Trentadue v. Gay

Filing 13

ORDER signed by Judge J P Stadtmueller on 8/31/15 AFFIRMING the decision of the bankruptcy court and DISMISSING this appeal. See Order. (cc: all counsel)(nm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
CHRISTOPHER TRENTADUE,
Appellant,

Case No. 15-CV-388-JPS

v.
JULIE GAY,
Appellee.

ORDER

This bankruptcy appeal has a long and complicated history, dating
back to a 2007 divorce proceeding in Waukesha County. The debtorappellant, Christopher Trentadue, and his ex-wife divorced in 2007. In re
Trentadue, 527 B.R. 328, 330 (Bankr. E.D. Wis. 2015) (opinion below). After
their divorce was final, the two engaged in a bitter and drawn-out fight
involving disputes over custody, placement, and support of their children.
See id. Apparently, Mr. Trentadue was the primary aggressor in these
disputes, resulting in wasted time and excessive legal fees. (See Docket #3 at
31–51 (May 16, 2013 written decision of Waukesha County Circuit Court in
underlying divorce action, describing Mr. Trentadue’s litigation tactics)).
Thus, as a result of Mr. Trentadue’s “overtrial” of the issues in the case, the
Waukesha County Circuit Court ordered Mr. Trentadue to pay $25,000.00
directly to his ex-wife’s attorney, claimant-appellee Julie Gay. (Docket #3 at
50).
Mr. Trentadue never paid that amount to Ms. Gay; instead, he filed a
chapter 13 bankruptcy petition. See In re Trentadue, 527 B.R. at 331. Ms. Gay
filed her $25,000.00 claim in relation thereto, and in doing so specified that
the claim was a priority domestic support obligation (“DSO”) under 11
U.S.C. § 507(a)(1), and thus excepted from discharge and also entitled to

priority. Id. Mr. Trentadue objected to Ms. Gay’s claim, arguing that it should
not be classified as a DSO. Id. Ultimately, the presiding bankruptcy judge
sided with Ms. Gay and, thus, allowed the $25,000.00 claim as a DSO. Id. at
335.1
Mr. Trentadue has appealed that ruling. (See Docket #1). On appeal,
he maintains that Ms. Gay’s $25,000.00 claim cannot be classified as a DSO.
(See Docket #6, #12).2
So, what qualifies as a DSO? The term “domestic support obligation”
or “DSO” is defined by 11 U.S.C. § 101(14A) as:
a debt that accrues before, on, or after the date of the order of
relief in a case under this title, including interest that accrues
on that debt as provided under applicable nonbankruptcy law
notwithstanding any other provision of this title, that is—
(A)

owed to or recoverable by—
(i)

a spouse, former spouse, or child of the
debtor or such child’s parent, legal
guardian, or responsible relative; or

(ii)

a governmental unit;

1

Ms. Gay’s claim and Mr. Trentadue’s related objection remained pending
while Mr. Trentadue appealed the underlying award against him. The Wisconsin
Court of Appeals affirmed the award and declined Mr. Trentadue’s motion for
reconsideration, whereafter the Wisconsin Supreme Court denied Mr. Trentadue’s
petition for review. See In re Trentadue, 527 B.R. at 331.
2

There is no question that DSOs are entitled to first priority, 11 U.S.C.
§ 507(a)(1)(A). Accordingly, if Ms. Gay's $25,000.00 can properly be classified as a
DSO, then the bankruptcy court correctly allowed it as a priority claim.

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(B)

in the nature of alimony, maintenance, or
support (including assistance provided by a
governmental unit) 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—
(i)
(ii)

an order of a court of record; or

(iii)

(D)

a separation agreement, divorce decree,
or property settlement agreement;

a determination made in accordancewith
applicable nonbankruptcy law by a
governmental unit; and

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).
Both the bankruptcy court and Mr. Trentadue (now, on appeal) have
focused on the second of those requirements: that the debt be “in the nature
of alimony, maintenance, or support.” See In re Trentadue, 527 B.R. at 332;
(Docket #6 (focusing solely on whether Ms. Gay’s claim is in the nature of

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support)).3 The bankruptcy court determined that the fee award against Mr.
Trentadue was, in fact, “in the nature of support.” See In re Trentadue, 527 B.R.
at 333–35. Mr. Trentadue disagrees, asserting the Waukesha County Circuit

