Weingartner v. McGriff

MEMORANDUM OF DECISION - 1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF IDAHO
______________________________________________________
In Re:
Bankruptcy Case
THERON WAYNE MCGRIFF, 	No. 05-40097
Debtor.
_______________________________________________________
SHAWN WEINGARTNER,
Plaintiff, 	Adv. Proceeding
No. 05-8032-JDP
vs.
THERON WAYNE MCGRIFF,
Defendant.
______________________________________________________
MEMORANDUM OF DECISION
_______________________________________________________
Marie T. Tyler, HOLDEN, KIDWELL, HAHN & CRAPO, Idaho
Falls, Idaho, Attorney for Plaintiff.
Theron W. McGriff, Idaho Falls, Idaho, Pro Se, Defendant.
In this adversary proceeding, both the Plaintiff Shawn Weingartner,
a creditor, and Defendant Theron McGriff, the Chapter 7 debtor, have moved the
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1 Defendant, who is acting pro se, filed no motion expressly asking for entry of a
summary judgment. But his response to Plaintiff’s complaint filed May 27, 2005, when
construed liberally as provided by Fed. R. Bankr. P. 7008(f), effectively seeks such relief.
Therefore, in the interests of justice and for judicial economy, the Court will treat
Defendant’s pleading as not only an answer, but also as his motion for summary
judgment.
2 No affidavits have been filed by the parties. Instead, they attached copies of
certain documents to their briefs. This practice is inconsistent with the Rules, and such
documents are not properly before the Court for consideration on a motion for summary
judgment. Fed. R. Bankr. P. 9017, incorporating Fed R. Civ. P. 43(requiring evidence to
be submitted by affidavit or testimony); L.B.R. 7056.1. See also In re Garner, 246 B.R.
MEMORANDUM OF DECISION - 2
Court for summary judgment. 1 The parties were previously married, and this
dispute concerns whether a debt owed by Defendant to Plaintiff for attorney fees
incurred in the course of a state court custody suit should be excepted from
discharge in Defendant’s bankruptcy case as support under 11 U.S.C. § 523(a)(5).
The Court conducted a hearing concerning the motions on July 27, 2005, at which
the parties appeared and argued their positions. In addition, the Court allowed the
parties until August 5, 2005, to make additional submissions. What follows
constitutes the Court’s disposition of the motions.
Undisputed Facts2
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617, 624 (B.A.P. 9th Cir. 2000) (noting evidence must be offered by affidavit or
testimony). On the other hand, the Court may properly, and did, consider the documents
attached to the verified complaint and answer.
MEMORANDUM OF DECISION - 3
Plaintiff and Defendant were divorced in 1997. In 2000 and 2001,
both parties sought a modification of the state court order governing custody of
their minor children. Ultimately, the magistrate court granted Plaintiff’s motion to
modify custody and denied Defendant’s motion. Defendant appealed the order
modifying custody to the Idaho Supreme Court.
While the appeal was pending, on December 27, 2002, the
magistrate court entered an order requiring Defendant to pay Plaintiff’s attorney
fees incurred during the appeal. 	Defendant was instructed to pay Plaintiff $750
on or before January 15, 2003, and then $500 per month thereafter toward her
fees. The order did not specify when these monthly payments should end.
Defendant amended his appeal to the Idaho Supreme Court to also seek review of
this award of attorney fees. On April 3, 2003, Defendant filed a motion with the
magistrate court to modify the attorney fees order. The magistrate court denied
this order on November 12, 2003, finding there was no substantial change in
circumstance to justify a modification. Compl. Ex. B, Docket No. 1; Answer,
Attachment 5, Docket No. 6.
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MEMORANDUM OF DECISION - 4
On September 21, 2004, the Idaho Supreme Court entered its
decision on Defendant’s appeal, and in part decided that the magistrate’s award of
attorney fees to Plaintiff was appropriate under Idaho Code § 32-704. McGriff v.
