Sheila Renee Mcadam , 335 P.3d 466 ( 2014 )

IN THE SUPREME COURT, STATE OF WYOMING
2014 WY 123
APRIL TERM, A.D. 2014
October 3, 2014
SHEILA RENEE MCADAM,
Appellant
(Plaintiff),
v. S-14-0044
DOUGLAS RAYMOND MCADAM,
Appellee
(Defendant).
Appeal from the District Court of Natrona County
The Honorable Catherine E. Wilking Judge
Representing Appellant:
Devon P. O’Connell and Dustin J. Richards of Pence and MacMillan LLC, Laramie,
Wyoming.
Representing Appellee:
Richard H. Peek, Casper, Wyoming.
Before BURKE, C.J., and HILL, KITE*, DAVIS, and FOX, JJ.
*Chief Justice at time of expedited conference.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third.
Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building,
Cheyenne, Wyoming 82002, of typographical or other formal errors so correction may be made
before final publication in the permanent volume.
KITE, Justice.
[¶1] Shelia Renee McAdam (Wife) and Douglas Raymond McAdam (Husband) were
divorced by stipulated decree. Both parties later claimed the other party was in contempt
for failing to list the marital residence for sale as required by the decree. Wife also
claimed Husband was in contempt for failing to transfer half of his investment accounts
and stock options to her.
[¶2] The district court found both parties in contempt with regard to the listing and sale
of the home and again ordered it listed by a specified date. If it sold, the district court
ordered the parties to share any profit or loss; if it did not sell, the court ordered Wife to
pay one-half of the mortgage payment. The district court concluded Husband had not
willfully violated the decree with regard to the investment account and stock options but
ordered him to transfer an investment account and three stock options to Wife. The
district court further ordered the parties to bear their own fees and costs resulting from
the post-divorce contempt proceedings.
[¶3] On appeal, Wife claims the district court improperly modified the stipulated divorce
decree when it ordered her to share any loss on the home or, if it did not sell, pay one-half
of the mortgage payment until it did sell. She also contends the district court erred in not
ordering Husband to pay her fees and costs after he violated the decree by failing to
transfer the investment accounts and stock options. We conclude the district court
properly exercised its discretion and affirm.
ISSUES
[¶4] Wife asserts the district court improperly modified the divorce decree contrary to
the doctrine of res judicata by: 1) ordering the parties to share in any loss on the marital
home if it sold; 2) ordering her to pay one-half of the mortgage payments if the home did
not sell; and 3) failing to award her attorney fees and costs resulting from Husband’s
failure to transfer the investment accounts and stock options. Husband asserts no error
occurred.
FACTS
[¶5] Wife and Husband were divorced pursuant to a stipulated decree on May 9, 2011.
The parties agreed to list the marital residence in Gillette, Wyoming for sale with a
licensed realtor within thirty days after entry of the decree. They further agreed to
cooperate with the realtor and comply with reasonable requests associated with selling
the residence. The stipulated decree provided that written consent of both parties was
required for acceptance or countering any offer to purchase the home. They agreed that
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after sale of the home, they would equally divide any proceeds remaining after payment
of costs, commissions or amounts owing on the mortgage. The decree stated:
[Husband] shall enjoy exclusive possession of the residence
pending sale of it and shall timely [sic] the monthly mortgage
payment and utilities until closing is completed. [Husband]
shall be entitled to claim all payments associated with the
residence as deductions on his federal income tax returns.
The stipulated decree also awarded Wife one-half of Husband’s investment accounts and
stock options. The decree further provided:
In the event either party shall fail to perform, in whole or in
part, any obligation or duty imposed by the terms of this
Order, the defaulting party shall be responsible for the
payment of all attorney’s fees, costs, and expenses incurred
by the other party as a result of such default.
[¶6] In January 2012, Wife filed a motion for order to show cause claiming Husband was
in contempt of court for violating the decree in several respects including that he had not
listed the residence for sale within the time required and had allowed it to become flood
damaged, causing a substantial decrease in its value. She sought an order requiring
Husband to repair the damage done to the home and list it for sale. Husband
subsequently filed a motion for order to show cause claiming Wife was in contempt of
court for violating the decree in several respects including that she was at fault for the
fact that the residence was not listed for sale. After a hearing, the district court found
both parties in contempt with regard to the listing and sale of the residence and again
ordered that it be listed for sale within thirty days and sold “as is.” The district court
further ordered that the parties “shall equally share any equity or loss in the sale” and
declined to award attorney fees and costs to either party based upon its finding that
neither of them had complied with the decree.
