George Harrison Seymour v. Sharon Lee Seymour ( 2002 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Clements and Agee
Argued at Richmond, Virginia
GEORGE HARRISON SEYMOUR
MEMORANDUM OPINION * BY
v. Record No. 0554-01-2 JUDGE LARRY G. ELDER
MARCH 5, 2002
SHARON LEE SEYMOUR
FROM THE CIRCUIT COURT OF HENRICO COUNTY
George F. Tidey, Judge
Scott Gregory Crowley (Crowley & Crowley, on
brief), for appellant.
Robert L. Flax (Flax & Stout, on brief), for
appellee.
George Harrison Seymour (husband) appeals from a ruling of
the Circuit Court of Henrico County holding him in contempt for
failing to pay to his former spouse, Sharon Lee Seymour (wife),
certain sums due pursuant to the parties' divorce decree. On
appeal, husband contends the court erroneously exercised
jurisdiction because wife's filing for bankruptcy deprived her
of standing to initiate the show cause action and vested all
claims of her estate in the bankruptcy trustee, who had already
accepted partial payment for the debt from husband in the form
of a piano and declared the remainder to be uncollectable. He
also contends the trial court abused its discretion in finding
* Pursuant to Code § 17.1-413, this opinion is not
designated for publication.
him in contempt when the evidence showed he had cooperated with
the bankruptcy trustee and was financially unable to pay the
remainder of his obligation.
We hold the evidence supports the trial court's finding
that wife had standing to initiate the show cause both (1)
because the bankruptcy trustee had abandoned any right of
collection under the property settlement agreement and (2)
because the debt wife sought to have repaid was unrelated to the
piano husband claimed to have relinquished to the trustee. We
also hold the trial court did not abuse its discretion in
finding husband in contempt because the evidence, viewed in the
light most favorable to wife, established that husband failed to
satisfy his obligations under the property settlement agreement
and did not establish his inability to pay. Therefore, we
affirm.
A.
TRIAL COURT'S JURISDICTION
Husband contends the trial court lacked jurisdiction to
entertain wife's request for issuance of a show cause summons
because her bankruptcy filing deprived her of standing and
vested all claims of her estate in the bankruptcy trustee. We
disagree.
Assuming without deciding the record and wife's statements
on brief are sufficient to establish that wife in fact filed for
bankruptcy, one of the exhibits offered into evidence at trial
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establishes that wife regained standing to pursue these claims
when the bankruptcy trustee abandoned any interest in the
parties' property settlement agreement and related judgment. 11
U.S.C. § 554 provides that the bankruptcy trustee "may abandon
any property of the estate that is burdensome to the estate or
that is of inconsequential value and benefit to the estate."
"Property abandoned under this section ceases to be a part of
the estate. It reverts to the debtor and stands as if no
bankruptcy petition was filed. Following abandonment, 'whoever
had the possessory right to the property at the filing of
bankruptcy again reacquires that right.'" Dewsnup v. Timm, 908
F.2d 588, 590 (10th Cir. 1990) (citation omitted) (quoting In re
Dewsnup, 87 B.R. 676, 681 (Bankr. D. Utah 1988)), aff'd, 502
U.S. 410, 112 S. Ct. 773, 116 L. Ed. 2d 903 (1992). Thus, wife
reacquired her right to enforce the parties' property settlement
agreement as incorporated into the final decree of divorce
entered December 10, 1997.
Contrary to husband's contention, wife was not bound by the
trustee's conclusion that the debts owed wife under the property
settlement agreement were uncollectable. As the court
acknowledged in Dewsnup, property abandoned by the trustee
"reverts to the debtor and stands as if no bankruptcy petition
was filed." 908 F.2d at 590 (emphasis added); see Worth v.
Tamarack American, 47 F. Supp. 2d 1087, 1099 n.9 (S.D. Ind.
1999) ("[E]ven though a lawsuit may be an asset of the
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bankruptcy estate, a bankruptcy trustee may abandon the
litigation, leaving the debtor/plaintiff to continue the fight
outside the purview of the bankruptcy action."), aff'd mem., 210
F.3d 377 (7th Cir. 2000); In re West Pointe Props., L.P., 249
B.R. 273, 286 n.13 (Bankr. E.D. Tenn. 2000) (when the trustee
"abandon[s] the cause of action, . . . the cause of action
revests in the debtor[, and] . . . [t]he abandonment enables the
debtor . . . to pursue the cause of action"). Thus, wife
retained her right to attempt to enforce the agreement as
incorporated into the final decree.
