West v. West


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Docket Number: 2002-IA-01158-SCT
Linked Case(s): 2002-IA-01158-SCT ; 2002-IA-01158-SCT ; 2002-IA-01158-SCT ; 2002-IA-01158-SCT

Supreme Court: Opinion Link
Opinion Date: 01-27-2005
Holding: Reversed and Remanded

Additional Case Information: Topic: Contempt - Application of M.R.C.P. 60 - Property settlement agreement - Unconscionability - Escalation clause - Attorneys’ fees - Jurisdiction - Section 93-5-2(3) - Findings of fact - M.R.C.P. 52(a) - Motion to quash
Non Participating Judge(s): Diaz, Graves and Randolph, JJ.
Procedural History: Bench Trial
Nature of the Case: CIVIL - DOMESTIC RELATIONS

Trial Court: Date of Trial Judgment: 07-08-2002
Appealed from: Jones County Chancery Court
Judge: Franklin C. McKenzie, Jr.
Disposition: The chancellor voided certain provisions of the property settlement agreement, ordering that the parties resubmit the alimony issue to the court.
Case Number: 94-0191

Note: Appellant's Motion for Correction of a Clerical Error is granted

  Party Name: Attorney Name:  
Appellant: Deborah Gayle Thornton West




PATRICK F. McALLISTER WILLIAM B. PEMBERTON, II



 

Appellee: Charles Timothy West JOHN V. ESKRIGGE JAMES A. BECKER, JR. EDWARD L. CARLISLE  

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Topic: Contempt - Application of M.R.C.P. 60 - Property settlement agreement - Unconscionability - Escalation clause - Attorneys’ fees - Jurisdiction - Section 93-5-2(3) - Findings of fact - M.R.C.P. 52(a) - Motion to quash

Summary of the Facts: The motion for rehearing is granted, and this opinion is substituted for the original opinion. Deborah West brought a contempt action against her former husband, Tim West, after he stopped complying with their property settlement agreement. The chancellor court voided certain provisions of the agreement, ordering that the parties resubmit the alimony issue to the court. The Supreme Court granted an interlocutory appeal.

