Case Summary:
On remand from the District Court, the Court was instructed to determine whether the creditor even had standing to assert nondischargeability of the debt. Debtor’s wife was awarded contribution of $70,000 in attorneys’ fees in the divorce decree. The law firm which represented debtor’s wife in the divorce proceeding asserted priority under § 507(a)(1). The Court held that, absent an express provision in the divorce decree directing payment to the law firm, the payment of the attorneys’ fees was, by default, payable to the spouse. The Court noted that historically, in Wisconsin, attorneys’ fees could not be awarded in a law firm, but must be awarded to the spouse. In 1977, the Wisconsin legislature amended the statute, permitting attorneys’ fees to be awarded directly to the law firm. Nevertheless, the historical and ethical background suggested that, unless otherwise stated, attorneys’ fees were to be interpreted as awarded to the wife. The court also noted that the unique enforcement provisions for alimony precluded alimony from being enforced by an action at law. Allowing alimony to be indirectly enforced by an action at law, through a garnishment, would be an injustice.