Hope Carlton v. United States Bankruptcy Court for the District of Colorado

FILED
U.S. Bankruptcy Appellate Panel
of the Tenth Circuit

January 18, 2017
Blaine F. Bates
* Clerk
NOT FOR PUBLICATION
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE TENTH CIRCUIT
_________________________________

IN RE HOPE MARIE CARLTON, BAP No. CO-15-044

Debtor.
__________________________________

KEITH ROBERT LEVIN, Bankr. No. 12-29679
Adv. No. 15-01099
Plaintiff - Appellee, Chapter 7

v.

HOPE MARIE CARLTON, OPINION

Defendant - Appellant.

_________________________________

Appeal from the United States Bankruptcy Court
for the District of Colorado
_________________________________

Before NUGENT, SOMERS, and HALL, Bankruptcy Judges.
_________________________________

SOMERS, Bankruptcy Judge.
_________________________________

Debtor Hope Carlton appeals two bankruptcy court orders: (1) the order

granting Robert Levin’s motion to dismiss Carlton’s counterclaim for Levin’s

alleged violation of the automatic stay by virtue of his making alimony payments

*
This unpublished opinion may be cited for its persuasive value, but is not precedential,
except under the doctrines of law of the case, claim preclusion, and issue preclusion. 10th Cir.
BAP L.R. 8018-6.
in accord with a schedule approved by the state court, which reduced postpetition

alimony payments to collect assessments of attorney fees and costs against

Carlton; and (2) the grant of summary judgment1 to Levin on his adversary

complaint contending that the debt Carlton owes him for attorney fees and costs

awarded in conjunction with an appeal from an order in the divorce proceedings is

nondischargeable under 11 U.S.C. § 523(a)(15). 2 We affirm.

I. Background.

A. Prebankruptcy State Court Proceedings.

This case begins with the “long and very tortuous divorce proceeding” of

Hope Carlton and Robert Levin.3 Levin and Carlton were married in 1991. Prior

to the marriage, they entered into a prenuptial agreement (“the Agreement”),

which provided for the division of assets in the event of a divorce. The Agreement

also provided for attorney fees and costs to be awarded to the prevailing party in

the event a dispute arose regarding the terms, conditions, and obligations imposed

by the Agreement. In 2005, Levin filed a divorce petition in the Seventh Judicial

District Court in Grand County, Utah (the “Domestic Court”). Carlton disputed

1
The summary judgment order also granted Levin “relief from automatic stay to
pursue collection of the Judgment pursuant to 11 U.S.C. § 362.” Corrected Judgment at
7, in Appellant’s App. at 204. In her brief, Carlton does not allege error in this portion of
the order.
2
All future references to “Code,” “Section,” and “§” are to the Bankruptcy Code,
Title 11 of the United States Code, unless otherwise indicated. All future references to
“Bankruptcy Rule” or “Bankruptcy Rules” are to the Federal Rules of Bankruptcy
Procedure, unless otherwise indicated. All future references to “Civil Rule” or “Civil
Rules” are to the Federal Rules of Civil Procedure, unless otherwise indicated.
3
Order Denying Defendant’s Motion for Reconsideration of Order Dismissing
Counterclaim at 1, in Appellant’s App. at 178.

2
the validity of the Agreement and the appropriate amount of alimony.

On November 6, 2007, the Domestic Court entered its Decree of Divorce

(the “Domestic Court Order”).4 It held that the Agreement was valid and awarded

Carlton $15,000 per month in alimony until January 1, 2022.5 If prior to October

1, 2012, Carlton remarried or cohabitated, then beginning October 1, 2012,

alimony would be reduced to $7,500 per month until October 1, 2017, at which

time it would cease. The Domestic Court Order also awarded Levin attorney fees

and costs6 of $167,884.75, with interest at 6.99% per year, as the prevailing party

in the dispute regarding the validity of the Agreement. 7 The Domestic Court

Order provided that Levin was

only entitled to recover these fees from [Carlton] by deducting $5,000
per month from her alimony payment until the $167,884.75 together
with interest is paid in full. An amortization table reflecting the
payment schedule is attached hereto as Exhibit B. Notwithstanding
this deduction, the Court clarifies that the amount of alimony
[Carlton] is to be paid is $15,000 per month, from which a deduction
to pay this judgment is to be made. 8

Three months later, beginning on February 1, 2008, this monthly deduction was

4
Exhibit A, Motion for Reconsideration of Order Dismissing Debtor’s Counterclaim
Order in Appellant’s App. at 56 (The schedule of payments in the Appellant’s Appendix
following the Decree of Divorce appears not to be part of the original order, since it refers
to subsequent events).
5
The Domestic Court Order specified that alimony should be paid for fourteen years
and three months beginning on October 1, 2007.
6
In the rest of the text, awards of attorney fees and costs will be referred to as
awards of attorney fees.
7
Domestic Court Order at 5, in Appellant’s App. at 60.
8
Id. in Appellant’s App. at 60. (Exhibit B to the Domestic Court Order is not in the
record on appeal).

3
reduced to $2,500 per month.9 Attached to the order is a loan amortization

schedule for payment of the remaining attorney fees at 6% in seventy-three

monthly payments of $2,500. 10

Carlton appealed the Domestic Court Order to the Utah Court of Appeals.

