Elawyers Elawyers
Washington| Change

In re: Matthew Banks Ashworth, CC-12-1591-TaDPa (2013)

Court: United States Bankruptcy Appellate Panel for the Ninth Circuit Number: CC-12-1591-TaDPa Visitors: 6
Filed: Dec. 16, 2013
Latest Update: Mar. 02, 2020
Summary: , 1 INTRODUCTION, 2 Chapter 131 debtor Matthew Ashworth appeals from the, 3 bankruptcy courts order overruling Ashworths objection to the, 4 proof of claim for domestic support obligations filed by his, 5 ex-spouse, Kathryn Ehrgott.or child of the debtor ., (ii) an order of a court of record, 25 .
                                                            FILED
                                                             DEC 16 2013
 1
                                                         SUSAN M. SPRAUL, CLERK
 2                                                         U.S. BKCY. APP. PANEL
                                                           OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )       BAP No. CC-12-1591-TaDPa
                                   )
 6   MATTHEW BANKS ASHWORTH,       )       Bk. No. 11-10946-RK
                                   )
 7                  Debtor.        )
     ______________________________)
 8                                 )
     MATTHEW BANKS ASHWORTH,       )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )       MEMORANDUM*
11                                 )
     KATHRYN EHRGOTT; AMRANE COHEN,)
12   Chapter 13 Trustee,           )
                                   )
13                  Appellees.     )
     ______________________________)
14
                    Argued and Submitted on November 22, 2013
15                           at Pasadena, California
16                          Filed - December 16, 2013
17               Appeal from the United States Bankruptcy Court
                     for the Central District of California
18
              Honorable Robert N. Kwan, Bankruptcy Judge, Presiding
19                       ________________________________
20   Appearances:     Richard G. Heston of Heston & Heston for Appellant
                      Matthew Banks Ashworth; Scott H. Talkov of Reid &
21                    Hellyer, APC for Appellee Kathryn Ehrgott.
                       __________________________________
22
     Before: TAYLOR, DUNN, and PAPPAS, Bankruptcy Judges.
23
24
25
26
          *
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.
 1                              INTRODUCTION
 2        Chapter 131 debtor Matthew Ashworth appeals from the
 3   bankruptcy court’s order overruling Ashworth’s objection to the
 4   proof of claim for domestic support obligations filed by his
 5   ex-spouse, Kathryn Ehrgott.   Ashworth objected, not to the
 6   amount, but to § 507(a)(1)(A) priority classification of the
 7   claim, asserting that the claim is, instead, a general unsecured
 8   claim based on a pre-petition settlement of a civil action that
 9   Ehrgott filed against him for personal injury.   He argued that
10   the parties settled the civil action concurrently and in
11   conjunction with their divorce settlement and that they did not
12   intend any of the obligation to be for domestic support.
13        The bankruptcy court held a trial at which it considered
14   testimony and evidence regarding what the parties intended at the
15   time they agreed to the settlement terms.   The bankruptcy court
16   followed the controlling Ninth Circuit authority established in
17   Friedkin v. Sternberg (In re Sternberg), 
85 F.3d 1400
(9th Cir.
18   1996) and determined that Ehrgott proved by a preponderance of
19   the evidence that, at the time of the parties’ stipulated
20   agreement, they intended the entire obligation to be for
21   Ehrgott’s support.   We conclude that the bankruptcy court
22   committed no error and AFFIRM.
23
24
25
26
          1
            Unless specified otherwise, all chapter and section
27   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
     all “Rule” references are to the Federal Rules of Bankruptcy
28   Procedure, Rules 1001-9037.