3

This is an interesting tactic, because there is also at least a colorable
argument that Ms. Gay might not satisfy the first requirement of 11 U.S.C.
§ 101(14A)(A). That first requirement provides that, to qualify as a DSO, a debt
must be “owed to or recoverable by…a spouse, former spouse, or child of the
debtor or such child's parent, legal guardian, or responsible relative.” 11 U.S.C.
§ 101(14A)(A)(i). Ms. Gay does not appear to satisfy any of those categories—she
is not Mr. Trentadue’s spouse, former spouse, or child; nor is she the parent, legal
guardian, or responsible relative of Mr. Trentadue’s child.
Now, to be sure, the Waukesha County Circuit Court ordered that Mr.
Trentadue “contribute $25,000.00 toward [his ex-wife]’s attorney fees.” So, perhaps,
the debt is, in fact, owed to Mr. Trentadue’s former spouse (despite the direction
that the award be paid directly to Ms. Gay). But, if that is the case, then shouldn’t
the ex-wife—as opposed to the ex-wife’s attorney—be the claimant?
Nonetheless, assuming that Mr. Trentadue owes the debt to Ms. Gay
directly, that may not ultimately pose a problem to Ms. Gay’s position. Courts from
this circuit have come down on both sides of the issue of whether debts owed to
third parties can qualify as DSOs. See, e.g., Levin v. Greco, 415 B.R. 663, 666-67 (N.D.
Ill. 2009) (listing cases that classify debts to third parties as DSOs, but citing all preBAPCPA cases) (citing In re Spong, 661 F.2d 6 (2d Cir. 1981) (excepting attorneys'
fees of debtor's spouse); In re Maddigan, 312 F.3d 589, 594 (2d Cir. 2002); In re Dvorak,
986 F.2d 940 (5th Cir. 1993) (both attorneys’ fees of debtor’s spouse and fees of
guardian ad litem); In re Kline, 65 F.3d 749 (8th Cir. 1995) (attorneys’ fees of debtor’s
spouse); In re Miller, 55 F.3d 1487 (10th Cir. 1995) (fees of guardian ad litem); In re
Chang, 163 F.3d 1138 (9th Cir. 1998) (both attorneys’ fees of spouse and fees of
guardian ad litem)); In re Bobinski, 517 B.R. 900, 904-05 (Bankr. N.D. Ind. 2014)
(disagreeing with the analysis in Levin).
This is an interesting question—and one that will, hopefully, be resolved;
but this is not the case in which to resolve it. Mr. Trentadue failed to raise the issue
below (see Docket #3 at 19–29) and also failed to assert it in this appeal (see, e.g.,
Docket #6, #12). Thus, he failed to preserve the issue and the Court will not address
it. See, e.g., In re Airadigm Comm’s, Inc., 616 F.3d 642, 653 (7th Cir. 2010); In re Kroner,
953 F.2d 317, 319 (7th Cir. 1992).

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Court had a single intention in issuing the award: to punish him. (See, e.g.,
Docket #6 at 5–18). Accordingly, in Mr. Trentadue’s opinion, the award could
not have been in the nature of support, and, therefore, the bankruptcy court
erred in reaching its decision. (See, e.g., Docket #6 at 5–18).
To prevail on appeal, Mr. Trentadue must demonstrate that the
bankruptcy court clearly erred in finding that the award was in the nature of
support. That is so for two reasons. First, on appeal, the Court reviews the
bankruptcy court’s factual findings for clear error. In re Marcus-Rehtmeyer,
784 F.3d 430, 436 (7th Cir. 2015) (citing In re Mississippi Valley Livestock, Inc.,
745 F.3d 299, 302 (7th Cir. 2014)). Second, though the Seventh Circuit has not
