Rhodes v. Rhodes
| Decision Date | 01 May 2020 |
| Docket Number | 2180928 |
| Citation | 317 So.3d 37 |
| Court | Alabama Court of Civil Appeals |
| Parties | Don Franklin RHODES v. Susan Davis RHODES |
Robert E. Lusk, Jr., of Lusk Law Firm, LLC, Fairhope, for appellant.
Stephen P. Johnson of Brackin & Johnson PC, Fairhope, for appellee.
Don Franklin Rhodes ("the husband") appeals from a judgment of the Baldwin Circuit Court ("the trial court") holding him in contempt after finding that he failed to comply with certain provisions of the 2017 judgment ("the divorce judgment") divorcing him from Susan Davis Rhodes ("the wife").
The divorce judgment was entered on December 27, 2017. At that time, the parties had two minor children. The older child was 18 years old; the younger child was approximately one month shy of his 17th birthday. In the divorce judgment, the husband was ordered to pay child support in the amount of $1,137 each month, which, the trial court noted, was in compliance with the amount contemplated by Rule 32, Ala. R. Jud. Admin. The divorce judgment also included the following provision relevant to this appeal:
In the divorce judgment, the trial court also ordered that any proceeds the parties received "from a settlement or an award of damages resulting from a Deepwater Horizon/BP claim are to be split equally between the parties." If the husband had already received those proceeds ("the BP settlement"), the trial court directed that he was to "send one-half of said amount to Wife with proof of his award." If a law firm still held the proceeds, the trial court directed that firm to divide the money equally between the parties. Neither party appealed from the divorce judgment.
On August 3, 2018, the wife filed the current action ("the contempt action"), which was given a .02 designation in the trial court.1 In the contempt action, the wife alleged that, among other things, the husband was in receipt of the BP settlement but that he had failed to give the wife her share. She also alleged that, "in direct, intentional and contumacious violation" of the divorce judgment, the husband had failed to provide her with an "adequate monthly cash [sic] detail of all of the activities, income and expenses of the continued management" of the three properties owned by Rhodes Properties LLC ("Rhodes Properties"). The wife said that she understood that the three properties had been sold. However, she alleged, the husband had "failed to properly divide the proceeds" and had engaged in "self dealing." She also claimed that the husband had failed to properly dissolve Rhodes Properties. Finally, regarding issues relevant to this appeal, the wife alleged that the husband had failed to pay the amount of child support ordered in the divorce judgment.
The evidence presented at the hearing in the contempt action, which was conducted over several days, demonstrated the following. The husband testified that he believed that he had complied with the provision in the divorce judgment and the order amending the divorce judgment regarding the dissolution of Rhodes Properties. He said that the real-estate company he had hired to sell the three properties –- two rental houses and a warehouse in Loxley –- had provided the wife with "offerings, negotiations," and similar information. However, the husband said, he did not supplement the records given to the wife and did not respond to e-mails the wife had sent to him with questions about the properties.
The husband acknowledged that he did not immediately disburse any money to the wife after the sale of the two rental houses because, he said, he had "final bills" to pay. The settlement document presented at the closing of the sale of the rental houses indicated that the net proceeds paid to Rhodes Properties from the sale of the two rental houses was $13,570.79. The husband said that the closing on those sales took place in April 2018 but that he did not disburse any money to the wife at that time because Rhodes Properties had not yet been dissolved.
The warehouse in Loxley sold on May 25, 2018, for $1,340,000. After the mortgage on the warehouse was satisfied, the settlement statement indicates, Rhodes Properties received $262,417.20. Out of that amount, taxes and closing costs of $5,650 were deducted. The wife did not challenge the deduction of those expenses from the total amount from which her share was to be disbursed. However, at the trial, she did question the husband's payment of certain items on the settlement statement presented at the closing on the warehouse, including the reasonableness of a 6% sales commission in the amount of $80,400 paid to the real-estate company that had listed the warehouse, $10,000 paid to Rhodes Mechanical, which the husband owned and which he said did work for the benefit of Rhodes Properties, and a $1,000 payment for "environmental" that appears to have been deducted from the real-estate company's commission. She also questioned expenses that the husband paid to himself, as discussed later in this opinion. The husband testified that, as was the case with the sale of the rental houses, he did not immediately disburse to the wife her share of the proceeds from the sale of the warehouse because Rhodes Properties still had not been dissolved.
The husband testified that his understanding of the divorce judgment was that he was responsible for managing and dissolving Rhodes Properties. After the divorce, he said, he used $36,428.60 of his own money to pay Rhodes Properties' expenses during his management and the dissolution of that entity. He said that he repaid himself for those expenses before paying the wife her share of the proceeds from the sale of the three properties because, he said, the divorce judgment did not make him personally responsible for those expenses.
The husband explained that, after the sale of the three properties, Rhodes Properties made a gross profit of $178,449.25. From that total, he said, he deducted $36,428.60 to repay himself for the money he had spent to manage and dissolve Rhodes Properties and an additional $7,492.24 he paid for work he said Rhodes Mechanical had done on behalf of Rhodes Properties. The husband said that, after the expenses were deducted, the remaining balance was $134,529.71. He then paid the wife half of that balance, or $67,264.71.
Regarding the wife's contention that the husband had failed to pay child support as ordered in the divorce judgment, the husband testified that, when the parties' older child turned 19 in September 2018, he began paying half of the amount of child support ordered in the divorce judgment. He explained that he had paid the older child's college tuition and expenses. The husband said that he notified the court, through his attorney, of what he was doing. It is undisputed that the husband did not seek to modify his child-support obligation.
Regarding the BP settlement, the husband testified that, on December 20, 2017, he received a check in the amount of $301,161.93, representing proceeds from that settlement. At the contempt hearing, the husband testified that, in April 2018, he had given the wife $84,325.34, which, he said, was her share of the $301,161.93. He explained that he had deducted taxes from the total amount before dividing the proceeds with the wife. During the course of the litigation of the contempt action, the trial court ordered the husband to immediately pay the wife an additional $66,255.62, which was the balance of the half of $301,161.93 owed to the wife. The husband paid the wife $66,255.62 in May 2019, after being ordered to do so. He also paid the wife $6,764.63 for her share of approximately $13,000 that he had earlier received as part of the BP settlement.
On July 8, 2019, the trial court entered a judgment in the contempt action ("the contempt judgment"). Among other things not relevant to this appeal, the trial court found that the husband was in contempt for charging the wife for his expenses regarding Rhodes Properties, which, it held, was not in compliance with the divorce judgment. The trial court found that the husband owed the wife an additional $46,539.40 for the sale of the properties "as a result of his actions." The trial court also found the husband to be in contempt for his failure to pay child support as ordered in the divorce judgment. The husband was directed to pay $4,548 plus interest in unpaid child support. The husband was also ordered to pay the wife an attorney fee of $15,000.
Both the husband and the wife filed timely motions to alter, amend, or vacate the contempt judgment. On July 30, 2019, after a hearing, the trial court entered an order denying both motions. The husband then filed a timely notice of appeal on August 6, 2019.
The trial court received both oral and documentary evidence at the trial of the contempt action; therefore, the ore tenus rule applies. ...
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