Purviance et al v. Region 1 Self Reliance Program et al

1 On occasion and for clarity, the Court will also use the Debtors’ first names.
MEMORANDUM OF DECISION - 1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF IDAHO
IN RE 	)
)
LARRY D. PURVIANCE & 	) 	Case No. 04-20665-TLM
VICTORIA A. PURVIANCE, 	)
)
Debtors. 	) 	MEMORANDUM OF DECISION
)
___________________________________ )
)
VICTORIA A. PURVIANCE, 	)
)
Plaintiff, 	)
)
vs. 	) 	Adversary No. 04-6153-TLM
)
REGION 1 SELF RELIANCE 	)
PROGRAM, 	)
)
Defendant. 	)
)
___________________________________ )
I. 	INTRODUCTION
Larry and Victoria Purviance (“Debtors”)1 are joint chapter 7 debtors in
Case No. 04-20665-TLM. On July 12, 2004, Victoria (“Plaintiff”) filed a
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 1 of 26

2 The complaint, Doc. No. 1, was filed only by Victoria and did not include her husband
and joint debtor (and licensed lawyer), Larry, as a named plaintiff. Even though the “adversary
proceeding cover sheet” which was attached to the complaint listed both Debtors as plaintiffs, the
Court in a prior Decision followed the form of the complaint and of the other pleadings filed
throughout this matter by both parties. See Doc. No. 28. Thus, it treats Victoria as the sole
Plaintiff. Larry is, in essence, her attorney, as well as interested in the outcome by virtue of being
Victoria’s spouse.
3 See Doc. No. 16 (Schwab Affidavit), at attached Ex. A (certified court file) at 2.
MEMORANDUM OF DECISION - 2
complaint, Doc. No. 1, commencing the present adversary proceeding. 2
She seeks an order declaring discharged her obligations under a certain
Canadian child support order in favor of her ex-husband, Dr. Garnet Falck,
(hereinafter the “Support Order”3 ). Her complaint named as the only defendant
“Region 1 Self Reliance Program,” which is a division of the Department of
Health and Welfare for the State of Idaho that is charged with collecting unpaid
child support in Kootenai County, Idaho (“State”).
The State answered the complaint and thereafter moved for summary
judgment. See Doc. Nos. 5, 13 and 17. Victoria also moved for summary
judgment. See Doc. No. 12. The Court issued a Memorandum of Decision (the
“SJ Decision”) and an Order granting partial summary judgment in favor of the
State declaring that a prima facie enforceable debt existed, and denying the rest of
the State’s motion and denying Plaintiff’s motion. See Doc. Nos. 28, 29.
The Court was unwilling to conclude on summary judgment whether or to
what extent the debt was “actually in the nature of . . . support” and thus
nondischargeable under the provisions of § 523(a)(5)(B). See Doc. No. 28 at 22-
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 2 of 26

4 Jurisdiction exists under 28 U.S.C. § 1334(b). The matter is a core proceeding, see 28
U.S.C. § 157(b)(2)(I), upon which the Court may enter final judgment, 28 U.S.C. § 157(a), (b)(1).
Venue is proper. 28 U.S.C. § 1409(a).
MEMORANDUM OF DECISION - 3
26. Therefore the matter was set for trial so that the parties could present such
evidence on the issue as they deemed appropriate.
Trial occurred on October 26, 2005. The matter was taken under
advisement upon the submission of post-trial briefing.
After consideration of the evidence, legal arguments, and applicable
authorities, the Court determines that the subject debt under the Support Order is
not dischargeable. Judgment will be entered for the State. The following
constitute the Court’s findings of fact and conclusions of law. Fed. R. Bankr. P.
7052.4
II. 	SUMMARY OF APPLICABLE LAW AND THE SJ DECISION
The SJ Decision addressed the applicable law under § 523(a)(5),
particularly in light of the undisputed facts established in the summary judgment
process and set out by the Court in that Decision. For ease of reference, that law
will here be summarized, though it is also addressed in Part IV infra.
A. 	Law on § 523(a)(5)(B)
1. 	A valid, enforceable debt
In general, before the Court can consider whether a debt should be excepted
from discharge under one of the subsections of § 523(a), the creditor must prove
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 3 of 26

