Lindsay v. Lindsay

• Decision Date: 04 June 1997
• Docket Number: No. 2708,2708
• Court: South Carolina Court of Appeals
• Parties: Mary Ann Haden LINDSAY, Respondent, v. Ross M. LINDSAY, III, Appellant. . Heard

Page 583

491 S.E.2d 583

328 S.C. 329

Mary Ann Haden LINDSAY, Respondent, v. Ross M. LINDSAY, III, Appellant.

No. 2708.

Court of Appeals of South Carolina.

Heard June 4, 1997.

Decided Aug. 18, 1997.

Rehearing Denied Oct. 23, 1997.

Certiorari Denied June 18, 1998.

Morris D. Rosen, of Rosen, Rosen & Hagood, Charleston, for appellant.

Robert L. Widener, of the McNair Law Firm, Columbia, for respondent.

CURETON, Judge:

This post-divorce action involves cross-claims of contempt for failure to comply with the terms of an agreement incorporated into a final decree of divorce. The trial court was called upon to interpret the order of the Honorable William K. Charles, Jr., filed on February 9, 1994, which incorporates an oral agreement of the parties. We affirm in part, reverse in part and remand.

Facts

The 1994 order incorporated the following provisions of the parties' property settlement agreement:

E. Additional Covenants of the Parties:

The parties further agree to the following covenants and conditions, and the aforesaid division of property is subject to each party performing these covenants, as follows:

1. The wife agrees as follows:

(a) The wife will execute and deliver to the husband, within ten (10) days after the final decree in this case, a promissory note in the form and with the conditions used by the Georgetown Bar, including the right to anticipate payments and to declare the balance due on default in any installment, in the amount of $115,500.00, with interest at seven (7%) percent on the unpaid balance, accruing as of the date of the final decree of the Court and payable annually commencing one year from the date of final decree; principal will be payable in equal installments over a five (5) year period with the first installment of principal being payable six (6) months after the present audit of the South Carolina Tax Commission is completed and the Internal Revenue Service has completed its findings in connection with such audit, including any appeal by the husband; the six (6) month period not to commence until the payment by the husband of any taxes required by the South Carolina Tax Commission and the Internal Revenue Service under such audit....

(iv) The wife will pay up to one-half of federal and state income taxes assessed up to $50,000.00, or a maximum of $25,000.00 in connection with the South Carolina Tax Commission audit now in progress, exclusive of the tax, interest and penalties on Caravel, Brickyard Plantation, and Motel Ventures; and,

(v) her interest in RML Limited Partnership.

2. The husband agrees as follows:

(a) The husband will hold the wife harmless from the payment of any state or federal income taxes including penalties and interest, if any, related to the following properties and audit:

(i) Caravel Properties

(ii) Motel Ventures

(iii) Brickyard Plantation

(iv) All taxes found by the South Carolina Tax Commission and the Internal Revenue Service to be due as a result of the audit presently in progress, except that the wife will pay one-half of all such taxes up to $50,000.00, or maximum of $25,000.00. This hold hold harmless is to cover all joint returns and returns of Wife's P.A. and Pension Plan prepared by husband for all the years of the marriage as to all tax matters, including penalties and interest. Husband acknowledges that wife asserts that she is protected as to such taxes by the innocent spouse doctrine. This hold harmless agreement is additional protection for the wife.

(b) Such hold harmless agreement will be secured by the following:

(i) Assignment of the aforesaid note of $115,500.00 to King & Vernon, as Trustee, within twenty (20) days after final decree, who will hold said note until the husband has complied with the payment of any taxes assessed as a result of said audit referred to above, or if no taxes ares [sic] assessed, than [sic] at the time of the completion of audit and appeals.

(ii) Assignment to King & Vernon, as Trustee, of 40,000 shares of Plantation Federal Stock now owed [sic] by the Lindsay Family Trust, within twenty (20) days after final decree, which will hold said shares until the husband has complied with the payment of any taxes assessed as a result of said audit referred to above or, if no taxes are assessed, then at the completion of audit and appeals. Such properties will be reconveyed to the husband and trust immediately upon the completion of the audit set forth above and any appeals, and the payment of any taxes, if taxes are assessed....