                                      - 2 -
 1                            BACKGROUND FACTS2
 2        Ashworth and Ehrgott3 married in Georgia in 1999.    During
 3   the marriage, Ashworth worked in the banking industry and
 4   received multiple promotions with substantial increases in salary
 5   and bonuses.   Ehrgott worked as a school teacher for the first
 6   three years of the marriage, but remained at home after the birth
 7   of their first child.
 8        In April 2005, the parties separated and Ehrgott filed for
 9   divorce in Tennessee, where they resided at the time.    In
10   December 2005, during the pendency of the divorce proceeding,
11   Ehrgott also filed a civil action against Ashworth in the
12   Chancery Court for Knox County, Tennessee (the “Civil Action”),
13   seeking $10 million in general and punitive damages for battery,
14   fraud, intentional and negligent infliction of emotional
15   distress, and negligence.4   Later that month, Ehrgott gave birth
16   to the parties’ second child.
17        The Tennessee divorce court issued several orders that
18   required Ashworth to pay child support and alimony to Ehrgott
19   during the pendency of the divorce.     In 2006, Ashworth’s annual
20   salary was $150,000, while Ehrgott had no outside source of
21   income and cared for their two young children.
22
          2
23          We base the background facts, which are not in dispute, on
     the Joint Pretrial Order entered by the bankruptcy court on
24   January 13, 2012 (“JPTO”).
25        3
            Ehrgott is Ashworth’s ex-spouse’s current name, after
     remarriage.
26
          4
            In support of her claims in the Civil Action, Ehrgott
27   alleged that Ashworth contracted herpes simplex 1 as a result of
     an extramarital affair and transmitted it to her. Ashworth later
28   stipulated that he infected Ehrgott with the virus.

                                     - 3 -
 1        Eventually, the parties appeared in response to notices of
 2   deposition in the Civil Action.   At that time and with counsel
 3   present, the parties discussed and then entered into a settlement
 4   of all claims that arose in the divorce proceeding and the Civil
 5   Action.   The parties recited the settlement terms, which were
 6   stenographically recorded, and then filed them in the form of a
 7   Final Judgment in the divorce proceeding.
 8        In the Final Judgment, the divorce court accepted the
 9   agreement of the parties “for the settlement of property rights
10   and the equitable division of their marital property.”
11   Dkt. #24-1 at 2.   As relevant here,5 Ashworth agreed and was
12   ordered to pay to Ehrgott the sum of $306,000 as alimony (the
13   “$306,000 Obligation”), payable in the amount of $1,500 per month
14   commencing November 1, 2006 and ending December 31, 2023 (a
15   period of over 17 years).   For the period of time between
16   November 1, 2006 and May 31, 2008, however, Ashworth was required
17   to pay only $1,000 per month, accruing the balance of $500 per
18   month.    The deferred alimony incurred interest at the rate of 8%,
19   with the unpaid total due on or before December 31, 2008.
20        The Final Judgment provides that Ashworth’s “alimony
21   obligation” is “not dischargeable in bankruptcy and terminates
22   only upon the death of [Ehrgott]” or upon full payment.
23   Dkt. #24-1 at 5.   It further required Ashworth to obtain a life
24   insurance policy insuring the full amount, prohibited
25   modification of the amount, and provided that the paid amounts be
26
27        5
            Parenting and child support issues were addressed
     separately in a Permanent Parenting Plan, but fully incorporated
28   into, and ordered and decreed by, the Final Judgment.

