Wunsch v. Pickering

2011 WY 59, 249 P.3d 717, 2011 Wyo. LEXIS 62, 2011 WL 1366644
CourtWyoming Supreme Court
DecidedApril 12, 2011
DocketS-10-0004
StatusPublished
Cited by1 cases

This text of 2011 WY 59 (Wunsch v. Pickering) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wunsch v. Pickering, 2011 WY 59, 249 P.3d 717, 2011 Wyo. LEXIS 62, 2011 WL 1366644 (Wyo. 2011).

Opinion

249 P.3d 717 (2011)
2011 WY 59

James P. WUNSCH, Appellant (Plaintiff),
v.
Kelly M. PICKERING, f/k/a Kelly M. Wunsch, Appellee (Defendant).

No. S-10-0004.

Supreme Court of Wyoming.

April 12, 2011.

*718 Representing Appellant: Matthew Giacomini and Andrew Reid, Springer and Steinberg, PC, Denver, Colorado. Argument by Mr. Reid.

Representing Appellee: Lea Kuvinka, Kuvinka & Kuvinka, PC, Jackson, Wyoming.

Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.

BURKE, Justice.

[¶ 1] In this post-divorce case between James Wunsch and Kelly Pickering, formerly known as Kelly Wunsch, the district court resolved a dispute between the parties concerning an amount of money Mr. Wunsch owed Ms. Pickering pursuant to the provisions of their divorce settlement agreement. Mr. Wunsch challenges the district court's decision. We will affirm.

*719 ISSUES

[¶ 2] Mr. Wunsch presents these issues:

1. Did the district court abuse its discretion by issuing an order compelling Mr. Wunsch to produce documents that were irrelevant or not in his possession, custody, or control?
2. After the district court entered default against Mr. Wunsch as a sanction for failing to produce the documents as ordered, did the district court err as a matter of law by restricting Mr. Wunsch's participation in the subsequent hearing on damages?
3. Was the evidence sufficient to support the trial court's award of damages?

FACTS

[¶ 3] Before their divorce in 2004, Mr. Wunsch and Ms. Pickering owned and operated a financial services business, helping to invest their clients' funds in a wide variety of financial products, including mutual funds, stocks, bonds, annuities, and life insurance. The two were affiliated with LPL Financial Corporation, a financial investment company. During the divorce, the couple entered into a property settlement agreement that was later approved by the district court and incorporated into the divorce decree. The agreement provided generally that Mr. Wunsch would continue operating most of the financial services, while Ms. Pickering would receive payments to compensate for her share of the former business. The agreement, referring to Mr. Wunsch as "JIM" and to Ms. Pickering as "KELLY," included this fee-splitting provision:

The parties will share equally any fees earned on joint client accounts.... If JIM replaces any of the above joint client accounts, JIM and KELLY will share equally the fees on the replaced account ... until such time as KELLY has received in fees an amount equal to two times the annual earnings on the amount replaced, based on the fee charged before the replacement. At such time, KELLY shall no longer receive any fees on the replaced account.

[¶ 4] Not long after the divorce, disputes developed between the parties about the interpretation and administration of this agreement. The disputes were mediated, and many of them settled. In this mediation, the parties agreed to appoint an accountant as Administrator to perform the accounting required under the settlement agreement. The mediation did not resolve the parties' disagreement about the meaning of the phrase "two times the annual earnings on the amount replaced." That dispute was ultimately resolved in Wunsch v. Pickering, 2008 WY 131, 195 P.3d 1032 (Wyo.2008).

[¶ 5] The Administrator developed a list of approximately 165 joint accounts held by the parties as of the date of divorce. As long as clients' funds remained in the parties' joint account, the accounting was relatively simple. The financial services company could split the fees, and send one half directly to Mr. Wunsch and one half directly to Ms. Pickering. Both parties had access to information about the accounts and the fees received. The Administrator could use this information to reconcile the accounts and, when some adjustment was necessary because of medical expenses for the children, for example, the Administrator would facilitate payments from one party to the other to balance the accounts.

[¶ 6] The accounting was more difficult when clients removed their funds from the parties' joint accounts. A client might take the funds and reinvest in another financial product offered by Mr. Wunsch, such as insurance or annuities. In their settlement agreement, the parties referred to this as a "replaced" account. For a replaced account, Mr. Wunsch would continue to receive fees, and under the agreement, Ms. Pickering remained entitled to half of those fees. Because a replaced account was held by Mr. Wunsch individually, however, Ms. Pickering did not have the same access to information about it, and the fees would not be paid directly to her. She and the Administrator had to rely on information provided by Mr. Wunsch to determine what amount Ms. Pickering should receive pursuant to the settlement agreement.

*720 [¶ 7] However, a client might instead remove funds from the parties' joint account and, for example, keep the cash or reinvest through a different financial services company unrelated to Mr. Wunsch. For a "non-replaced" or "closed" account such as this, Mr. Wunsch would no longer earn any fees. According to Mr. Wunsch, he would, in turn, not owe Ms. Pickering any fee split under the terms of the settlement agreement.

[¶ 8] As noted above, the Administrator originally listed approximately 165 joint accounts held by the parties. By the time the current dispute arose, the Administrator had listed approximately 50 of those as "inactive" accounts that were no longer held in the parties' joint accounts. A dispute developed concerning these inactive accounts. Ms. Pickering pointed out that, if the accounts had been replaced and Mr. Wunsch was still earning fees on them, then she was still owed half of those fees. Mr. Wunsch claimed, to the contrary, that these accounts had not been replaced and he owed Ms. Pickering no fees relating to these accounts. The Administrator could tell that the clients' funds had been removed from the parties' joint accounts, but did not have adequate information to tell if the accounts had been replaced. He continued to calculate the "projected amount" Ms. Pickering would be owed if these accounts had been replaced, but he could not determine whether Ms. Pickering was actually owed these amounts.

[¶ 9] In 2009, Mr. Wunsch filed a motion asking the district court to clarify what, if anything, he owed Ms. Pickering on certain accounts. Ms. Pickering filed a response asserting that Mr. Wunsch had replaced these accounts, but had breached the settlement agreement by failing "to disclose sufficient information to [allow her or the Administrator] to follow the replaced accounts." Based on this alleged breach, she asked the district court to order Mr. Wunsch to pay the entire projected amount. The district court set a hearing on these issues for May 8, 2009.

[¶ 10] On March 24, 2009, Ms. Pickering served discovery requests on Mr. Wunsch. These included requests for admissions, interrogatories, and requests for production of documents. Among the documents requested were those referring to or relating to the "inactive" accounts, the tax returns and forms for Mr. Wunsch individually and for Wunsch Financial Services, Inc., and the commission statements Mr. Wunsch had received since August of 2005. Mr. Wunsch's response, delivered on April 28, 2009, was generally to object to the production of these documents, stating that the requests were "irrelevant and not calculated to lead to the discovery of admissible evidence and ...

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2011 WY 59, 249 P.3d 717, 2011 Wyo. LEXIS 62, 2011 WL 1366644, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wunsch-v-pickering-wyo-2011.