Reid v. Reid

• Decision Date: 29 August 2017
• Docket Number: Record No. 1862-16-1
• Citation: Reid v. Reid, Record No. 1862-16-1 (Va. App. Aug 29, 2017)
• Parties: JANE E. REID v. ANGAS W. REID
• Court: Virginia Court of Appeals

JANE E. REID v. ANGAS W. REID

Record No. 1862-16-1

COURT OF APPEALS OF VIRGINIA

AUGUST 29, 2017

UNPUBLISHED

Present: Judges Beales, Chafin and Malveaux

Argued at Norfolk, Virginia

MEMORANDUM OPINION^* BY JUDGE TERESA M. CHAFIN

FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH

A. Bonwill Shockley, Judge

Peter V. Chiusano (Meghan M. Casey; Abrons, Chiusano & Sceviour, P.L.L.C., on briefs), for appellant.

Kenneth B. Murov (Hannah E. Carter, on brief), for appellee.

This case involves a dispute over certain interpleader funds in the context of a divorce. When Angas W. Reid ("husband") and his partner sold their business, the sale proceeds were held in interpleader by the Circuit Court of the City of Norfolk ("Norfolk Circuit Court"). Husband and Jane E. Reid ("wife") agreed that wife was entitled to a fifty percent (50%) share of any proceeds received by husband for his ownership in the business. On appeal, wife contends that the Circuit Court of the City of Virginia Beach ("Virginia Beach Circuit Court" or "circuit court") ignored the express terms of their agreement. Wife further argues that the Virginia Beach Circuit Court failed to rule on whether certain interpleader funds were subject to properly perfected and enforceable attorney's liens. For the reasons stated below, we affirm the circuit court's decision.

Background

Under settled principles of appellate review, we view the evidence in the light most favorable to the prevailing party, and we grant that party the benefit of any reasonable inferences flowing from the evidence presented. Congdon v. Congdon, 40 Va. App. 255, 258, 578 S.E.2d 833, 835 (2003). Accordingly, we view the evidence pertaining to the issues raised in wife's assignments of error in the light most favorable to husband. So viewed, the evidence is as follows.

The parties were married on June 5, 1982 and separated on February 15, 2008. Wife filed for divorce on August 7, 2009. The parties entered into a consent pendente lite order on June 21, 2010 which, among other things, stated that each party was responsible for his or her own separate debts incurred after June 1, 2010, the date of their last separation.

Husband was a fifty percent (50%) owner in Rising Tide Holding Company, LLC, and RIC Capital Ventures, LLC, (collectively, "Rising Tide"). Rising Tide was sold to AEG, Inc., in 2014. The sale proceeds, after the payment of certain debts, were deposited with the Norfolk Circuit Court in connection with an interpleader action. This action was filed to resolve any prior claims and distribute the remaining funds to the two Rising Tide shareholders, husband and his former partner, Scott Benton. The two shareholders were the subject of multiple lawsuits relating to the mismanagement of funds, claims of wrong-doing by both husband and Benton, and a suit to dissolve the companies (the "Centennial case"). Husband and Benton each filed suit requesting to be paid in whole or in part from their partner's share of the net sale proceeds.

At a hearing in the divorce case, husband and wife stipulated that wife was entitled to a fifty percent (50%) share of any proceeds received by husband for his ownership in Rising Tide. On June 25, 2015, the Virginia Beach Circuit Court entered an injunction order dictating that the proceeds were to be preserved, and enjoined the parties from disposing of the same, as well asany other marital asset. Divorce counsel for wife sent copies of this order to the attorneys involved in the interpleader action on July 23, 2015.

The interpleader action concluded with a final order of disbursement, entered on October 8, 2015. Proceeds, in the amount of $390,262.27, were disbursed from the interpleader fund to Wayne Williams, counsel for husband in the interpleader action. Counsel for wife again sent notice of wife's interest in those funds and of the injunction order to Mr. Williams in a letter on October 14, 2015. The letter also stated that "no disbursements should be made from the [proceeds which Mr. Williams was to receive] without [wife's] prior written approval."

Husband incurred significant attorney's fees with several law firms as a result of the Centennial case and other matters. All of these debts were incurred after June 1, 2010. On November 3, 2015, husband, unilaterally and without notice to wife, directed Williams to pay $15,114.40 of the interpleader proceeds to the firm of Shuttleworth, Ruloff, Swain, Haddad and Morecock ("Shuttleworth") for legal fees. These fees were incurred relating to the defense and representation of husband and his companies in a post-separation federal tax evasion investigation.

