Sunday, December 6, 2015

In Equity and In Estate

Simendinger v. Simendinger, 2015 VT 118

By Amy Davis

Husband and wife got married in May of 1987 and divorced in February of 2014. The divorce decree included a stipulation between the parties which ordered the husband to pay wife about $2.25 million—$50,000 within 30 days and the balance of $2.2 million within a year. Wife got her $50,000 but did not receive the balance and husband did not secure the unpaid amount in real estate.

In March 2014, after the 30 days had come and gone, wife filed a motion for contempt and enforcement, as well as a motion for attorney’s fees. The court scheduled a hearing date for August. Unfortunately, husband unexpectedly died on July 14, 2014. Wife filed a motion to substitute his estate.

In September, the family court denied the contempt motion but granted the motions for substitution and attorney’s fees. It also enjoined the estate from disposing of or encumbering any real estate held by the estate that could be used to pay the wife her $2.2 million. The husband’s estate appeals the injunction, the family court’s inclusion of “business properties” in that injunction, and the award of attorney’s fees.

In regards to injunctive relief, Husband’s estate argues that there was no evidence that husband had violated a court order. Reviewing under an abuse-of-discretion standard, the SCOV notes that a court may not hold a decedent in contempt. Citing this case the SCOV says that a family court may use contempt as an enforcement tool, but its inherent powers include other tools in the kit—including equitable remedies.

Husband’s estate argues that there was no factual basis upon which the family court could issue an injunction. Evidence from a June 2014 status conference showed that husband stipulated he had not complied, and the estate effectively admitted non-compliance in response to wife’s motions. In reading between the lines, the SCOV notes that husband’s estate acknowledged that the husband had not yet complied with the order to secure the $2.2 million award.

Husband’s estate also argues that the injunction is too broad because it enjoined all of the estate’s business interests. The injunction, however, only applies to real property the estate holds, and does not apply to real property owned by the corporate entities in which husband’s estate holds an interest. The SCOV also notes that during oral argument, there was a question about whether wife could pierce the corporate veil in order to reach real property held by corporations in which husband’s estate has an interest. But since this never came up in a brief or at any point below, the SCOV goes no further.

Finally, husband’s estate argues that the family court abused its discretion by awarding wife some $5,000 in attorney’s fees. The estate admits that attorney’s fees are generally recoverable in divorce actions as suit money. A court may also award fees when they are in “the interests of justice and equity.” In this case, the wife wanted the fees she incurred while trying to enforce a prior order against a non-compliant husband. She submitted an affidavit from her attorney, monthly billing statements, and an expert opinion as to the reasonableness of the rate charged. The family court also knew about the parties’ finances from the evidence from the divorce. All things considered, the court awarded reasonable attorney’s fees.

3 comments:

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