## Facts

- John J. Phegley and Sheri L. Phegley divorced in Missouri in 2009.
- The dissolution decree required John to pay Sheri “maintenance” of $1,250 per month for 48 months, terminating upon Sheri’s remarriage or the death of either party.
- The decree stated the maintenance was intended to allow Sheri to pursue a teaching certificate and increase her earning capacity because she could not then support herself at the marital standard of living.
- The decree also required John to pay $9,178.69 toward Sheri’s attorney’s fees, based in part on the parties’ disparate financial circumstances and earning capacities.
- John filed Chapter 13 bankruptcy in 2009.
- Sheri filed an adversary proceeding seeking a determination that both obligations were nondischargeable “domestic support obligations” (DSOs).
- The bankruptcy court held both the maintenance and attorney’s fees were nondischargeable DSOs; John appealed.

## Issues

1. Whether the $1,250 monthly payments for 48 months constituted a “domestic support obligation” under 11 U.S.C. § 101(14A) and thus were nondischargeable under 11 U.S.C. § 523(a)(5) in Chapter 13.
2. Whether the $9,178.69 attorney’s fee award was support (nondischargeable) or a property-settlement debt (dischargeable).

## Decision

- The Bankruptcy Appellate Panel affirmed.
- The monthly “maintenance” obligation was a nondischargeable domestic support obligation.
- The attorney’s fee obligation was also a nondischargeable domestic support obligation.

## Legal Principles

- Whether a divorce-related obligation is support or property division is a question of federal bankruptcy law informed by the divorce court’s intent and the obligation’s function at the time of the decree.
- State-court labels (e.g., “maintenance”) are relevant but not controlling; they are a starting point for determining intended function.
- The function of the obligation, not the source or mechanics of payment, controls classification as support.
- Features commonly associated with support include need-based findings, termination upon remarriage or death, and time-limited rehabilitative purposes tied to improving a spouse’s self-supporting capacity.
- Attorney’s fee awards in dissolution proceedings may be treated as support when based on relative financial resources and intended to address economic disparity between spouses.

## Conclusion

The court held that both the time-limited, need-based maintenance award and the attorney’s fee award served support functions reflected in the divorce decree, making each a nondischargeable domestic support obligation in the debtor’s Chapter 13 case.


In re Phegley, 443 B.R. 154 (B.A.P. 8th Cir. 2011)