Finally, even assuming the evidence is sufficient to
establish that husband had possession of the piano and
relinquished it to the bankruptcy trustee in satisfaction of a
portion of his debt under the property settlement agreement, 1 the
agreement makes clear that husband owed wife an additional
$9,000. In addition to husband's agreement to pay the purchase
price of the piano which resulted in a $9,000 balance on wife's
"First" credit card, husband owed wife another $9,000 as payment
1
Although husband apparently did not provide any
documentary evidence to support this argument in the trial
court, he attempted to include such evidence in the appendix
filed in this Court. Wife objected to this inclusion, arguing
that the orders were neither proffered to nor admitted into
evidence by the trial court. By order entered June 11, 2001,
this Court sustained wife's objection and prohibited the
inclusion of the orders in the appendix. Despite this ruling,
husband attached these same documents to his brief. For the
reasons set out in our order of June 11, 2001, we do not
consider these documents.
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for wife's certificates of deposit husband "cashed in" without
her permission. Husband represented in his statement of facts
that the $9,000 wife sought to recover was in exchange for her
interest in his business. An examination of the settlement
agreement makes clear that this sum was entirely unrelated to
husband's debt for the piano. Thus, the trustee abandoned his
right to collect the $9,000 husband owed wife for her share of
his business, and wife regained standing to seek payment of that
debt.
B.
CONTEMPT FINDING
On appellate review of a finding of contempt,
we may reverse the ruling of the trial court
only if we find that it abused its
discretion. A trial court may hold a[n]
obligor in contempt for failure to pay where
such failure is based on unwillingness, not
inability, to pay. Once nonpayment is
established, the burden is on the obligor to
provide justification for the failure to
comply.
Barnhill v. Brooks, 15 Va. App. 696, 704, 427 S.E.2d 209, 215
(1993) (citations omitted). In reviewing a trial court's
contempt determination, we view the evidence in the light most
favorable to the prevailing party. Glanz v. Mendelson, 34 Va.
App. 141, 148, 538 S.E.2d 348, 351-52 (2000).
Here, wife established that husband failed to comply with
the terms of the August 1997 property settlement agreement
incorporated into the December 1997 final decree, and the
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evidence, viewed in the light most favorable to wife, failed to
prove that husband's noncompliance for a period of approximately
three years was justified. Husband, as the appellant, had a
duty to furnish a sufficient record to permit us to resolve the
issues on appeal. See, e.g., Twardy v. Twardy, 14 Va. App. 651,
658, 419 S.E.2d 848, 852 (1992) (en banc). Despite this duty,
the record fails to establish that husband had insufficient
income or assets to make the payments required under the decree.
The statement of facts husband proffered for the trial
court's approval indicated in paragraph 8(c) that wife's
bankruptcy "trustee had advised him not to make any payments to
[wife], but only to the trustee; further that the trustee had
determined any debts he owed to [wife] [were] uncollectable
because [husband's] only source of income was Social Security
Disability payments." However, the trial court stated in its
"Additions or Corrections to the Statement of Facts" that it
"[did] not recall the hearsay testimony set out in 8(c)." The
quoted evidence regarding husband's income as contained in
paragraph 8(c) was hearsay because it involved out-of-court
statements husband made to the trustee about his income and
out-of-court statements the trustee made to husband about the
information husband had given him. See, e.g., Arnold v.
Commonwealth, 4 Va. App. 275, 279-80, 356 S.E.2d 847, 850
(1987). Thus, the statement of facts approved by the trial
court did not include this information. No other evidence in
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the statement of facts indicated that husband's only income was
social security disability, and even if the record had contained
such evidence, it did not indicate the amount of that income as
compared to husband's expenses.
Further, the evidence established that husband received the
net proceeds from a $250,000 personal injury settlement in
August of 1995, around the time the parties separated. Husband
testified at the show cause hearing in November 2000 that he
invested this money in a business that failed, but the evidence
offered to the trial court in the show cause proceeding did not
establish when this failure occurred. Thus, no evidence
properly before us on appeal establishes that husband was
financially unable to pay wife in accordance with the settlement
agreement in August 1997 when he extended the settlement offer
or in December 1997 when the trial court entered the final
decree incorporating the settlement agreement. The evidence,
even viewed in the light most favorable to husband, establishes
only that the business had failed by the time of the November
22, 2000 hearing on wife's motion to show cause and, therefore,
does not justify husband's nonpayment prior to that time.
Finally, the trial court was not required to believe husband's
testimony in its entirety. It was entitled to accept his
testimony about receiving the personal injury settlement
proceeds and to reject his testimony that he lost the money when
his business failed, especially in light of husband's statement
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on January 22, 2001 that he had access to sufficient funds to
allow him to "make arrangements to assume the remaining balance
of the mortgage and to pay the legal fees and costs owing to
[wife's] divorce counsel."
Thus, viewing the evidence in the light most favorable to
wife, husband did not meet his burden of providing justification
for his failure to comply with the final decree, and the court
did not abuse its discretion when it found him in contempt.
For these reasons, we affirm the ruling of the trial court.
Affirmed.
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