Opinion
21-17539 21-17539
03-17-2022
H. F., PETITIONER, v. J. F., RESPONDENT.
ORDER
JAMES G. MCGIFFIN, JR., JUDGE
Rule to Show Cause-Ancillary Matters
Before the HONORABLE JAMES G. McGIFFIN JR., JUDGE of the Family Court of the State of Delaware:
On February 8, 2022, the Court convened on Petition - Rule to Show Cause related to the June 22, 2020, Order that resolved matters ancillary to the divorce of H-----F-----(Ex-Wife) and j- f-----(Ex-Husband). Ex-Wife appeared with counsel Kara Swasey. Ex-Husband appeared with counsel Daniel Huestis.
The parties were married from September 12, 2015, until November 26, 2019. They entered a Stipulation and Order Resolving Ancillary Matters Pursuant to Decree of Divorce on June 22, 2020. The Order included a child support provision requiring Ex-Husband to make to Ex-Wife 18 payments of $3,266.67 (current support plus arrears), followed by monthly payments of $2,100 (current support). The support payments were to begin August 1, 2020. The parties agree that Ex-Husband failed to make the child support payments as ordered. He recently paid Ex-Wife a lump sum of $36,466.72, his arrearage at the time of payment. Ex-Husband intended this payment to bring his child support obligation current.
The Stipulation and Order also included a provision requiring Ex-Husband to "indemnify, defend and hold [Ex-]Wife harmless from any tax debt incurred during the marriage." Ex-Husband acknowledges that he has not yet paid the taxes due for 2017 through 2019. The Internal Revenue Service intercepted Ex-Wife's 2017 tax refund for $5,334, representing the parties tax debt for that year. The parties received notice from the I.R.S. that they owe $24,935.27 in tax debt for 2018, and $21,419 for 2019.
The evidence established that the parties filed their 2019 tax returns separately. Ex-Wife suggested that the action threatened against Ex-Wife by the I.R.S. is an error by the I.R.S, as the debt is solely Ex-Husband's responsibility.
CLAIMS AND DEFENSES
Ex-Wife seeks an order holding Ex-Husband in contempt and authorizing her to apply Ex-Husband's $36,466.72 payment to reimbursement for the intercepted refund and to the outstanding tax bill for 2018. Ex-husband would remain in arrears on child support in the corresponding amount.
$5334 + $24,935,27 = $30,269.27.
Ex-Husband defends against these claims by advancing these points:
1. Compliance with the Stipulation and Order is not enforceable by civil contempt.
2. His income reduced to the point that he could not make the tax payments ordered.
3. The Stipulation and Order included no requirement that the tax debt be paid by a date certain.
4. The tax debt for 2020 was inflated because Ex-Wife wrongfully claimed two of the parties three children as dependents for income tax purposes. Ex-Husband proffered that the parties agreed to a shared placement arrangement by which the children spent an equal number of nights with each parent. Under I.R.S. Rules for
Claiming a Dependent, the parent with the higher Adjusted Gross Income (Ex-Husband) may claim the children as dependents. The inflated tax debt impaired his ability to pay the tax debts for the previous years. Ex-Husband seeks a credit against Ex-Wife of $4,000.
1.R.S. PUB. 501 (Jan. 2021).
ANALYSIS
Family Court judges do not agree about the applicability of civil contempt to a violation of an ancillary agreement made an order as in this case. One school of thought holds that when an agreement becomes an order it remains an agreement for enforcement and civil contempt is not available. The other school of thought recognizes that the Court treats a stipulation and order as a contract for interpretation, modification, and revision but may enforce the stipulation and order by civil contempt. Interestingly, both schools of thought cite as authority the Delaware Supreme Court case Rockwell v. Rockwell, 681 A.2d 1017 (Del. 1996).
see Brown v Green, 2020 WL 3127381 at *2, Del. Fam. Ct. May 4, 2020; Hawthorne v. Jameson, 2006 WL 4555232 at *6, Del. Fam. Ct. Oct. 7, 2006.
see S.S. v F.S., 2020 WL 2614629 at *1, Del. Fam. Ct. May 22, 2020; NR.A v. GL.S, Sr., 2005 WL 3593636 at *4, Del. Fam. Ct. Jun 22, 2005; McClintock v McClintock, 1998 WL 668013 at *6, Del. Fam. Ct. Apr. 14,1998.
2014 WL 1003588.
My review of Rockwell does not help me resolve the question of enforcement of the agreements reduced to order. Rockwell states:
We hold that when the Family Court is asked to modify or terminate an alimony award that is set forth in a court order, pursuant to an agreement of the parties, the proper standards are the same that are generally applicable to modification, reformation, or rescission of contracts.Rockwell is silent on enforcement of the agreement and order.
Rockwell, at 1021.
An example of the pro-contempt school of thought is Peyton v. Peyton, 152 A.3d 582 (Del 2016). Wife filed a petition for a rule to show cause claiming Husband violated the agreement and order that resolved their dispute over maters ancillary to their divorce. The Family Court found by clear and convincing evidence that Husband was in civil contempt of the agreement and order. The Delaware Supreme Court affirmed the Family Court in a tacet, or at least implied, approval of the process. A very recent example of similar circumstance is Cook v. Cook, a 2022 Delaware Supreme Court decision affirming the Family Court in holding an ex-husband in contempt for violating several terms of the Property Division Stipulation and Order that resolved their issues.
