Harshaw v. Harshaw

Dist. Ct. did not err in reversing Bankruptcy Ct.’s order that found that defendant-former husband’s $435,000 debt to plaintiff-former wife that arose from arbitrator’s award in favor of plaintiff regarding plaintiff’s entitlement to portion of increase in defendant’s retirement savings that occurred after divorce was not dischargeable in defendant’s bankruptcy proceedings. Record supported defendant’s claim that said debt was dischargeable, since language of arbitrator’s award indicated that it was money judgment, as opposed to award of interest in specific property that would not be dischargeable. This is so, Ct. of Appeals reasoned, where: (1) arbitrator found that plaintiff was entitled to $435,000, plus post-judgment interest; (2) under Indiana law, any order requiring payment of sum of money and stating specific amount due is money judgment; and (3) under Indiana law, award of post-judgment interest applies only to money judgments and not judgments partitioning property. Ct. further noted that arbitrator’s award allowed defendant to choose how to satisfy award, which is consistent with finding that instant debt was money judgment. Fact that amount awarded was based on defendant’s retirement account, or that arbitrator stated that award was not dischargeable in bankruptcy did not require different result.