MATTHEW BANKS ASHWORTH V. KATHRYN EHRGOTT, No. 14-60005 (9th Cir. 2016)
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FILED NOT FOR PUBLICATION UNITED STATES COURT OF APPEALS FEB 22 2016 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT In re: MATTHEW BANKS ASHWORTH, Debtor, No. 14-60005 BAP No. 12-1591 MATTHEW BANKS ASHWORTH, MEMORANDUM* Appellant, v. KATHRYN EHRGOTT; AMRANE COHEN, Chapter 13 Trustee, Appellees. Appeal from the Ninth Circuit Bankruptcy Appellate Panel Pappas, Dunn, and Taylor, Bankruptcy Judges, Presiding Argued and Submitted February 9, 2016 Pasadena, California Before: FARRIS, CLIFTON, and BEA, Circuit Judges. * This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. Matthew Ashworth filed for bankruptcy in 2011. His ex-wife, Kathryn Ehrgott, filed a priority claim for the remaining balance that Ashworth owed her from the settlement they entered into at the time of their divorce. Ashworth objected to the priority status of the claim. The bankruptcy court found that the settlement was a domestic support obligation and was entitled to priority status. See 11 U.S.C. §§ 101(14A), 507(a)(1)(A). Ashworth appealed to the Bankruptcy Appellate Panel, which affirmed the bankruptcy court’s decision. Ashworth now appeals to this Court. We have jurisdiction under 28 U.S.C. § 158(d)(1). We affirm. We review the bankruptcy court’s findings of fact for clear error. Comer v. Comer (In re Comer), 723 F.2d 737, 739 (9th Cir. 1984). We review questions of law de novo. Id. The bankruptcy court correctly applied the controlling Ninth Circuit precedent of Friedkin v. Sternberg (In re Sternberg), 85 F.3d 1400, 1405 (9th Cir. 1996), overruled on other grounds by Murray v. Bammer (In re Bammer), 131 F.3d 788, 792 (9th Cir. 1997) (en banc). Ashworth’s arguments that Sternberg has been superseded, or that this Court should reconsider Sternberg en banc, are unconvincing. 2 Under Sternberg, the dispositive factor in determining whether a settlement is a domestic support obligation is the intent of the parties at the time of settlement. Id. The “[f]oremost” factor that a court looks at to determine intent is whether the spouse receiving the settlement was in need of support at the time of the divorce. Id. In making this assessment, the court should consider the “‘imbalance in the relative income’” of the two spouses. Id. (quoting Shaver v. Shaver, 736 F.2d 1314, 1316 (9th Cir. 1984)). The court should also consider: (1) whether the settlement is paid directly to the receiving spouse, in installments, over a lengthy period of time; (2) whether the payments terminate on the death or remarriage of the receiving spouse; and (3) the labels the parties themselves attach to the payments. Id. On this record, we cannot hold that the bankruptcy court clearly erred in finding that the parties intended for the settlement to be domestic support. Ehrgott needed support. There was imbalance in the relative incomes of Ehrgott and Ashworth. The other Sternberg factors, though mixed, also suggest that the settlement was intended to be support. AFFIRMED. 3
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