Five years of litigation, all for naught

Posted Saturday, September 10th, 2016 by Gregory Forman
Filed under Alimony/Spousal Support, Attorney's Fees, Contempt/Enforcement of Orders, Equitable Distribution/Property Division, Of Interest to Family Court Litigants, Of Interest to Family Law Attorneys, South Carolina Appellate Decisions, South Carolina Specific

Pity poor Lori Stoney, a fellow member of the Charleston County family court bar, and the appellant in the July 27, 2016 Court of Appeals opinion in Stoney v. Stoney, 417 S.C. 345, 790 S.E.2d 31 (Ct. App. 2016).  After waiting over 20 months from oral argument to the decision, the Court of Appeals simply ordered a new trial on the issues she appealed: alimony, child support, equitable distribution, grounds for divorce, and attorney’s fees. If a 20-month wait for a decision is extremely rare, the decision to order a complete new trial from a family court appeal is, perhaps, unprecedented. I cannot recall a similar remedy from a family court appeal. The trial ended May 27, 2011. With Husband’s motion to reconsider and likely petition for certiorari, she is unlikely to have her new trial before 2018 (perhaps 2019).

However frustrating this result is to Wife, it is hard to determine how the Court of Appeals could have fashioned a better remedy. The family court simply did not get Husband, who is also an attorney, to obey court orders or rules of procedure. Prior to trial, Husband was found in contempt five times, with one additional contempt claim unresolved. Wife sought further contempt findings at trial because Husband had not paid his share of the joint-expert CPA fees. The family court failed to address that contempt claim. Despite being asked to provide an updated financial declaration during trial, Husband never did so and the family court never required him to do so. It was apparent during trial that Husband had not fully responded to discovery. The family court simply went forward.

The family court allowed Husband’s brother to intervene in this case to protect Brother’s claimed interest in assets that were owned by the parties. The family court allowed Brother’s attorney to intrude on portions of the case outside that intervention, directed Brother’s attorney to draft the proposed final orders, and signed these drafts before obtaining input from Wife. The Court of Appeals opinion could be a primer on the myriad ways a family court judge can be derelict in his or her duties.

Wife’s first issue on appeal was Brother’s intervention. The Court of Appeals found it was proper for Brother to intervene, as he claimed ownership interests in and debt obligations from marital properties. However the Court of Appeals found “the record establishes that the family court erred in failing to control the depth of Brother’s intervention. Throughout the trial, Brother’s counsel was permitted to interject objections and comments regarding matters that had nothing to do with Brother’s interests in the litigation.” It further found error in allowing Brother’s attorney to draft the final orders, especially an order that only addressed the ground for divorce.

Wife’s second issue on appeal asked that the case be reopened due to newly discovered evidence. The month after trial Wife received documents from a third party that contradicted Brother and Husband’s assertion as to the ownership interest and debt obligations of two marital businesses. Based on this after discovered evidence she moved to reopen the case. Despite Husband’s past denial that these records existed, the family court refused to reopen the case, using an analysis the Court of Appeals called “unsupported.” Holding “the record is replete with evidence that Husband was evasive and uncooperative with discovery,” the Court of Appeals found that these records could not have been discovered prior to trial. It further found “it is difficult to discern how such documents could not have affected the outcome of the litigation.” (emphasis in original). Thus it found the family court erred in not reopening the case.

Wife’s third issue on appeal was the family court’s determination of Husband’s income. At trial the family court imputed $100,000 annual income to Husband. Given Husband’s failure to file a financial declaration, along with substantial evidence that significant personal expenses were being paid by his businesses, the Court of Appeal found this imputation erroneous. However, other than finding $100,000 imputed income was insufficient, the opinion offered no guidance on what income Husband should be imputed (Wife argued that Husband’s actual income is $892,958 per year), insuring a substantial fight on that issue upon remand.

Wife also appealed the family court’s failure to award her alimony and its insufficient award of child support. Because it determined the family court’s imputation of income to Husband was insufficient, the Court of Appeals remanded these two issues. Wife’s further appealed the family court’s failure to require Husband to have life insurance to secure his support obligations. Because it remanded child support and alimony, the Court of Appeals remanded that issue too.

Because the Court of Appeals determined that there had been insufficient and inaccurate financial disclosure by Husband, it remanded the equitable distribution award, including Wife’s claim for a special equity interest in a business Husband developed after the date of filing, in which Wife claimed marital funds were used to start the business.

Wife argued the family court erred in failing to find Husband in contempt for failing to pay his portion of the fee for the court-appointed CPA as well as the fees he was ordered to pay her attorney upon consideration of the sixth rule to show cause. Husband’s contempt sentence from the sixth rule to show cause was suspended on the condition that he make the court-ordered payments to the court-appointed CPA and Wife’s attorney. Because Husband failed to make the two payments, the Court of Appeals held that the family court erred in failing to hold Husband in contempt or in any way address his nonpayment.

Wife appealed the family court’s decision to grand a one year’s separation divorce when she sought an adultery divorce. Finding that the family court had not properly considered Wife’s evidence of fault, it remanded that issue.

Wife’s final issue on appeal was the denial of her claim for attorney’s fees and the allocation of expert fees. Again the Court of Appeals remanded the issue, determining the family court’s finding on attorney’s fees:

is significantly impacted by the family court’s erroneous rulings on Husband’s income, alimony, and child support. A proper calculation of Husband’s true income would establish his greater ability to pay fees. In addition, Husband’s behavior in eliciting six rules to show cause, as well as his conduct throughout the trial, significantly increased the costs of this litigation. Thus, we reverse and remand with instructions for a proper analysis and award of Wife’s attorney’s fees and costs, including the ongoing suit costs she will likely incur on remand.

Family court judges often make mistakes–it is the nature of judging–but I cannot recall a published opinion in which a family court judge made so many apparently obvious mistakes. It is hard to understand how a family court judge could have failed to make a litigant file a financial declaration or comply with the rules of discovery and court orders–especially considering that litigant was an attorney. The family court’s decision to allow Brother’s attorney so much involvement in this litigation is further inexplicable. The whole trial and post-trial procedure in Stoney was clearly prejudicial to Wife–so prejudicial that it is hard to fashion any proper remedy other than a new trial. With incomplete disclosure of Husband’s income and assets, the Court of Appeals could not properly determine alimony or property division. Yet Wife has gone without alimony or equitable distribution for over five years and now will encounter additional delay and expense to obtain just results on remand. She has my sympathy.

3 thoughts on Five years of litigation, all for naught

  1. Mindy Schneider says:

    WOW! It makes one wonder if this case was a “Pay Off Under The Table” kind of thing. Sounds like he has friends in high places. What goes around, comes around. Good luck to the wife.

    1. JDawes says:

      Absolutely agree!!

  2. cassie says:

    The judge appears to have abrogated his/her task of judging the case on the merits. This abrogation has its genesis in something other than judicial wisdom, efficaciousness, or interpretation of the law. Although the time line stresses the wife in all aspects, she certainly deserves her day in court….again. Hope it goes better the next go round.

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