McGriff, 99 P.3d 111, 122–23 (Idaho 2004). In its decision, the court explained,
The magistrate’s decision reflects that he was aware of
the need to consider the factors in I.C. § 32-705, and
that he did consider in depth the financial
circumstances of each party in arriving at his
conclusion. The magistrate’s decision shows that the
court recognized that though the incomes from
employment for each of the parents were somewhat
similar, Shawn was not able to make ends meet with
her and the children and pay her attorney fees at the
same time. Shawn owed her attorneys over $8000 at
the time the trial court made its findings. The evidence
also showed that due to outside contributions and
assistance given to Theron, he was able to establish a
savings account with over $4000 and he had a credit of
over $800 with his attorneys at the time the trial court
made its findings of fact. As such, there was adequate
evidence presented to demonstrate there was a
disparity in incomes relating to the parties’ abilities to
carry on this appeal and, accordingly, the magistrate
judge was within his discretion in ordering Theron to
pay a portion of Shawn’s attorney fees.
Id. However, the Idaho Supreme Court vacated the attorney fee order, concluding
that in leaving its order “open-ended,” the magistrate court had improperly failed
to determine the total amount of reasonable attorney fees Defendant should be
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MEMORANDUM OF DECISION - 5
required to pay. Id. at 123. The Supreme Court remanded the action to the
magistrate court to make that determination.
On remand, the magistrate court affirmed its prior findings and
conclusions and ordered Defendant to pay an additional $11,095.40 in attorney
fees and costs to Plaintiff’s counsel. In making its decision, the magistrate court
considered the parties’ income and monthly expenses and concluded Defendant
was financially able to pay Plaintiff’s attorney fees while Plaintiff was not.
Compl. Ex. C, Docket No. 1; Answer Attachment 7, Docket No. 6.
In her motion, Plaintiff asks this Court to enter a summary judgment
declaring that the state court’s award of attorney fees is in the nature of support
and, therefore, nondischargeable under § 523(a)(5). Defendant’s request for
summary judgment is founded upon his argument that, based upon the position
Plaintiff asserted in state court, Plaintiff should be judicially estopped from
asserting the attorney fees are in the nature of support. He also argues that the
award of attorney fees is not in the nature of support.
Discussion and Disposition of the Issues
A. Summary Judgment Standard.
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MEMORANDUM OF DECISION - 6
Summary judgment is mandated if, when viewing the evidence in the
light most favorable to the nonmoving party, there are no genuine issues of
material fact and the moving party is entitled to a judgment as a matter of law.
Fed. R. Civ. P. 56(c), made applicable in adversary proceedings by Fed. R. Bankr.
P. 7056; Esposito v. Noyes (In re Lake Country Investments, LLC), 255 B.R. 588,
596–97 (Bankr. D. Idaho 2000); see also Elsaesser v. Central Pre-Mix Concrete
Co. (In re Pioneer Constr., Inc.), 01.2 I.B.C.R. 66, 66 (Bankr. D. Idaho 2001).
The initial burden is on the moving party to show no genuine issue of material fact
exists, and a failure to do so with respect to any required element of the cause of
action is fatal to the motion. Esposito, 255 B.R. at 597. “If the nonmoving party
bears the ultimate burden of proof on an element at trial, that party must make a
showing sufficient to establish the existence of that element in order to survive a
motion for summary judgment.” Id. (internal citations omitted). The court may
not weigh the evidence presented; its role is to simply decide if a material factual
dispute exists. Id.
B. Nature of the Attorney Fee Award.
Section 523(a)(5) excepts from discharge a debt to a former spouse
if the debt is in the nature of support. “The creditor bears the burden of proof in
an action under § 523(a)(5).” Mallo v. Mallo (In re Mallo), 03.3 I.B.C.R. 196, 197
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MEMORANDUM OF DECISION - 7
(Bankr. D. Idaho 2003) (citing Stocks v. Calo (In re Calo), 97.3 I.B.C.R. 87, 88
(Bankr. D. Idaho 1997)).