That court affirmed the Domestic Court’s decision, held that Levin as the

prevailing party was entitled to reasonable attorney fees on appeal, and remanded

to the Domestic Court for a determination of the amount.11 On April 19, 2011, the

Domestic Court awarded Levin $77,745.33 in additional attorney fees as the

prevailing party in the appeal.12 The judgment provided that the award “shall be

collected by withholding a portion of each alimony payment in accordance with

the attached schedule,”13 which provided for net monthly alimony payments of

$10,000 through September 1, 2012, and other adjustments thereafter. 14

In October 2009, Levin filed a motion that asked the Domestic Court to find

9
Exhibit 2, Plaintiff’s Objection to Debtor’s Motion for Reconsideration of Order
Dismissing Debtor’s Counterclaim at 3, in Appellant’s App. at 105.
10
Id. at 5-7, in Appellant’s App. at 107-109 (The Domestic Court Order states the
interest rate on the unpaid balance owed to Levin by Carlton will be 6.99%, but the loan
amortization schedule rate is 6%).
11
Exhibit 3, Plaintiff’s Objection to Debtor’s Motion for Reconsideration of Order
Dismissing Debtor’s Counterclaim, in Appellant’s App. at 110.
12
Exhibit 5, Plaintiff’s Objection to Debtor’s Motion for Reconsideration of Order
Dismissing Debtor’s Counterclaim at 2, in Appellant’s App. at 137.
13
Id. in Appellant’s App. at 137.
14
Id. at 4, in Appellant’s App. at 139.

4
that Carlton had cohabitated and her alimony should therefore be reduced. 15

Following a trial, the Domestic Court entered its ruling on March 22, 2011,

finding that Carlton was in fact cohabitating and reducing her alimony beginning

October 1, 2012 to $7,500 per month.16 By an order entered on October 12, 2011,

the Domestic Court awarded Levin attorney fees of $125,000 “to be paid by

deduction from alimony payments as set forth in Exhibit ‘A’” to the order. 17 The

exhibit provides for net alimony of $4,150 per month, commencing on October 1,

2012, with the last payment scheduled for September 1, 2017. 18 Carlton then

appealed the 2011 cohabitation order and the attorney fees order to the Utah Court

of Appeals.

B. Proceedings after bankruptcy filing.

In September 2012, Carlton filed a Chapter 13 bankruptcy, which she

subsequently converted to a Chapter 11, and then converted to a Chapter 7.

Carlton alleges that on the petition date she owed Levin approximately $85,000. 19

In January 2014, the Utah Court of Appeals issued its opinion on the appeal

of the 2011 cohabitation and attorney fees orders, affirming the Domestic Court

and remanding for a determination of attorney fees incurred in connection with the
15
Exhibit 4, Plaintiff’s Objection to Debtor’s Motion for Reconsideration of Order
Dismissing Debtor’s Counterclaim at 2, in Appellant’s App. at 126.
16
Id. in Appellant’s App. at 125.
17
Motion for Reconsideration of Order Dismissing Debtor’s Counterclaim at 3-4, in
Appellant’s App. at 147-148.
18
Id. at 7, in Appellant’s App. at 151.
19
Answer of Debtor, Hope Marie Carlton at 3, in Appellant’s App. at 31.

5
second appeal.20 The Utah Court of Appeals noted that its ruling was subject to

any limitations related to Carlton’s bankruptcy and “express[ed] no opinion on the

calculation or recoverability of attorney fees insofar as the same may be limited or

precluded by [Carlton’s] bankruptcy case.” 21

After Levin obtained relief from stay, the Domestic Court on remand,

entered its Amended Order and Judgment Re: Attorney’s Fees 22 on February 9,

2015 (the “February 2015 Judgment”) awarding Levin $52,263.58 in attorney fees

incurred in conjunction the appeal of the 2011 orders. The Domestic Court stated

that:

This judgment constitutes a debt owed by [Carlton] to a former
spouse and was incurred during the course of a divorce and/or in
connection with a divorce decree. . . . 23

To the extent that this Court has the authority to make such a
determination, it is this Court’s opinion that this judgment should be
deemed non-dischargeable pursuant to 11 U.S.C. §523(a)(15) . . . ;
and
20
Exhibit 9, Plaintiff’s Objection to Debtor’s Motion for Reconsideration of Order
Dismissing Debtor’s Counterclaim at 9-10, in Appellant’s App. at 160-61.
21
Id. at 9, in Appellant’s App. at 160. In May 2013, Levin filed a motion for relief
from the automatic stay only with respect to the appeal pending before the Utah Court of
Appeals. The bankruptcy court subsequently entered an order for relief from the
automatic stay providing that “the request for the relief from the automatic stay is granted
to permit the Utah State Court of Appeals, to complete its determination of the issues
raised in Appeal No. 2011-1023-CA.” Bankr. Dkt. Entry 91. In November 2014, Levin
filed a second motion for relief from stay to permit the Domestic Court to determine the
attorney fees arising out of the appeal. Bankr. Dkt. Entry 165. The bankruptcy court
entered a second order granting the motion for relief from stay permitting the Domestic
Court to address the outstanding attorney fee issue left unresolved in the Utah Court of
Appeals’ opinion, but prohibiting Levin from pursuing collection against Carlton. Bankr.
Dkt. Entry 174. Appellant did not include these motions or orders in the Appendix and
Appellee did not file a Supplemental Appendix.
22
February 2015 Judgment in Appellant’s App. at 162.
23
Id. at 2, in Appellant’s App. at 163.

