Rizzen v. Spaman (106 Ohio App. 3d 95, 1995)

Glasser, Judge.

This case is before the court on appeal from a judgment of the Lucas County Court of Common Pleas, Domestic Relations Division.

The relevant facts of this case are as follows. On February 18, 1982, plaintiffappellee and cross-appellant (“appellee”), Carol Sue Rizzen, f.k.a. Spaman, was granted a divorce from defendant-appellant and cross-appellee (“appellant”), William C. Spaman. The trial court’s judgment entry provided in pertinent part:

“It is further ORDERED, ADJUDGED and DECREED, that defendant shall transfer his interest in the real property of the parties located at 2832 Sherbrooke, Toledo, Ohio to plaintiff by Quit-Claim Deed and further that defendant shall pay and hold plaintiff harmless on the balance of the mortgage on said real property at First Federal Savings and Loan Association in the approximate balance of Fourteen thousand five hundred dollars ($14,500.00). The plaintiff shall pay and hold defendant harmless as to taxes, assessments, insurance and maintenance on said real property.

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“It is further ORDERED, ADJUDGED and DECREED, that defendant shall pay to plaintiff as and for lump sum alimony Two hundred thousand dollars ($200,000.00) as payment in full settlement of all claims, receipt of which plaintiff hereby acknowledges.

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“It is further ORDERED, ADJUDGED and DECREED, that defendant shall pay the sum of $75.00 per week plus poundage through the Lucas County Bureau of Support beginning forthwith, as and for child support for Kimberly, until such time as she is eighteen years old and graduated from high school unless otherwise emancipated sooner. In addition thereto, defendant shall pay all medical, dental, optical, hospital, and surgical expenses on behalf of the minor child and defendant shall pay the tuition for Kimberly at Central Catholic High School.

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“It is further ORDERED, ADJUDGED and DECREED, that the defendant shall provide plaintiff and the minor child, Kimberly, with an Aetna Medical Insurance Plan and defendant shall pay all premiums thereon until plaintiffs death or remarriage, whichever occurs first, and as to Kimberly until emancipated and any reimbursed medical bills from Aetna Insurance, shall be paid to the defendant.

“It is further ORDERED, ADJUDGED and DECREED, that plaintiff shall sign the 1980 and 1981 joint tax returns as soon as they are prepared and any refunds on said returns shall be the exclusive property of defendant. In the event of any tax liability on behalf of these parties, defendant agrees to hold plaintiff harmless thereon.

“It is further ORDERED, ADJUDGED and DECREED, that defendant is to pay all the existing bills of the marriage, and it is acknowledged by both defendant and plaintiff that all bills of the marriage have been paid in full prior to this date.”

Subsequently, appellant moved to Texas and, on March 14,1983, filed a petition in bankruptcy under Chapter 7, Title 11, U.S.Code in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. As part of the bankruptcy proceedings, appellee was listed as an unsecured creditor without priority. The amount of her claim, however, was listed as undetermined. Thereafter, on March 21, 1984, appellant was discharged from all dischargeable debts by order of the bankruptcy court.

Subsequently, appellant fell behind on the payments he was ordered to make under the divorce decree, and on August 12,1986, the trial court filed a judgment entry in which the court ordered in part:

“1. A lump sum judgment is granted against the Defendant, William C. Spaman in the amount of $17,470.71, representing child support arrears as of May 28, 1986; unpaid medical expenses for the minor child; and unpaid school expenses of the minor child.

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“5. A lump sum judgment is awarded Plaintiff, Carol Sue Spaman, against Defendant, William C. Spaman in the amount of $52,007.72 representing unpaid mortgage payments ($7,590.00 total); tax liens from the City of Toledo and the State of Ohio ($9,444,867 [sic] total); unpaid medical expenses incurred by Plaintiff Carol Sue Spaman ($34,972.85 total).”

Thereafter, on October 17, 1991, appellee filed in the trial court a motion to show cause, for lump sum judgment, attorney fees and costs. In relevant part she alleged (1) that since July 1986, appellant had willfully failed to pay the mortgage payments with the exception of a payment of $1,551.48 on August 23, 1991; (2) that from August 1986 through January 23, 1988, the date of her remarriage, she accumulated medical expenses and medical insurance expenses for which appellant is responsible and which he has failed to pay; (3) that appellant failed to pay his tax obligation for 1980 and 1981 and as a result appellee has incurred legal expenses in the amount of $18,216.16; and (4) that appellant failed to pay the lump sum judgments granted to appellee on August 12, 1986, weekly child support, and attorney fees. In response, appellant filed a motion for a continuance of the domestic court proceedings. Appellant asserted that he had filed a motion in the Texas bankruptcy court to reopen his case and that he had filed in that action a motion to show cause why appellee should not be held in contempt for violating the discharge order. The trial court granted the continuance pending the proceedings in the bankruptcy court. Subsequently, the bankruptcy court directed the parties to bring an action in domestic relations court to determine the dischargeability of the debts created under prior domestic court orders. Accordingly, on February 6, 1992, appellee filed a motion for declaratory judgment in the trial court, asking that court to declare that the underlying obligations for which the August 12,1986 judgment was granted were for the maintenance and support of appellee and the minor child and that those obligations were nondischargeable in bankruptcy.

