Metzner v. Metzner

• Decision Date: 27 May 1994
• Docket Number: No. 21380,21380
• Citation: 191 W.Va. 378,446 S.E.2d 165
• Court: West Virginia Supreme Court
• Parties: , 63 USLW 2115, 44 A.L.R.5th 883 Sydney O. METZNER, Plaintiff Below, Appellant, v. William R. METZNER, Defendant Below, Appellee.

Page 165

446 S.E.2d 165

191 W.Va. 378, 63 USLW 2115, 44

A.L.R.5th 883

Sydney O. METZNER, Plaintiff Below, Appellant, v. William R. METZNER, Defendant Below, Appellee.

No. 21380.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 11, 1994.

Decided May 27, 1994.

Syllabus by the Court

1. "For purposes of equitable distribution, W.Va.Code, 48-2-32(d)(1) (1984), requires that a determination be made of the net value of the marital property of the parties." Syllabus point 2, Tankersley v. Tankersley, 182 W.Va. 627, 390 S.E.2d 826 (1990).

2. " W.Va.Code, 48-2-33 [1984], requires a full disclosure of one spouse's financial assets to the other spouse at the time of divorce, and contemplates a meaningful hearing on the subject of equitable distribution of property at which the spouse submitting financial data may be cross-examined concerning the nature, origin and amount of assets." Syllabus point 1, Hamstead v. Hamstead, 178 W.Va. 23, 357 S.E.2d 216 (1987), overruled on other grounds, Roig v. Roig, 178 W.Va. 781, 364 S.E.2d 794 (1987).

3. When a contingent fee contract is acquired during marriage, it is "marital property" within the meaning contemplated by West Virginia Code § 48-2-1(e)(1).

4. Accounts receivable are assets with a value that can be ascertained as of the date of separation and are to be considered marital property for purposes of equitable distribution.

5. Contingent and other future earned fees which an attorney might receive as compensation for cases pending at the time of a divorce should be treated as marital property for purposes of equitable distribution. However, only that portion of the fee that represents compensation for work done during the marriage is actually "marital property" as defined by our statute. Because the ultimate value of a contingent fee case remains uncertain until the case is resolved, a court must retain continuing jurisdiction over the matter in order to determine how to effectuate an equitable distribution of this property.

Frank Cuomo, Jr., Wellsburg, for appellant.

William R. Metzner, pro se.

BROTHERTON, Chief Justice:

In this case, we are asked to determine whether the compensation that an attorney might receive for contingent fee contracts and other future earned fees for cases which are pending at the time of a divorce is "marital property" within the meaning contemplated by West Virginia Code § 48-2-1(e)(1): "property and earnings acquired ... during the marriage." The appellant, Sydney O. Metzner, now appeals from the lower court's ruling that only accounts receivable as of the date of separation are considered as marital property subject to equitable distribution.

The parties herein, William R. and Sydney O. Metzner, were married on September 6, 1965, in Ohio County, West Virginia. They separated after twenty-four years of marriage on March 8, 1989, when Mrs. Metzner filed a complaint in the Circuit Court of Ohio County seeking an absolute divorce, equitable distribution of marital property, alimony, and allocation of marital debts. The Metzners have two children, both emancipated.

Before we discuss the trial court's distribution of the couple's assets, a brief overview of their employment and financial histories is necessary. After graduating from law school at the University of Cincinnati in June, 1965, Mr. Metzner worked as an associate in two Wheeling, West Virginia, law firms from September, 1965, through December, 1969. He practiced law in a partnership with another attorney in Wheeling from January, 1970, through September, 1981. In October, 1981, he became a solo practitioner.

Mr. Metzner states that low net profits in 1985 and 1986, "coupled with extraordinary expenses for the children's educations, the daughter's marriage, and the payment of the wife's 'secret' debts," contributed to his inability to pay his tax obligations until the following years. In 1987, the parties bought a home in Morgantown, West Virginia, for their son to live in while attending college, with the intention of procuring other tenants to reside in the house and contribute rent. Mr. Metzner now describes this as a "regrettable purchase" and states that the house's market value declined because of the extensive damages it sustained during its occupancy by his son and his friends. Liens for delinquent taxes arose in 1988 and 1989.

