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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Hillsborough-northern judicial district
No. 95-685
PETER A. JOHNSON
v.
CATHY R. COE
July 15, 1997
Douglas, Robinson, Leonard & Garvey, P.C., of Concord (Charles G. Douglas, III and Carolyn S. Garvey on the brief, and Mr. Douglas orally), for the plaintiff.
Sanders and McDermott, of Hampton (Edwinna C. Vanderzanden on the brief and orally), for the defendant.
BROCK, C.J. The plaintiff, Peter A. Johnson, appeals the recommendation of the Master (Bruce F. DalPra, Esq.), approved by the Superior Court (Groff, J.), regarding the character of a $1,500 per month obligation to the defendant, Cathy R. Coe, his former spouse. He also appeals the recommendation of another Master (Alice S. Love, Esq.), approved by the Superior Court (Hampsey, J.), concerning the award of attorney's fees to the defendant and the transfer of a parcel of real estate to the defendant that had been awarded to him pursuant to the divorce decree. He argues that: (1) the monthly payment was a property settlement and thus dischargeable in his Chapter 7 bankruptcy; (2) the award of attorney's fees was improper or at the least excessive; and (3) the transfer of the property to the defendant was an impermissible modification of a property settlement. The defendant cross-appeals, maintaining that the Trial Court (Hampsey, J.) erred in adopting the recommendation of the Master (Alice S. Love, Esq.), that a portion of the plaintiff's debt to her was discharged in the bankruptcy proceeding. We affirm in part and reverse in part.
During the course of their marriage, the parties obtained several pieces of property, including the family home in Hollis, a house in Dixville Notch (the Notch house), and land in Colebrook (the McLane land). In April 1986, the parties remortgaged the Hollis property for $230,000, using the bulk of the proceeds to discharge mortgages that had been obtained to build the Hollis house and to purchase the McLane land and the Notch house.
The parties were divorced on February 10, 1988. Pursuant to the divorce decree, the plaintiff was awarded both the Notch house and the McLane land. Although the defendant received the Hollis house, the plaintiff was ordered within six months to reduce the amount of the mortgage by $160,000, "to return the amount of the encumbrance relative to the Hollis property to that level of March, 1986, just prior to the refinancing." In addition, the plaintiff was ordered to pay the defendant $1,500 per month until he met his obligation. Because both parties were employed full-time and capable of self-support, the decree imposed "no alimony obligation . . . upon either party."
In October 1988, the plaintiff mortgaged eleven properties to Walter A. Margerison for $275,000. In what the trial court characterized as "displeasure with the Divorce Decree," however, the plaintiff never discharged the $160,000 encumbrance. Nevertheless, he stopped making the $1,500 monthly payment after December 1988.
The plaintiff's financial prosperity rapidly declined. On November 13, 1989, he filed for relief under Chapter 13 of the Bankruptcy Code, which was later converted to a Chapter 11 and then to a Chapter 7 proceeding. The plaintiff's bankruptcy, however, did not impede the defendant's attempts to enforce the plaintiff's obligations under the divorce decree or the plaintiff's attempts to painstakingly avoid them. At issue was the characterization of the $1,500 monthly payment. The plaintiff maintained that it was a partial property settlement and thus dischargeable; the defendant asserted that it was spousal support and hence exempt from the discharge provisions.
To resolve the conflict, the bankruptcy court issued an order of abstention deferring to the trial court the characterization of the $1,500 payment. The question was assigned to the marital master who had drafted the initial recommendation mandating the monthly payment. The Master (Bruce F. DalPra, Esq.) clarified that the $1,500 monthly payment "was in the nature of a temporary spousal support payment and not a property settlement."
The bankruptcy court released the plaintiff from all dischargeable debts on January 4, 1995. Because a debtor is not discharged from any debt under a divorce decree to a former spouse "in the nature of alimony, maintenance, or support," 11 U.S.C.