Opinion
No. COA15–227.
11-17-2015
Faye K. WILLARD, Plaintiff, v. Robert A. WILLARD, Defendant.
No brief filed for plaintiff-appellee. Michael E. Casterline for defendant-appellant.
No brief filed for plaintiff-appellee.
Michael E. Casterline for defendant-appellant.
Opinion
Appeal by defendant from order entered 23 July 2014 by Judge Lori G. Christian in Wake County District Court. Heard in the Court of Appeals 26 August 2015. Wake County, No. 06 CVD 18122.
McCULLOUGH, Judge.
Robert A. Willard (“defendant”) appeals from an order holding him in civil contempt. For the following reasons, we reverse and remand.
I. Background
Faye K. Willard (“plaintiff”) and defendant were married from 1978 to 1993. In connection with their divorce, on 17 February 1993, plaintiff and defendant entered into a separation and property settlement agreement (the “agreement”) which included provisions requiring defendant to provide various forms of support to plaintiff until such time as defendant dies, plaintiff dies, or plaintiff remarries. The support included the payment of $1,566.00 per month in alimony, the maintenance of a hospital insurance policy on plaintiff, the payment of $500.00 per year for medical expenses as additional alimony, and the maintenance of a cancer insurance policy on plaintiff.
On 13 December 2006, plaintiff filed a complaint for breach of the agreement and specific performance. In the complaint, plaintiff alleged defendant stopped making alimony payments in September 2006 and was “in default in the amount of $1898.20 per month for October, November, and December 2006 for a total of $5694.60.” Following a hearing on plaintiff's complaint in Wake County District Court on 14 August 2007, an order for specific performance was filed on 13 September 2007. Although the court indicated in the order that defendant's monthly income appeared insufficient to fully comply with the alimony provisions of the agreement, the court found and concluded that “[p]laintiff [was] entitled to an order of specific performance because the [d]efendant ha [d] engaged in a course of conduct to deliberately dissipate his resources and transfer assets from his name.” The court further explained that
[d]efendant has done this by paying for things that he had no legal obligation to pay while ignoring his contractual obligation for alimony to the [p]laintiff and by transferring assets from his name to his current wife such that [d]efendant will continue to live in his accustomed lifestyle but will have no assets against which the [p]laintiff can execute any judgment. Had the [d]efendant not dissipated his resources and transferred his assets, he would have the means to meet his alimony obligation under the ... [a]greement.
Thus, defendant was ordered to specifically perform the alimony provisions of the agreement and pay plaintiff $21,272.25 in past due alimony plus $19,301.20 in attorney's fees within fourteen days of the entry of the order.
Years later on 18 March 2013, plaintiff filed a motion for order to show cause based on defendant's alleged failure to comply with the 13 September 2007 order for specific performance and a subsequent 28 January 2008 order of contempt. Plaintiff alleged that defendant was ordered to “[c]ontinue to pay alimony, including insurance premiums, for the use and benefit of [p]laintiff and to continue to specifically perform all of the terms of the parties' contract regarding alimony payments and insurance payments[,]” but defendant has willfully failed to comply with the order in that
[d]efendant stopped paying alimony as of [December 2009]; he has never paid the total amount due under the prior order of Contempt dated 28 January 2008, [d]efendant has been held in contempt of the previous orders on 10 January 2008, 12 April 2010 and 10 May 2010. The only payments [d]efendant has made towards alimony since [December 2009] have been to purge himself of contempt. Since the last time [d]efendant was held in contempt on 10 May 2010, [d]efendant has not paid any money towards alimony whatsoever.
Based on these allegations the court ordered defendant to appear and show cause.
Prior to the hearing, defendant filed an affidavit of indigency indicating his total monthly income was $1,120.00 and his total monthly expenses were $1,100.00. The court then determined defendant was indigent and assigned a public defender.