6
 [Levin] is stayed from executing or otherwise collecting on this
judgment until he has received relief to do so from the bankruptcy
court. 24

In March 2015, Levin filed this adversary proceeding (the “Complaint”), 25

seeking a determination of the dischargeability of the February 2015 Judgment

pursuant to § 523(a)(5) and (a)(15), and requesting relief from the automatic stay

“to permit [Levin] to return to the Domestic Court to pursue collection of the

February 9, 2015 Judgment.”26 Carlton subsequently filed an answer, 27 generally

admitting all of Levin’s factual allegations concerning the state court proceedings,

but denying the characterization of the February 2015 Judgment as

nondischargeable.

Carlton’s response to the Complaint included an answer and a counterclaim

asserting a cause of action for violation of the automatic stay (the

“Counterclaim”).28 Its allegations are stated in only five paragraphs: (1) the

action was for violation of § 362; (2) Debtor filed her petition on September 21,

2012; (3) on the petition date, Carlton was indebted to Levin in the approximate

amount of $85,000; (4) “[n]otwithstanding the filing of the bankruptcy by Carlton,

without the permission of the Bankruptcy Court, Levin continued to withhold

24
Id. at 3, in Appellant’s App. at 164.
25
Complaint Objecting to Dischargeability of Debts in Appellant’s App. at 10.
26
Id. at 5, in Appellant’s App. at 14.
27
Answer of Debtor, Hope Marie Carlton in Appellant’s App. at 29.
28
Id. at 3, in Appellant’s App. at 31.

7
payments he was obligated to make to Carlton to reduce the indebtedness owed to

him;”29 and (5) as a result, Carlton was damaged.

Levin filed his Motion to Dismiss Counterclaim based on two arguments:

(1) dismissal was required under Civil Rule 12(b)(1) because the bankruptcy court

lacked subject matter jurisdiction under the “domestic relations exception” to

federal court jurisdiction and under the Rooker-Feldman Doctrine; and

(2) dismissal was required under Civil Rule 12(b)(6) because there was no

violation of the stay since Levin was simply complying with the payment schedule

ordered by the Domestic Court (the “Motion to Dismiss”). 30 Carlton responded by

arguing that Civil Rule 8(a) provides that a complaint need only contain a short

and plain statement of the claim; motions to dismiss are viewed with disfavor; the

Motion to Dismiss improperly asserted affirmative defenses as a basis for

dismissal; and the allegation that Levin withheld payment owed by him to offset a

prepetition debt owed by Carlton in violation of the stay was sufficient to state a

cause of action.31 There was no discussion of subject matter jurisdiction. Carlton

did not suggest that the Motion to Dismiss should be converted to a motion for

summary judgment because matters outside the pleadings should be considered.

29
Id. in Appellant’s App. at 31. The Court understands this allegation to address the
postpetition payments made by Levin where the prepetition attorney fee awards were
deducted from the alimony owed, in accord with the Domestic Court orders. The attorney
fees awarded postpetition by the February 2015 Judgment are the subject of the
Complaint, not the Counterclaim.
30
Motion to Dismiss Counterclaim in Appellant’s App. at 41.
31
Counterclaim Plaintiff, Hope Marie Carlton’s Response to Counter-Defendant’s
Motion to Dismiss Counter Claim in Appellant’s App. at 47.

8
 The bankruptcy court subsequently conducted a telephonic hearing to issue

its oral ruling on the Motion to Dismiss (the “Oral Ruling”) and docketed the

minute sheet as its order (the “Dismissal Order”).32 The minute sheet states “for

reasons stated on the record” the Counterclaim was dismissed as a matter of law. 33

The record on appeal does not contain a transcript of the Oral Ruling. When

denying Carlton’s later-filed motion for reconsideration, the bankruptcy court

described its Oral Ruling as follows:

The Court found that the Defendant [Carlton]’s counterclaim sought
to alter the Utah state court orders of alimony awarded . . . in a
manner prohibited by the Rooker-Feldman Doctrine. Consequently,
the Court dismissed the Defendant’s counterclaim under Fed. R. Civ.
P. 12(b)(6) for failure to state a claim upon which relief could be
granted. Importantly, the Court found that the Plaintiff [Levin] was
not withholding alimony payments from the Defendant in an improper
manner, but was simply obeying the Utah state court’s orders in
making alimony payments to the Defendant. 34

On June 24, 2015, Carlton moved for reconsideration (the “Reconsideration

Motion”).35 Carlton argued that she was not asking the bankruptcy court to modify

the alimony award and that the Domestic Court’s orders that the attorney fees be

paid by deductions from alimony did not modify the alimony award, but just

provided for a method of payment similar to garnishment. She did not address

32
Dismissal Order, in Appellant’s App. at 51.
33
Id. at 1-2, in Appellant’s App. at 51-52.
34
Order Denying Defendant’s Motion for Reconsideration of Order Dismissing
Counterclaim at 2, in Appellant’s App. at 179 (internal citations omitted).
35
Motion for Reconsideration of Order Dismissing Debtor’s Counterclaim in
Appellant’s App. at 53.

