Mark A. Blevins, Esq.
David C. White, Esq.
The Opinion of the Court was delivered PER CURIAM.
1. The standard of review applicable to an appeal from a motion to alter
or amend a judgment, made pursuant to W. Va. R. Civ. P. 59(e), is the same standard that
would apply to the underlying judgment upon which the motion is based and from which the
appeal to this Court is filed. Syllabus Point 1, Wickland v. American Travellers Life
Insurance Co., 204 W.Va. 430, 513 S.E.2d 657 (1998).
Per Curiam: This case is before this Court
upon appeal of a final order of the Circuit Court of Marshall County entered
on October 5, 2001. In that order, the circuit court denied a motion to alter
or amend a judgment and an alternative motion for a new trial filed by the
appellant and plaintiff below, Samuel Harris, after the court found him in
contempt for failing to pay the appellee and defendant below, Michelle D.
Harris, $50,000.00 pursuant to a property settlement agreement
(See footnote 1) signed
by the parties in the underlying divorce action. The court further ordered
Mr. Harris to pay Ms. Harris $7,468.60 plus interest for certain medical bills
she incurred during their marriage.
In this appeal, Mr. Harris contends that the circuit court misinterpreted the
parties' property settlement agreement, and therefore, the circuit court erred by holding him
in contempt. This Court has before it the petition for appeal, the entire record, and the briefs
and argument of counsel. For the reasons set forth below, we reverse, in part, and affirm, in
part, the circuit court's decision holding Mr. Harris in contempt.
The parties were married on July 15, 1988, and separated on July 1, 1996. A
final divorce order was entered on September 6, 1996. The final divorce order incorporated
a property settlement agreement which the parties signed on August 1, 1996.
The property settlement agreement addressed, inter alia, the distribution of any
monies the parties might receive from two lawsuits. The agreement specifically provided
that each party would receive:
½ of all amounts received from the settlement, verdict or
mediation pertaining to a personal injury case involving physical
injury to Husband and ½ of all funds received regarding the
accompanying claim for loss of consortium.
Shortly before the parties separated, they contemplated filing their own
personal bad faith lawsuit against McDonough Caperton Insurance Company and USF&G
based on the companies' actions following the wreck of the mobile home. However, after
the parties signed the property settlement agreement, they decided, upon advice of counsel,
not to file the bad faith lawsuit against McDonough Caperton Insurance Company and USF&G.
(See footnote 3) Thereafter, Housing Showcase settled its
lawsuit against McDonough Caperton Insurance Company and USF&G for $100,000.00
(See footnote 4)
By contrast, Ms. Harris contends that the lawsuit filed by Housing Showcase
against McDonough Caperton Insurance Company and USF&G is the bad faith action
referenced in the property settlement agreement. She claims that although the lawsuit was
filed by Housing Showcase, the action was brought to recover money she and Mr. Harris
spent on behalf of the corporation. Thus, she maintains that the evidence supports the circuit
court's finding of contempt against Mr. Harris.
The agreement at issue was executed for the purpose of dividing the parties'
personal assets and debts. The circuit court essentially found that the Housing Showcase
lawsuit was a personal asset of the parties. The court stated that the corporation and the
parties were indistinguishable. However, the record does not support such a conclusion.
The evidence clearly shows that the parties were not the only stockholders of Housing
Showcase. Documents issued by Housing Showcase indicate that there were at least three
additional stockholders at the time the agreement at issue was executed. Thus, the evidence
does not support the court's finding that the Housing Showcase lawsuit was a personal asset
of the parties.
Furthermore, other than Ms. Harris' testimony, there is no evidence that the
parties even contemplated dividing up the proceeds of the lawsuit brought by Housing
Showcase. While Ms. Harris testified that the parties' personal funds were used to finance
the Housing Showcase lawsuit, documents submitted by Mr. Harris show that the corporation
used commercial loans to pay its legal fees.
It appears that the circuit court simply discounted the evidence showing that
the parties contemplated filing their own personal bad faith lawsuit against McDonough
Caperton Insurance Company and USF&G shortly before they separated and executed the
property settlement agreement. Essentially, the circuit court concluded that the parties
intended to distribute the proceeds of the Housing Showcase lawsuit which were clearly not
their personal property, yet chose to ignore the possible proceeds of the personal bad faith
lawsuit which they were intending to file at the time the property settlement agreement was
executed. The evidence simply does not support that conclusion.
