Gottstein v. Gottstein, S-18042

CourtSupreme Court of Alaska (US)
PartiesROBERT W. GOTTSTEIN, Appellant, v. JO GOTTSTEIN, Appellee.
Docket NumberS-18042
Decision Date14 September 2022

ROBERT W. GOTTSTEIN, Appellant,
v.

JO GOTTSTEIN, Appellee.

No. S-18042

Supreme Court of Alaska

September 14, 2022


UNPUBLISHED See Alaska Appellate Rule 214(d)

Appeal from the Superior Court 3AN-10-07318 CI of the State of Alaska, Third Judicial District, Anchorage, Andrew Guidi, Judge.

Robert Gottstein, pro se, Anchorage, Appellant.

Notice of nonparticipation filed by Cameron K. Compton, Law Office of Cameron K. Compton, LLC, Anchorage, for Appellee.

Before: Winfree, Chief Justice, Maassen, Carney, Borghesan, and Henderson Justices.

MEMORANDUM OPINION AND JUDGMENT [*]

I. INTRODUCTION

A divorcing couple negotiated a settlement of issues related to division of their property and payment of spousal support. Under the terms of the settlement, which was adopted in the court's divorce order, the husband was permanently required to pay spousal support in monthly installments and provide security to guarantee the payments. The husband complied with these terms for a number of years, but he stopped paying spousal support and posting the required security in December 2020. The wife then moved to enforce the ordered spousal support. After two hearings the court reduced the unpaid spousal support to judgment and issued a charging order that assigned the

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distributions from the husband's interest in a family limited liability company (LLC) to the wife in satisfaction of the husband's past due and future spousal support obligations.

The husband appeals, arguing that the superior court abused its discretion by issuing a charging order that assigned his interest in the family LLC not only to satisfy amounts past due, but also to satisfy future obligations. The husband also contends that the court clearly erred in interpreting the parties' settlement and finding that he breached its terms. In the time between the husband's appeal and our review, the wife received several distributions pursuant to the charging order that appear to extinguish any ongoing obligation between the parties.

We affirm the superior court's finding that the husband failed to pay spousal support as ordered, as well as its decision to enforce its spousal support order. We also affirm the court's issuance of a charging order to allow the wife to recover past amounts due, but we agree with the husband that a charging order may not be used to recover future obligations. However, because we cannot tell from the record before us whether the recent distributions to the wife were made pursuant to an agreement that would end future entanglement between the parties, we remand for further proceedings as needed to determine the parties' positions regarding the recent distributions and the resulting impact on future obligations between the parties.

II. FACTS AND PROCEEDINGS

A. When Robert and Jo Gottstein Decided To Divorce, The Superior Court Initially Ordered A Property Division And Spousal Support.

Robert and Jo Gottstein married in 1991. The couple first met in the 1980s, when Jo worked as a retail clerk at a Carrs grocery store. Robert's father co-founded Carrs grocery stores, and Robert received substantial earnings from the related businesses. When Robert and Jo decided to get married in 1991, Jo left her job at Carrs.

During the marriage Robert and Jo resided with their children in a home in

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Anchorage. Jo provided full-time care for the children. At some point during the marriage the couple purchased a cabin in Willow.

Jo filed for divorce in 2010. She sought spousal support given her relative lack of education or job experience and inability to support herself. Her filings reflected her general lack of familiarity with the family's finances and properties. A divorce trial took place in 2011.

The superior court issued a divorce decree in June 2011. In its accompanying findings of fact, the court found that Jo had no independent income and was the children's primary caregiver. Meanwhile, Robert had received significant assets from the Gottstein family businesses, including compensation from Safeway after it purchased Carrs. The court also identified Robert's membership interests in multiple family LLCs and noted that he regularly received distributions from the LLCs based on those interests.

Robert's individual business ventures, on the other hand, had incurred substantial debt, some of which he secured with marital property. Robert financed several business opportunities during the marriage that encumbered the Anchorage home and the Willow cabin multiple times over. Robert took out seven loans from his father's living trust totaling over $2.4 million.

