Appeal from the United States District Court for the Eastern District of Kentucky at London. No. 97-00055-Jennifer B. Coffman, District Judge.
Before: Nelson, Clay, and Gilman, Circuit Judges.
The opinion of the court was delivered by: Ronald Lee Gilman, Circuit Judge.
RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 24
The United States Bankruptcy Court for the Eastern District of Kentucky discharged Karren L. Sorah's former husband, Perle Albert Sorah, from an obligation to pay her $750 per month pursuant to a state court divorce decree. The bankruptcy court found that the payments, though decreed as "maintenance" by the state court, were not actually in the nature of maintenance, and were therefore dischargeable in bankruptcy pursuant to 11 U.S.C. § 523(a)(5)(B). The district court affirmed. Because we find that both the bankruptcy court and the district court incorrectly applied § 523 to the facts of this case, we REVERSE the district court's decision and REMAND for entry of an order consistent with this opinion.
Mr. and Mrs. Sorah were married in 1973. In 1993, Mr. Sorah was employed as an x-ray technician. He was forty-two years old and earned over $35,000 per year. Mrs. Sorah was then fifty years old and employed as a teacher's aide, earning approximately $8,000 per year. She also had rental income from property inherited from her mother. Mrs. Sorah suffers from varicose veins and thrombophlebitis that could limit the amount of work she will be able to undertake in the future.
In March of 1992, Mr. Sorah petitioned for divorce. In May of 1993, he filed a Chapter 7 bankruptcy petition. The Bell Circuit Court in Kentucky granted the divorce in November of 1993 and entered a Decree of Dissolution of Marriage. It awarded Mrs. Sorah direct payments that it designated as "maintenance" and that are structured to cease upon Mrs. Sorah's death, remarriage, or 62nd birthday, whichever first occurs. Mr. Sorah appealed the maintenance award to the Kentucky Court of Appeals, which upheld the award in 1995.
As part of his bankruptcy proceeding, Mr. Sorah then sought a ruling that his obligation to pay the $750 monthly "maintenance" payments was dischargeable in bankruptcy pursuant to 11 U.S.C. § 523(a)(5)(B). This section of the Bankruptcy Code discharges debts to spouses even though designated alimony, support, or maintenance, unless they are actually in the nature of alimony, support, or maintenance.
The bankruptcy court reviewed the state court record without hearing any additional proof. Based upon this review, it determined that the payments were not in fact in the nature of maintenance, but rather were intended to punish Mr. Sorah for his alleged marital infidelity. The bankruptcy court apparently reached this Conclusion based upon the following language contained in the divorce decree:
The separation of the parties and the breakup of the marriage involved infidelity on [the] part of the Petitioner while he "frivolates", "cajoles", "Bevis and Buttheads" around in financial freedom as a result of his bankruptcy, searching for another victim . . . .
The bankruptcy court further found that the Bell Circuit Court's findings of fact regarding the parties' respective incomes and Mrs. Sorah's rental income from the inherited property were without support in the record. The bankruptcy court, however, ...