9
Levin’s jurisdictional arguments. As exhibits to her Reconsideration Motion,

Carlton submitted the Domestic Court Order and an alimony payment spreadsheet,

which appears to be a proposed payment schedule after the cohabitation ruling. 36

Levin filed an objection to the Reconsideration Motion 37 again asserting the

argument that the Counterclaim should be dismissed because the bankruptcy court

lacked jurisdiction to modify a divorce or alimony decree. As exhibits to his

response, Levin s ubmitted the Domestic Court orders discussed above allowing

him to reduce his alimony payments and apply the reductions to the attorney fees

debt.

On September 21, 2015, the bankruptcy court denied the Reconsideration

Motion (the “Reconsideration Order”). 38 It construed the motion as a motion

under Civil Rule 59(e), under which relief is appropriate where “a court has

misapprehended the facts, a party’s position, or controlling law.” 39 While

recognizing that the Oral Ruling required consideration of facts in addition to the

bare bones allegations of the Counterclaim and that Carlton was contending that

the court had misapprehended the facts, the court concluded that it did not err in

granting the Motion to Dismiss without converting it into a motion for summary

36
Id. at 9, in Appellant’s App. at 61.
37
Plaintiff’s Objection to Debtor’s Motion for Reconsideration of Order Dismissing
Debtor’s Counterclaim in Appellant’s App. at 69.
38
Order Denying Defendant’s Motion for Reconsideration of Order Dismissing
Counterclaim in Appellant’s App. at 178.
39
Reconsideration Order at 3, in Appellant’s App. at 180.

10
judgment under Civil Rule 12(d). As the basis for its ruling, the bankruptcy court

accepted as true the facts alleged in the Counterclaim and the facts alleged in the

Complaint setting forth the history of the Domestic Court orders, which Carlton

had admitted in her answer. Based on these facts alone, which the court found to

be sufficient, the bankruptcy court concluded that it could not draw a reasonable

inference that Levin could be liable for violation of the automatic stay because

those facts showed that Levin was “simply following the orders of the Utah state

court by paying the amount specified in the applicable orders and judgments.” 40

The court further said, “As previously stated by this Court, by seeking an order

that the amount of the alimony payments made by the Plaintiff, as determined by

the Utah state court, violates the automatic stay, Defendant seeks substantive

review of a state court judgment, and this Court has no jurisdiction to do so.” 41

On July 1, 2015, while Carlton’s Reconsideration Motion was pending

before the bankruptcy court, Levin filed a motion for judgment on the pleadings,

requesting that the attorney fees awarded by the Utah Domestic Court in its

February 2015 Judgment be excepted from discharge pursuant to either

§ 523(a)(15) or (a)(5) and that he be granted relief from stay to return to state

court to enforce the February 2015 Judgment.42 Carlton filed an objection 43
40
Id. at 6, in Appellant’s App. at 183.
41
Id.
42
Motion for Judgment on the Pleadings in Appellant’s App. at 62.
43
Debtor/Defendant’s Response to Motion for Judgment on the Pleadings in
(continued...)

11
arguing that as a matter of law, § 523(a)(15) was not applicable and Levin was not

entitled to judgment on the pleadings.

On September 24, 2015, the bankruptcy court ruled in Levin’s favor on the

dischargeability and stay issues by issuing its Order Granting Summary Judgment

Under 11 U.S.C. § 523(a)(15) (the “Summary Judgment Order”).44 The court

concluded that “the only inquiry under § 523(a)(15) is whether the [February

2015] Judgment was incurred by [Carlton] ‘in the course of a divorce . . . or in

connection with a separation agreement, divorce decree or other order of a court of

record.’”45 Carlton’s argument that § 523(a)(15) did not apply because the

judgment was based upon the parties’ prenuptial agreement was rejected. The

bankruptcy court found the February 2015 Judgment was entered in an ongoing

divorce and “emanated from a series of court orders, as opposed to a stand alone

prenuptial agreement,”46 and was therefore nondischargeable under § 523(a)(15).

The court also granted Levin “relief from automatic stay to pursue collection of

the [February 2015] Judgment.”47 A corrected order (the “Corrected Summary

43
(...continued)
Appellant’s App. at 174.
44
Summary Judgment Order in Appellant’s App. at 186.
45
Id. at 6, in Appellant’s App at 191 (quoting 11 U.S.C. § 523(a)(15)).
46
Id. at 7, in Appellant’s App. at 192.
47
Id.

12
Judgment Order”)48 and a Corrected Judgment were subsequently entered. 49

Carlton now appeals the Dismissal Order, the Reconsideration Order, the

Corrected Summary Judgment Order, and the Corrected Judgment. 50

II. Issues on appeal.

A. Whether the bankruptcy court erred in granting the Motion to
Dismiss Counterclaim.

B. Whether the bankruptcy court erred in entering summary
judgment in favor of Plaintiff Levin and finding the February 2015 Judgment
owed to Levin by Carlton was nondischargeable under 11 U.S.C. § 523(a)(15).

