Rebecca B. Downing v. Richard W. Downing ( 2022 )

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Rebecca B. Downing, Appellant,
v.
Richard W. Downing, Respondent.
Appellate Case No. 2019-000914
Appeal From Charleston County
James G. McGee, III, Family Court Judge
Unpublished Opinion No. 2022-UP-394
Submitted April 1, 2022 – Filed October 26, 2022
AFFIRMED
Mark O. Andrews and Kelley D. Andrews-Edwards, both
of Andrews Mediation and Law Firm, PA; and Aaron
Eric Edwards, of Edwards Firm, LLC, all of Mount
Pleasant, for Appellant.
William P. Tinkler and Paul E. Tinkler, both of Tinkler
Law Firm LLC, of Charleston, for Respondent.
PER CURIAM: Rebecca B. Downing (Wife) appeals the family court's order
finding Richard W. Downing (Husband) was not in willful contempt. Wife argues
the family court erred in finding the final settlement agreement (the Agreement)
was unambiguous; considering parol evidence to contradict the plain meaning of
the Agreement; and, determining Husband was not required to indemnify Wife
when he used proceeds from the sale of marital property to discharge one of his
debts. We affirm.
FACTS
Husband and Wife (collectively, the Parties) were married in 1982, and separated
in January 2010. In 2011, the Parties entered into the Agreement, which included
language relating to a house in Virginia (the Powhaton Property) that the Parties
owned jointly with Wife's brother and his wife, Eric and Laurie Butterworth. In
pertinent part, the Agreement read:
ARTICLE IV
....
4.3 Real Estate:
....
b. 1801 Hillenwood Drive[,] Powhaton, V.A.:
i. The parties shall continue to equally retain all
right, title and interest to the Parties['] one-half (1/2)
interest in the property known as 1801 Hillenwood
Drive[,] Powhaton, Virginia.
ii. The Parties' one-half interest in this property is
encumbered by an existing line of credit to Wells Fargo
Mortgage Company,[1] in the approximate balance of One
Hundred Forty Six Thousand Dollars ($146,000.00). In
addition, the Parties acknowledge that their one-half
interest in this property also secures a debt owed to J.C.
Folk in the amount of Fifty Thousand Dollars
($50,000.00) plus accrued interest.
1
This debt originated as a Wachovia Bank line of credit; Wachovia subsequently
merged with Wells Fargo Bank.
iii. The Parties agree that the Husband shall be responsible
for both of the debts listed above. Husband shall pay the
Wells Fargo Mortgage monthly as required by the
mortgage and note. He shall also be responsible for the
payment of the debt to J.C. Folk as is more fully
addressed hereafter. Husband shall indemnify and hold
Wife harmless from both of these debts.
....
ARTICLE V
5.1 Except as set forth herein, each Party shall be
responsible for payment of all debt incurred by each in
his or her name. Each shall indemnify and hold the other
harmless from any debt assigned to each pursuant to the
terms of this Agreement. Except as is specifically
provided for herein, neither shall hereafter enter into any
contracts or incur any debt for which the other shall be
liable.
...
5.4 Husband's Debts: The Husband acknowledges and
agrees that he shall be responsible for the debts to
. . . J.C. Folk . . . [and] the Wells Fargo equity line on the
Virginia property . . . . He shall indemnify and hold the
Wife harmless from these debts.
The Agreement provided, "[T]he terms and conditions of this Agreement and any
order approving the same shall not be modifiable by the parties or any court
without the written consent of the Husband and Wife."
In November 2017, the Parties and the Butterworths sold the Powhaton Property.
Under the terms of the sale, a portion of the sales price was used to discharge the
Wells Fargo debt totaling $142,458.60. In execution of the sale, Wife signed a
form instructing that "[a]ll sales proceeds after the payoff of the Wells Fargo loan
will go to [the Butterworths]." The Butterworths received $152,518.21 in net
proceeds from the sale.
