Frisch v. Henrichs

Decision Date17 July 2007
Docket NumberNo. 2005AP534.,2005AP534.
PartiesIn re the marriage of Heidi FRISCH, f/k/a Heidi Henrichs, Petitioner-Respondent-Petitioner, v. Ronald J. HENRICHS, Respondent-Appellant.
CourtWisconsin Supreme Court

For the petitioner-respondent-petitioner there were briefs by Thomas L. Frenn, Kelly M. Dodd, George M. Mistrioty, and Petrie & Stocking S.C., Milwaukee, and oral argument by Kelly M. Dodd.

For the respondent-appellant there was a brief by Richard J. Podell, Barbara J. Stippich, and Richard J. Podell & Associates, S.C., Milwaukee, and oral argument by Richard J. Podell.

¶ 1 DAVID T. PROSSER, J

This is a review of a published decision of the court of appeals, reversing a judgment of the Circuit Court for Waukesha County, Ralph M. Ramirez, Judge. Frisch v. Henrichs, 2006 WI App 64, 290 Wis.2d 739, 713 N.W.2d 139. We are asked to address whether the circuit court may use its remedial contempt power to craft a remedy where a party has consistently failed to provide tax returns and income information in a timely manner as required under statute, a divorce judgment, and a court order, but does produce the information before the contempt hearing.

¶ 2 The court of appeals reversed the circuit court, which found Ronald J. Henrichs (Ronald) in contempt for failing to produce tax information on an annual basis to his former wife Heidi Frisch, f/k/a Heidi Henrichs (Heidi), and for failing to timely report substantial changes in his income, as required under statute, their divorce judgment, a November 1995 court order, and a stipulation entered into between Ronald and Heidi. The circuit court also held that the stipulation between the parties, which set a ceiling on the amount of Ronald's child support obligations for four years, was not in the best interests of the parties' children and was contrary to public policy. The circuit court ordered Ronald to pay Heidi $100,000 as compensation for Ronald's contemptuous conduct and also ordered Ronald to pay $32,000 of Heidi's attorney fees on grounds that he had engaged in overtrial.1

¶ 3 The court of appeals reversed, holding that the circuit court improperly employed remedial contempt because Ronald's contempt was no longer continuing at the time of the contempt hearing. The court of appeals noted that Ronald had provided Heidi with all the tax information before the contempt hearing; therefore, the contempt was no longer continuing and the circuit court was not authorized under Wis. Stat. ch. 785 to employ remedial contempt. The court of appeals also held that the stipulation between Ronald and Heidi was not contrary to public policy. The court of appeals reversed the circuit court's order that Ronald pay $100,000 to Heidi and also reversed the $32,000 overtrial award.

¶ 4 We reverse the court of appeals and hold that the circuit court properly employed remedial contempt in this case. Ronald's contempt was continuing at the time of the contempt hearing because, although he had provided Heidi with complete tax and income information at the time of the hearing, his failure to produce the information in a timely manner, as required, permitted him to evade exposure to the possibility of a modification of his child support obligation and thereby deprived Heidi and their children of their traditional remedies under statutory law. The timely provision of information was an essential element of the court's order. Because Ronald could not and did not turn back time when he produced the required information too late to be acted on, his contempt was and is continuing within the legislative directive of Wis. Stat. § 767.27(2m).2 This continuing contempt in relation to Wis. Stat. § 767.27(2m) gave the circuit court authority to fashion an alternative purge condition of $100,000 to allow Ronald to purge himself of his continuing contempt.3 We also conclude that the stipulation between the parties was unenforceable because it was not in the best interests of the children and therefore contrary to public policy.

¶ 5 We therefore reverse the court of appeals and affirm the circuit court, which ordered Ronald to pay Heidi a sum of $100,000 for loss suffered as a result of Ronald's contempt and $32,000 in attorney fees for Ronald's overtrial.

BACKGROUND

¶ 6 Ronald and Heidi divorced in 1993 after ten years of marriage. On August 16, 1993, Waukesha County Circuit Court Judge James Kieffer entered a judgment of divorce, which incorporated the parties' marital settlement agreement. The agreement awarded the parties joint legal custody of two minor children but gave primary physical placement to Heidi. In addition, it required Ronald to pay Heidi $600 per month in child support. Ronald represented that he would be able to pay this amount despite an annual income of only $11,000. A provision of the divorce judgment referenced Wis. Stat. § 767.263 (1993-94), which required child support obligors to report all substantial changes in income within 10 days to the clerk of court.4 The agreement also provided that as long as Ronald had an obligation to pay support, he was to provide Heidi with a copy of his Form 1040 tax return, together with all schedules.

