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In re Sodergren

United States District Court, D. Arizona

September 10, 2018

IN THE MATTER OF Gabrielle Ann Sodergren, Debtor, Daniel Rychlik, Appellant,
v.
Gabrielle Ann Sodergren, Appellee. Civ. No. CV-18-1948-PHX-HRH

          ORDER

          H. RUSSEL HOLLAND UNITED STATES DISTRICT JUDGE

         Appellant Daniel Rychlik appeals the bankruptcy court's Judgment granting appellee Gabrielle Ann Sodergren's Motion for Summary Judgment and denying Rychlik's Motion for Summary Judgment. Oral argument was not requested and is not deemed necessary.

         Background

         Rychlik and Sodergren were once married and have four minor children together. At the time of their divorce, Rychlik and Sodergren both lived in Arizona and were awarded joint legal custody of the children with parenting time on a 5-2-2-5 schedule.[1] At the time of the divorce, Rychlik was ordered to pay monthly child support to Sodergren.[2]

         In February 2013, Rychlik moved to Virginia.[3] Rychlik petitioned to have the children relocate to Virginia with him, but that petition was denied.[4]

         In October of 2013, Sodergren notified Rychlik that she intended to relocate to Illinois with the children.[5] In response, on November 6, 2013, Rychlik filed a petition to prevent relocation.[6] On June 3, 2014, Rychlik and Sodergren reached agreement as to the relocation issue, but the agreement was conditional on the outcome of a mental health evaluation of Sodergren.[7] The agreement would be binding if a mental health evaluation showed that Sodergren did not have any mental health issues that would prevent her from providing appropriate parenting but the agreement would not be binding if Sodergren were found to have such mental health issues.[8]

         The subsequent mental health evaluation of Sodergren indicated that her mental health issues might impact her ability to parent appropriately.[9] As a result of the evaluation, on November 6, 2014, Rychlik filed an emergency petition in which he asked for sole legal decision making authority for the children and that they be allowed to relocate to Virginia immediately.[10] The children were allowed to relocate to Virginia and lived with Rychlik from January 2015 through June 2015. Rychlik contends that Sodergren was obligated, by state statute, to pay him child support during these six months. Any obligation Sodergren had to pay child support was resolved by an offset agreement between the parties entered on July 21, 2016.[11]

         On April 13, 2015, Sodergren withdrew her petition to relocate the children to Illinois.[12] On July 27, 2015, Rychlik filed a motion for summary judgment on his petition to prevent relocation, which the family court granted on September 25, 2015.[13] On October 23, 2015, Rychlik filed an application for attorney fees and costs.[14] Rychlik sought $34, 831.10 in fees and costs.[15] Sodergren opposed Rychlik's application for attorney fees and costs.[16] On December 18, 2015, the family court granted Rychlik's motion for attorney fees and costs in part, awarding him $16, 802 in attorney fees and $379.10 in costs, for a total of $17, 181.10.[17]

         On November 3, 2016, Sodergren filed a Chapter 13 petition for bankruptcy. On May 17, 2017, Sodergren initiated an adversary proceeding to resolve the issue of whether the December 18, 2015 Judgment was a non-dischargeable Domestic Support Obligation (DSO). Sodergren claimed that the December 18, 2015 Judgment was not a DSO and thus was dischargeable. On June 26, 2017, Rychlik filed his answer to Sodergren's complaint in the adversary proceeding and asserted a counterclaim. Rychlik claimed that the December 18, 2015 Judgment was a DSO and thus was not dischargeable.

