Littleton v. Littleton, et al

United States Court of Appeals
Fifth Circuit
F I L E D
June 20, 2006
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 05-41854
Summary Calendar
_______________
IN THE MATTER OF:
BRYAN L. LITTLETON, JR
Debtor.
* * * * * * * * * * * * * * *
BRYAN L. LITTLETON, JR
Appellant,
VERSUS
DEBRA L. LITTLETON,
Appellee.
____________________________________
Appeal from the United States District Court
for the Eastern District of Texas
m 4:04-CV-211
_____________________________________

-- 1 of 4 --

2
Before SMITH, GARZA, and PRADO,
Circuit Judges.
PER CURIAM:*
Bryan Littleton appeals the district court’s
ruling that a debt he owes his ex-wife, Debra
Littleton, is in the nature of alimony, mainte-
nance, or support, and accordingly is nondis-
chargeable in bankruptcy proceedings under
11 U.S.C. § 523(a)(5). We affirm.
I.
The Littletons were divorced in March
2001 and negotiated a settlement agreement
that was incorporated by the state court into
its final decree of divorce. Under the heading
of “Alimony,” the agreement states that
[i]t is the mutual desire of the parties to
provide a continuing measure of support
for Debra L. Littleton, Respondent, after
the divorce. These payments undertaken
by Petitioner, Bryan Littleton, are intended
to qualify as contractual alimony as that
term is defined in section 71(a) of the In-
ternal Revenue Code of 1986 (“the code”),
as amended . . . . All provisions of this
article will be interpreted in a manner con-
sistent with this intention.
The agreement goes on to specify that “Bryan
Littleton will pay to Debra L. Littleton
$1,100.00 per month as and for alimony.” Be-
ginning on March 1, 2001, and ending on Feb-
ruary 1, 2011, payments under the agreement
are to be made on the first day of every month.
The obligation lapses immediately, however, if
either party dies before the contractual ter-
mination date.
Bryan adhered to the terms of the agree-
ment until July 2003, when he stopped making
the required payments. In November 2003 he
filed for chapter 7 bankruptcy, listing
$167,439 he owed to Debra as a dischargeable
general unsecured debt. Debra challenges that
characterization, arguing that Bryan’s indebt-
edness to her is in the nature of “alimony to,
maintenance for, or support of” a former
spouse and accordingly, pursuant to 11 U.S.C.
§ 523(a)(5), is nondischargeable.
Bryan counters that although the payments
underlying the debt are labeled as alimony in
the agreement, they are more accurately con-
sidered as part of the couple’s property settle-
ment. He bases this argument on the fact that
under the terms of the agreement governing
property division, Debra was to receive only
$140,000 from a business of Bryan’s that had
an appraised value of $500,000. Bryan claims
that Debra was entitled to half of the value of
the business ($250,000) and that he agreed to
categorize $110,000 of that amount as alimo-
ny, instead of as a portion of the property set-
tlement, to get her to sign the agreement.1
After considering the terms of the settle-
ment agreement and hearing the testimony of
both Bryan and Debra, the bankruptcy court
found that $101,200 of the debt Bryan owes
Debra is in the nature of alimony, maintenance,
* Pursuant to 5TH CIR. R. 47.5, the court has de-
termined that this opinion should not be published
and is not precedent except under the limited
circumstances set forth in 5TH CIR. R. 47.5.4.
1 Bryan testified that “[Debra’s] attorney want-
ed in the event that [the business] went broke or we
didn’t make it or something, you know, that there
would still be a factor of $110,000” available to
Debra. The alimony provision in the settlement
agreement actually calls for Bryan to pay Debra
$1,100 per month for ten years, a total of
$132,000.

-- 2 of 4 --

3
or support, and accordingly is nondischarge-
able. The court found that the remaining
$66,239 is a dischargeable general unsecured
debt. The district court affirmed the bank-
ruptcy court’s findings, and Bryan appeals.
II.
The district court’s “[f]indings of fact are
reviewed under the ‘clearly erroneous’ stan-
dard; conclusions of law are subject to de novo
review.” In re Evert, 342 F.3d 358, 363 (5th
Cir. 2003).
III.
Bryan contends that the district court erred
in resting its findings exclusively on the lan-
guage of the settlement agreement and by
foregoing an evaluation of the factors articu-
lated in In re Nunnally, 506 F.2d 1024 (5th
Cir. 1994), as a means for determining wheth-
er a divorce-related obligation constitutes ali-
mony, maintenance, or support, or is more
appropriately considered as part of a property
settlement.2 He further asserts that “consider-
ation of the Nunnally factors would show that
Debra failed to introduce any evidence that the
[relevant] payments were actually necessary
for her support,” and accordingly that the dis-
trict court should have found that his monthly
obligation under the settlement agreement
could not be characterized as alimony.
We do not agree that consideration of the
Nunnally factors is necessary in this case. We
held in Evert that
[u]nder bankruptcy law, the intent of the
parties at the time a separation agreement is
executed determines whether a payment
pursuant to the agreement is alimony, sup-
port or maintenance within the meaning of
section 523(a)(5). See generally In re Da-
vidson, 947 F.2d 1294, 1296-97 (5th Cir.
1991); In re Gianakas, 917 F.2d 759, 762
(3d Cir. 1990). A written agreement be-
tween the parties is persuasive evidence of
their intent. Tilley v. Jessee, 789 F.2d
1074, 1077 (4th Cir. 1986). Thus, if the
agreement between the parties clearly
shows that the parties intended the particu-
lar debt in question to reflect either support
or a property settlement, then that charac-
terization will normally control. In re
Yeates, 807 F.2d 874 (10th Cir. 1986). On
the other hand, if the agreement is ambigu-
ous, then the court must determine the par-
ties’ intentions by looking to extrinsic evi-
dence. Id.
Evert, 342 F.3d at 368.
We found no ambiguity in the agreement at
issue in Evert, and thus no need to consider
extrinsic evidence such as the Nunnally fac-
tors, because “both the labels given to the ob-
ligation at issue in the agreement and the sub-
stantive characteristics of the obligation clearly
reflect it is part of a property settlement.” Id.
The presence of an “explicit, separate pro-
vision for nontrivial alimony in the agreement”
further established that “there is no basis for
judiciallyrefashioning the note contained in the
property settlement portion of the agreement
as alimony.” Id. at 368-69.
Similarly, the settlement agreement in this
case unambiguously categorizes the relevant
payments as alimony and contains an explicit,
separate provision for the division of property.
As the district court asserted, the statements in
2 The Nunnally factors “include the disparity of
the earning power of the parties, as well as their
business opportunities, the physical condition of
the parties, probable future need for support, . . .
educational background, the fault in breaking up
the marriage and the benefits [the] innocent spouse
would have received from a continuation of the
marriage.” Nunnally, 506 F.2d at 1026-27.

-- 3 of 4 --

4
the agreement “demonstrate that both the label
and the substantive characteristics of the pay-
ments underlying Bryan’s $101,200.00 debt
are indisputably in the nature of alimony as
opposed to a property settlement . . . .” Ac-
cordingly, the district court did not err in
deciding, without looking to extrinsic evi-
dence, “that Bryan and Debra did in fact intend
for the payments underlying the debt to oper-
ate as such.”
AFFIRMED.

-- 4 of 4 --