Brass v. Dupont (In Re Dupont)

Citations: 19 B.R. 605; 1982 Bankr. LEXIS 4244Docket: 8-19-71031

Court: United States Bankruptcy Court, E.D. New York; April 27, 1982; Us Bankruptcy; United States Bankruptcy Court

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E. Lawrence Brass initiated an adversary proceeding against debtor Francois Dupont in a Chapter 7 bankruptcy case, seeking a determination that his attorney's fees and disbursements of $1,640 from a matrimonial action are nondischargeable under Section 523(a)(5) of the Bankruptcy Code, which addresses debts related to alimony, maintenance, or support. The court treated Brass's complaint as a motion for summary judgment, with no objections from Dupont. 

Key issues included:
1. Whether the debt for legal services rendered, ordered to be paid directly to Brass by the Judgment of Divorce, is nondischargeable.
2. Whether additional fees for services related to recovering unpaid alimony installments are also nondischargeable.
3. The status of unpaid alimony installments at the time of Brass's judgment against Dupont.

Findings of the court included:
1. The Judgment of Divorce required Dupont to pay Brass $1,250 in counsel fees and $140 in disbursements in installments.
2. After Dupont failed to make payments, Brass successfully moved for wage deductions from Dupont's employer, resulting in an additional $250 award to Brass for his services.
3. Brass obtained a judgment on March 19, 1981, for $771.44, representing unpaid installments. 
4. Dupont filed for Chapter 7 relief on April 28, 1981, which stayed Brass's collection efforts.
5. As of the bankruptcy filing, Brass was owed $1,640 for fees and disbursements. 

The court ultimately addressed whether these debts were excepted from discharge under the relevant bankruptcy code section.

Under Section 523 of the Bankruptcy Code, a discharge does not relieve an individual debtor from debts owed to a spouse, former spouse, or child for alimony, maintenance, or support linked to separation agreements, divorce decrees, or property settlements. Such debts are nondischargeable unless assigned to another entity or not in the nature of alimony or support. Determining the nature of these debts involves examining state law, particularly regarding attorney fees in matrimonial actions. New York law recognizes that an award of attorney fees is a necessary expense, often granted to ensure that a disadvantaged spouse can retain legal representation. Consequently, attorney fees awarded in divorce proceedings are treated as alimony or support and deemed nondischargeable in bankruptcy. 

The court specifically addressed the dischargeability of a $250 counsel fee awarded to the Plaintiff for legal services related to enforcement proceedings. New York Domestic Relations Law allows for the recovery of attorney fees in actions to enforce divorce-related judgments. The court concluded that such fees in enforcement actions are treated similarly to those in divorce actions, confirming their nondischargeable status. The court emphasized that failing to recognize the $250 fee as nondischargeable would result in a significant injustice, as it arose directly from the Debtor's failure to comply with prior payment obligations.

In re Golden and subsequent cases establish that attorneys' fees awarded in divorce proceedings are generally dischargeable in bankruptcy when paid directly to the attorney. However, the Second Circuit, as clarified in In re Spong, ruled that such fees are nondischargeable, regardless of the payment arrangement to counsel. The court in Spong emphasized that the entire debt remains nondischargeable, even if parts of it are subject to collection limitations under state law. 

In this case, the plaintiff's claim, based on a divorce judgment and an additional fee order, constituted a fixed, liquidated, and non-contingent claim. The installment nature of the payments does not alter its nondischargeability under Section 523(a) of the Bankruptcy Code, which defines "debt" broadly and includes various forms of claims. 

The court determined that no genuine issue of material fact exists, thereby granting the plaintiff summary judgment, confirming that the total debt of $1,640 is not dischargeable. An order will be settled accordingly.