In re Marriage of Lakha

• Decision Date: 28 November 2022
• Docket Number: 83270-1-I
• Parties: In re the Marriage of: AMIN S. LAKHA, Appellant, v. AFSHAN A. LAKHA, Respondent.
• Court: Washington Court of Appeals

In re the Marriage of: AMIN S. LAKHA, Appellant,
v.
AFSHAN A. LAKHA, Respondent.

No. 83270-1-I

Court of Appeals of Washington, Division 1

November 28, 2022

UNPUBLISHED OPINION

Díaz, J.

Amin Lakha^[1] appeals the superior court's order granting Afshan Lakha's motion to enforce an "equalizing payment provision" in their CR 2A Agreement^[2] and Separation Contract (the "Agreement"). Amin argues that the equalizing payment provision was subject to the Agreement's alternative dispute resolution ("ADR") provisions and that the court erred by ruling that that ADR process did not apply to the equalizing payment provision. Amin also challenges the court's award of attorney fees to Afshan. We reverse and remand this matter to the superior court to order the parties to comply with the Agreement's ADR provisions, and we direct the court to determine and award

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Amin's reasonable attorney fees in defending against the motion to enforce and to bring this appeal.

I. FACTS

Afshan and Amin were married in 1991 and separated in May 2017. Amin petitioned for divorce in December 2018.

At the time of their separation, the couple's marital estate was worth approximately $194 million dollars and included ownership of several business entities and commercial properties. In August 2019, Afshan and Amin entered into the Agreement, largely allocating certain property and making financial management arrangements prior to their divorce. The parties also agreed Amin would make an "equalizing payment" to Afshan in the amount of $2,701,885, plus repayment of a loan from Afshan to Amin of up to $3 million and interest on that loan, in order to achieve an equal division of the estate.

Specifically, the Agreement allocated to Amin "Avenue Bellevue," a development project and, as part of financial management of that project, entitled him to borrow up to $3 million in cash from Afshan at six percent interest while he sought other financing. The Agreement gave Afshan the option either to invest the loan obligation into the Avenue Bellevue project in return for ownership shares or making the loan amount part of her equalizing payment (along with interest and any other debts incurred). Regardless, the Agreement indicated that, if Afshan declined to invest some or all of her equalizing payment,

[Amin] shall pay her the equalizing payment with 7.5% interest from the date she notifies him of her decision, due in full on or before 12 months of the entry of the parties' divorce decree. . . . If the equalizing payment is not timely paid, it will accrue interest from the due date at 12% per annum until paid in full

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There is no further statement as to how long the interest could accrue.

In the Agreement's general provisions in Section 4.1, the parties agreed that the document was a

complete agreement between the parties and is enforceable in court. Each party understands that even though a decree yet needs to be prepared, this stipulation and Agreement is binding upon them and enforceable in court.

. . .

Any party failing to carry out the terms of this Agreement shall be responsible for any court costs and reasonable attorney's fees of the other party incurred as a result of such failure.

In Section 4.4 of the Agreement, the parties also agreed to engage in informal negotiation and ADR where necessary:

[I]f any other issue arises in connection with . . . the interpretation or implementation of this Agreement . . . or if the parties later realize that essential terms have been omitted, they shall endeavor to work such matters out through informal negotiation. If those efforts are not successful, either party may submit the matter to a single neutral panelist from JAMS^[3]or JDR^[4] for mediation and, if mediation is unsuccessful, for binding arbitration pursuant to RCW 7.04.^[5]

A substantially prevailing party would be entitled to attorney fees "in the arbitration and in any subsequent court action to enforce an arbitral award."

Afshan and Amin's divorce became final on March 23, 2020. Their dissolution decree incorporated by reference the August 2019 Agreement, and required the parties to comply with its terms. The decree specifically noted that the parties were required to pay debts as directed by the Agreement, and again restated the Agreement's requirement

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for the parties to resolve any "issues with interpretation or implementation of their [A]greement or any omitted issues" through "informal negotiation, mediation, or if those are unsuccessful, then by binding arbitration."

In July 2020, Afshan notified Amin that she declined to invest her equalizing payment in Avenue Bellevue. According to the terms of the Agreement, as Afshan did not invest her equalizing payment in the project, Amin was required to disburse the equalizing payment to Afshan on March 23, 2021, which was one year after their divorce became final, or begin to incur interest of 12 percent on the entire amount. Amin failed to make this payment.

In September 2021,^[6] Afshan filed a motion to enforce the CR 2A Agreement to compel Amin to pay her the equalizing payment in addition to the accrued interest, damages, and attorney fees and costs. She argued that Amin's default was not subject to the Agreement's dispute resolution provision because the equalizing payment did not fall under the scope of "interpretation," "implementation," or an "essential term" that had been omitted. Rather, Afshan argued that the terms of the Agreement were clear that Amin "shall pay" the equalizing payment "before 12 months of the entry of the parties' divorce decree." As such, the issue was about "enforcement" and outside of the scope of the parties' dispute resolution provision and immediately enforceable in court.^[7]

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In his opposition to Afshan's motion to enforce, Amin argued that the terms of the August 2019 Agreement required the parties to first engage in informal negotiation and ADR, which they had not done despite his constructive request. Amin emphasized that the parties agreed to dispute resolution instead of a "typical enforcement, remedy, and default provisions" as a financial safeguard as a "public hearing or judgment could conceivably start a domino effect of foreclosures across the entire range of marital assets." As proof of such intent, Amin points to Section 2.5 of the Agreement, in which Afshan and Amin explicitly agreed to "cooperate with the other party" to ensure stability across the parties' mortgaged holdings. Amin claimed that the parties "knew that if Afshan wanted a cash payment, it was very likely that I would not be able to pay it within one year of the decree" so the 12 percent interest was the agreed remedy in the event of his untimely payment.

The superior court granted Afshan's motion to enforce and issued judgment against Amin in the amount of $7,814,570.28^[8] and awarded Afshan her attorney fees and costs. The court found that the dispute resolution provision of the Agreement did not apply to the equalizing payment because it was limited to "issues in the interpretation or implementation of the Agreement" or "if essential terms ha[d] been omitted from the Agreement". The court found that it had the authority to remedy Amin's breach because the terms of the Agreement were "clear" and "enforceable by the Court." The court denied Amin's motion for reconsideration.

Amin appeals.

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II. ANALYSIS

A. The Superior Court's Granting of Afshan's Motion to Enforce

Amin argues that the superior court erred in granting Afshan's motion to enforce the Agreement's equalizing payment because the dispute was subject to the parties' ADR provision. We agree.

We interpret CR 2A agreements by applying normal contract principles. In re Marriage of Pascale, 173 Wn.App. 836, 841, 295 P.3d 805 (2013). Where parties dispute a contract's...