III. Standard of Review.

We review a bankruptcy court’s dismissal of a claim pursuant to Civil Rule

48
Corrected Summary Judgment Order in Appellant’s App. at 196. The Corrected
Summary Judgment Order corrected typographical errors in the Summary Judgment
Order.
49
Corrected Judgment in Appellant’s App. at 204.
50
Appellant submitted copies of pages one and two of Levin’s Proof of Claim as
attachments to her Reply Brief, referred to as “Exhibit Number 2.” Appellee then filed
his Appellee’s Motion to Strike “Exhibit Number 2” Attached to Appellant’s Reply Brief
(the “Motion to Strike”). BAP ECF No. 17. He argued that: (1) Exhibit Number 2 was
neither included in Appellant’s Designation of the Record on Appeal nor Appellant’s
Appendix; and (2) Exhibit Number 2 was an incomplete copy of the Proof of Claim, as
Appellant omitted six attachments to the Claim from Exhibit Number 2. Appellant did
not file a response to the Motion to Strike. BAP Local Rule 8018-1(g) provides that
“[o]nly documents properly before the bankruptcy court may be included in the appendix
and considered by this Court.” 10th Cir. BAP L.R. 8018-1(g). The BAP Local Rules
also provide that absent the filing of a supplemental or amended appendix, “[t]his Court
need not remedy any failure by a party to designate an adequate record. When the party
asserting an issue fails to provide a record sufficient for considering that issue, this Court
may decline to consider it.” 10th Cir. BAP L.R. 8009-3; see also Boone v. Carlsbad
Bancorporation, Inc., 972 F.2d 1545, 1549 n.1 (10th Cir. 1992) (appellate court declined
to review evidence not before the trial court when rulings at issue were made). Exhibit
Number 2 was not submitted to the bankruptcy court in the adversary proceeding and was
not referred to in the bankruptcy court’s Reconsideration Order. Furthermore, Exhibit
Number 2 was not included in the Designation of Record. Accordingly, Exhibit Number
2 is HEREBY STRICKEN. The Motion to Strike is GRANTED.

13
12(b)(6) de novo51 and the bankruptcy court’s ruling on a Civil Rule 59 motion for

an abuse of discretion.52

We review an order granting summary judgment de novo, applying “‘the same

legal standard as was used by the bankruptcy court to determine whether either party is

entitled to judgment as a matter of law.’”53

IV. Discussion

A. Did the bankruptcy court err in granting the Motion to Dismiss
Counterclaim.

1. The positions of the parties.

On appeal, Carlton contends that the bankruptcy court erred in granting the Motion

to Dismiss and denying her Reconsideration Motion. The arguments presented in her

Appellant’s Brief allege violations of procedural rules. She asserts that the Civil Rules

are to be construed liberally, that Civil Rule 8(a) requires only that a complaint contain a

short and plain statement of the claim showing the pleader is entitled to relief, that

motions to dismiss are disfavored, and that Levin’s Motion to Dismiss improperly

asserted a number of affirmative defenses. Carlton also argues that the bankruptcy court

erred when denying her Reconsideration Motion because, under Civil Rule 12(d), it

should have decided the Motion to Dismiss using summary judgment standards and

51
Sutton v. Utah State Sch. for Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999).
52
LTF Real Estate Co. v. Expert S. Tulsa, LLC (In re Expert S. Tulsa, LLC), 522
B.R. 634, 643 (10th Cir. BAP 2014) (citing Loughridge v. Chiles Power Supply Co., 431
F.3d 1268, 1275 (10th Cir. 2005)).
53
Id. (quoting Rushton v. Bank of Utah (In re C.W. Mining Co.), 477 B.R. 176, 180
(10th Cir. BAP 2012)).

14
procedures. In his Appellee’s Brief, Levin argues that the bankruptcy court was correct in

dismissing the Counterclaim because addressing Carlton’s allegations of violations of the

automatic stay would have been tantamount to relitigating the Domestic Court’s various

alimony orders, and the bankruptcy court lacked jurisdiction to do so under the “domestic

relations exception”54 to federal court jurisdiction and under the Rooker-Feldman

Doctrine.55 Levin also supports the bankruptcy court’s denial of the Reconsideration

Motion.

2. Carlton has not shown that the bankruptcy court committed reversible
error when dismissing the Counterclaim.

As stated above, the Motion to Dismiss was granted by the Oral Ruling.

Bankruptcy Rule 8009, titled “Record on Appeal; Sealed Documents,” in subsection

(a)(4), provides that the record on appeal must include, among other items, “any opinion,

findings of fact, and conclusions of law relating to the issues on appeal, including

transcripts of all oral rulings.”56 But Carlton has failed to include a transcript of the Oral

54
Levin argues the “domestic relations exception” precluded the bankruptcy court
from exercising subject matter jurisdiction over the Counterclaim. The bankruptcy court
did not specifically address the domestic relations exception. The “domestic relations
exception . . . divests the federal courts [including bankruptcy courts] of power to issue
divorce, alimony, and child custody decrees,” Ankenbrandt v. Richards, 504 U.S. 689,
703 (1992), or to fix payments for support, id. at n.6. Levin cites Ebel v. King (In re
Ebel), 338 B.R. 862 (Bankr. D. Colo. 2005), as authority for his position.
55
Under the Rooker-Feldman Doctrine, federal courts lack subject matter jurisdiction
to hear appeals from final judgments of state courts or to adjudicate claims that are
inextricably intertwined with those judgments. In order for Rooker-Feldman to apply,
(1) the party must have lost in state cour t; (2) the party must complain of injuries caused
by the state-court judgment; (3) the party must invite a review and rejection of that
judgment; (4) and the judgment must have been rendered before the federal proceedings
commenced. Flanders v. Lawrence (In re Flanders), 517 B.R. 245, 256 (Bankr. D. Colo.
2014) (quoting Hoblock v. Albany Cty. Bd. of Elections, 422 F.3d 77, 85 (2d Cir. 2005),
but omitting internal quotation marks)).
56
Fed. R. Bankr. P. 8009(a)(4).

