Robert W. Kortus v. Jeffery S. Weihs ( 2001 )


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  •                     United States Court of Appeals
    FOR THE EIGHTH CIRCUIT
    ___________
    No. 99-2535
    ___________
    In re: Jeffrey Stephen Weihs,        *
    *
    Debtor,              *
    -------------------------            *
    *
    Robert W. Kortus; Karen Bernice      *
    (Weihs) Kenkel,                      *
    *
    Appellants,          *
    * Appeal from the United States
    v.                           * District Court for the
    * Southern District of Iowa.
    Jeffrey Stephen Weihs,               *
    *     [UNPUBLISHED]
    Appellee.            *
    ___________
    Submitted: December 7, 2000
    Filed: January 10, 2001
    ___________
    Before RICHARD S. ARNOLD, HANSEN, and BYE, Circuit Judges.
    ___________
    PER CURIAM.
    Under a Nebraska dissolution decree, Jeffrey Stephen Weihs was ordered to pay
    Karen Bernice Kenkel alimony of $425 per month for five years. Shortly thereafter,
    Weihs initiated Chapter 7 bankruptcy proceedings, Kenkel initiated state court
    contempt proceedings against Weihs for nonpayment of alimony, and Weihs filed the
    instant adversary proceedings seeking the bankruptcy court’s determination as to (1)
    whether the alimony was dischargeable as not actually in the nature of support, and (2)
    whether Kenkel and her attorney, Robert W. Kortus, should be cited in contempt for
    violation of the automatic stay provisions of 11 U.S.C. § 362. The bankruptcy court
    ultimately found the obligation under the dissolution decree dischargeable under 11
    U.S.C. §§ 523(a)(5) and (a)(15), and assessed sanctions against Kortus in the amount
    of $1,670, representing attorney’s fees incurred by Weihs in defending the state court
    contempt action. The district court affirmed, and Kenkel and Kortus appeal. We affirm
    in part, and reverse in part.
    Initially, contrary to Kenkel’s argument on appeal, we conclude that neither the
    state court’s original dissolution decree nor its contempt order barred relitigation of the
    dischargeability issue. Bankruptcy courts give deference to but are not bound by a
    divorce decree’s characterization of an award as maintenance or a property settlement,
    and on the record before us it is not clear what, if any, validity the contempt order has.
    See In re Sorah, 
    163 F.3d 397
    , 403 (6th Cir. 1998) (deference bankruptcy courts owe
    state divorce courts is not based upon res judicata principles); Franklin Sav. Ass’n v.
    Office of Thrift Supervision, 
    31 F.3d 1020
    , 1022 (10th Cir. 1994) (any action taken in
    violation of automatic stay is void); In re Williams, 
    703 F.2d 1055
    , 1056 (8th Cir.
    1983) (whether debt is support obligation or part of property settlement is question of
    federal bankruptcy law, not state law); see also In re Miera, 
    926 F.2d 741
    , 743 (8th Cir.
    1991) (party asserting collateral estoppel has burden of proof; to determine whether
    issue was actually litigated and was necessary to decision in prior action, court should
    examine entire record of earlier proceeding).
    Turning to the question of dischargeability within the meaning of section
    523(a)(5), we conclude the bankruptcy court’s factual findings were clearly erroneous.
    See In re Kline, 
    65 F.3d 749
    , 750 (8th Cir. 1995) (standard of review). Section
    523(a)(5) prohibits the discharge of a debtor’s obligation to make alimony,
    maintenance, or support payments to his or her former spouse. Although the
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    bankruptcy court was not bound by the divorce decree’s characterization of Weihs’s
    debt to Kenkel as alimony, the bankruptcy court was not entitled to ignore this label.
    See In re 
    Sorah, 163 F.3d at 401
    (holding state court’s award of alimony is entitled to
    deference when labeled and structured as such, and finding bankruptcy court’s
    independent analysis failed to give proper deference to decree).
    Under Nebraska law, courts ordering payment of alimony must consider the
    circumstances of the parties, the duration of the marriage, the history of the
    contributions to the marriage by each party, including contributions to the care and
    education of the children and interruption of personal careers or educational
    opportunities, and the ability of the supported party to engage in gainful employment.
    See Neb. Rev. Stat. § 42-365 (1998). Here, many of the factors tended to establish the
    obligation was intended as support. The state court expressly designated the obligation
    as alimony, and although the court indicated both parties were “capable” of supporting
    themselves, the court did not indicate both were self-supporting at the time of the
    decree. Also, while the decree provided that the obligation did not terminate upon
    Kenkel’s remarriage, it was modifiable under Nebraska law, was limited to five years,
    and terminated upon Kenkel’s death, all of which are indicative of support. See Neb.
    Rev. Stat. § 42-365 (1998); In re Sampson, 
    997 F.2d 717
    , 723-24 (10th Cir. 1993)
    (holding fact that debtor’s obligation to his former wife would survive her remarriage
    was countered by its termination upon her death, which is consistent with support
    obligation; debt’s non-termination upon remarriage is insufficient to overcome clear
    expression that obligation was for support); Murrell v. Murrell, 
    440 N.W.2d 237
    , 241
    (Neb. 1989) (alimony is intended to assist party during reasonable period of time to
    bridge period of unavailability of employment or to obtain proper training for
    employment). Because we conclude the finding that the alimony award was not
    actually in the nature of alimony was clearly erroneous, section 523(a)(15)--which
    applies to debts incurred in the course of a divorce “not of the kind described in
    paragraph (5)”--is inapplicable.
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    Turning to the issue of sanctions, although Kortus was entitled to pursue alimony
    on behalf of Kenkel from Weihs’s post-petition wages, see 11 U.S.C. § 362(b)(2)(B)
    (automatic stay does not prohibit collection of alimony from property that is not
    property of bankruptcy estate), he was not entitled to file a contempt action against
    Weihs personally. We therefore find no abuse of discretion in the imposition of the
    sanctions. See Harlan v. Lewis, 
    982 F.2d 1255
    , 1259 (8th Cir.), cert. denied, 
    510 U.S. 828
    (1993) (standard of review).
    Accordingly, we affirm the imposition of sanctions against Kortus, and we
    reverse the determination that the debt to Kenkel was not alimony within the meaning
    of section 523(a).
    A true copy.
    Attest:
    CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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