“Whether an obligation is actually in the nature of support, and
therefore nondischargeable in bankruptcy, is determined under federal law.” In re
Kimball, 253 B.R. 920, 923 (Bankr. D. Idaho 2000) (citing Shaver v. Shaver, 736
F.2d 1314, 1316 (9th Cir. 1984)). The Court must look to the substance of the
obligation to determine whether it is dischargeable. Id. The Ninth Circuit has
articulated several factors to guide the Court in determining whether the debt is in
the nature of support:
In determining whether an obligation is intended for
support of a former spouse, the court must look
beyond the language of the decree to the intent of the
parties and to the substance of the obligation. . . . The
courts that have considered this issue have used
several factors to aid in the characterization of the
debt. If an agreement fails to provide explicitly for
spousal support, a court may presume that a so-called
‘property settlement’ is intended for support when the
circumstances of the case indicate that the recipient
spouse needs support. . . . Factors indicating that
support is necessary include the presence of minor
children and an imbalance in the relative income of the
parties. . . . Similarly, if an obligation terminates on the
death or remarriage of the recipient spouse, a court
may be inclined to classify the agreement as one for
support. . . . The court will look also to nature [sic] and
duration of the obligation to determine whether it is
intended as support. Support payments tend to mirror
the recipient spouse’s need for support.
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MEMORANDUM OF DECISION - 8
In re Martin, 04.3 I.B.C.R. 131, 132 (Bankr. D. Idaho 2004) (quoting Shaver, 736
F.2d at 1316-17 (internal citations omitted)). “However, in determining whether
awards of attorney’s fees are ‘in the nature of support,’ the primary consideration
is whether the award of fees was based upon financial need.” Norris v. Norris (In
re Norris), 94 I.B.C.R. 233, 235 (Bankr. D. Idaho 1994) (citing Johns v. Tyson,
518 F.2d 678, 681 (9th Cir. 1975); Matter of Catlow, 663 F.2d 960, 963 (9th Cir.
1981)).
The magistrate court ordered Defendant to pay attorney fees
pursuant to Idaho Code § 32-704. That statute instructs the state court to award
attorney fees only “after considering the financial resources of both parties and the
factors set forth in section 32-705.” Idaho Code § 32-704(3). Idaho Code § 32-
705 lists the factors to be considered by the state court:
1. Where a divorce is decreed, the court may grant a
maintenance order if it finds that the spouse seeking
maintenance:
(a) Lacks sufficient property to provide for his
or her reasonable needs; and
(b) Is unable to support himself or herself
through employment.
2. The maintenance order shall be in such amounts and
for such periods of time that the court deems just, after
considering all relevant factors which may include:
(a) The financial resources of the spouse
seeking maintenance, including the marital
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3 Defendant argues because the Idaho Supreme Court vacated and remanded the
original order, the only order that may be considered is the order entered after remand.
The Court respectfully disagrees; the magistrate court expressly incorporated its earlier
factual findings in its decision to award fees after remand.
MEMORANDUM OF DECISION - 9
property apportioned to said spouse, and said
spouse's ability to meet his or her needs
independently;
(b) The time necessary to acquire sufficient
education and training to enable the spouse
seeking maintenance to find employment;
(c) The duration of the marriage;
(d) The age and the physical and emotional
condition of the spouse seeking maintenance;
(e) The ability of the spouse from whom
maintenance is sought to meet his or her needs
while meeting those of the spouse seeking
maintenance;
(f) The tax consequences to each spouse;
(g) The fault of either party.
Here, the Court must review the magistrate court’s order to
determine if it is in the nature of support. 3 See Kimball, 253 B.R. at 923. In the
order entered after remand the magistrate court states,
[a]fter reviewing the factors set forth in Idaho Code §
32-704 and 705 including the Plaintiff’s continuing
need for assistance in paying her attorney’s fees and
costs, and Defendant’s ability to pay the same, the
Court affirms its prior findings and conclusions and
finds that Defendant has the ability to pay Plaintiff’s
attorney’s fees and costs and Plaintiff has need for his
assistance.
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MEMORANDUM OF DECISION - 10
Ex. C, Docket No. 1; Attachment 7; Docket No. 6.
