Tracy R. via (n/K/A/ Tracy R. Gray) v. Gary B. Via ( 2022 )

RENDERED: AUGUST 26, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-0469-MR
TRACY R. VIA (N/K/A TRACY R. APPELLANT
GRAY)
APPEAL FROM MCCRACKEN CIRCUIT COURT
v. HONORABLE BRANDI H. ROGERS, SPECIAL JUDGE
ACTION NO. 16-CI-00032
GARY B. VIA APPELLEE
OPINION
AFFIRMING
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BEFORE: ACREE, CALDWELL, AND K. THOMPSON, JUDGES.
THOMPSON, K., JUDGE: Tracy Gray, formerly Tracy Via, appeals from an
order of the McCracken Circuit Court holding her in contempt for failing to
comply with her marital settlement agreement, the terms of which were
incorporated into the divorce decree entered by the circuit court. As the circuit
court acted appropriately in accordance with its civil contempt powers, we affirm.
Tracy and Gary Via were married on August 31, 1996. Tracy filed for
divorce on January 15, 2016. Tracy and Gary were both represented by counsel
and ultimately entered a marital settlement agreement (the settlement). On August
31, 2016, the circuit court entered a dissolution decree which specifically
incorporated the settlement, stating as follows:
The Marital Settlement Agreement entered into by and
between the parties wherein and whereby all matters
pertaining to division of property, maintenance, and
payment of debts, have been agreed upon, is made a part
of this Decree; and the parties are bound by the
provisions thereof and are ordered and directed to
comply therewith.
The settlement required Gary to pay $900 per month in maintenance
to Tracy for a period of three years, beginning September 2016 and ending
September 1, 2019. However, the settlement also recognized that Tracy had an
expectation of receiving a substantial inheritance in the near term which could,
potentially, make continuing maintenance payments inequitable. Specifically, the
settlement states in relevant part:
In the event TRACY receives any inheritance, the parties
acknowledge that inheritance shall be characterized as
TRACY’S non-marital property. GARY shall have no
claim to any inheritance other than that he reserves the
right to request a modification of his maintenance
obligation in the event the inheritance is significant
enough to make the current obligation unconscionable.
And further:
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The parties acknowledge TRACY has an expectancy of
an inheritance. TRACY shall be under an obligation to
provide GARY formal written notice within seven (7)
days of the receipt of said inheritance or the denial of
said inheritance, whichever the case may be. GARY
shall be entitled to file a motion any time after June 1,
2017 seeking to modify the maintenance in the event the
inheritance is of sufficient size to make the current award
unconscionable.
The material facts of what occurred after the settlement and decree
were entered are not in dispute. Gary, as required, began making $900 monthly
payments to Tracy beginning in September 2016. In December 2018, Tracy
received $430,000 in inheritance proceeds. While substantial, this payment was
not the entirety of the inheritance Tracy would ultimately receive and the estate
was not closed. Tracy did not inform Gary that she had received those funds.
Being unaware of Tracy receiving any inheritance, Gary did not file a motion
seeking to modify his maintenance obligation at that time. Gary continued to
dutifully pay maintenance, and Tracy continued to accept those payments.
Approximately five months later, in May 2019, Gary was informed by
Tracy’s stepfather of the inheritance dispersal. On June 13, 2019, Gary filed
motions to modify maintenance which were set to be heard in September 2019.
Gary continued to pay maintenance while his motions were pending. In
September, the circuit court determined that Gary’s motion was moot insofar as his
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maintenance obligation ended, in accord with the settlement, on September 1,
2019.
Thereafter, Gary moved for a finding of contempt on the part of Tracy
for violating the terms of the settlement and sought reimbursement of the monthly
payments he had made from January 1, 2019, through September 1, 2019. Tracy
in turn argued that the $430,000 she received was only a “partial payment” and that
she owed no duty to inform Gary until the estate was finalized.
