Opinion
No. 12-10636 A.P. No. 12-1106
05-05-2013
In re ANGELA K. DUERR, Debtor(s). DEBRA S. NYGAARD, Plaintiff(s), v. ANGELA K. DUERR, Defendant(s).
Memorandum on Cross-Motions for Summary Judgement
Chapter 7 debtor and defendant Anglea Duerr is the former husband of one Richard Domingo. Prior to their marriage, Domingo had fathered a child of plaintiff Debra Nygaard. In 2008, while Duerr and Domingo were married, Duerr had personally guaranteed a support obligation of Domingo to Duerr. Domingo and Duerr later divorced, and Duerr filed her Chapter 7 petition on March 2, 2012. On March 6, 2012, the state family law court found that Domingo was in arrears in his support obligations to Nygaard. These facts are undisputed. Both sides move for summary judgment.
Nygaard argues that her claim against Duerr on the guarantee is nondischargeable pursuant to § 523(a)(5) of the Bankruptcy Code, which excepts from discharge a debt for a domestic support obligation. That term is defined in § 101(14A) as a debt in the nature of alimony, maintenance or support owed to or recoverable by a spouse, former spouse or child of the debtor or the child's parent. There is no dispute that the debt at issue in this case is in the nature of support.
Duerr argues that neither Nygaard nor her child is Duerr's spouse, former spouse or child and accordingly the exception of § 523(a)(5) is simply not applicable. Nygaard responds by citing In re Chang, 163 F.3d 1138, 1141 (9th Cir. 1998), holding that a debt in the nature of support may be nondischargeable even if not owed directly to a spouse, former spouse or child. However, in 2005 Congress changed the law by adding the words "or recoverable by" to the definition of a domestic support obligation. This is a significant change which requires the court to examine pre-2005 case law. Tucker v. Oliver, 423 B.R. 378 (W.D.Okla. 2010); In re Brooks, 371 B.R. 761, 765 (Bkrtcy. N.D.Tex. 2007), but see In re Burnes, 405 B.R. 654, 659 (Bankr.W.D.Mo.2009).
In Chang, the family law court allocated expenses incurred a custody dispute for which both sides were liable. 163 F.3d at 1140. The Court of Appeals held that these debts were in the nature of support and allowed the persons to whom the debts were owed to assert their claims directly against the debtor. It appears that the 2005 amendments to the Bankruptcy Code would not change this result, since in Chang if the debtor had failed to pay her allocated share the nondebtor father, who was liable on the debt, could have enforced the debtor's obligation in the state court and recovered anything he had to pay in excess of the allocation. In fact, it appears that in most cases the 2005 amendments to the Code would not change the result reached in pre-2005 cases regarding liability on support obligations. However, there is a significant difference in this case.
Under California law a principal has no rights against a guarantor, whose duty is only to the third party obligee. Schmitt v. Insurance Co. Of North America, 230 Cal.App.3d 245, 258 (1991); Fin.Pacific Ins. Co. v. Northrup, 2009 WL 1132339*5 (2009). Domingo has no right to recover anything from Duerr. Thus, Duerr's obligation on her guarantee is neither owed to nor recoverable by her spouse, former spouse or child. Accordingly, her liability on her guarantee to Nygaard is not within the scope of § 523(a)(5).
For the foregoing reasons, Nygaard's motion for summary judgment will be denied and Duerr's countermotion will be granted. Counsel for Duerr shall submit an appropriate form of order and a form of judgment. Each side shall bear its own costs.
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Alan Jaroslovsky
Chief Bankruptcy Judge