Often, the family home is one of the more difficult assets to address in a divorce. Even if both parties agree to sell the home, the process can still be difficult. In a recent unpublished case, a Washington appeals court determined whether the sale of a home was “imminent,” as required by the divorce decree, or whether the husband was required to pay the wife $15,000 because it was not imminent.
The marriage was dissolved by a degree of dissolution that awarded the home to the husband. The wife was required to execute and deliver a quit claim deed. The trial court subtracted $30,000 from the net value of the home for the closing costs and used that reduced value to determine the property award. The court subtracted the closing costs because the husband assured the court he intended to sell the home imminently. The decree included a provision that required him to pay the wife $15,000 if he did not sell the house “imminently,” which was defined as within nine months from the entry of the decree. February 18, 2016 was nine months from the entry of the decree.
A purchase and sale agreement was signed on February 11, 2016, although the purchase was subject to contingencies. The buyers then waived all contingencies on February 17. The wife moved the court for an order enforcing the decree and awarding her the $15,000 on March 10. The sale of the home then closed on March 15.
The trial court found that the sale had not been completed imminently and ordered the husband to pay the $15,000. The husband appealed.
On appeal, the husband argued that the standard of review for contract interpretation should apply because the trial court merely approved the agreement reached by the parties. The wife argued that the standard was abuse of discretion because the court interpreted its own language in the decree. The husband’s attorney’s declaration referenced a stipulation entered in the court, but the stipulation was not on appeal. The wife did not contest the declaration, however, so the appeals court inferred that she did not dispute that the parties had agreed to the language.
When an agreement between the parties is incorporated into the decree, the appeals court must determine the intent of the parties at the time of the agreement, applying the general rules of construction. The court may decide the meaning of the language as a matter of law if the facts are not disputed, and no extrinsic evidence is presented.
The facts were not disputed, and no extrinsic evidence had been submitted. The appeals court therefore reviewed the meaning of the language de novo, as a question of law.
The husband argued that the sale of his home became imminent when the purchase and sale agreement was signed and became binding when the buyer waived the contingencies. He argued there was a difference between the sale and passing title.
It was undisputed that the decree required the husband to pay the wife $15,000 if he failed to sell the home within the nine-month period. The issue was whether the sale was accomplished with the agreement or if it only occurred when ownership was transferred to the buyer.
An undefined term in a contract is interpreted according to its ordinary meaning. A court may use a dictionary to determine that meaning. The appeals court found that the purchase and sale agreement did not meet the Webster’s definition of the word “sale,” which is “a contract transferring the absolute or general ownership of property…” The agreement did not transfer ownership or title but simply set forth the rights and obligations of the parties before and at the time of transfer of title. The deed of conveyance transfers the ownership and is therefore the sale. The deed was signed at the closing in March and was therefore outside the defined period of imminence under the decree.
Although the husband provided a different definition, the appeals court found that it also required the contract to transfer title. The appeals court affirmed the order requiring the husband to pay $15,000 to the wife. The appeals court also awarded reasonable attorney’s fees to the wife, finding that the husband had the ability to pay and that if the attorney’s fees were denied, the wife would not realize the benefit of the $15,000.
The Washington property division attorneys at Blair and Kim, PLLC, understand the importance of the terms of a divorce decree. Before agreeing to any terms, you should have a full understanding of what they mean. You should also make sure you understand any requirements under the divorce decree. Although the husband in this case may have completed the sale as quickly as he could, it is possible that confusion over what was required to meet the stipulations of the decree cost him. If you are facing a divorce, call us at (206) 622-6562 or contact us online.
More Blog Posts:
Image: FreeImages.com / Aaron Murphy