Loscher v. Hudson
| Decision Date | 18 April 2008 |
| Docket Number | No. 97,035.,97,035. |
| Citation | 182 P.3d 25 |
| Parties | In the Matter of the Marriage of Brenda S. LOSCHER (f/k/a Hudson), Appellee, v. William B. HUDSON, Appellant. |
| Court | Kansas Court of Appeals |
Diana L. Miller, of McCollum & Parks, L.C., of Fairway, for the appellant.
Allan E. Coon and Gregory D. Kincaid, of Norton, Hubbard, Ruzicka & Kreamer L.C., of Olathe, for the appellee.
Before MALONE, P.J., PIERRON, J., and BUKATY, S.J.
William B. Hudson appeals the district court's finding that his agreement to indemnify Brenda S. Loscher in their separation agreement for a deficiency that remains on their second mortgage includes Loscher's payments for criminal restitution on that deficiency. We affirm.
In 1999, Loscher and Hudson purchased a home for approximately $354,500. Loscher prepared a mortgage loan application for Norwest Mortgage, claiming that she and Hudson would use their own funds to make a down payment of approximately $153,000. In support of her application, Loscher provided a falsified bank statement indicating that she and Hudson had $2,647.10 and $157,145.34 in their checking and savings accounts, respectively. In reality, they only had $838.87 in their checking and $4 in their savings accounts.
At the time of closing, Loscher called Shirley Hudson (Loscher's mother-in-law who lived in Colorado) for a short-term loan of $150,000. Loscher told Shirley that the bank was improperly holding funds that she intended to use for the down payment of the house, which was untrue. Based on the understanding that Loscher would repay the loan within days, Shirley agreed to provide them a loan. Shirley obtained a 30-day bank loan and wired the funds to Loscher who used the funds for the down payment.
After Loscher and Hudson moved into their new home, Loscher did not repay the loan to Shirley. Instead, she undertook several actions to circumvent her repayment obligation.
First, Loscher told Shirley's bank that she had the money and would send the check via Federal Express. The bank, however, checked with Federal Express and, finding no record of the shipment, contacted Loscher. In response, Loscher faxed false copies of the Federal Express Airway bill and the payoff check and mailed an empty Federal Express envelope to the bank.
Second, Loscher began fraudulently using the identity of an attorney, faxing multiple letters and making telephone calls to the bank and Shirley. Purporting to be the attorney or the attorney's assistant, Loscher stated she was aggressively pursuing the release of Loscher and Hudson's funds. Loscher also forged the attorney's signature.
Third, Loscher interfered with Hudson being contacted by Shirley or his other family members to discuss the loan/down payment matter. Loscher refused to relay telephone messages left for Hudson in their home; deleted messages left for Hudson on the voice mail system at his old office; and falsely informed family members that Hudson did not have a telephone in his new office.
Loscher's nonrepayment of the loan forced Shirley to cash out several certificates of deposit to repay the bank. Shirley then placed a second mortgage on Loscher's and Hudson's home. Once the home was sold, Shirley recovered $87,402.55, leaving a difference of $66,000.84 unpaid.
For this reason and others, Loscher and Hudson divorced. Incorporated into their November 21, 2000, divorce decree, the separation agreement contained a hold harmless provision stating that Hudson would be liable for any deficiency that existed from the parties' second mortgage to Shirley.
LOT 3, BLOCK 2, Woodland Place, a subdivision in the City of Shawnee, Johnson County, Kansas, according to the recorded plat thereof.
is currently on the market for sale.
In entering into the agreement, the parties specified their general intent was as follows:
....
Sometime afterwards, the United States Attorney for the District of Colorado filed multiple charges against Loscher for her unlawful acts related to the nonrepayment of Shirley's loan. In 2004, Loscher entered a plea of guilty to one count of wire fraud. In exchange for her plea, the United States Attorney agreed to dismiss the remaining counts and not file any other federal criminal charges against Loscher. Because Loscher stated that she was freely and voluntarily pleading guilty to the crime and because she was guilty of the crime, for no other reason, the United States District Court for the District of Colorado accepted her guilty plea.
For her sentence, the federal district court applied the Mandatory Victims Restitution Act of 1996 (MVRA) and ordered full restitution. Under 18 U.S.C. § 3663A (2000), the court sentenced Loscher to a 5-year term of probation with restitution in the amount of $66,000.84 to be owed to Shirley as a condition of probation. A special assessment of $100 was also ordered against Loscher.
However, for the reason that additional financial obligations would hamper Loscher's ability to pay her criminal restitution, the federal district court declined to further impose a fine against Loscher, which could have ranged from $2,000 to $20,000, or require interest for the restitution.
Because Loscher's criminal restitution was in the amount of the deficiency remaining on the second mortgage to Shirley, Loscher filed an accusation in contempt against Hudson in the divorce case. In her contempt claim, Loscher argued that Hudson's failure to satisfy the second mortgage to Shirley as assigned by the hold harmless provision required the district court to impose a judgment against Hudson in the amount of $66,000.84. In response, Hudson maintained that while Loscher's court-ordered criminal restitution did not relieve him of his obligation under the hold harmless provision, Loscher's sentence did not require him to perform his contractual obligations.
After hearing evidence on the matter, the district court classified the $66,000.84 as restitution, which represented the deficiency owing for the second mortgage. Under that assessment, the court declined to find Hudson in contempt but interpreted the hold harmless provision to mean that Hudson's liability encompassed any event in which Loscher would be found liable for the deficiency. Consequently, because Loscher's criminal restitution made her liable for the deficiency of the second mortgage, the court enforced the hold harmless provision. The judge noted:
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"I'll order that the [$1600 that has been paid] be reimbursed upon proof of payment, restitution payment to the court in Colorado....
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On February 3, 2006, the journal entry memorializing these findings was entered.
On February 17, 2006, Hudson filed a motion to alter or amend judgment under K.S.A. 60-259(f), requesting the district court modify its previous interpretation of the hold harmless provision since the previous hearing began as a contempt citation and not as a motion to enforce, reinterpret, or modify the hold harmless provision in the property settlement agreement. After conducting a hearing on May 4, 2006, the district court denied Hudson's motion to reconsider:
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