Aither v. Estate of Aither

• Decision Date: 09 November 2006
• Docket Number: No. 05-369.,05-369.
• Citation: 913 A.2d 376,2006 VT 111
• Court: Vermont Supreme Court
• Parties: Karen AITHER v. ESTATE OF JEFFREY AITHER.

Page 376

913 A.2d 376

2006 VT 111

Karen AITHER v. ESTATE OF JEFFREY AITHER.

No. 05-369.

Supreme Court of Vermont.

November 9, 2006.

Walter G. French and Jodi P. French, Law Clerk (on the Brief), West Dummerston, for Plaintiff-Appellant.

Present: REIBER, C.J., and DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

REIBER, C.J.

¶ 1. Wife Karen Aither appeals a family court decision denying her motion to enforce an initial temporary order barring husband Jeffrey Aither from disposing of any marital asset during the pendency of their divorce. Husband replaced wife as beneficiary of his life insurance policy in violation of the order, and then died before a final divorce decree was entered. The family court concluded that it lacked jurisdiction to enforce its injunctive order after husband's death, and accordingly dismissed wife's motion as moot. We reverse and remand.

¶ 2. The following facts are not disputed. On February 11, 2005, wife filed for divorce from husband. On February 14, the family court issued an initial temporary order barring both parties from selling, conveying, concealing, or encumbering "any marital asset," which was defined to include "whole life insurance policies," among other things. When the order was issued, husband had a universal life insurance policy in the amount of $100,000 that named wife as primary beneficiary. The parties do not dispute that the universal life policy was subject to the order's prohibition; universal life insurance is a type of whole life insurance. Cf. Gleed v. Noon, 415 Mass. 498, 614 N.E.2d 676, 678 (1993) (holding that probate court order not specifically prohibiting insurance beneficiary changes but restraining decedent from "withdrawing, transferring, conveying, assigning, spending encumbering, pledging, bequeathing, or otherwise divesting ... any assets" subject to division in probate did not bar beneficiary change). On March 1, however, husband removed wife as beneficiary and replaced her with husband's father and sister. Husband then died on March 27. On the following day, March 28, wife notified husband's life insurer of his death and learned of the change in beneficiaries. Wife then moved the family court to enforce the initial order and to find husband in contempt of that order. After a hearing on the enforcement and contempt motion, the family court enjoined disbursement of the proceeds from husband's life insurance policy pending disposition of wife's motion.¹ On April 12, the family court appointed a volunteer guardian ad litem, Gary Carrier, to represent husband's interests. Mr. Carrier attended the oral argument on this appeal, and we thank him for his service.

¶ 3. The family court issued a decision on wife's enforcement motion in June 2005. The court concluded that the life insurance policy was an "asset of the parties" and therefore subject to the initial order's prohibition on transfer, but that under Estate of Ladd v. Estate of Ladd, 161 Vt. 270, 272-74, 640 A.2d 29, 30-31 (1994), the divorce had been abated by husband's death. Accordingly, the family court determined that it was "without jurisdiction to issue any relief" for a claimed violation of its order, and dismissed wife's motion as moot. Wife appeals.

¶ 4. On appeal, wife argues that husband's death did not divest the family court of all jurisdiction to enforce its order. She contends that the court retained authority to enforce the order by contempt or, in the alternative, based on more general equitable principles. Whether the family court — after a divorce proceeding is abated by a party's death — retains residual jurisdiction to enforce an order it issued before the death is a question of first impression for this Court. We review the family court's dismissal for lack of jurisdiction de novo. Jordan v. State, 166 Vt. 509, 511, 702 A.2d 58, 60 (1997).

¶ 5. The family court is a creature of statute, 4 V.S.A. §§ 451-459, and consequently has only the limited jurisdiction established thereby. See Allen v. Allen, 161 Vt. 526, 530-31, 641 A.2d 1332, 1335 (1994) (Dooley, J., concurring and dissenting) (citing cases). The family court has jurisdiction over seventeen types of proceedings, including divorces. 4 V.S.A. § 454(4). In cases over which the family court properly has jurisdiction, the court also has "all of the equitable and other powers of the superior court ... except as specifically limited by statute." Id. § 453(a). We have held, as have many other states, that a party's death while a divorce is pending abates the divorce action because the marriage is dissolved by operation of law at the time of death. Ladd, 161 Vt. at 273, 640 A.2d at 30-31; accord, e.g., Hook v. Hook, 35 Ohio App.3d 51, 519 N.E.2d 687, 689 (Ct.App.1987); Estate of Hackler v. Hackler, 44 Va.App. 51, 602 S.E.2d 426, 434 (2004); Pratt v. Pratt, 99 Wash.2d 905, 665 P.2d 400, 402 (1983); Pettygrove v. Pettygrove, 132 Wis.2d 456, 393 N.W.2d 116, 119 (1986). In such cases the family court no longer has jurisdiction because "the object sought to be accomplished by the final decree, ... the dissolution of the marriage relation, is already accomplished by the prior death." Hook, 519 N.E.2d at 689 (citation omitted). We have also held, however, that a pre-abatement settlement agreement incorporated into the final divorce decree survives abatement. Ladd, 161 Vt. at 274-77, 640 A.2d at 32-33.

