In re: James Thomas v. ( 2014 )


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  •               ELECTRONIC CITATION: 2014 FED App.0004P (6th Cir.)
    File Name: 14b0004p.06
    BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT
    In re: JAMES ALBERT THOMAS;                  )
    REBECCA MARIE THOMAS,                 )   No. 13-8048
    )
    Debtors.                         )
    ______________________________________
    Appeal from the United States Bankruptcy Court
    for the Eastern District of Kentucky.
    Bankruptcy Case No. 13-10043.
    Decided and Filed: June 3, 2014
    Before: HUMPHREY, OPPERMAN, and PRESTON, Bankruptcy Appellate Panel Judges.
    ____________________
    COUNSEL
    ON BRIEF: Elaina L. Holmes, HOLMES LAW FIRM, Ashland, Kentucky, for Appellants.
    Christopher A. Conley, CAMPBELL WOODS, PLLC, Ashland, Kentucky, for Appellee.
    1
    ____________________
    OPINION
    ____________________
    GUY R. HUMPHREY, Bankruptcy Appellate Panel Judge. Debtor1 appeals the order
    overruling his objection to a proof of claim filed by his ex-wife asserting a priority domestic support
    obligation debt for $12,500. The bankruptcy court applied the Calhoun test and found the debt
    ordered to be paid by the domestic relations court to the debtor's former spouse on account of her
    payment of a judgment lien and second mortgage against the former marital residence from proceeds
    from the sale of the home was “in the nature of alimony, maintenance, or support.” For the reasons
    stated below, the bankruptcy court’s order is AFFIRMED.
    ISSUE ON APPEAL
    The issue on appeal is whether the bankruptcy court erred in finding that Creditor’s claim is
    a domestic support obligation and overruling Debtor’s objection to Creditor’s proof of claim.
    JURISDICTION AND STANDARD OF REVIEW
    Under 28 U.S.C. § 158(a)(1), this Panel has jurisdiction to hear appeals “from final
    judgments, orders, and decrees” issued by the bankruptcy court. For purposes of appeal, an order
    is final if it “ends the litigation on the merits and leaves nothing for the court to do but execute the
    judgment.” Midland Asphalt Corp. v. United States, 
    489 U.S. 794
    , 798, 
    109 S. Ct. 1494
    , 1497
    1
    Debtor’s current wife is listed as a co-appellant in this appeal. In a parenthetical, their brief
    argues that she should not be listed as an obligor on Creditor’s proof of claim. This issue is not
    listed in the issues presented on appeal. “‘Issues adverted to in a perfunctory manner,
    unaccompanied by some effort at developed argumentation, are deemed waived.’” Thomas v. Aquil
    (In re Thomas), 
    516 F. App'x 543
    (6th Cir. 2013) (quoting United States v. Layne, 
    192 F.3d 556
    , 566
    (6th Cir. 1999)). Nothing in the bankruptcy court’s opinion indicates that this issue was raised
    before the bankruptcy court. Moreover, the bankruptcy court’s opinion references the Debtor in the
    singular tense throughout. This opinion will also refer to Debtor in the singular.
    2
    (1989) (citation and quotation marks omitted). “The concept of ‘finality’ in the bankruptcy context,”
    however, “should be viewed functionally,” with appellate courts enforcing this threshold requirement
    “in a more pragmatic and less technical way in bankruptcy cases than in other situations.” Simon
    v. Lis (In re Graves), 
    483 B.R. 113
    , 115 (E.D. Mich. 2012) (quoting Cottrell v. Schilling (In re
    Cottrell), 
    876 F.2d 540
    , 541–42 (6th Cir.1989) (internal quotation marks and citations omitted));
    Huntington Nat’l Bank v. Richardson (In re Cyberco Holdings, Inc.), 
    734 F.3d 432
    , 437 (6th Cir.
