In Bankruptcy Case No. 00-72881, Adversary No. 00-7212.United States Bankruptcy Court, C.D. Illinois
October 31, 2001
O P I N I O N
LARRY LESSEN, United States Bankruptcy Judge.
This matter is before the Court on Defendant’s Motion for Summary Judgment and Plaintiff’s Responses thereto.
On November 22, 1990, Plaintiff Teresa Rueb (“Plaintiff” or “Teresa”)) and Defendant/Debtor Charles L. Bent (“Defendant” or “Charles”) were married. On December 3, 1998, a Judgment for Dissolution of Marriage was entered in the Adams County Circuit Court dissolving the marriage. Paragraph J of the Judgment states as follows:
That (Teresa) be and is hereby awarded as her just property, $7,500 which represents (her) equitable share of the current equity in the real estate located at Rural Route #1, Box 193A, Liberty, Illinois, and (Charles) shall pay to (Teresa) by paying $300 per month beginning November 28, 1998 and a similar payment of $300 per month on or before the 28th day of each and every month thereafter.
An appeal to the Fourth District Appellate Court of Illinois followed, and the Appellate Court found that the allocation of equity in the marital residence was unreasonable. The Appellate Court ordered that Teresa’s share of the equity in the marital residence should be increased to $31,600 and that Charles’ share should be decreased by that same amount. On February 23, 2000, an Amended Judgment for Dissolution of Marriage was entered by the Circuit Court of Adams County, Illinois, reflecting the Appellate Court’s ruling. Defendant has paid Plaintiff the sum of $5,100 (17 payments of $300). On September 15, 2000, Defendant filed his voluntary Chapter 7 petition in bankruptcy. On December 22, 2000, Plaintiff filed her “Complaint to Objection to Discharge” (sic), wherein Plaintiff asserts that the debt is nondischargeable under 11 U.S.C. § 523(a)(5) as a maintenance obligation. Defendant filed a timely answer and, on February 28, 2001, Defendant filed his Motion for Summary Judgment wherein he asserts that 11 U.S.C. § 523(a)(5) is inapplicable, that the subject debt is clearly in the nature of a property settlement and is not maintenance, and that the subject debt is dischargeable.
In order to prevail on a motion for summary judgment, Plaintiff must meet the statutory criteria set forth in Rule 56 of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7056. Rule 56(c) states in part as follows:
[T]he judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c). See also Dugan v. Smerwick Sewerage Co., 142 F.3d 398, 402 (7th Cir. 1998). The primary purpose for granting a summary judgment motion is to avoid unnecessary trials when there is no genuine issue of material fact in dispute. Trautvetter v. Quick, 916 F.2d 1140, 1147 (7th Cir. 1990). The burden is on the moving party to show that no genuine issue of material fact is in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Matsushita Electric Indus. Co., Ltd. v. ZenithRadio Corp., 475 U.S. 574, 585-86; Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). All reasonable inference drawn from the underlying facts must be viewed in a light most favorable to the party opposing the motion.Parkins v. Civil Constructors of Illinois, Inc., 163 F.3d 1027, 1032 (7th Cir. 1998). “Summary judgment is not an appropriate occasion for weighing the evidence; rather the inquiry is limited to determining if there is a genuine issue for trial.” Lohorn v. Michal, 913 F.2d 327, 331 (7th Cir. 1990).
Section 523(a)(5) provides in relevant part as follows:
(a) A discharge under section 727 . . . of this title 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 . . . .
11 U.S.C. § 523(a)(5).
A debt owed to a former spouse or a debt to be paid to a third party in the nature of alimony, maintenance, or support pursuant to a divorce decree is nondischargeable in bankruptcy under 11 U.S.C. § 523(a)(5).See In re Coil, 680 F.2d 1170, 1171 (7th Cir. 1982); In re Maitlen, 658 F.2d 466, 468 (7th Cir. 1981); In re Bradaric, 142 B.R. 267, 269
(Bankr. N.D. Ill. 1992). Obligations that arise as part of the division of marital property, however, are dischargeable under that section. Coil, supra, 680 F.2d at 1171.
The determination of whether a debt is in the nature of alimony, maintenance, or support is a matter of federal bankruptcy law rather than state law. In re Haas, 129 B.R. 531, 536 (Bankr. N.D. Ill. 1989); In reSeidel, 48 B.R. 371, 373 (Bankr. C.D. Ill. 1984). In making this determination, the Court must look to the substance of the obligation and not to labels imposed by state law. See Maitlen, supra, 658 F.2d at 468;In re Cockhill, 72 B.R. 339, 341 (Bankr. N.D. Ill. 1987). The critical and principal inquiry is whether the intent of the divorce court and the parties was to provide support or divide marital property and debts. In reWright, 184 B.R. 318, 321 (Bankr. N.D. Ill. 1995).
In this case, there is no ambiguity in the written documents, and there is nothing in the record (nor even a serious factual contention) to contradict, refute, or call into question the trial court’s and appellate court’s characterization of the obligation as a division of equity in the marital residence. This was clearly a property settlement, and none of the evidence in any way suggests otherwise. Accordingly, summary judgment is appropriate, and the subject debt is nondischargeable under 11 U.S.C. § 523(a)(5) as a matter of law.
Plaintiff vigorously asserts that the equities in this case strongly favor her position, and based upon the pleadings, the Court tends to agree. However, the narrow question before the Court is whether the subject obligation constitutes alimony, maintenance, or support under 11 U.S.C. § 523(a)(5). It clearly does not. A “balancing of the equities” test is utilized under 11 U.S.C. § 523(a)(15)(B); however, Plaintiff’s Complaint did not allege nondischargeability under 11 U.S.C. § 523(a)(15).
This Opinion is to serve as Findings of Fact and Conclusions of Law pursuant to Rule 7052 of the Rules of Bankruptcy Procedure.
See written Order.
O R D E R
For the reasons set forth in an Opinion entered this day,
IT IS HEREBY ORDERED that Defendant’ Motion for Summary Judgment be and is hereby granted, and the subject debt be and is hereby declared dischargeable under 11 U.S.C. § 523(a)(5).