After a continuance, the matter came on for hearing in Wake County District Court on 15 January 2014 before the Honorable Lori G. Christian. At the hearing, defendant testified that he was 86 years old and suffered from Alzheimer's disease and dementia. Defendant, however, recalled previously being held in contempt, that the court found he had transferred assets to his current wife, and that his current wife had previously taken out a mortgage on their $147,000 house to purge defendant's contempt, which his wife later worked to pay off. Defendant stated that he transferred the assets to his current wife on the advice of an attorney. Defendant also acknowledged that he had not paid alimony in the past three years, but explained that was because he had no money to pay. Defendant testified he and his current wife no longer had the accounts or property they once had because they were dissolved or sold to pay living expenses and alimony. Defendant claimed his only current source of income was social security, which he used to pay living expenses. Yet, defendant could not elaborate on those expenses because his current wife took care of them. Defendant, however, was able to identify checks written from a joint checking account he shared with his current wife to his church and to cash. Defendant also testified that his current wife had two vehicles, one of which he drove, and he had two oriental rugs of unknown value that were acquired during his marriage to plaintiff.
At the conclusion of the hearing, the trial judge announced her decision to hold defendant in contempt. In a contempt order subsequently entered on 23 July 2014, the trial court issued the following pertinent findings of fact:
5.... [A]n [o]rder for [s]pecific [p]erformance was entered on 17 September 2007 requiring [d]efendant to specifically perform the alimony provisions of the ... [a]greement....
6. There has [sic] been several contempt hearings in this case, specifically set forth in the orders of 11 September 2007, 28 January 2008, 12 March 2010 and 12 April 2010, where [d]efendant was placed in custody with purges and always has paid the purge, but has never paid any payments that are not a purge since 2009.
7. Defendant presented evidence that in spite of his age and his diagnosis of dementia, he still drives a motor vehicle and participates in finances with his current wife and writes checks for items.
8. The court notes that based on [d]efendant's evidence, the situation is virtually the same as it was in 2010.
9. The court again concludes that [d]efendant is not credible in his testimony about his finances.
10. Defendant made a contract, in the form of [a] separation agreement, which was entered in February 1993 and he made a contract to pay [p]laintiff alimony and insurance costs and even though [d]efendant did pay that for a time period, since 2006, the only way [d]efendant pays is after [p]laintiff files a[m]otion and [d]efendant has to be put in jail to make him pay.
11. Since the entry of the court orders in 2010, [d]efendant has not paid any money whatsoever to [p]laintiff other than the purge amounts to be released from jail.
12. While [d]efendant may have memory loss, he is very sharp and he understands this process because he has been through this process before and is able to speak for himself and can be sarcastic on the stand.
13. Since the entry of the last order, [d]efendant has not paid and thus accumulated arrears in the amount of $1,833.70 each month for alimony and insurance costs.
14. Since the entry of the last order, [d]efendant's bank records show that he takes significant cash withdrawals from his account totaling various amounts including $700, $200 and $1,000 and although the amounts vary, the taking of cash withdrawals is a regular pattern.
15. Defendant currently lives in a home that does not have a mortgage that he shares with his current wife.
16. Defendant is able to make regular donations to his church and pays LUMC one hundred dollars a month, but he has made no payments to [p]laintiff whatsoever.
17. The court concludes that unless [d]efendant if [sic] faced with jail time, he will not voluntarily pay [p]laintiff anything.
18. Defendant maintains his standard of living, pays his bills and owns half of the paid off home and the court concludes that [d]efendant has the ability to pay support to [p]laintiff.
19. The court has no desire to place [d]efendant in jail due to his advanced age, but [d]efendant's actions leave the court with no other choice.
....
21. The court concludes that [d]efendant has chosen to keep this case going. He testified about selling property but never said what the proceeds were used for and he has previously placed property items in his current wife's name to keep them from [p]laintiff. Defendant also keeps a positive balance in his checking account every month, is able to donate to his church and takes huge sums of cash from his checking account but was unable to tell the court what he uses the case [sic] for testifying only that it is “to pay bills”.
