THOMAS P. AGRESTI, Chief Judge.
Plaintiff, Mary Lynn Kennedy ("Wife"), is the ex-wife of Debtor/Defendant, Donald W. Kennedy ("Husband"). Wife initiated this adversary proceeding on February 8, 2010 by filing a Complaint to Determine Dischargeability of Debt Pursuant to 11 U.S.C. § 523(a)(15) ("Complaint"). The Complaint pertains to certain unpaid obligations which Husband owes Wife pursuant to a "Final Decree" that was entered on September 2, 2008, concluding the Parties' divorce action previously pending in the Crawford County Court of Common Pleas.
The Complaint asks that the Court declare the obligations to be non-dischargeable under 11 U.S.C. § 523(a)(15)
11 U.S.C. § 523(a)(15). Section 523(a)(5) excepts from discharge debts resulting in a "domestic support obligation," a term defined by 11 U.S.C. § 101(14A).
When Husband filed his Answer he correctly pointed out a subtle, yet critical, distinction involving the discharge of debt arising from divorce related matters in a Chapter 13 bankruptcy proceeding. While the Section 523(a)(15) exception to discharge generally applies to discharges in cases under Chapters 7 and 11, as to Chapter 13 cases, it applies only to hardship discharges under Section 1328(b). See In re Blackburn, 412 B.R. 710 (Bankr. W.D.Pa.2009) (discussing the applicability of Section 523(a)(15) to discharges under Chapters 7, 11 and 12, but not Chapter 13). With respect to a "normal" discharge granted upon completion of a Chapter 13 plan, debts described in Section 523(a)(15) are not excepted from discharge although debts under Section 523(a)(5) are excepted from discharge. See Section 1328(a)(2).
At the Pretrial Conference held in this matter on April 21, 2010, the Parties advised the Court that they believed the matter could be decided on stipulated facts. Based on that representation, the Court issued an order directing the Parties to file such a stipulation as well as accompanying briefs and allowing each a further opportunity to request an evidentiary hearing by May 21st if for some reason they changed their view as to the need for such a hearing.
On June 16, 2010, Husband filed a brief in support of his position essentially reiterating the distinction set forth in his Answer as to the extent of the various, available discharges but adding that the basis for differing treatment of Section 523(a)(15) debts in Chapter 7 and Chapter 13 cases was supported by the "longstanding legislative intent" to provide broader relief to debtors in the latter instance. Wife filed her brief on June 30, 2010, and for the first time argued that Husband's obligation pursuant to the Final Decree should be "properly characterized as a domestic support obligation under 523(a)(5) versus a mere division of property under 523(a)(15)." Plaintiff's Brief in Support of Combined Pretrial Statement, Document No. 16, at 8.
In response, on July 7, 2010, Husband filed a motion for leave to file a supplemental brief pointing out that the Complaint itself was strictly limited to Section 523(a)(15) and that the factual stipulation of the Parties clearly stated that $94,466.20 of the amount at issue represented an equitable distribution award. On July 12, 2010, the Court granted Husband's request to file a supplemental brief, followed by an opportunity for Wife to file a reply brief. The Order granting that motion specifically directed the Parties to address in their briefs the "conclusive" effect of their stipulation concerning the nature of the $94,466.20 obligation.
Despite that Order, neither of the Parties addressed the conclusiveness issue in their supplemental briefs. This caused the Court to issue a further Order on August 5, 2010, which stated in part:
Neither Party took any action by the August 13, 2010 deadline set by the Court and neither Party requested oral argument by August 27, 2010, an option also provided by the Court. Accordingly the matter is now ripe for decision on the stipulated facts.
Based on the stipulations of the Parties the entire amount at issue in this case may be summarized as follows:
$ 94,466.20 Balance of equitable distribution
award
$ 5,000.00 Counsel fees
$ 10,467.88 Costs and expenses
$ 15,509.34 Rental credit
___________ _____________
$125,443.42 Total
As previously indicated, by agreement of the Parties, the $94,466.20 is an equitable distribution award and therefore properly classified as a debt falling under Section 523(a)(15). Thus, this debt is not
In arriving at its decision on the remaining, disputed items in this matter, the Court operates under the well-recognized principle that Wife, as the party who is in effect objecting to discharge, bears the burden of proof by a preponderance of the evidence. See Fed.R.Bnkr.P. 4005; In re Cohn, 54 F.3d 1108, 1114 (3d Cir.1995). Furthermore, in light of the overriding purpose of the Bankruptcy Code, exceptions to discharge are strictly construed against creditors and liberally construed in favor of debtors. Cohn, 54 F.3d at 1113.
In the present case, Wife therefore has the burden of proving that the three items remaining in issue are properly characterized as "domestic support obligations." As previously noted, this is a defined term under Section 101(14A) of the Bankruptcy Code. See n. 2, supra. A review of that definition shows that four, separate elements must be established for a debt to be considered a domestic support obligation. Three of the four required elements are clearly met by the obligations here, leaving one remaining element at issue, viz., that the debt is
Section 101(14A)(B). The Court turns to an examination of the remaining three areas of Husband's obligation using this standard.
The only evidence, of record, as to the basis of this obligation is that found in Paragraph 7 of the Final Decree, which provides:
See Combined Pretrial Statement at Exhibit B. Some courts have found that an attorney fee award in a divorce proceeding can itself be in the nature of alimony, maintenance, or support if those fees were incurred to secure alimony, maintenance, or support. See, e.g., In re Glabb, 261 B.R. 170, 173 (Bankr.W.D.Pa.2001). However, there is nothing of evidence in the record which could support such a finding in the present case. The Final Decree itself does not give any indication that the fees in question were incurred to secure alimony, maintenance or support (as opposed, say, to being incurred in connection with the property distribution litigation.)
Some courts have also considered whether there was a significant disparity in the financial conditions of the parties when making a determination whether an attorney fee award should be considered in the nature of alimony, maintenance, or support. See, e.g., In re Kornguth, 111 B.R. 525, 528 (Bankr.W.D.Pa.1990). Again, however, there is nothing in the Final Decree or elsewhere in the record in this case to indicate a significant financial disparity existed between Husband and Wife.
The evidence as to this obligation is limited to information found in Paragraph 8 of the Final Decree which indicates that this sum represents payment for "the appraisal fee of McGill Power for the services of Robert Power, Jr., CPA, CVA, for the valuation of Kennedy Trucking, Inc./Kennedy Landscaping." Although the Parties have submitted nothing further as to the basis for this obligation, it appears clear from the language of the Final Decree itself that the appraisal in question was done to value marital property in connection with the equitable property division. See Paragraph 2 of the Final Decree, which sets a value on "Kennedy Trucking/Landscaping." The evidence therefore does not support a finding that these costs and expenses were incurred as part of an effort to secure alimony, maintenance or support for Wife. The Court therefore finds that Wife has failed to meet her burden of proof as to this obligation.
The evidence for this obligation comes from Paragraph 8 of the Final Decree which provides that "Husband shall pay to Wife the total sum of $15,509.34,
