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Yonker v. Yonker
Citations: 423 S.W.3d 848; 2014 WL 849879; 2014 Mo. App. LEXIS 240Docket: No. SD 32564
Court: Missouri Court of Appeals; March 3, 2014; Missouri; State Appellate Court
Valerie Kay Yonker (now Boyce, Ex-Wife) appeals a contempt judgment and order of commitment due to her failure to pay $250,000 to her ex-husband, Scott Damian Yonker (Ex-Husband), as stipulated in their dissolution judgment. She argues that the trial court abused its discretion in finding her in contempt, claiming she lacked the financial ability to pay. Additionally, she challenges the order of commitment, asserting it was not supported by substantial evidence of her ability to pay either at the time of trial or at the time of the order. The court affirms the contempt judgment but reverses the order of commitment, indicating a lack of substantial evidence regarding Ex-Wife's ability to purge the contempt. The opinion outlines that a trial court's civil contempt judgment must be upheld unless it lacks substantial evidence, is against the weight of the evidence, or misapplies the law. Judicial discretion is deemed abused if the ruling is unreasonable or lacks careful consideration. The court notes a dispute over the deference owed to the trial court regarding credibility of witnesses versus documentary evidence, with Ex-Wife arguing for de novo review of the latter based on precedent.
Most evidence in this case is documentary and not subject to the deference rule. Prior opinions referenced precede the Missouri Supreme Court's ruling in *Business Men’s Assur. Co. of Am. v. Graham*, which states that appellate courts defer to trial courts as fact-finders regarding substantial evidence and the weight of evidence, even if derived from pleadings and depositions. The appellate court finds the appellant's argument inconsistent with the Missouri Supreme Court's ruling in *White v. Director of Revenue*, which allows the trier of fact to believe or disbelieve uncontradicted evidence. Consequently, if the trier of fact disbelieves the evidence from the burden-bearing party, it can rule for the opposing party. The appellate courts, following the *Murphy v. Carrón* standard, accept evidence favorable to the trial court's judgment while disregarding contrary evidence.
Regarding the facts, the parties were divorced on February 3, 2009, under a settlement agreement that included a property division. Ex-Wife was to make two cash payments to Ex-Husband: the first payment of $300,000 was made upon the dissolution judgment, and a second payment of $250,000 was due within two years, secured by a promissory note with 6% interest. Ex-Husband filed a motion for contempt on January 9, 2012, after Ex-Wife admitted not paying the second amount and claimed financial inability to comply. During the contempt hearing, the court acknowledged its files and heard testimony from Ex-Husband regarding the agreement on payment timing due to asset liquidation. Ex-Wife made a partial payment of $240,000 from her bank accounts and had over $632,800 in cash after her initial payment.
Ex-Wife utilized funds from the first bank to reduce a loan on vacant land linked to her business. From the second bank, she spent $59,000 shortly after the divorce as a down payment on a house and used the remainder for living expenses. After March 2010, she allocated funds from the third bank for monthly bills. Ex-Wife also acquired a 25% interest in Kensington Park Apartments, valued at $650,000 during the divorce, and received approximately $104,000 in distributions from it in 2009. By March 2010, this entity split into two companies, maintaining ownership percentages. Ex-Wife’s first bank held $67,200 as collateral for a loan on the vacant land, which was refinanced under Kensington Park Investments, with Ex-Wife pledging $140,502.76 as security. In 2010 and 2011, Ex-Wife received substantial distributions from both companies, totaling over $100,000.
Ex-Wife was awarded four rental houses, but only one had equity estimated at $10-15,000. After the divorce, she purchased and sold another house for a profit of $18,000, which she did not apply toward her obligations to Ex-Husband. She ran a real estate business, Boyce Homes, and had a realtor’s license. Ex-Husband demanded a second payment in January 2011, which Ex-Wife could not make. She invested $41,000 in an Orange Leaf Yogurt shop in July 2011 but received no distributions. Ex-Wife traded a 2007 Cadillac Escalade for a 2010 model, receiving $10,000 back, which she used for bills instead of paying Ex-Husband. In her vehicle loan application, she claimed an income of $100,000, but a separate credit application listed her income at $250,000. By November 2011, Ex-Husband initiated garnishments to collect the payment, but these efforts were unsuccessful, and Ex-Wife did not appear for a judgment debtor examination. The summons issued for her was returned as non-deliverable.