22. Defendant has the possession and use of a truck and has expensive oriental rugs that he kept from the marriage to [p]laintiff, and [d]efendant can sell these items as well [as] access the equity in the home to pay [p]laintiff.
23. Defendant has willfully failed to comply with the Order of this Court.
24. Defendant at this time has the ability to comply with the Order and the purposes of the Order may still be served by compliance with the order.
Based on these findings, the court concluded defendant “has willfully failed to comply with the prior order of the [c]ourt[,]” “has the current ability to comply with the Order[,]” and “is in [c]ontempt.” In addition to holding defendant in civil contempt, the trial court ordered as follows:
3. Defendant shall pay the amount of $20,000[.00] directly to [p]aintiff's attorney ... within 10 days of the signing and entry of this order.
4. If [d]efendant does not pay $20,000[.00] within 10 days of the entry of this order, [d]efendant shall be ordered to be taken into custody and held in custody by the Sheriff of Wake County, North Carolina and [d]efendant shall remain in custody until such time as he purges himself of contempt of court by the payment of TWENTY THOUSAND DOLLARS ($20,000.00) to the Wake County Clerk of Court for the benefit of [p]laintiff herein....
....
6. Defendant shall reimburse [p]laintiff her reasonable attorney's fees in the amount of $3,000.00 ... by 1 October 2014.
Defendant filed notice of appeal from the contempt order on 8 August 2014.
II. Discussion
Now on appeal, defendant contends the trial court erred in holding him in civil contempt. “The standard of review for contempt proceedings is limited to determining whether there is competent evidence to support the findings of fact and whether the findings support the conclusions of law.” Sharpe v. Nobles, 127 N.C.App. 705, 709, 493 S.E.2d 288, 291 (1997).
Article 2 of Chapter 5A of the North Carolina General Statutes governs civil contempt. Pertinent to this appeal, N.C. Gen.Stat. § 5A–21(a) provides that
[f]ailure to comply with an order of a court is a continuing civil contempt as long as:
(1) The order remains in force;
(2) The purpose of the order may still be served by compliance with the order;
(2a) The noncompliance by the person to whom the order is directed is willful; and
(3) The person to whom the order is directed is able to comply with the order or is able to take reasonable measures that would enable the person to comply with the order.
N.C. Gen.Stat. § 5A–21(a) (2013). N.C. Gen.Stat. § 5A–23(e) further provides that
[a]t the conclusion of the [contempt] hearing, the judicial official must enter a finding for or against the alleged contemnor on each of the elements set out in N.C. Gen.Stat. § 5A–21(a). If civil contempt is found, the judicial official must enter an order finding the facts constituting contempt and specifying the action which the contemnor must take to purge himself or herself of the contempt.
N.C. Gen.Stat. § 5A–23(e) (2013). In regard to these sections, this Court has explained that
[c]ivil contempt is designed to coerce compliance with a court order, and a party's ability to satisfy that order is essential. Because civil contempt is based on a willful violation of a lawful court order, a person does not act willfully if compliance is out of his or her power. Willfulness constitutes: (1) an ability to comply with the court order; and (2) a deliberate and intentional failure to do so. Ability to comply has been interpreted as not only the present means to comply, but also the ability to take reasonable measures to comply. A general finding of present ability to comply is sufficient when there is evidence in the record regarding defendant's assets.
Watson v. Watson, 187 N.C.App. 55, 66, 652 S.E.2d 310, 318 (2007) (citations and quotation marks omitted), disc. review denied, 362 N.C. 373, 662 S.E.2d 551 (2008). In addition, “[t]he order of the court holding a person in civil contempt must specify how the person may purge himself of the contempt.” Id. at 65, 652 S.E.2d at 317 (citations and quotation marks omitted). A contemnor must “have the present ability to comply with the conditions for purging the contempt before that person may be imprisoned for civil contempt.” McMiller v. McMiller, 77 N.C.App. 808, 809, 336 S.E.2d 134, 135 (1985).
