Carol Kinsinger v. Todd Pethel

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

September 2014 Term

_______________ FILED

November 13, 2014

released at 3:00 p.m.

No. 13-0892 RORY L. PERRY II, CLERK

SUPREME COURT OF APPEALS

_______________ OF WEST VIRGINIA

CAROL KINSINGER,

Respondent Below, Petitioner

v.

TODD PETHEL,

Petitioner Below, Respondent

____________________________________________________________

Appeal from the Circuit Court of Mason County

The Honorable David W. Nibert, Judge

Civil Action No. 05-D-110

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

____________________________________________________________

Submitted: October 14, 2014

Filed: November 13, 2014

Bruce Perrone, Esq. Todd Pethel, Respondent

Sherrone Hornbuckle, Esq. No Appearance

Hoyt Glazer, Esq.

Legal Aid of West Virginia, Inc.

Huntington, West Virginia

Counsel for Petitioner

JUSTICE BENJAMIN delivered the Opinion of the Court.

JUSTICE KETCHUM concurs, in part, and dissents, in part, and reserves the right to file

a separate Opinion.

SYLLABUS BY THE COURT

1. “In reviewing a final order entered by a circuit court judge upon a review of, or

upon a refusal to review, a final order of a family court judge, we review the findings of

fact made by the family court judge under the clearly erroneous standard, and the

application of the law to the facts under an abuse of discretion standard. We review

questions of law de novo.” Syl. Pt. 1, Carr v. Hancock, 216 W. Va. 474, 607 S.E.2d 803

(2004).

2. “In reviewing the findings of fact and conclusions of law of a circuit court

supporting a civil contempt order, we apply a three-pronged standard of review. We

review the contempt order under an abuse of discretion standard; the underlying factual

findings are reviewed under a clearly erroneous standard; and questions of law and

statutory interpretations are subject to a de novo review.” Syl. Pt. 1, Carter v. Carter, 196

W.Va. 239, 470 S.E.2d 193 (1996).

3. “Delay alone does not constitute laches; it is delay which places another at a

disadvantage.” Syl. Pt. 3, Carter v. Carter, 107 W. Va. 394, 148 S.E.2d 378 (1928).

4. “Mere delay will not bar relief in equity on the ground of laches.” Syl. Pt. 4, State

ex rel. DHHR v. Carl Lee H., 196 W. Va. 369, 472 S.E.2d 815 (1996).

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5. “The general rule in equity is that mere lapse of time, unaccompanied by

circumstances which create a presumption that the right has been abandoned, does not

constitute laches.” Syl. Pt. 4, Laurie v. Thomas, 170 W. Va. 276, 294 S.E.2d 78 (1982).

ii

Benjamin, Justice:

The instant case is before the Court upon the appeal of Petitioner, Carol

Kinsinger, from a July 30, 2013, order of the Circuit Court of Mason County denying her

petition for appeal of a final order of the family court which declined to find Respondent,

Todd Pethel, in contempt of a qualified domestic relations order (hereinafter “QDRO”).

Herein, Petitioner argues that 1) the circuit court erred in applying the doctrine of laches

below because there was no finding or evidence of prejudice to Respondent caused by the

passage of time; and 2) the failure of a QDRO to obtain full payment does not thereby

extinguish the underlying award of equitable distribution of property rights. Upon review

of the Petitioner’s arguments,1 the record before us on appeal, and applicable legal

precedent, we affirm the circuit court’s finding that Respondent was not in contempt of

the QDRO, but we reverse the circuit court’s finding that Petitioner was barred from

obtaining her share of Respondent’s retirement benefits pursuant to the doctrine of

laches. We therefore remand this matter to the circuit court for entry of a judgment order

awarding Petitioner the remainder of the $4,081.51 to which she is entitled under the

settlement agreement.

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The Respondent, Todd Pethel, has not entered an appearance or filed a

responsive brief in this appeal.

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I. FACTUAL AND PROCEDURAL BACKGROUND

The parties to this action were divorced by a final order entered on January

27, 2006. A settlement agreement prepared by Respondent’s attorney was incorporated

by reference into the final order. The settlement agreement specified in paragraph five

that

[Petitioner] is entitled to 1/2 the marital portion of the Thrift

Savings Plan (TSP) - that is the portion that was contributed

between October 6, 2001 and April 26, 2005. If she chooses

to receive this money, then she shall be responsible for

preparing the Qualified Order to receive the same.

Six years later, Petitioner prepared and filed a QDRO on January 4, 2012.

On that date, the family court entered a Retirement Benefits Order requiring that

Petitioner be paid fifty percent (50%) of the portion of Respondent’s TSP that was

contributed while the parties were married and living together, specifically, from October

6, 2001, until April 26, 2005. Respondent did not appeal the QDRO.

