Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of San Diego County No. D370341. Randa Trapp, Judge.
BENKE, P. J.
In this family law case the family court denied appellant Diane Marie Porter's (Diane) request to enforce existing orders directing respondent Franklin L. Porter, Jr. (Franklin), to reimburse her for attorney fees incurred in child custody proceedings. The family court found the reimbursement order was discharged in bankruptcy. The family court also denied Diane interest on medical expenses and child support arrears and declined to award attorney fees Diane incurred in attempts to enforce the existing orders. We reverse.
The prior attorney fees were in the nature of support and thus not dischargeable in bankruptcy. Moreover, the family court did not have discretion to deny interest on the child support and medical expense arrears. Because Diane was entitled to the relief she sought, she may also be entitled to the attorney fees she incurred in making her motion and on appeal. Accordingly, we reverse and remand to the trial court with instructions.
SUMMARY
Diane married Franklin in February 1987. They had four children. They divorced in February 1995 and shared legal and physical custody of their minor children. However, primary physical custody remained with Diane. In addition to child support, Franklin was ordered to pay one-half of the children's medical expenses.
In January 2000 Franklin filed a motion requesting physical child custody or, in the alternative, an increase in child visitation to 50 percent timeshare. Franklin also asked the court to impute income to Diane based on her earning ability. Franklin's modification request resulted in multiple hearings conducted over the span of 15 months. As a consequence, Diane incurred $35,709.87 in attorney fees.
On October 17, 2000, the family court denied Franklin's request for more visitation and his attempt to impute income to Diane. The court's order also directed Franklin to pay $3,000 of the attorney fees Diane had incurred. Franklin was also ordered to deposit into Diane's attorney's trust account $2,350 of additional income he received as a member of the Naval Reserve pending further order of the court. The attorney was directed to hold the funds until the family court determined what portion of the reserve pay was payable to Diane as child support.
A May 9, 2001, order directed Franklin to pay Diane an additional $10,000 in attorney fees. The court awarded attorney fees based on the fact Franklin started the child custody litigation and had the ability to pay, while Diane was in financial need and incurred $35,709.87 in fees during the lengthy custody dispute. After Diane presented evidence of missed medical reimbursement payments from the years 1997, 1998, 1999 and 2000, Franklin was ordered to pay unreimbursed medical expenses in the amount of $2,392.
Franklin never complied with these orders. On September 17, 2001, Franklin filed a voluntary chapter 7 bankruptcy. Diane did not file any objections in Franklin's bankruptcy case.
On February 1, 2006, Franklin asked the court to modify the existing child support award, because his oldest child had turned 18. Diane filed a response and a companion order to show cause, in which she asked the court to enforce the prior child support, medical reimbursement and attorney fee orders. In preparing the motion, Diane incurred $1,095 in attorney fees.
In response to Diane's motion, Franklin asserted the prior attorney fee award was discharged in bankruptcy. Diane argued the court should find that attorney fees were awarded as "support" and thus were not dischargeable under 11 United States Code section 523(a)(5).
The family court denied Diane's request that it enforce its prior attorney fee award. The court found that award was discharged in Franklin's bankruptcy. The court also denied Diane's request for her current attorney fees. The court did order Franklin to pay $2,392 in unreimbursed medical expenses and $2,350 for back child support arrears. However, the court denied Diane's request for interest on these amounts.
DISCUSSION
I
We review the decision of the trial court de novo where, as here, the facts are not in dispute, and the appeal raises only questions of law. (In re Chang (9th Cir. 1998) 163 F.3d 1138, 1140 [de novo standard in interpreting and applying 11 U.S.C. § 523(a)(5) of the Bankruptcy Code]; In re Marriage of McClellan (2005) 130 Cal.App.4th 247, 254; In re Marriage of Hubner (2004) 124 Cal.App.4th 1082, 1089 [accrual of interest on judgments awarding child support and medical reimbursement is a legal issue to be renewed de novo].)
II
Diane argues the prior attorney fee award was in the nature of support and hence not dischargeable in bankruptcy (See § 523, subd. (a)(5) of the Bankruptcy Code). We agree with Diane.
The Bankruptcy Code exempts certain debts from discharge. At the time of Franklin's bankruptcy in 2001, the Bankruptcy Code exempted from discharge a debt owed to "a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child" if the debt is "actually in the nature of . . . support." (11 U.S.C. § 523(a)(5)(B).) It is a question of federal law whether an obligation is in the nature of support and therefore nondischargeable. (Shaver v. Shaver (9th Cir. 1984) 736 F.2d 1314, 1316; In re Chang, supra, 163 F.3d at p. 1140.)
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 changed the language of section 523(a)(5). The current section states that a debtor is not discharged from any debt "for a domestic support obligation." (11 U.S.C. § 523(a)(5).)
In determining whether an obligation was intended for support, the court must look at the relevant factors considered by the trial court, such as "the recipient spouse's need for support." (In re Shaver, supra, 736 F.2d at p. 1317; In re Gionis (Bankr. Fed. App. 1994) 170 B.R. 675, 682.)
Factors indicating that support is necessary include the presence of minor children and an imbalance in the relative income of the parties. (In re Gionis, supra, 170 B.R. at p. 682, quoting Shaver v. Shaver, supra, 736 F.2d at p.1316.)
