Mundlein v. Mundlein, 22871.
| Decision Date | 25 February 2004 |
| Docket Number | No. 22871.,22871. |
| Parties | Judy MUNDLEIN, Plaintiff and Appellant, v. Jerry MUNDLEIN, Defendant and Appellee. |
| Court | South Dakota Supreme Court |
Rick Johnson, Sandy Steffen of Johnson, Eklund, Nicholson & Peterson, Gregory, for plaintiff and appellant.
Thomas M. Issenhuth of Arneson, Issenhuth & Parent, Madison, for defendant and appellee.
[¶ 1.] Judy Mundlein (Judy) appeals a decision of a circuit court finding her in contempt of court for failing to pay credit card debt as required by a divorce decree. Because the circuit court made no findings concerning Judy's ability to actually pay the debt, we reverse and remand.
[¶ 2.] On June 23, 2000, Judy and Jerry Mundlein obtained a final decree of divorce. Pursuant to the decree and property division, Judy was awarded various marital debts. The total amount of the debt was approximately $35,000. In order to equalize distribution of the marital assets, the circuit court ordered Jerry to pay Judy a $45,850 property settlement. After the parties were unable to reach an agreement on a payment plan, the circuit court ordered Jerry to pay $22,925 by December 31, 2000, with the remaining half of the settlement to be paid in three equal installments, plus interest, on December 31 of the following three years.
[¶ 3.] A Capital One credit card account was among the debt awarded to Judy. Because the account was in Jerry's name, however, he continued to receive monthly statements from Capital One. Eventually, Judy stopped making payments on the credit card. When a collection agency notified Jerry that the account was in default, he directed his attorney to hold the 2001 payment to Judy in his trust account until the Capital One credit card was paid. The Capital One account was still in default at the end of 2002, and Jerry once again directed his attorney to hold the yearly payment owed Judy in his trust account until she paid the debt. On January 3, 2003, Jerry authorized his attorney to send Judy a sum of $6,340.06, but he retained $12,000 in his attorney's trust account in order to cover the balance owing on the Capital One credit card. Shortly thereafter, Judy paid $5,588.06 to a collection company pursuant to a settlement agreement in satisfaction of the outstanding balance on the Capital One credit card. At the time of the settlement, the balance on the credit card was well over $11,000.
[¶ 4.] On February 13, 2003, Judy brought a motion requesting the circuit court to find Jerry in contempt of court for his willful refusal to make the yearly property settlement payments. Jerry subsequently filed a motion to hold Judy in contempt for her failure to pay the full credit card debt thereby damaging his credit rating. After a hearing on both motions, the circuit court held both parties in contempt of court—Jerry for his refusal to pay the periodic property settlement payments, and Judy for her failure to pay the full amount due on the Capital One credit card account. The circuit court found that Judy's settlement agreement with the collection agency damaged Jerry's credit rating, and it ordered Jerry's counsel to pay the full amount of the Capital One credit card debt and then remit the remaining funds from the yearly property payments to Judy. Judy now appeals the judgment of the circuit court and raises the following issues for our review:
1. Whether the circuit court erred in holding Judy in contempt of court for failing to pay the credit card debt as required by the divorce decree.
2. Whether the circuit court was clearly erroneous in determining that Judy's settlement of the credit card debt for less than the outstanding balance damaged Jerry's credit rating.
3. Whether the circuit court's abused its discretion by requiring Judy to pay the full balance owing on the credit card.
[¶ 5.] We defer to the circuit court's findings of fact and we will only reverse when "after a review of all the evidence, `we are left with a definite and firm conviction that a mistake has been made.'" City of Deadwood v. Summit, Inc., 2000 SD 29, ¶ 9, 607 N.W.2d 22, 25 (citing New Era Mining Co. v. Dakota Placers, Inc., 1999 SD 153, ¶ 7, 603 N.W.2d 202, 204). We review the application of law to the facts de novo, however, with no deference to the circuit court's decision. Id.
[¶ 6.] 1. Whether the circuit court erred in holding Judy in contempt of court for failing to pay the credit card debt as required by the divorce decree.
[¶ 7.] The circuit court held Judy in contempt for her willful failure and refusal to pay the Capital One credit card debt as required by the divorce decree. In order to hold a party in civil contempt, the following elements must be established: (1) the existence of an order; (2) knowledge of the order; (3) ability to comply with the order; and (4) willful or contumacious disobedience of the order. Keller v. Keller, 2003 SD 36, ¶ 9, 660 N.W.2d 619, 622. In this case, Judy disputes the third of the element of the test and maintains that she did not have the ability to comply with the court order by paying the credit card debt. As we recognized in Johnson v. Johnson, "if [a party] did not have the ability to pay ... [she] cannot be held in contempt." 451 N.W.2d 293, 295 (S.D.1990).
[¶ 8.] When a party raises the inability to pay as a defense in a civil contempt proceeding, that party has the burden of proving her inability to comply with the court's order. Taecker v. Taecker, 527 N.W.2d 295, 298 (S.D.1995); Johnson, 451 N.W.2d at 295. "Proof of an inability to pay requires more than an assertion that one lacks adequate funds." Taecker, 527 N.W.2d at 298. At the contempt hearing, Judy testified that she initially made $250 monthly payments on the Capital One credit card. After payment of attorney's fees and various other debts, however, Judy testified she was unable to make further payments on the Capital One...
To continue reading
Request your trial
-
Sickler v. Sickler
...1127 (2007) ; In re Brown, 12 S.W.3d 398 (Mo.App.2000) ; Clark v. Gragg, 171 N.C.App. 120, 614 S.E.2d 356 (2005) ; Mundlein v. Mundlein, 676 N.W.2d 819 (S.D.2004) ; Russell v. Armitage, 166 Vt. 392, 697 A.2d 630 (1997).53 See Maddux v. Maddux, supra note 33. See, also, Liming v. Damos, 2012......
-
Midzak v. Midzak
...court's application of law to fact under the de novo standard of review, with no deference to the circuit court's decisions. Mundlein v. Mundlein, 2004 SD 25, ¶ 5, 676 N.W.2d 819, 821 (citing City of Deadwood v. Summit, Inc., 2000 SD 29, ¶ 9, 607 N.W.2d 22, 25) (citations [¶ 15.] Our standa......
-
Muenster v. Muenster
...(S.D.1979)). A party cannot be held in contempt if he or she did not have the ability to pay in compliance with a court's order. Mundlein v. Mundlein, 2004 SD 25, ¶ 7, 676 N.W.2d 819, 822 (quoting Johnson, 451 N.W.2d at 295). However, "[w]hen the defense is inability to pay, the burden shif......
-
Streier v. Pike
...relevant factors, a judgment of contempt “must be based upon clear and specific findings of fact as to all material elements.” Mundlein v. Mundlein, 2004 S.D. 25, ¶ 9, 676 N.W.2d 819, 822 (emphasis omitted) (quoting Thomerson v. Thomerson, 387 N.W.2d 509, 513 (S.D.1986), abrogated on other ......