In this case, defendant contends the trial court erred in holding him in civil contempt because the contempt order does not contain the required findings of his ability to comply with the prior order for specific performance or the purge condition.
Order for Specific Performance
Concerning the prior order, defendant argues the trial court's findings do not establish that he has the present ability to comply with the 13 September 2007 order for specific performance. As determined by the trial court, defendant's monthly obligation under that order was $1,833.70.
At the outset, we note the trial court found that “[d]efendant at this time has the ability to comply with the Order” in finding of fact 24. Defendant acknowledges finding 24, but argues “this ‘finding’ should actually be characterized as a legal conclusion, and this Court should determine if this conclusion is supported by properly-characterized findings.” We disagree.
This Court has accepted findings that a defendant has the present ability to pay as sufficient to support orders of civil contempt in other cases. See Adkins v. Adkins, 82 N.C.App. 289, 292, 346 S.E.2d 220, 222 (1986) (holding a finding that the defendant “currently and presently possesses the means and ability to comply” was minimally sufficient to satisfy the statutory requirement for civil contempt). In fact, in Watson, this Court made clear that “[a] general finding of present ability to comply is sufficient when there is evidence in the record regarding defendant's assets.” 187 N.C.App. at 66, 652 S.E.2d at 318 (citing Adkins, 82 N.C.App. at 292, 346 S.E.2d at 222.). Thus, we must look to the other findings and record to determine if there is support for the trial court's general finding that “[d]efendant at this time has the ability to comply with the Order[.]”
A review of the contempt order shows that findings 14, 15, 16, 18, 21, and 22 concern assets or spending habits of defendant. In summary, those findings indicate that defendant has made regular withdrawals from a joint checking account he shares with his current wife ranging between $200 and $1000, defendant lives in a home with his current wife that is free of a mortgage, defendant donates $100 per month to his church, defendant has been able to maintain his standard of living, defendant has sold property but is unable to account for the proceeds, defendant keeps a positive balance in the joint checking account, defendant has possession and use of a truck, and defendant has expensive oriental rugs. Finding 22 further indicates that defendant can sell the truck and rugs and access equity in the house to pay plaintiff.
Defendant now takes issue with these findings, claiming they do not establish a present ability to comply with the order for specific performance. Specifically, defendant contends his testimony at the contempt hearing explained that his monthly social security check was deposited in the joint checking account and the regular withdrawals from the account were to pay bills and donations to his church. Concerning the assets, defendant claims the record shows the cost of the rugs when they were purchased years prior but there is no indication of the present value of the rugs. Furthermore, the record indicates that the truck belongs to defendant's current wife and defendant owns the house with his current wife as tenants by the entireties.
We hold the trial court's findings are supported by the evidence with the exception of finding 22. Yet, finding 22 is critical to the contempt order.
While it is clear from finding of fact 9 that the trial court afforded little weight to defendant's testimony concerning his finances, we agree with defendant that the record does not support finding 22 concerning defendant's ability to use assets to comply with the order. First, it is evident from the order for specific performance that the house was owned by defendant and his current wife as tenants by the entireties and, therefore, the equity therein was inaccessible to defendant without his current wife's consent. Thus, the trial court's finding that “[d]efendant can ... access the equity in the home to pay [p]laintiff” is not supported by the evidence and does not support the determination of defendant's present ability to comply. Second, there was no evidence in the record concerning the value of the truck and rugs; therefore, it was error for the trial court to rely on defendant's ability to sell the items to comply with the order for specific performance.