         The parties filed cross-motions for summary judgment, and the bankruptcy court held oral argument on May 10, 2018. At oral argument, the bankruptcy court explained that in order for the December 18, 2015 Judgment to be a DSO, the award must be “for the purposes of, or in the nature of maintenance, support, or alimony” and that there was nothing in the record to support a finding that the December 18, 2015 Judgment was for any of these purposes.[18] The bankruptcy court further explained that it did not see anything in the record to indicate that the family court “judge . . . was making this award based upon some consideration of [the parties'] economic resources, their financial ability, his need versus her ability to pay.”[19] The bankruptcy court rejected Rychlik's argument that “there's a presumption” that the December 18, 2015 Judgment was a DSO simply because it arose “within a child custody context. . . .”[20]

         On June 8, 2018, the bankruptcy court entered judgment granting Sodergren's motion for summary judgment and denying Rychlik's motion for summary judgment.[21] The bankruptcy court held that the December 18, 2015 Judgment was “not a ‘domestic support obligation' as the term is defined in 11 U.S.C. § 101(14A); and the Rychlik Award is subject to discharge pursuant to 11 U.S.C. § 1328(a).”[22]

         On June 20, 2018, Rychlik timely filed this appeal.

         Standard of Review

         The court reviews the bankruptcy court's decision on the motions for summary judgment de novo. In re Tenderloin Health, 849 F.3d 1231, 1234 (9th Cir. 2017). “The issue of dischargeability of a debt is a mixed question of fact and law that is reviewed de novo.” Miller v. United States, 363 F.3d 999, 1004 (9th Cir. 2004). “The issue of dischargeability of debt is a question of federal law, not state law, and is governed by the provisions of the Bankruptcy Code.” In re Bowen, 198 B.R. 551, 555 (9th Cir. BAP 1996)).

         Discussion

         “One of the ‘main purpose[s]' of the federal bankruptcy system is ‘to aid the unfortunate debtor by giving him a fresh start in life, free from debts, except of a certain character.'” Lamar, Archer & Cofrin, LLP v. Appling, 138 S.Ct. 1752, 1758 (2018) (quoting Stellwagen v. Clum, 245 U.S. 605, 617 (1918)). “To that end, the Bankruptcy Code contains broad provisions for the discharge of debts, subject to exceptions.” Id. “‘[E]xceptions to discharge should be strictly construed against an objecting creditor and in favor of the debtor.'” In re Scheer, 819 F.3d 1206, 1209 (9th Cir. 2016) (quoting Snoke v. Riso, 978 F.2d 1151, 1154 (9th Cir. 1992)). “Those objecting to discharge ‘bear[] the burden of proving by a preponderance of the evidence that [the debtor's] discharge should be denied.'” In re Retz, 606 F.3d 1189, 1196 (9th Cir. 2010) (quoting Khalil v. Developers Sur. & Indem. Co., 379 B.R. 163, 172 (9th Cir. BAP 2007)).

         One exception to dischargeability is “for a domestic support obligation[.]” 11 U.S.C. § 523(a)(5). A “domestic support obligation” is a debt “in the nature of alimony, maintenance, or support [of a] spouse, former spouse, or child of the debtor or such child's parent, without regard to whether such debt is expressly so designated[.]” 11 U.S.C. § 101(14A). “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.'” In re Chang, 163 F.3d 1138, 1140 (9th Cir. 1998) (quoting Shaver v. Shaver, 736 F.2d 1314, 1316 (9th Cir. 1984)). “‘[T]he court must look to the intent of the parties and the substance of the obligation.'” In re Gibson, 103 B.R. 218, 221 (9th Cir. BAP 1989) (quoting Shaver, 736 F.2d at 1316).

         Rychlik first argues that the bankruptcy court erred as to whether a DSO presumption applied to the December 18, 2015 Judgment. Rychlik argues that a judgment for attorney fees entered pursuant to A.R.S. § 25-324 in matters involving child custody or support is presumed to be a DSO. “The Arizona superior court has authority under A.R.S. § 25-324 to award attorney's fees and costs in custody disputes[.]” In re Jarski, 301 B.R. 342, 346 (Bkrtcy. D. Ariz. 2003). A.R.S. § 25-324(A) provides that “[t]he court from time to time, after considering the financial resources of both parties and the reasonableness of the positions each party has taken throughout the proceedings, may order a party to pay a reasonable amount to the other party for the costs and expenses. . . .”[23] A.R.S. § 25-324(B) provides that “the court shall award reasonable costs and attorney fees to the other party” if the court determines that a party filed a petition in bad ...


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