During the years 1975-1979, Mrs. Metzner occasionally did secretarial work for the law partnership. Her earnings in these years were $1,700 (1975), $1,900 (1976), $2,100 (1978), and $3,100 (1979). In 1980, Mrs. Metzner began working full time as a secretary for Youghiogheny & Ohio Coal Company (Y & O). She was terminated in 1986 for alleged insubordination. Mrs. Metzner's gross earnings ranged from $9,759 in 1980 to $17,230 in 1985. Early in 1986, she earned several thousand dollars at Y & O, and Mr. Metzner paid her $3,000 for working in the law firm from June through August, 1986. Her gross earnings in 1986 were $7,347. Also, during 1986 and for much of 1987, Mr. Metzner's elderly uncle paid her $800 a month to fix his meals and provide him with companionship. Mrs. Metzner testified that "then I had a lot of cash." Mr. Metzner states that Mrs. Metzner received unemployment benefits and her Y & O retirement fund ($6,500) during this time, and he also indicates that, at his wife's request, he took over payments on a Cadillac she bought in May, 1985, "the only so-called 'basic' bill on which she ever had paid."

Following their separation, the parties eventually agreed on temporary relief for Mrs. Metzner, and an interlocutory order was entered by the family law master on May 31, 1989. The order awarded Mrs. Metzner temporary use and occupancy of the marital home and directed Mr. Metzner to continue to pay the monthly installments on two bank loans secured by liens against the marital home and the residence in Morgantown (including real estate taxes and casualty insurance for the marital home) and to continue to pay for all of the utility services, except the telephone, used in the marital home. According to the order, this temporary relief was to expire on July 1, 1989. This order also provided for the exchange by the parties of financial disclosures of assets and liabilities within a reasonable time prior to July 1, 1989.

The final divorce hearing was held before the family law master on December 19, 1989. Mrs. Metzner did not appear in person or by counsel. Mr. Metzner presented evidence to support absolute divorce on grounds of irreconcilable differences, but requested that the family law master reserve all economic issues, including equitable distribution, for later decision.

Through a new attorney, Mrs. Metzner filed a petition on December 27, 1989, setting forth her exceptions to the family law master's recommended decision and seeking to disqualify both the family law master and her husband's attorney from the case. Mrs. Metzner's petition and motions were heard and argued before Judge Tsapis on February 2, 1990.

Following this hearing, Judge Tsapis assumed jurisdiction over this case and accepted the recommendations of the family law master, awarding the parties an absolute divorce on grounds of irreconcilable differences and reserving all other issues for later decision. In addition, Judge Tsapis continued Mr. Metzner's obligations to Mrs. Metzner under the May 2, 1989, interlocutory order and added that Mr. Metzner was to pay any medical expenses incurred by Mrs. Metzner that were not covered by her insurance. ¹

On February 8, 1990, Mr. Metzner was served with combined interrogatories and requests for production of documents. Mrs. Metzner sought lists of all Mr. Metzner's work in progress, including contingent fee cases as of the date of separation, and copies of all time logs, files, ledgers and other materials related to such work. She also sought copies of all fee-splitting agreements as of the date of separation, copies of all monthly billings and accounts receivable since the date of separation, all year-end financial accountings and tax returns for 1988 and 1989, copies of all bank statements, deposit slips, and cancelled checks, and a list of all fixed [tangible] assets used in his law practice, and their market values, as of the date of separation. Mr. Metzner objected to the discovery requests for a variety of reasons, including his physical inability to perform the work necessary for compliance after he had a heart attack on March 14, 1990.

On May 17, 1990, the trial court issued a memorandum which directed Mr. Metzner to comply with Paragraph H of the discovery requests (accountings and tax returns for 1988 and 1989), requested a medical report from his doctor, and scheduled a hearing for June 1, 1990, to determine the date of separation.

In a memorandum of opinion dated July 3, 1990, the trial court stated that the separation date for purposes of equitable distribution was March 8, 1989. The court also indicated that Mr. Metzner's work in progress, including potential fees in contingent fee cases, were not marital property subject to equitable distribution. However, the court decided that his accounts receivable as of the date of separation were marital property.

For this reason, the lower court sustained Mr. Metzner's objections to paragraphs A through E of the discovery requests (relating to work in progress, particularly contingent fee cases), but directed him to respond to paragraphs F through J (fee-splitting agreements, accounts receivable, accountings and tax returns, bank account records, and fixed assets) within twenty days. On July 23, 1990, Mr. Metzner served Mrs. Metzner with the written, verified responses to the discovery requests with which he was required to comply.

A trial of the economic issues was held on March 6, 1991, after which the trial judge directed the parties to file their proposed plans for equitable distribution within fifteen days of her rulings on other matters....