    2013). The Sixth Circuit allows appeals from “an order in a bankruptcy case [that] finally disposes
    of discrete disputes within the larger case[.]” Lindsey v. O'Brien, Tanski, Tanzer & Young Health
    Care Providers (In re Dow Corning Corp.), 
    86 F.3d 482
    , 488 (6th Cir.1996) (internal quotation
    marks, alteration, and citation omitted). “A bankruptcy court's order overruling debtor's objection
    to claim is a final order for purposes of appeal.” In re Mace, 
    496 B.R. 252
    , 
    2013 WL 4067623
    , at
    *1 (B.A.P. 6th Cir. Aug. 13, 2013) (table) (citing Morton v. Morton (In re Morton), 
    298 B.R. 301
    ,
    303 (B.A.P. 6th Cir. 2003)). The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction
    to decide this appeal. The United States District Court for the Eastern District of Kentucky has
    authorized appeals to the Panel, and no party has timely elected to have this appeal heard by the
    district court. 28 U.S.C. § 158(b)(6), (c)(1).
    The Sixth Circuit Court of Appeals has held that the determination of non-dischargeability
    for a domestic support obligation is a mixed question of law and fact.
    We review the factual determination of whether an obligation
    constitutes nondischargeable support under the “clearly erroneous”
    standard. See In re Perlin, 
    30 F.3d 39
    , 40 (6th Cir. 1994). On the
    other hand, the interpretation of § 523 is a legal issue that we review
    de novo. See In re Calhoun, 
    715 F.2d 1103
    , 1111 (6th Cir. 1983)
    (stating that the application of the wrong legal standard, and the
    district court’s misallocation of the burden of proof, would be
    reviewed de novo).
    3
    Sorah v. Sorah (In re Sorah), 
    163 F.3d 397
    , 400 (6th Cir. 1998).2
    FACTS3
    A. The First Marriage
    Debtor, James Thomas, and Creditor, Jennifer Clark, were originally married on August 4,
    1995. They had two children together, born during the term of the first marriage. Debtor and
    Creditor purchased a family home on July 12, 1999, using a loan secured by a first mortgage on the
    property. On April 28, 2001, the couple obtained a loan in the amount of $15,463.79 secured by a
    second mortgage on the property.
    On May 13, 2003, the parties entered into a separation agreement pertaining to child custody,
    division of property and child support. Their divorce was final on June 25, 2003.
    In the 2003 divorce consent decree, Debtor agreed to relinquish any interest in the family
    home and Creditor agreed to assume and hold Debtor harmless from the obligation to pay both the
    first mortgage and second mortgage. Debtor also agreed to pay child support in the amount of
    $510.00 per month, which was an upward deviation from the standard calculation of child support
    2
    Debtor asserts that the standard of review should be de novo because the bankruptcy court
    did not need to assess the credibility of witnesses due to the fact that there was no live testimony.
    The parties stipulated to certain facts and stipulated to the entry as exhibits the 2003 and 2007
    divorce judgments as well as the 2009 post-divorce order. Additionally each submitted an affidavit
    in lieu of live testimony and waived cross-examination. Even assuming Debtor is correct, the Panel
    holds that the result would be the same under a de novo standard of review.
    3
    These facts are taken primarily from the bankruptcy court’s opinion In re Thomas, No. 13-
    10043, 
    2013 WL 5493214
    (Bankr. E.D. Ky. Oct. 2, 2013). Debtor does not challenge these factual
    findings. Rather, Debtor challenges the inferences the bankruptcy court made from the factual
    findings and the ultimate conclusion that both debts were support obligations that are non-
    dischargeable.
    4
    in Ohio. The 2003 consent decree specified that “[t]he deviation [in child support] is in the best
    interests of the children as the Wife is paying both mortgages on the marital property.” Further, the
    parties agreed that neither of them would pay spousal support to the other.
