Klein v. Klein, Record No. 0211-03-4 (Va. App. 12/2/2003)
| Decision Date | 02 December 2003 |
| Docket Number | Record No. 0211-03-4. |
| Parties | FREDERICK C. KLEIN, v. KAREN N.E. KLEIN. |
| Court | Virginia Court of Appeals |
Appeal from the Circuit Court of Arlington County, Benjamin N. A. Kendrick, Judge.
Robert G. Culin, Jr. (Culin, Sharp & Autry, on briefs), for appellant.
Thomas Peter Mann (Greenspun & Mann, on briefs), for appellee.
Present: Judges Frank, McClanahan and Senior Judge Coleman.
Frederick C. Klein (husband) appeals from an order dated December 23, 2002, finding that he violated certain terms of a final decree of divorce and subsequent court orders.
Husband filed for divorce from Karen Klein (wife) on September 8, 1993, based on living apart for over a year. The trial court entered a final decree of divorce on May 22, 1995. A document signed by both parties and their attorneys, titled "Klein — Terms of Settlement" (Settlement), was incorporated into the final decree by reference. The Settlement required husband to refinance several properties, remove wife's name from the deeds, and pay wife for her interest in the real estate in unspecified "installments" as husband refinanced the properties. The clause noted that time was of the essence. The Settlement also allowed husband to receive a ten percent fee for managing the couple's partnerships, required him to provide certain documents to wife, and required him to consult wife on all business matters, although he was not obligated to obtain her consent for his actions. The parties originally intended the Settlement to form the basis for a more detailed and formal property settlement agreement, which wife was to prepare, but no further agreement was reached. The parties never modified their partnerships to reflect the provisions of the Settlement.
1. On February 5, 1998, wife filed for a Rule to Show Cause, alleging husband had violated certain terms of the final decree and Settlement by failing to pay her approximately $230,000 for her ownership interest in the real estate. She also claimed that husband collected a ten percent management fee without amending the partnership agreements and that he refused to comply with the consultation and information requirements for the partnerships established in the Settlement. The trial court issued a rule to show cause, which was heard on April 20 and 21, 1999.
2. While awaiting the show cause hearing, wife filed a Motion to Compel Discovery, which was granted on February 9, 1999.1 Wife then filed a Motion for Relief and Sanctions, based on husband's failure to abide by the order compelling discovery. The trial court entered an order granting this motion on April 19, 1999.2 Imposing sanctions, this order prohibited husband from presenting expert witnesses and from using a defense of "impossibility with regard to the payment of the funds" during the hearing to be held on the original show cause motion. This order was not appealed.
On April 20, 1999, the trial court heard the rule to show cause. Husband objected to the testimony of wife's former attorney, who drafted the Settlement, arguing it constituted parol evidence. Wife argued parol evidence was necessary as the Settlement was vague, particularly its use of the term "refinance." The trial court allowed the testimony.
When wife asked for interest on the payments due under the Settlement, husband argued the Settlement did not include a provision for interest. The court found interest was warranted. Husband requested permission from the court to examine wife regarding her "obstructionist" behavior, which allegedly prevented him from refinancing the properties. The court did not allow the examination.
Wife argued husband should not collect the ten percent management fee because the partnership agreements had never been amended. Husband argued, if he could not collect the ten percent fee, then he should not be required to provide documents and make reports as required by the Settlement.
On May 7, 1999, the trial court entered an order finding husband in contempt on the rule to show cause, but continued the case to June 18, 1999, to give husband the opportunity to pay the money he owed wife under the Settlement and to purge the contempt finding. The court ordered that husband pay interest on this money, with an accrual date of May 22, 1995, the day the final decree of divorce was entered. The court also ordered that husband cease taking the management fee, that he consult with wife on the partnerships, and that he provide her with all relevant partnership documents.
