Rebecca Elgin, f/k/a Rebecca Elgin Kroner v. Kroner

COURT OF APPEALS OF VIRGINIA
Present: Judge Humphreys, Senior Judges Hodges and Overton
Argued at Chesapeake, Virginia
REBECCA ELGIN, F/K/A
REBECCA ELGIN KRONER
MEMORANDUM OPINION * BY
v. Record No. 2472-99-1 JUDGE WILLIAM H. HODGES
JUNE 13, 2000
DAVID ROBERT KRONER
FROM THE CIRCUIT COURT OF THE CITY OF HAMPTON
Christopher W. Hutton, Judge
Donald K. Butler (Mary Beth Joachim; Morano,
Colan & Butler, on briefs), for appellant.
Charles E. Haden (Stuart A. Saunders, on
brief), for appellee.
Rebecca Elgin appeals from an order of the Circuit Court of
the City of Hampton (trial court) that denied her request for an
award of attorney's fees and costs. Elgin contends the trial
court erred by failing to abide by a provision in the parties'
property settlement agreement that provided for the payment of
attorney's fees and costs by the defaulting party to the enforcing
party. She also seeks an award of attorney's fees and costs
incurred in pursuing this appeal. We reverse the ruling of the
trial court and remand this matter for further proceedings.
* Pursuant to Code § 17.1-413, recodifying Code
§ 17-116.010, this opinion is not designated for publication.
Background
Elgin and Dr. David Kroner married on August 14, 1971. They
subsequently separated, and a May 24, 1995 separation and property
settlement agreement (Agreement) was "ratified, confirmed, and
incorporated" into their June 11, 1995 divorce decree. Paragraph
12 of the Agreement provided as follows:
It is understood and agreed between the
parties hereto that each party shall be
entitled to have this Agreement enforced as
a binding contract between the parties . . .
either before or after the entry of any
decree of divorce . . . and any costs,
including reasonable attorney's fees,
incurred in enforcing this Agreement shall
be paid by the defaulting party.
Paragraph 8 of the Agreement required Dr. Kroner to maintain
a life insurance policy on himself in an amount no less than
$100,000. The Agreement provided that the insurance proceeds
would be payable to Dr. Kroner's brother as trustee for Elgin and
the parties' two children.
Dr. Kroner obtained a $400,000 life insurance policy, but
named his current wife as the sole beneficiary. He amended his
will to provide that $100,000 from his estate would be payable to
his brother in trust for Elgin and the parties' children. He
testified that, at all times pertinent, had he died his estate
would have been large enough to pay $100,000 into the trust.
In the summer of 1998, Elgin contacted Dr. Kroner seeking
assurances that he was complying with Paragraph 8. Dr. Kroner did
not provide Elgin with the assurances she sought, and Elgin
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retained counsel to pursue the matter. On June 15, 1999, Elgin
filed a show cause petition asserting Dr. Kroner's non-compliance
with Paragraph 8 of the Agreement.
Dr. Kroner subsequently amended his insurance policy, making
his brother a beneficiary-in-trust of twenty-five percent of the
$400,000 policy. The policy named the parties' children, but not
Elgin, as the beneficiaries of the insurance trust. On July 12,
1999, Dr. Kroner amended the policy again, this time adding Elgin
as a beneficiary of the insurance trust. Dr. Kroner conceded that
he had not been in compliance with Paragraph 8 of the Agreement.
But he claimed that, until June 1999, he believed that he was
complying with the Agreement.
With the insurance issue resolved by the July 12 amendment,
the only matter of contention addressed at the September 1, 1999
hearing was Elgin's entitlement to attorney's fees and costs. The
trial court denied Elgin's request for fees and costs, holding
that Dr. Kroner was "not in contempt for his failure to comply
with the Agreement and Court Order."