15
Ruling in the record on appeal. This Court’s local rule states, “This Court need not

remedy any failure by a party to designate an adequate record. When the party asserting

an issue fails to provide a record sufficient for considering that issue, this Court may

decline to consider it.”57 Since the transcript of the Oral Ruling is not provided, this

Court could in its discretion decline to consider whether the bankruptcy court erred when

granting the Motion to Dismiss.

However, because we find the bankruptcy court’s statement contained in its order

denying the Reconsideration Motion regarding its Oral Ruling to be a sufficient substitute

for a transcript, we elect to reach the merits. As stated above, the bankruptcy court

summarized its Oral Ruling as follows: “The Court found that the Defendant’s

counterclaim sought to alter the Utah state court orders of alimony awarded . . . in a

manner prohibited by the Rooker-Feldman Doctrine. Consequently, the Court dismissed

the Defendant’s counterclaim under Fed. R. Civ. P. 12(b)(6) for failure to state a claim

upon which relief could be granted.”58 Thus, this Court could reverse only if the

bankruptcy court erred in finding that the Rooker-Feldman Doctrine bars the

Counterclaim.

But Carlton has never during the course of these proceedings contended that the

Rooker-Feldman Doctrine does not apply. The matter was not addressed in her

57
10th Cir. BAP L.R. 8009-3; see also Lopez v. Long (In re Long), 255 BR 241, 245
(10th Cir. BAP 2000) (appellate court need not remedy counsel’s failure to provide
adequate record on appeal but may summarily affirm lower court); Tuloil, Inc. v. Shahid
(In re Shahid), 254 B.R. 40, 43 (10th Cir. BAP 2000) (appellate court need not remedy
counsel’s failure to provide appendix sufficient for consideration of issues on appeal).
58
Reconsideration Order at 2, in Appellant’s App. at 179.

16
opposition to Levin’s Motion to Dismiss or in support of her Reconsideration Motion.

Further, as a basis for reversal, Carlton’s Appellant’s Brief relies solely upon alleged

procedural errors. There is no discussion of the Rooker-Feldman Doctrine, and no

contention that the bankruptcy court had jurisdiction to rule that the offset was a violation

of the stay even though it arose out of domestic relations orders.59

Because Carlton has not identified the Rooker-Feldman Doctrine as an issue on

appeal and has not briefed the question, this Court will not consider whether the

bankruptcy court erred in applying the doctrine.60 In contrast to the rule that an appellate

court may affirm on any basis shown by the record, there is no rule of appellate procedure

that an appellate court may reverse based upon an issue not raised by the appellant.

Bankruptcy Rule 8014(a) provides that an appellant’s brief must contain, among other

things, “a statement of the issues presented” and “the argument, which must contain the

appellant’s contentions and the reasons for them, with citations to the authorities and parts

of the record on which the appellant relies.”61 This bankruptcy rule is derived from

Federal Rule of Appellate Procedure 28(a), which has been construed to mean that an

appellate court should not reverse on the basis of an error not addressed in the appellant’s

59
In her Reply Brief, Carlton does argue that the domestic relations exception to
federal jurisdiction does not apply, but she does not mention the Rooker-Feldman
Doctrine.
60
See e.g., Wyoming v. Livingston, 443 F.3d 1211, 1216 (10th Cir. 2006) (holding
whether defendant-appellee was federal employee was waived by plaintiff-appellant
because not addressed in appellant’s opening brief, even though issue was raised before
district court and at appellate oral argument); Abercrombie v. City of Catoosa, 896 F.2d
1228, 1231 (10th Cir. 1990) (issue not argued in appellate brief or at oral argument is
waived).
61
Fed. R. Bankr. P. 8014(a)(5), (a)(8).

17
opening brief. The Tenth Circuit has said,

An appellant’s opening brief must identify “appellant’s contentions
and the reasons for them, with citations to the authorities and parts of the
record on which the appellant relies.” Consistent with this requirement, we
routinely have declined to consider arguments that are not raised, or are
inadequately presented, in an appellant’s opening brief. Stated differently,
the omission of an issue in an opening brief generally forfeits appellate
consideration of that issue.62

The foregoing rule is related to the general principle that “a party may not lose in the

district court on one theory of the case, and then prevail on appeal on a different

theory.”63 In this case, before the bankruptcy court, Carlton did not meaningfully respond

to Levin’s position that the Rooker-Feldman Doctrine precluded consideration of

Carlton’s Counterclaim. She has waived any right to have the decision reversed even if

the bankruptcy court erred when relying on the doctrine.