held as much, other courts have held that the question of whether a debt
constitutes a domestic support obligation is one of fact. See, e.g., In re Phegley,
443 B.R. 154, 156 (B.A.P. 8th Cir. 2011) (citing In re Tatge, 212 B.R. 604, 608 (8th
Cir. B.A.P. 1997); In re Kline, 65 F.3d 749, 750 (8th Cir. 1995); Adams v. Zentz,
963 F.2d 197, 200 (8th Cir. 1992); In re Williams, 703 F.2d 1055, 1056 (8th Cir.
1983)); Prensky v. Clair Greifer LLP, 2010 WL 2674039, at *3 (D.N.J. June 30,
2010); In re Duffy, 344 B.R. 237, 242 (S.D.N.Y. 2006); In re Clark, 441 B.R. 752,
755 (Bankr. M.D.N.C. 2011) (calling DSO determination a “fact specific
inquiry”) (citing In re Catron, 164 B.R. 912, 916 (E.D.Va. 1994), aff'd, 43 F.3d
1465 (4th Cir. 1994)).
This is a high bar for Mr. Trentadue to meet. To find clear error, the
Court must be “left with the definite and firm conviction that a mistake has
been committed.” Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985);
Reynolds v. Tangherlini, 737 F.3d 1093, 1104 (7th Cir. 2013). This will be the
case when “the [bankruptcy] judge’s interpretation of the facts is implausible,
illogical, internally inconsistent or contradicted by documentary or other
extrinsic evidence.” Furry v. United States, 712 F.3d 988, 992 (7th Cir. 2013)
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(internal quotation omitted) (citing EEOC v. Sears Roebuck & Co., 839 F.2d 302,
309 (7th Cir. 1988); Ratliff v. City of Milwaukee, 795 F.2d 612, 617 (7th Cir.
1986)). But, so long “as the [bankruptcy] court’s conclusions are ‘plausible in
light of the record viewed in its entirety,’ [the Court] will not disturb them.”
Reynolds, 737 F.3d at 1104 (quoting Fyrnetics (Hong Kong) Ltd. v. Quantum
Grp., Inc., 293 F.3d 1023, 1028 (7th Cir. 2002)).
The bankruptcy court’s task was to examine the Waukesha County
Circuit Court’s order awarding fees to determine the “intent” behind it.
8B C.J.S. Bankruptcy § 1073 (“Whether particular obligation under divorce
judgment is in nature of ‘domestic support obligation,’ as that term is used
in the Bankruptcy Code, depends not on the label attached to obligation, but
on purpose that it was intended to serve by court that fashioned it.”) (citing
In re Angelo, 480 B.R. 70 (Bankr. D. Mass. 2012)); see also Estate of Mayer v.
Hawe, 303 B.R. 375, 377 (E.D. Wis. 2003) (“in determining whether a debt
constitutes support…, a court must determine whether the debt was created
for the purpose of protecting the debtor’s family.”). The bankruptcy court
listed three factors that can be used to ascertain the intent of a state court:
(1) the language and substance of the order or agreement in the
context of the surrounding circumstances, using extrinsic
evidence if necessary; (2) the parties' financial circumstances at
the time of the order or agreement; and (3) the function served
by the obligation at the time of the order or agreement.
Trentadue, 527 B.R. 333–335 (citing Henry J. Sommer & Margaret Dee
McGarity, Collier Family Law and the Bankruptcy Code ¶ 6.04[2] (1991, Suppl.
2014); 9D Am. Jur. 2d Bankruptcy § 3646 (updated Aug. 2014)).
It then considered the facts in relation to those factors. In perhaps the
most relevant passage from its order, the bankrupcty court stated:

