Carolina Moore v. Darren Smith ( 2023 )

THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Caroline Rebecca Moore, Appellant,
v.
Darren Scott Smith, Respondent.
Appellate Case No. 2019-002073
Appeal From Orangeburg County
Angela W. Abstance, Family Court Judge
Opinion No. 6018
Submitted March 1, 2023 – Filed August 23, 2023
REVERSED AND REMANDED
Amy E. Willbanks, of Strom Law Firm, LLC; Susan
Rawls Strom and Michelle B. Matthews, both of Law
Office of Susan Rawls Strom; and Whitney Boykin
Harrison, of McGowan Hood Felder & Phillips, all of
Columbia, for Appellant.
Darren Scott Smith, of Branchville, pro se.
VINSON, J.: Caroline Rebecca Moore (Wife) appeals the family court's order
denying her contempt action against Darren Scott Smith (Husband). Wife argues
the family court erred in (1) finding a rule to show cause was not the proper avenue
to seek redress for Husband's alleged contempt and (2) excluding evidence
establishing the factual basis for Husband's alleged contempt. In addition, Wife
asks this court to award her attorney's fees and costs. We reverse and remand.
PROCEDURAL HISTORY
This appeal arose out of an action for separate maintenance and support between
Husband and Wife (collectively, the parties). Wife filed a motion for temporary
relief. The family court entered a temporary order (the Temporary Order), filed
March 25, 2018, on issues related to custody, visitation, and sale of the marital
residence. The parties entered into a final custody, support, and property
settlement agreement (the final settlement agreement) on September 20, 2018, and
the family court entered the final settlement agreement as the final order (the Final
Order) the following day. Wife subsequently filed a rule to show cause alleging
Husband violated the terms of the Temporary Order and the Final Order. 1
Following a hearing, the family court denied Wife's contempt action. Wife filed a
motion to reconsider, which the family court denied without a hearing.
FACTS
The Temporary Order provided in relevant part,
Both parties shall be restrained from alienating, disposing
of or borrowing money, or from injuring, damaging,
destroying, trading, or otherwise liquidating or
decreasing in value any assets of the parties' except as in
the ordinary course of business and with the exception of
the marital residence as outlined below.
It further restrained the parties "from incurring any debt for which the other party
would be held responsible, including, but not limited to debt connected with any
joint credit cards."
The Final Order provided that "[t]he parties shall strictly comply with the terms of
the [final settlement a]greement or risk the contempt powers of the court."
Paragraph 12 of the Final Order required:
The parties warrant and represent that they have made a
full and complete disclosure of any and all existing
indebtedness or liabilities of any nature or description,
whether contingent or otherwise, which they have
1
Husband filed a Rule 60(b), SCRCP motion for relief from judgment, which the
family court denied. Husband did not appeal the denial of this motion.
incurred at any time during the parties' marriage which
has not been paid or satisfied in full prior to the date of
th[e final settlement a]greement and that all such
indebtedness and liabilities have been expressly
addressed and allocated in the terms of [the final
settlement a]greement. In the event any undisclosed
indebtedness or liability of any nature or description
exists, it shall be the sole and exclusive responsibility of
the party who incurred that liability or indebtedness to
pay the same and to hold the other party harmless and
indemnify the other party from any liability thereon,
including attorneys' fees and costs.
Under the terms of the Final Order, Wife was "entitled to all net equity from the
[marital residence], following payment of the mortgage balance, pro-rata taxes, and
agreed upon repair costs."
In her contempt petition, Wife alleged Husband violated the Temporary Order by
obtaining a commercial promissory note related to his business (the 2018 Note) in
April 2018 that was secured by a mortgage on the marital residence and Husband's
business. She further alleged Husband violated the Final Order by failing to
disclose this debt on his financial declaration. Wife believed the family court
should have held Husband in contempt and ordered him to immediately pay her
$21,813.49 to reimburse her for and indemnify her from the debt. In addition, she
sought an award of attorney's fees and costs incurred in bringing the contempt
action. Wife filed an affidavit of attorney's fees evidencing the charges incurred
for time spent in preparing for the prosecution of Wife's rule to show cause for
contempt and defending Husband's Rule 60(b), SCRCP motion totaled $9,590.55.
