Va. L. Walters v. Walters
| Decision Date | 09 March 2011 |
| Docket Number | S–10–0059.,Nos. S–09–0152,s. S–09–0152 |
| Citation | 249 P.3d 214,2011 WY 41 |
| Parties | Virginia L. WALTERS, Appellant (Plaintiff),v.Lonnie WALTERS, Appellee (Defendant). |
| Court | Wyoming Supreme Court |
OPINION TEXT STARTS HERE
Representing Appellant: Kristin Shaun Wilkerson of Trent & Wilkerson Law Office, LLC, Laramie, Wyoming.Representing Appellee: Mary T. Parsons of Parsons & Cameron, P.C., Cheyenne, Wyoming.Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.GOLDEN, Justice.
[¶ 1] The two appeals consolidated for decision in this opinion arise out of the divorce litigation between Virginia L. Walters (Mrs. Walters) and Lonnie Walters (Mr. Walters). In appeal No. S–09–0152, Mrs. Walters challenges the district court's property distribution set forth in the Judgment and Decree of Divorce filed on June 3, 2009. We affirm that judgment. In appeal No. S–10–0059, Mrs. Walters appeals from the district court's order filed on January 15, 2010, in the post-divorce proceeding that found her in civil contempt and imposed sanctions. We reverse that order.
[¶ 2] Mrs. Walters presents this statement of the issues:
I. Did the district court abuse its discretion, commit serious procedural error and/or violate a principle of law by finding Ms. Walters in contempt?
II. Did the district court abuse its discretion by punishing Ms. Walters through its distribution of property?
III. Was the district court's division of marital property clearly erroneous, against the great weight of evidence, and/or otherwise not supported by substantial evidence?
Mr. Walters presents the issues in this way:
I. Whether the district court abused its discretion, committed a procedural error, or violated a principal of law by finding the appellant in contempt of court
II. Whether the district court's division of marital property was clearly erroneous, against the great weight of the evidence or otherwise not supported by substantial evidence
In her reply brief, Mrs. Walters responds with this issue statement:
Even if Appellant were properly found in civil contempt, the district court abused its discretion, committed a procedural error or violated a principal of law by not imposing a fine based on Appellee's actual loss.
[¶ 3] The parties married on May 5, 2006; Mrs. Walters filed her complaint for divorce on August 6, 2008; and Mr. Walters filed his answer and counterclaim on August 14, 2008. No children were born to the parties. The parties pursued discovery. The district court issued mutual restraining orders that prohibited the parties from expending marital assets, other than for daily living expenses, until further order of the court. The district court issued orders to show cause to both parties concerning alleged violations of those orders but opted to determine those alleged violations at the trial.
[¶ 4] The trial consumed three full days and an hour of a fourth day, from March 24 to April 1, 2009. The primary contested issue at trial was the distribution of the marital property, although the district court also determined whether Mrs. Walters had violated a mutual restraining order as mentioned above. The district court heard testimony from twelve witnesses and considered a substantial number of exhibits, including financial records and a real estate appraisal of the parties' Cheyenne property on Cox Road. The parties' respective counsel agreed that the district court's determination of the marital property distribution would turn on the credibility of the parties. As succinctly stated by Mrs. Walters' counsel in his closing argument,
[¶ 5] The trial concluded on April 1, 2009; the district court issued its decision letter on April 15, 2009; and the district court filed the Judgment and Decree of Divorce, which incorporated by reference its decision letter, on June 3, 2009. In the decision letter, the district court explained its determination of the marital property distribution and its determination of Mrs. Walters' alleged violation of a mutual restraining order:
The determination of an equitable distribution of property is a more involved question. [Mr. Walters] operated Lonnie's Roustabout Service, LLC (LRS) in Kansas for over twenty years. The roustabout service was a Kansas limited liability company with [Mr. Walters] as the sole and controlling member. [Mrs. Walters] is also originally from Kansas, although she lived in Cheyenne at the time the parties developed what might loosely be described as a romantic relationship. Her testimony as to her earnings and occupation at the time of the marriage began was nebulous, and the Court gleaned from it only that she was trained as a paramedic and provided some form of home health care to an elderly woman living in Cheyenne.