                                     - 4 -
 1   tax deductible by Ashworth and reportable as taxable income by
 2   Ehrgott.
 3        Three paragraphs of the Final Judgment directly or
 4   indirectly refer to the resolution of the Civil Action.
 5   Paragraph 17 assigns responsibility to Ashworth for any uninsured
 6   expenses Ehrgott incurred related to medical treatment for
 7   herpes, while requiring Ehrgott to make reasonable efforts to
 8   maintain her own health insurance coverage.   Paragraph 18 recites
 9   Ehrgott’s agreement to sign a release and to dismiss the Civil
10   Action.    And the final paragraph provides for Ashworth to pay all
11   costs associated with both the divorce and the Civil Action.6
12        As agreed, Ehrgott executed a written “Release” of the
13   claims asserted in the Civil Action.    The Release provides that
14   Ehrgott executed it “in consideration of the payment to [her] of
15   the sum of One Dollar ($1.00), and other good and valuable
16   consideration, as set forth in a transcript of the Agreed
17   Settlement, dated September 29, 2006, and the Final Judgment
18   . . . .“   Dkt. #24-3 at 2.
19        Ehrgott remarried in August 2007 and not long thereafter she
20   relocated with the parties’ minor children to Indiana, with
21   permission of the Tennessee divorce court and over Ashworth’s
22   objection.   In 2009 and 2010, the parties litigated over child
23   support or alimony issues in multiple Indiana and Tennessee
24
25
26        6
            The Final Judgment also provides for Ashworth to pay, “as
     alimony,” $40,000 of Ehrgott’s attorney’s fees directly to her
27   attorney in five equal annual payments. Dkt. #24-1 at 6. And it
     labeled such payments as “a domestic support obligation” that is
28   “nondischargeable in bankruptcy.” 
Id. - 5
-
 1   courts.7
 2        Ashworth made the required monthly payments to Ehrgott on
 3   the $306,000 Obligation up until mid-2009.8   On January 7, 2011,
 4   Ehrgott filed a notice of entry of sister-state judgment in
 5   Orange County Superior Court,9 to collect on the $306,000
 6   Obligation.10   Ashworth filed a chapter 13 petition on
 7   January 21, 2011, in the Central District of California.
 8        Ehrgott filed proof of claim no. 2 in Ashworth’s bankruptcy
 9   case, seeking priority for a domestic support obligation under
10   § 507(a)(1)(A) in the amount of $259,682.81 (the “Claim”).    She
11   attached copies of a payment history spreadsheet and the Final
12
          7
            Ehrgott first registered the child support order for
13   enforcement in Indiana, and amounts were ordered withheld from
     Ashworth’s wages. Ashworth unsuccessfully petitioned in Indiana
14   to stay the child support withholding order. The Indiana court
     thereafter entered a revised child support withholding order,
15   from which Ashworth appealed, arguing that his payments on the
     $306,000 Obligation should be deducted from his income when
16   calculating child support payments. Ashworth also petitioned the
     Tennessee court to extinguish the $306,000 Obligation on various
17   grounds. The Tennessee court denied Ashworth’s petition and
     specifically found that the lump sum alimony agreed upon by the
18   parties did not violate public policy. The court thereafter
     dismissed Ashworth’s petition as a matter of law. The Tennessee
19   court also stated that it would not entertain any further
     petitions seeking to modify the $306,000 Obligation. Thereafter,
20   the Indiana Court of Appeals reversed the Indiana trial court’s
     child support order, agreeing with Ashworth that the payments on
21   the $306,000 Obligation should reduce his child support payments.
22        8
            Ashworth’s payments did not resume until 2011 when
     garnishment of his paychecks commenced pursuant to the
23   garnishment order obtained by Ehrgott in February 2011 for
     support and unpaid arrears on the $306,000 Obligation. Ashworth
24   testified that the garnishment continued during his chapter 13
     case.
25
          9
            The record is not clear, but at some point Ashworth moved
26   to and now resides in California.
27        10
            Ehrgott shortly thereafter commenced garnishment of
     Ashworth’s wages for support and unpaid arrears on the $306,000
28   Obligation.

                                    - 6 -
 1   Judgment.       Ashworth objected to the Claim (“Claim Objection”),
 2   commencing a contested matter.
 3           After completion of discovery11 the parties submitted the
 4   JPTO.        Ashworth and Ehrgott presented their direct testimony by
 5   declarations, and the bankruptcy court held trial on the Claim
 6   Objection on April 19, 2012.       The bankruptcy court ultimately
 7   filed and entered its Memorandum Decision finding that the Claim
 8   was a domestic support obligation.          The Order Overruling Debtor’s
 9   Objection to Claim No. 2 was entered on November 2, 2012
10   (“Order”), and Ashworth timely filed a notice of appeal from the
11   Order.
12                                   JURISDICTION
13           The bankruptcy court had jurisdiction under 28 U.S.C.
14   §§ 1334, 157(b)(1), and 157(b)(2)(B).
15           Ehrgott argues in her opening brief that we lack
16   jurisdiction to hear this appeal based on mootness.         She contends
17   that the appeal is moot due to two motions filed in the
18   bankruptcy court in February 2013 for dismissal of Ashworth’s
19   bankruptcy case.12       Notably, Ehrgott does not contend that the
20   case has been dismissed, and, in fact, the bankruptcy case
21
22
23
             11
            Also during the interlude between the filing of the Claim
24   Objection and trial, Ehrgott filed a motion for relief from stay
     seeking authority to allow her to seek determination of the
25   nature of the $306,000 Obligation from the state court in
     Tennessee handling the family law matter. The bankruptcy court
26   denied Ehrgott’s relief from stay motion.
27           12
            Ashworth filed an ex parte request for voluntary
     dismissal, then Ehrgott filed a motion for dismissal with
28   prejudice to re-filing.