Rather than addressing the basis for the bankruptcy court’s Dismissal Order in her

Appellant’s Brief, Carlton addresses irrelevant procedural matters. She asserts that the

Civil Rules are to be construed liberally, that Civil Rule 8(a) requires only that a

complaint contain a short and plain statement of the claim showing the pleader is entitled

to relief, and that motions to dismiss are disfavored. These assertions are generally true,

but Carlton fails to show how they were violated. Carlton also argues that Levin’s

Motion to Dismiss asserted a number of affirmative defenses and that affirmative

defenses are not the proper basis for a motion to dismiss. Affirmative defenses are

addressed in Civil Rule 8(c), which states that in responding to a pleading, a party must
62
Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007) (citations omitted).
63
Lyons v. Jefferson Bank & Trust, 994 F.2d 716, 721 (10th Cir. 1993) (citing Lone
Star Steel v. United Mine Workers, 851 F.2d 1239, 1243 (10th Cir. 1998)).

18
affirmatively state any avoidance or affirmative defense, including eighteen listed

defenses.64 Carlton does not identify any defenses which were stated as grounds to

dismiss the Counterclaim, and the bankruptcy court did not grant the Motion to Dismiss

based on any affirmative defense. Carlton’s basic position, stated in her brief and

reiterated at oral argument, is that the Counterclaim should not have been dismissed

because the allegations in it are sufficient to state a cause of action. But this contention

provides no basis for reversal since it fails to address the reason for the bankruptcy

court’s Dismissal Order.

3. The bankruptcy court did not abuse its discretion when denying Carlton’s
motion to reconsider the order dismissing the Counterclaim on the ground that the
Motion to Dismiss should have been treated as a motion for summary judgment.

A bankruptcy court’s ruling on a Civil Rule 59 motion is reviewed for an abuse of

discretion, and we find no such abuse. On appeal, Carlton asserts that the bankruptcy

court erred when denying her Reconsideration Motion because, contrary to the

bankruptcy court’s ruling, under Civil Rule 12(d), the Motion to Dismiss should have

been treated as a motion for summary judgment because the bankruptcy court considered

matters outside the four corners of the Complaint.65

Civil Rule 12(d) requires a court to treat a 12(b)(6) motion as a motion for

summary judgment under certain circumstances. Specifically, Civil Rule 12(d)

provides:

64
Fed. R. Civ. P. 8(c), made applicable to adversary proceedings by Fed. R. Bankr.
P. 7008.
65
Appellant’s Brief is ambiguous about whether she asserts that summary judgment
treatment was required for the Motion to Dismiss or the Reconsideration Motion.

19
 [i]f, on a motion under Rule 12(b)(6) . . . , matters outside the pleadings are
presented to and not excluded by the court, the motion must be treated as
one for summary judgment . . . . [P]arties must be given a reasonable
opportunity to present all [pertinent] material.66

Under Civil Rule 12(d), a bankruptcy court commits reversible error if it considers

supplementary materials without converting the motion to dismiss into a motion for

summary judgment and complying with the summary judgment rules.67 But even if a

bankruptcy court considers and relies on matters outside the pleadings without giving the

parties a chance to present pertinent material, that action does “not necessarily mandate

reversal unless ‘the record discloses the existence of unresolved material fact issues,’ or

‘the parties represent that they would have submitted specific controverted material

factual issues to the trial court if they had been given the opportunity.’”68

Carlton urges us to read Civil Rule 12(d) narrowly69 to mean that in a situation

such as this, where an Answer and Counterclaim are filed as one responsive pleading to a

66
Fed. R. Civ. P. 12(d), made applicable to adversary proceedings by Fed. R. Bankr.
P. 7012(b).
67
Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991) (citing Ohio v. Peterson,
Lowry, Rail, Barber & Ross, 585 F.2d 454, 457 (10th Cir. 1978)).
68
United States v. Rogers Cartage Co., 794 F.3d 854, 861 (7th Cir. 2015) (quoting
Woods v. City of Chicago, 234 F.3d 979, 991 (7th Cir. 2000)); see also GFF Corp. v.
Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997) (failure to
convert Civil Rule 12(b)(6) motion to one for summary judgment where outside materials
not excluded is reversible error unless outside materials were not outcome determinative).
69
We exercise our discretion to address the Civil Rule 12(d) issue despite several
deficiencies in Carlton’s presentation to this Court. Carlton did not raise the issue before
the bankruptcy court. When opposing the Motion to Dismiss, she did not argue that
matters outside the pleadings should be considered or that the motion should be converted
to one under Civil Rule 56. Also, she made no such contention when seeking
reconsideration. The bankruptcy court sua sponte raised the Civil Rule 12(d) issue when
denying the Reconsideration Motion. Further, our review of this issue, like the Rooker-
Feldman issue, is hampered by the absence of the transcript of the Oral Ruling from the
record on appeal.

20
Complaint, a bankruptcy court may only consider the allegations contained in the

Counterclaim — not any admissions or denials in the Answer — in the context of a

12(b)(6) motion. There does not appear to be any authority to support such a narrow

reading of the rule,70 and Carlton does not cite any. The plain language of Civil Rule

12(d) limits its application to situations where “matters outside the pleadings are

presented.”71 The Answer and Counterclaim filed by Carlton fall squarely within the

plain meaning of the word “pleadings.”

