In Re Taylo

737 F.3d 670 (10th Cir. 2013)

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Nature of the Case

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Facts

In 1988, H and W were married. In 2005, they divorced and entered into a Marital Settlement Agreement (MSA). A circuit court in Fairfax County, Virginia entered a final decree of divorce on September 22, 2005, which incorporated the MSA. The court ordered H to pay $2,500 per month as spousal support, said payments to begin on August 1, 2005, and to continue until 'the death of either party, or the remarriage of [Eloisa], or after' ten years of payments, 'whichever event first . . . occurred.' On April 21, 2009, H moved to terminate spousal support arguing that W had been living with a man for the past two years and that the two were in a marriage-like relationship. The Virginia circuit court agreed and retroactively terminated his spousal support obligation. The Virginia circuit court ordered W to repay $40,660.59 in overpaid spousal support payments, plus $10,000.00 for Matthew's attorney fees incurred in prosecuting the motion for termination. On November 22, 2010, Eloisa W filed for bankruptcy under Chapter 7 of the Bankruptcy Code. H filed a complaint objecting to the dischargeability of the $50,660.59 judgment and initiated an adversary proceeding. H argued that the overpayment debt constituted a debt to a former spouse incurred by the debtor 'in connection with a separation agreement' under 11 U.S.C. § 523(a)(15). H argued that the overpayment debt constituted a 'domestic support obligation' under 11 U.S.C. § 523(a)(5). H argued that W knew that she was not entitled to spousal support under Va. Code § 20-109, and that her acceptance of such support constituted fraud under 11 U.S.C. § 523(a)(2)(A). The bankruptcy court granted in part W's motion by rejecting Matthew's reliance on § 523(a)(5) and § 523(a)(2)(A). The court ruled that § 523(a)(15) applied to the overpayment debt and was therefore nondischargeable. H and W both filed motions for summary judgment regarding the applicability of § 523(a)(15) to the dischargeability issue. The bankruptcy court granted H's motion for summary judgment but did not address attorney fees. Both parties appealed to the BAP. The BAP affirmed the bankruptcy court's ruling. It ruled that neither it nor the bankruptcy court had authority to award attorney fees under the MSA's fee-shifting agreement. Both parties appealed; W under §523(a)(15) and H under §523(a)(5)