At the rule to show cause hearing, Matt Stokes, a former loan officer at Farmers &
Merchants Bank, testified he assisted the parties in their purchase of the marital
residence as an investment property in October 2012. Stokes explained the
promissory note Husband executed to purchase the marital residence was secured
by a mortgage on Husband's business and the marital residence. Stokes stated
Husband executed three additional promissory notes on the marital residence for
improvements and repairs in February 2013, June 2015, and November 2015. He
explained these notes were renewed several times. He confirmed Wife's name was
not on any of the notes. His testimony was supported by the admission of the
promissory notes into evidence. Stokes clarified that he was not involved in
issuing the 2018 Note because he left employment with the bank in December
2017. However, he stated the 2018 Note represented a "workout" loan of two of
the prior notes. On cross-examination, Stokes confirmed he did not speak for the
bank and he admitted he was married to Husband's niece.
Wife testified she was unaware of the 2018 Note prior to the sale of the marital
residence. When asked whether Husband produced the promissory notes during
discovery, Wife testified she subpoenaed information from Farmers & Merchants
Bank and the bank produced the promissory notes in response. She also gave
contradictory testimony that she knew nothing about the promissory notes or
whether she had received them from Husband in discovery. Wife stated the 2018
Note had an outstanding balance of $21,813.49 at the time of the sale of the marital
residence. Wife paid the outstanding balance of the 2018 Note under the terms of
the sale of the marital residence. Wife moved to enter a payoff letter from the
closing on the marital residence into evidence and Husband objected to its
admission. The family court sustained Husband's objection.
Husband testified the parties purchased the marital residence in October 2012 as an
investment property; he later clarified Wife was not a signatory on the promissory
note executed to purchase the residence. He stated the 2018 Note comprised two
prior promissory notes for improvements on the marital residence that had been
renewed. Husband acknowledged he did not disclose the 2018 Note during
discovery or on his financial declaration. Husband's financial declaration was
made an exhibit and confirmed he did not disclose the 2018 Note. During his
testimony, Husband used the payoff letter from the closing to refresh his
recollection, over Wife's objection. He testified Wife knew about the promissory
notes taken out on the marital residence and stated that the loans were intended to
repair and make improvements to the marital residence. Husband denied investing
the loan proceeds into his business.
In its order on Wife's rule to show cause, the family court held it could not hold
Husband in contempt of the Temporary Order after the Final Order had been
issued. The family court further held Husband was not in contempt of the Final
Order when no evidence supported a finding Husband violated the provision
holding him responsible for the debt associated with the marital residence he
retained under the terms of the final settlement agreement. It found that if Wife
was attempting to allege Husband violated the warranty provision of paragraph 12
of the Final Order relating to the disclosure of indebtedness, Wife could
request, by proper motion, [that] the [family] court
enforce the portion of the [final settlement] agreement
requiring one party to be responsible for any
non-disclosed debt under Paragraph 12, or [Wife] may
seek to set aside the [final settlement agreement] for
failure to disclose the indebtedness, but those remedies
[were] not properly before the court in a contempt
proceeding.
The family court further found Husband had neither failed to do something he was
ordered to do nor done something he was ordered not to do.
Wife filed a Rule 59(e), SCRCP motion to alter or amend, arguing evidence
supported a finding that Husband violated the Temporary Order and the Final
Order and that the family court erred in excluding the payoff letter from evidence.
Wife also moved under Rule 60(b), SCRCP, for relief from the Final Order, in
accordance with the family court's instructions. The family court denied Wife's
motions, finding Wife misunderstood its ruling concerning the Rule 60(b) motion.