Ex-Husband incurred attorney fees of $21,066.82 related to the contempt hearing, supported by a Statement of Attorney’s Fees (Ex-Husband’s Exhibit 28). Six weeks prior to the hearing, Ex-Wife sold 99% of her interest in Kensington Park Apartment Homes for $45,000 and 99% of her interest in Kensington Park Investments for $20,000, with payments structured as promissory notes over twenty years. Ex-Wife also incurred $4,000 in legal fees for these transactions. Following the evidence presentation, the trial court set deadlines for filing briefs and proposed judgments. On May 3, 2012, Ex-Wife filed for bankruptcy, prompting a stay of all proceedings. In October 2012, the court issued an order staying Chapter 13 proceedings pending a state court contempt case resolution. The trial court rendered a Judgment of Contempt on October 19, 2012, determining that Ex-Wife had the ability to comply with the dissolution judgment but had willfully failed to do so, resulting in a contempt finding and an order for her incarceration. The incarceration was stayed pending her compliance with a Purge Order requiring payment of $250,000 within 60 days. Ex-Wife was additionally ordered to pay interest on overdue payments and Ex-Husband’s attorney fees, though these were not conditions for purging contempt. On January 18, 2013, Ex-Husband filed a notice regarding the dismissal of Ex-Wife's bankruptcy case, which was deemed to have been filed in bad faith. On January 22, 2013, the trial court issued a commitment judgment, reiterating Ex-Wife's intentional contempt and failure to comply with the dissolution judgment. It amended the Purge Order, mandating Ex-Wife to pay $50,000 by January 31, 2013, and $200,000 by May 1, 2013, with immediate commitment to jail for missed deadlines.
A hearing on January 31, 2013, determined that Ex-Wife failed to purge the commitment judgment, leading to the trial court ordering her to post a $50,000 bail. Ex-Wife subsequently filed an appeal against both the October 19, 2012 contempt judgment and the January 22, 2013 commitment judgment.
To establish civil contempt, the party must prove two elements: the contemnor’s obligation to perform as required by the decree, and the failure to meet that obligation. Ex-Wife acknowledged that Ex-Husband established a prima facie case of contempt by showing her failure to make a payment by February 3, 2011, as mandated by the divorce judgment. Once this case is established, the burden shifts to the alleged contemnor to prove financial inability to pay without it being a result of intentional conduct.
Ex-Wife contended that the trial court's finding of her ability to pay was unsupported by substantial evidence. The court noted that after her first payment to Ex-Husband, she had over $333,000 in cash as of February 2009, and after a $59,000 down payment on a house, she retained over $274,000 in cash. Despite her claims of spending significant amounts on land debt and living expenses, the court found her explanations unconvincing. It also noted that she had transferred business interests valued at $650,000 to evade debt collection, and that the transfers occurred after the contempt motion was filed. The court concluded that Ex-Wife's actions indicated intentional contempt, as she made decisions to pay certain debts and transfer ownership to her brothers without necessity.
Ex-Wife's arguments regarding her financial decisions and claims of diminished asset values were dismissed by the court, which found substantial evidence supporting its conclusions regarding her intentional conduct in failing to pay Ex-Husband.
Ex-Wife cites Fugitt v. Fugitt as a relevant case where the appellate court upheld the trial court's decision not to find contempt, emphasizing that the motion for civil contempt is at the trial court's discretion and will only be overturned for clear abuse of that discretion. The trial court did not accept Ex-Wife's claims regarding her financial situation, concluding she either could comply with the dissolution judgment or had intentionally made herself unable to do so.