In September 2018, Wife filed a rule to show cause against Husband for violation
of the Agreement, alleging Husband violated sections 4.3, 5.1, and 5.3 by applying
her unencumbered one-fourth interest in the Powhaton Property to satisfy the
Wells Fargo debt. Wife asserted she was "entitled to her 50% of the Parties' share
of proceeds (1/4 of the distributable proceeds from the sale of the [Powhaton]
Property), not reduced by [Husband]'s debt, as payment for the interest she was
awarded [in the Agreement]." Wife asked that the family court require Husband to
pay her an amount equivalent to one-fourth of the net proceeds from the sale, not
reduced by the Wells Fargo debt, as payment for her interest in the property. She
also asked that the family court find Husband in contempt for willful violation of
the terms of the Agreement and order appropriate sanctions.
At the November 2018 rule to show cause hearing, Husband testified he believed
the Agreement only obligated him to pay the monthly mortgage payment on the
Wells Fargo debt. Husband thought Wife was ultimately responsible for
repayment of the Wells Fargo debt because she cosigned the loan. As to the sale of
the Powhaton Property, Husband confirmed the Parties and the Butterworths
agreed the amount used to satisfy the Wells Fargo debt was acceptable as a full
share representing the Parties' half interest, even though it was less than fifty
percent of the net proceeds from the sale. He stated Eric initiated the sale of the
Powhaton Property and all the Parties wanted from the transaction was the
satisfaction of the Wells Fargo debt. Husband testified Wife did not tell him
before the closing that he had to pay her for her one-quarter interest in the
Powhaton Property. Wife first approached him about her interest in the Powhaton
Property in July 2018, demanding he pay her within one week or she would file a
contempt action. Husband recalled that the Parties agreed they had no equity in the
Powhaton Property and they had an obligation to repay the Wells Fargo debt. He
clarified that the Parties had always intended to use their fifty-percent share in the
Powhaton Property to satisfy the Wells Fargo debt. When asked what "indemnify"
meant to Husband, he responded that he believed it meant to not do anything that
causes loss or harm to the other party. He testified "harmless" meant to refrain
from taking an action that would result in a liability to the other party. Husband
stated, "I neither act[ed n]or failed to act in a way that caused [Wife] to be less well
off than she was before."
Wife stipulated the Agreement did not address what would happen if the Powhaton
Property were sold. She testified she did not refer back to the Agreement until
May 2018, when Husband filed a complaint seeking a divorce and a reduction in
alimony. She confirmed the Powhaton Property was sold with her "agreement and
involvement" and she authorized the use of her share in the property to satisfy the
outstanding Wells Fargo debt but maintained she did not waive or forgive
Husband's obligation to repay her for her one-quarter interest in the Powhaton
Property. Wife maintained her one-quarter interest in the Powhaton Property
equaled half of the outstanding balance on the Wells Fargo debt at the time of the
sale. Wife confirmed that as of 2011, she understood the Parties had no equity in
the Powhaton Property but believed she was not obligated to repay the Wells Fargo
debt.
In its order on contempt, the family court found the Agreement was ambiguous and
Husband was therefore not in willful contempt of court. The family court
concluded that because the Agreement was ambiguous, the court was required to
resort to evidence outside the four corners of the Agreement to determine the
Parties' intent. The family court held the Parties intended for Husband to be
responsible for the Wells Fargo debt so long as they owned the Powhaton Property
but the Agreement was silent as to how the parties would apply the proceeds from
a future sale. The family court found Husband held Wife harmless from the Wells
Fargo debt because he made monthly mortgage payments for as long as the Parties
owned the Powhaton Property. Finally, the family court found the Parties did not
have any equity in the Powhaton Property at the time they entered the Agreement
or when the property was sold; Wife voluntarily signed a deed and settlement
agreement directing the closing attorney to pay off the Wells Fargo debt with the
proceeds from the sale; and, Wife did not make a claim to the proceeds until nine
months after the sale.
STANDARD OF REVIEW
On appeal from the family court, this court reviews factual and legal issues de
novo. Simmons v. Simmons, 392 S.C. 412, 414, 709 S.E.2d 666, 667 (2011); Lewis
v. Lewis, 392 S.C. 381, 386, 709 S.E.2d 650, 652 (2011). "[W]hether a contract is
ambiguous is a question of law." Miles v. Miles, 393 S.C. 111, 117, 711 S.E.2d
880, 883 (2011). "If the court finds it necessary to examine extrinsic evidence to
discern the intent of the parties, the determination of intent is a question of fact."