Significantly, if they are predicated on need, attorney fees awarded to the debtor's former spouse, incurred in a child custody proceeding, are nondischargeable debts in the nature of support. (In re Ratcliff (Bankr. C.D.Cal. 1996) 195 B.R. 466, 468; In re Chang, supra, 163 F.3d at p. 1141; In re Catlow (9th Cir. 1981) 663 F.2d 960, 961, 963.) The fact that the fees were to be paid to Diane's attorney does not change the nature of the debt. "Fees paid to third parties on behalf of a child or former spouse can be 'as much for . . . support as payments made directly to [the former spouse or child].'" (In re Chang, supra, 163 F.3d at p. 1141, quoting In re Catlow, supra, 663 F.2d at pp. 962-963.)
At the time of the award, Diane was disabled, had no income and had four minor children. The award of attorney fees in the amount of $3,000 in October 2000 was made after a child custody proceeding initiated by Franklin and was based on the court's finding that the Diane had "absolutely no ability to pay." At the time of the award, Franklin had a monthly income of $6,180. Similarly, the award of fees in the amount of $10,000 in May 2001 was made during the same child custody battle and was "based on need and ability."
Admittedly, the family court, in denying Diane's motion, stated that the award of attorney fees was not "child support." However, attorney fees need not be awarded as child support in order to be nondischargeable. The award of attorney fees need only be "in the nature" of support based on recipient's need. (11 U.S.C. § 523(a)(5)(B).)
We note trial courts have no authority to award attorney fees as child support. (Boutte v. Nears (1996) 50 Cal.App.4th 162, 165-167.)
Importantly, Diane did not need to file an objection in the bankruptcy proceeding in order challenge the dischargeability of the attorney fee award. A creditor with a debt listed as nondischargeable under section 523(a)(5) may bring suit on her claim "in any appropriate nonbanrkuptcy forum, even after the close of the prior bankruptcy proceeding." (In re Marriage of Henderson (1990) 225 Cal.App.3d 531, 534, citing Advisory Com. Note, Rules of Bankruptcy Proc., rule 4007.)
In sum, because the attorney fee award was in the nature of support and thus nondischargeable, we must reverse the order denying Diane's request the award be enforced with instructions to enter an order providing for enforcement.
III
Diane next disputes the denial of interest on medical and child support arrears. She argues that medical and child support arrears accrue interest as a matter of law. Again, we agree with Diane.
Family Code section 4502, subdivision (a), states that "[n]otwithstanding any other provision of law, a judgment for child, family, or spousal support, . . . including all lawful interest and penalties computed thereon, is enforceable until paid in full . . . ." Code of Civil Procedure section 685.020 contains the basic rule for calculating postjudgment interest:
"(a) Except as provided in subdivision (b), interest commences to accrue on a money judgment on the date of entry of the judgment.
"(b) Unless the judgment otherwise provides, if a money judgment is payable in installments, interest commences to accrue as to each installment on the date the installment becomes due."
Further, Code of Civil Procedure section 685.010, subdivision (a), establishes that "[i]nterest accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied."
Delinquent child support payments accrue postjudgment interest under the rules applicable to installment judgments: "Statutory interest on unpaid child support payments accrues as a matter of law as to each installment when each installment becomes due. . . . [¶] Accrued arrearages are treated like a money judgment for purposes of assessing statutory interest. Unless otherwise specified in the judgment, interest accrues as to each installment when each installment becomes due and continues to accrue for so long as the arrearage remains unpaid." (In re Marriage of Hubner (2004) 124 Cal.App.4th at p. 1089, fns. omitted.)
Because accrued arrearages are treated like money judgments, "courts cannot retroactively modify or terminate the arrearages." (In re Marriage of Hubner, supra, 124 Cal.App.4th at p. 1089, fn. omitted; In re Marriage of Robinson (1998) 65 Cal.App.4th 93, 98; In re Marriage of McClellan, supra, 130 Cal.App.4th at p. 259.) "Interest accrues as a matter of law [on unpaid child support], and parents are charged with knowledge of the law." (In re Marriage of Thompson (1996) 41 Cal.App.4th 1049, 1057.) Interest on child support accrues regardless of Franklin's bankruptcy and is nondischargeable. (In re Foster (9th Cir. 2003) 319 F.3d 495, 497.)
On May 9, 2001, Franklin was ordered to pay $2,350 of his additional Navy reserve income into Diane's attorney's trust account as unpaid child support. Franklin was ordered to compensate Diane for total unreimbursed medical expenses of his children in the amount of $ 2,392. Despite Franklin's argument that the medical reimbursement and child support arrearages were discharged in bankruptcy, the family court in 2006 properly found that the debts were in arrears. The court erred, however, in not enforcing the legal interest on arrearages on both the medical reimbursement and child support arrearages.
Because interest on arrearages accrues as a matter of law, we reverse and remand to determine the amount of interest owed to Diane.
IV
Because we have found the prior attorney fee orders enforceable and that Diane is entitled to interest on all the arrearages and reverse on these issues, we remand to the trial court to reconsider whether and in what amount Diane is entitled to an award of attorney fees incurred in enforcing the past orders and obtaining interest, including fees she incurred on appeal. (Fam. Code, § 2030.)
DISPOSITION
The family court's order is reversed and remanded with instructions to enforce the prior attorney fee orders and provide interest to Diane on the prior attorney fee, medical reimbursement and child support arrears and consider Diane's request for attorney fees incurred in these proceedings.
WE CONCUR: NARES, J., McDONALD, J.