It determined Wife's argument that Husband committed fraud upon the parties or
the court in obtaining the Final Order was not proper during the contempt hearing
and should have been made by filing a Rule 60(b) motion to set aside the Final
Order. The family court stated Wife could file a Rule 60(b) motion to set aside the
final settlement agreement or a motion to enforce the warranty provision in
paragraph 12 of the final settlement agreement if she so chose. This appeal
followed.
ISSUES ON APPEAL
1. Did the family court err in finding Wife's rule to show cause was not the proper
manner to seek a remedy for contempt when there was clear and convincing
evidence in the record showing Husband violated a court order?
2. Did the family court err in excluding and failing to consider Wife's evidence
establishing the factual basis for Husband's contempt?
3. Should Husband be required to pay Wife's attorney's fees and costs if this court
finds the family court erred in denying Wife's rule to show cause?
STANDARD OF REVIEW
"The family court is a court of equity." Lewis v. Lewis, 392 S.C. 381, 386, 709
S.E.2d 650, 652 (2011). "Appellate courts review family court matters de novo,
with the exceptions of evidentiary and procedural rulings." Stone v. Thompson,
428 S.C. 79, 91, 833 S.E.2d 266, 272 (2019). "[T]his court may find facts in
accordance with its own view of the preponderance of the evidence." Weller v.
Weller, 434 S.C. 530, 537, 863 S.E.2d 835, 838 (Ct. App. 2021). "Civil contempt
must be proven by clear and convincing evidence." Poston v. Poston, 331 S.C.
106, 113, 502 S.E.2d 86, 89 (1998). "The appellant maintains the burden of
convincing the appellate court that the family court's findings were made in error
or were unsubstantiated by the evidence." Weller, 434 S.C. at 538, 863 S.E.2d at
838.
LAW AND ANALYSIS 2
I. Contempt Remedy for Husband's Noncompliance with the Temporary
Order and Final Order and Award of Attorney's Fees and Costs
Wife argues the family court erred in finding her rule to show cause was the
incorrect procedural avenue to obtain the relief sought when Husband violated the
Temporary Order and the Final Order. Wife avers the family court's holding that a
Rule 60(b), SCRCP motion to set aside the final settlement agreement was the
proper avenue for relief was unwarranted when the Final Order provided the
requested relief. She asserts that by filing a motion to set aside the final settlement
agreement, the Final Order would be abrogated in its entirety. Wife further argues
she is entitled to attorney's fees under the terms of the Final Order. We agree.
We find a rule to show cause was the proper procedural avenue for Wife to obtain
the relief she sought for Husband's failure to disclose the 2018 Note pursuant to the
terms of the Final Order. Initially, we agree with the family court that Husband
was not in contempt of the Final Order. Cf. Moseley v. Mosier, 279 S.C. 348, 351,
306 S.E.2d 624, 626 (1983) ("Contempt results from the willful disobedience of a
court's order."). Although Husband failed to disclose the 2018 Note on his
financial declaration as required under paragraph 12 of the Final Order, Wife failed
2
Husband did not file a respondent's brief. See Turner v. Santee Cement Carriers,
Inc., 277 S.C. 91, 96, 282 S.E.2d 858, 860 (1981) (holding "failure to [file a
respondent's brief] allows [an appellate court] to take such action upon the appeal
as it deems proper"); see also Rule 208(a)(4), SCACR ("Upon the failure of
respondent to timely file a brief, the appellate court may take such action as it
deems proper.").
to demonstrate by clear and convincing evidence Husband willfully and
intentionally refused to pay Wife the amount of the loan or indemnify her from any
liability, including the payment of attorney's fees and costs prior to the filing of the
contempt action. However, we conclude Wife demonstrated Husband failed to
meet his obligation under the Final Order to hold harmless and indemnify Wife for
the outstanding balance on the 2018 Note, which was disclosed at the closing of
the sale of the marital residence.