In applying the Shaver factors to the magistrate court’s order, the
primary consideration for the Court is whether the award was based upon financial
need. See Norris, 94 I.B.C.R. at 235. The magistrate court clearly considered the
parties’ income and monthly expenses to determine whether Defendant should pay
Plaintiff’s attorney fees and costs. Its decision was founded upon the state court’s
analysis of the needs of Defendant’s former spouse. Defendant received financial
donations to assist in paying his legal costs, and he was able to maintain a savings
account during that time. Plaintiff’s financial situation was such that she had more
expenses than income. The magistrate court’s careful review of the relative
financial situations of the parties demonstrates that its award was based on
Plaintiff’s need and Defendant’s ability to pay. This Court confidently concludes
that the state court’s order requiring Defendant to pay Plaintiff’s attorney fees was
in the nature of support.
And contrary to Defendant’s suggestion, the analysis does not
change simply because the state court ordered Defendant to pay the fees directly to
Plaintiff’s attorney. This Court and others have decided that “a claim for
attorney’s fees awarded to the debtor’s wife’s attorney in a prebankruptcy divorce
action can be excepted from discharge under Section 523(a)(5), even though the
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MEMORANDUM OF DECISION - 11
debt is payable directly to the attorney.” Stocks, 97.3 I.B.C.R. at 88 (citing Porter
v. Gwinn (In re Gwinn), 20 B.R. 233, 234 (9th Cir. B.A.P. 1982); In re Spong, 661
F.2d 6 (2d Cir. 1981); In re French, 9 B.R. 464 (Bankr. S.D. Cal. 1981)).
C. Judicial Estoppel.
Defendant argues Plaintiff should be judicially estopped from
asserting in this action that the attorney fee award is in the nature of support
because, he says, she argued it was not support in state court in connection with
Defendant’s motion to modify the attorney fee award. Plaintiff maintains judicial
estoppel does not apply because she did not argue the attorney fee order was not
support, and even if she did, the magistrate court did not rely on that argument in
ruling on the motion to modify.
“Judicial estoppel is an equitable doctrine that precludes a party
from gaining an advantage by asserting one position, and then later seeking an
advantage by taking a clearly inconsistent position.” Hamilton v. State Farm Fire
& Cas. Co., 270 F.3d 778, 782 (9th Cir. 2001); see also In re Pich, 253 B.R. 562,
568–69 (Bankr. D. Idaho 2000). The Court may weigh several factors in
determining whether judicial estoppel applies, but the Ninth Circuit has “restricted
the application of judicial estoppel to cases where the court relied on, or
‘accepted,’ the party’s previous inconsistent position.” Hamilton, 270 F.3d at 783
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MEMORANDUM OF DECISION - 12
(citing Interstate Fire & Cas. Co. v. Underwriters at Lloyd’s, London, 139 F.3d
1234, 1239 (9th Cir. 1998); Masayesva v. Hale, 118 F.3d 1371, 1382 (9th Cir.
1997)).
No factual dispute exists regarding the basis for the magistrate
court’s decision denying the motion to modify the attorney fees award. That
decision clearly indicates Defendant’s request to modify the attorney fee award
should be denied due to the lack of a “substantial, material and permanent change
in circumstances to justify a modification of the Court’s prior order.” Compl. Ex.
B, Docket No. 1; Answer Attachment 5, Docket No. 6. Because the magistrate
court did not base its decision to deny the motion to modify attorney fees upon
whether it was a support order, even if Plaintiff had argued it was not, under the
Ninth Circuit decisions, Defendant can not invoke the doctrine of judicial
estoppel.
Conclusion
There are no disputes concerning the material facts. Plaintiff is not
judicially estopped from arguing the award of attorney fees was in the nature of
support, and the Court concludes the state magistrate court’s order requiring
Defendant to pay Plaintiff’s attorneys fees is in the nature of support. Under 11
U.S.C. § 523(a)(5), a support debt owed by the debtor to a former spouse is
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MEMORANDUM OF DECISION - 13
excepted from discharge in bankruptcy. Plaintiff’s motion for summary judgment
will be granted, and Defendant’s motion denied, by separate order.
Dated: August 22, 2005
Honorable Jim D. Pappas
United States Bankruptcy Judge
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