At the time of the execution of the agreement, the parties were in a dispute with the South Carolina Tax Commission regarding the under reporting of income and capital gains for the years 1988, 1989 and 1990. Between the approval of the agreement by the court in October 1993, and the filing of the divorce decree in February 1994, the parties reached an agreement with the State Tax Commission which required the parties to pay additional taxes in the amount of $67,555.88 for the years 1988, 1989 and 1990. In addition, the husband agreed to report additional capital gains of $686,863 on his 1993 individual tax return. The husband paid the additional taxes, reported the capital gains and paid the taxes thereon as agreed.

The present controversy arose when the wife refused to pay the husband the $25,000 for her share of the parties' back taxes, deliver to the husband the $115,500 note, or make principal and interest payments on the undelivered note as provided in the agreement. The husband's complaint and rule to show cause requested the court hold the wife in contempt, require her to deliver the $115,500 note, make the principal and interest payments that would then be due under the note if it had been timely delivered, pay the $25,000 she owes as her share of back taxes paid to the state, and pay attorney fees and costs. The wife answered and counterclaimed requesting, inter alia, that the court hold the husband in contempt for failure to assign the $115,500 note and the Plantation Federal stock to her former attorneys to secure the hold harmless provision of their agreement, that the husband's complaint be dismissed because the assignment of the note--and stock were conditions precedent to her obligation to deliver the note, make payments thereunder or pay the $25,000 for her share of state taxes. She also asked that the provision of the agreement requiring her to deliver the $115,500 note and pay the $25,000 taxes be set aside because of mistake of fact. Finally, she requested the husband pay her attorney fees and costs.

In its order of September 6, 1995, the trial court granted the husband's request that the wife pay the $25,000 tax contribution, but denied all other relief to both parties. The trial court found the language of the agreement concerning the "[w]ife's contribution to state tax liability appears to be clear and unambiguous." Nevertheless, the court concluded the wife's conduct not to be willful, and refused to hold her in contempt. As to the husband's request that the court order the wife to deliver the note and make the payments that would be due thereunder, the court construed the agreement to find that the claims of both the husband and wife were not ripe for determination. The court made no specific findings on the question of ambiguity as pertains to these provisions. Specifically, the court found:

In sum, any payment under the note are [sic] not yet due and payable as there has not been a "completed" IRS finding in connection with the S.C. Tax Commission audit. For the same reasons, Wife cannot argue that she was harmed by Husband's failure to post stock as security for his indemnification agreement until a demand for back taxes by the IRS is made. Consequently, the issues of the wife's failure to execute and deliver the note to attorneys King and Vernon and Husband's failure to post stock as security is not ripe for determination, nor is Wife's contention that the agreement was entered into as a result of a material, mutual mistake of fact.

Issues on Appeal

The issues raised on appeal are:

(1) Whether the husband has appealed the trial court's finding that the wife's obligation to deliver the $115,500 note was not ripe for determination, and if so whether such ruling was error;

(2) assuming error in the previous question, did the trial court also err in not ordering the wife to make principal and interest payments that would now be due if the note had been delivered; and

(3) whether the trial court erred in not awarding the husband attorney fees and costs.

Applicable Law

Unambiguous marital agreements will be enforced in accordance with their terms, while ambiguous agreements will be examined in the same manner as other agreements in order to determine the intention of the parties. McDuffie v. McDuffie, 313 S.C. 397, 438 S.E.2d 239 (1993). Whether or not an ambiguity exists in an agreement, however, must be determined from the language of the instrument. White v. White, 210 S.C. 336, 42 S.E.2d 537 (1947). Parole evidence may be allowed for the purpose of determining the intent of the parties and clearing up any ambiguity. Klutts Resort Realty, Inc. v. Down'Round Dev. Corp., 268 S.C. 80, 232 S.E.2d 20 (1977). The purpose of all rules of contract construction is to determine the parties' intention. The courts, in attempting to ascertain that intention, will endeavor to determine the situation of the parties, as well as their purposes at the time the contract was entered into. Mattox v. Cassady, 289 S.C. 57, 344 S.E.2d 620 (Ct.App.1986). Finally, an agreement that omits material terms may be determined to be unenforceable for indefiniteness. Ellis v. Taylor, 316 S.C. 245, 449 S.E.2d 487 (1994).

Contempt results from the willful disobedience of a court order. Before a party may be found in contempt, the record must clearly and specifically show the contemptuous conduct. State v. Bevilacqua, 316 S.C. 122, 447 S.E.2d 213 (Ct.App.1994). In a...