                                         - 7 -
 1   remains pending.13
 2        We lack jurisdiction to hear a moot appeal.    IRS v. Pattullo
 3   (In re Pattullo), 
271 F.3d 898
, 901 (9th Cir. 2001).    Our
 4   mootness inquiry necessarily focuses on whether we can still
 5   grant effective relief between the parties.   
Id. Here, Ehrgott
 6   fails to argue or allege facts from which we might conclude that
 7   no relief is available.
 8        Based on the current posture of the case, we conclude that
 9   Ehrgott’s mootness contention is factually not well taken.    As
10   long as the bankruptcy case remains pending, the claims allowance
11   process and decisions related thereto directly impact Ashworth’s
12   ability to confirm or perform under a chapter 13 plan, and relief
13   from this Panel is available.   Therefore, the appeal is not moot,
14   and we have jurisdiction under 28 U.S.C. § 158(a)(1).
15                                   ISSUE
16        Whether the bankruptcy court erred when it determined that
17   the Claim was in the nature of support and therefore a “domestic
18
19        13
            We have exercised our discretion to consult the
     bankruptcy court’s docket in Debtor’s bankruptcy case to assist
20   us in ascertaining the relevant facts and procedural background.
     O’Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 
887 F.2d 21
  955, 959 (9th Cir. 1989). We note that Ashworth withdrew his
     request for dismissal and filed a motion seeking to modify or
22   suspend his unconfirmed chapter 13 plan. Ashworth’s motion seeks
     suspension of up to 34 pre-confirmation plan payments, pending
23   the outcome of this appeal. The chapter 13 trustee filed an
     opposition. To date, the bankruptcy court has not ruled on
24   Ehrgott’s motion to dismiss or on Ashworth’s motion to suspend
     payments, but rather continued the scheduled hearings on the
25   pending matters multiple times. The bankruptcy court most
     recently continued the hearings on both pending motions to
26   January 2014. Also continued for hearing in January 2014 is
     Ehrgott’s motion seeking recovery of attorney’s fees against
27   Ashworth under Tennessee law for enforcement of support
     obligations and under bankruptcy law for opposing Ashworth’s
28   alleged bad faith bankruptcy filing.
                                     - 8 -
 1   support obligation” under § 101(14A) entitled to priority under
 2   § 507(a)(1)(A).
 3                          STANDARD OF REVIEW
 4        We review the bankruptcy court's legal conclusions de novo
 5   and its findings of fact for clear error.   See Allen v. US Bank,
 6   NA (In re Allen), 
472 B.R. 559
, 564 (9th Cir. BAP 2012) (“‘An
 7   order overruling a claim objection can raise legal issues (such
 8   as the proper construction of statutes and rules) which we review
 9   de novo, as well as factual issues (such as whether the facts
10   establish compliance with particular statutes or rules), which we
11   review for clear error.’”)(internal citation omitted).    In the
12   context of this appeal, “[w]e review the bankruptcy court’s
13   factual determination that a debt was for alimony, maintenance,
14   or support for clear error.”   See Seixas v. Booth (In re Seixas),
15   
239 B.R. 398
, 401 (9th Cir. BAP 1999).   Review under the clearly
16   erroneous standard is significantly deferential and requires us
17   to accept the bankruptcy court’s findings unless we have a
18   definite and firm conviction that a mistake has been made.
19   United States v. Syrax, 
235 F.3d 422
, 427 (9th Cir. 2000).     We
20   will affirm unless the bankruptcy court’s findings were
21   illogical, implausible, or without support in the record.     United
22   States v. Hinkson, 
585 F.3d 1247
, 1261-62 (9th Cir. 2009).     The
23   bankruptcy court’s choice among multiple plausible views of the
24   evidence cannot be clear error.   United States v. Elliott,
25   
322 F.3d 710
, 714 (9th Cir. 2003).
26                              DISCUSSION
27        Ashworth based the Claim Objection on his contention that
28   the $306,000 Obligation was not in the nature of support, but

