Bakala v. Bakala

• Decision Date: 27 January 2003
• Docket Number: No. 25586.,25586.
• Citation: 352 S.C. 612,576 S.E.2d 156
• Court: South Carolina Supreme Court
• Parties: Marguerite A. BAKALA, Respondent, v. Zdenek BAKALA, Appellant.

352 S.C. 612

576 S.E.2d 156

Marguerite A. BAKALA, Respondent, v.Zdenek BAKALA, Appellant.

No. 25586.

Supreme Court of South Carolina.

Heard November 19, 2002.

Decided January 27, 2003.

Fleet Freeman, of Freeman & Freeman, of Mt. Pleasant; and John B. Kern, of Charleston, for appellant.

Robert N. Rosen and Donald B. Clark, both of Rosen, Rosen, & Hagood, L.L.C., of Charleston; and Alexandra D. Varner, of Mt. Pleasant, for respondent.Acting Justice FLOYD:

In this domestic case, appellant(Husband) appeals three family court orders regarding contempt, equitable division, and divorce on the ground of adultery.We affirm.

FACTS

Husband was born in the Czech Republic, which was formerly part of Czechoslovakia, and came to this country as a political refugee.He holds dual U.S. and Czech citizenship.Husband and respondent(Wife) met while both were business graduate students at Dartmouth College.They married after graduation in 1990 while living in New York City.

After marrying, the parties moved to London and then Prague where they both worked.Wife quit working sometime before the birth of their son in 1994.When Czechoslovakia was divided in the early 1990's, Husband co-founded the first full-service investment bank in the Czech Republic, Patria Finance, and was very successful.He also invested in several restaurants through his investment company, Hartig Company.According to Wife, during this time, the parties"traveled a lot and lived very, very well."They renovated a four-story house in one of Prague's most fashionable neighborhoods.Husband's average yearly income was $536,817.

In November 1996, Wife confronted Husband with information that he was having an affair.After a physical altercation, Wife left the marital residence.Two weeks later, she and Husband divided their savings account and, with $198,000, Wife moved back to the U.S. where she eventually settled in Beaufort County.

On May 1, 1998, while Husband was visiting from Prague, Wife had him personally served with a summons and complaint seeking a divorce on the ground of adultery or physical cruelty, custody of the parties' minor son, child support, alimony, and equitable division of the marital estate.

On May 7, Wife filed a motion for temporary relief.A hearing was held June 3, 1998, at which both parties and their attorneys appeared.Husband agreed to submit himself to the jurisdiction of the Beaufort County Family Court on all issues.Following this hearing, as part of its temporary order, the family court ordered Husband to deposit in escrow $500,000 upon the pending sale of shares of Patria Finance in which he acknowledged owning a 34.5% interest.An additional $250,000 was to be deposited pro rata over the next eighteen months resulting in a payment schedule requiring equal payments of $83,333 each in December 1998, June 1999, and December 1999.

Husband answered and counterclaimed on the merits of Wife's action.He alleged that on the day of the temporary hearing, he had learned that Wife was engaged in an adulterous relationship and accordingly he was entitled to a divorce on the ground of her adultery.In Wife's reply, she admitted she was currently engaged in a relationship that began in June 1997 after the parties had separated.Wife subsequently withdrew her request for alimony.

Meanwhile, Husband returned to Prague while the litigation continued.On June 3, 1999, a pre-trial conference was held at which Husband's counsel appeared.A trial date was set for November 1, 1999.Effective August 13, 1999, counsel was relieved at Husband's request and Husband was ordered to appoint an agent for service or he would be served by mail in the Czech Republic.

The final hearing in the case was held as scheduled on November 1, 1999.Husband did not appear.By order dated December 21, 1999, the family court found Husband in contempt of the 1998 temporary order, ordered child support, equitably divided the marital estate 50/50, and awarded attorney's fees and costs.By order dated December 22, 1999, Wife was granted a divorce on the ground of adultery.These appeals followed.

ISSUES

1.Is the family court's order dividing the marital estate reversible because of an ex parte communication?

2.Were Husband's due process rights violated?

3.Did service in Prague violate international law?

4.Was the valuation of the marital estate proper?

5.Did the family court retain jurisdiction to determine the validity of the bench warrant?

6.Did the deposit of funds with the court purge Husband of contempt?

7.Was the award of attorney's fees excessive?

8.Should the family court have sua sponte dismissed Wife's complaint on the ground of recrimination?