A hearing was held before a court appointed referee. Subsequently, on December 2, 1993, the referee filed a report, including findings of fact and conclusions of law. Based on its findings of fact, the referee concluded that the orders covering appellee’s medical insurance and Kimberly’s medical and school expenses were for support and therefore were not dischargeable in bankruptcy and that the mortgage payment order and the order to pay the tax liability resulting from the 1980 and 1981 joint tax returns were not for support and thus were dischargeable in bankruptcy. Accordingly, the court concluded that appellee was entitled to enforcement of her 1986 judgment for medical expenses and for Kimberly’s medical and school expenses and appellee was entitled to a lump sum judgment for her own medical insurance expenses from August 12, 1986 to January 23,1988. The court then found the total amount of the nondischargeable debts owed to appellee was $37,239.33, that appellant was entitled to a credit of $2,049.99 for overpayment of child support, and awarded appellee partial attorney fees of $2,500, for a total lump sum judgment of $37,689.34.

Both parties filed objections to the referee’s report. Appellee argued that the report failed to provide her with statutory interest from August 12, 1986 as mandated by R.C. 1343.03. Appellant objected to the finding of the referee that admitted most of appellee’s exhibits, and objected to the referee’s recommendations which he asserted were based on this evidence. Specifically, he objected to the recommendations that he be ordered to pay appellee $1,506.75 representing her medical insurance costs between August 12, 1986 and January 23, 1988, that he be ordered to pay appellee partial attorney fees of $2,500, and that appellee be awarded a lump sum judgment of $37,689.34. On June 13, 1994, the trial court filed its decision and judgment entry finding appellant’s objections not well taken. The court then ordered that the lump sum judgment awarded to appellee on August 12, 1986 be reduced to $31,632.60, that appellee was entitled to statutory interest of ten percent from that date, that the interest accrued as of February 17, 1994 equalled $26,040.56, that the interest would continue to accrue until the judgment was paid in full, and that the 1986 judgment in its reduced amount plus interest was a nondischargeable obligation on the part of appellant. The court further ordered that appellee be granted an additional lump sum judgment of $4,006.75 plus interest from December 2, 1993, representing her medical insurance payments since August 12, 1986, that such interest shall continue to accrue until the judgment is paid in full, and that said judgment plus interest is a nondischargeable obligation on the part of appellant. It is from this judgment that appellant appeals and appellee cross-appeals.

Appellant’s assignments of error are as follows:

“First Assignment of Error: The trial court erred in admitting virtually all of appellee’s exhibits over the objections of appellant.

“Second Assignment of Error: The trial court erred in ordering appellant to pay to appellee the amount of $1506.75, representing appellee’s medical insurance costs between August 12,1986, and January 23,1988.

“Third Assignment of Error: The trial court erred in ordering appellant to pay to appellee as partial attorney fees for this action the sum of $2,500.00.

“Fourth Assignment of Error: The court erred in refusing to make an independent determination of the dischargeability of the alleged expenses which had resulted in the 1986 judgment, including alleged medical expenses of $34,-972.85, and alleged medical and school expenses for the minor child of $759.53.

“Fifth Assignment of Error: The trial court erred in failing to give appellant credit for the sum of $1551.48, which appellee collected from appellant pursuant to collection proceedings, on August 23,1991.

“Sixth Assignment of Error: The trial court erred in awarding interest to the appellee.”

Appellee raises two additional assignments of error:

“I. It was against the manifest weight of the evidence for the trial court to determine the defendant/appellant’s mortgage and tax obligations to be dis-chargeable in bankruptcy.

“II. It was against the manifest weight of the evidence for the trial court to fail to award plaintifFcross-appellant mortgage, tax, and attorney fees and other obligations incurred.”

We will first address appellant’s fourth assignment of error and the cross-assignments of error as they each challenge the trial court’s determination of which obligations were dischargeable in bankruptcy. In particular, appellant contends that the court erred in concluding that the appellee’s medical expenses and the medical and school expenses of the minor child were nondischargeable. Appellee contends that the court erred in holding that the mortgage and tax obligations were dischargeable and erred in failing to award her medical expenses incurred between August 12,1986 and January 23,1988.

In the present case, appellant’s bankruptcy was filed under Chapter 7 of the Bankruptcy Code. Section 727(b), Title 11, U.S.Code states that not all debts of the debtor are subject to discharge in bankruptcy. Section 523, Title 11, U.S.Code, specifies those debts which are excepted from discharge and reads in relevant part:

“(a) A discharge under section 727 * * * of this title does not discharge an individual debtor from any debt—