                                    - 9 -
 1   instead was intended as settlement of the Civil Action, and
 2   therefore not entitled to priority.      The bankruptcy court
 3   considered the testimony and other evidence at trial and found
 4   the obligation, instead, to be in the nature of support.        We find
 5   no clear error in the bankruptcy court’s decision.
 6   A.   Legal standards.
 7        The Bankruptcy Code, in relevant part, grants first priority
 8   status for unsecured claims for domestic support obligations that
 9   are owed to or recoverable by a former spouse.     See
10   § 507(a)(1)(A).    The term “domestic support obligation” is
11   defined in § 101(14A).14    Section 507(a)(1) was amended and
12
13        14
               Section 101(14A) provides, in relevant part, as follows:
14        The term “domestic support obligation” means a debt
          that accrues before, on, or after the date of the order
15        for relief in a case under this title, including
          interest that accrues on that debt as provided under
16        applicable nonbankruptcy law notwithstanding any
          provision under this title, that is,
17             (A) owed to or recoverable by–
                    (i) a spouse, former spouse, or
18                  child of the debtor . . .
               (B) in the nature of alimony, maintenance, or
19             support . . . of such spouse, former spouse,
               or child of the debtor . . . without regard
20             to whether such debt is expressly so
               designated;
21             (C) established or subject to establishment
               before, on, or after the date of the order
22             for relief in a case under this title, by
               reason of applicable provisions of–
23                  (i) a separate agreement, divorce
                    decree, or property settlement
24                  agreement;
                    (ii) an order of a court of record
25                  . . .
               (D) not assigned to a nongovernmental entity,
26             unless that obligation is assigned
               voluntarily by the spouse, former spouse,
27             child of the debtor, or such child’s parent,
               legal guardian, or responsible relative for
28             the purpose of collecting the debt.
                                     - 10 -
 1   § 101(14A) was added as part of the Bankruptcy Abuse Prevention
 2   and Consumer Protection Act of 2005 (“BAPCPA”).
 3        Of the four elements set forth in § 101(14A), the parties
 4   here dispute only one – whether the $306,000 Obligation is in the
 5   nature of alimony or support.      Courts addressing the issue of
 6   whether a debt is actually in the nature of alimony or support
 7   rely on pre-BAPCPA case law construing the phrase as contained in
 8   § 523(a)(5).15    See Beckx v. Beckx (In re Beckx), 2009 Bankr.
 