[¶7] In March 2013, Wife filed another motion for order to show cause claiming the
residence still had not been listed and Husband had prevented her from having it listed.
She also claimed Husband had not transferred her share of the stock options and
investment accounts as the decree required. Husband filed a response claiming that he
had complied with the decree and subsequent order and Wife had failed to comply with
the provision requiring sale of the home.
[¶8] After a hearing, the district court again ruled that both parties were in contempt of
the decree and subsequent order with regard to the home. The court ruled that the parties
could purge their contempt by executing a listing agreement within thirty days with the
real estate agent who had testified at the hearing. If the home was not sold within ninety
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days, the district court ordered that Wife would become responsible for one-half of the
mortgage payment. Addressing the stock options, the district court concluded Husband
did not commit a willful violation of the decree but ordered him to transfer three stock
options and an investment account to Wife. Finally, the district court ordered the parties
to pay their own fees and costs. Wife timely appealed the district court order.
STANDARD OF REVIEW
[¶9] Under our established standard for reviewing contempt orders in domestic relations
cases, we will not disturb the decision of the district court absent a serious procedural
error, a violation of a principle of law, or a clear and grave abuse of discretion. Greene v.
Finn, 2007 WY 47, ¶ 5, 153 P.3d 945, 948 (Wyo. 2007). The inherent power to punish
contempt of court is firmly vested in the district court’s broad discretion, and we will not
intrude upon its decision unless it commits a clear and grave abuse of that discretion.
Meckem v. Carter, 2014 WY 52, ¶ 18, 323 P.3d 637, 644 (Wyo. 2014). In reviewing the
exercise of a district court’s broad discretion under its contempt powers, we determine
whether the court reasonably could have concluded as it did. Shindell v. Shindell, 2014
WY 51, ¶ 7, 322 P.3d 1270, 1273 (Wyo. 2014). We review questions of law de novo,
giving no deference to the district court’s decision. Greene, ¶ 15, 153 P.3d at 948.
DISCUSSION
[¶10] Wife claims the district court had no authority in the contempt proceedings to
modify the terms of the stipulated property division in the decree. First, she claims the
district court erred when it ordered her to share in any loss on the sale of the marital home
or, if it did not sell, pay one-half of the mortgage payments. She asserts this is contrary
to the decree which required the home to be listed for sale, gave Husband possession of
the home pending sale and made him responsible for the mortgage payments.
[¶11] Husband argues that upon finding both parties in contempt with regard to sale of
the home, the district court properly ordered them to share any loss equally or, if the
home did not sell, to each pay half of the mortgage payment. Husband asserts the district
court had the inherent authority to enforce its own judgment and, upon finding that the
parties were in contempt for failing to comply with the home sale provision of the decree,
had the discretion to impose punishment. He argues the district court’s decision to make
them share equally in any loss or jointly pay the mortgage as punishment was
appropriate. Husband also argues that Wife did not appeal the first contempt order
requiring the parties to share in any loss from sale of the home and she is barred from
appealing it now.
[¶12] Husband is correct that Wife did not appeal the first contempt order. However, in
the second contempt order, the district court again ordered the parties to share equally
any profit or loss on the home. Because the district court’s second order also required the
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parties to share any profit or loss, we conclude the issue is properly before us for
consideration. We, therefore, consider Wife’s contention that the district court erred
when it ordered her to share in the profit or loss on the sale of the home or, in the event it
did not sell, pay half the mortgage.
[¶13] This Court has said that upon entry of a decree dividing marital property the
division is final and not subject to revision because of a change in circumstances.
Broadhead v. Broadhead, 737 P.2d 731, 733 (Wyo. 1987), citing Barnett v. Barnett, 704
P.2d 1308, 1309 (Wyo. 1985) and Paul v. Paul, 631 P.2d 1060 (Wyo. 1981). We have
also said, however, that district courts have jurisdiction to modify a judgment resulting
from a property division when the facts in a particular case establish the requisite
circumstances to permit modification. Barnett, 704 P.2d at 1309-1310. More
importantly for purposes of the present case, district courts have continuing jurisdiction
to enforce the provisions of the original divorce decree and contempt proceedings are the
appropriate mechanism for doing so. Dorr v. Newman, 785 P.2d 1172, 1179 (Wyo.
1990).
