In re Sheehan

511 P.3d 708

2022 COA 29

IN RE the MARRIAGE OF Julie Lynn SHEEHAN, Appellee, and Brian John Sheehan, Appellant.

Court of Appeals No. 20CA1109

Colorado Court of Appeals, Division IV.

Announced March 3, 2022

Aitken Law, LLC, Sharlene J. Aitken, Denver, Colorado, for Appellee

Cecelia M. Espenoza, Denver, Colorado, for Appellant

Opinion by JUDGE TOW

¶ 1 In this post-dissolution of marriage contempt proceeding, Brian John Sheehan (husband) appeals from the district court's adoption of a magistrate's judgment finding him in contempt and imposing remedial and punitive sanctions against him. Husband's challenge raises questions not previously addressed by a Colorado appellate court — questions involving the interplay between imputation of income based on voluntary underemployment and contempt findings and sanctions for nonpayment of family support. We conclude that, when considering whether a party is in contempt for failure to pay support, a court cannot base a finding that the party has the present ability to pay solely on a conclusion that the party is voluntarily underemployed.¹ But the court can consider the party's voluntary underemployment as evidence of a willful violation of the support order for punitive contempt purposes.

¶ 2 Applying this construct, we conclude that the district court magistrate improperly found husband in remedial contempt and imposed remedial sanctions. We further conclude that the magistrate's findings related to punitive contempt are insufficient to allow for meaningful review. Accordingly, we reverse the judgment and remand the matter to the district court for further proceedings consistent with this opinion.

I. Background

¶ 3 The thirty-year marriage between husband and Julie Lynn Sheehan (wife) was dissolved in May 2014. Along with their co-petition for dissolution of marriage, the parties filed a separation agreement in which husband agreed to pay wife (1) $18,419.50 as an equalization payment related to the property division within forty-eight months of the entry of the decree, and (2) $5,300 in monthly spousal maintenance until she reaches the age of sixty-seven years. The court incorporated the terms of the separation agreement into the decree as the permanent orders.

¶ 4 Almost immediately, the parties commenced a series of disputes over husband's maintenance obligation. While the prior disputes are not directly raised in this appeal, an understanding of the history is relevant to our consideration of the issues before us.

A. Husband's First Motion to Modify Maintenance

¶ 5 Three months after the marriage was dissolved, husband filed a motion to modify maintenance, asserting that his position had been eliminated and he was unlikely to find a new job at a comparable rate of pay. After a hearing in May 2015, the magistrate found that the parties’ maintenance calculation had been based on husband earning $13,750 per month, that husband had started his own business after being laid off, and that his income from that business was increasing and should increase to the point where his income would be approximately $11,000 per month (which the magistrate opined was "not significantly less" than the income on which his maintenance calculation was based).² Thus, the court found, husband had failed to establish a substantial and continuing change such that the maintenance obligation had become unfair. The court did, however, retroactively modify the maintenance obligation for the months during which husband's motion had been pending to enable husband's business to get established; specifically, the court reduced husband's obligation to $3,000 per month for three months and then to $4,000 for six months, but it ordered husband to resume paying the original maintenance amount beginning in July 2015. Based on the reduced amounts, the court determined that husband was $13,234 in arrears, which the court ordered him to pay over twenty-four months.

B. Wife's Six Prior Motions for Contempt

¶ 6 Husband immediately fell behind on his financial obligations to wife. Between August 2015 and June 2018, wife filed six contempt motions against husband for his noncompliance. Her first two contempt motions, filed in August and November 2015, alleged that husband had not timely paid either his ongoing obligation or his arrearages and sought only remedial sanctions. These first two motions were addressed in a single hearing in February 2016, at the conclusion of which the magistrate found husband in contempt.³ Reiterating her finding from the hearing on husband's modification motion, the magistrate found that husband could be making at least $11,000 per month. The magistrate ordered him to pay $16,418.79 in arrearages within sixty days and also awarded wife $4,826.50 in attorney fees. Husband ultimately paid these amounts to wife in several installments, albeit not within sixty days.⁴

¶ 7 In September 2016, wife again requested that the court issue a contempt citation. Wife asserted that husband was still not paying his support obligation and was now over $32,000 in arrears. In addition, she alleged that husband owed her an additional sum for failing to pay a debt allocated to him in the property division. This time, wife sought both remedial and punitive sanctions. In March 2017, the court again found husband to be voluntarily underemployed and, thus, willfully violating the support order. The court determined that husband's total arrearage was $30,598 and that he owed wife $4,742 in attorney fees. The court set a sentencing date in August 2017, at which time the court found that husband had purged the contempt by paying the amounts he owed under the March 2017 order.

