Anne duPont Corbin v. Richard Beverley Corbin, III.

Citations: 152 A.3d 1146; 2017 R.I. LEXIS 15Docket: 13-236

Court: Supreme Court of Rhode Island; January 30, 2017; Rhode Island; State Supreme Court

Original Court Document: View Document

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In the case of Anne duPont Corbin v. Richard Beverley Corbin, III, the Supreme Court of Rhode Island addressed an appeal from the defendant, Richard Beverley Corbin, III, concerning a Family Court order related to post-final-judgment motions filed by the plaintiff, Anne duPont Corbin. The defendant argued that the trial justice erred in classifying his post-employment compensation from Wells Fargo as marital property, thereby incorrectly awarding Anne 50 percent of that amount. He also contended that if the court upheld the trial justice's findings, the attorney fees he incurred for negotiating that compensation should be considered marital debt, with Anne responsible for half. Additionally, the defendant disputed the award of counsel fees to Anne for a motion to modify child support, citing inadequate notice regarding his employment status.

The court affirmed the Family Court's judgment, which stemmed from a divorce finalized on April 9, 2009, after the parties had signed a property settlement agreement (PSA) on January 9, 2009. The trial justice's decision, issued on April 16, 2013, included the approval of Anne's motion to modify child support, the awarding of counsel fees, and a ruling compelling compliance with the PSA regarding the division of Bev’s post-employment compensation. The negotiations surrounding the PSA included a specific dispute over the treatment of future earnings, wherein the defendant’s counsel argued that potential damages related to future earnings should not be considered divisible marital assets. The trial justice's comprehensive seventy-page decision ultimately upheld the award to Anne and addressed the various motions filed by both parties.

Paragraph 7(E) of the final PSA, executed on January 9, 2009, stipulates that if the Husband receives any settlement from his claim against Wells Fargo related to his employment prior to the Final Judgment of Divorce, he must pay the Wife 40% of the net settlement amount, after deducting taxes and litigation expenses. Additionally, paragraph 10(A) mandates that the Husband must notify the Wife upon obtaining employment so that child support calculations can be adjusted according to both parties' incomes and relevant guidelines.

Bev's employment history includes a two-year agreement with Acordia RE, Inc., a Wells Fargo division, starting July 17, 2006, with a salary of $175,000. He also signed two nonsolicitation agreements, one for two years and another for one year, with the latter nullifying the former. By June 2008, tensions arose between Bev and Wells Fargo, and his initial employment agreement ended in July 2008. After working with a new supervisor, Bev faced hostility and uncertainty regarding his job security. An offer for continued employment was made on August 19, 2008, but negotiations were unsuccessful, leading Bev to initiate the dispute resolution process by contacting a department head on September 17, 2008, regarding his performance and compensation for 2007 and 2008.

After being placed on administrative leave with pay, Bev was terminated in October 2008. He later inquired about the resolution of his compensation claims, but the human resources department informed him that his claims were unsubstantiated and that he had received appropriate compensation. Following this, he was presented with a departure agreement offering $175,000. Bev expressed concern over conflicting nonsolicitation agreements, particularly about the duration of the restrictions in exchange for one year's salary.

On December 22, 2008, Bev’s employment attorney communicated with Wells Fargo's senior counsel regarding Bev’s discharge and requested a chance for Bev to comprehend the departure agreement. If this opportunity was not provided, Bev would consider legal action for the owed amount. Wells Fargo's senior counsel rejected these claims but extended the deadline for signing the agreement to January 16, 2009. Subsequently, Bev expressed willingness to settle on terms similar to Wells Fargo's proposal, suggesting revisions to specific paragraphs of the agreement.

On January 21, 2009, after negotiating the payment from $175,000 to $218,000 and including a one-year nonsolicitation clause, Bev signed the departure agreement. On February 4, 2009, Wells Fargo sent the executed agreement and a check for $138,937.29 to Bev’s attorney, who forwarded them to Bev on March 4, 2009. Bev did not cash the check immediately, citing uncertainty about his intentions, despite depositing $175,000 from another source during that time.

In April 2009, Bev began employment with EquiSales, with his first paycheck in May. While Anne claimed Bev did not inform her about this job, Bev contended that she was adequately informed through various channels, including reports from the guardian ad litem and therapists.

In April 2013, the Family Court issued a seventy-page decision after extensive hearings. The trial justice determined that Bev believed he deserved additional compensation for work in 2007 and 2008. The court found Bev's claims that the dispute with Wells Fargo was not about compensation to be incredible, clarifying that the $175,000 settlement was not for future earnings. The trial justice noted that Bev, along with his divorce and employment attorneys, had discussed the departure agreement in relation to divorce matters. However, she criticized Bev’s divorce attorney for not informing Anne’s attorney about the settlement offer before the divorce trial, stating that the tactics employed in negotiation crossed ethical limits and constituted a breach of fiduciary duty.

Anne's motion to modify child support was granted by the trial justice, who noted that the parties' PSA required Bev to inform Anne of any new employment to adjust child support in line with the Child Support Guidelines. Bev's lack of direct notification was deemed inadequate, as he attempted to deflect the question of when he informed Anne about his employment. The trial justice ruled that Bev was not entitled to benefit from his litigation expenses, totaling $22,211.25, due to prior misconduct by him and his counsel. Bev appealed the final judgment.

In the standard of review, it is established that appellate courts will not overturn factual findings from Family Court unless there is a clear error or misinterpretation of evidence. Legal questions, however, are reviewed de novo.

On appeal, Bev challenges the trial justice's classification of his post-employment compensation as marital property, arguing it should be considered nonmarital as it was future compensation. He further argues that if the trial justice's ruling is maintained, the attorney fees incurred for negotiating his departure should be classified as marital debt to be shared by Anne. He also disputes the awarding of counsel fees to Anne, claiming she was adequately notified of his employment by the guardian ad litem.

The trial justice defined Bev's compensation from Wells Fargo as back wages for 2007 and 2008, not severance pay, based on an extensive review of the record. As an at-will employee, Bev was not entitled to severance unless a valid contract existed, which was not shown. The record lacks evidence of any Wells Fargo severance policy regarding his employment.

The trial justice determined that Bev's testimony lacked credibility after evaluating his statements and the documentary evidence presented. The court upheld the principle that credibility assessments made by a trial justice are typically not overturned unless there is a clear error or misconception of material evidence. Bev contended that his separation pay qualified as traditional severance pay, which he argued should be classified as nonmarital property based on case law from other jurisdictions. However, the trial justice found that the post-employment compensation did not constitute severance pay, making the issue of whether severance pay is marital property irrelevant to the appeal.

Bev also argued that the attorney fees incurred for negotiating the departure agreement should be recognized as marital debt, with Anne responsible for half. The trial justice acknowledged that Bev was entitled to a credit for his litigation expenses but decided that he should not benefit from these costs due to the circumstances surrounding the negotiation process. Consequently, Bev remained solely accountable for these expenses.

Regarding attorney fees in divorce petitions, the Family Courts have established authority to award such fees, with the trial justice exercising discretion in determining their necessity and amount. The trial justice found that Bev failed to provide adequate notice to Anne of his new employment, which was a requirement outlined in their Property Settlement Agreement (PSA). After reviewing the evidence and the parties' arguments, the court affirmed the trial justice's findings and decisions.

Ultimately, Bev's appeal was denied, and the original order was upheld, with the case remanded to the Family Court for further proceedings.