Michael S. O'Brien

OCR transcription for search; preserved printed pages are authoritative

_ Case 05-30172 Doc53_ Filed 03/23/06 Entered 03/29/06 09:23:43 Desc Main
Document Pagel1of5

UNITED STATES BANKRUPTCY COURT
DISTRICT OF MASSACHUSETTS

In re

Chapter 7

MICHAEL 8S. O'BRIEN
Case No. 05-30172-RS

Debtor

ORDER
REGARDING
RELIEF FROM STAY
(Carlin and Crowne)

The Debtor’s former wife (Paula M. Carlin (“Carlin”) and his former divorce lawyer

(Stephen G. Crowne) (“Crowne”) filed separate relief from stay motions concerning discrete fee

“— awards issued in favor of each by the Middieses. Probate and Family Court in post-diverce
litigation between the Debtor and Carlin cccasicned by alleged breaches of their divorce decree
(“Metions”) (“Fee Awards”) (Probate Court”) .“Litigation”).

The Movants seek (a) relief from the automatic stay tu enforce the Fee Awards (which
they label domestic support orders) or (5) alternatively, an order of the Court generally advising
Massachusetts state court judges that rele! from stey 1s not necessary for enforcement cf such
orders.’ The Debter opposes the Motions.

The Carlin Fee Award is an award of aftorney’s fees for services rendered to Cartin by ber
lawyer un the Litigation. The Crowne bee Awarfis an order fixing and determining the amount

of a Massachusetts attorney’s lien asserted by Crowne tor services rendered to the Debtor by his

‘The Court declines the invitation for such an advisory as unwarranted in the
circumstances,

AUTHENTICATED
U.S. GOVERNMENT
INFORMATION

GPO

Case 05-30172 Doc53_ Filed 03/23/06 Entered 03/29/06 09:23:43 Desc Main
Document Page2of5

lawyer in the Litigation.

Although labeled relief from stay, the Motions are more accurately described as requests
for determination that (a) the Fee Awards are domestic support obligations under the Bankruptcy
Code and {b} thus, the collection of the Fee Awards trom non- estate property is not subject to the
automatic stay.

Background

The full record of the divorce acion and the Litigation is not before the Court. However,
the following factual background is derived from the submissions of the parties in connection
with the Motions and ts not disputed.

Carhn and the Debtor married in May 1481, separated in May 2000 and divorced in
March 2001. They have three children. Vheir civerce judgement issued on
March 13, 2001 and incorporated their separation agreement. In late 2004 and early 2005,
litigation between them ensued in the Middlesex Probate and Family Court (“Probate Court’)
involving disputes regarding their obligations wth tespect to child support, college education
funds and certain mandatory reporting (‘Litigation’). Crewne represented the Debtor is the
Litigation (though he no longer does so).

After trial, the Probate Court (a} modified the divorce judgment by an adjustment to the
Debtor’s child support obligations favoralsic to the Debtor; (b) declined to unpose upon the
Debtor a college education expense obligation thus apparently leaving the divorce judgment
unchanged in that regard; (c) found the Debtor vailty of contempt for willful non-payment of
chiid support; and (d)} found Carlin guilty of contempt for willful failure to establish college fund

accounts and to report to the Debtor regarding the children and these accounts.

Case 05-30172 Doc53_ Filed 03/23/06 Entered 03/29/06 09:23:43 Desc Main
Document Page3of5

In addition, the Probate Court dectined 1a award attorney's Jees to the Debtor but did
award aitorney’s [ees to Carlin ($15,000) and te Crowne $18,320.03). directing that they be
paid by immediate withdrawal from the Debtor's reurement account(s) established and
maintained through his employurent at Massachusetts Institute of Technology (“Retirement
Aecout”).

On December 7, 2005, the Debtor comnienced his Chapter 7 case tn which he claims the
Retirement Account as exempt under Seetion 522(d)( 10) E) of the Bankruptcy Code. At that
time, the Fee Awards had not been paid by withdrawal from the Retirement Account or
otherwise.

On December 23, 2005, the Probate Court heid a hearing regarding enforcement of the
Fee Awards but apparently declined to act pending « determination by this Court regarding the
effect of the within automatic stay on such enforcement.