¶ 7 Eleven months after the divorce was final, Ronald obtained a $165,000 residential mortgage based on a sworn statement to the lender that his monthly income was $5852.03 (or roughly $70,225 per year). On January 24, 1995, Heidi moved for an increase in child support pursuant to Wis. Stat. § 767.32, for a finding of contempt based on Ronald's alleged failure to provide copies of his income tax returns, and for an award of costs and attorney fees. After several other motions were filed, Heidi's contempt motion was dismissed.

¶ 8 A hearing on the motion for increased child support was held on November 14, 1995. Ronald testified that the income figures on his loan application were false and that his annual income was truly about $30,000. The court found, however, that Ronald had fraudulently misrepresented his income, and it set a revised child support award of $1463 per month retroactive to February 1, 1995.5 This amount represented 25 percent of what Ronald purported to be his annual income on the loan application.6 In addition, to monitor the situation, the court ordered Ronald to provide Heidi with copies of his annual personal and corporate tax returns by May 12 of each year as long as he had an ongoing child support obligation. Finally, the court found that Ronald had engaged in overtrial and ordered him to pay $5000 in attorney fees. This finding was followed by further litigation, including a motion by Ronald to reduce his child support obligation and a motion by Heidi to hold Ronald in contempt for his failure to pay child support.

¶ 9 On October 29, 1996, the parties entered into a stipulation modifying child support to $1050 per month and imposing a four-year moratorium on litigation. The parties stipulated that neither Ronald nor Heidi would seek a modification of the child support order before January 1, 2001, due to a change in economic circumstances, specifically income fluctuations.7 The stipulation reiterated Ronald's continuing obligation to provide Heidi with copies of his tax returns.

¶ 10 At the hearing on the proposed stipulation, Heidi's attorney noted that each of the parties had been assisted by counsel and certified public accountants in negotiating and drafting the stipulation. Under questioning by the court, both parties represented that they had discussed the stipulation with their attorneys, understood the provisions, had no questions, and believed the stipulation to be in their children's best interests. Heidi's counsel noted that counsel for both parties explained that Wisconsin public policy discourages agreements that bar parents from seeking child support modifications. The court also explained to the parties that they could enter into the stipulation but that the court could not order the same. The parties said they understood, and the court approved the stipulation.

¶ 11 Except for a February 1999 stipulation modifying child support as a result of a change in dependent health and dental insurance, the parties remained out of court as agreed. After the moratorium's expiration date of January 1, 2001, Ronald filed motions on May 22, 2002, one to obtain primary placement of the parties' son, and a second to reduce his required child support payments to Heidi because the parties' daughter was vacating Heidi's residence. The court commissioner granted Ronald's motion to reduce his child support obligation on July 19, 2002, conditioned on the fact that the parties' daughter would reside with Ronald or reside in an apartment paid for by Ronald. The court commissioner reduced the amount of Ronald's monthly child support obligation to $691.89, effective August 10, 2002.

¶ 12 In August 2002 Heidi brought a pro se contempt motion against Ronald for his continuing failure to provide copies of his tax returns since 1996 and for dishonesty in reporting his income.8 At a September 24, 2002, hearing on the motion, the court dismissed Heidi's contempt motion on the basis that Heidi had received the requested income tax returns from Ronald. At the hearing, Heidi also orally requested an increase in child support. The court directed Heidi to file a written motion relating to this request. The court set a hearing date for January 8, 2003, and ordered that Ronald's motion for change of placement be heard at that time.

¶ 13 On October 28, 2002, before the scheduled hearing of January 8, 2003, Heidi obtained counsel and immediately filed an amended motion seeking, among other things, the following: (1) Wis. Stat. § 806.07 relief from the court commissioner's July 2002 order reducing Ronald's child support obligation; (2) increased child support retroactive to May 2002; and (3) an award of attorney fees and expenses based on a claim that Ronald's motion to modify...

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