    B. The Second Marriage
    The couple remarried on April 30, 2004. However, on April 18, 2007, this marriage also
    ended in divorce. Like their first separation, Debtor and Creditor reached an agreement for the
    “distribution of assets, payment of debts, and other matters.” The 2007 divorce consent decree
    provided that the agreement was “in all respects fair, just and equitable” and adopted and approved
    the terms of the settlement agreement reached by the parties. Debtor and Creditor were each
    represented by counsel who signed off on the 2007 consent decree.
    The terms of the 2007 consent decree were similar to the parties’ 2003 consent decree in
    some respects. Neither spouse was obligated to provide spousal support. Creditor received primary
    custody of the children. Debtor again agreed to give up any interest in the property, which he had
    never conveyed as required by the 2003 consent decree. Creditor agreed to assume and hold Debtor
    harmless on the first mortgage loan in the 2007 consent decree.
    However, there were several important differences. Debtor's child support obligation was
    just $369.15 per month, and Debtor and Creditor agreed to split the second mortgage obligation.
    Specifically, Section 4 of the 2007 consent decree provides:
    That [Creditor] shall receive the marital residence, free and clear of
    any and all claims on behalf of [Debtor], and she shall assume and be
    responsible for the first mortgage, saving [Debtor] harmless thereon,
    and the parties shall equally pay the second mortgage. After the sale
    of the real estate, any deficiency on the mortgage indebtedness shall
    be divided between the parties. Should there be a net balance after
    the sale, these proceeds shall be the sole property of [Creditor].
    5
    Consistent with the 2007 consent decree, Debtor quit-claimed his interest in the property to Creditor
    by Deed dated April 4, 2007, and recorded May 31, 2007.
    C. The Judgment Lien
    On November 18, 2004, Auto Now Acceptance Co., LLC (“Auto Now”) obtained a judgment
    against Debtor in the amount of $8,082.37, plus interest and costs. On October 20, 2005, Auto Now
    filed a judgment lien against Debtor. The judgment lien was not addressed in the 2007 consent decree
    even though it had attached to the property prior to the second divorce. Creditor testified that she was
    not aware of the judgment lien until she offered the property for sale. Although Debtor's affidavit
    addresses the circumstances preceding imposition of the judgment lien, the record does not disclose
    whether Debtor knew that the judgment lien had attached to the property at the time of the 2007
    divorce proceeding. On appeal Debtor asserts that Creditor knew about the circumstances leading
    to the judgment lien.
    D. The Property Sale and 2009 Order
    Creditor sold the family home to third-party buyers on September 18, 2008. The sale proceeds
    were not sufficient to fully cover all of the costs of the sale. The first mortgage and second mortgage
    debts of $66,095.64 and $15,000.00, respectively, were satisfied. Creditor negotiated release of the
    judgment lien for $5,000.00, which was paid from the sales proceeds. After the assessment of all
    taxes and fees, Creditor paid $836.14 to close the transaction.
    On January 15, 2009, the state court entered another order in the 2007 divorce proceeding (the
    “2009 order”), which provided in part:
    2. Defendant [Debtor] shall reimburse the Plaintiff [Creditor]
    $7,500.00 for his interest in the secondary mortgage.
    6
    3. Defendant shall reimburse the Plaintiff $5,000.00 for monies paid
    by her for paying off a judgment lien of his.
    E. The Disputed Claim
    Debtor filed a petition for relief under chapter 13 of the Bankruptcy Code. Debtor’s schedules
    listed two obligations to Creditor. The first was a $560.00 unsecured priority claim for child support
    on Schedule E, which was not disputed. The other was a $15,000.00 unsecured claim on Schedule
    F described only as “Debt.” Creditor filed Proof of Claim 6–1 asserting a priority unsecured claim
    for “[a]limony, maintenance, or support” in the amount of $12,500.00 for the second mortgage debt
    and the judgment lien debt. Debtor objected, arguing that Claim 6-1 is not in the nature of alimony,
    maintenance, or support, but “is for a second mortgage debt and judgment lien on property that were
    satisfied when the real estate was sold by creditor previously,” and is thus not a domestic support
    obligation.