Unbeknownst to Petitioner, in 2009, Respondent had withdrawn all funds

from the TSP (totaling $15,297.19), including the Petitioner’s half of the marital portion

referenced in the settlement agreement as incorporated in the family court’s January 27,

2006, final order. Respondent’s withdrawal of the TSP funds took place three years after

entry of the divorce order and three years prior to Petitioner’s drafting of the QDRO and

the family court’s entry of the QDRO. Thus, at the time the QDRO was filed, there were

no funds remaining in the original TSP from which the QDRO could be satisfied.

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Immediately prior to Petitioner’s drafting of the QDRO, however, in

December 2011, Respondent opened a new TSP. From this new TSP, a payment of

$780.58 was made to Petitioner on May 8, 2012, pursuant to the January 4, 2012

Retirement Benefits Order. This payment represented only a portion of the amount of

benefits to which Petitioner was entitled from the original TSP. According to later

calculations by the TSP Plan Administrator, Petitioner’s share of the original TSP based

on the dates of marriage noted in the settlement agreement was determined to be

$4,081.51. Upon realizing that the remaining sum of $3,300.93 was not available to her

from the new TSP, Petitioner filed a Petition for Contempt of the Retirement Benefits

Order on November 5, 2012, in order to compel Respondent to pay the remaining sum to

which Petitioner alleged she was entitled pursuant to the divorce settlement agreement

and the original January 27, 2006, final order. The family court held a hearing on the

contempt petition on May 6, 2013, and heard the testimony of both parties and examined

the documents submitted by the parties concerning the TSP.

In an order dated June 7, 2013, the family court declined to find

Respondent in Contempt, finding that the Petitioner, having had an affirmative duty to

cause a QDRO to be entered if she wished the money to be received from the TSP

account, failed to timely file her QDRO. It was this failure by the Petitioner, the family

court reasoned, that then later caused her to be unable to receive her money. Thereafter,

Petitioner appealed the family court’s June 7, 2013, order to the Circuit Court of Mason

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County asserting that the family court abused its discretion when it (1) subjected terms of

a stipulation of settlement to a statute of limitations, (2) found Respondent’s delay in

filing a QDRO was evidence of an intent to waive her rights, and (3) did not give fair

meaning to language to properly effect the understanding of the parties.

In an order dated July 30, 2013, the circuit court affirmed the June 7, 2013,

order of the family court, finding no abuse of discretion in the family court’s findings that

Petitioner failed to timely satisfy the condition of the agreement and therefore forfeited

her share of the TSP. In response to Petitioner’s argument that the family court applied a

statute of limitations contrary to West Virginia law, the circuit court interpreted the

family court ruling as an application of the doctrine of laches. The circuit court stated, in

part,

This Court interprets the family court’s findings as an

application of the laches doctrine by which “a delay in the

assertion of a known right works to the disadvantage of

another, or such delay as will warrant the presumption that

the party has waived his right.” Grose v. Grose, 222 W. Va.

722, 728 (2008) (internal citations omitted). Accordingly,

“[l]aches is an equitable remedy which places the burden on

the person asserting it to prove both lack of diligence by the

party causing the delay and prejudice to the party asserting

it.” Id. Both of these factors were demonstrated in the present

case.

In Grose [v. Grose, 222 W.Va. 722 (2008)], the West

Virginia Supreme Court of Appeals found no error in the

application of the laches doctrine in divorce proceedings

regarding retirement benefits and date of entry of a QDRO

under the facts presented therein. Id. In Grose, the final order

on equitable distribution placed no duty of notification on the

husband recipient of retirement benefits and the wife made no

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claim that she was misled or unable to make an earlier inquiry

as to the husband’s receipt of benefits. Id. In the present case,

the settlement agreement placed no duty to notify on the

Appellee/Petitioner, but rather placed an affirmative duty on

the Appellant/Respondent to cause a QDRO to be entered if

she wished to receive a share of the marital portion of the

TSP account. The Appellant/Respondent failed to timely

satisfy the condition of the settlement agreement and has

made no allegation that she was misled or unable to fulfill her

duty. As a result thereof, this Court finds no abuse of

discretion in the family court’s findings that: (1) the

Appellant/Respondent does not have an absolute right to a

share of the TSP account, (2) the Appellant/Respondent failed

to timely satisfy the condition of the agreement, and (3) the

Appellee/Petitioner is not required to pay further sums to the

Appellant/Respondent.

