
Record
repercussions
record
of
fees
at
of
32
attorney
Second, the fee award was not labeled as support,
Koch's
(doc.
fee
8)
bill) .
and the state
court did not order that the attorney fee award be applied to
the
amount of child support
owed by Koch
(as
respect to Olsson's child support payments).
it ordered with
Third,
no findings
were made with respect to Koch's need for the attorney's fees or
Olsson's ability to pay; rather, the state court imposed the fee
award
as
similar
a
punitive
conduct.
In
explicitly stated:
not
reasonable
measure
fact,
the
intended
state
to
court's
"the Court finds that
and
attorney
fees
- OPINION AND ORDER
others
opinion
[Olsson's]
would
asserting meritless claims." Def.'s Suppl.
5
deter
deter
from
letter
claims were
others
from
Excerpt of Record at
30.
Thus,
the purpose of the fee award was to "punish" Olsson
for
bringing
the
Motion
to
Show
Cause
and
deter
others
from
bringing similar motions; it was not for the purpose of support.
Finally,
the state court did not order the fee award to be made
on a monthly or similar basis. In other words, nothing about the
fee award suggests that it was in the nature of support.
Nonetheless,
domestic
Koch
support
argues
obligation
that
the
because
it
disputed
arose
out
debt
of
is
a
custody
proceedings and involved the best interests and welfare of the
child.
In
so
arguing,
2006 WL 6811011
Koch
(9th Cir.
relies
primarily on
BAP August 17,
2006),
In Re
Rehkow,
aff' d 239 Fed.
Appx. 341 (9th Cir. Jun. 29, 2007).
However,
this case.
I
find
the
facts
of Rehkow distinguishable
from
Rehkow involved attorney fees arising from disputes
over the services of a mental health expert appointed to provide
an opinion regarding custody and visitation. 2006 WL 6811011, at
*1. The BAP held that "attorneys' fees incurred in child custody
proceedings in which issues involving the best interests of the
child are
in dispute are
in the nature of support
and,
thus,
non-dischargeable in bankruptcy." Id. at *4. Because "all of the
attorneys'
fees
determine
custody
child,"
6
and
"were
awarded
of
[]
arose
and visits
incurred
- OPINION AND ORDER
in
to
the
from
the
best
the
former
proceedings
couple's
interests
of
to
minor
and
to
support
the minor child," the BAP held that the
non-dischargeable under
Here,
to
award was
523 (a) (5). Id.
§
the attorney fee award did not arise from proceedings
determine
Rather,
fee
it
custody,
arose
from
visitation
the
denial
rights
of
or
child
Olsson's
support.
motion
to
show
cause and the state court's finding that the motion was without
merit;
custody proceedings were never reopened or reevaluated.
The fact
that the fee award arose in the context of a
custody
dispute does not automatically render it a support obligation.
Indeed,
"[t] he legal question is not whether repayment of
the debt will benefit the children, but whether the basis of the
debt
803
the
benefitted the
children."
In
re Leibowitz,
217
F.3d 799,
(9th Cir. 2000). Here, the record reflects that the basis of
debt
was
to
punish
Olsson
and
deter
similar
conduct.
Therefore, it was not in the nature of support and does not fall
within the "domestic support obligation" exception to discharge.
CONCLUSION
The decision of the Bankruptcy Court is AFFIRMED.
IT IS SO ORDERED.
Dated this ~ day of June, 2015.
a.(FCLJ
Ann Aiken
United States District Judge
7
- OPINION AND ORDER
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