In summary, we find that the circuit court clearly erred by interpreting the
property settlement agreement as referencing the lawsuit brought by Housing Showcase
rather than the personal bad faith lawsuit being prepared by the parties at the time the
agreement was executed. Therefore, the circuit court's decision is reversed to the extent that
it holds Mr. Harris in contempt and orders him to pay Ms. Harris $50,000 of the proceeds
resulting from the settlement of the lawsuit filed by Housing Showcase against McDonough
Caperton Insurance Company and USF&G.
Mr. Harris also contends that the circuit court erred by interpreting a provision
in the property settlement agreement apportioning the parties' debts as requiring him to pay
Ms. Harris $7,468.60 for medical bills she incurred while they were married. He contends
that Ms. Harris did not cooperate in filling out forms so that the bills would be paid by his
insurance company, and therefore, he should not have to reimburse her for those expenses.
Accordingly, as set forth above, the decision of the Circuit Court of Marshall
County holding Mr. Harris in contempt is affirmed, in part, and reversed, in part.
Quan Le, Esq.
Neiswonger & White
Wheeling, West Virginia Moundsville, West Virginia
Attorneys for Appellant
Attorney for Appellee
2. In reviewing the findings of fact and conclusions of law of a circuit
court supporting a civil contempt order, we apply a three-pronged standard of review. We
review the contempt order under an abuse of discretion standard; the underlying factual
findings are reviewed under a clearly erroneous standard; and questions of law and statutory
interpretations are subject to a de novo review. Syllabus Point 1, Carter v. Carter, 196
W.Va. 239, 470 S.E.2d 193 (1996).
½ of any and all amounts
received from the settlement or verdict or mediation pertaining to an insurance
company bad faith action against McDonough Caperton Insurance Company and
USF&G (See footnote 2)
and
The agreement also provided that Mr. Harris would maintain health insurance coverage for
Ms. Harris until her remarriage or death and that he would pay medical bills incurred at
Wheeling Hospital during the marriage which have not yet been paid.
On July 16, 1998, Ms. Harris filed a Petition for Contempt in the Circuit Court
of Marshall County alleging that Mr. Harris had failed to comply with the property settlement
agreement. Specifically, she asserted that Mr. Harris had not given her one-half of the
proceeds resulting from the settlement of the bad faith lawsuit. She further asserted that Mr.
Harris had failed to pay certain hospital bills which she had incurred during their marriage.
The record shows that during the marriage, the parties were stockholders in a
mobile home business known as Housing Showcase Mobile Homes, Inc. (hereinafter
Housing Showcase). Sometime before the parties separated, Housing Showcase was
named as a defendant in a series of lawsuits arising out of the wreck of one of its mobile
homes which was being transported incident to its sale. Eventually, Housing Showcase filed
suit against McDonough Caperton Insurance Company and USF&G alleging, inter alia, that
the insurance companies had failed to provide a defense for Housing Showcase in the
lawsuits arising from the wreck of the mobile home.
On April 3, 2000, the circuit court held a bench trial on the Petition for
Contempt filed by Ms. Harris. After reviewing the evidence, the circuit court entered an
order on September 5, 2001, finding Mr. Harris in contempt and ordering him to pay Ms.
Harris the sum of $50,000.00, without interest, as her net share of the settlement of the
lawsuit filed by Housing Showcase against McDonough Caperton Insurance Company and
USF&G. The court further ordered Mr. Harris to pay Ms. Harris $7,468.60 plus interest for
medical bills she incurred at Wheeling Hospital during the marriage which had not yet been
paid. Subsequently, Mr. Harris filed a motion to alter or amend the judgment and an
alternative motion for a new trial. The motions were denied in the final order entered on
October 5, 2001. This appeal followed.
As noted above, Mr. Harris appeals from an order denying his motion to alter
or amend the judgment finding him in contempt. This Court has held that, The standard of
review applicable to an appeal from a motion to alter or amend a judgment, made pursuant
to W. Va. R. Civ. P. 59(e), is the same standard that would apply to the underlying judgment
upon which the motion is based and from which the appeal to this Court is filed. Syllabus
Point 1, Wickland v. American Travellers Life Insurance Co., 204 W.Va. 430, 513 S.E.2d
657 (1998). Since the underlying judgment is the September 5, 2001 order finding Mr.
Harris in contempt, we must apply the standard of review applicable to such a proceeding.
