Elizabeth R. Sutherlin v. Scott K. Sutherlin ( 2017 )

FILED
MAY 11, 2017
In the Office of the Clerk of Court
WA State Court of Appeals, Division Ill
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
ELIZABETH R. SUTHERLIN, )
) No. 34370-7-111
Respondent, )
)
v. )
) UNPUBLISHED OPINION
SCOTT K. SUTHERLIN, )
)
Appellant. )
SIDDOWAY, J. - Scott Sutherlin obtained an ex parte temporary restraining order
(TRO) to prevent his ex-wife from disposing of funds that he argued should be applied to
a long-outstanding equalization obligation owed by her under their dissolution decree.
The same court commissioner who issued the TRO later quashed it. The superior court
denied a motion to revise.
We read the decree and a relevant postjudgment settlement agreement differently
than did the trial court. But a genuine dispute over what amount, if any, Mr. Sutherlin's
ex-wife was presently required to pay was a sufficient basis for refusing to revise the
order quashing the TRO. We affirm.
FACTS AND PROCEDURAL BACKGROUND
Scott Sutherlin and his ex-wife Elizabeth (Sutherlin) Corulli divorced in April
2006. The decree of dissolution provided that Ms. Corulli would retain the family home
and make an equalization payment of $29,100 to Mr. Sutherlin for his interest in the
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property. This appeal arises from Mr. Sutherlin's motion for an order requiring Ms.
Corulli "to immediately pay the equalization transfer amount ordered by this Court
pursuant to the Decree of Dissolution," and for an ex parte temporary order restraining
her from disposing of certain funds until his motion could be heard. Clerk's Papers (CP)
at 19.
In support of the motion, Mr. Sutherlin presented the court with the following
payment term from the parties' dissolution decree, together with his sworn declaration
that Ms. Corulli had paid nothing toward the equalization obligation in the nine years
since their divorce:
Wife shall owe husband an equalization payment in the amount of $29,100.
This amount shall bear no interest and wife shall pay at her ability. Wife
shall have an affirmative duty to make good faith and reasonable efforts to
remit payment in a prompt and timely manner so as not to take advantage
of husband's agreement to waive interest and specific repayment terms. If
wife sells home, husband shall receive the first $29,100 payable directly
from the net proceeds of the sale at the time of closing. If wife refinances
the mortgage on the home, wife shall refinance an amount sufficient to
repay husband the full equalization payment balance owing at the time of
the refinance. If equalization payment has not been paid in full by the time
that the parties' youngest child graduates from high school, payment shall
be due in full within 90 days of child's graduation.
CP at 10. While Mr. Sutherlin acknowledged that one of the parties' children was still in
high school and living at home, he provided evidence of investment properties his wife
had inherited from her father and of a $241,352 promissory note under which she was
receiving payments from her siblings. He contended that Ms. Corulli "clearly has the
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ability to repay me what is owed." CP at 20. A court commissioner issued a TRO and
set a hearing at which Ms. Corulli could show cause why the relief requested by Mr.
Sutherlin should not be granted.
Upon receiving notice of the restraining order, Ms. Corulli moved to quash it and
brought to the court's attention a postdecree "Voluntary Settlement Agreement" in the
dissolution action, signed by herself and Mr. Sutherlin on June 27, 2007. CP at 50-51. It
was self-described as "a fair and reasonable resolution" following mediation of several
issues. CP at 50. The following language appears under the caption, "Liabilities outline
[sic] in Decree of Dissolution":
The parties intend to abide by the Decree of Dissolution regarding the court
ordered debt of twenty-nine thousand one hundred dollars ($29,100.00).
The terms of payment are outlined in the Decree, however the parties want
to add clarity to ensure the understanding between the parties regarding
payment of the debt.
Both parties agree the debt will not be due until 90 days after their youngest
daughter ... graduates as a senior in high school . . . . The approximate
graduation date is June 2017. The approximate date the debt is to be paid
in full is September 2017. In the event the debt can be paid prior to that,
the paying party may do so without any prepayment penalty. Should the
child not complete high school for any reason, the debt is still due 90 days
after what would have been the child's anticipated graduation date. In
addition, the debt will be due and payable upon the resale or refinancing of
the home located at 11214 E. 44th Ave., Spokane, WA. This loan will be
forgiven should the defendant become deceased before the debt is due as
clarified above.
Both parties also agree defendant has received a payment of $600.00 and a
credit of $3 7 5 .00. The new balance, effective today, June 27, 2007 is
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$28,125.00. The parties further agree that this is a non interest bearing loan
and shall remain the same until the loan has been paid in full.
