Wheeler v. Wheeler

JON S. WHEELER v. KIMBERLY R. WHEELER

No. 1392-20-1

Court of Appeals of Virginia

August 3, 2021

FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH Leslie L Lilley, Judge

Brandon H. Zeigler (LeeAnne C. Schocklin; Parks Zeigler PLLC, on brief), for appellant.

Emily K. Miller (Julia E. Keller; Victoria V. Humphreys; Keller Law Group, on brief), for appellee.

Present: Judges Huff, Malveaux and Senior Judge Annunziata Argued by teleconference

MEMORANDUM OPINION ^[*]

ROSEMARIE ANNUNZIATA, JUDGE

Jon S. Wheeler (husband) appeals the circuit court's order finding him in contempt of court for failing to comply with the parties' separation agreement. Husband argues that the circuit court erred in finding him in contempt for his failure to remove Kimberly R. Wheeler's (wife) name from certain real property and to list that property for sale. Husband also contends that the circuit court erred in awarding attorney's fees to wife and denying his request for an award of attorney's fees. We find no error and affirm the decision of the circuit court.^[1]

BACKGROUND

"When reviewing a [circuit] court's decision on appeal, we view the evidence in the light most favorable to the prevailing party, granting it the benefit of any reasonable inferences." Mills v. Mills, 70 Va.App. 362, 368 (2019) (quoting Kahn v. McNicholas, 67 Va.App. 215, 220 (2017) (alteration in original)).

In October 2018, husband and wife signed a separation agreement, which was incorporated into their final decree of divorce. The separation agreement included a provision stating that certain real property, including 54033 Marlin Drive in Frisco, North Carolina ("the Fin City property"), would be husband's sole and separate property. The separation agreement further provided that:

Until [wife's] name is refinanced off of the property known as "Fin City" the property shall remain listed for sale at an agreed upon price. If the property sells for less than is owed on it, then [husband] is solely responsible for whatever is necessary to bring clear title to the closing table. From the signing of this Agreement until either [wife's] name is refinanced off of the property or it is sold, [wife] shall have no right to use, occupy, rent, visit or otherwise have a say in how "Fin City" is managed, run, used or occupied. Further, she shall have no right to any depreciation or tax benefits resulting from ownership. Likewise, she shall be held completely harmless and be indemnified from any debt, lien, repair, tax, mortgage or bill related to this property. [Husband] shall use his best efforts to have [wife's] name removed as an obligor from all financial obligations related to this property within 365 days of the signing of this Agreement.

In addition, the parties agreed that "[e]very duty imposed by this Agreement imposes also an obligation of good faith, cooperation, due diligence, best efforts and honesty in fact in its performance or enforcement."

On November 8, 2019, wife filed a petition and affidavit for rule to show cause, alleging that husband had failed to list for sale or refinance the Fin City property. The parties first appeared before the circuit court on January 14, 2020.^[2] Husband argued that he had used his "best efforts" to remove wife's name from the note associated with the Fin City property. He claimed to have contacted the bank about a refinance, but because the debt exceeded the value of the property, it could not be refinanced without additional collateral. The property needed repairs to increase its value. Husband proffered that he had applied to the North Carolina Disaster Relief fund for aid with the repairs, and he had contacted contractors for estimates. Wife argued that she had not seen anything regarding husband's efforts to refinance or repair the property.

Furthermore, husband argued that he had tried to list the property for sale. He had signed a listing agreement to sell the Fin City property for $938, 255, which was a value he determined would cover the debt and repairs. Wife, however, refused to sign the listing agreement because the price was too high for the market. After hearing the arguments, the circuit court continued the matter for six months to afford husband additional time to refinance or sell the Fin City property.

On January 23, 2020, the circuit court sent a letter to counsel because it "want[ed] to be clear about expectations for the new date." The circuit court "expect[ed] and encourage[d] the parties to communicate with each other through their attorneys." The circuit court directed the parties to exchange documents regarding the efforts made to sell or remove wife's name from the Fin City property and to be prepared to present that information at the next hearing if the matter remained unresolved.

