Melinda Newnam Mills v. Robert Alexander Mills

Court of Appeals of Virginia·Decided May 9, 2023·No. 1043202·Published

Opinion

COURT OF APPEALS OF VIRGINIA PUBLISHED

Present: Judges Chaney, Raphael and Callins Argued at Richmond, Virginia

MELINDA NEWNAM MILLS

OPINION BY

v. Record No. 1043-20-2 JUDGE DOMINIQUE A. CALLINS MAY 9, 2023

ROBERT ALEXANDER MILLS

FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND Phillip L. Hairston, Judge

Eileen McNeil Newkirk (The McNeil Law Group, on briefs), for appellant.

Benjamin R. Rand (Blackburn, Conte, Schilling & Click, P.C., on brief), for appellee.

Robert Mills (husband) and Melinda Mills (wife) come before this Court once more to address issues related to their 2015 divorce. Both challenge the judgment of the trial court in exercising its jurisdiction to adjudicate the terms of a 2018 amendment to their property settlement agreement (“PSA”) and in its allocation of attorney fees. Their primary issues are whether the trial court properly determined that the modification to their PSA was enforceable under the court’s power to enforce the divorce decree; whether the trial court fully and properly directed the special commissioners to disburse the proceeds from the sale of the marital residence; and whether the trial court properly allocated attorney fees. For the following reasons, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

BACKGROUND

I. The Marital Residence

On July 19, 2012, husband and wife entered the PSA and signed the document in the presence of a notary public. The PSA established that husband and wife would continue to own the marital residence jointly after the final divorce decree. In Section 9.3, it also provided:

The parties agree that unless the parties agree otherwise in writing, the Wife may continue to reside in and have exclusive use and possession of the marital residence until the youngest child begins attending college at which time the parties will decide the disposition of the property. If the parties cannot agree on a disposition at that time, the property shall be placed on the market for sale forthwith upon request of either party and the sales proceeds divided 50/50 or as the parties may otherwise agree in writing.

Section 13.5 of the PSA addressed modification and established that “The parties may modify the terms of [the PSA], but any such modification shall not be effective unless in writing and executed with the same formality as [the PSA].” About three years after the parties entered the PSA, the Circuit Court for the City of Richmond entered a final decree of divorce between husband and wife. That final decree affirmed, ratified, and incorporated the PSA.

On August 10, 2015, following their divorce, husband and wife entered a written, notarized modification to the PSA. That agreement granted wife the marital residence as her sole and separate property and granted wife 100% of the net proceeds from the sale of the marital property.

In 2018, husband filed a “motion to reinstate the matter” to reopen the parties’ case to enforce Section 9.3 of the PSA, which motion the trial court granted. Husband also moved for the trial court to appoint a special commissioner to sell the marital residence. Wife objected to husband’s motion and moved for appointment of a special commissioner to execute a deed transferring title to wife in fee simple. Wife planned to sell the property after it was titled in her

name. On May 30, 2018, the trial court appointed both parties’ counsel as co-special commissioners to sell the marital property and distribute the proceeds “pursuant to [the] court’s forthcoming order upon a final determination of the enforceability of the parties’ [PSA] and any modification thereto . . . .” The order also directed the commissioners to place the proceeds in escrow until “a final distribution of such assets may be made by [the trial court].” It provided that the non-prevailing party would pay all costs associated with the appointment of the special commissioners, “including any commission authorized by statute,” unless otherwise directed by the trial court. The marital residence sold on July 24, 2018, resulting in net proceeds of $168,601.43.

On September 17, 2018, wife filed a motion for declaratory judgment asking the trial court to determine that the parties’ modification to the PSA was valid and enforceable; determine each party’s respective rights in the marital residence and sale proceeds; determine when those rights were established; and determine whether husband violated or infringed on wife’s rights. Alternatively, wife asked the trial court to enter judgment against husband for breach of contract because husband’s “refusal to execute the Deed transferring legal title of the marital residence to [wife] upon her request for the same constitutes a breach [of the PSA modification].” Wife asked the trial court to award her the full net proceeds from the sale of the marital residence and to award her attorney fees related to husband’s breach, as well as a monetary judgment as reimbursement for any commission awarded to the special commissioners resulting from the sale of the marital residence.

The parties convened for a hearing on the motion for declaratory judgment on October 11, 2018. That transcript is not part of the record. By an order dated December 20, 2018, the trial court determined that it had subject matter jurisdiction over the matter, continued the matter, and ordered the parties to file additional briefings. Upon agreement of the parties, the trial court

ordered a distribution of $62,000 to wife from the escrow account holding the proceeds of the sale of the marital residence. The court referred the parties to a settlement conference, which was not successful.

The parties reconvened for another hearing on October 10, 2019, where the trial court heard arguments related to the declaratory judgment. The court found that the modification was a valid part of the PSA and therefore found that wife was entitled to 100% of the proceeds from the sale of the house. After that pronouncement, the court was unsure whether husband could present his affirmative defenses in a declaratory judgment action and requested that the parties brief the issue. Following the hearing, husband advised the trial court that he “would no longer seek to pursue any affirmative defenses.”

The trial court entered a written order on January 30, 2020, granting wife’s motion for declaratory judgment and finding that she was entitled to 100% of the proceeds from the sale of the marital estate. The court reserved ruling on attorney fees, awaiting further argument.

II. Attorney Fees

Under the PSA, the parties are entitled to fee awards in some circumstances. The PSA established that in all future litigation, the trial court would have the discretion to award attorney fees. It also provided that “any and all” legal expenses incurred through enforcing the PSA would be paid by the “party found at fault.” Upon a breach, the breaching party would also “pay the attorney’s fees and costs incurred by the other party in securing compliance herewith or incurred in connection with said breach.”

The attorney fees issues that we must review encompass three iterations of this case.

Along with the issues related to the marital residence, we must consider attorney fees associated with wife’s prior appeals to this Court and to the Supreme Court of Virginia. See Mills v. Mills,

70 Va. App. 362 (2019) (“Mills I”), petition for appeal denied, No. 190781 (Va. Oct. 25, 2019) (order).

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