In her second argument, Ex-Wife asserts that the trial court abused its discretion in finding she could purge herself of contempt, arguing that her financial status did not support this conclusion. Legal precedent dictates that commitment for contempt is only appropriate if the contemnor has the present ability to comply with the court's order. If not, an alternative purging method must be specified. Previous cases highlight that findings necessary for contempt differ from those for commitment; a trial court must establish the contemnor's ability to pay to justify imprisonment. Although evidence suggested Ex-Wife might be able to pay the owed amount, the court remanded the case due to a lack of a specific finding regarding her ability to do so. Additionally, it was noted that without established current financial capability, imprisonment for civil contempt is unwarranted, leading to directions for discharge from custody in similar past cases.
A contemnor must have the ability to purge themselves of contempt to be imprisoned for failing to pay a court-ordered amount, as the purpose of civil contempt is to compel compliance rather than to punish. Sanctions in civil contempt cases are designed to coerce compliance, meaning the contemnor should be able to terminate the sanction through compliance. If the contemnor cannot pay, the coercive intent of civil contempt is ineffective. Moreover, previous ability to pay does not imply current ability. In the case at hand, delays caused by the Ex-Wife's bankruptcy filing, which was dismissed, did not negate the requirement that she had the means to purge her contempt at the time of commitment. The court found no explicit determination that she had this ability at the time of her incarceration. Even if such a determination had been made, insufficient evidence existed to support it. Consequently, the commitment judgment was reversed, and the case was remanded for further proceedings. The court also noted that a claim regarding the weight of evidence must demonstrate why the favorable evidence lacks probative value, which the Ex-Wife failed to do, leading to the abandonment of that argument. The appellate review of court-tried cases is conducted de novo, with due regard to the trial court's credibility assessments.
In Menos v. Hodges, the reviewing court conducts a de novo review, considering only admissible evidence and excluding improperly admitted parol evidence, leading to a determination that no conflict exists in the record. When only documentary evidence is presented, witness credibility does not factor into the analysis. The court focuses on the legal effect of the documentary evidence, including the construction and disbursement of an escrow agreement, which is a matter of law for appellate review. A prior ruling in Kimberling N. Inc. v. Pope that suggests deference to trial court credibility judgments is not applicable when the facts derive from written documents. Ex-Wife claims that documentary evidence should always be viewed as more credible than oral testimony in cases of conflict. Evidence includes Ex-Husband's tax returns showing discrepancies in company names, and a property bond posted pending appeal, which grants the appellate court jurisdiction. On February 1, 2013, Ex-Wife was allowed to postpone incarceration by posting $50,000 in cash bonds. If the contemnor does not claim inability to pay, the court assumes financial ability remains unchanged. Ex-Wife conveyed a 24% interest in Kensington Park Investments and testified about her anticipated salary and the refinanced debt on the land, which totaled $668,615.61. An appraiser valued the apartment complex at $14.9 million and the vacant land at $640,000.
Ex-Wife cites Caldwell v. Caldwell to argue against a contempt and commitment order, emphasizing that the original ruling lacked factual detail and was therefore insufficient. In contrast, the current case contains specific findings regarding Ex-Wife's intentional actions leading to contempt. The trial court found that Ex-Husband acted in a way that prevented him from paying child support and justifiably ordered his commitment until he purged the contempt. The court modified the judgment to retain jurisdiction until the contempt is purged and indicated that if Ex-Husband cannot purge within a reasonable timeframe, alternative solutions like a work-release program may be considered.
The commitment judgment revealed that Ex-Wife had the ability to comply with the contempt order but willfully chose not to, using ambiguous language ("and/or") that created confusion. This ambiguity necessitated a remand, as it was unclear if the commitment was based on Ex-Wife's ability to purge at the time of her commitment. Ex-Husband contends that Ex-Wife waived her argument regarding the judgment's language by not raising it earlier. However, the circumstances differ from Sneil, LLC v. Tybe Learning Ctr., as Ex-Wife's claims focus not just on the judgment's form but also on substantive issues regarding evidence and legal misapplication concerning her ability to purge contempt at the time of her incarceration.