In Re: Todd Benson, Todd Benson v. Sally Benson ( 2011 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 11-12284 ELEVENTH CIRCUIT
Non-Argument Calendar SEPTEMBER 26, 2011
________________________ JOHN LEY
CLERK
D.C. Docket No. 9:10-cv-81569-KAM,
BKCY No. 9:09-bkc-35783-EPK
In Re: TODD BENSON,
lllllllllllllllllllllllllllllllllllllll Debtor.
__________________________________________________________________
TODD BENSON,
llllllllllllllllllllllllllllllllllllllll Plaintiff–Appellant,
versus
SALLY BENSON,
lllllllllllllllllllllllllllllllllllllll Defendant–Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(September 26, 2011)
Before TJOFLAT, CARNES and KRAVITCH, Circuit Judges.
PER CURIAM:
When Sally and Todd Benson divorced, they agreed that Todd would pay
the mortgage on their home, which Sally would keep.1 Eventually Todd stopped
making mortgage payments. Shortly thereafter, he declared bankruptcy and
sought to discharge his obligations under the property settlement agreement they
made when they divorced. Sally objected and argued that the mortgage payments
were a non-dischargeable domestic support obligation. Both the bankruptcy court
and the district court agreed with Sally. Todd appeals. Because we also conclude
that the mortgage payments are non-dischargeable, we affirm.
In a Chapter 13 bankruptcy, a debtor can discharge most of his debts after
he completes his bankruptcy plan payments. 11 U.S.C. § 1328. But among the
debts that cannot be discharged are domestic support obligations. A domestic
support obligation is a debt owed to a former spouse that was incurred as a result
of a property settlement agreement that is “in the nature of alimony, maintenance,
or support . . . [of that former spouse] without regard to whether such debt is
expressly so designated.” 11 U.S.C. § 101(14A) (emphasis added); see also id. §
523(a)(5) . We must decide whether the bankruptcy court correctly found that the
mortgage payments Todd was obligated to make under the property settlement
1
Because the parties here share a last name, we refer to them by their first names for the
sake of clarity.
2
agreement were domestic support obligations.2
In making this determination, a court should look beyond the label the
parties have given to a particular debt and determine whether the debt is actually
in the nature of alimony or support. Cummings v. Cummings, 244 F.3d 1263,
1265 (11th Cir. 2001). Thus, a debt is a domestic support obligation if the parties
intended it to function as support or alimony, even if they called it something else.
Id. The court’s decision should also be informed by state law. Id. But there are
other factors a court should consider as well. They include: (1) the agreement’s
language; (2) the parties’ financial positions when the agreement was made; (3)
the amount of the division; (4) whether the obligation ends upon death or
remarriage of the beneficiary; (5) the frequency and number of payments; (6)
whether the agreement waives other support rights; (7) whether the obligation can
be modified or enforced in state court; and finally (8) how the obligation is treated
for tax purposes. In re McCollum, 415 B.R. 625, 631 (Bankr. M.D. Ga. 2009).
Here the agreement supports Sally’s contention that the parties intended the
mortgage payments to be a domestic support obligation. Although in the
2
Todd argues that the district court applied the wrong standard of review, but even
though he is right, the district court’s error does not affect our review of this appeal. That is
because we do not review the district court’s decision, but rather review the bankruptcy court’s
order de novo. In re Mitchell, 633 F.3d 1319, 1326 (11th Cir. 2011). And whether a pre-petition
debt is a domestic support obligation is a legal conclusion that we review de novo. In re
Strickland, 90 F.3d 444, 446 (11th Cir. 1996).
3
agreement Sally waived any right to claim alimony, she did so in consideration for
the benefits she received in the agreement. The agreement also required Todd to
maintain life insurance that would be sufficient to cover his mortgage obligation.
Furthermore, Sally agreed to let Todd claim a tax exemption for their minor
children as long as he continued paying the mortgage, which made the payments
appear to be child support.3 And when Todd failed to pay the mortgage, he was
found in contempt in state court. Last, we note that Todd testified that at the time
the agreement was made Sally had not been working outside the home for at least
a decade.
Based on the agreement itself, the state contempt proceedings, and Todd’s
testimony, we conclude that the bankruptcy court correctly found that the
mortgage payments were non-dischargeable domestic support obligations.4
AFFIRMED.
3
Although Todd argued in the district court that the pre-petition debt was intended to be
a form of child support, the bankruptcy court also found that it was “in the nature of alimony,”
accordingly it does not affect our conclusion that the debt was non-dischargeable.
4
Both parties’ motions for sanctions are denied.
4