Id. at 117-18, 711 S.E.2d at 883. Although this court reviews the family court's
findings de novo, we are not required to ignore the fact that the family court, which
saw and heard the witnesses, was in a better position to evaluate their credibility
and assign comparative weight to their testimony. Lewis, 392 S.C. at 385, 709
S.E.2d at 651-52.
LAW/ANALYSIS
I. Ambiguity in the Agreement
Wife argues the terms of the Agreement concerning the Powhaton Property were
clear and unambiguous. She asserts she owned half of the Parties' interest in the
Powhaton Property and because Husband accepted sole responsibility for the
payment of debts secured by the property, he was required to indemnify Wife for
the use of her interest to satisfy the Wells Fargo debt. Wife avers the Agreement
did not require her to forfeit her unencumbered one-quarter interest in the
Powhaton Property upon the sale of the property to contribute to the payment of
Husband's debt, which she had no responsibility or legal obligation to pay. She
contends the Agreement clearly stated Husband was required to reimburse Wife for
the loss of her one-quarter interest in the Powhaton Property. We disagree.
We hold the family court did not err in finding the Agreement was ambiguous
because it was silent as to what Husband's debt obligations were in the event the
Powhaton Property was sold and the terms concerning the Wells Fargo debt were
inconsistent. See Heins v. Heins, 344 S.C. 146, 158, 543 S.E.2d 224, 230 (Ct. App.
2001) ("Unambiguous marital agreements will be enforced according to their
terms."); id. ("Where an agreement is clear and capable of legal interpretation, the
court's only function is to interpret its lawful meaning, discover the intention of the
parties as found within the agreement, and give effect to it."); Lacke v. Lacke, 362
S.C. 302, 309, 608 S.E.2d 147, 150 (Ct. App. 2005) ("A contract is ambiguous
when it is capable of more than one meaning or when its meaning is unclear."
(quoting Smith-Cooper v. Cooper, 344 S.C. 289, 295, 543 S.E.2d 271, 274 (Ct.
App. 2001))). Here, section 4.3(b)(i) of the Agreement stated, "The parties shall
continue to equally retain all right, title and interest to the Parties['] one-half (1/2)
interest in the [Powhaton P]roperty . . . ." This language demonstrates the
Agreement did not contemplate the sale of the Powhaton Property; rather, it
instructed the parties to retain their shared interest in the property. Moreover, the
Agreement does not address whether Wife was entitled to half of the Parties'
interest in the Powhaton Property. Although sections 4.3(b)(iii), 5.1, and 5.4 of the
Agreement assigned the Wells Fargo debt to Husband and required him to
indemnify and hold Wife harmless from that debt, section 4.3(b)(iii) specifically
required Husband to pay the monthly mortgage amount on the Wells Fargo debt
without addressing his repayment obligations in the event the Powhaton Property
was sold. Read together, these sections were unclear about what Husband was
required to do upon the sale of the Powhaton Property. Furthermore, Wife
stipulated at the rule to show cause hearing that the Agreement was silent as to
what would happen if the Powhaton Property was sold. Accordingly, we affirm
the family court's finding that the Agreement was ambiguous.
Based on the foregoing, we hold the family court did not err in finding Husband
was not in willful contempt because the Agreement created uncertainty about what
his obligations were as to repayment of the Wells Fargo debt in the event the
Powhaton Property was sold. See Phillips v. Phillips, 288 S.C. 185, 188, 341
S.E.2d 132, 133 (1986) ("A court need go no further in reviewing the evidence in a
contempt action when there is uncertainty in the commands of an order."); id.("[The supreme c]ourt has explicitly stated, 'One may not be convicted of contempt
for violating a court order which fails to tell him in definite terms what he must do.
The language of the commands must be clear and certain rather than implied.'"
(quoting Welchel v. Boyter, 260 S.C. 418, 421, 196 S.E.2d 496, 498 (1973))).
II. Consideration of Extrinsic Evidence
Wife argues the family court erred as a matter of law by considering extrinsic
evidence of Husband's intent when his testimony was contradicted by the plain
language of the Agreement and barred by the parol evidence rule. She contends
the family court's order read contradictory, material terms and an unexpressed
intent into the Agreement. We disagree.