MEMORANDUM OF DECISION - 4
that the debtor is indebted to it. See Banks v. Gill Distribution Ctrs., Inc. (In re
Banks), 263 F.3d 862, 868 (9th Cir. 2001) (holding that “there are two distinct
issues to consider in the dischargeability analysis: first, the establishment of the
debt itself” and, second, the nature of the debt). In granting partial summary
judgment to the State, the Court concluded a valid, enforceable debt existed,
evidenced by the Support Order issued by the Canadian court. Plaintiff’s various
arguments why this Court should refuse to recognize the foreign Support Order
were rejected. Thus, the State established a debt existed.
2. 	The nature of the debt
Section 523(a)(5) makes debts for child support and spousal support
nondischargeable in bankruptcy. It provides:
(a) A discharge under section 727 . . . does not discharge an individual
debtor from any debt —
. . .
(5) to a spouse, former spouse, or child of the debtor, for
alimony to, maintenance for, or support of such spouse or child,
in connection with a separation agreement, divorce decree or
other order of a court of record, determination made in
accordance with State or territorial law by a governmental unit,
or property settlement agreement, but not to the extent that–
. . .
(B) such debt includes a liability designated as alimony,
maintenance, or support, unless such liability is actually
in the nature of alimony, maintenance, or support[.]
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 4 of 26

5 Two points are worth noting. First, the provisions of § 523(a)(5) have been
substantially modified by the Bankruptcy Abuse Prevention and Consumer Protection Act of
2005, Pub. L. No. 109-8, 119 Stat. 23 (2005). The instant litigation is controlled by the Code
provisions existing immediately prior to BAPCPA. Second, § 523(a)(5)(A) addresses another
basis for determining a support debt to be dischargeable, to wit, its “assignment” to the federal
government, a state, or a political subdivision of a state. This provision is not urged by Plaintiff
here; she evidently agrees that the State acts only as an enforcement agency for the beneficiaries
of the Support Order, and was not assigned the rights under that Order within the sense of this
Code provision.
MEMORANDUM OF DECISION - 5
Section 523(a)(5) (2004). 5
This Court discussed in the SJ Decision several authorities on the question
of dischargeability under § 523(a)(5)(B). It need not repeat them verbatim here.
But some discussion and citation is warranted.
In Beaupied v. Chang (In re Chang), 163 F.3d 1138 (9th Cir. 1998), the
court held:
The § 523(a)(5) exception to discharge strikes a balance between
competing policies. On the one hand, the goal of providing a “fresh
start” to the bankruptcy debtor requires that exceptions to discharge be
confined to those plainly expressed. In re Klapp, 706 F.2d 998, 999
(9th Cir. 1983). 	On the other hand, this court has recognized “an
overriding 	public 	policy 	favoring 	the 	enforcement 	of 	familial
obligations.” Shaver v. Shaver, 736 F.2d 1314, 1316 (9th Cir. 1984).
When determining whether a particular debt is within the
§ 523(a)(5) exception to discharge, a court considers whether the debt
is “actually in the nature of . . . support.” Id. at 1316. This question is
a factual determination made by the bankruptcy court as a matter of
federal bankruptcy law. In re Sternberg, 85 F.3d 1400, 1405 (9th Cir.
1996), rev’d on other grounds, In re Bammer, 131 F.3d 788 (9th Cir.
1997) (en banc). A relevant factor for the bankruptcy court to consider
when making this determination is how the particular state law
characterizes the debt. In re Catlow, 663 F.2d 960, 962-63 (9th Cir.
1981).
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 5 of 26

MEMORANDUM OF DECISION - 6
163 F.3d at 1140.
Because of the policy favoring discharge, as noted in Chang, the party
asserting nondischargeability has the burden of demonstrating that the debt is truly
in the nature of support. See Kimball v. Kimball (In re Kimball), 253 B.R. 920,
925, 00.2 I.B.C.R. 106, 108 (Bankr. D. Idaho 2000) (noting that because the state
court’s decision was equivocal, the plaintiff creditor could not meet her burden of
showing the allocation of debts was actually in nature of support) (citing Gard v.
Gibson (In re Gibson), 103 B.R. 218, 220 (9th Cir. BAP 1989)).
A leading treatise on bankruptcy law explains the policy, and presumptions,
in the following fashion:
In determining whether a particular debt falls within one of the
exceptions of section 523, the statute should be strictly construed
against the objecting creditor and liberally in favor of the debtor. Any
other construction would be inconsistent with the liberal spirit that has
always pervaded the entire bankruptcy system. One exception to this
principle of statutory construction is found in section 523(a)(5), in
which the term “support” has been given a broad construction by most
courts to promote the congressional policy that favors enforcement of
obligations for spousal and child support. In this respect, Congress has
overridden the general bankruptcy policy in which exceptions to
discharge are construed narrowly.
4 Collier on Bankruptcy ¶ 523.05, 523-24 to 523-25 (Alan N. Resnick & Henry J.
Sommer eds., rev. 15th ed. 2005).
Chang acknowledges that the determination whether a debt is actually in
the nature of support for purposes of discharge is a question of federal bankruptcy
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 6 of 26