2016 WL 7212306.
2022 WL 533731, Del. Feb. 23, 2022.
I find that Ex-Wife's invocation of civil contempt is appropriate.
A party may file a Petition - Rule to Show Cause if that party believes the other party is in contempt of an existing Family Court order. This Court has explained that:
[t]hree criteria must be met to support a finding of contempt: 1) there must exist a valid mandate, judgment or order; 2) the alleged contemptor must have had the ability to abide by the valid mandate, judgment or order; and, 3) the alleged contemptor must have, in fact, disobeyed the mandate, judgment, or order without just cause.
Watson v. Givens, 758 A.2d 510, 512 (Del. Fam. Ct. Nov. 10,1999) (citations omitted).
In a contempt action, the petitioner must prove the violation by clear and convincing evidence.
Watson, 758 A.2d at 512.
Ex-Husband does not suggest there is any question about the validity of the June 22, 2020, Order, but he argues that the Order does not require he pay the marital tax debt by a date certain. The Order is meaningless if Ex-Husband has an unlimited amount of time to satisfy his obligation. "Where a valid separation agreement fails to specify a time for performance, the Family Court has found that a reasonable time can be implied." The Order is enforceable once Ex-Wife suffers a loss, which triggers Ex-Husband's obligation to indemnify her. The evidence is clear and convincing that Ex-Wife suffered a loss of $5,334 and that Ex-Husband failed to indemnify her.
Harris v. Frank-Harris, 2014 WL 1003588 Del. Mar. 7, 2014, quoting with approval E.F.L v. J.M.D., 2002 WL 1929538 at *5, Del. Fam. Ct. Jan. 8, 2002.
Ex-Husband claims he could not abide by the Order. Ex-Husband testified that he suffered a reduction in income in October 2020. Though unfortunate, this fact is not determinative. The income on which the couple was taxed in 2017 and 2018 was earned in 2017 and 2018 and due to be paid in 2018 and 2019. Ex-Husband proffered no evidence about an inability to meet this tax obligation when it was timely to do so. Ex-Husband had a duty of good faith and fair dealing upon the entry of this agreement in June 2020. He had a plan then. His failure to pay his taxes timely does not constitute just cause.
"[E]very contract includes an implied duty of good faith and fair dealing between the parties." Harris, at *2, quoting Williston on Contracts § 63.22 (4th ed. 2004).
Ex-Husband raised a claim of his own that merits attention. The claim is irrelevant to contempt, but relevant to relief for contempt. The record of litigation between these parties includes an August 27, 2019 Order indicating that Ex-Wife has placement of the children. But Ex-Wife testified that in 2020 she and Ex-Husband practiced a "50%" placement arrangement.She changed her testimony on re-direct examination, led by counsel to claim that the children spent more overnight time with her than with Ex-Husband. Ex-Wife's testimony opened a door for Ex-Husband to present evidence to support his claim he enjoyed the same amount of overnight time as Ex-Wife. Family Court rules place the burden of clear and convincing proof on Ex-Husband in this circumstance. Ex-Husband presented nothing to satisfy that burden. Ex-Husband's claim for a credit of $4,000 against that which he owes to Mother is denied.
F.- v F.-f Pet Nos 19-14541,19-14314, 19-15042, Exh. A.
Ex-Wife testified, "For 2020 it was 50% custody."
Ms. Swasey: "Ms. F-----, although your custody agreement says that you have shared residential placement, do you have more overnights ... in 2020 and 2021 than Mr. F-----did?" Ex-Wife: "Yes. I have had more overnights than Mr. F--."
Del. Fam. Ct. R. Civ. P. 505(c)(1).
ATTORNEY FEES
Ex-Wife seeks an award of attorney fees as relief. "The Family Court has the power to determine and punish civil contempt[,] which includes the assessment of fees, costs, and fines."As Ex-Wife has suffered financial loss because of Ex-Husband's contemptuous behavior, her financial circumstances and Ex-Husband's blatant failure merit an award of fees Ex-Wife incurred. Ex-Wife did not prevail on all her claims, so the Court will consider awarding to her a portion of the total fees incurred.
Cook, at *5, quoting 10 Del. C. § 925(3), (10).
ISSUE IN AGREEMENT
The Parties Agree that Ex-Wife shall provide health insurance for herself and the children of the parties.
CONCLUSION
Ex-Husband is in contempt of the June 22, 2020, Stipulation and Order for his failure to satisfy the 2017 tax debt. Ex-Wife shall attribute $5,334 from Ex-Husband's recent payment to her as a remedy to make her whole after the tax intercept she suffered. That $5,334 sum is a child support arrearage.
Ex-Wife shall provide health insurance for the children of the parties.
Ex-Wife's counsel shall submit an attorney fee affidavit with a form of order requiring payment directly to counsel.
IT IS SO ORDERED this 17 day of MARCH, 2022.