As to ground three in the petition for appeal, this Court

finds the family court’s finding that the settlement agreement

imposed an affirmative duty on the Appellant/Respondent

was not an abuse of discretion. The Appellant/Respondent

argues that the family court did not use language giving fair

meaning to the understanding of the parties. This Court

disagrees. The settlement agreement was clear and

unambiguous, and the family court applied the plain meaning

of the agreement, which made the Appellant/Respondent’s

receipt of her portion of the marital share of the TSP account

conditional on her affirmative duty to cause a QDRO to be

entered.

On appeal herein, Petitioner seeks reversal of the circuit court’s application

of the doctrine of laches, and of the order extinguishing any further obligation by

Respondent for the agreed marital property distribution under the settlement agreement

and final divorce order.

II. STANDARD OF REVIEW

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This Court’s well-established standard of review of domestic relations proceedings

was set forth in the syllabus of Carr v. Hancock, 216 W. Va. 474, 607 S.E.2d 803 (2004):

In reviewing a final order entered by a circuit court judge

upon a review of, or upon a refusal to review, a final order of

a family court judge, we review the findings of fact made by

the family court judge under the clearly erroneous standard,

and the application of the law to the facts under an abuse of

discretion standard. We review questions of law de novo.

See also Mark V.H. v. Dolores J.M., 232 W. Va. 378, 752 S.E.2d 409 (2013).

Furthermore, as it pertains to civil contempt orders, this Court has stated,

In reviewing the findings of fact and conclusions of law of a

circuit court supporting a civil contempt order, we apply a

three-pronged standard of review. We review the contempt

order under an abuse of discretion standard; the underlying

factual findings are reviewed under a clearly erroneous

standard; and questions of law and statutory interpretations

are subject to a de novo review.

Syl. Pt. 1, Carter v. Carter, 196 W.Va. 239, 470 S.E.2d 193 (1996).

III. ANALYSIS

In her first assignment of error, Petitioner asserts that the circuit court’s

order is erroneous because there was no finding or evidence of prejudice to Respondent

caused by the passage of time as required for application of the doctrine of laches under

West Virginia law. The doctrine of laches is “an equity doctrine to the effect that

unreasonable delay will bar a claim if the delay is a prejudice to the defendant.” 1 Dan B.

Dobbs, Handbook on the Law of Remedies § 2.4(4) (2d ed. 1993). Long ago the United

States Supreme Court stated that “laches is not, like limitation, a mere matter of time; but

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principally a question of the inequity of permitting the claim to be enforced, - an inequity

founded upon some change in the condition or relations of the property or the parties.”

Galliher v. Cadwell, 145 U.S. 368, 373, 12 S.Ct. 873, 875 (1892). In 1929, this Court

stated, “[d]elay alone does not constitute laches; it is delay which places another at a

disadvantage.” Syl. Pt. 3, Carter v. Carter, 107 W. Va. 394, 148 S.E.2d 378 (1929).

Again in 1950, this Court recognized that “time alone is not now considered a controlling

factor in the application of the doctrine.” Hoffman v. Wheeling Svgs. & Loan Ass’n, 133

W. Va. 694, 707, 57 S.E.2d 725, 732 (1950).

This Court has affirmed the same understanding of the doctrine of laches on

numerous occasions since Hoffman. See, e.g. Grose v. Grose, 222 W. Va. 722, 728, 671

S.E.2d 727, 733 (2008) (“Laches is an equitable remedy which places the burden on the

person asserting it to prove both lack of diligence by the party causing the delay and

prejudice to the party asserting it.”); Syl. Pt. 4, State ex rel. DHHR v. Carl Lee H., 196

W. Va. 369, 472 S.E.2d 815 (1996) (“Mere delay will not bar relief in equity on the

ground of laches. ‘Laches is a delay in the assertion of a known right which works to the

disadvantage of another, or such delay as will warrant the presumption that the party has

waived his right.’”); Syl. Pt. 4, State ex rel. DHHR v. Robert Morris N., 195 W. Va. 759,

466 S.E.2d 827 (1995) (same); Rodgers v. Rodgers, 184 W. Va. 82, 89, 399 S.E.2d 664,

671 (1990) (“It is clear that delay itself in bringing the suit will not bar laches”); Maynard

v. Board of Educ., 178 W. Va. 53, 60, 357 S.E.2d 246, 253 (1987) (“[T]he controlling

element of the equitable defense of laches is prejudice, rather than the amount of time

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which has elapsed without asserting a known right or claim”); Syl. Pt. 4, Laurie v.

Thomas, 170 W. Va. 276, 294 S.E.2d 78 (1982) (“The general rule in equity is that mere

lapse of time, unaccompanied by circumstances which create a presumption that the right

has been abandoned, does not constitute laches.”).