[¶14] Civil contempt must be proven by clear and convincing evidence. Shindell, ¶ 10,
322 P.3d at 1274. Clear and convincing evidence is evidence that would persuade a
finder of fact that the truth of the contention is highly probable. Id. The elements of civil
contempt include: 1) an effective court order that required certain conduct by the alleged
contemnor; 2) the contemnor had knowledge of the order; and 3) the alleged contemnor
disobeyed the order. Id. Once those elements are proven, the burden shifts to the person
charged with contempt to show he or she was unable to comply.
[¶15] The divorce decree the district court entered in this case required the parties to list
the home for sale within thirty days. The parties stipulated to the property division
provisions contained in the decree. Presumably, they familiarized themselves with the
contents of the decree before they agreed to it. Regardless, their show cause motions and
testimony at the hearing reflect that they knew the decree required the home to be listed
within thirty days. The decree requiring the parties to list the home for sale within thirty
days was entered in May of 2011. The parties did not contact a realtor until 2012.
Husband signed a listing agreement sometime in June 2012; Wife signed the listing
agreement on July 9, 2012.
[¶16] After the parties signed the listing agreement, the realtor learned the parties were
attempting to work out an agreement whereby Wife would transfer her ownership interest
in the home to Husband in exchange for Husband taking her name off the mortgage. The
realtor “fell out of the loop,” stopped trying to contact the parties and received no
communication from them until sometime in mid-2013. By the time of the second
contempt hearing in September 2013, the realtor still did not have full authority from the
parties to move forward with listing the home and the thirty day deadline to list the home
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for sale imposed in the district court’s first contempt order of May 16, 2012, had long
since passed.
[¶17] Based upon this evidence, the district court was persuaded that neither party had
obeyed the order contained in the May 2011 stipulated decree requiring them to list the
home within thirty days. Although they signed a listing agreement in the summer of
2012, their actions thereafter caused the realtor to believe he did not have the authority to
move ahead with the listing. The parties did nothing to follow up with the realtor for
nearly a year. By September 2013, nearly two and a half years after they were first
ordered to list the home for sale, the documentation necessary to formally list it still was
not in place. Although each party attempted to show the other was at fault for the home
not being listed, the district court apparently found their testimony unpersuasive and
concluded neither of them had taken the steps required to get the home listed and sold.
Clear and convincing evidence supported the district court’s determination that the
parties disobeyed the orders to list the home for sale within thirty days and the court’s
determination that they were in contempt was reasonable.
[¶18] Having concluded both parties were in contempt for failing to obey its earlier
order, the district court then ordered that they could purge the contempt by executing the
documentation necessary to give the realtor the authority to sell the home and filing it
with the court within twenty days. As it had done in its earlier order, the district court
exercised its inherent power to punish the contempt by directing that the home be sold
“as is” with the parties sharing equally in any profit or loss from the sale and, in the event
the home was not sold within ninety days, directing Wife to pay half the mortgage
payment until it did sell.
[¶19] We find no clear and grave abuse in the district court’s exercise of its discretion to
punish the contemptuous conduct. Evidence was presented that by the time the district
court entered its second contempt order, the value of the house was less than the
outstanding mortgage. Given its finding that both parties were to blame for not getting
the house on the market as the original decree required, it was reasonable for the district
court to conclude the parties should share the loss on the sale. By the time the district
court entered its second contempt order, Husband had been paying the mortgage of $2000
per month on the marital home for nearly two and a half years. Given the finding that
Wife was equally at fault for not getting the home listed and sold, it was reasonable for
the district court to require her to pay half the mortgage from that point until the home
sold. The district court did not abuse its discretion in fashioning a remedy for the parties’
contempt.
[¶20] Wife also claims the district court erred in failing to award her attorney fees and
costs resulting from Husband’s failure to transfer the investment accounts and stock
options. She points to the provision in the stipulated decree requiring a party who fails to
perform an obligation required by the decree to pay all fees and costs the other party
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incurs as a result of the failure. She argues all that is required under the provision is
failure to perform and the district court’s finding that Husband’s failure to transfer the
accounts was not willful is irrelevant given the express language in the decree. Among
other arguments, Husband asserts that the district court’s order requiring the parties to
bear their own fees and costs was proper given his testimony that when he changed
employment in January 2012 his accounts were zeroed out, he believed he had lost the
stock options with his former employer and he also believed the stock options issued by
his new employer were not covered by the decree.
