Interpretation of Marital Dissolution Agreement Leads to Civil Contempt in Memphis, Tennessee: Cowan v. Cowan

May 18, 2020 K.O. Herston 0 Comments

Facts: Husband and Wife divorced after 30 years of marriage.

Paragraph 7 of their marital dissolution agreement (MDA) says:

If Husband receives a one-time lump-sum payment in the nature of a bonus in connection with work performed after the execution of this Agreement, Husband shall receive said payment, even if paid to him at the time of his retirement. If, at or about the time of his retirement, Husband receives a one-time lump-sum payment in connection with his retirement or his years of service, Husband shall pay to Wife a sum equal to one-half of the net amount that he receives upon his receipt of the same. . . . Said payment is made to effectuate an equitable division of the marital property and shall not be taxable to Wife or deductible by Husband. Husband shall provide to Wife all documentation necessary for her to verify that she received proper payment under this paragraph.

Husband worked as a pilot for Federal Express for 35 years and retired less than a year after the divorce. The month after his retirement, he received an “End of Career Sick Leave/Advance Notice of Plan to Retirement Bonus” of $44,026.18.

Tennessee contempt attorney's feesWife demanded half of the bonus per the MDA, and Husband refused.

Wife petitioned to have Husband held in civil contempt and for her attorney’s fees.

Husband argued that the first sentence of Paragraph 7 limits the application of that paragraph to “work performed after the execution of” the MDA.

The trial court applied the second sentence of Paragraph 7, awarded Wife one half of the bonus, found Husband in civil contempt, and awarded Wife $10,500 in attorney’s fees per the enforcement provision in the MDA.

Husband filed a Rule 52 motion. The trial court denied that motion and awarded Wife another $1900 in attorney’s fees for responding to the motion.

Husband appealed.

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

A marital dissolution agreement is a contract subject to the rules governing construction of contracts. The primary goal of a court interpreting an MDA is to find and give effect to the intent of the parties when the agreement was executed. To do so, courts must begin with the language of the agreement itself.

If an MDA is clear and unambiguous, it must be enforced according to its plain terms. A provision is ambiguous if there is more than one reasonable interpretation of it.

Like the trial court, the Court of Appeals could not find more than one reasonable interpretation of Paragraph 7:

First, the bonus was received as a result of Husband’s retirement. . . . The Bonus was not based on Husband’s additional or exceptional service in the months following the final decree of divorce. Second, $40,000 of the Bonus was the result of Husband’s age and years of service as of November 2015, before the MDA’s execution.

* * * * *

[B]y the terms of the MDA, the order was clear, specific, and unambiguous. Paragraph 7 adequately describes the type of payments that would entitle Wife to one-half of the net amount. By its terms, Wife is entitled to payments made in relation to Husband’s retirement or his age and years of service. Both possibilities have occurred with the Bonus.

* * * * *

Husband violated the MDA by refusing to pay Wife one-half of the Bonus.

The trial court’s judgment was affirmed, including the nearly $12,500 in attorney’s fees. The court also awarded Wife her attorney’s fees on appeal.

K.O.’s Comment: I don’t know what Wife’s attorney’s fees were on appeal, but it would not at all surprise me if they exceed $10,000, in which case Wife will have received her half of the bonus plus Husband’s half in attorney’s fees.

Cowan v. Cowan (Tennessee Court of Appeals, Western Section, April 24, 2020).

Interpretation of Marital Dissolution Agreement Leads to Civil Contempt in Memphis, Tennessee: Cowan v. Cowan was last modified: May 18th, 2020 by K.O. Herston

Leave a Comment