CP at 50. A notice provision included in the settlement agreement states that "if the
terms of this agreement are not carried out, then, following written notice to the non-
complying party, of not less than ten days and by certified mail, return receipt requested,
that judgment by default will be presented at Court for non-compliance." CP at 51.
An affidavit from Ms. Corulli acknowledged she had inherited what she
characterized as three dilapidated rental homes from her father and received $1,000 a
month in payments from her siblings for her former interest in two other properties. In
response to Mr. Sutherlin's contention that her inheritance "changes things," she
responded, "It does not." CP at 48. According to Ms. Corulli, money she had recently
received had been applied to obligations that were "significantly past due" and she and
the parties' son faced legal exposure for a recent auto accident, in her car, for which her
son had been found at fault. Id.
At a hearing on the motion to quash, the court commissioner expressed his
displeasure that Mr. Sutherlin failed to disclose the settlement agreement. The
commissioner granted the motion to quash, stating that although he did not read the
settlement agreement as modifying Ms. Corulli's duty under the decree, it was unclear
from the record whether Ms. Corulli had the ability to make payments toward the
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equalization obligation. The commissioner commented on what he thought needed to
happen next:
I've read Ms. Corulli's ... declaration. Whether or not she's needing to
use those funds for other aspects-she mentions a child getting into an
accident, that she's trying to deal with-the affirmative duty I don't think
goes away, but I'm not going to continue the restraining order at this point.
I think this is more of a discovery issue that the parties need to deal with
going forward.
And if it can be ... found out that Ms. Corulli really did have this
extra income and has not been performing her affirmative duty, I think that
could be another hearing down the road but I'm not going to continue the
restraining order at this point. ...
[MR. SUTHERLIN'S ATTORNEY]: Just to clarify for my own
understanding, are you finding that what was determined in the mediation
agreement is substantively different than what was in the decree?
THE COURT: No.
CP at 100-02.
The commissioner apparently entered no written order, and in his oral ruling
merely quashed the TRO. Although there was discussion toward the end of the hearing
about Mr. Sutherlin's right to seek discovery and then schedule a hearing on his motion
to compel the equalization payment, Mr. Sutherlin did neither. 1 Instead, he moved in
superior court for revision of the commissioner's oral ruling.
After reviewing the file and hearing argument of the revision motion, the trial
1
Evidently some discovery occurred in connection with a separate child support
modification order, but it was not used as the basis for a further decision on the motion to
compel the equalization payment.
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court denied it, explaining its decision as follows:
Well, I'm going to affirm the commissioner, and in large part it's because
of what the Voluntary Settlement Agreement provides ....
. . . [The] settlement agreement was entered into on June 27, 2007,
and in part this provides that both parties agree the debt will not be due
until 90 days after their youngest daughter ... graduates as a senior from
high school, which would be approximately June 2017. It goes on in other
parts to provide that it may not be due until September of 2017. And then
now I quote, "In the event that the debt can be paid prior to that, the paying
party," I emphasize, "may do so without any prepayment penalty." The
way I interpret that is that there isn't really any obligation to pay until
September of 2017, but if you do pay early, there wouldn't be any
prepayment penalty. And with respect to notice of ex-parte restraining
order, in the last paragraph of this agreement, it says, "We further agree that
if the terms of this agreement are not carried out, then following written
notice to the noncomplying party of not less than 10 days and by certified
mail return receipt requested judgment by default may be entered.
So to me, it's clear that the Parties contemplated that this agreement
would control. The commissioner was correct by vacating the restraining
order. And the agreement itself and the rules, I think, under these
circumstances, required notice. That's my ruling.
Report of Proceedings (RP) at 14-15. Mr. Sutherlin moved for reconsideration, which
was denied. He appeals.
ANALYSIS
I. It was not error or an abuse of discretion to refuse to revise
the order quashing the TRO
Standard of review. RCW 26.09.060(2)(a) authorizes a trial court in a dissolution
proceeding to issue a temporary restraining order providing relief "proper in the
circumstances," including one that restrains a party from disposing of property except in
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the usual course of business or for the necessities of life. When a trial court's
interpretation of a contract is based solely on its language, that interpretation is a question
oflaw reviewed de novo. Tyrrell v. Farmers Ins. Co., 140 Wash. 2d 129, 133, 994 P.2d 833
(2000). The decision to grant or dissolve a temporary injunction "lies within the sound
discretion of the court, to be exercised according to the circumstances of each case."