On July 1, 2020, the parties appeared before the circuit court for their second hearing. Wife requested that husband be found in contempt. Wife informed the circuit court that she had not received any documentation, other than "one page," supporting husband's claims that he had attempted to refinance the mortgage on the Fin City property. She also was concerned that the Fin City property had "fallen [in]to substantial disrepair." In fact, husband had signed a new listing agreement, without wife's signature, for a reduced price of $725, 000. The realtor removed the Fin City property from the market after seven days, however, due to safety concerns at the property and the need for certain repairs. Wife asked that husband "cure those safety issues" and list the Fin City property for sale at a price recommended by the realtor because husband's suggested price was too high.^[3] Wife also requested an award of attorney's fees.

Husband argued that the parties' separation agreement required the parties to list the Fin City property for sale "at an agreed upon price," and he did not agree with the realtor's suggested price. He explained that he had tried to list the Fin City property for sale, but wife had not cooperated with his efforts. Husband also proffered that he had contacted the bank about refinancing the property.

Wife moved to introduce a deposition transcript from a realtor regarding the Fin City property. Husband objected to the transcript because he had not cross-examined the witness. The circuit court continued the matter to give husband an opportunity to review the deposition. Notwithstanding the continuance, the circuit court found that husband "had not listed the 'Fin City' property in good faith or removed [wife's] name from the property in violation . . . of the separation agreement." The circuit court forewarned husband that "[a]ttorney's fees are running."

The parties appeared before the circuit court for a third hearing on September 2, 2020. Husband informed the circuit court that the Fin City property had been listed for an agreed price of $635, 000. The parties had received an offer of $535, 000, but husband had rejected it.^[4]Husband also had received estimates and entered contracts for some of the necessary repairs, but wife indicated that the only completed repair was a minor repair to the air conditioning. Husband testified that he expected the repairs to start in October and take approximately sixty to ninety days to complete. Wife told the circuit court that she still had not received any documentation to substantiate husband's purported efforts to refinance the Fin City property. Wife again argued that husband should be held in contempt and asked for an award of attorney's fees. Over wife's objection, husband requested an award of attorney's fees for matters previously withdrawn by wife.^[5] After hearing the evidence and argument, the circuit court took the matter under advisement.

On November 12, 2020, the circuit court issued a letter opinion. The circuit court found husband in contempt for his failure to comply with the parties' separation agreement by not removing wife's name from the Fin City property and failing to list the Fin City property for sale "in good faith." Accordingly, the circuit court ordered husband to ten days in jail but afforded him the opportunity to purge the contempt and jail sentence by complying with the terms of the separation agreement by February 5, 2021. The circuit court awarded $7, 500 to wife for her attorney's fees, finding that she had successfully enforced the terms of the separation agreement. The circuit court denied husband's request for attorney's fees because the parties, by agreement, had removed the other issues from the show cause petition, so the circuit court did not decide them. The circuit court entered an order memorializing its ruling on the same day. This appeal followed.

ANALYSIS

Contempt

Husband argues that the circuit court erred in finding him in contempt of the parties' separation agreement. "[W]e review the exercise of a court's contempt power under an abuse of discretion standard." Mills, 70 Va.App. at 373 (quoting Zedan v. Westheim, 60 Va.App. 556, 574 (2012)) (alteration in original). "[A] trial court by definition abuses its discretion when it makes an error of law." Id. (quoting Zedan 60 Va.App. at 574) (alteration in original). Where the circuit court heard evidence ore tenus, its factual findings may not be disturbed on appeal unless plainly wrong or unsupported by the evidence. Id.

"'[T]o hold a litigant in contempt, the litigant must be "acting in bad faith or [in] willful disobedience of [the court's] order."'" Koons v Crane, 72 Va.App. 720, 737 (2021) (quoting Zedan, 60 Va.App. at 574-75 (second and third alterations in original)). "In a show cause hearing, the moving party need only prove that the offending party failed to comply with an order of the trial court." Id. "Once the movant proves noncompliance ...