6 A number of additional authorities were discussed in the SJ Decision, and are not here
repeated.
MEMORANDUM OF DECISION - 7
law. See also Kimball, 253 B.R. at 923; In re Martin, 04.3 I.B.C.R. 131, 132
(Bankr. D. Idaho 2004); Norris v. Norris (In re Norris), 94 I.B.C.R. 233, 234
(Bankr. D. Idaho 1994) (citing Shaver v. Shaver, 736 F.2d 1314, 1315-16 (9th Cir.
1984)); see also Jodoin v. Samayoa (In re Jodoin), 209 B.R. 132, 137-38 (9th Cir.
BAP 1997). In making this determination, the Court “is compelled to look beyond
the language of the [subject order or] divorce decree to the substance of the
obligation[.]” Kimball, 253 B.R. at 923 (citing Shaver, 736 F.2d at 1316); see also
Collier on Bankruptcy, § 523.11[6].
How does the Court go about this inquiry? Shaver stated:
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 also look 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.
Shaver, 736 F.2d at 1316-17 (internal citations omitted).6
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 7 of 26

7 As discussed further below, the present case does not present such a “classic” situation
where the debt is either property division or support, and the Court is asked to consider its “true”
nature notwithstanding how the parties or the state court chose to characterize it. Here, Plaintiff
does not contend that the Support Order is really a property division in disguise. What she really
contends is that it could not truly be “support” because there was no economic need for her to pay
support given Dr. Falck’s resources. She does not clearly say what the obligation is, if not
support, though the inference is that it was simply the result of Dr. Falck’s desire to be punitive.
MEMORANDUM OF DECISION - 8
The described standards require the Court to focus on the function served
by the award or agreed obligation, i.e., whether it was actually intended for the
spouse’s or child’s “maintenance or support” at the time it was entered by the state
court or otherwise established by the parties’ agreement.
In the classic § 523(a)(5)(B) case, a debtor generally argues that what is
seemingly cast as a support obligation is in fact a disguised property division or,
conversely, a creditor argues that an award of fees or costs, or an obligation that
appears to divide assets or allocate debts, truly served the purpose of providing
support. This gives rise to the sorts of factors addressed in Shaver, those outlined
in Leppaluoto v. Combs (In re Combs), 101 B.R. 609, 616 (9th Cir. BAP 1989),
and the numerous cases mentioned above and in the SJ Decision.7
Finally, the required focus is on the situation that existed at the time of the
entry of the subject order or decree or agreement, and not the parties’ prior
situation or their current circumstances. Thus, in the present case, the critical
inquiry is as of October 2000, the date of entry of the Support Order. However,
facts either before or after that date, if proven to exist, may be relevant to that
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 8 of 26

8 A good deal of testimony related to matters preceding October, 2000, and still more
related to events after the Support Order was entered. Most of these were not relevant and are
therefore not discussed in this Decision.
9 The relatively brief testimony and the one exhibit introduced at trial obviously did not
tell the whole story. Both parties rather evidently relied on their prior summary judgment
submissions to establish much of the foundation for their respective cases. The Court does not
disagree with that approach to the extent that the summary judgment process established that
certain facts were undisputed. A different conclusion must be reached where the litigants appear
to rely on affidavits they earlier submitted in relation to disputed facts. Those attempts are
improper and must be rejected, as allegations in earlier affidavits are not proper evidence for
resolution of the issues which remained open at trial. The Court has carefully reviewed the
record and the contentions of the parties to ensure that facts as found in this Decision were (a)
established by competent evidence introduced at trial or (b) were undisputed facts adequately
established in the summary judgment process. The latter facts are set forth in this Part III.A.
MEMORANDUM OF DECISION - 9
specific inquiry.8
III. 	FACTS
A. 	Undisputed facts as of summary judgment9
Victoria and her ex-husband, Dr. Falck, separated and, in January, 1997,
entered into a written agreement (the “Separation Agreement”). Under the
Separation Agreement, Victoria and Dr. Falck agreed that no spousal support or
alimony would be claimed by either party, but that Dr. Falck would pay Victoria
child support for their three children:
[Dr. Falck] shall pay [Victoria] for the support and maintenance
of the children of the marriage the sum of FIVE HUNDRED AND
TWENTY ($520.00) DOLLARS per month for each of the children
making together the sum of ONE THOUSAND FIVE HUNDRED
AND SIXTY ($1,560.00) DOLLARS. The payments shall begin on the
1st day of December, 1996, and continue on the first day of each and
every month thereafter for so long as the children remain eligible. . . .
[Dr. Falck] and [Victoria] confirm that [Victoria] is providing
care and homemaking services for the children in [Dr. Falck’s] home
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 9 of 26

MEMORANDUM OF DECISION - 10
to the extent of four hours per day. In the event that those services are
withdrawn or terminated, the maintenance as provided . . . shall be
reduced by the sum of $200.00 per child per month.
If the three children are residing with and receiving full care by
[Victoria], the payments shall remain at $520.00 per month for each of
the children of the marriage.
See Doc. No. 16, at attached Ex. A at 23-24.
The Separation Agreement acknowledged that the agreed division of
property and the child support arrangements did not comport with Canadian law,
but stated in several places that the terms of the Separation Agreement would
apply despite contrary provisions of Canada’s Family Relations Act and Divorce
Act. See id. at 22, 25. The parties also agreed that the Separation Agreement
would survive the divorce of the parties. Id. at 26.
In January, 1998, the Supreme Court of British Columbia entered an order
granting Victoria a divorce (the “Divorce Order”). Id. at 56. The British
Columbia court granted joint custody to Victoria and Dr. Falck, determined the
parties’ guideline incomes, and ordered child support in the following manner:
[Dr. Falck] shall pay to [Victoria], for the maintenance and support of
the children of the marriage, LISA ANN FALCK, [born] January 22,
1980, DANIEL STEWARD FALCK, born October 5, 1982, AND
MATTHEW GRAEME FALCK, born May 5, 1986, the sum of
$520.00 per month per child, for a total of $1,560.00 per month, for as
long as the children are residing primarily with [Victoria] or, in the
event that the children are not residing primarily with [Victoria], the
sum of $320.00 per month per child, for a total of $960.00 per month
. . . and shall continue . . . until the children are no longer children of
the marriage as defined by the Divorce Act, 1985.
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 10 of 26

MEMORANDUM OF DECISION - 11
Id. at 57.
Upon the parties’ divorce, Victoria moved to Idaho. The children stayed in
Canada with their father.
Because Dr. Falck failed to make payments, Victoria registered the Divorce
Order with the British Columbia Family Maintenance Enforcement Program
(“FMEP”) in December, 1999, so that the FMEP could enforce the agreement and
collect past due support payments under the Separation Agreement and Divorce
Order. When Dr. Falck was made aware of this attempt, he filed a motion with the
British Columbia court to modify his child support obligations, set any past due
amounts at zero, and obtain child support from Victoria. See Doc. No. 16, at
attached Ex. A at 13.
While Victoria was personally served with Dr. Falck’s motion, see id. at 10,
she failed to appear for the hearing on the motion on July 4, 2000. At that hearing,
the British Columbia court set the child support arrearage owed by Dr. Falck at
zero, and varied the Divorce Order such that Dr. Falck was not liable for any child
support payments in the future. Id. at 6-7. That court further ordered Victoria to
provide Dr. Falck with income information to determine any possible child support
obligations owed by her, and set a continued hearing on the matter. Id.
Victoria failed to appear at two further hearings or provide the income
information required by the court’s order. The British Columbia court ultimately
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 11 of 26

10 In certain instances in Part III.B, the Court combines trial testimony with undisputed
portions of the prior record in order to set forth the facts in a slightly more cogent way than they
were presented to the Court.
11 Victoria testified, as did her sister, Deborah Jane Arness. Plaintiff called no other
witnesses and introduced no exhibits. The State called but one witness, who testified only in
regard to the outstanding amount of the Support Order. Thus, essentially all the evidence
presented regarding the situation in October, 2000 (outside the undisputed facts gleaned from the
summary judgment process), came from Victoria’s perspective. In some aspects, the trial
testimony offered by Plaintiff was incomplete, unclear, glossed over detail, lacked evident
foundation, or focused on irrelevant matters to the detriment of more important things. In some
(though relatively few) aspects, it was effectively challenged by the State’s cross-examination.
Of course, in all regards, the Court has evaluated the credibility of the witnesses and determined
(continued...)
MEMORANDUM OF DECISION - 12
imputed an income to Victoria and ordered her to pay $300.00 per month for child
maintenance commencing October 1, 2000. See Support Order at 2. In addition,
the court awarded Dr. Falck $500.00 in costs. Id.
Victoria did not appeal or otherwise challenge in the British Columbia
courts the Support Order entered against her. The FMEP, responsible for the
collection and enforcement of the child support orders, now in favor of Dr. Falck,
issued a statement of arrears and sent the Support Order and statement to the State
for enforcement.
B. 	Additional facts established at trial
The foregoing summary of undisputed facts was not contradicted by any of
the evidence introduced at trial. The evidence did, however, flesh out certain
details, and provided a few more facts relevant to the issue before the Court.10
Plaintiff and Dr. Falck were married for about 19 years according to
Victoria.11 This indicates the marriage occurred in 1979. They had three children:
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 12 of 26

11
(...continued)
the weight to be provided their testimony.
12 Victoria testified that the government of Canada provides a small monthly payment to
women in the country with children, and that this amounted to $100.00 to $120.00 per month.
Though this “income” was received by her and deposited to the family’s accounts, its de minimis
nature renders it unimportant in addressing the issues.
MEMORANDUM OF DECISION - 13
a daughter, Lisa, born January 22, 1980, and two sons, Dan, born October 5, 1982
and Matt, born May 5, 1986.
In 1981, Victoria and Dr. Falck purchased a house for $35,000.00 in
Nelson, British Columbia. They rented it out for two years, while they resided in
New Guinea. They moved to Nelson in 1983.
This house was sold in 1988 for $75,000.00, and the parties used the
proceeds in acquiring another house located about 1/2 mile from Nelson for
$175,000.00. A mortgage on this house for the unpaid portion of the purchase
price was retired in about 5 years.
Insofar as the testimony showed, Dr. Falck’s medical practice provided the
parties’ sole income during the marriage.12 During some undefined portion of the
marriage, Victoria worked as an office manager, secretary and bookkeeper in Dr.
Falck’s private practice. She was paid about $35,000.00 per year, depositing the
paychecks she received from the practice into the family’s personal accounts.
Victoria estimates Dr. Falck’s gross yearly income at a relatively constant
$140,000.00 though she indicated that it could vary by $10,000.00 or so, up or
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 13 of 26

13 It did not appear to be Victoria’s assertion that this average income was accurate for
the entire 19 year duration of the marriage, but the number of years for which this average
applied was not made clear.
MEMORANDUM OF DECISION - 14
down, in any given year.13
In September 1997, Victoria started taking classes in Canada as a full-time
college student. Though she had no high school diploma, she was given
“provisional” status to attend college-level classes. As noted previously, it was in
January, 1997, that the parties’ Separation Agreement was reached. It appears that
her work at Dr. Falck’s practice ceased at some point prior to this date. Nothing
indicates Victoria was otherwise employed during the marriage or at the time of
separation and divorce.
In the divorce, Victoria received a lump sum payment of $40,000.00 from
Dr. Falck. She relinquished any interest in other marital assets, specifically
including the Nelson house. She testified that the home was, at that time, free and
clear of debt, and that Dr. Falck placed a $40,000.00 mortgage against it to
generate the funds paid to her.
Victoria also received in the divorce her interests in a retirement account.
In cashing out this account starting in 1998, she lost about half its value to taxes
and penalties for early withdrawal. She ultimately received about $55,000.00 from
this account. She testified that Dr. Falck’s retirement account at the time of the
divorce, which he retained, was approximately as large as hers.
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 14 of 26

14 From 2002 to May, 2004, Victoria was enrolled in a masters degree program at Idaho
State University in Pocatello, Idaho. She commuted twice weekly to Pocatello from her home in
western Idaho. She incurred $28,000.00 in student loans in the process of obtaining her masters
degree in counseling in 2004.
15 She did not testify in regard to any job(s) she held after successfully obtaining her
“green card.” Additionally, it appears she married Larry at some point prior to the entry of the
Support Order in October, 2000 (e.g., the Support Order refers to her as “Victoria Ann Falck,
now known as Victoria Ann Purviance”). See Doc. No. 16, at attached Ex. A at 2. Nothing was
said of employment she may have had while married to Larry, or of any financial support or
assistance Larry provided her.
MEMORANDUM OF DECISION - 15
Victoria used the $40,000.00 and the $55,000.00 over the next several years
to provide for her support and her continuing education. She attended Boise State
University in Boise, Idaho, starting in the spring of 1998. She eventually received
a bachelors degree in psychology. It appears her bachelors degree was awarded in
2002.14 She indicated that the funds she had from the retirement account and
divorce settlement, plus some scholarship funds and about $2,800.00 of student
loans, sustained her during the 1998-2002 period.
Victoria testified that she also used $7,000.00 of the funds from the divorce
settlement and the retirement account in 1998, to hire an attorney to assist her in
immigration matters so that she could be legally employed in the United States.15
Victoria indicated that after she came to Idaho, she regularly sent money to
the children for school clothes, school supplies, and other reasons. Her testimony,
and that of her sister, Deborah Jane Arness, indicated that Dr. Falck took regular
vacations out of the country. At times, certain of the children would remain in
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 15 of 26

16 There was some testimony, though in certain regards disjointed and sketchy, dealing
with the location of the children. According to Victoria, Lisa left the Nelson home in 1998, the
same year Victoria moved to Idaho. Lisa was in New Zealand most of that year. She has since
returned periodically to Nelson but, for the most part, is self-supporting. Dan moved with
Victoria to Idaho in January, 1998 but only stayed a month or so before wanting to return to
Canada. He moved back and stayed with Ms. Arness for several months. (Ms. Arness also
indicated that Lisa lived with her for about 6 months, post-divorce, while attending college.) Dan
finally moved out of the Nelson home in September of 2000, shortly before the Support Order
was entered. Matt was the only child left with Dr. Falck in Nelson after 2000. Matt stayed for
“several months” (though in an unspecified year) with Ms. Arness. Matt also stayed with
Victoria for a semester (and was home schooled during that time) while Dr. Falck was in Saipan.
This stay may have been in 2000, or later.
17 Matt was born in 1986 and was therefore 12 years old at the time of the divorce and 14
years old at the time of the Support Order.
18 Victoria was repeatedly asked to testify regarding the period “from 2000 to 2004.”
The issue in the present case, as noted, focuses more on the financial status and related facts at or
about the time of the Support Order.
MEMORANDUM OF DECISION - 16
Nelson during such vacations.16 At other times, the Nelson house would be
“rented out” and the children would stay with Victoria or Ms. Arness. On at least
two occasions, Victoria drove to Nelson to help care for the youngest child, Matt,
who had been left alone at the residence.17
Victoria testified to other expenditures she made for the children. For
example, she advanced $7,000.00 to obtain a car for Lisa, and paid money in
regard to cars for Matt and Dan. She also created a Canadian credit card account,
which she arranged for the children to access when they needed funds. This was
an easier alternative, Victoria indicated, than sending cash or checks. It was not
clear, however, just when these various events occurred.18
The evidence also established that Victoria and Dr. Falck had created a
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 16 of 26

19 Though not very clear, the testimony left the Court with the impression that this was
something similar to what is known as a “529 plan” in the United States, i.e., a savings or
investment vehicle with favorable tax treatment but also with certain restrictions on accumulation
and disposition of the fund.
MEMORANDUM OF DECISION - 17
college fund19 to assist each of the children with their first year of post-high school
education, and help with their education expenses in later years to the extent
possible. The ability of the fund to do so was dependent on interest earned and
growth of the investments. The amount of the fund was never established, though
there was testimony that several thousands of dollars were disbursed to the
children or on their behalf.
The testimony indicated that Dr. Falck has recently retired from private
practice, and he is presently 58 years old. He would thus have been about 53 at the
time of the Support Order. It appears he was employed in his practice at that time.
When Victoria commenced the enforcement process in 1999 against Dr.
Falck to recover unpaid support under the Divorce Order, she was contacted by Dr.
Falck. She testified that he made a proposal to her to the effect that he would
agree to be solely responsible for the support of the children if she would abandon
the pursuit of the prior support claims and not seek to assert any support or
maintenance claims. Victoria said she rejected this proposition, concerned over
whether the support to the children would actually be provided as promised.
Further, Victoria indicated that, when Dr. Falck’s pleadings were served on
her, she failed to appear and defend because: she lacked the money to hire a
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 17 of 26

20 Recall, Victoria had also previously indicated that she never received service of the
support modification pleadings, a contention effectively abandoned by her during the course of
proceedings herein, and rejected by the Court in the SJ Decision.
21 The State’s one witness, Sharon Banducci, an employee of the Child Support Division
at the Idaho Department of Health and Welfare, testified in connection with the transmittal of the
Support Order to Idaho for collection, its supporting documentation and history of accrual and
collection, and its present outstanding balance.
MEMORANDUM OF DECISION - 18
lawyer; her schooling was hectic and stressful; she had no appreciation that the
issues involved included a change of which party was to pay child support; she had
just started a job that she would lose if she took time to go to court in British
Columbia; and she suffered feelings of persecution and was in therapy. 20
The State established that the obligation under the Support Order as of the
date of trial was $11,743.03 USD ($13,958.20 CAD), and that no payments were
ever made on the obligation voluntarily by Victoria, though $600.00 USD was
garnished from her wages. See Ex. A. The State’s witness21 indicated that the
Support Order was “lump sum” in nature rather than in “descending order.” This
means that the obligation did not vary in amount depending on the number of
children and was not reduced as each child was emancipated.
IV. 	DISCUSSION AND DISPOSITION
A. 	The amounts under the Support Order labeled as support
The Support Order required that: “plaintiff Victoria Ann Falck, now known
as Victoria Ann Purviance, pay to the defendant Garner Ralph Falck $300 per
month for child maintenance commencing on the 1st day of October, 2000 and
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 18 of 26

MEMORANDUM OF DECISION - 19
continuing on the first day of each and every month thereafter.” Doc. No. 16, at
attached Ex. A at 2 (emphasis added). The Support Order was entered after
Victoria had started a process to collect prior child support, and Dr. Falck
responded with a request to modify the extant orders so as to eliminate his
obligation to pay support and impose that obligation on Victoria instead.
Facially, therefore, the subject debt certainly appears to be actually in the
nature of child support. It was so denominated. Nothing in the evidence indicates
that it was something else. This obviously is not the situation where parties
contend that an obligation denominated as support is actually a property division.
As noted, the authorities make it clear that labels do not control. The Court
is required to evaluate all relevant factors and facts in determining if the obligation
is actually in the nature of support. Those facts, primarily the records of the
British Columbia court that were established and undisputed in the summary
judgment process and not impeached or contradicted at trial, indicate that the debt
cannot be seen as anything other than support.
Recall, Dr. Falck’s reply to Victoria’s enforcement efforts was to ask the
Canadian court to cancel his outstanding obligation, eliminate any future child
support to be paid by him, and to impose an obligation on Victoria to pay child
support. That court thus had no issue before it other than child support on which a
monetary obligation against Victoria would be premised.
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 19 of 26

22 Though some of the testimony related, on the surface, to the question of financial need
and the parties’ circumstances and conditions at the time the Support Order was entered, as
already noted, the testimony was in many ways unclear and incomplete, even though it may have
been unrebutted.
MEMORANDUM OF DECISION - 20
Recall further that, in entering the Support Order, the Canadian court
imputed an income to Victoria, based on her failure to appear and provide
evidence of income, and then reached a conclusion on the magnitude of the child
support obligation that should be imposed. This further supports the “actual”
nature of the debt as support.
Stripped of gloss, Victoria’s arguments are not that this debt represents
something other than child support. Instead, it is her contention that the Canadian
court should not have awarded any support to Dr. Falck given the relative incomes,
expenses and resources of the two parties. She argues the court made an error in
its ruling on the subject of child support.
Victoria emphasizes that, under the evidence (i.e., her testimony and that of
her sister), several facts relate to the respective financial condition of the parties
and the question of Dr. Falck’s need for child support.22
1. 	In 2000, Dr. Falck was employed in a private medical practice and
had been for a significant period of time. The practice was
successful, and had supported the family, including Victoria, prior to
the divorce. Dr. Falck’s gross income was estimated at $140,000.00.
2. 	In 2000, Victoria was a student, and paying for her education and
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 20 of 26

23 On the other hand, she had the ability to be employed, having worked in Dr. Falck’s
practice as a secretary, office manager and bookkeeper. In her testimony, Victoria did not
disclose any employment income in the 2000 time frame, and she did not discuss any financial
support she had by virtue of remarrying.
24 Victoria and her sister argued that market conditions have improved in Nelson such
that the house’s value may have doubled. Of course, the asserted value in 2005, even if the
testimony is to be given credence, does not establish its value in 2000.
25 Nor did either witness have knowledge of Dr. Falck’s financial affairs after 1998 other
than in the most general sense (he took vacations out of the country; he made investments; he
provided some ongoing support to the children; etc.).
MEMORANDUM OF DECISION - 21
supporting herself through the use of what remained of the liquid
assets she obtained in the divorce.23
3. 	In the 1998 divorce, Dr. Falck received the Nelson house worth at
least $175,000.00 and at that time it was free and clear of debt except
for the $40,000.00 mortgage incurred to generate the cash needed for
the divorce settlement.24 Dr. Falck also had at the time of divorce a
retirement account of perhaps $110,000.00 and, of course, his
practice.25
4. 	In the divorce, Victoria received $40,000.00 and her retirement
account of roughly $110,000.00, which generated about $55,000.00
net of penalties and taxes once she cashed it out.
5. 	In 2000, Lisa was 20 years old and out of the house, and Dan was 3
days shy of 18, and still living there. Matt was 14 and living at the
house. Each of the children spent a significant amount of time with
Victoria and/or her sister, Ms. Arness, away from the house in
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 21 of 26