We hold the trial court erred even in light of the recognition that “a failure to pay may be willful within the meaning of the contempt statutes where a supporting spouse is unable to pay because he or she voluntarily takes on additional financial obligations or divests him or herself of assets or income after entry of the support order.” Faught v. Faught, 67 N.C.App. 37, 46, 312 S.E .2d 504, 509 (1984). At the time the order for specific performance was entered on 13 September 2007, it was clear the court's determination of defendant's ability to comply with the agreement was based in part on defendant's divestment of assets to avoid support obligations to plaintiff. It is now evident the trial court continues to rely on defendant's past divestment of assets and its prior contempt orders to support its determination that defendant has the present ability to comply years later. This is evident from the trial court's finding of fact 8, in which the court found “the situation is virtually the same as it was in 2010[,]” and the court's statement while announcing its findings in open court that “[t]he [c]ourt admits that $14,000 is not a lot of money, compared to probably the amount of money [defendant]'s making, but the [c]ourt has no doubt that he has access to more money than just his Social Security. It's not the [c]ourt's job to try to figure that out.”
We hold the trial court erred in relying on its past contempt orders, especially because those orders are not in the record now before this court for review. The trial court must make sufficient findings in the contempt order concerning defendant's finances and assets to demonstrate a present ability to comply with the order for specific performance, or the trial court may make a general finding of present ability to comply that is supported by evidence in the record. In this case, we agree with defendant that the evidence and findings showed, at most, defendant had the ability to pay some amount of alimony, but did not establish defendant had the ability to comply with the order for specific performance.
Purge Condition
Concerning the purge condition, defendant also argues the trial court's findings do not establish that he has the present ability to make the ordered $20,000 payment within 10 days to purge his contempt.
In McMiller, this court made clear that the ability to have complied with a prior order is separate and distinct from the present ability to comply with the conditions for purging the contempt, which the statutes require before a person may be imprisoned for civil contempt. 77 N.C.App. at 809, 336 S.E.2d at 135. This Court then held that the trial court's finding that
[the] defendant “has had the ability to pay as ordered[ ]” ... justifies a conclusion of law that [the] defendant's violation of the support order was willful; however, standing alone, this finding of fact does not support the conclusion of law that defendant has the present ability to purge himself of the contempt by paying the arrearages.”
Id. (internal citation omitted). The Court further explained that
[t]o justify conditioning [the] defendant's release from jail for civil contempt upon payment of a large lump sum of arrearages, the district court must find as fact that [the] defendant has the present ability to pay those arrearages. The majority of cases have held that to satisfy the “present ability” test [the] defendant must possess some amount of cash, or asset readily converted to cash.
Id. In McMiller, “there was no finding relating to [the] defendant's ability to come up with $4320.50 in readily available cash.” Id. at 810, 336 S.E.2d at 136. Subsequent to McMiller, in Adkins this Court held that where there was evidence in the record of the defendant's assets and earnings, a “finding regarding ‘present means to comply’ [was] minimally sufficient to satisfy the statutory requirement for civil contempt.” 82 N.C.App. at 292, 346 S.E.2d at 222. In so holding, this Court distinguished McMiller on the basis that “[i]n McMiller the order contained no finding whatever as to that defendant's present means to purge himself of the contempt; the only finding was that the defendant ‘has had’ the ability to comply with the support order.” Id. Yet, this Court reiterated “that specific findings supporting the contemnor's present means are preferable.” Id.
In this case, although there is no specific finding or conclusion that defendant has the present ability to comply with the purge conditions, the trial court did find that “[d]efendant at this time has the ability to comply” and concluded “[d]efendant has the current ability to comply.” These determinations by the trial court are similar to those in Adkins and would normally be sufficient to support holding defendant in civil contempt given the trial court's findings regarding defendant's assets. See also Shippen v. Shippen, 204 N.C.App. 188, 191, 693 S.E.2d 240, 244 (2010). However, as discussed above, the trial court's findings regarding defendant's ability to liquidate assets or access equity in the house are not supported by the evidence. Therefore, we hold the trial court did not establish that defendant has the present ability to purge the civil contempt by paying plaintiff $20,000 within 10 days.
III. Conclusion
For the reasons discussed, we hold the trial court did not make sufficient findings to support the contempt order. As a result, we must reverse and remand.
REVERSED AND REMANDED.
Judges STEPHENS and ZACHARY concur.
Report per Rule 30(e).