We find Wife's rule to show cause gave the family court the ability to enforce the
terms of the Final Order and provide Wife's requested relief. See Rule 14(a),
SCRFC, note ("The rule to show cause provided [in Rule 14(a), SCRFC,] is for
contempt of court arising from failure to comply with the Court's orders, decrees or
judgments and for enforcement thereof." (emphasis added)); Moseley, 279 S.C. at
353, 306 S.E.2d at 627 ("With the court's approval, the terms [of an agreement]
become a part of the decree and are binding on the parties and the court."). "Once
approved, an agreement may be enforced by the family court through its contempt
powers, unless the agreement unambiguously denies the court continuing
jurisdiction over the matter." Swentor v. Swentor, 336 S.C. 472, 479, 520 S.E.2d
330, 334 (Ct. App. 1999); see also Moseley, 279 S.C. at 353, 306 S.E.2d at 627("[U]nless the agreement unambiguously denies the court jurisdiction, the terms
will be modifiable by the court and enforceable by contempt."). Here, the Final
Order did not deny the family court jurisdiction to enforce the terms of the final
settlement agreement; rather, it provided that "[t]he parties shall strictly comply
with the terms of the [final settlement a]greement or risk the contempt powers of
the court." Accordingly, we find Wife's rule to show cause gave the family court
leave to enforce the unambiguous payment and indemnification terms of the Final
Order by ordering Husband to pay Wife $21,813.49 to indemnify her for the
outstanding balance of the 2018 Note and $9,590.55 in attorney's fees and costs
incurred in bringing her contempt action. See Davis v. Davis, 372 S.C. 64, 75, 641
S.E.2d 446, 451 (Ct. App. 2006) ("Where an agreement is clear and capable of
legal construction the court's only function is to interpret its lawful meaning and
the intention of the parties as found within the agreement and give effect to them."
(quoting Bogan v. Bogan, 298 S.C. 139, 142, 378 S.E.2d 606, 608 (Ct. App.
1989))). Based on the foregoing, we reverse and remand to the family court to
issue an order enforcing the Final Order and requiring Husband to promptly pay
Wife $21,813.49 and pay Wife's attorney's fees and costs in the amount of
$9,590.55.
Because the reversal of the family court's denial of Wife's contempt action for
Husband's violation of the Final Order allows Wife to obtain the relief sought, we
decline to address the issue of Husband's alleged violation of the Temporary Order.
See Futch v. McAllister Towing of Georgetown, Inc., 335 S.C. 598, 613, 518
S.E.2d 591, 598 (1999) (holding an appellate court need not address remaining
issues on appeal when its determination of a prior issue is dispositive).
II. Exclusion of Evidence
Wife argues the family court improperly excluded relevant evidence—the affidavit
of authenticity from the closing on the marital residence—when the court allowed
Husband's counsel to question Husband about the document at the hearing over
Wife's objection. We find this issue is moot because the family court accepted
Wife's testimony regarding the $21,813.49 balance on the 2018 Note in its order.
See Cheap-O's Truck Stop, Inc. v. Cloyd, 350 S.C. 596, 602, 567 S.E.2d 514, 517
(Ct. App. 2002) ("An appellate court will not pass on moot and academic questions
or make an adjudication where there remains no actual controversy." (quoting
Curtis v. State, 345 S.C. 557, 567, 549 S.E.2d 591, 596 (2001))); Sloan v. Friends
of Hunley, Inc., 369 S.C. 20, 26, 630 S.E.2d 474, 477 (2006) ("A moot case exists
where a judgment rendered by the court will have no practical legal effect upon an
existing controversy because an intervening event renders any grant of effectual
relief impossible for the reviewing court."). Accordingly, we decline to address
this issue as moot.
CONCLUSION
Based on the foregoing, we reverse and remand to the family court to issue an
order enforcing the Final Order and requiring Husband to promptly pay Wife
$21,813.49 and pay Wife's attorney's fees and costs in the amount of $9,590.55.
REVERSED AND REMANDED. 3
THOMAS, J., and LOCKEMY, A.J., concur.
3
We decide this case without oral argument pursuant to Rule 215, SCACR.