Koons v. Crane
| Decision Date | 02 February 2021 |
| Docket Number | Record No. 0580-20-4 |
| Citation | 853 S.E.2d 524,72 Va.App. 720 |
| Parties | Clyde Carleton KOONS, IV, f/k/a Clyde Carleton Crane, IV v. Leslie Elizabeth CRANE |
| Court | Virginia Court of Appeals |
A. Van McFadden (The McFadden Law Office, PLLC, on briefs), for appellant.
David Horowitz (Law Office of David Horowitz, PLLC, on brief), for appellee.
Present: Judges Beales, O'Brien and Malveaux
OPINION BY JUDGE MARY GRACE O'BRIEN
Clyde Carleton Koons ("husband") appeals an order finding him in contempt for failing to comply with terms of a final decree of divorce. Husband's six assignments of error address service of the rule to show cause, the willful nature of his violations, and the sanctions imposed by the court.
Husband and Leslie Elizabeth Crane ("wife") were married in 2002 and divorced by final decree entered in April 2016. The divorce decree incorporated the parties’ property settlement and support agreement ("PSA") and required husband to pay spousal support and certain insurance premiums and unreimbursed medical expenses for wife. The divorce decree also required husband to pay the mortgages on the parties’ two condominiums, Unit #109 and Unit #302.
The PSA provided that the condominiums would be sold, and the aggregate net sale proceeds would be divided equally, after payment of any commissions, liens, and expenses resulting from the sales. Paragraph 7(E) of the PSA also provided as follows:
[I]n the event either party is delinquent in any payments provided for herein, same shall be charged against his share or her share of the net proceeds and paid to the other party.
Further, the PSA specified that husband would pay $5,000 of wife's attorney's fees "upon the sale of the first of the real properties to sell."
The divorce decree listed a street address in Woodland, Washington as husband's residential address and required that the parties "give each other and this court at least thirty days[’] advance written notice of any change of address." In a paragraph entitled "Knowledge of Residence," the PSA specifically required the parties to notify each other of a change in residential address : "For so long as any obligation of this [PSA] remains unexecuted and either party still has obligations hereunder, each shall keep the other informed of his or her address of residence. " (Emphasis added). The PSA also reserved the court's authority to award attorney's fees in connection with any future actions to modify or enforce the terms of the agreement.
In October 2018, wife requested a show cause rule based on husband's failure to comply with his financial obligations under the divorce decree. Simultaneously, wife filed a motion to modify spousal support. The court issued a show cause rule setting a hearing for November 16, 2018. The court subsequently issued an amended show cause rule setting a hearing for January 30, 2019.
Husband did not appear at the January 30, 2019 hearing. When the court inquired whether husband had been properly served, wife produced an affidavit of service showing that on December 18, 2018, the amended show cause rule, along with a letter from wife's counsel, the verified petition, discovery requests, and the motion to modify spousal support, were served upon husband's "mother-in-law/co-resident" at the Washington address husband provided in the divorce decree.
Wife advised the court that husband never provided her with an updated residential address as required by the divorce decree, but he did send her the following email entitled "change of address" in July 2017:
Wife's counsel informed the court that he understood husband was but because husband had not provided wife with an updated residential address, wife "d[id]n't know for certain" if he was currently living in Saudi Arabia. Counsel also represented that Saudi Aramco's location in Houston, Texas is "fire walled" from its Saudi Arabia branch and "won't accept service, or do anything, or give out any information about the rest of Saudi Aramco."
Wife testified and confirmed that husband never advised her of a change in his residential address. Although in January 2017 husband emailed wife purporting to inform her of a residential address change in the United States, he merely provided a post office box in Washington. Wife responded,
Wife's counsel informed the court that in October 2018, he used a commercial delivery service to send the initial show cause rule and accompanying documents to the Saudi Arabian post office box provided in husband's July 2017 email. However, the package was returned several days later without explanation. Also in October 2018, wife's counsel emailed the initial show cause rule and accompanying documents to husband at the address he had used in July 2017 and as recently as March 2018. When the court issued the amended show cause rule in November 2018, wife's counsel arranged for a private process server to serve it on husband at the Washington address he provided in the divorce decree.
The court found that substituted service on husband's mother-in-law at the Washington address was valid, noting that husband never informed wife or the court of any change in his residential address as required by the divorce decree. Additionally, the court acknowledged that wife sent the initial show cause rule and accompanying documents "by email to what appear[ed] to be a valid address" and unsuccessfully attempted to serve husband in Saudi Arabia.
Wife introduced evidence demonstrating husband's noncompliance with his financial obligations under the divorce decree. She testified that husband was an attorney with an estimated yearly salary of $250,000, yet he consistently ignored his financial obligations under the divorce decree to pay spousal support, insurance premiums, and unreimbursed medical expenses. She estimated that he owed her approximately $89,464 for those financial obligations alone.
Additionally, husband ignored his obligation to pay the condominium mortgages, resulting in foreclosure of the two properties. After deductions for various fees and costs, including a commission for the commissioner of sales, the net proceeds from the two foreclosure auctions totaled $6,067.55. Wife asserted that husband's nonpayment of the mortgages diminished the foreclosure proceeds, and she requested an opportunity to supplement the record with the precise amount. As a sanction, wife sought half the difference between the foreclosure sale price of each condominium and the price each condominium would have commanded if sold for its fair market value.
The court found husband in contempt and continued the matter to determine whether it had authority to order husband to pay wife half the difference between the foreclosure price and the fair market value of the condominiums at the time they were sold.
Wife filed a supplemental brief. Husband did not file a response. In an April 2019 order, the court ruled that it had authority to award wife half the difference between the foreclosure sale prices and the fair market values of the condominiums as a contempt sanction. The court continued the matter to hear additional evidence.
Prior to that hearing, counsel for husband filed a special appearance and moved to quash service of process and dismiss the show cause rule for lack of service. At the hearing, husband argued that the Washington residence might have been "the place [he] was last found" and "the last address that [he] submitted to the court," but it was not his "usual place of abode" as required by Code § 8.01-296(2)(a). Husband emphasized that he informed wife of his move to Saudi Arabia in July 2017, well before she attempted personal service on him at the Washington address in December 2018. Husband's evidence consisted of a de bene esse deposition transcript of his father-in-law, resident owner of the Washington address, who testified equivocally about husband's residence. Although his father-in-law testified that husband "moved out of our house when he got the job in Saudi [Arabia]," he further stated that husband's intent was to remain in Saudi Arabia only as long as he "could handle it" and husband had returned to the Washington residence in summer 2018 and winter 2017. Husband did not introduce any other evidence demonstrating that he abandoned the Washington abode or established a new residence elsewhere.
The court held that service of process on husband was valid and denied his motion to quash. Specifically, the court ruled that husband was properly served pursuant to Code § 8.01-296(2)(a), which provides for substituted service by delivering pleadings to a family member at a person's "usual place of abode." The court found that the process server delivered the show cause rule to husband's mother-in-law in December 2018 at the Washington address listed in the divorce decree. The court further found that although husband emailed wife in July 2017 that he was working in Saudi Arabia and provided a post office box, he did not notify wife or the court of any change in his residential address as required by the divorce decree, and therefore the Washington address remained his usual place of abode.
In December 2019, the court conducted a hearing to determine sanctions for husband's contempt, which included determining the difference between the foreclosure sale price and fair-market value for each condominium. Although the court had found husband in contempt, it allowed him to present mitigation evidence.
Husband offered testimony from a real estate agent that in 2016, wife refused to remove excess personal property from Unit #109, leaving it...
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