¶ 6. The question of whether the death of a party strips the family court of all jurisdiction over matters relating to the abated divorce, even violations of its own pre-abatement orders, is not a simple one. As appellant argues, there are two theories under which the family court could enforce the order: (1) under that court's contempt power, established by statute, 4 V.S.A. § 453(a), 12 V.S.A. § 122, and further expounded by Rule 16 of the Vermont Rules for Family Proceedings; or (2) through the court's inherent equitable power over matters in its jurisdiction. Although we agree with the family court that contempt is not available against a deceased contemnor, we conclude that the family court did have the equitable power to award the insurance proceeds to wife, the party protected by the court's initial order.

I.

¶ 7. Wife first argues that the family court could have exercised its contempt powers to remedy husband's change of beneficiaries. Wife argues that the family court could, pursuant to the family court contempt statutes, 4 V.S.A. § 453(a) and 15 V.S.A. § 603, and the general contempt statute, 12 V.S.A. § 122, made applicable by § 603, cause this case to be brought back onto the family court docket despite its earlier abatement. However, wife has cited no authority for the proposition that the ensuing contempt proceeding could go forward against a dead person, nor can we find any such authority. See Hackler, 602 S.E.2d at 437 (holding that the trial court erred in ordering conservator of deceased husband's estate to pay wife in order to "purge [the deceased husband] of contempt"); see also Socha v. Socha, 183 Wis.2d 390, 515 N.W.2d 337, 339 n. 2 (Ct. App.1994) (noting that contempt is not available when the putative contemnor is dead, citing cases). Further, the sanctions provided by Rule 16(c) of the Vermont Rules for Family Proceedings are inadequate to compel compliance from a deceased person; as the Reporter's Notes to that rule make clear, even the "additional remedies" allowed by Rule 16(c)(4) include only those remedies "provided by statute" (e.g., escrow orders to secure payment of child support arrearages, 15 V.S.A. § 796, or civil penalties for willful arrearages, id. § 797). The family court correctly concluded that contempt provides no adequate remedy here.

II.

¶ 8. Other courts are divided on the question whether a divorce proceeding's abatement also divests the trial court of equitable jurisdiction to enforce orders entered before the abatement. Several states follow the rule that abatement also divests the trial court of the equitable power to enforce its pre-abatement orders. See, e.g., Am. Family Life Ins. Co. v. Noruk, 528 N.W.2d 921, 923 (Minn.Ct.App. 1995) ("When one of the parties dies ... a temporary restraining order has no effect and the court's jurisdiction to enforce it ends."); Hackler, 602 S.E.2d at 437 (holding that trial courts do not have jurisdiction to remedy violations of injunctions when divorce has been abated by a party's death). Other courts have determined that the abatement of a divorce by a party's death does not divest the trial court of jurisdiction to enforce pre-abatement orders. See, e.g., Cent. States, S.E. & S.W. Areas Pension Fund v. Howell, 227 F.3d 672, 675-76 (6th Cir.2000) (applying Michigan law); Candler v. Donaldson, 272 F.2d 374, 377 (6th Cir.1959) (applying Michigan law); Webb v. Webb, 375 Mich. 624, 134 N.W.2d 673, 674-75 (1965) ("Transfers of property in violation of an injunction are invalid and may be set aside by the party to a divorce suit, and subsequent death of the injunction violator does not prevent the court from exercising such power."); Lindsey v. Lindsey, 342 Pa.Super. 72, 492 A.2d 396, 398 (1985) (holding that, even after the death of a party, "the lower court had the authority to void the disposal of any marital property in violation of its injunction"); Standard Ins. Co. v. Schwalbe, 110 Wash.2d 520, 755 P.2d 802, 805 (1988) (holding that a trial court had equitable power to enforce its preliminary injunction prohibiting a change in insurance beneficiaries, despite the death of the violator). A federal district court, similarly, has noted that transfers in violation of temporary injunctions, while not per se void, may be voided based on a balancing of equities. Valley Forge Life Ins. Co. v. Delaney, 313 F.Supp.2d 1305, 1309 (M.D.Fla.2002) (citing Wilharms v. Wilharms, 93 Wis.2d 671, 287 N.W.2d 779, 784 (1980), in which the Wisconsin Supreme Court remanded for an evidentiary hearing to consider relevant equitable factors affecting validity...