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Coffey v. Coffey

Supreme Court of South Dakota

December 21, 2016

2016 S.D. 96
v.
MICHAEL F. COFFEY, Defendant and Appellant. DEBRA R. TECH COFFEY, Plaintiff and Appellee,

          CONSIDERED ON BRIEFS ON AUGUST 29, 2016

         APPEAL FROM THE CIRCUIT COURT OF THE FIRST JUDICIAL CIRCUIT MCCOOK COUNTY, SOUTH DAKOTA THE HONORABLE TIMOTHY W. BJORKMAN Judge

          TRESSA ZAHRBOCK KOOL of Lockwood & Zahrbock Kool Law Office Attorneys for plaintiff and appellee.

          MICHAEL E. UNKE Salem, South Dakota Attorney for defendant and appellant.

          KERN, Justice

         [¶1.] Debra R. Tech Coffey sought a divorce from Michael F. Coffey. They entered into a stipulation and agreement (Agreement) to resolve all issues and divide their property and debt. Paragraph 2 of the Agreement awarded the marital home to Michael, divided responsibility for the two mortgages on the home, and declared that should the home be sold, the proceeds from the sale would first be used to pay off any sum remaining on the mortgages.

         [¶2.] Michael sold the home in April 2015 and used the proceeds of the sale to pay off both mortgages. He requested reimbursement from Debra for the mortgage debt assigned to her. She refused to reimburse him. Michael filed a motion for an order to show cause, asking the circuit court to hold Debra in contempt and enter a judgment against her for the amount he paid on her mortgage plus interest. The circuit court denied his motion. Michael appeals. We affirm.

         BACKGROUND

         [¶3.] Michael and Debra married on February 14, 1987. On February 18, 2010, they entered into the Agreement, which divided their property and debt. Debra's counsel drafted the Agreement. This case concerns the first two sections of Paragraph 2 of the Agreement:

Defendant shall be awarded the marital residence . . . . The Plaintiff will be responsible for the 1st mortgage at Bank of America and shall have the length of the loan to either pay it off or refinance it. Plaintiff will save and hold harmless the Defendant from any liability on said mortgage. Defendant will be responsible for the second at Service First Credit Union and shall have the length of the loan to either pay it off or refinance it. Defendant will save and hold harmless the Plaintiff from any liability on said mortgage. Defendant agrees to be responsible for the taxes and insurance on said property.
If Defendant would sell the home prior to the 1st or 2nd mortgage being paid in full, then upon sale of the home these mortgages will be paid in full first out of the proceeds of the home.

         On February 23, 2010, the circuit court signed a judgment and decree of divorce, which incorporated the Agreement.

         [¶4.] On April 10, 2015, Michael sold the home and used the proceeds from the sale to extinguish both mortgages. He immediately sought reimbursement from Debra for the $56, 040.35 he paid to satisfy the remaining balance on the first mortgage. Debra refused to pay him.

         [¶5.] On August 17, 2015, Michael filed a motion for an order to show cause, seeking to have Debra held in contempt. He requested judgment against Debra in the amount of $56, 040.35 plus prejudgment interest accrued from the date of sale and attorney's fees. In November 2015, with the parties' consent, the court held a hearing on the interpretation of the contract but did not address the contempt portion of the motion because notice was inadequate. The court told the parties if it determined the contract was ambiguous, it would hold a hearing to take evidence of the parties' intent and on the issue of contempt. On December 28, 2015, the court issued a memorandum decision and order denying Michael's motion. The court held: (1) the Agreement was unambiguous, and its plain meaning did not require Debra to reimburse Michael; (2) reimbursement would constitute an improper modification of the property division; and (3) because Debra had no duty to reimburse Michael, she was not in contempt. Michael appeals.

         [¶6.] We restate Michael's issues as follows:

1. Whether the circuit court erred in its interpretation of the Agreement as unambiguous and not requiring reimbursement.
2. Whether the circuit court erred in holding that an order for reimbursement would constitute an impermissible modification ...

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