The marriage occurred in 2006 after [Mr. Walters] asked [Mrs. Walters], whom he barely knew, to go to Hawaii with him for a vacation in January of that year. During the vacation he proposed, and she accepted. The marriage followed in May.
The story of the engagement and marriage grew more improbable as it developed. [Mr. Walters] had been quite successful in his business, and had acquired cash, real estate, and other assets. [Mrs. Walters] had around $100,000 in liquid assets, a 2004 Ford pickup, and lived in a rented mobile home. At some point before or after the marriage, depending upon whom one believes, [Mrs. Walters] became involved in [Mr. Walter's] business.
The business accounting of LRS did not adhere to standard practices. Rather than reimbursing himself for business expenses based on credit card receipts or cash payments, Mr. Walters would receive checks from the business which were deposited in a personal account or converted to cash. He does claim that he had receipts for appropriate expenses and provided them to his accountant, who would not expense any item not supported by a receipt for tax purposes. This was no doubt acceptable in a single-member LLC, since no owner was harmed, but it created a climate in which it became very difficult for the Court to analyze the transactions for purposes of the property division in this divorce action. For example, at one point Mr. Walters testified that he had written a check on the business account to Mrs. Walters before the marriage for around $3,000. The memo on the check was for mowing and painting. The logical conclusion one would draw is that LRS paid Virginia Walters for mowing and painting. However, Mr. Walters testified that he actually did the mowing and painting himself, and gave her the money to buy a wedding dress. This sort of improbable testimony about the accounting processes of LRS emanated from both parties and abounded throughout the trial.
The Court cannot shake the notion that each party may have invented a story, at least in part, to justify his or her claims with regard to the property settlement. We shall begin with Mrs. Walters. Funds in the amount of $50,000 were transferred from an account controlled by Lonnie Walters to Lonnie Walters by wire transfer, and the day after, were used by Mr. Walters to purchase a lot in Cheyenne on which a metal building was constructed and then razed, and on which a house was also constructed, as more fully discussed below. Mr. Walters' claims' concerning these funds are credible—he contends that he provided the funds for the purchase of a lot that he and Mrs. Walters had looked at and agreed upon for purposes of building a marital home, and that at closing, while he was in Kansas, she simply omitted him from the title intentionally.
Mrs. Walters claims, on the other hand, that before the marriage Mr. Walters asked her to help get his roustabout service in shape to sell (including cleaning up the books), and promised to pay her $50,000 to do so, regardless of whether the business sold or not. Mrs. Walters has no experience to speak of in accounting and none in the roustabout business. There is nothing to corroborate this claim, and the Court rejects it.
The testimony indicated that Mrs. Walters eventually took control of the roustabout service books. She paid herself about $80,000 in expense reimbursement, which she placed in accounts to which only she and her children had access. She now claims that Mr. Walters promised to pay her between $80,000 and $100,000 per year for her services for the business (in which she performed some painting, mowing and minor bookkeeping services). She testified that these amounts were to be in addition to her wages, which amounted to about $25.00 per hour, in addition to $10 per hour for her teenage son, who was not even in Kansas, the only place he could have been working for LRS, at certain times that he was receiving paychecks. Remarkably, the amounts of the expense checks adds up to approximately the $80,000 to $100,000 per year she claims to have been promised. She and her accountant characterized these as draws against the business.
Virginia Walters never owned any interest in the roustabout service, and no check to her is characterized as a dividend or draw. She wrote these checks to herself after persuading Mr. Walters to let her sign checks on the business account. No logical reason for such compensation is evident based on the services she rendered or the prosperity of the business, and there is likewise no evidence which would indicate that Mr. Walters knew of the scope of these withdrawals. Testimony indicated that Mrs. Walters kept the checkbook and business records under lock and key. The Court arrives at the inevitable conclusion that Mrs. Walters simply looted the business and segregated those funds in anticipation of this divorce.
In addition, the record is clear that Mrs. Walters violated a court order in this case. The Court entered a...
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