On January 5, 2006, Carlin filed her Movior, and on January 11, 2006, Crowne filed his
Motion,

Qn February 7, 2006, the Court held a non-evidentiary hearing on the Motions. At that
hearing, the Debtor acknowledged that the Retirement Account is not property of the estate. [
afforded the parties the opportunity to subniit pest-hearing briefs regarding whether the ree
Awards constitute domestic support obligations within the contemplation of the Bankruptcy
Code, and each party did so. Since then, the niatter has been under advisement.

Discussion
1. Framework

The determination of this matter prompts consideration of the interplay between

‘Case 05-30172 Doc53_ Filed 03/23/06 Entered 03/29/06 09:23:43 Desc Main
Document Page4of5

bankruptcy and domestic relations law. ‘The applicable statutory provisions iand iheir explicating
case law) are Section 101 (defined terms), See.ion 362 (automatic stay) and Section 523
(discharge exceptions).

The term domestic support obligation is newly added to the Bankrupicy Code oy the
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (2005 Amendments”).
The definition may be summarized as follows: a dumestic support obligation is (a) a debt owed
to or recoverable by a spouse, former spouse or child of a debtor; (b) in the nature of alinony,
Maintenance, or support of such spouse. former spouse or child: (c) established under 4
separation agreement, divorcee decree or property settlement agreement, or an order of a court of
record; and (d) not assigned other than for collection purposes. 11 U.S.C. $101 4A)"

Vhe filing of a bankruptcy case does not stay che collection of a domestic suipport
obligation from property that is not property of the estate, 11 U.S.C. § 362 2(bH2B). ¢
bankruptcy discharge does not discharge an individual debtor (a) from a debt for a domestic
support obligation, 11 U.S.C. § 523(a)\(3) or (b) trom a debt to a spouse, former spouse or child
of the Debior that (i} is not a domestic support obligation and (ii) is incurred in a divorce or
divorce-related action, 11 U.S.C. § $23(a}(15).

it is within this framework that the Court considers the Motions and the Fee Awards.

“The 2005 Amendments also placed this terra in Scetion 362(b)(2)(B) and Section
523{a)(5) in substitution for the phrase alimony, .naintenance, and support. Case law construing
alimony, maintenance, and support has lurgely developed in respect of former Section 523(a)(5)
whose text is comparable to and largely micrors Section 101(1 ANA),

4.

Case 05-30172 Doc53_ Filed 03/23/06 Entered 03/29/06 09:23:43 Desc Main

Document Page5of5

2. fee Awards

The issue raised in the Motions is this: whether and under what circumstances are
debts owed by a debtor to his own lawyer or on account of his former wile’s lawyer for services
in a divorce-related action domestic suppert obligations under the Bankruptey Code. Having
considered the Motions, the arguments, the recerd and applicable law, the Court concludes that
there are material factual matters relevant to the deiermination of the Fee Awards as domestic
support obligations reyuiring an evidentiary beering. . See Ja re Rios, 901 F2d71 (7” Cir, LY9U)
and In re Dean, 231 B.R. 19 (Bankr. W9. N.Y. 1999) as to the Crowne Fee Award. See /n re
Michaels, 157 B.R. 190 (Bankr, D. Mass. 1993) and én re Hale, 289 B.R. 788 (1* Cir. GAP
2003) as to the Carlin Fee Award.

The matters for evidentiary hearing inchide (but are not Limited to) the divorce decree, the
separation agreement, Crowne’s written engagement terms (if any), the intent of the parties
regarding support and their financial condition at the time of their divorce, and the scope of
services rendered in respect of the Fee Awards, None of these matters is yet (or fully) before the
Court One or more may lave some bearing (pcrhaps dispositive) on the ultimate outcome, The
Court is not inclined to make a summary ruling on im incomplete record.

Cenclusion

In the foregoing circumstances, the Court will refiain from ruling on the Motions pending

the conduct of an evidentiary hearing which will be separaicly scheduled in accordance with the

Court’s docket.

aed Sapte.
Robert Somma
Dated: March a3 » 2006 United States Bankruptcy Judge