    F. The Parties' Evidence
    Debtor and Creditor submitted a joint stipulation of facts, acknowledging entry of the 2007
    consent decree and the 2009 order and attaching copies of each. The parties each presented testimony
    by affidavit. No objections were raised and the affidavits were admitted as the direct testimony of
    the witnesses. At the evidentiary hearing, both parties agreed to forego cross-examination, allowing
    the affidavits to stand as the witnesses' only testimony. In addition to their direct testimony, each
    party submitted an exhibit list and copies of relevant documentary evidence. The exhibits of both
    parties were admitted without objection.
    The bankruptcy court entered an opinion and order finding Creditor’s claim is in the nature
    of “alimony, maintenance or support” and overruling Debtor’s objection to her proof of claim. In re
    Thomas, No. 13-10043, 
    2013 WL 5493214
    (Bankr. E.D. Ky. Oct. 2, 2013). Debtor timely filed an
    appeal to this panel.
    7
    DISCUSSION
    “Sections 523(a)(5) and (15) operate to provide greater protection for alimony, maintenance,
    and support obligations owing to a spouse, former spouse, or child of a debtor in bankruptcy[,]” In
    re Johnson, 
    397 B.R. 289
    , 295 (Bankr. M.D.N.C. 2008) (citation omitted). Such debts are non-
    dischargeable for individuals in a Chapter 7, 11 or 12. However, unlike those chapters, chapter 13
    distinguishes between § 523(a)(5) domestic support obligations, which are non-dischargeable, and
    other § 523(a)(15) “post-marital obligations,” including property settlements, which are
    dischargeable. 
    Id. See 11
    U.S.C. § 1328(a)(2). In addition, domestic support obligations, as a
    priority debt, must be paid in full during the chapter 13 plan. 11 U.S.C. §§ 507(a)(1)(A) and
    1322(a)(2).
    “Domestic support obligation” is defined by the Bankruptcy Code as follows:
    (14A) The term “domestic support obligation” means a debt that accrues before, on,
    or after the date of the order for 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;
    (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--
    8
    (i) a separation agreement, divorce decree, or property
    settlement agreement;
    (ii) an order of a court of record; or
    (iii) a determination made in accordance with applicable
    nonbankruptcy law by a governmental unit; 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).
    In Long v. Calhoun (In re Calhoun), 
    715 F.2d 1103
    , 1109-10 (6th Cir. 1983), the Sixth Circuit
    enunciated a four-part analysis for making the determination whether an obligation that was not
    specifically designated as alimony or maintenance was actually in the nature of support, and thus,
    nondischargeable. As subsequently re-stated in Fitzgerald:
    First, the obligation constitutes support only if the state court or parties
    intended to create a support obligation. Second, the obligation must
    have the actual effect of providing necessary support. Third, if the
    first two conditions are satisfied, the court must determine if the
    obligation is so excessive as to be unreasonable under traditional
    concepts of support. Fourth, if the amount is unreasonable, the
    obligation is dischargeable to the extent necessary to serve the
    purposes of federal bankruptcy law.
    Fitzgerald v. Fitzgerald (In re Fitzgerald), 
    9 F.3d 517
    , 520 (6th Cir. 1993) (citing 
    Calhoun, 715 F.2d at 1109-10
    ). “The burden of demonstrating that an obligation is in the nature of support is on the non-
    debtor.” 
    Fitzgerald, 9 F.3d at 520
    (citing 
    Calhoun, 715 F.2d at 1111
    ).
    9
    The bankruptcy court applied the proper test and analyzed the claim at issue using the Calhoun
    factors.4 Thomas, 
    2013 WL 5493214
    at *4. Debtor’s brief on appeal focuses on the first element,
    that is, whether the state court or parties intended to create a support obligation. Accordingly, this
    opinion will not address the remainder of the Calhoun test.