In Grose v. Grose, 222 W. Va. 722, 671 S.E.2d 727, the Petitioner wife was

awarded a share of the husband’s retirement benefits pursuant to a 1990 equitable

distribution order. The Respondent husband was then 49 years old, and would not qualify

for full retirement benefits until reaching age 62. Id. at 725, 671 S.E.2d at 730. Shortly

after the divorce proceedings, the Respondent husband was injured in a mining accident

and began receiving monthly disability benefits from the same account. Sixteen years

after the entry of the equitable distribution order (and three years after the Respondent

husband turned 62), the Petitioner wife filed a petition seeking an accounting and a

QDRO. Id. The Respondent husband having passed age 62 by the time of Petitioner’s

filing, it was uncertain whether the monthly benefit payments he was then-receiving from

the account after age 62 should be treated as either “retirement” or “disability” benefits or

some mix thereof. Id. This Court ultimately permitted the Petitioner wife to receive a

share of the benefits paid on or after the date she filed her action. The sixteen-year

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passage of time between the equitable distribution order and the QDRO did not bar her

from submitting the QDRO and obtaining benefits. Id. at 728, 671 S.E.2d at 733.2

In the instant case, the courts below failed to make any finding of harm or

prejudice to Respondent as required by our law to impose a laches bar. The family court

order entered June 7, 2013, contains no finding or language identifying any harm,

prejudice or disadvantage to Respondent accruing from Petitioner’s delay in her

submission of the QDRO. Of the seven findings of fact made by the family court below,

none of them mention Respondent’s circumstances. Rather, the focus of the order was

entirely upon Petitioner’s delay and her responsibility to prepare the QDRO if she chose

to do so. Likewise, in the circuit court’s order, there was no discussion of or

identification of “disadvantage to another” or “prejudice to the party asserting” laches, as

required by our prior decision in Grose, a case which was cited by the circuit court. For

these reasons, we believe that the circuit court’s finding that Petitioner forfeited her share

of the TSP under the doctrine of laches is erroneous.3 In reversing the circuit court’s

2

In Grose, this Court did, however, uphold the application of laches to bar the

Petitioner wife from seeking a share of the monthly retirement benefits which had already

been paid to the Respondent husband before the wife filed her request for QDRO. Id.

3

Furthermore, the doctrine of laches is moot unless the affected party raises it as a

defense. See State Dept. of Health v. Robert Morris N., 195 W.Va. 759, 764, 466 S.E.2d

827, 832 (1995). The family court order did not discuss the doctrine of laches as the

Respondent did not file any answer or motion raising the defense of laches in this

particular case. Additionally, he never appealed the QDRO. That said, to the extent that

a QDRO is the mechanism through which a settlement order in a divorce proceeding is

achieved, it is vital that the parties and/or their counsel in these types of proceedings

(continued . . .)

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application of the laches defense, we find that the underlying equitable distribution

obligation contained in the settlement agreement in the amount of $4,081.51 is

unimpaired, and that the Petitioner is permitted to pursue any other judgment

enforcement mechanism that may be available to her under the law for the amount still

owed by Respondent.

Although we conclude that the circuit court’s order must be reversed to the

extent that Petitioner’s underlying award of equitable distribution of property rights was

not extinguished by application of the doctrine of laches, we cannot say that the circuit

court’s ruling affirming the family court’s denial of Petitioner’s Petition for Contempt

was an abuse of discretion. The denial of Petitioner’s Petition for Contempt was a

discretionary ruling made by the family court. The family court considered the fact that

Petitioner did not take any affirmative steps to obtain the money from the TSP in this

case for six years. The family court felt that the Petitioner failed to act in a timely

manner in filing the QDRO and thus, it found that Respondent was not in contempt of the

Final Order of Divorce, which stated that “if she chooses to receive the money,” she was

required to file a QDRO. At the time of Respondent’s withdrawal of funds, there was no

QDRO in place. Given the passage of time before entry of the QDRO and the

discretionary nature of the circuit court’s ruling, we cannot say that said ruling was

ensure that the QDRO is entered in a timely manner to effectively preserve the parties’

respective property rights.

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erroneous. Accordingly, we affirm the circuit court’s denial of Petitioner’s Petition for

Contempt.

IV.

CONCLUSION

For the foregoing reasons, we affirm the circuit court’s finding that

Respondent was not in contempt of the QDRO, but reverse the circuit court’s finding that

Petitioner was barred from obtaining her share of Respondent’s retirement benefits

pursuant to the doctrine of laches. This matter is remanded to the circuit court for entry

of a judgment order awarding Petitioner the remainder of the $4,081.51 to which she is

entitled, with appropriate credit for that which she has already been paid, under the

settlement agreement.4

Affirmed, in part, reversed, in part, and remanded.

4

Although Petitioner has not sought pre-judgment interest in this case, she is

entitled to seek post-judgment interest.

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