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Sometimes the court’s intent in creating an obligation is not
clear and must be inferred from surrounding circumstances
that gave rise to the obligation. Not so here. The state court
ordered the debtor to contribute $25,000.00 toward his
ex-wife’s attorney's fees because of his “overtrial,” and the
judge went into considerable detail faulting the debtor for his
conduct leading up to the litigation and in the litigation itself.
The debtor now wishes to take advantage of the judge’s focus
on his bad acts by having the award declared a non-DSO,
intended as punishment rather than for the support of anyone.
He does not dispute, however, that the fees were incurred in
litigation relating to the care, custody, and welfare of the minor
children of the marriage, although most of the issues litigated
were noneconomic. Accordingly, this award was not
“punishment,” as the debtor tries to characterize it. That might
have been the case if, for example, the debtor was sanctioned
solely for disruptive behavior in court or withholding
documents from discovery. However, this award was directly
related to his unnecessarily protracted litigation over the
welfare of his children and the detrimental effect of his conduct
on them. The purpose was to compensate for the harm he had
done, but it was not punishment per se.
Trentadue, 527 B.R. at 333–34. The bankruptcy court went on to note that the
Waukesha County Circuit Court did not reference the financial resources of
Mr. Trentadue and his ex-wife, but found that to be non-dispositive. Id. at
334. The bankruptcy went on to find that the Waukesha County Circuit
Court’s order did “not go so far into the realm of pure punishment,” that it
could not be considered in the nature of support. Id. at 335.
None of those findings are clearly erroneous. To begin, the bankruptcy
court was correct that the award against Mr. Trentadue related to fees
“incurred in litigation relating to the care, custody, and welfare of the minor
children of the marriage.” Id. at 333. The bankruptcy court also considered
but discounted the fact that the Waukesha County Circuit Court did not
discuss the parties’ respective finances; that was permissible, because the test
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for intent is not clearly defined in the law—at most, it involves consideration
of factors. See, e.g., Trentadue, 527 B.R. 333–335 (describing three factors)
(citing Henry J. Sommer & Margaret Dee McGarity, Collier Family Law and the
Bankruptcy Code ¶ 6.04[2] (1991, Suppl. 2014); 9D Am. Jur. 2d Bankruptcy
§ 3646 (updated Aug. 2014)); In re Nolan, 2010 WL 3926870 *2 (D. Minn. 2010)
(describing other factors to be considered). Finally, the bankruptcy court’s
finding that the award was not “pure punishment” or was not “punishment
per se” was not clearly erroneous. While the Waukesha County Circuit Court
certainly was very critical of Mr. Trentadue’s actions—even finding certain
actions to be a clear case of contempt (Docket #3 at 41)—it ultimately did not
hold him in contempt, and instead issued an award against him for
“overtrial.” As the Court will discuss further, overtrial awards can be issued
on the basis of compensating a party for fees incurred in response to its
opposing party’s overlitigation. In short, the Court cannot identify any errors
(let alone clear errors) in the bankruptcy court’s determination that the fee
award was in the nature of support.
Perhaps Mr. Trentadue is arguing that the bankruptcy court should
have used another set of factors to determine the intent of the Waukesha
County Circuit Court, but that argument goes nowhere because the factors
he lists come from cases that are merely persuasive. (See Docket #6 at 13–14
(citing to cases from the Eighth Circuit regarding other factors used to
determine intent)).
Mr. Trentadue does argue that “the Bankruptcy Court’s legal
conclusions as to whether the state court doctrine of overtrial can lead to an
award that is in the nature of support.” (Docket #6 at 1, 7–8). The Court
understands him to be arguing that any award for overtrial per se cannot be
in the nature of support. It is not clear why that would be the case. “The
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policy underpinning an overtrial attorney’s fees award is to compensate the
overtrial victim for fees unnecessarily incurred because of the other party’s
litigious actions.” Johnson v. Johnson, 199 Wis. 2d 367, 377, 545 N.W.2d 239,
243 (Ct. App. 1996) (citation omitted); Ondrasek v. Ondrasek, 126 Wis. 2d 469,
484, 377 N.W.2d 190, 196 (Ct. App.1985) (“As a matter of sound policy, an
innocent party who is the victim of ‘overtrial’ should not be burdened with
the payment of extra and unnecessary attorney fees occasioned by the other
party.”). In other words, overtrial awards are not intended solely (or even
primarily) to punish, but instead are directed at compensating a party who
has suffered an opposing party’s overlitigation. So long as that overlitigation
occurred in relation to a proceeding regarding a child’s welfare—as was the
case here—it is not clear why an award to compensate therefor could per
se not be in the nature of support.
Finally, the Court points out that most other courts to have considered
the issue of whether attorney fees incurred in litigation related to a child’s
welfare are in the nature of support. See, e.g., Macy v. Macy, 114 F.3d 1 (1st
Cir. 1997); In re Maddigan, 312 F.3d 589, 594 (2d Cir. 2002); In re Peters, 964
F.2d 166, 167 (2nd Cir. 1992); In re Hudson, 107 F.3d 355, 357 (5th Cir. 1997);
Rogers v. Morin, 189 F. App’x 299, 302 (5th Cir. 2006); In re Dvorak, 986 F.2d
940, 941 (5th Cir. 1993); In re Rehkow, 2006 WL 6811011, at *3-4 (B.A.P. 9th Cir.
Aug. 17, 2006) aff'd, 239 F. App’x 341 (9th Cir. 2007); In re Catlow, 663 F.2d
960, 963 (9th Cir. 1981); In re Miller, 55 F.3d 1487, 1490 (10th Cir. 1995); In re
Jones, 9 F.3d 878, 882 (10th Cir. 1993); In re Ratcliff, 195 B.R. 466, 468 (Bankr.
C.D. Cal.1996); In re Gionis, 170 B.R. 675, 683 n. 11 (9th Cir. B.A.P. 1994), aff'd
92 F.3d 1192 (9th Cir. 1996); Prensky v. Clair Greifer LLP, 2010 WL 2674039
(D.N.J. June 30, 2010); In re Johnson, 445 B.R. 50, 58-60 (Bankr. D. Mass. 2011);

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In re Tarone, 434 B.R. 41 (Bankr. E.D.N.Y. 2010); In re Andrews, 434 B.R. 541
(Bankr. W.D. Ark. 2010); In re Papi, 427 B.R. 457 (Bankr. N.D. Ill. 2010); In re
Sullivan, 423 B.R. 881 (Bankr. E.D. Mo. 2010); In re Fricke, 2010 WL 5475808
(Bankr. N.D. Ill. Dec. 30, 2010). Thus, here, where the award was based upon
“findings of overtrial” and Mr. Trentadue was ordered “to contribute
$25,000.00 toward [his ex-wife]’s attorney fees,” it seems clear that the award
is readily classifiable as being in the nature of support.
In short, the Court cannot find any factual or legal errors in the
bankruptcy court’s order.
Accordingly,
IT IS ORDERED that the decision of the bankruptcy court be and the
same is hereby AFFIRMED; and
IT IS FURTHER ORDERED that this appeal be and the same is
hereby DISMISSED.
The Clerk of Court is directed to enter judgment accordingly.
Dated at Milwaukee, Wisconsin, this 31st day of August, 2015.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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