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

• Court: Court of Appeals of Virginia
• Decided: June 13, 2000
• Docket: 2472991
• Status: Unpublished

Opinion

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

- 2 - 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

- 3 - 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.

- 4 - 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).

- 5 - 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.

- 6 -