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In re Trentadue

United States Court of Appeals, Seventh Circuit

September 14, 2016

In re: Christopher A. Trentadue, Debtor,
Julie Gay, Defendant-Appellee. Christopher A. Trentadue, Plaintiff-Appellant,

          Argued February 11, 2016

         Appeal from the United States District Court for the Eastern District of Wisconsin. No. 15-CV-388 - J.P. Stadtmueller, Judge.

          Before Ripple, Kanne, and Williams, Circuit Judges.

          Kanne, Circuit Judge.

         Plaintiff and debtor Christopher A. Trentadue and his wife divorced in 2007, and as part of that judgment, Trentadue and his then ex-wife received joint legal custody of the couple's six children. This arrangement proved unworkable and resulted in protracted litigation over custody and child support. The Wisconsin state court overseeing the litigation determined that Trentadue's conduct resulted in excessive trial time to resolve the case and awarded Trentadue's ex-wife $25, 000 in attorney's fees for "overtrial." The state court directed Trentadue to make the payment directly to his ex-wife's attorney Defendant Julie M. Gay

         Trentadue never paid Gay. Instead, he filed a chapter 13 bankruptcy petition. Gay countered by filing a $25, 000 claim for the unpaid overtrial award and classified it as a non-dischargeable, domestic support obligation entitled to priority. Trentadue objected that the obligation was imposed as a punishment and therefore could not be a domestic support obligation, but the bankruptcy court overruled his objection. The district court agreed with the bankruptcy court after Trentadue challenged its ruling. We find no error and affirm the decision of the district court.

         I. Background

         This case traces its roots to a May 2010 filing made by Trentadue's ex-wife to modify placement and child support related to one child. The filing ignited a contentious, three-year legal dispute over custody, placement, health insurance, and child support that involved substantial motion practice, requests for contempt findings, engagement of experts, and evidentiary hearings. The Wisconsin state court handling the case provided its oral decision on pending matters in November 2012 and entered its Findings of Fact and Amended Order in May 2013.

         It was in this May 2013 order that the state court determined that Trentadue committed "significant over-trial" and ordered that he "contribute $25, 000 toward [his ex-wife's] attorney fees." In support of its finding, the state court observed the following: (1) Trentadue "expended a great deal of trial time" pursuing the issue of where to send the children to high school; (2) the experts engaged by Trentadue and a "significant number of witnesses called" on his behalf "undercut his position;" (3) "[h]e raised issues that did not need to be addressed" that "protracted the trial well beyond what was necessary;" and (4) he "raised repeatedly" the same issues to the court. In sum, the court determined "Tren-tadue's desire to 'win' and control resulted in additional legal fees for [his ex-wife]." The state court directed Trentadue to pay the $25, 000 directly to his ex-wife's lawyer, Gay. In the same order, the trial court memorialized its findings with regard to custody, placement, health insurance, and child support, including evaluating each party's ability to pay. Trentadue appealed the ruling to the Wisconsin Court of Appeals.

         Meanwhile, in July 2013, Trentadue filed a petition for bankruptcy under Chapter 13. Gay countered by filing a claim for $25, 000 and labeled it a priority, non-dischargeable domestic support obligation ("DSO") under 11 U.S.C § 507(a)(1). Trentadue objected to the claim's classification as a DSO and argued it should be considered non-priority and unsecured because the trial court ordered the payment as punishment, not support.

         Before the bankruptcy court resolved Trentadue's objection, the Wisconsin Court of Appeals issued its decision in November 2014 in which it affirmed the trial court's order, including the overtrial award. Trentadue appealed to the Wisconsin Supreme Court, but it declined to hear his case.

         In March 2015, the bankruptcy court overruled Trentadue's objection and allowed Gay's claim to be classified as a DSO. The bankruptcy court determined that Trentadue's claim was not a punishment but was instead meant to "compensate for the harm he had done" to the children in the form of an "expensive custody litigation" that would have a negative financial and emotional impact on them. In re Trentadue, 527 B.R. 328, 334-35 (Bankr. E.D. Wis. 2015). Trentadue appealed the bankruptcy court's decision to the district court, which affirmed the bankruptcy court's ruling. This appeal followed.

         II. Analysis

         Trentadue advances two arguments as to why we should reject the classification of his $25, 000 debt to Gay as a DSO: (1) the overtrial award can never be a DSO because it is not payable to his spouse, former spouse, child, or a caregiver and (2) the overtrial award was intended to be a punishment and not in the nature of support. We address each argument in turn.

         A. Identity of the Payee

         Trentadue argues that under 11 U.S.C. § 101(14A), the identity of the payee is relevant to determining whether a debt may be considered a DSO. Trentadue is correct. For a debt to qualify as a DSO, it must satisfy all four requirements under § 101 (14A), including the requirement that the debt be "owed to or recoverable by-(i) a spouse, former spouse, or child of the debtor or such child's parent, legal guardian, or responsible relative; or (ii) a governmental unit." Trentadue argues that Gay's debt is dischargeable because it is payable to her, not to Trentadue's spouse, former spouse, child, or caregiver.

         However, this issue is not relevant to this appeal. Trentadue did not raise this argument before the bankruptcy court or the district court and therefore did ...

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