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In re Maitlen

August 24, 1981

IN RE: DENNIS NEIL MAITLEN, BANKRUPT ; JOYCE A. MAITLEN, PLAINTIFF-APPELLEE,
v.
DENNIS NEIL MAITLEN, DEFENDANT-APPELLANT .



Appeal from the United States District Court for the Northern District of Indiana Hammond Division at Lafayette Bankruptcy No. LB 79-117 Civil No. L 80-42 Jesse E. Eschbach, Judge

Before PELL and SPRECHER, Circuit Judges, and EAST,*fn* District Judge .

Per Curiam. This appeal concerns the interpretation of a portion of a decree dissolving a marriage in Indiana. The District Court concluded that an obligation to pay mortgage payments incorporated into the property settlement agreement was non-dischargeable in bankruptcy. We note jurisdiction under 28 U.S.C. § 1291 and affirm.

Dennis and Joyce Maitlen, bankrupt and plaintiff in an adversary proceeding in the Bankruptcy Court, when husband and wife, entered into a "Property Settlement Agreement" which was incorporated into a "Decree of Dissolution" of their marriage on November 20, 1974. Paragraph 3 of the agreement provides that the wife would have custody of the minor child, that Dennis Maitlen (Maitlen) would pay $40 every other Friday for support of the child and would pay all reasonable and necessary medical and dental expenses. Paragraph 4 provides:

The Wife should become the sole owner of the real estate of the parties.... The Husband shall pay and satisfy and mortgage upon said real estate in favor of Waterfield Mortgage Company... by making the monthly payments thereon as the same become due, which monthly payments include principal, interest, taxes and insurance, all of which shall be paid by the Husband. The obligation of the Husband to make said mortgage payments and to satisfy said mortgage indebtedness shall terminate upon the death or remarriage of the Wife prior to payment of said indebtedness in full.

On March 22, 1979, Maitlen filed for bankruptcy. After proceedings on the question of the dischargeability of this mortgage payment obligation, the Bankruptcy Judge entered an order determining that the obligation was dischargeable. Joyce Maitlen appealed to the District Court and that court reversed.

There is no dispute that if in an obligation is a debt for alimony, maintenance, or support of a spouse or child in connection with a divorce decree, it is not dischargeable in bankruptcy. 11 U.S.C. § 523(a)(5). In re Woods, 561 F.2d 27 (7th Cir. 1977). Maitlen here argues that the debt is not one of child or spousal support. In fortifying this position, he points to the explicit provision for child support, to the fact that the agreement was a "Property Settlement," and to a paragraph of the agreement which releases the husband from any obligation of support for the wife. Finally, he argues that the debt was one of property equalization, not support. Joyce Maitlen responds, arguing that the debt is in the nature of support. She emphasizes the reasoning and conclusions of the District Court in her argument.

This court has recently considered the issue of dischargeability of a debt arising out of an Indiana dissolution decree and settlement. In re Woods. Woods enunciates principles for guidance in the interpretation of such agreements. Although certain of Indiana's substantive laws have been amended since the Woods facts developed, we believe the principles announced there are still valid.

This case turns on the interpretation of paragraph 4 of the Maitlens' "Property Settlement Agreement." After careful review, we conclude that the District Court has properly interpreted the agreement and correctly applied the law under Woods . We, therefore, affirm the decision of the District Court for the reasons set forth in its opinion, which we attach as Appendix A.

AFFIRMED.

APPENDIX A

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF INDIANA HOMMOND DIVISION AT LAFAYETTE

IN RE DENNIS NEIL MAITLEN, Bankrupt, JOYCE A. MAITLEN, Plaintiff/Appellant, v . DENNIS NEIL MAITLEN, Defendant/Appellee .

BANKRUPTCY No. LB ...


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