Summary of Opinion Analysis: Issue 1: Application of M.R.C.P. 60 Debbie argues that M.R.C.P. 60 does not allow Tim to challenge the chancery court's judgment over five years after it was entered. Because Tim's Counterclaim for Relief was merely a response to Debbie's contempt action, Rule 60 is wholly inapplicable. Issue 2: Property settlement agreement Debbie argues that the parties simply agreed to equally divide Tim's business and employment income so that both parties would receive the same annual net income, while Tim argues the property settlement agreement provisions are ambiguous. Property settlement agreements are contractual obligations and must be interpreted by courts as any other contract. When the language of the contract is clear or unambiguous, the court must effectuate the parties' intent. The general purpose of the agreement in question was for Tim to provide one-half of his various forms of income to Debbie, regardless of their marital status to each other or to a third party. As to marital property, the agreement states that Debbie is entitled to one-half of all existing marital assets, including, but not limited to, stocks, limited partnerships, and business assets. This provision clearly manifests an intent that Tim and Debbie equally share all marital assets. Other provisions equitably divide the parties' respective entitlements to the marital dwelling, husband’s residence, automobiles, household furnishings, and personal effects. The only remaining assets within the parties’ definition of marital assets are Tim’s interests in various West family businesses. Pursuant to the terms of the property settlement agreement, Debbie is entitled to equally share these assets, and she is authorized to review financial information which would positively or negatively affect her agreed entitlement to his various forms of income. Nothing demonstrates the overall clarity of the agreement more plainly than the simple fact that the parties managed to comply with the agreed property settlement agreement for over five years before Tim decided he would no longer respect the agreement. What remains unclear is whether the trial court ordered an award of lump sum or periodic alimony. Unless it is clear from the record what sort of alimony award is given, the alimony must be construed as being periodic and not lump sum. The trial court's original order refers to the award as lump sum in name, but then appears to describe a periodic alimony award. Therefore, the alimony award is deemed to be periodic. Issue 3: Unconscionability The chancellor concluded that the provisions in question were unconscionable but stated no reasons for this conclusion. A contract may be either procedurally or substantively unconscionable. Procedural unconscionability goes to the formation of the contract, and substantive unconscionability occurs when the terms of the agreement are so one-sided that no one in his right mind would agree to its terms. Here, the terms are neither procedurally nor substantively unconscionable. Issue 4: Escalation clause The chancellor concluded that the pertinent provisions constituted illegal escalation clauses. Escalation clauses in property settlement agreements are enforceable absent fraud, overreaching, or mistake, even though one party may, in the future, find that he or she entered into the agreement imprudently. The property settlement agreement appropriately contained an escalation clause, protecting both Debbie and Tim in the case that Tim's salary fluctuates during the prescribed time for payment of alimony. Tim has presented no hard evidence of fraud, overreaching, or mistake. Issue 5: Attorneys’ fees Debbie argues that the chancellor failed to address property settlement agreement- related issues including whether, under the property settlement agreement, Debbie was entitled to a portion of the $411,000 in "loans" from West Quality to Tim, whether Tim breached his obligation to Debbie under a pre-divorce death benefit agreement, and whether Debbie was entitled to attorneys fees on her contempt action and for fees she incurred on appeal. The issues regarding the death benefit agreement and attorneys fees will not be considered since the trial court has not addressed them. Issue 6: Jurisdiction Referring to section 93-5-2(3), Debbie argues that the chancellor lacked jurisdiction to try the issues in question, either initially or anew, without the parties' express written consent. The written consent requirement addressed in the statute requires that a court have the written consent in the original irreconcilable divorce action before deciding property rights between the couple. Issue 7: Findings of fact Debbie argues that the court abused its discretion by failing to enter findings of fact and conclusions of law regarding its judgment and subsequent order after both she and Tim requested that it do so. M.R.C.P. 52 (a) requires a court to find the facts specially and state separately its conclusions of law upon the request of a party. Because the chancellor's decision is reversed, this issue need not be addressed. Issue 8: Motion to quash Debbie argues that Tim violated the property settlement agreement in failing to inform her of a West Quality transaction resulting in a realization of positive income for Tim. After unsuccessfully attempting to obtain financial information regarding Tim's involvement in the West Family business by way of routine discovery, Debbie issued subpoenas duces tecum to the West family business entities regarding twenty-nine categories and 17,000 pages of financial information. The West entities filed a joint motion to quash Debbie's subpoenas and set hearing one week before trial which the court granted. A husband or wife, in respect of his or her right to maintenance or alimony, is within the protection of statutes or the rule avoiding conveyances or transfers in fraud of creditors or other persons to whom the maker is under legal liability; and this is so irrespective of whether the conveyance or transfer was made before, and in anticipation of the husband or wife's suit for maintenance or alimony, or pending the suit, or after a decree has been made in the husband or wife's favor. This law is applicable in a situation where the offending spouse is on the receiving end of a conveyance of property to which the other spouse appears reasonably entitled under a maintenance or alimony agreement. In determining whether an advance to a shareholder is a dividend or a loan, courts consider the extent to which the shareholder controls the corporation; the earnings and dividend history of the corporation; the magnitude of the advances; whether a ceiling existed to limit the amount the corporation advanced; whether or not security was given for the loan; whether there was a set maturity date; whether the corporation ever undertook to force repayment; whether the shareholder was in a position to repay the advances; and whether there was any indication the shareholder attempted to repay the advances. Analysis of the alleged loan in question under these factors reveals that, in quashing Debbie's subpoena for documents regarding West Quality's financial dealings, the chancellor made impossible a determination of whether or not the West Quality transfer to Tim was a loan or a distribution. Therefore, the chancellor abused his discretion in refusing to require disclosure of the underlying business documents with respect to the loan.


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