Bonneville v. Bonneville
| Decision Date | 19 November 1997 |
| Docket Number | No. 96-229.,96-229. |
| Citation | 702 A.2d 823,142 N.H. 435 |
| Court | New Hampshire Supreme Court |
| Parties | Florence BONNEVILLE v. Edward BONNEVILLE and another. |
Brennan, Caron, Lenehan & Iacopino, Manchester (William E. Brennan, on the brief and orally, and Kathleen A. Hickey, on the brief), for plaintiff.
McLane, Graf, Raulerson & Middleton, P.A., Manchester (Thomas J. Donovan, on the brief and orally, and Mark M. Whitney, on the brief), for defendants.
The defendants, Edward Bonneville and Bonneville Realty, Inc. (BRI), appeal a decision of the Superior Court (Barry , J.) construing the divorce decree of Edward Bonneville and the plaintiff, Florence Bonneville. The court held that the divorce decree did not require the plaintiff to relinquish immediate control of her BRI stock, and therefore BRI owes the plaintiff forty percent of the corporate distributions it made between December 1990 and May 1993. We reverse.
Edward Bonneville and the plaintiff were married in 1950. BRI was incorporated during the marriage. At the time of the divorce in December 1990, the plaintiff was a forty percent shareholder of BRI, while Edward was BRI's president, sole director, and remaining shareholder.
The divorce decree provided each party a share of the real and personal property, required Edward to pay the balance of a mortgage on real estate transferred to the plaintiff, and required Edward to pay a cash settlement to the plaintiff. In paragraph 2 of the decree, the court ordered that "[s]ubject to paragraph # 6 below, [Edward] is awarded all the stock of Bonneville Realty, Inc." Paragraph 6 ordered Edward to pay the plaintiff $1,000,000 immediately and $650,000 plus nine percent interest per annum within two years, secured by a mortgage on Edward's stock interest in BRI. A court-approved stipulation for settlement, executed by the plaintiff and Edward, amended paragraph 6 so as to order Edward to pay the plaintiff $500,000 no later than December 28, 1990, $1,000,000 no later than January 15, 1991, and $100,000 within two years. The amended terms also provided that if Edward failed to pay on or before January 15, 1991, he must pay interest at the rate of eleven percent per annum on the $1,000,000 and execute a mortgage to the plaintiff on his stock interest in BRI. Finally, the stipulation amended the language in paragraph 6 prohibiting Edward from "transferring, encumbering or hypothecating any of the real estate owned by him and any of his stock interests" in BRI or Bonneville & Son, Inc. to allow Edward to use the real estate or stock to "effectuat[e] the provisions of this paragraph."
In May 1993, Edward paid the plaintiff $1,100,000 plus $15,008.64 in interest, calculated at eleven percent per annum, and the plaintiff signed over the BRI stock. The plaintiff filed suit in March 1994 against Edward, as a shareholder and director of BRI, and against BRI to recover stock dividends distributed by BRI. The trial court found that the decree did not require the plaintiff to transfer her BRI stock to Edward immediately and that the plaintiff "failed to support a claim that [Edward] is liable, in his individual capacity, for the incorrect distribution." The trial court determined that BRI wrongfully distributed all of the stock dividends to Edward and ordered BRI and Edward, as BRI's director, to pay the plaintiff $311,699, the amount to which she was entitled as a forty percent shareholder.
The primary issue on appeal is whether the divorce decree required the plaintiff to immediately transfer ownership of her BRI stock. The plaintiff urges us to review the trial court's decision for abuse of discretion or error of law, the standard of review we use when reviewing a trial court's determination of property division. See Grandmaison v. Grandmaison , 119 N.H. 268, 270, 401 A.2d 1057, 1058-59 (1979). This case requires an interpretation of the divorce decree, not a review or modification of the property distribution, so we interpret the decree de novo . See Frederick v. Frederick , 141 N.H. 530, 531, 687 A.2d 711, 713 (1996) ; see also Byrne v. Ackerlund , 108 Wash.2d 445, 739 P.2d 1138, 1143 (1987) ().
In ascertaining the meaning of the divorce decree and the stipulation, we look to the plain meaning of the language and at the meaning of the language in the context of the entire decree. See Frederick , 141 N.H. at 532, 687 A.2d at 713. Subsidiary clauses are construed so as not to conflict with the primary purpose of the decree. See Parkhurst v. Gibson (Parkhurst) , 133 N.H. 57, 63, 573 A.2d 454, 458 (1990).
The primary purpose of a property settlement is to establish a final and equitable distribution of the marital property. See, e.g., McSherry v. McSherry , 135 N.H. 451, 453, 606 A.2d 311, 313 (1992). We interpret property settlements so as to avoid future conflicts between the parties and to eliminate joint ownership of a business, whether operated primarily by one spouse or by both. See McAlpin v. McAlpin , 129 N.H. 737, 742, 532 A.2d 1377, 1380 (1987) ; Grandmaison , 119 N.H. at 271, 401 A.2d at 1059. In order to dissolve joint ownership of assets, a court may award title to one party and a mortgage to the other until the occurrence of a particular event, see Leary v. Leary , 137 N.H. 161, 165, 623 A.2d 1346, 1348 (1993), or upon the failure of one party to meet the terms of the decree, see Baker v. Baker , 444 A.2d 982, 987 (Me.1982). A lien or mortgage is preferable to co-ownership because it "is merely an encumbrance to secure an obligation and involves no characteristics of co-ownership." Byrne, 739 P.2d at 1141. Thus, we will generally construe ambiguous language in a decree in favor of a mortgage rather than co-ownership.
In this case, paragraph 2 of the divorce decree awarded all BRI stock to Edward "[s]ubject to paragraph 6." Although the term "subject to" may commonly indicate a condition precedent, see Holden Eng'g and Surveying v. Pembroke Rd. Realty Trust , 137 N.H. 393, 396, 628 A.2d 260, 262 (1993), "conditions precedent are not favored," and we will not infer that they were intended unless required by the plain language of the decree or stipulation. In re Estate of Kelly , 130 N.H. 773, 781, 547 A.2d 284, 289 (1988) ; cf. Perron v. Perron , 122 N.H. 855, 856, 451 A.2d 1282, 1283 (1982). Here, the remaining language in paragraph 2 awarding Edward all of the BRI...
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