¶ 8 Just days after the court found husband in contempt on wife's third contempt motion, wife filed her fourth such motion on March 14, 2017. Wife claimed another $22,687 in support arrears since the filing of the previous contempt motion. Wife also asserted that husband had failed to pay his share of a tax debt pursuant to the parties’ separation agreement. In September 2017, the parties resolved this fourth contempt motion by a stipulation. Husband conceded that he was in contempt and promised to pay $14,949.49 in support arrears and $1,200 for wife's attorney fees by December 18, 2017, which would be treated as a sentencing date.

¶ 9 In October 2017, two weeks after entering into that stipulation, wife filed her fifth contempt motion. In this motion, wife sought additional arrearages that had accrued since the filing of the fourth contempt motion and reiterated her demand related to the unpaid tax debt. In all, wife alleged husband owed, but had not paid, another $40,582.13. Wife again sought both remedial and punitive sanctions. In December 2017, this contempt motion was also resolved by a stipulation, whereby husband pleaded guilty to contempt and agreed to pay wife $37,721.62 in support arrears and $500 in attorney fees by June 1, 2018. The court approved the parties’ stipulation and set the matter for sentencing on June 21, 2018.

¶ 10 On June 3, 2018, wife filed her sixth contempt motion. This time, wife asserted that husband had not paid any ongoing maintenance since the filing of the last contempt motion. Again, wife sought remedial and punitive sanctions.

¶ 11 At the June 21, 2018, sentencing hearing on the fifth contempt motion, wife requested husband be incarcerated because he had not purged the contempt. The court found that husband had paid over $32,000 toward the arrears, but still owed $5,661.62. The court continued the sentencing until August to give husband the chance to purge the contempt.

¶ 12 Before that hearing, however, the parties entered into another stipulation. Wife agreed that husband had purged the fifth contempt, while husband pleaded guilty to the sixth contempt and acknowledged that he owed arrears of $46,165.45 and attorney fees of $1,400. The magistrate set a sentencing hearing for April 1, 2019, at which husband conceded he still had not paid $25,515. The court remanded husband to jail until he paid this amount. On April 11, 2019, wife's attorney filed a status report informing the court that husband had "arranged a loan through his employer secured by his future earnings and liquidation of his retirement accounts," and that the contempt had been purged.

C. Husband's Second Motion to Modify Maintenance

¶ 13 On July 5, 2019, husband filed a second request to modify his maintenance obligation. Husband noted the lengthy history of contempt motions and orders, as well as the fact that wife had filed a verified entry of judgment for $73,970.82⁵ and had begun garnishing husband's wages. Husband noted that the garnishment was not sufficient to cover his monthly obligation.

¶ 14 Husband alleged that he had been unable to obtain employment at the salary he was making when he agreed to the original maintenance obligation. He asserted that his then-current full-time position paid the highest salary he had been able to obtain — roughly half of what he had made at the time his maintenance obligation was established.

¶ 15 Husband's motion remains pending.⁶

D. Wife's Seventh Motion for Contempt

¶ 16 A few hours after husband filed his second motion to modify maintenance, wife filed her seventh motion for contempt. Wife alleged that husband owed $64,839.03 for unpaid maintenance and interest from June 1, 2018, through June 15, 2019. She also alleged that husband had not paid anything toward the $18,419.50 equalization payment required pursuant to the permanent orders. Wife requested remedial sanctions in the form of an order to pay the principal and interest due on both obligations, along with an award of attorney fees. She also requested a punitive sanction in the form of a fine or fixed period of imprisonment, or both.

¶ 17 At the contempt hearing, husband conceded that he knew of, but did not comply with, the terms of the permanent orders. His defense was that he did not have the present ability to pay wife what he owed her and that he...