Murphy v. Holland
| Decision Date | 16 December 2021 |
| Docket Number | Appeal No. 2020AP1802 |
| Parties | In re the Marriage of: James T. MURPHY, Petitioner-Respondent-Cross-Appellant, v. Nancy C. HOLLAND, Respondent-Appellant-Cross-Respondent. |
| Court | Wisconsin Court of Appeals |
¶1 When James Murphy and Nancy Holland divorced in 2010, Holland was awarded indefinite spousal maintenance as a percentage of Murphy's income. Holland appeals a subsequent judgment of the circuit court, entered in 2020, that granted Murphy's motion to terminate maintenance. She argues that the court erred when it determined that there had been a substantial change in the parties’ financial circumstances and, further, that the court's decision to terminate maintenance constituted an erroneous exercise of discretion. We conclude that the court did not erroneously terminate maintenance.
¶2 Murphy cross-appeals the provision of the circuit court's 2020 judgment and a subsequent order requiring him to pay a portion of Holland's attorney fees. We reject the majority of Murphy's arguments. However, as explained below, we conclude that the court did not make one finding necessary to support a fee award under WIS. STAT. § 767.241(1)(a) (2019-20).1
¶3 Accordingly, we reverse the portions of the 2020 judgment and the subsequent order pertaining to the attorney fee award, affirm all other aspects of the judgment and order, and remand to the circuit court for further consideration of the attorney fee issue and to make any findings necessary to support its decision.
¶4 The circuit court proceedings leading to this appeal were fact-intensive and prolonged. We limit our focus to the facts that are pertinent to the parties’ arguments on appeal. When possible, we recite the facts as they were stated in circuit court and arbitration orders, and we supplement the facts from other sources in the record as needed.
¶5 Murphy and Holland were divorced in 2010 after a thirty-year marriage. At the time of the divorce, Murphy was fifty-four years old and Holland was fifty-five. Murphy worked as an emergency room physician for multiple employers in different states, and his income fluctuated from month to month. Holland was a stay-at-home mother and homemaker.
¶6 In the months leading up to the 2010 judgment of divorce, the parties agreed that Murphy would pay indefinite spousal maintenance to Holland. However, they disagreed on the amount of the maintenance payments and other matters, such as how the parties’ substantial marital debt would be paid. The parties stipulated that they would resolve these and other contested matters through binding arbitration.
¶7 As relevant here, the arbitrator developed a plan for the parties to pay off the marital debt, and also determined the amount of maintenance and a system by which it would be paid. Specifically, the arbitrator ordered that, after paying marital debt, Murphy would pay half of his gross income to Holland (after it was adjusted for any income imputed to Holland). The arbitrator also ordered annual "true-ups" prepared by the parties’ accountant to ensure that the proper amount was paid to Holland each year. These provisions were incorporated into the 2010 divorce judgment, which also provided that disputes over the calculation or modification of maintenance would be submitted to binding arbitration.
¶8 In 2012, after Holland alleged that Murphy was hiding income, the parties once again engaged in binding arbitration with the same arbitrator. The arbitrator determined that Murphy had underpaid his maintenance obligation and ordered him to pay arrearages. The arbitrator also modified the system for paying maintenance and marital debts. Moving forward, Murphy would deposit all paychecks into a joint account, over which Holland would have exclusive control. Holland would pay both parties’ marital debts from this account, and then, after making adjustments for her imputed earnings, she would divide the remaining funds equally between herself and Murphy. The annual true-ups would continue. The arbitrator ordered Murphy to adjust his tax withholding to maximize the funds deposited into the joint account, and ordered Holland to use her best efforts "to manage bill payments in a manner that leaves sufficient funds for each party's daily personal and business activities." These changes were memorialized in an amended arbitration award, which we refer to as the "2012 arbitration award."
¶9 The parties continued to have conflicts over maintenance and arrearages. In August 2014, Holland sought and obtained contempt sanctions on the grounds that Murphy had failed to make arrearage payments ordered by the arbitrator and had stopped depositing his paychecks into the joint account.
