Marguerite C. Shine v. Louis M. Shine
802 F.2d 583, 15 Bankr. Ct. Dec. (CRR) 465, 1986 U.S. App. LEXIS 31672 (1986)
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Rule of Law:
A court-ordered spousal support obligation is not dischargeable in bankruptcy under the 1978 Bankruptcy Code, even if it is not explicitly embodied in a separation agreement, divorce decree, or property settlement agreement. The statutory phrase 'in connection with' must be interpreted broadly to uphold the long-standing public policy of protecting family support obligations from discharge.
Facts:
- Marguerite Shine and Louis Shine were married in 1969.
- The couple separated in October 1972 without any formal agreement regarding spousal support.
- In December 1972, Marguerite commenced a separate maintenance action, and in April 1973, the Superior Court of the District of Columbia ordered Louis to pay her $250 per month.
- In 1975, a Virginia court granted the couple a divorce decree, which made no provision for alimony or support and stated there were no property rights to be determined by the court.
- Louis Shine failed to make the court-ordered support payments, and a significant arrearage accumulated under the D.C. court order.
- In 1976, the D.C. Superior Court entered a judgment against Louis for the arrearage of $9,045.
Procedural Posture:
- Marguerite Shine sued Louis Shine in D.C. Superior Court in 1976 to collect on the support arrearage, and the court entered a judgment in her favor.
- In 1982, Marguerite sued in the U.S. District Court for the District of New Hampshire to enforce the D.C. judgment, and a new judgment was issued.
- Marguerite then initiated a collection action in New Hampshire state court, which was stayed when Louis Shine filed for bankruptcy.
- Marguerite filed a complaint in the U.S. Bankruptcy Court for the District of New Hampshire, seeking to have the support debt declared nondischargeable.
- The Bankruptcy Court initially held the debt was nondischargeable, but on reconsideration, it reversed its decision and held the debt was dischargeable.
- Marguerite appealed to the U.S. District Court, which reversed the Bankruptcy Court's final decision, holding the debt was not dischargeable.
- Louis Shine, the debtor, appealed the district court's decision to the United States Court of Appeals for the First Circuit.
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Issue:
Is a court-ordered spousal support obligation dischargeable in bankruptcy under 11 U.S.C. § 523(a)(5) (1978) when the obligation was not created by a separation agreement, divorce decree, or property settlement agreement?
Opinions:
Majority - Bownes, Circuit Judge
No. A court-ordered spousal support obligation is not dischargeable in bankruptcy, even if it does not arise from one of the specific documents listed in the 1978 version of § 523(a)(5). The court reasoned that there is a deeply rooted public policy in American law to protect spousal and child support obligations from being discharged in bankruptcy. This policy predates the specific statutory language and reflects the understanding that support is a legal and moral duty arising from the marital relationship, not a typical debt from a business transaction. The court examined the legislative history of the 1978 amendment and concluded that its ambiguous 'in connection with' clause was likely a result of a hurried legislative process and was not intended to reverse decades of established policy. The court emphasized that in bankruptcy, substance must prevail over form, meaning the genuine nature of the debt as support is what matters, not the specific type of document that created it. The court also noted that a 1984 amendment explicitly including 'other order of a court of record' was a clarification of Congress's original intent, not a change to the law.
Analysis:
This decision reinforces the principle that the substantive nature of a family support obligation trumps the formal source of that obligation for bankruptcy discharge purposes under the 1978 Code. It instructs lower courts to look beyond a statute's literal text when a narrow interpretation would contravene a deeply rooted public policy, such as the protection of dependents. The ruling signals that legislative drafting ambiguities should not be exploited to achieve results contrary to clear, long-standing congressional intent. This interpretation effectively harmonized the 1978 statute with both its historical predecessors and its 1984 successor, ensuring continuity in the protection of support debts.
