Enforcement Provision in Marital Dissolution Agreement Compels Attorney’s Fee Award in Rhea Co., TN Divorce: Panda v. Panda

panda madFacts: After 26 years of marriage, Husband and Wife divorced. The trial court approved their marital dissolution agreement (MDA) that addressed the division of assets and debt accumulated during the marriage.

Among other things, the MDA directed that until the marital residence was sold, Husband and Wife would equally divide the mortgage payment, insurance, and utilities. It also required Husband to pay for certain repairs to the home.

The MDA also contained the following enforcement provision:

In the event either party defaults in the performance of the provisions of this agreement and the other party is required to file an action to enforce the agreement and compel performance, the defaulting party will pay the attorney’s fees incurred by the other party.

Five months after the MDA was adopted by the trial court, Wife petitioned to hold Husband in contempt. She alleged he failed to reimburse her for his one-half portion of the mortgage payment, insurance, and utilities.

After a hearing, the trial court concluded that Wife was entitled to a judgment of $3884.73 for Husband’s portion of the maintenance of the marital residence. The court denied her request for attorney’s fees, however, based on its findings that Husband’s actions were not contemptuous.

Wife appealed.

On Appeal: The Court of Appeals reversed the trial court.

Tennessee follows the American Rule which provides that litigants pay their own attorney’s fees absent a statute or an agreement providing otherwise. Under the American Rule, a party in a civil action may recover attorney’s fees only if (1) a contractual or statutory provision creates a right to recover attorney’s fees, or (2) some other recognized exception to the American Rule applies, allowing for recovery of such fees in a particular case.

The language of a fee provision in a marital dissolution agreement is subject to the usual rules of contract interpretation, and the award of such fees is limited to the situation agreed to by the parties. The court’s role in resolving disputes regarding the interpretation of a contract is to ascertain the intention of the parties based upon the usual, natural, and ordinary meaning of the language used.

The trial court has no discretion regarding whether to award attorney’s fees when the contract provides for the recovery of such fees in a certain situation.

The Court agreed with Wife that the MDA required the trial court to award attorney’s fees, explaining:

Pursuant to the MDA, Husband was required to remit payment for “one-half of the mortgage payments, insurance and utilities . . . until the property is sold.” He also agreed to “make certain repairs to the property” . . . and to execute such documents necessary to effectuate the agreement. The record reflects that Wife was required to file several actions to compel Husband’s performance and that he did not comply with the provisions of the MDA until after such actions had been filed and an order was entered by the trial court. . . . With these considerations in mind, we conclude that Wife is entitled to an award of attorney fees pursuant to the provisions of the MDA. We remand this case to the trial court for proceedings to determine the reasonable amount of such fees.

Wife also requested her attorney’s fees on appeal. Finding that an award of attorney’s fees on appeal was contemplated in the MDA, the Court remanded the case back to the trial court to determine Wife’s reasonable attorney’s fees both in the trial court and on appeal and award those fees to her.

Panda v. Panda (Tennessee Court of Appeals, Eastern Section, August 19, 2016).

Information provided by K.O. Herston: Knoxville, Tennessee Divorce and Family-Law Attorney.

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K.O. Herston is a family-law attorney in Knoxville, Tennessee whose practice is devoted exclusively to family law, including divorce, child custody, child support, alimony, prenuptial agreements, and other aspects of family law.

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