N.J. BANKRUPTCY COURT – ATTORNEY FEES AWARDED TO WINNING PARTIES ATTORNEY IN PROSECUTION OF DOMESTIC VIOLENCE ACTION NON-DISCHARGEABLE

April 16, 2015 by Craig A. Squitieri ·

In the recent unreported opinion of Binney v. Binney, the debt at issue arose from a domestic violence action filed in the New Jersey Superior Court. The Superior Court judge in granting a permanent restraining order against Jarrett Binney, concluded that Mr. Binney was guilty of harassment, assault, and terroristic threats to Jennifer Binney. Furthermore, the Superior Court judge also granted Ms. Binney's attorney $15,000.00 in legal fees as part of the damage award. Thereafter, the Binney's were divorced and the divorce judgment stated that Jarrett Binney continued to owe Jennifer Binney $15,000.00 as part of the Spousal Support section of the divorce judgment.

Approximately three (3) years later, Jarrett Binney filed a Chapter 7 bankruptcy petition. In his petition, Mr. Binney attempted to discharge the $15,000.00 obligation owed to Ms. Binney's attorney that was ordered as part of the permanent restraining order and further restated in the judgment of divorce. Ms. Binney filed a timely complaint seeking a determination of dischargeability under 11 U.S.C. § § 523(a)(6), (a)(5), and (a)(15).

Judge Ferguson, USBJ, held that the $15,000.00 owed to Ms. Binney's attorney was not dischargeable under 11 U.S.C. § 523(a)(5) which provides that a debt may not be discharged in bankruptcy if it is "for a domestic support obligation." The term "domestic support obligation" is defined by 11 U.S.C. § 101(14A). The main issues under 523(a)(5) were whether Mr. Binney could discharge a debt owed to his former spouse's attorney (not directly to Ms. Binney) and whether the $15,000.00 was in the nature of alimony, maintenance, or support of such spouse, former spouse, or child of the debtor or such child's parent.

As to the first issue, Judge Ferguson held that despite the fact that the $15,000.00 was for legal fees ordered to paid to Ms. Binney's attorney as part of the final restraining order, Ms. Binney remained personally liable for paying her attorney so for the purposes of the court's analysis it was the same as a debt owed directly to Ms. Binney. This is significant since the law requires that the debt be owed to or recoverable by a spouse, former spouse, or child of the debtor or such child's parent, legal guardian, or responsible relative.

As to the second issue, it was mush easier for Judge Ferguson since the $15,000.00 was expressly designated under the "spousal support" section in the divorce judgment.