[¶21] The relevant provision of the decree stated:
[Wife] shall be, and she hereby is, awarded, as her sole and
separate property, the following:
....
ii. ½ of [Husband]’s investment accounts, pension
plans, retirement accounts, 401K accounts, IRA accounts
and/or stock options, as of the date of the entry of the within
decree, to be divided by QDRO, as necessary. The Stock
Options when they vest shall be equally divided between the
parties in the same manner as the parties divided the vesting
stock options in November, 2010, based on the value of the
vesting stock options at the time of the entry of the Decree,
less 28% of the value to cover [Husband]’s tax liability
thereon.
[¶22] In her second motion for order to show cause, Wife claimed at the time of the
divorce Husband had in his account 8,411 unvested shares of stock having a combined
value of $278,992.87 as of April 30, 2011, and had not transferred any of those shares to
her. She further claimed that on December 31, 2011, a stock split occurred and the above
shares were reissued as 15,193 shares, with a total value of $250,380.64, in a spin-off
company. She asserted that 8,555 of those shares vested on February 28, 2012, at a
combined value of $159,123.00. After subtracting the 28% for taxes as the decree
provided, Wife claimed she was entitled to $57,284.28 worth of the vested shares. Wife
further asserted 1,595 shares had vested in February 2013 and the remaining 5,043 shares
would vest in February 2014 and, while she did not know the value of those shares, she
was entitled to half of the value after accounting for taxes.
[¶23] At the time of the divorce, Husband worked for Williams Energy and Production
(Williams). At the hearing, Husband testified that at the end of 2011 he left his
employment with Williams and went to work for WPX Energy (WPX), a spin-off
company of Williams. He testified that in early 2012 he checked the account containing
the stock options he had received from Williams and it showed “zero” stock options. He
further testified that WPX later issued stock options to him but to his knowledge they had
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nothing to do with his former employment. He testified that no stock options rolled over
from Williams to WPX. Because none of the stock options from Williams ever vested,
his account showed zero after he left Williams and WPX did not issue stock options to
him until 2012, he believed he owed Wife nothing in the way of stock options under the
terms of the decree.
[¶24] Based upon Husband’s testimony, the district court “opted to [give] him the benefit
of the doubt” that he did not understand the stock options WPX re-issued were the same
stock options issued to him by Williams. The district court held that they were in fact the
same stock options and ordered Husband to pay Wife one-half of the funds that had
vested (less the 28% for taxes) within sixty days of the ruling and to transfer one-half of
the remaining funds (again less the tax amount) within thirty days after they vested. The
district court declined to order Husband to pay Wife’s fees and costs related to the stock
options, concluding that the evidence did not show he acted willfully.
[¶25] Wife argues the decree does not require a finding of willfulness before payment of
fees and costs is ordered; rather, the decree simply requires a failure to perform. She
asserts Husband failed to transfer one-half the stock options; therefore, he was required to
pay her fees and costs. She also argues Husband knew the stock options re-issued by
WPX were the same as those issued by Williams and his testimony to the contrary was
not given in good faith.
[¶26] Addressing the last argument first, the district court had been dealing with the
parties for over two years and was familiar with them and how they dealt with each other.
Our rule is that the credibility of witnesses, the weight of the evidence, and conflicts in
the evidence must be resolved by the finder of fact. Olsen v. Olsen, 2013 WY 115, ¶ 32,
310 P.3d 888, 895 (Wyo. 2013). We will not disturb the district court’s findings
concerning the credibility of the witnesses.
[¶27] We turn to Wife’s assertion that a finding of willfulness was not required for the
district court to order Husband to pay attorney fees and costs. In Bowker v. Bowker, 795
P.2d 1215, 1219 (Wyo. 1990), the property settlement agreement provided that a party
who failed to perform an obligation imposed by the agreement would be responsible for
the payment of attorney fees and costs incurred by the other party as a result of the failure
or default. The post-decree proceeding in that case was caused by the husband’s failure
to perform his obligations under the property settlement agreement. This Court enforced
the attorney fees provision of the agreement and awarded wife reasonable fees and costs
because husband had “failed to demonstrate any justification for his conduct.” Id. “[I]n
the absence of such justification,” we concluded, wife was entitled to payment of her fees
and costs.
[¶28] In the present case, the district court declined to order Husband to pay attorney
fees and costs mostly because it found that both parties were at fault for the house not
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being listed. With regard to the stock options, the district court gave Husband the benefit
of the doubt and accepted his explanation that he did not know the Williams and WPX
stock options were one and the same. Thus, the district court was satisfied with the
justification Husband gave for his failure to perform. The district court’s decision not to
award Wife attorney fees and costs was proper under Bowker because it found that
Husband did not understand he was obligated to transfer stock options to Wife.
[¶29] Affirmed.
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