    A. Second Mortgage Debt
    The bankruptcy court determined that it was the intent of the state court and the parties to
    create a support obligation. The bankruptcy court cited five reasons for its decision: (1) support is
    inferred because the second mortgage payments protected the children’s home; (2) the lack of an
    upward deviation in child support payments in the 2007 consent decree indicates a support payment;
    (3) the 2007 consent decree’s provision that if a sale of the family home created a deficiency debt that
    the parties split the debt, while if it created a surplus, Creditor was entitled to all of the surplus, was
    intended to assist in providing a home for the children; (4) Creditor’s hold harmless agreement in the
    2003 consent decree does not relieve Debtor from his obligation to pay the disputed claim; and (5)
    the agreements do not show that Debtor was entitled to spousal support.
    Debtor’s brief implies that Creditor’s obligation to pay both mortgages in the 2003 divorce
    decree is binding despite entry of the 2007 consent decree and the 2009 order, but does not cite any
    authority for this proposition. The bankruptcy court took the better view, that is, that the 2007
    consent decree and the 2009 order superceded the 2003 divorce terms. However, the bankruptcy
    court did also consider the terms of the 2003 divorce in determining the state court and parties’ intent.
    Debtor also challenges the bankruptcy court’s reliance on the fact that in the 2007 consent
    decree child support payments went down, but that Debtor became obligated on the second mortgage
    4
    In 
    Fitzgerald, 9 F.3d at 520
    and 
    Sorah, 163 F.3d at 401
    , the Sixth Circuit modified the
    Calhoun standard to eliminate the “present needs” test, holding that the current needs of the
    non-debtor spouse should not be considered when determining if the obligation was intended as
    support. This prong is not relevant to this appeal.
    10
    as a further indication that the obligation was in the nature of support. Debtor argues that the record
    indicates that the reason for the reduction in child support was the fact that he was unemployed.
    While that fact is supported by the record, that fact does not negate the bankruptcy court’s inference.
    They are not mutually exclusive. The 2003 upward deviation from the standard calculation of child
    support clearly ties payment of the second mortgage to the children’s support. The fact that Debtor
    was out of work at the time of the second divorce and the amount labeled as “child support” decreased
    but that he obtained a new obligation to pay half of the second mortgage supports an inference that
    the mortgage payment was part of support for the children. As stated by one bankruptcy court:
    [T]he majority of courts considering whether a mortgage debt assumed
    by or ordered to be paid by a debtor pursuant to a judgment of divorce
    have held that such an obligation is in the nature of “support.” See,
    e.g., Gianakas v. Gianakas (In re Gianakas), 
    917 F.2d 759
    , 764 (3d
    Cir.1990) (“The great weight of authority holds that a spouse's
    assumption of mortgage debts which enable members of the family to
    remain in the marital residence is an obligation in the nature of
    support, maintenance or alimony.”) (collecting cases); In re 
    Johnson, 397 B.R. at 297
    –98 (“Numerous courts have held that an obligation
    that is essential to enable a party to maintain basic necessities or to
    protect a residence constitutes a nondischargeable support obligation.”
    (collecting cases)). And although the divorce judgments before some
    courts included a hold harmless clause, the absence of such a clause
    here is not dispositive. In re 
    Trump, 309 B.R. at 593
    –94 (“Even absent
    [hold harmless or indemnification] language, the Agreement created
    a legally enforceable obligation for [the debtor] to make payments on
    the second mortgage note.”).
    In re Palmieri, No. 11-51224, 
    2011 WL 6812336
    , at *5 (Bankr. E.D. Mich. Nov. 21, 2011). See also
    In re King, 
    461 B.R. 789
    , 794 n.23 (Bankr. D. Alaska 2010) (collecting cases).