In this case, when objecting to dismissal, Carlton did not identify any material

controverted facts or suggest that Civil Rule 56 applied. She also did not reference Civil

Rule 12(d) in her Reconsideration Motion. Carlton was aware of and admitted the facts

alleged in the Complaint, and those facts were sufficient for the bankruptcy court’s ruling.

There is no showing of what would have been accomplished if the Motion to Dismiss had

been decided under the Civil Rule 12(d) procedures.

The Court therefore affirms the grant of the Motion to Dismiss and the denial of

the Reconsideration Motion.

B. Whether the bankruptcy court erred in granting summary judgment on
Levin’s § 523(a)(15) Claim.

A ruling on a summary judgment motion is reviewed de novo, applying “the same

70
The Tenth Circuit Court of Appeals has liberally construed Civil Rule 12(d). See
GFF Corp., 130 F.3d at 1384 (Notwithstanding the general rule that a Civil Rule 12(b)(6)
motion must be converted to a motion for summary judgment if matters outside the
pleadings are considered, “if a plaintiff does not incorporate by reference or attach a
document to its complaint, but the document is referred to in the complaint and is central
to the plaintiff’s claim, a defendant may submit an indisputably authentic copy to the
court to be considered on a motion to dismiss.”).
71
Fed. R. Civ. P. 12(d) (emphasis added).

21
legal standard as was used by the bankruptcy court to determine whether either party is

entitled to judgment as a matter of law.”72 Section 523(a)(15) provides that a debt “to a

spouse, former spouse, or child of the debtor and not of the kind described in paragraph

(5) that is incurred by the debtor in the course of a divorce or separation or in connection

with a separation agreement, divorce decree or other order of a court of record” is

nondischargeable under § 727.73 The bankruptcy court independently examined the

nondischargeability of the February 2015 Judgment under § 523(a)(5) and (a)(15),

ultimately concluding that it was nondischargeable pursuant to § 523(a)(15).

Carlton argues that the bankruptcy court erred in concluding that the February

2015 Judgment was nondischargeable because § 523(a)(15) does not include a specific

reference to prenuptial agreements. Her argument is not persuasive. This Court has

previously held that exceptions to discharge under § 523(a)(15) are construed more

liberally than other provisions of § 523.74 The Ninth Circuit has also specifically held, as

have other bankruptcy courts, that attorney fee awards owed to a non-debtor spouse are

nondischargeable under § 523(a)(15).75

The record indicates there is no dispute that the February 2015 Judgment is a debt

72
LTF Real Estate v. Expert S. Tulsa, 522 B.R. at 643 (quoting Rushton v. Bank of
Utah (In re C.W. Mining Co.), 477 B.R. 176, 180 (10th Cir. BAP 2012)).
73
11 U.S.C. § 523(a)(15).
74
In re Taylor, 478 B.R. 419, 427 (10th Cir. BAP 2012), aff’d, 737 F.3d 670 (10th
Cir. 2013).
75
Lilly v. Smithson (In re Lilly), No. AZ-11-1185, 2012 WL 603771, at *3-4 (9th Cir.
BAP Jan. 31, 2012); Baker v. Baker (In re Baker), No. 12-1302, 2013 WL 2606406, at
*3-5 (Bankr. D.N.M. June 11, 2013); Mordas v. Schenkein (In re Schenkein), No. 09-
01947, 2010 WL 3219464, at *4-6 (Bankr. S.D.N.Y. Aug. 9, 2010).

22
owed to a spouse or former spouse and is not a “domestic support obligation” under

§ 523(a)(5). Accordingly, the only issue on appeal is whether the judgment was incurred

by Carlton in the course of a divorce or in connection with a divorce decree or other order

of a court of record.76

We conclude that the bankruptcy court was correct in determining that the

February 2015 Judgment was incurred by Carlton in the course of a divorce and in

connection with a divorce decree or other order of a court of record. The Domestic Court

entered the February 2015 Judgment following remand from the Utah Court of Appeals’

affirmance of an order entered in the course of alimony reduction proceedings. Levin

incurred and paid attorney fees directly attributable to the divorce-related litigation

instigated by Carlton, for which Carlton was responsible pursuant to the Agreement and

Utah law. Accordingly, the bankruptcy court did not err in determining that the February

2015 Judgment was nondischargable pursuant to § 523(a)(15), and entering its Corrected

Summary Judgment Order.

V. Conclusion

Carlton has not shown that the bankruptcy court erred when it entered the

Dismissal Order granting the Motion to Dismiss, or that its Reconsideration Order

denying her Reconsideration Motion was an abuse of discretion. The bankruptcy court

correctly determined that Levin had established that no material issues of fact existed and

that he was entitled to judgment as a matter of law on his § 523(a)(15)

nondischargeability claim, so the bankruptcy court’s Corrected Summary Judgment Order

76
11 U.S.C. § 523(a)(15).

23
and its Corrected Judgment were not erroneous.

Based on the forgoing, we hold that the dismissal of the Counterclaim and the

grant of summary judgment in favor of Levin on the allegations of the Complaint were

appropriate. We AFFIRM.

24