Following a hearing, the circuit court entered an order finding Tracy
in contempt and determining the proper sanction to be an amount equal to the
repayment of the nine months of maintenance ($8,100) she had received following
receipt of $430,000 from the estate. Tracy filed a motion to alter, amend, or vacate
arguing that the circuit court had effectively ordered a retroactive modification of
maintenance in violation of Kentucky Revised Statutes (KRS) 403.250. She also
claimed that if any reimbursement was required, it should only have applied to the
period after Gary filed his motion. Lastly, Tracy claimed that her failure to notify
Gary was the result of a “misunderstanding or a difference of interpretation”
regarding the language found in the agreement and therefore, her actions could not
“rise to the level of contempt.” The circuit court denied her motion and Tracy
appealed.
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We begin our review recognizing that our courts are afforded wide
latitude in the use of their contempt powers to enforce their judgments and remove
any obstructions to their enforcement. Akers v. Stephenson, 469 S.W.2d 704, 706
(Ky. 1970). We will not disturb a circuit court’s exercise of its contempt powers
on appeal absent an abuse of that discretion. Meyers v. Petrie, 233 S.W.3d 212,
215 (Ky.App. 2007).
On appeal Tracy offers two arguments. First, she argues that there
was an ambiguity in the agreement regarding her duty to notify Gary. Second, she
argues the circuit court was not permitted to effect a retroactive modification of
maintenance by compelling her to reimburse Gary for payments he had made
before he filed his motion.
Tracy’s first argument actually has three components. Initially she
argues that the circuit court found her in criminal contempt and, thereafter, argues
that her conduct could not be described as evincing the required mens rea of
willfulness or “conscious purpose to disobey the authority of the court” necessary
to sustain criminal contempt. Cabinet for Health & Family v. J.M.G., 475 S.W.3d
600, 620 (Ky. 2015). Tracy is incorrect on this point. Our courts’ powers
of contempt are separable into two distinct categories: civil and criminal.
Civil contempt is a failure to do what is ordered by the court in a civil action for
the benefit of an opposing party, while criminal contempt is some action by a party
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that offends the dignity or authority of the court or the judge which obstructs
justice or tends to bring the court into disrespect. Tucker v. Commonwealth ex rel.
Att’y Gen., 299 Ky. 820, 826, 187 S.W.2d 291, 294 (1945). The essence of
criminal contempt is its intent to punish an individual for disrespect shown to the
court while the spirit of civil contempt is its coercive effect upon litigants to
comply with court orders. See, e.g., Commonwealth v. Burge, 947 S.W.2d 805,
808 (Ky. 1996) as modified on denial of reh’g (Jun. 19, 1997). In this case it is
clear that the circuit judge held Tracy in civil contempt, as it was not some
offensive behavior directed at the court which prompted the court, but rather,
Tracy’s failure to follow the court’s decree which had adopted the terms of the
settlement.
As to the alleged ambiguity in the settlement, Tracy argues that she
was not required to inform Gary of the inheritance sums she received because she
had not received the “full inheritance” she would ultimately acquire, and that the
settlement would have stated “any” or “a portion” if she was required to inform
Gary of the receipt of only a part of her inheritance.
As an initial matter we recognize that the settlement did not, as a
matter of law, in any way state or imply that Tracy was not responsible for
informing Gary until she had recovered “all” of her inheritance or that the estate
would need to be concluded prior to her being responsible for informing Gary.
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Conversely, the settlement is clear that Gary’s responsibility to pay maintenance to
Tracy would not end based merely upon Tracy receiving “some” inheritance. At
the time of the settlement, both the timing and amount of inheritance Tracy would
receive were unknown. According to the settlement, the circuit court (pursuant to
KRS 403.250(1)) would be the final arbiter of whether Gary would pay a reduced
amount, or stop paying maintenance altogether, once Tracy received inheritance
monies from the estate.
The goal of any court in interpreting a contract is to ascertain and to
carry out the original intentions of the parties. Wilcox v. Wilcox, 406 S.W.2d 152,
153 (Ky. 1966). In that context, this Court notes that the $430,000 that Tracy
received in inheritance was more than 13 times the cumulative sum of $32,400 in
maintenance afforded by the settlement. This Court can envision no circumstance
where any party to a settlement, worded such as this one, would not consider
income of such magnitude to be a “substantial” change in circumstances under
KRS 403.250(1) which would have, and should have, afforded Gary the
opportunity to request modification from the circuit court. Tracy’s refusal to
inform Gary denied him the opportunity – to which he was entitled per the
settlement – to make a timely motion to modify maintenance.