In Syllabus Point 1 of Carter v. Carter, 196 W.Va. 239, 470 S.E.2d 193 (1996), this Court
held that:
In reviewing the findings of fact and conclusions of law of a
circuit court supporting a civil contempt order, we apply a
three-pronged standard of review. We review the contempt
order under an abuse of discretion standard; the underlying
factual findings are reviewed under a clearly erroneous standard;
and questions of law and statutory interpretations are subject to
a de novo review.
We also note that a clearly erroneous standard of review is applicable to the
court's interpretation of the parties' property settlement agreement. This Court has stated
that: When a trial court determines that an agreement is ambiguous and construes the
meaning of a provision in the contract based on extrinsic evidence, such as the parties' intent,
our standard of review is 'clearly erroneous.' Jessee v. Aycoth, 202 W.Va. 215, 218, 503
S.E.2d 528, 531 (1998). With these standards in mind, we now consider the parties'
arguments.
Mr. Harris contends that the circuit court misinterpreted the parties' property
settlement agreement. He asserts that the only reasonable interpretation of the provision in
the agreement which concerns an insurance company bad faith action is that it references
the personal bad faith lawsuit the parties contemplated filing against McDonough Caperton
Insurance Company and USF&G before they separated. Mr. Harris says the agreement does
not refer to the Housing Showcase lawsuit because neither he or Ms. Harris had a personal
stake in that action. In other words, he claims that the Housing Showcase lawsuit was not
a personal asset subject to equitable distribution in the parties' divorce.
This Court has observed that: The mere fact that parties do not agree to the
construction of a contract does not render it ambiguous. The question as to whether a
contract is ambiguous is a question of law to be determined by the court. Syllabus Point 1,
Berkeley County Pub. Serv. Dist. v. Vitro Corp. of America, 152 W.Va. 252, 162 S.E.2d 189
(1968). Generally, [a] contract is considered ambiguous if it is 'reasonably susceptible to
more than one meaning in light of the surrounding circumstances and after applying the
established rules of construction.' Jessee, 202 W.Va. at 218, 503 S.E.2d at 531 (quoting
Williams v. Precision Coil, Inc., 194 W.Va. 52, 65 n.23, 459 S.E.2d 329, 342 n.23 (1995)).
In order to resolve ambiguity in a contract, the intent of the parties must be ascertained.
Exploring the intent of the contracting parties often, but not always, involves marshaling
facts extrinsic to the language of the contract document. When this need arises, these facts
together with reasonable inferences extractable therefrom are superimposed on the
ambiguous words to reveal the parties' discerned intent. Fraternal Order of Police, Lodge
Number 69 v. City of Fairmont, 196 W.Va. 97, 101 n.7, 468 S.E.2d 712, 716 n.7 (1996).
In the instant case, the circuit court found that the property settlement
agreement was ambiguous and allowed the parties to testify with regard to their intentions
at the time the agreement was executed. The court then found that the testimony herein
clearly shows that there is no mistake as to the lawsuit in question. Without further
explanation, the circuit court summarily concluded that the lawsuit referenced in the property
settlement agreement was the civil action filed by Housing Showcase against McDonough
Caperton Insurance Company and USF&G.
We believe that the circuit court's determination that the agreement is
ambiguous with respect to the provision regarding the bad faith action was correct. The
agreement is vague in that regard and fails to identify a specific lawsuit. Given the fact that
the parties were involved in multiple lawsuits at the time the agreement was signed, the
provision relating to a bad faith action is clearly ambiguous. However, after thoroughly
reviewing the entire record, including the parties' testimony, we find that the circuit court
clearly erred by finding that the agreement was referring to the Housing Showcase lawsuit.
Ms. Harris contends, however, that Mr. Harris must pay these medical expenses
pursuant to the agreement. We agree. The property settlement agreement clearly provides
that Mr. Harris will maintain in full force and effect health insurance covering Ms. Harris.
In addition, the agreement specifically states that, Husband shall pay medical bills incurred
at Wheeling Hospital during the marriage which have not yet been paid. The evidence
presented at the contempt proceeding established that Mr. Harris had not paid the medical
bills incurred by Ms. Harris at Wheeling Hospital while they were married. Accordingly, the
circuit court's decision finding Mr. Harris in contempt for failing to pay Ms. Harris' medical
expenses and ordering him to pay her $7,468.60 plus interest is affirmed.
Affirmed, in part, and Reversed, in part.
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