## Facts

- Eloisa Maria Taylor and Matthew E. Taylor divorced in Virginia in 2005 under a marital settlement agreement incorporated into a divorce decree.
- The decree required Matthew to pay Eloisa $2,500 monthly spousal support for up to ten years, subject to termination upon death, Eloisa’s remarriage, or other conditions, with the Virginia court retaining jurisdiction.
- Matthew later sought termination of support based on Eloisa’s cohabitation in a relationship analogous to marriage.
- The Virginia court terminated support retroactively and entered a $50,660.59 judgment against Eloisa for overpaid support.
- Eloisa filed Chapter 7 bankruptcy in New Mexico.
- Matthew filed an adversary complaint asserting the $50,660.59 debt was nondischargeable under 11 U.S.C. § 523(a)(5) and § 523(a)(15).
- The bankruptcy court dismissed the § 523(a)(5) claim for failure to state a claim and granted summary judgment for Matthew under § 523(a)(15).
- The Bankruptcy Appellate Panel affirmed nondischargeability under § 523(a)(15) and denied Matthew’s request for attorney’s fees based on the marital settlement agreement.

## Issues

1. Whether a judgment requiring a debtor to reimburse a former spouse for overpaid spousal support is nondischargeable under 11 U.S.C. § 523(a)(15).
2. Whether that reimbursement judgment is a “domestic support obligation” and thus nondischargeable under 11 U.S.C. § 523(a)(5).
3. Whether the bankruptcy court or appellate panel could award the former spouse attorney’s fees for the bankruptcy adversary proceeding under the marital settlement agreement or other authority.

## Decision

- The Tenth Circuit affirmed that the $50,660.59 debt was nondischargeable under § 523(a)(15) because it was owed to a former spouse and incurred in connection with the divorce decree and related state-court order.
- The court rejected the debtor’s argument that applying § 523(a)(15) produced an absurd result, holding the statutory text controlled and the outcome was not so irrational as to justify departing from plain meaning.
- The court affirmed dismissal of the § 523(a)(5) claim because the overpayment reimbursement was not in the nature of alimony, maintenance, or support for Matthew.
- The court affirmed denial of attorney’s fees, concluding the marital settlement agreement did not authorize fees for the bankruptcy litigation and there was no independent basis to award them.

## Legal Principles

- Under § 523(a)(15), a Chapter 7 debtor cannot discharge a debt that (1) is owed to a spouse or former spouse, (2) is not a § 523(a)(5) domestic support obligation, and (3) was incurred in the course of, or in connection with, a divorce decree, separation agreement, or other qualifying court order.
- Post-2005 amendments, § 523(a)(15) broadly covers divorce-related obligations beyond traditional support, including reimbursement obligations arising from modification or enforcement of divorce decrees.
- A “domestic support obligation” under § 523(a)(5) turns on the function and purpose of the obligation; reimbursement of overpaid support is not automatically support for the payor spouse.
- The absurdity doctrine is narrowly applied; courts will not override unambiguous statutory text based on perceived inequity absent an outcome Congress could not plausibly have intended.
- Attorney’s fees in bankruptcy litigation require a valid contractual or statutory basis applicable to the proceeding; a divorce-related fee provision does not automatically extend to nondischargeability litigation.

## Conclusion

The Tenth Circuit held that a former spouse’s state-court judgment for reimbursement of overpaid spousal support was nondischargeable under § 523(a)(15) but was not a domestic support obligation under § 523(a)(5), and it also affirmed denial of attorney’s fees for the bankruptcy adversary proceeding.


Taylor v. Taylor (In re Taylor), 737 F.3d 670 (10th Cir. 2013)