[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
MAY 21, 2008
No. 07-14445
THOMAS K. KAHN
Non-Argument Calendar
CLERK
________________________
D. C. Docket Nos. 06-01896-CV-ORL-19 & 05-00321-BCK
IN RE: ALMA JEANNE SLIZYK,
Debtor.
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ALMA JEANNE SLIZYK,
Plaintiff-Appellant,
versus
STEVEN A. SMILACK,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(May 21, 2008)
Before TJOFLAT, BLACK and MARCUS, Circuit Judges.
PER CURIAM:
Alma Slizyk appeals pro se from the district court’s order affirming the
bankruptcy court’s order determining that $62,072.68 of Slizyk’s debt to Steven
Smilack, her ex-husband, was not dischargeable under 11 U.S.C. § 523(a)(15) in
her Chapter 7 bankruptcy proceeding. Slizyk argues that the bankruptcy court
erred in finding that the debt was not dischargeable because she does not have the
ability to pay the debt and because the bankruptcy court did not consider how
much discharging the debt would harm Smilack. Slizyk also claims that
$38,146.16 of the debt should be discharged because, although Smilack was
awarded that amount in a divorce decree to pay a debt to his mother, he never
actually paid the debt. After thorough review, we affirm in part, and reverse and
remand in part.
In appeals from bankruptcy proceedings, “we review determinations of law
made by either the district or bankruptcy court de novo, while reviewing the
bankruptcy court’s findings of fact for clear error.” In re Int’l Pharmacy & Disc.
II, Inc., 443 F.3d 767, 770 (11th Cir. 2005). “Equitable determinations by the
Bankruptcy Court are subject to review under an abuse of discretion standard. In
reviewing for abuse of discretion, we . . . must affirm unless we find that the court
has made a clear error of judgment, or has applied the wrong legal standard.” In re
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Kingsley, 518 F.3d 874, 877 (11th Cir. 2008) (citations, quotations and alteration
omitted). We review the bankruptcy court’s order independently of the district
court. Int’l Pharmacy, 443 F.3d at 770.
Chapter 7 bankruptcy generally discharges a debtor from all debts that arose
before she filed the bankruptcy petition. 11 U.S.C. § 727(b). However, a debt
incurred “in connection with a . . . divorce decree” is not dischargeable unless (A)
“the debtor does not have the ability to pay such debt from income or property of
the debtor not reasonably necessary to be expended for the maintenance or support
of the debtor,” or (B) “discharging such debt would result in a benefit to the debtor
that outweighs the detrimental consequences to a . . . former spouse . . . of the
debtor.” 11 U.S.C. § 523(a)(15) (2005).1 An objecting creditor first bears the
burden of proving, by a preponderance of the evidence, that the debt should be
exempted from discharge, and then the burden shifts to the debtor to establish the
debt is dischargeable under either subsection (A) or (B). In re Bowers, 357 B.R.
663, 667-68 (Bankr. M.D. Fla. 2006). When determining whether a debt should be
discharged under § 523(a)(15), courts may consider the totality of the
circumstances, including the parties’ incomes, assets, liabilities, health, job skills,
1
Congress amended the applicable statute to remove subsections (A) and (B) from
Section 523(a)(15), but the amendment is inapplicable to cases filed before the effective date of
the amendment, and Slizyck’s petition was filed before this date. See Pub. L. 109-8 §§ 215(c),
1501(a).
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training, age, education, future earning capabilities, and long-term financial
prospects. Id. at 668; In re Daniel, 290 B.R. 914, 918 (Bankr. M.D. Ga. 2003).
Weighing the detrimental consequences to the parties under § 523(a)(15)(B)
“require[s] the bankruptcy court to reach an equitable conclusion rather than a
factual or legal one.” In re Myrvang, 232 F.3d 1116, 1121 (9th Cir. 2000); cf.
Matter of Crosswhite, 148 F.3d 879, 888 (7th Cir. 1998) (discussing the “equitable
balancing test” of § 523(a)(15)(B)); In re Henrie, 235 B.R. 113, 121 (Bkrtcy. M.D.
Fla. 1999) (“Section 523(a)(15)(B) requires the Court to exercise its pure equitable
powers” and “make a value judgment in deciding which party suffers the most.”)
(quotations omitted). “[C]ourts generally construe the statutory exceptions to
discharge in bankruptcy liberally in favor of the debtor . . . .” In re Miller, 39 F.3d
301, 304 (11th Cir. 1994) (internal quotations omitted).
As an initial matter, the bankruptcy court did not clearly err in determining
that, based on Slizyk’s future earning potential and employment opportunities, she
was able to pay the $62,072.68 debt to Smilack. Int’l Pharmacy, 443 F.3d at 770.
However, the bankruptcy court nonetheless abused its discretion in holding that the
debt was not dischargeable, because there is no indication in the record that the
court ever applied the correct legal test to determine whether discharging the debt
“would result in a benefit to the debtor that outweighs the detrimental
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consequences to a spouse, former spouse, or child of the debtor.” 11 U.S.C. §
523(a)(15)(B). Specifically, the bankruptcy court said that it was using this test,
but never actually discussed what, if any, harm discharging the debt would do to
Smilack. Moreover, during the hearings, the bankruptcy court indicated that it did
not understand why Slizyk or Smilack’s financial status was relevant. And when
Slizyk sought to enforce the bankruptcy court’s order that Smilack disclose various
financial records, the court said it did not think it would need those documents to
make a decision. This record shows that the bankruptcy court plainly did not
assess Smilack’s financial condition.
We are thus compelled to conclude that because the bankruptcy court did not
consider the detriment that discharging the debt would cause Smilack and whether
that detriment would outweigh the benefit to Slizyk, it did not apply the correct
legal standard, and in so doing, abused its discretion. Kingsley, 518 F.3d at 877.
Accordingly, we reverse the portion of the district court’s order affirming the
bankruptcy court’s ruling that the divorce decree debt of $62,072.68 was not
dischargeable, and instruct the district court to vacate this part of the bankruptcy
court’s order and remand to the bankruptcy court for further proceedings.
We reject, however, Slizyk’s argument that the portion of the debt awarded
to Smilack in the divorce decree to pay a debt to his mother should be discharged.
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Under the Rooker-Feldman doctrine,2 the U.S. Supreme Court is the only federal
court that Congress has granted jurisdiction to adjudicate a claim seeking review of
a state court judgment. 28 U.S.C. § 1257; Exxon Mobil Corp. v. Saudi Basic
Indus. Corp., 544 U.S. 280, 284 (2005). The doctrine applies to claims actually
raised in state court and to claims that were not raised in state court but are
“inextricably intertwined” with the state court judgment, so long as the plaintiff
had a reasonable opportunity to raise the claim in state proceedings. Powell v.
Powell, 80 F.3d 464, 466-67 (11th Cir. 1996). Using this doctrine, the district
court correctly concluded that it could not review Slizyk’s challenge to this portion
of the divorce decree because it is “inextricably intertwined” with the state court
judgment, and Slizyk had a reasonable opportunity to raise it in state court. We
likewise decline to address this issue, and affirm the ruling of the district court.
AFFIRMED IN PART, REVERSED AND REMANDED IN PART.
2
See District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983);
Rooker v. Fidelity Trust Co., 263 U.S. 413, 416 (1923).
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