Husband and wife entered into a separation agreement on December 3, 2015. The separation agreement stated that each party was responsible for any and all debts that he or she incurred after February 15, 2008, the date of their initial separation. The separation agreement also stated that all equitable distribution claims were resolved and that the agreement settled all rights and obligations arising from the marriage. Furthermore, the agreement provided that

The parties agree that $168,000.00 (of the approximately $390,000[.00]) currently held by Williams Deloatche, PC pursuant to the Norfolk Order shall be immediately disbursed as follows:

$84,018.12 to Wife

$31,000.00 to Wife

$53,018[.00] to Husband¹

The remaining balance [of the interpleader action proceeds - $222,226.15] may be subject to attorney liens. The remaining balance, if any, shall be disbursed equally between Husband and Wife, however, counsel for the parties shall be able to discuss and negotiate the remaining claims to the balance held by Williams Deloatche. The parties agree that any and all capital gains tax liability and capital losses associated with the sale of [Rising Tide] to AEG shall be equally divided between the parties.

In December of 2015, husband unilaterally approved the disbursement of additional amounts of the interpleader action proceeds without giving any notice to wife. Husband, via Williams, disbursed $10,935 to Kelly Michaelson for tax work on December 7; $180,000 to LeClair Ryan, P.C., on December 18; and $10,262.27 to Williams Deloatche, P.C., on December 31. Williams divided the remaining $5,914.48 evenly between husband and wife. Williams notified wife of these disbursements in a letter dated December 31, 2015. Wife objected to the disbursements.

On February 3, 2016, wife filed a show cause petition against husband for unilaterally disbursing the interpleader funds without her written consent in violation of the consent pendente lite order and the injunction order. On September 28, 2016, wife filed a motion to compel the payment of her share of the disbursed interpleader action proceeds. The parties' final decree of divorce was also entered on September 28, 2016. While the final decree reserved the matter on the docket to hear the motion to show cause, it did not expressly refer to the motion to compel.²

The Virginia Beach Circuit Court held a hearing on wife's motion to show cause and her motion to compel on September 29, 2016. In ruling on the motions, the circuit court stated that"[Husband] ha[s] prove[n] by the preponderance of the evidence that [the fees were incurred to . . . preserve the [marital property]." The circuit court ruled that, although husband should not have disbursed the funds without wife's consent, husband would not be held in contempt of court. Accordingly, the circuit court dismissed wife's motion to show cause. The circuit court also denied wife's motion to compel the payment of her share of the disbursed funds. Wife appealed both decisions to this Court.

Analysis

Wife's assignments of error challenge the Virginia Beach Circuit Court's denial of her motion to show cause and her motion to compel payment under the June 21, 2015 consent pendente lite order, the June 25, 2015 injunction order, and the December 3, 2015 separation agreement. We address each motion separately.

I. Motion to Show Cause

On February 3, 2016, wife filed a motion for husband to show cause as to why he should not be held in contempt of court for disbursing the interpleader funds unilaterally, and without her written consent in violation of the June 21, 2015 consent pendente lite order and the June 25, 2015 injunction order. The Virginia Beach Circuit Court found husband was not in contempt of court despite his failure to comply with the terms of the orders.

As conceded by wife on brief and at oral argument, the Virginia Beach Circuit Court's decision declining to hold husband in civil contempt of court is not reviewable on appeal. Jenkins v. Mehra, 281 Va. 37, 48, 704 S.E.2d 577, 583 (2011). Although Code § 19.2-318 states that a judgment holding a party in civil contempt of court may be appealed to this Court, the Supreme Court has concluded "that Code § 19.2-318 does not provide appellate jurisdiction for either [the Supreme] Court or the Court of Appeals to review the judgment of the circuit court dismissing the rule to show cause and refusing to hold [a party] in civil contempt of court." Id.(emphasis added). Accordingly, we do not have appellate jurisdiction to consider the show cause decision.

II. Motion to Compel

On the same day the final decree of divorce was entered, wife filed a motion to compel payment based on the June 21, 2015 consent pendente lite order, the June 25, 2015 injunction order, and the property settlement agreement. The Virginia Beach Circuit Court denied the motion. For the reasons that follow, we affirm the circuit court's decisions.

A. Consent Pendente Lite Order and Injunction Order

A pendente lite order is an interlocutory order that becomes inoperative upon the entry of a final decree. See Code § 20-79; Beatty v. Beatty, 105 Va. 213, 215, 53 S.E. 2, 3 (1906); Pinkard v. Pinkard, 12 Va. App. 848, 851, 407 S.E.2d 339, 341 (1991).

The decree supersedes the order and disposes of it. The court speaks only through the decree, which is as eloquent in its omissions

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