M. Morgan Cherry & Associates, Ltd. v. Cherry

558 S.E.2d 534, 37 Va. App. 329, 2002 Va. App. LEXIS 25
CourtCourt of Appeals of Virginia
DecidedJanuary 22, 2002
DocketRecord No. 2854-00-4
StatusPublished
Cited by4 cases

This text of 558 S.E.2d 534 (M. Morgan Cherry & Associates, Ltd. v. Cherry) is published on Counsel Stack Legal Research, covering Court of Appeals of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
M. Morgan Cherry & Associates, Ltd. v. Cherry, 558 S.E.2d 534, 37 Va. App. 329, 2002 Va. App. LEXIS 25 (Va. Ct. App. 2002).

Opinions

ANNUNZIATA, Judge.

The appellant, M. Morgan Cherry & Associates, Ltd. (MMCA), appeals the award of a judgment against it in the amount of $9,900. The judgment stemmed from an alleged violation of a court order, issued pursuant to Code § 20-79.1, directing MMCA to withhold and pay out of the disposable income of M. Morgan Cherry, an employee and shareholder of MMCA, a deducted amount for spousal support due the appellee, Natalie W. Cherry. The trial court found that MMCA had violated the income deduction order and entered judgment against it. For the following reasons, we affirm.

BACKGROUND

Under familiar principles, we state the evidence in the light most favorable to Ms. Cherry, the party prevailing below. Richardson v. Richardson, 80 Va.App. 341, 349, 516 S.E.2d 726, 730 (1999). MMCA is a Virginia corporation that provides private investigation services. Mr. Cherry owns 60% of the outstanding stock of MMCA. MMCA’s other two shareholders, Robert M. Puglisi and Thomas G. Byrne, each own 20% of the stock. Puglisi and Byrne are not related to Mr. Cherry.

Ms. Cherry filed her bill of complaint for divorce against Mr. Cherry on January 31, 2000. The parties entered into a Consent Pendente Lite Support Order on May 8, 2000, which provided that Mr. Cherry would pay Ms. Cherry $3,300 per month in spousal support. Mr. Cherry ceased making spousal support payments in July 2000. On July 17, 2000, Mr. Cherry instructed MMCA to stop paying him a salary and they complied.

[333]*333On August 28, 2000, at Ms. Cherry’s request, the court issued an income deduction order pursuant to Code § 20-79.1. The income deduction order identified MMCA as the “employer” and required MMCA to withhold and pay out of the disposable income of Mr. Cherry a deducted amount for spousal support for Ms. Cherry. It also provided that MMCA “shall be liable for payments which [it] fails to withhold or mail as specified in the Order.” The amount of the deduction was set at $3,300 per month, subject to a limitation based on Mr. Cherry’s disposable income. Thus, depending upon the amount of disposable income it paid to Mr. Cherry, MMCA would be obligated to make payments of up to $3,300 per month.

On September 22, 2000, Ms. Cherry filed a motion for satisfaction of judgment by defendant’s interest in his corporate entities. By that motion, Ms. Cherry asked the court to require MMCA to directly satisfy, in whole or in part, judgments and other obligations of Mr. Cherry in the case. The court denied the motion without prejudice, holding that it could not be heard on an abbreviated motions day.

Ms. Cherry proceeded to an equitable distribution hearing before the trial court on October 31, 2000. MMCA filed a motion to intervene to protect itself against discovery requests served by Ms. Cherry. It claimed that Ms. Cherry sought privileged and confidential information relating to the company. The trial court denied the motion, and MMCA did not participate in the hearing. As part of the equitable distribution hearing, Ms. Cherry again asked that the court require MMCA to pay judgments entered against Mr. Cherry. The court again denied the request without prejudice, holding that Ms. Cherry had to file a separate lawsuit to pursue the relief sought.

At the hearing, the trial court also sua sponte issued a rule to show cause why MMCA should not be held in contempt for its failure to comply with the income deduction order. The trial court set a return date of November 3, 2000 for the rule to show cause hearing.

[334]*334The trial court conducted the show cause hearing on November 3 and November 17. The evidence proved that Mr. Cherry had instructed MMCA to stop paying a salary to him on July 17, 2000 and that MMCA complied, but that Mr. Cherry continued as an employee of MMCA.

Ms. Cherry contended that MMCA had a continuing liability to Mr. Cherry. She relied, in part, on the testimony of Puglisi, MMCA’s sole witness. Puglisi acknowledged that MMCA had approved the response to the income deduction order filed on September 1, 2000, which stated that “Mr. Cherry instructed [MMCA] not to make any further payments of salary or any other amounts to him. Mr. Cherry is still an employee of [MMCA].” Further, Puglisi testified that Mr. Cherry is co-founder and majority shareholder of the company, that some clients choose MMCA based on Mr. Cherry’s reputation, that Mr. Cherry may have clients that he solicits, and that he has marketing responsibilities.

Counsel for Ms. Cherry indicated three times throughout the show cause proceeding that she was basing her argument, in part, on the testimony of Ms. Cherry from the equitable distribution hearing.1 No transcript of evidence from the equitable distribution hearing was introduced, however. MMCA did not object to the references by counsel and did not produce the evidence referred to by Ms. Cherry’s counsel on appeal.

Ostensibly treating the referenced evidence from the prior hearing as before her, the trial court judge specifically stated [335]*335that, in entering judgment against MMCA, she was relying upon it, including, inter alia, the evidence regarding “the nature of [MMCA’s] business, the kind of work that it does, its ownership, its structure, and ... the way Mr. Cherry operates with respect to his multiple identities, passports, et. cetera.” MMCA failed to object, on due process or other grounds, to the court’s consideration of this evidence.

The trial judge concluded that “MMCA continues to be liable to Max Cherry for his salary whether MMCA is paying it or not ... and inasmuch as it’s an obligation that MMCA owes to Mr. Cherry, it’s an obligation that MMCA under this Court’s income deduction order owes to Ms. Cherry.”

The trial judge did not find MMCA in contempt, but entered judgment against MMCA for $9,900, representing the amount the court deemed due from MMCA to Ms. Cherry under the income deduction order for the months of September, October, and November 2000. MMCA objected to the amount of the judgment.

Thereafter, the trial court refused to allow MMCA to post a supersedeas bond. We reversed that ruling on December 22, 2000, and an appropriate supersedeas bond was set and posted by MMCA.

MMCA now appeals the trial court’s entry of judgment against it.

ANALYSIS

I.

Threshold Issues

Although Ms. Cherry presented three threshold issues for our consideration, one of them is moot.2 We address the remaining issues. First, Ms. Cherry maintains that we lack [336]*336subject matter jurisdiction to hear MMCA’s claims. We disagree. We find that we have jurisdiction pursuant to Code § 17.1-405, which states, “Any aggrieved party may appeal to the Court of Appeals from ... [a]ny ... domestic relations matter arising under Title 16.1 or Title 20.” The court issued the income deduction order pursuant to Code § 20-79.1. Therefore, this appeal involves a domestic relations matter arising under Title 20 and comes within our jurisdiction.

Second, Ms. Cherry contends that, to the extent MMCA attempts to appeal the trial court’s denial of its motion to intervene in the divorce case, the appeal is untimely.

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558 S.E.2d 534, 37 Va. App. 329, 2002 Va. App. LEXIS 25, Counsel Stack Legal Research, https://law.counselstack.com/opinion/m-morgan-cherry-associates-ltd-v-cherry-vactapp-2002.