We are also mindful of the fact that within every contract, there is
an implied covenant of good faith and fair dealing, and contracts impose on the
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parties thereto a duty to do everything necessary to carry them out. Ranier v.
Mount Sterling National Bank, 812 S.W.2d 154, 156 (Ky. 1991). Even were this
Court to be persuaded that a potential ambiguity existed within the settlement’s
language, or that Tracy’s inheritance was not clearly a substantial change in
circumstances, her conscious decision to not inform Gary, or to seek the guidance
of the circuit court, exhibited a lack of candor wholly contrary to her obligations of
good faith and fair dealing.
Within her argument alleging that an ambiguity in the settlement
insulates her from the circuit court’s contempt powers, Tracy also asserts that the
advice of her counsel serves as a defense. We can assume for purposes of this
argument that Tracy, in a timely manner, informed her attorney that she had
received a large sum of money from the estate and was advised by counsel that she
need not inform Gary. Regardless of such incorrect advice, advice of counsel is
not a defense in matters of civil contempt as in the case before us.
Advice of counsel serves to immunize a defendant from an allegation
of lack of probable cause as an element of malicious prosecution claims. The
advice of counsel defense is customarily applicable to situations where an
aggrieved party seeks the advice of an attorney and presents to him fairly and
accurately all the relevant facts, after which the attorney counsels the party on
whether or not to file or prosecute a civil or criminal complaint. See, e.g., Flynn v.
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Songer, 399 S.W.2d 491 (Ky. 1966); Reid v. True, 302 S.W.2d 846 (Ky.
1957); Puckett v. Clark, 410 S.W.2d 154 (Ky. 1966).
Furthermore, the settlement was a contract. The advice of counsel
cannot serve a defense to an action for breach of contract. Were it otherwise, all
contractual parties could void their agreements merely by finding one attorney to
“rubberstamp” their own personal interpretations of the contract’s terms.
Lastly, Tracy argues that the circuit court was not permitted to affect a
retroactive modification of maintenance since any order modifying maintenance
may only have prospective application. Combs v. Combs, 787 S.W.2d 260 (Ky.
1990). Such argument would be correct if that is what had actually occurred.
Here the circuit court found itself faced with an injustice wholly of
Tracy’s making. Tracy’s decision to not inform Gary of her inheritance was self-
serving and denied Gary the right, specifically set forth in the settlement, to seek
modification in a timely manner. The only means by which the circuit court had to
correct Tracy’s breach of the settlement, and to truly enforce the court’s original
judgment decree, was through its civil contempt powers. It was an appropriate
exercise of such powers to require Tracy to pay Gary an amount equivalent to
those sums which she had accepted but to which she was not entitled. If we were
to permit the rule against retroactive modification of maintenance to apply in
circumstances such as this, we would not only materially limit courts’ powers of
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contempt but would encourage the lack of candor evidenced herein all to the
detriment of the judiciary’s inherent power to enforce its judgments. This we will
not do. As stated in Murphy v. Commonwealth, 50 S.W.3d 173, 186 (Ky. 2001),
“[i]f the courts are to have the power to control participants in the judicial process
and effectively administer justice, the power of contempt must be more than a
hollow threat.” The fact that the amount of the contempt sanction matched the
amount of the unwarranted maintenance payments does not constitute a retroactive
modification of maintenance.
We find no abuse of discretion in the circuit court’s finding
of contempt. The court’s sanction requiring the repayment of an amount
equivalent to the maintenance accepted by Tracy following the receipt of her
inheritance was proper and not violative of either statute or the court’s powers.
ALL CONCUR.
BRIEF FOR APPELLANT: BRIEF FOR APPELLEE:
Jeffrey P. Alford Heather L. Jones
Paducah, Kentucky Paducah, Kentucky
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