    The bankruptcy court also found that Debtor’s payment of the second mortgage provided
    necessary support because the uncontradicted testimony of Creditor was that her income was
    insufficient to cover both the first and second mortgage payments. Although Debtor has asserted that
    he was out of work at the time and that Creditor made more money, Debtor has not disputed the
    finding that Creditor could not afford both the first and second mortgage payments.
    11
    Debtor argues that the debt created by the requirement in the 2007 consent decree that he pay
    half of the second mortgage is a property settlement rather than a domestic support obligation. He
    argues that nothing in either divorce decree was labeled as spousal support and that the 2003 consent
    decree specifically says that no alimony or spousal support was awarded. Debtor asserts that the
    bankruptcy court erroneously relied on “stock language” in the 2007 consent decree, which referred
    to spousal support, even though none had been awarded. See Thomas, 
    2013 WL 5493214
    at *8.
    The bankruptcy court’s opinion does mention references to “child and spousal support” in the
    2007 consent decree to indicate a probability that the state court intended something to be in the
    nature of spousal support. However, this reference is in passing and is not the primary support for
    the bankruptcy court’s conclusion. If the bankruptcy court erred in using the “stock language” as
    creating an inference of support, it was harmless in view of the other reasons for finding that the
    mortgage obligation was in the nature of support. Bankruptcy courts are permitted to find a debt to
    be in the nature of support regardless of the label used by the state court. In the present case, the
    bankruptcy court’s primary focus was the state court’s implications that the mortgage obligation was
    to assist in providing for the children’s support by providing them with a home.
    Finally, Debtor asserts that the 2007 consent decree language that contemplates the sale of the
    home rather than Creditor’s continued residence there, undermines the bankruptcy court’s conclusion.
    Accordingly, Debtor argues that the bankruptcy court’s reliance on the children’s need to maintain
    their home is a false conclusion and does not support a finding that the requirement to pay the second
    mortgage is in the nature of alimony, maintenance or support.
    The bankruptcy court found paragraph 4 of the 2007 consent decree to create an ambiguity
    due to the language providing for the allocation of sale proceeds in the event of a surplus arising from
    the sale of the property or a deficiency in the event that the sale proceeds did not equal or exceed the
    mortgages. The bankruptcy court acknowledged that this paragraph could be read as an indication
    of a property settlement. However, the bankruptcy court found it more likely that the order allowing
    Creditor to keep proceeds of a possible sale, while requiring Debtor to help cover a deficiency was
    12
    likely intended to provide for the children’s need for a home. Allowing Creditor to keep proceeds
    provided her with a possible down payment on a future home, while requiring Debtor to cover part
    of any deficiency also increased creditor’s ability to come up with a loan payment on a new home.
    Looking at the totality of the circumstances, the bankruptcy court’s conclusion that the parties
    and the state court intended to create a support obligation is not clearly erroneous. The fact that the
    mortgage payments helped provide a residence for the children is a strong indication that the
    payments were intended as support rather than a property settlement. The language in the 2003
    consent decree is the strongest indication that the state court tied the payment of the second mortgage
    to the children’s support. The payment of half of the second mortgage was never specifically labeled
    as either support or a property settlement. The bankruptcy court’s determination that it is support is
    not clearly erroneous.
    B. Judgment Lien Debt
    The bankruptcy court also held that the $5,000 debt that arose from Creditor paying off a
    judgment lien against the home was a domestic support obligation.
    Although the 2007 Consent Decree did not specifically address the
    Judgment Lien, it did assign any proceeds from the sale of the
    Property to the Creditor and, as discussed above, these proceeds are
    in the nature of support. The Debtor's sole responsibility for the
    Judgment Lien is resolved conclusively by the 2009 Order. The
    Judgment Lien Debt is necessarily a DSO because it prevented the
    Creditor and her children from receiving sales proceeds that were
    intended as support. The Judgment Lien Debt is thus “in the nature of
    alimony, maintenance, or support,” and is properly characterized as
    a DSO.