Elgin contends the fact that Dr. Kroner was found not to be
in contempt of court was immaterial. He conceded that he had not
complied with the Agreement; therefore, he was liable for Elgin's
reasonable attorney's fees and costs incurred in enforcing the
Agreement. Dr. Kroner responds that whether to award attorney's
fees and costs was a matter within the discretion of the trial
court. And given the fact that he made a good faith effort to
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comply with the Agreement, the court did not abuse its discretion
in denying Elgin's request for attorney's fees and costs.
Moreover, the trial court did not find that he was in default, so
he was not required under the Agreement to pay Elgin's attorney's
fees or costs.
Analysis
Code § 20-109.1 permits a circuit court to incorporate into a
decree of divorce any valid agreement executed by the parties
pertaining to the maintenance of the parties and their minor
children. "Where the court affirms, ratifies and incorporates by
reference in its decree such agreement or provision thereof, it
shall be deemed for all purposes to be a term of the decree, and
enforceable in the same manner as any provision of such decree."
Code § 20-109.1.
"When a judgment is based upon the construction or
interpretation of a contract, an appellate court is not bound by
the trial court's construction of the contract's provisions. An
appellate court is equally able to construe the meaning of the
provisions of an unambiguous contract." Nicholson v. Nicholson,
21 Va. App. 231, 239, 463 S.E.2d 334, 338 (1995) (citation
omitted).
Generally, whether a defaulting party should be required to
pay the attorney's fees and costs of the party seeking to enforce
the terms of an incorporated property settlement agreement is left
to the discretion of the circuit court. See Alexander v.
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Alexander, 12 Va. App. 691, 697, 406 S.E.2d 666, 669 (1991). But
where the parties' separation agreement expressly provides for an
award of attorney's fees to a party who incurs expenses and costs
to enforce a default, the court must enforce the terms of the
agreement and enter an award in favor of the enforcing party,
consistent with the terms of the agreement. See Sanford v.
Sanford, 19 Va. App. 241, 249, 450 S.E.2d 185, 190 (1994).
Paragraph 8 of the Agreement expressly required Dr. Kroner to
maintain $100,000 of life insurance coverage, with his brother as
beneficiary and trustee of the proceeds for Elgin and the parties'
children. Dr. Kroner admittedly failed to comply with this
provision until July 1999, well after he was requested to do so by
Elgin. 1 While the trial court concluded that Dr. Kroner was not
in contempt of court, this conclusion does not equate to a finding
that he had not been in default. Indeed, the court's order
reflected that Dr. Kroner had not complied with the Agreement.
Dr. Kroner's assertion, therefore, that the trial court did not
find him in default is without merit.
The Agreement unambiguously requires the defaulting party
to pay the reasonable attorney's fees and costs of the party
1
While Dr. Kroner amended his will to make his brother a
devisee-in-trust of $100,000, this bequest, unlike naming the
brother as a beneficiary-in-trust on the life insurance policy,
did not protect Elgin and the children from potential creditors
of the estate. See Code § 38.2-3122 (with certain exceptions,
exempting life insurance proceeds from the claims of the
insured's creditors); N.H. Rev. Stat. Ann. § 408:2 (1998).
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required to enforce its terms. The Agreement does not make
recovery conditional on the defaulting party acting in bad faith
or being held in contempt of court. Dr. Kroner conceded that he
was not in compliance with Paragraph 8, and, as a result of this
default, Elgin incurred legal fees to enforce the Agreement.
Thus, the court erred by refusing to enter an award of
reasonable attorney's fees and costs. Moreover, because Elgin
has prevailed on appeal, pursuant to the Agreement, Dr. Kroner
is obligated to pay her attorney's fees and costs expended on
appeal to enforce the Agreement. See Sanford, 19 Va. App. at
249, 450 S.E.2d at 190.
Accordingly, the matter is remanded to the trial court for
a determination and award of attorney's fees and costs due
Elgin, including an amount for her fees and costs incurred on
appeal to this Court.
Reversed and remanded.
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