9 LEXIS 4584
at *16 (9th Cir. BAP 2009) (citing Wis. Dep’t of
10   Workforce Dev. v. Ratliff, 
390 B.R. 607
, 612 (E.D. Wis. 2008)).
11   And such a determination is a “factual determination made by the
12   bankruptcy court as a matter of federal bankruptcy law.”
13   Beaupied v. Chang (In re Chang), 
163 F.3d 1138
, 1140 (9th Cir.
14   1998).    Where the obligation arises as a result of a settlement
15   agreement, “the intent of the parties at the time the settlement
16   agreement is executed is dispositive.”     
Sternberg, 85 F.3d at 17
  1405 (citations omitted).    This factual finding of intent is
18   reviewed for clear error.    
Id. 19 In
order to make the factual finding of intent, Sternberg
20   instructs that:
21        A trial court should consider several factors in
          determining how the parties intended to characterize
22        the obligation. Foremost, the trial court should
          consider whether the recipient spouse actually needed
23        spousal support at the time of the divorce. In
          determining whether spousal support was necessary, the
24        trial court should examine if there was an “imbalance
          in the relative income of the parties” at the time of
25        the divorce decree. The trial court should also
          consider whether the obligation terminates upon the
26        death or remarriage of the recipient spouse and whether
27
          15
            Section 523(a)(5) excepts from discharge any debt “for a
28   domestic support obligation.”
                                     - 11 -
 1        the payments are “made directly to the recipient spouse
          and are paid in installments over a substantial period
 2        of time.” Finally, the labels given to the payments by
          the parties may be looked at as evidence of the
 3        parties’ intent.
 4   
Id. (internal citations
omitted).
 5   B.   The bankruptcy court’s determination that the $306,000
          Obligation is in the nature of support is not clearly
 6        erroneous.
 7        The undisputed evidence established that at the time of the
 8   parties’ settlement in 2006, Ehrgott needed support and Ashworth
 9   had the ability to pay it.   When Ehrgott filed for divorce in
10   2005 she was an unemployed stay-at-home mother of a two-year-old
11   and pregnant with her second child.      Ashworth, on the other hand,
12   was an employed banker with a salary of $150,000.     Ashworth
13   offered no evidence to rebut the evidence of the large imbalance
14   between the parties’ incomes.
15        Other factors also support the bankruptcy court’s conclusion
16   that the claim was on account of a support obligation.     The
17   parties labeled the $306,000 Obligation as support in a
18   settlement where both were represented by counsel.     The Final
19   Judgment allowed Ashworth to claim the payments as alimony on his
20   tax returns and required Ehrgott to report the payments as
21   taxable income.   As the bankruptcy court reasoned, inconsistent
22   positions Ashworth took – his deduction of payments as alimony on
23   tax returns and argument in Indiana that such payments should
24   reduce his child support, versus his argument postbankruptcy that
25   the payments are not alimony or support – are also probative of
26   their characterization as spousal support.
27        The bankruptcy court noted that some factors arguably were
28   inconsistent with a characterization of the $306,000 Obligation