We hold the family court did not err in considering extrinsic evidence to determine
the Parties' intent. First, as we stated, the Agreement was ambiguous, and
therefore, the family court could consider extrinsic evidence to determine the
Parties' intent. See Lacke, 362 S.C. at 309, 608 S.E.2d at 150 ("[W]here an
agreement is ambiguous, the court should seek to determine the parties' intent.");
Miles, 393 S.C. at 117, 711 S.E.2d at 883 ("[The family court] may [determine the
parties' intent] by examining extrinsic evidence.").
Second, as to Wife's argument the family court impermissibly used extrinsic
evidence to supply material terms that contradicted the plain meaning of the
Agreement, we conclude the family court's findings did not contradict the terms of
the Agreement. See Ebert v. Ebert, 320 S.C. 331, 339, 465 S.E.2d 121, 126 (Ct.
App. 1995) ("Ordinarily, a court will not supply omitted terms to an agreement,
and an agreement where the parties did not agree to essential terms will simply not
be enforced."); id. ("[W]he[n] an agreement is silent as to a particular matter and
because of the nature and character of the transaction an ambiguity arises, parol
evidence may be admitted in order to supply a deficiency in the language of the
contract."); id. ("[P]arol evidence is admissible not to contradict the terms of the
written agreement, but to determine the intent of the parties as to that particular
matter."). Here, the family court considered the testimony and evidence presented
at the rule to show cause hearing to determine that the Parties intended for
Husband to be responsible for the Wells Fargo debt only so long as they owned the
Powhaton Property. In so holding, the family court did not read any additional
terms into the Agreement. The family court noted the Agreement omitted terms
pertaining to the future sale of the Powhaton Property, any rent to be charged to
Wife's parents, and the payment of taxes, insurance, and maintenance on the
property. Furthermore, the family court's remaining findings did not contradict the
Agreement. The family court found Husband held Wife harmless from the Wells
Fargo debt because he made the monthly mortgage payments as required under the
terms of the Agreement. The family court further found Wife voluntarily signed
documents directing the use of the proceeds from the sale of the Powhaton
Property to pay off the remaining balance on the Wells Fargo debt and noted
Wife's nine-month delay in filing her motion for a rule to show cause.
Accordingly, we hold the family court did not err in considering extrinsic evidence
to determine the Parties' intent.
III. Enforcement of the Agreement
Wife argues any lack of intent on Husband's part to violate the Agreement did not
negate his violation of the Agreement. Wife contends that because the Agreement
was unambiguous, this court should enforce the Agreement as written, while
finding Husband's failure to comply was noncontemptuous. We disagree.
We hold the family court did not err in not requiring Husband to pay wife a portion
of the sale proceeds from the sale of the Powhaton Property. Initially, we note
Wife brought her claim as a rule to show cause, rather than a declaratory judgment
action. Furthermore, Wife solely relies on this court's holding in Gaffney v.
Gaffney2 to support her argument that the family court should have interpreted and
enforced the Agreement as written and found Husband's noncompliance was
noncontemptuous. However, Gaffney does not support her proposition because
unlike the Agreement in the instant case, the agreement in Gaffney was found to be
unambiguous on appeal. Gaffney, 401 S.C. at 221-24, 736 S.E.2d at 686-88.
Moreover, the Gaffney court reversed the family court's finding that the husband
was not in compliance with the parties' settlement agreement but that his
noncompliance was noncontemptuous. Id. at 224, 736 S.E.2d at 688.
Accordingly, because the Agreement was silent as to Husband's debt obligations in
the event the Powhaton Property was sold and the sale of the Powhaton Property
2
401 S.C. 216, 736 S.E.2d 683 (Ct. App. 2012).
created an entirely new agreement between the Parties, as well as the Butterworths,
we conclude the family court was not obligated to require Husband to pay Wife a
portion of the sales proceeds from the sale of the Powhaton Property.
CONCLUSION
For the foregoing reasons, the family court's order finding Husband was not in
willful contempt is
AFFIRMED.3
WILLIAMS, C.J., and KONDUROS and VINSON, JJ., concur.
3
We decide this case without oral argument pursuant to Rule 215, SCACR.