¶10 Then, in December 2015, Murphy sought to modify or terminate maintenance based on, among other things, changes in his income and employment and the recent loss of his Medicare billing privileges as a physician.2 Murphy emailed the arbitrator, indicating that he could not pay the cost of arbitration, and the arbitrator, in turn, withdrew from participation and referred the matter back to the circuit court. During the proceedings that followed, Murphy also sought to reduce the arrearages he owed based on alleged miscalculations by the accountant who conducted the annual true-ups. Holland responded by seeking contempt sanctions on grounds that Murphy had failed to pay maintenance arrearages and was hiding income. Murphy filed his own contempt motions, alleging that Holland was willfully managing the joint account in a way that deprived him of the use of any income. By the time the proceedings were over, multiple contempt motions had been filed by both parties.
¶11 Starting in March 2017, the circuit court commenced what ended up being an eight-day trial spanning several years. The issues set for trial were the parties’ competing contempt motions, their dispute over the amount of maintenance arrearages, and Murphy's motion to modify or terminate maintenance.
¶12 After four days of trial in March and April 2017, the trial was postponed for more than two years due to uncertainty regarding Murphy's continued employment and expected income. During this time, the circuit court held numerous status conferences and hearings to address issues related to the parties’ financial circumstances and Murphy's fluctuations in income. Following a status conference, the court entered what we refer to as the "May 2018 order." In the May 2018 order, the court anticipated that the trial would resume and, at Murphy's request, the court addressed his "maintenance obligations in the interim." The court ordered that, given his "changed employment circumstances," Murphy would pay Holland "a set amount of $10,000 each month in maintenance payments effective [on a date certain] and continuing until the next hearing."
¶13 The circuit court held the final four days of trial in July 2019. During this phase of the trial, the parties entered into stipulations resolving the amount of Murphy's maintenance arrearages and the contempt motions. The parties stipulated that Murphy owed Holland $285,148.50 in arrearages, and that he would pay an additional $100,000 toward Holland's attorney fees to "purge his contempt." The parties represented that the stipulations resolved all contempt motions filed by both parties. As a result of the stipulations, the only remaining issues for trial were how Murphy was going to pay his arrearages and whether maintenance should be modified or terminated.
¶14 Following the final day of trial, but before the circuit court entered its final judgment, Murphy began working for another healthcare provider and his income increased significantly. The court held a status conference on October 25, 2019, and, at Holland's request, it entered a second interim order. This order, which we refer to as the "October 2019 order,"3 increased the monthly maintenance payments from $10,000 to $15,000 and ordered Murphy to liquidate certain accounts to pay down his arrearages.
¶15 The parties submitted proposed findings of fact and conclusions of law. Then, in September 2020, the circuit court issued its findings of fact, conclusions of law, and judgment, which we refer to as the "2020 judgment." In the 2020 judgment, the court determined that there had been a substantial change of circumstances warranting a termination of maintenance. Although Murphy had asked the court to terminate his maintenance obligation retroactively as of January 2016, the court determined that maintenance should instead be terminated in October 2020 when Murphy turned sixty-five. In broad strokes, the court determined that: both parties were at retirement age; the system set up by the arbitrator had proven to be unworkable; Holland had received substantial maintenance payments over the past ten years and could be self-supporting once Murphy paid the arrearages that he currently owed; Murphy's assets had been drained; and Murphy could not continue to pay maintenance and at the same time meet his needs and save for retirement.
¶16 At the same time, the circuit court determined that Holland's "substantial" attorney fees would "likely eat away at her ability to live," and that it was reasonable for Murphy to contribute toward the payment of those fees. Therefore, the court's 2020 judgment invited the parties’ submissions on the amount of fees it should order Murphy to pay. After considering those submissions, the court issued an order requiring Murphy to contribute a total of $102,505 payable directly to Holland's attorneys over two years.
¶17 We provide additional background about the arguments and evidence introduced during the circuit court proceedings, the stipulations resolving the contempt sanctions, and the court's reasoning regarding termination of maintenance and attorney fees as needed below.
¶18 As stated above, Holland appeals the 2020 judgment terminating maintenance, and Murphy cross-appeals the provision in...
To continue reading
Request your trial