                                     - 12 -
 1   as support.   The fact that the $306,000 Obligation terminates
 2   upon Ehrgott’s death, but not on her remarriage may be equivocal
 3   and could mean the parties intended the $306,000 Obligation not
 4   to be support.   The bankruptcy court also noted that Ehrgott’s
 5   concern that the disease she acquired from Ashworth could
 6   preclude her from attracting desirable partners, thereby
 7   contributing to her desire for monetary protection, provided some
 8   evidence that her intent, in part, was to seek monetary
 9   compensation for the personal injury as opposed to support.
10   Finally, the bankruptcy court considered and recognized
11   Ashworth’s arguments that he intended the $306,000 Obligation
12   solely as settlement of the Civil Action and would not have
13   entered into the settlement but for dismissal of the Civil
14   Action.16
15        Ultimately, the bankruptcy court found that on balance
16   Ehrgott met her burden by a preponderance of the evidence in
17   showing that:
18        [S]he actually needed spousal support at the time of
          the divorce, that the obligation terminated on her
19        death, that the payments of the obligation were to be
          made directly to her and are paid in installments over
20        a substantial period of time and that the parties in
          their settlement agreement reflected in the Final
21        Judgment gave the obligation the label of alimony, or
          support. . . .
22
23   Memorandum Decision, Dkt. #125 at 25:25-28, 26:1.   It recognized
24
          16
            The bankruptcy court also acknowledged the undisputed
25   facts that Ehrgott remarried less than one year after entry of
     the Final Judgment, and remains married; returned to school and
26   obtained a graduate degree in social work in 2006-07; and gained
     employment in the field of social work in 2009. The bankruptcy
27   court gave no weight to these facts, however, as it appropriately
     recognized the relevant inquiry to be Ehrgott’s need for support
28   at the time of the divorce.
                                   - 13 -
 1   that the monthly payments of $1500 on the $306,000 Obligation are
 2   consistent with support obligations, although typically support
 3   obligations are modifiable based on changed circumstances.17     The
 4   bankruptcy court found that the amount was not “disproportionate
 5   if considered in the light of providing support for a single
 6   parent with two dependent minor children and without employment”
 7   (id. at 21:23-25) and that termination of the payments in 2023,
 8   when the parties’ second child turns 18, was consistent with the
 9   need for support in child-rearing years.   The bankruptcy court
10   concluded that “[t]here is simply no way to look past the
11   evidence that [Ehrgott] was in a state of need at the time of the
12   divorce.”   
Id. at 26:4-5.
  And, even though other factors in the
13   Sternberg test “point in different directions, . . . on balance,
14   [the factors] indicate that the obligation was in the nature of
15   support.”   
Id. at 26:22-23.
16        On appeal, Ashworth states that he takes no issue with the
17   bankruptcy court’s factual findings.    He implicitly argues
18   however, that the bankruptcy court’s ultimate factual finding is
19   error in light of the unique facts here.   Without citation to the
20   record or allegation of specific error by the bankruptcy court,
21   he makes a new argument on appeal that, in the context of a
22   global settlement of multiple claims, the bankruptcy court should
23   consider whether the obligation in question continues to meet a
24   former spouse’s reasonable need for support.   Ashworth argues
25   that not to do so can result in an unjust windfall at the expense
26
          17
            The bankruptcy court reviewed the Tennessee statutory
27   provisions governing lump sum alimony awards and found them not
     inconsistent with the policy behind the definition under the
28   Bankruptcy Code.
                                    - 14 -
 1   of other general unsecured creditors.18   Ashworth, however,
 2   presented neither argument nor evidence of need-based support
 3   versus non-need-based support - he only argued to the bankruptcy
 4   court that none of the settlement was intended to serve as
 5   support.   As Ashworth did not present this argument to the
 6   bankruptcy court, it is not properly raised for the first time on
 7   appeal.
 8        We also decline to consider Ashworth’s newly raised argument
 9   that perhaps some part of the $306,000 Obligation was not in the
10   nature of support.   Ashworth argued “all or nothing” to the
11   bankruptcy court and may not properly raise this issue for the
12   first time on appeal.
13        We conclude, based on our review of the record before us and
14   consideration of the properly presented issues, that the
15   bankruptcy court’s determination that the $306,000 Obligation is
16   in the nature of support, and thus entitled to priority, is
17   neither illogical nor implausible and is well supported by the
18   record.    We, therefore, find no reversible error.
19
20
          18
            In support of this contention, Ashworth argued, both in
21   his brief and by counsel at oral argument in this appeal, that
     classification of the $306,000 Obligation as a priority claim in
22   his chapter 13 case requires that the entire claim amount be paid
     in full during the chapter 13 case. This question was not
23   presented to nor addressed by the bankruptcy court, nor do we
     consider it here. We note, however, that Ashworth cites no legal
24   authority for the proposition that a judgment debtor’s bankruptcy
     filing requires that all future (i.e. postpetition) payments
25   payable under a contractually based judgment for a fixed
     term/fixed amount domestic support obligation must be accelerated
26   despite the judgment’s requirement that payments be made monthly
     over a fixed term. Nor have we located any such authority. See
27   In re Hutchens, 
480 B.R. 374
, 383-84 (Bankr. M.D. Fla. 2012)
     (analyzing pre- and postpetition domestic support obligations
28   separately).
                                    - 15 -
 1   C.   We decline to award attorney’s fees requested by Ehrgott.
 2        In her opening brief, Ehrgott urges this Panel to award her
 3   attorney’s fees on appeal as allowed by Tennessee law.   Ehrgott
 4   bases her request on the fact that Ashworth previously litigated
 5   support in other courts, and on various allegations of improper
 6   motives and speculation about what Ashworth plans to do in the
 7   future.   We decline to exercise our discretion to award to
 8   Ehrgott any attorney’s fees on this record.   This denial is
 9   without prejudice to Ehrgott seeking recovery in the bankruptcy
10   court or in state court.
11                               CONCLUSION
12        Based on the foregoing, we AFFIRM.
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

                                   - 16 -

Source:  CourtListener

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer