Gertrude Brown v. Mark Brown (2009)

MEMORANDUM OF DECISION

The court makes the following findings of facts and conclusions of law.

The parties are in the midst of a protracted and acrimonious divorce.   On or about July 14, 2008, Attorney Robert Romano was appointed by the court as an attorney for the parties' minor child (AMC).¹  On May 22, 2009, the court, Markle, J., ordered the defendant to pay the AMC $8,021.25 in attorney fees.   The court ordered the defendant to pay the AMC $400 within thirty days and then pay $200/month until paid in full.

In a motion for contempt dated June 23, 2009, the AMC alleges the defendant failed to pay the $400 ordered by Judge Markle and that the defendant has failed to comply with the monthly $200 order.   On June 19, 2009 the AMC also filed a Motion for Order, in which the AMC alleges, among other things, that although the defendant paid a $2000 retainer, to date there exists a balance owed to the AMC by the defendant of over $8,000.

An order to show cause regarding the contempt motion was ordered by the court, Swienton, J., on July 2, 2009 and scheduled for a hearing on August 19, 2009.   The defendant was served with a summons to appear but apparently on or about August 10th he requested a continuance, claiming he was unavailable to appear for court due to employment commitments.

On or about June 11, 2009 the defendant filed an appeal form with the appellate court.   On the appeal form the defendant claims the final judgment is Judge Markle's order “granting attorney fees to Attorney Robert Romano.”

On August 24, 2009, the defendant filed an objection (dated August 19, 2009) to Attorney's Romano's June 19th Motion for Order that the AMC “be granted attorney fees in connection with a certain appeal taken by the defendant involving the Court's order of May 22, 2009.”   Also filed on August 24, 2009 (dated August 19, 2009) was “Defendant's Motion for Stay of Court Order of May 22, 2009.”

All of the above mentioned motions were scheduled for a hearing on September 15, 2009.   On the morning of September 15th defendant's counsel filed a document entitled “Defendant's Notice of Bankruptcy” in which he alleges that on that day a Chapter 7 bankruptcy petition was filed in New Haven Federal Bankruptcy Court on the defendant's behalf.   The court queried the parties about the impact the last minute bankruptcy petition would have on the contempt hearing.²  The parties agreed to research the issues and the case was continued for an evidentiary hearing on Oct. 5th.³

At the commencement of the October 5th hearing the AMC filed a Motion for Sanctions asking the court to sanction the defendant's attorney and to order defense counsel to pay the AMC “fees for services rendered on and in preparation for the hearing of September 15, 2009.” ⁴

The defendant argues this court lacks the authority to proceed with matters at hand because of the automatic stay that attaches to any judicial hearing once a bankruptcy proceeding commences.   Additionally the defendant argues that the filing of the appeal automatically stayed Judge Markle's May 22nd order or alternatively that his August 19th motion should be granted.

At the October 5th hearing the defendant and his bankruptcy lawyer testified.   The defendant conceded no payments had been made to date regarding Judge Markle's May 22nd order.   The defendant testified that he did not pay attention to the court order because he could not afford to pay it.   The defendant testified he did pay his bankruptcy lawyer $2,300 on or about September 14, 2009 to file a bankruptcy petition on his behalf.

The court also makes the following findings of fact.   Notwithstanding the defendant's claims of dire financial circumstances in addition to paying $2,300 to a bankruptcy lawyer on September 14th, he also continued to pay $1,250 per month to his roommate for his share of the rent.   The defendant continued to spend money in June, July, August to the extent that he maintained his existing lifestyle with no significant alterations or reductions.

Preliminarily, it must be determined whether the AMC's contempt motion is properly before this court.  Title 11 U.S.C. § 362(a) states in part:  “a [bankruptcy] petition filed under section 301, 302, or 303 of this title or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities ․” However, subsection (b) of § 362 delineates exceptions to the automatic stay rule.   One exemption to the automatic stay is (2)(A) “if the commencement or continuation of a civil action or proceeding [is] (ii) for the establishment or modification of an order for domestic support obligations ․” Hence the question for this court is whether the AMC's fees are in the nature of support.

The case of Larson v. Larson, 89 Conn.App. 57 (2205) supports this court's conclusion that this court has jurisdiction to hear the merits of the AMC's contempt motion and the other motions presently before this court.

State courts of general jurisdiction have the power to decide cases involving federal ․ rights where ․ neither the Constitution nor statute withdraws such jurisdiction ․ In this instance, jurisdiction has not been withdrawn from state courts ․ Section 523(c)of the [Bankruptcy] Code[which is contained in title 11 of the United States Code] provides for a limited exception to this concurrent jurisdiction for question of dischargeability concerning § 523(a)(2) (fraud or a false financial state), § 523(a)(4) (fraud by a fiduciary, embezzlement or larceny and § 523(a)(6) (willful and malicious injury).   Therefore, all dischargeability issues other than those concerning § 523(a)(2), (4), and (6) may be determined by a nonbankruptcy court ․ (Citations omitted;  internal quotation marks omitted.)  Lewis v. Lewis, [35 Conn.App. 622, 626-27 (1994).   Because we conclude that the debt of attorneys fees falls squarely within the confines of § 523(a)(5) and not any of the excepted sections, our state courts are competent to entertain the question of whether the fees are dischargeable.

Larson at 61.

In addition to supporting the proposition that this court has jurisdiction over the pending matters, Larson is one of several cases in which the state and federal courts have previously concluded that an award of attorney fees in divorce proceedings is in the nature of alimony or support and therefore not dischargeable in bankruptcy.  In re Birdseye, 548 F.2d 321, 325 (10th Cir.1977);  Cook v. Bieluch, 32 Conn.App. 537, 545, 46 (1993);  Larson v. Larson, 89 Conn.App. 57, 66-68 (2005).   Courts, in determining whether the disputed fees are dischargeable, rely on three elements:  (1) the debt must be to a spouse, former spouse, or child of the debtor, (2) the debt must be in the nature of alimony, maintenance, or support and (3) the debt must have been incurred ‘in connection with a separation agreement, divorce degree or other order of a court of record.’  (Citations omitted.)  Title 11 U.S.C. § 523(a)(5).  Larson at 66.   In the present case the debt is owed to the court appointed AMC for services the AMC rendered in an ongoing dissolution and custody proceeding.   The fees Judge Markle ordered the defendant to pay to the AMC are clearly an order of a court of record.   Hence the AMC's fees would clearly be nondischargeable in a bankruptcy proceeding.⁵

The court is mindful that the issue presently before this court is not whether the AMC's fees would ultimately be dischargable in bankruptcy but whether said fees fall within the exemption to the automatic stay that exists pending the outcome of the bankruptcy proceedings.   In attempting to arrive at an answer it is helpful to examine the purpose of the automatic stay and the reasons behind the exemptions from said stay.

The automatic stay promotes two principal purposes:  (1) it provides the debtor with a ‘breathing spell’ from its creditors and (2) it ‘allows the bankruptcy court to centralize all disputes concerning property of the debtor's estate in the bankruptcy court so that reorganization can proceed efficiently, unimpeded by uncoordinated proceedings in other arenas.’  (Citation omitted.)   The automatic stay is thus one of the most fundamental debtor protections provided by the bankruptcy laws.   Essentially in protects the debtor from the harassment of lawsuits in other jurisdictions as is reinforces the exclusive jurisdiction of the bankruptcy court.  In re Heating Oil Partners, civil case no.:  3:08-CV-1976 (CSH), Bankruptcy Case No.:  3:05-51271 (United States District Court, D. Connecticut 12-17-09).

The right of a debtor to obtain a “breathing spell” and the logic of an efficient reorganization and centralization of a debtor's debt must be balanced against the child's right to effective representation and, inherent in that right, is the payment of the child's attorneys fees.

․ the general purpose of bankruptcy law is ‘to provide the bankrupt with comprehensive, much needed relief from the burden of his indebtedness by releasing him from virtually all of his debts' (citations omitted) ․ the exceptions to discharge ․ prioritize considerations other than relief from indebtedness- § 523(a)(5), for example, reflects significant concern for the debtor's family obligations (citations omitted) ․ Congress has chosen between two competing interests-those of bankrupts and those of their former spouses and offspring-and it chose in favor of the latter ․

In re Maddigan, 312 F.3d 589, 596 (2002).

This court is cognizant of the need to tread carefully.   If the federal bankruptcy court were to ultimately disagree with this court and find that the AMC's fees were not exempt from the stay, any orders by this court could be in jeopardy and the AMC may be foreclosed from receiving his just compensation.   “[A] state court makes such a decision at its peril, for the bankruptcy court is not precluded by the state court's decision.   If the bankruptcy court later decides that the state court was incorrect, the state court proceedings in violation of the stay are void ․ On the other hand, if the state court is correct in deciding that the stay does not apply, the state court proceedings are not void.”  (Citations omitted.)  Lockyer v. Mirant Corp. 398 F.3d 1098, 1106 (9th Cir.2005).

This court does not dispute the proposition that the federal bankruptcy court has the final decision making authority regarding the applicability of the automatic stay.  In re Gruntz, 202 F.3d 1074, 1084 (9th Cir.2000).   However, after a careful review of state and federal case law and Title 11 of the U.S.C. this court concludes a reasonable interpretation of the § 362(b)(2)(A)(ii) permits this court to adjudicate the merits of the AMC's contempt motion.   The wording of the exceptions to the automatic stay clause is clear and as the Gruntz court points out “[i]f the statutory command of the Bankruptcy Code is clear, we need look no further;  it must be enforced according to its terms.”  Id. at 1085.   For all of the foregoing reasons, the court now turns to the merits of the AMC's contempt motion.

Contempt has been defined as “a wilful failure to comply with a then outstanding court order.”  Marcil v. Marcil, 4 Conn.App. 403, 405 (1985).   In the present case, the defendant testified he paid no attention to the court's May 22nd order.   His reasoning for not paying attention to the order, namely that he could not afford it, is not credible.   From May to September the defendant continued to meet certain financial obligations, such as his share of the rent of $1,250, maintenance of his vehicles and his decision not to reduce or altered his daily living expenses.   It was clear from the defendant's demeanor on the witness stand that his anger and hostility toward the AMC motivated his noncompliance with the court order and not a legitimate inability to pay any portion of the court ordered fees.   The defendant is hereby found to be in contempt of Judge Markle's May 22nd orders regarding the payment of the AMC's fees.

The more perplexing decision before this court is the appropriate relief to grant the AMC. This court has had the unfortunate task of hearing a subsequent contempt motion regarding the defendant in his nonpayment of a weekly support order and an accompanying arrearage.   In December of 2009 the defendant was placed in the custody of the Commissioner of Corrections with a purge amount in excess of $6,900.   Although the defendant purged himself on the same day he was committed to the custody of the Commission of Corrections, his ongoing weekly support obligation is of significant concern to this court.   The court being acutely aware of the defendant's continuing perceptions about his financial situation (leaving aside for the moment anyone's level of culpability regarding said situation) this court is compelled to, in effect, ‘triage’ the AMC's request for relief with the ongoing and much needed weekly support obligation.   If this court were to now set a purge amount regarding the AMC's fees it could very well be to the financial detriment of the defendant's child and wife.   The court acknowledges the need for attorneys who accept the court's appointment to represent children in difficult and protracted dissolution cases to have some assurance that monetary reimbursement will eventually be forthcoming.   However, after a careful consideration of the varying but valid interests at stake in this case, the court has little choice but to at this time decline to set a purge amount.

The defendant is in contempt of Judge Markle's May 22nd order.   He is ordered to pay the AMC's fees as previously directed by the court on May 22nd.

Alternatively or concurrently the defendant argues his June 11th filing of the appeal form automatically stays the execution of the May 22nd order.   Section 61-11(b) of the Connecticut Practice Book identifies those instances in which an appeal does not automatically stay the judgment of the court.

Matters in which no automatic stay is available under this rule:  In addition, no automatic stay shall apply to orders of relief from physical abuse pursuant to General Statues § 46b-15 or to orders of periodic alimony, support, custody or visitation in domestic relations matter brought pursuant to chapter 25 or to any later modification of such orders.

Again, the May 22nd court order is clearly in the nature of support.   Any potential protection afforded the defendant by the federal bankruptcy court would not be applicable in the interpretation of section 61-11(b) of the practice book.   Because no automatic stay is afforded pursuant to section 61-11(b) of the practice book, the defendant's June 11th filing of an appeal form did not automatically stay Judge Markle's May 22nd order.⁶

Bernadette Conway, Judge

FOOTNOTES

FN1. On April 30, 2009, the court, Swienton, J., removed Attorney Romano as AMC..  FN1. On April 30, 2009, the court, Swienton, J., removed Attorney Romano as AMC.

FN2. Another attorney who had been appointed as a special master for purposes of facilitating discovery between the defendant and the plaintiff also had a contempt motion scheduled for the September 15th hearing.   In his motion the special master also alleges the defendant failed to pay him as previously ordered by the court.   On September 15th, the special master conceded that the fees due him were not in the nature of support and given the newly disclosed bankruptcy filing, he elected not to participate in the October 5th hearing..  FN2. Another attorney who had been appointed as a special master for purposes of facilitating discovery between the defendant and the plaintiff also had a contempt motion scheduled for the September 15th hearing.   In his motion the special master also alleges the defendant failed to pay him as previously ordered by the court.   On September 15th, the special master conceded that the fees due him were not in the nature of support and given the newly disclosed bankruptcy filing, he elected not to participate in the October 5th hearing.

FN3. The dissolution and custody issues had been scheduled for three consecutive days of trial commencing October 6th.   The defendant's bankruptcy filing necessitated a postponement..  FN3. The dissolution and custody issues had been scheduled for three consecutive days of trial commencing October 6th.   The defendant's bankruptcy filing necessitated a postponement.

FN4. The defendant acquiesced to the AMC's Oct. 5th motion be heard with the other motions previously scheduled for that day..  FN4. The defendant acquiesced to the AMC's Oct. 5th motion be heard with the other motions previously scheduled for that day.

FN5. Although exceptions to the dischargeability of a debt in bankruptcy are normally narrowly construed the phrase “in the nature of support” is to be given a broad or more liberal construction.  Larson at 65.  In re Maddigan, 312 F.3d 589, 596 (2d Cir.2002)..  FN5. Although exceptions to the dischargeability of a debt in bankruptcy are normally narrowly construed the phrase “in the nature of support” is to be given a broad or more liberal construction.  Larson at 65.  In re Maddigan, 312 F.3d 589, 596 (2d Cir.2002).

FN6. In light of the court's decision the AMC's request that the defendant's attorney be sanctioned and ordered to pay the AMC's fees for services rendered on and in preparation for the hearing of September 15, 2009 is denied.   The court also denies the defendant's motion for a stay of the May 22nd court order..  FN6. In light of the court's decision the AMC's request that the defendant's attorney be sanctioned and ordered to pay the AMC's fees for services rendered on and in preparation for the hearing of September 15, 2009 is denied.   The court also denies the defendant's motion for a stay of the May 22nd court order.

Conway, Bernadette, J.