Based on these findings, the court divided the couple's property. The court categorized the Anchorage home and the Willow cabin as marital property. According to the superior court's property division findings, the marital assets totaled approximately $2.7 million and the marital liabilities totaled approximately $886,000[1] The property subject to division was thus valued at approximately $1,826 million. The court then ordered a 50-50 equitable division, requiring Robert to pay $913,000 to Jo. The court

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split the required payment into three payments to be made over time, functioning as de facto retirement savings for Jo and allowing Robert to liquidate his assets.

The court also awarded Jo five years of rehabilitative spousal support. Acknowledging this court's preference for equitable property division over alimony, the superior court nonetheless found that the "specific circumstances of this case justify a departure from the normal rule and favor an award of rehabilitative support." Due to Robert's failed business ventures, Jo exited the marriage with over-encumbered marital assets and little savings. Even with "rehabilitative education," the court projected that Jo would earn "a small fraction . . . of the income Robert receives from his interests in the [family] LLCs in addition to whatever he can earn with his degree . . . and his business background."

Robert appealed the court's order in July 2011, contesting the property division and valuation.

B. In 2012 Robert And Jo Reached A Settlement Intended To Supersede The Court-Ordered Property Division And Spousal Support.

While Robert's appeal was pending, the parties entered mediation. In February 2012 they reached an agreement on all issues related to property division. The superior court then incorporated the property settlement's terms into the original decree.

The settlement called for a different property division and spousal support arrangement. Under the settlement Robert agreed to pay Jo for various expenses and Jo agreed to vacate the marital home. The settlement also guaranteed Jo permanent spousal support paid on a monthly basis. Robert would pay Jo $3,000 per month in support from January to June 2012, and from July 2012 through June 2014, Robert would pay $7,500 per month. Beginning July 2014 Robert would pay Jo $5,000 per month, "due and payable on the first of each month."

The settlement also required Robert to "obtain security to insure these

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[permanent spousal support] payments." Robert could secure the payments with any mix of security that equaled a "minimum required security" dollar amount set by a "Minimum Security Schedule" appended to the settlement. Within 10 days of signing, the settlement required that he post security valued at $500,000; within 75 days, he had to post security valued at $900,000; and by August 2012, the value grew again to $1 million. For every following year, the minimum security value declined by 5%.[2] Robert provided an "initial security mix" consisting of deeds of trust on the Willow cabin and Anchorage home.

C. In 2020 Jo Moved To Enforce The Settlement's Spousal Support And Minimum Security Terms.

From 2012 to 2020, Jo routinely received monthly spousal support. Robert's payments were sometimes late, however, and he refused Jo's request to automatically wire the monthly payments into her bank account so that she could receive her payments on the first of the month as required.

In December 2020 Robert refused to pay Jo at all. Jo initially notified Robert by email and text that she did not receive her December payment. Robert replied with excuses that evolved over the course of their correspondence. He first indicated that he had sent a check and that his records showed Jo had cashed it. After Jo asked him to resend the check because she had not received it, Robert replied by alleging that Jo had violated the settlement thereby nullifying his obligations to pay her permanent spousal support. Robert stated that he would "never ever consider paying [her] another dime unless [she took him] to court and a judge order[ed] [him] to do so."

Jo then returned to the superior court to enforce the spousal support order. In January 2021 she filed her first motion to enforce and requested an order for Robert to show cause why he should not be held in contempt. In February 2021 Jo filed another

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motion to enforce after learning that Robert had dissolved the company in which she had previously held a stock certificate to secure Robert's support obligation.

In February the court held a hearing on Jo's first motion regarding Robert's failure to pay. Robert did not participate in the hearing; he did not attend in person and did not answer his phone when the court called to give him the opportunity to participate telephonically. At this hearing Jo presented evidence of Robert's failure to pay monthly support since December 2020 and his unwillingness to make future payments. She also testified regarding Robert's failure to post the required security.

Based on this evidence the court ordered Robert to pay the past due support within three days and to make future payments by electronic deposit to Jo's bank account. The court scheduled a second hearing for March to address Robert's failure to post...

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