DISCUSSION

1.Ex parte communication

Husband complains the family court relied on an ex parte communication in valuing the marital estate.He claims he was unfairly prejudiced because the evidence does not otherwise support the family court's findings.

As found in the 1998 temporary order, at the time of filing Husband held a 34.5% interest in Patria Finance, the investment bank he co-founded in Prague, and had pending contracts to sell some of his shares.As required by the temporary order, Husband made an initial escrow deposit of $500,000 and made a second deposit of $83,333 in December 1998.He did not make the June 1999 payment.At the time of the final hearing on November 1, 1999, Husband owed two payments of $83,333 each, for a total of $166,666.

The record indicates Husband received a total of $3,049,475 for the sale of a 14.5% interest in Patria; he retained a 20% interest valued at $3,000,000.The total value of the Patria stock in the marital estate is therefore $6,049,475.

After the final hearing on November 1, 1999, the family court faxed to Wife's counsel a hand-written list dividing the marital assets and requested counsel to call the judge.There is no evidence Husband was informed of this fax.

In response to the family court's fax, Wife's counsel forwarded a letter from her financial expert explaining that the court had omitted $2,265,809 from the marital estate.The explanation notes that in dividing the Patria stock, the family court considered only the escrow amounts previously ordered to be paid to Wife under the temporary order and the value of the 20% interest still held by Husband.This division did not take into account the evidence that Husband actually received a total of $3,049,475 from the sale of the Patria stock, or $2,265,809 more than the amount considered.The record indicates a copy of this letter was faxed to Husband.

The family court's final order conforms to the calculation faxed by Wife's counsel to the family court.The family court ordered Husband to transfer to Wife 10,909 shares from his remaining 20% interest in Patria or pay her $1,636,404, to complete Wife's 50% share of the total Patria asset.

Husband contends the only support for the family court's final order is the calculation by Wife's expert faxed to the family court after the final hearing.He contends this letter was an improper ex parte communication that prejudiced him.He asserts by affidavit that he had no knowledge of the communication between Wife's counsel and the family court until this appeal was filed.¹

Generally, one who has notice and fails to appear cannot complain of an ex parte proceeding.SeePeople v. Klovstad,168 Ill.App.3d 444, 119 Ill.Dec. 141, 522 N.E.2d 803(1988);Repp v. Horton,44 Ohio App.2d 63, 335 N.E.2d 722(1974).Here, Husband had notice ² and intentionally absented himself from the entire evidentiary hearing.The communication between the family court and Wife's counsel introduced no new evidence and was simply a continued discussion of the same matter.Since the entire final hearing was ex parte because of Husband's intentional absence, Husband waived any objection to this post-hearing communication.

Further, although ex parte contacts are strongly disfavored, prejudice must be shown to obtain a reversal on this ground.Ellis v. Proctor and Gamble Distrib. Co.,315 S.C. 283, 433 S.E.2d 856(1993);Burgess v. Stern,311 S.C. 326, 428 S.E.2d 880(1993).Husband has shown no prejudice.As evidence of prejudice, Husband points to the family court's finding of a total marital estate of $8,384,809, which is greater than the $7,562,846 amount submitted by Wife as exhibit 36 at trial.This difference in the total marital estate, however, is not due to the recalculation of the Patria stock which was the subject of the ex parte communication.

The family court valued the marital residence at $1.5 million based on Wife's testimony and her request for admissions which Husband was deemed to admit by his failure to respond, rather than the $1 million valuation in exhibit 36.Further, the family court included in its calculation of the marital estate a credit of $198,000 to each party for the savings account they divided when they first separated.This credit was not calculated in Wife's exhibit 36 which accounts for only $74,037 from the parties' savings account.These differences in the valuation of the marital home and the savings account explain the difference between exhibit 36 and the order in the total marital estate.

In the family court's final order, neither the valuation of the house nor the $198,000 credit to each party is changed from the judge's hand-written note which issued before the ex parte communication from Wife's counsel.Further, these amounts are supported by the record.The division of the Patria stock, the only asset recalculated based on Wife's expert's letter, is also supported by the record.Accordingly, Husband cannot show prejudice from the ex parte communication between the family court and Wife's counsel.

In conclusion, we find Husband waived his objection to the ex parte communication between the judge and Wife's counsel and, further, that he has failed to show prejudice.

2.Due process

Husband claims his...