3. Wife's attorney prepared the order incorporating the foregoing rulings. Notice of the presentation of this order to the trial court was sent to husband on May 3, 1999. However, a copy of the order was not attached to the notice. The order was presented to and entered by the court on May 7, 1999, without the presence or signature of husband's counsel. On May 21, 1999, husband filed a motion to vacate the May 7, 1999 order. The trial court heard the motion a week later and denied it. Husband then filed an appeal of the May 7, 1999 order with this Court.
4. On June 29, 1999, husband filed a "Motion to Vacate Oral Ruling of June 18, 1999 and Release Complainant." The trial court apparently had sentenced husband from the bench on June 18, 1999, to 90 days in jail for contempt of the final decree of divorce. However, no written order or transcript from the June 18, 1999 hearing is in the record.
Husband's appeal to this Court of the May 7, 1999 order was dismissed as premature on November 4, 1999. Klein v. Klein, Rec. No. 1303-99-4 (unpublished). This Court found the order was not final nor an appropriate interlocutory order for appeal. In a footnote, this Court said, Id. at 3 n.1.
5. On September 28, 2001, wife filed a new Notice and Motion for Entry of a Rule to Show Cause, asking that the trial court find husband in contempt for violation of the "May 7, 1998"3 order and all subsequent orders of the court. On January 24, 2002, the court heard this show cause. From the bench, the court ordered that husband turn over a box of documents, formerly in the possession of Ms. Mahoney , as well as other documents related to the partnerships. The trial court also ordered that husband remove wife's name from a deed to Florida property and that he pay the previously ordered fees and costs related to wife's motion to compel discovery. The court found husband in contempt, but the finding was withheld and no sanctions were imposed at that time. No written order was entered to memorialize the trial court's pronouncements.
On September 25, 2002, wife filed a motion to impose sanctions for the contempt finding of January 24, 2002, requesting the motion be heard on October 4, 2002. Although the parties apparently were in the courthouse on that day, no transcript, written order, or agreement of the parties relevant to that day is in the record. While at the courthouse, the parties apparently negotiated a Memorandum of Understanding (Memorandum), which gave husband ninety days to pay wife $800,000 for her interest in the partnerships,4 continued the contempt case to November 15, 2002, and allowed the "instant motion to be dismissed" if all the requirements in the Memorandum were fulfilled.5 The Memorandum included a release clause that gave husband two weeks to determine whether he could raise the $800,000 to purchase wife's interest in the partnerships.
On November 4, 2002, wife again filed a notice and motion, asking that the trial court impose the January 24, 2002 "suspended finding of contempt" and enforce the Memorandum. A hearing on this motion was held on November 15, 2002.6 No transcript of this hearing is in the record, and no written order was entered memorializing the trial court's findings or rulings. According to testimony at a later hearing, after a hearing on November 15, 2002, the trial court found husband in contempt and sentenced him to jail.
On December 19, 2002, husband filed a motion to reconsider the November 4, 2002 ruling "ordering him to remain incarcerated until he paid the sum of $800,000 to [wife] pursuant to the October 4, 2002 Memorandum of Understanding." The motion argued that no evidence was introduced at the November hearing, that the trial court lacked the authority to enforce the Memorandum, and that the court lacked the authority to find him in contempt before the payment was due under the Memorandum.7
On December 20, 2002, the court conducted a hearing on husband's motion to reconsider. Husband's attorney argued the November hearing did not proceed on proffers, as the court believed it had. Wife's attorney disagreed, arguing husband did not object to the procedure at the time. The trial court noted, in response to wife's attorney, "And that was your understanding, but out of an abundance of caution, the ruling is going to stand." The court then said, When husband objected, the court said,
Although the trial court seemed to find the November 15, 2002 oral contempt order was not based on the presentation of evidence or proffers, nevertheless, it did not rescind the order jailing husband. Instead, the court required that husband remain incarcerated. The trial court set another hearing for the presentation of evidence on the contempt allegations for December 23, 2002.
At the December 23, 2002 hearing, husband testified he told wife he could not raise the...
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