Alderwood Assocs. v. Wash. Envtl. Council, 96 Wn.2d 230,233, 635 P.2d 108 (1981);
Schroeder v. Excelsior Mgmt. Grp., LLC, 177 Wash. 2d 94, 103-04, 297 P.3d 677 (2013).
"A trial court abuses its discretion if its decision is manifestly unreasonable or
based on untenable grounds or untenable reasons." In re Marriage of Littlefield, 133
Wash. 2d 39, 46-47, 940 P.2d 1362 (1997). A decision is manifestly unreasonable if, given
the facts and applicable legal standard, it is outside the range of acceptable choices; "it is
based on untenable grounds if the factual findings are unsupported by the record; it is
based on untenable reasons if it is based on an incorrect standard or the facts do not meet
the requirements of the correct standard." Id. at 47.
Decision reviewed. When a party appeals a trial court order denying revision of a
commissioner's decision, this court generally reviews the trial court's decision, not the
commissioner's. In re Marriage of Williams, 156 Wash. App. 22, 27, 232 P.3d 573 (2010).
"If the [trial] court simply denies the motion to revise the commissioner's findings or
conclusions, [appellate courts] have held that the court then adopts the commissioner's
findings, conclusions, and rulings as its own." Grieco v. Wilson, 144 Wash. App. 865, 877,
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184 P.3d 668 (2008), aff'd sub nom., In re Custody ofE.A.T. W, 168 Wash. 2d 335 (2010).
"But when the court makes independent findings and conclusions, the court's revision
order then supersedes the commissioner's decision." Id.
In proceedings below, the court commissioner merely quashed the TRO. He
indicated that he viewed the 2007 clarification in the settlement agreement as continuing
to include an obligation on Ms. Corulli' s part to make payments toward the equalization
obligation if she was financially able to prior to the ultimate September 2017 due date.
But the commissioner recognized that a factual dispute existed over whether she was
. financially able to pay earlier-one that could not be resolved on the basis of conflicting
declarations.
The trial court, on the other hand, affirmed the commissioner's decision to quash
the restraining order "in large part" because it construed the clarification provided by the
mediated settlement agreement as imposing no obligation on Ms. Corulli to make the
equalization payment until September 2017. RP at 14. It also concluded that since the
notice provision of the settlement agreement had not been complied with, Ms. Corulli's
use of her assets should not have been restrained. Because the trial court did more than
simply deny the motion to revise, its decision supersedes the commissioner's and is the
order that is subject to appellate review in the first instance.
Two of Mr. Sutherlin's assignments of error are to the trial court's alleged
determination that the parties' settlement agreement "modiflied]" or was a
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"modification" of their dissolution decree. Br. of Appellant at 2 (Assignments of Error 8
and 9). A claim that the court found a "modification" would conflict with the settlement
agreement's language that "[t]he parties intend to abide by the Decree" regarding the
court-ordered debt and that "[t]he terms of payment are outlined [in the] Decree, however
the parties want to add clarity to ensure the understanding between the parties regarding
payment of the debt." CP at 50.
Where, as here, an understanding is affirmed but clarified, both the original
agreement and the clarification should be enforced to the extent possible; to the extent
they are inconsistent, the clarification controls. See Higgins v. Stafford, 123 Wash. 2d 160,
165-66, 866 P.2d 31 (1994) (when two contracts conflict, the subsequently negotiated
contract covering the same subject controls). The decree includes several events
requiring payment toward the equalization obligation: "wife shall pay at her ability," she
must pay upon the sale or refinancing of the home, and if the equalization payment has
not earlier been paid in full, "payment shall be due in full within 90 days of [the
youngest] child's graduation" from high school. CP at 10.
The decree's language requiring Ms. Corulli to "make good faith and reasonable
efforts to remit payments in a prompt and timely manner" is not reasonably read as a
further event requiring payment. It only imposes a duty of diligence when one of the
payment events occurs. "Prompt" and "timely" are meaningless except in relation to
some other payment event.
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The clarification in the settlement agreement states:
Both parties agree the debt will not be due until 90 days after their youngest
daughter ... graduates as a senior in high school . . . . The approximate
graduation date is June 2017. The approximate date the debt is to be paid
in full is September 2017. In the event the debt can be paid prior to that,
the paying party may do so without any prepayment penalty.
CP at 50.