MEMORANDUM OF DECISION - 22
Nelson, following the divorce.
6. 	In 2000, college expenses had been incurred by Lisa and soon would
be incurred by the other children. To some degree, the expenses
were covered by funds from the college “scholarship fund” and, to
another indeterminate extent, by payments directly from either
Victoria or Dr. Falck.
7. 	In 1999 or 2000, Dr. Falck offered to assume 100% of the support
obligations for the children, if Victoria would waive collection of the
prior outstanding support and not assert any rights to maintenance.
Even assuming that the overall weight of this evidence indicates that, in
2000, Dr. Falck was equally well or better positioned than Victoria to provide
support for the children, Victoria’s contentions under § 523(a)(5)(B) are
unavailing. Such an evidentiary showing would not mean that the Canadian order
was not “actually in the nature of (child) support.” It might mean that the
Canadian court “got it wrong” and should not have awarded any support to Dr.
Falck. But the § 523(a)(5)(B) inquiry does not invite the bankruptcy court to
review the merits of the other court’s ruling as to whether a party should have been
awarded support, or whether the amount of the support award was justified. See
Kimball, 002.I.B.C.R. at 107 (“It is not the function of this Court to reconsider the
evidence presented to the state court, or to ponder additional facts not presented, in
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 22 of 26

MEMORANDUM OF DECISION - 23
making a dischargeability determination under Section 523(a)(5).”) Instead, this
Court’s charge is to ensure that support awards – if actually in the nature of
support (and not something else) – are upheld. As Chang notes, the Code requires
that true support debts be declared nondischargeable, thus furthering “the
overriding public policy favoring the enforcement of familial obligations.” 163
F.3d at 1140.
Therefore, upon the entirety of the evidence and record, the Court
concludes that the obligations under the Support Order, designated as child
support, are not discharged. See § 523(a)(5)(B). This determination addresses the
bankruptcy issue – discharge – which is within the province of this federal court.
This Court expresses no opinion as to whether the Canadian court was correct or
incorrect in its application of its own law to the facts before it in 1999 and 2000. It
further expresses no opinion on whether Victoria would or should be entitled to
now seek review of the merits of that decision, or to seek additional modification
regarding support, by or from the Canadian courts.
B. 	The amount in the Support Order for costs
A portion of the Support Order obligation ($500.00) is attributable to
“costs” awarded to Dr. Falck. See Doc. No. 16, at attached Ex. A at 2. The
Support Order does not state the basis on which this cost award was made. Id.
While a comment not attributable to the Canadian court, the FMEP refers to this
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 23 of 26

MEMORANDUM OF DECISION - 24
award as a “penalty” owed to Dr. Falck. See Ex. A at 5.
This Court has previously noted that the primary consideration in
determining if an award of fees or costs in connection with a divorce or related
matter is nondischargeable is whether it was based on financial need of the
recipient. See Martin, 04.3 I.B.C.R. at 132 (citing Norris, 94 I.B.C.R. at 235);
Kimball, 253 B.R. at 923-24.
Many of the “facts” Victoria relies upon can be viewed as relevant to the
question of Dr. Falck’s need, or lack thereof, for this award. Based on the
evidence before the Court, it is not at all clear that Dr. Falck needed this cost
award for support or that the Canadian court intended the cost award as support.
As the State carries the ultimate burden to prove the debt should be
nondischargeable, the Court must conclude the State has failed to meet its burden
and the portion of the debt attributable to the award of costs is discharged.
VI. 	CONCLUSION
For the reasons stated, this Court finds that the obligations owed by Plaintiff
under the Support Order - - with the exception of the $500.00 in costs - - are
“actually in the nature of . . . support” under § 523(a)(5)(B). Therefore, Victoria
owes a $13,458.20 CAD nondischargeable child support debt. See Ex. A at 5
(account summary separating out the amount owed as costs). Counsel for the State
may prepare a form of judgment consistent with this Decision.
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 24 of 26

MEMORANDUM OF DECISION - 25
DATED: November 8, 2005
TERRY L. MYERS
CHIEF U. S. BANKRUPTCY JUDGE
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 25 of 26

MEMORANDUM OF DECISION - 26
CERTIFICATE RE: SERVICE
A “notice of entry” of this Decision, Order and/or Judgment has been
served on Registered Participants as reflected by the Notice of Electronic Filing.
A copy of the Decision, Order and/or Judgment has also been provided to non-
registered participants by first class mail addressed to:
Larry D. Purviance
Victoria A. Purviance
2021 W. Lundy
Post Falls, ID 83854
Case No. 04-6153 (Purviance v. Region 1 Self Reliance Program)
Dated: November 8, 2005
/s/Jo Ann B. Canderan
Judicial Assistant to Chief Judge Myers
Case 04-06153-TLM Doc 39 Filed 11/08/05 Entered 11/08/05 16:04:54 Desc Main
Document Page 26 of 26