    In re Thomas, No. 13-10043, 
    2013 WL 5493214
    at *10 (Bankr. E.D. Ky. Oct. 2, 2013).
    13
    Debtor argues that since the judgment lien was not addressed by the divorce decree it cannot
    be considered to be alimony, maintenance or support. Debtor argues that it was obtained in July
    2004 while the second marriage was still intact, and that Creditor was fully aware of the
    circumstances leading to the judgment lien.
    Creditor argues that the proceeds from the sale of the home were intended to provide support
    for the children. Since the judgment lien reduced the amount that she received from the ultimate sale
    of the home, it reduced the amount of support she received. Therefore, she argues the debt should
    be treated as a support obligation.
    Case law explains that debts can qualify as support and be determined nondischargeable
    pursuant to § 523 even if they are owed to parties other than the payees in the statute, if the former
    spouse could be held responsible for the debt in question. See Holliday v. Kline (In re Kline),
    
    65 F.3d 749
    (8th Cir.1995). See also Rugiero v. DiNardo, 502 F. App’x 436, 439 (6th Cir. 2012)
    (holding that attorney fees could be properly treated as a domestic support obligation under the
    circumstances of that case, including the fact that they were incurred in a proceeding that concerned
    the welfare of the children); Kassicieh v. Battisti (In re Kassicieh), 
    482 B.R. 190
    (B.A.P. 6th Cir.
    2012), aff'g 
    467 B.R. 445
    (Bankr. S.D. Ohio 2012) (guardian ad litem fees constituted a “domestic
    support obligation”).
    The judgment lien debt is not a true third-party debt because it has already been paid to the
    third party and Debtor has been ordered to reimburse Creditor directly for the payment. However,
    the reasoning for non-dischargeability of third-party debts that qualify as support applies. The state
    court intended Creditor to keep the family home as a residence and shelter for the children or to have
    the proceeds of the sale of the home as support. The 2003 consent decree required Debtor to help
    provide that support for the children by making larger child support payments, while the 2007
    consent decree actually required the Debtor to pay half of the second mortgage. The judicial lien
    filed against the family home reduced the amount of support that the children received when the
    family home was sold. Accordingly, the state court’s order which required Debtor to pay Creditor
    14
    for that reduction in support is a domestic support obligation and is non-dischargeable in his chapter
    13 case.
    The parties and the bankruptcy court focus on the 2003 and 2007 consent decrees to
    determine the nature of the debt that Debtor owes to Creditor. However, both the debts also arise
    from the 2009 order. That order references Creditor’s motions for contempt for Debtor’s failure to
    pay child support and for modification of child support. The 2009 order notes that Creditor
    withdrew both of those motions due to the arrears being paid and due to Debtor being laid off of
    work. However, the 2009 order goes on to order Debtor to reimburse Creditor for the second
    mortgage debt and the judgment lien debt, as well as to reimburse half the expenses of certain
    medical bills. The fact that these two debts were addressed during a hearing to deal with support
    issues, further indicates that the state court and the parties intended that these debts be considered
    in the nature of alimony, maintenance or support. Moreover, at the time of the 2009 order, the
    family home had already been sold. If the intention had been for the proceeds of the sale to be a
    property settlement, the state court could have made that clarification. Because the payment of the
    second mortgage is tied to support issues in all three judgments, and the judgment lien debt reduced
    the amount of support received and is provided for as part of a support order, the bankruptcy court’s
    finding that the state court intended both these debts be treated as support obligations is not clearly
    erroneous.
    CONCLUSION
    The facts presented to the bankruptcy court support the legal conclusion that the debt owed
    to Creditor is in the nature of alimony, maintenance or support and is therefore non-dischargeable.
    The bankruptcy court’s order overruling Debtors’ objection to Creditor’s proof of claim is
    AFFIRMED.
    15