In isolation, this language can be read as the trial court read it. But read in
combination with the decree-which the settlement agreement says "outline[s]" "[t]he
terms of payment" and with which the parties "intend[ed] to abide"-this language is not
inconsistent with the "at [wife's] ability" payment event included in the decree. CP at 50,
10. The first and third sentences of the settlement agreement language we cite above are
reasonably read as referring to the outside date for payment ("the debt will not be due
until 90 days after [graduation]"; "approximate date the debt is to be paid in full is
September 2017"). Id. (emphasis added). Thus read, the language, "In the event the debt
can be paid prior to that," Id. (emphasis added), is reasonably read as affirming Ms.
Corulli' s duty to pay "at her ability. " 2 CP at 10.
2
Given our construction of the decree and settlement agreement, it is probably not
necessary to address Mr. Sutherlin's argument that Ms. Corulli failed to establish the
elements of an enforceable contract. In any event, we reject his premise that Ms. Corulli
bore that burden in responding to the order to show cause, even before he questioned the
settlement agreement's validity and enforceability.
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Since we can affirm the trial court on any ground supported by the record, see
LaMon v. Butler, 112 Wash. 2d 193, 200-01, 770 P.2d 1027 (1989), we hold that given the
evidence available at the hearing on the order to show cause, the equitable criteria
supporting an injunction were absent. RCW 26.09.060(2)(a)'s authorization to trial
courts to issue temporary restraining orders "proper in the circumstances" inherently
incorporates the equitable criteria governing the issuance of any injunction: a party
seeking relief by temporary or permanent injunction must show '"(1) that he has a clear
legal or equitable right, (2) that he has a well-grounded fear of immediate invasion of that
right, and (3) that the acts complained of are either resulting in or will result in actual and
substantial injury to him.'" Tyler Pipe Indus., Inc. v. Dep 't ofRevenue, 96 Wash. 2d 785,
792,638 P.2d 1213 (1982) (quoting Port of Seattle v. Int'! Longshoremen 's &
Warehousemen's Union, 52 Wn.2d 317,319,324 P.2d 1099 (1958)). Mr. Sutherlin had
not demonstrated a clear right that was being invaded. Injunctions "' will not issue in a
doubtful case."' Id. at 793 (quoting Isthmian S.S. Co. v. Nat'! Marine Eng'rs' Beneficial
Ass'n, 41 Wn.2d 106,117,247 P.2d 549 (1952)).
Mr. Sutherlin suggests, without legal support, that the language of the order to
show cause somehow made it incumbent on Ms. Corulli to irrefutably establish her
inability to pay. He is mistaken; the TRO he requested and obtained was an
extraordinary remedy and it remained his burden to demonstrate that extraordinary relief
was warranted. We agree with the court commissioner that a decision whether Ms.
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Corulli had a duty to make immediate payments toward the equalization obligation
required a further hearing and would likely require discovery.
Because we affirm the trial court on a basis different from that challenged in Mr.
Sutherlin's motion for reconsideration, his challenge to the denial of that motion is moot.
II. Attorney fees
Mr. Sutherlin requests attorney fees under RAP 18.l(a), RCW 26.09.140, and on
the basis of bad faith. A party is entitled to attorney fees if applicable law grants the right
to recover them. RAP 18.l(a).
RCW 26.09.140 provides that "the appellate court may, in its discretion, order a
party to pay for the cost to the other party of maintaining the appeal and attorneys' fees in
addition to statutory costs." When determining whether an award of fees is appropriate
in a dissolution case, this court considers the parties' "relative ability to pay" and the
"arguable merit of the issues raised on appeal." In re Marriage ofLeslie, 90 Wash. App.
796, 807, 954 P.2d 330 (1998). While Mr. Sutherlin filed a financial declaration with this
court, he did not attempt to include Ms. Corulli' s income and deductions for comparison
despite evidence in the record that he has access to that information from child support
proceedings. For that reason, and because we find no merit in his contention that the
TRO should have remained in place, we deny fees under RCW 26.09.140.
Mr. Sutherlin also argues that Ms. Corulli acted in bad faith by forcing him to
bring motions to secure her compliance with her duty of good faith under the dissolution
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decree. Facts are found by trial courts, not appellate courts, and no trial court has
determined that Ms, Corulli had the ability but failed, following notice, to pay amounts
toward the equalization obligation. We may award attorney fees where legal arguments
are advanced in bad faith but no bad faith legal argument on Ms. Corulli's part has been
shown.
Affirmed.
A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to RCW
2.06.040.
d'}dhw~[J-_-
1:
siddoway,
WE CONCUR:
Pennell, J.
j
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