KLEIN v. KLEIN




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revision. If you find a typographical error or other formal error, please notify
the Virginia Court of Appeals.


KLEIN

v.

KLEIN


COURT OF APPEALS OF VIRGINIA

Present: Judges Frank, McClanahan and Senior Judge Coleman

Argued at Richmond, Virginia

Record No. 0211-03-4

FREDERICK C. KLEIN

v.

KAREN N.E. KLEIN

 

MEMORANDUM OPINION[1]
BY JUDGE ROBER P. FRANK

DECEMBER 2, 2003

FROM THE CIRCUIT COURT OF ARLINGTON COUNTY

Benjamin N. A. Kendrick, Judge

Robert G. Culin, Jr. (Culin, Sharp & Autry, on briefs), for
appellant.

Thomas Peter Mann (Greenspun & Mann, on briefs), for
appellee.

Frederick C. Klein (husband) appeals from an order dated
December 23, 2002, finding that

he violated certain terms of a final decree of divorce and
subsequent court orders.

I. BACKGROUND

Husband filed for divorce from Karen Klein (wife) on September
8, 1993, based on living

apart for over a year. The trial court entered a final decree of
divorce on May 22, 1995. A

document signed by both parties and their attorneys, titled
"Klein – Terms of Settlement"

(Settlement), was incorporated into the final decree by
reference. The Settlement required

husband to refinance several properties, remove wife’s name
from the deeds, and pay wife for

her interest in the real estate in unspecified
"installments" as husband refinanced the properties.

The clause noted that time was of the essence. The Settlement
also allowed husband to receive a

ten percent fee for managing the couple’s partnerships,
required him to provide certain

documents to wife, and required him to consult wife on all
business matters, although he was not

obligated to obtain her consent for his actions. The parties
originally intended the Settlement to

form the basis for a more detailed and formal property
settlement agreement, which wife was to

prepare, but no further agreement was reached. The parties never
modified their partnerships to

reflect the provisions of the Settlement.

1. On February 5, 1998, wife filed for a Rule to Show Cause,
alleging husband had violated

certain terms of the final decree and Settlement by failing to
pay her approximately $230,000 for

her ownership interest in the real estate. She also claimed that
husband collected a ten percent

management fee without amending the partnership agreements and
that he refused to comply

with the consultation and information requirements for the
partnerships established in the

Settlement. The trial court issued a rule to show cause, which
was heard on April 20 and 21,

1999.

2. While awaiting the show cause hearing, wife filed a Motion to
Compel Discovery, which

was granted on February 9, 1999.[2]
Wife then filed a Motion for Relief and Sanctions, based on

husband’s failure to abide by the order compelling discovery.
The trial court entered an order

granting this motion on April 19, 1999.[3]
Imposing sanctions, this order prohibited husband from

presenting expert witnesses and from using a defense of
"impossibility with regard to the

payment of the funds" during the hearing to be held on the
original show cause motion. This

order was not appealed.

On April 20, 1999, the trial court heard the rule to show cause.
Husband objected to the

testimony of wife’s former attorney, who drafted the
Settlement, arguing it constituted parol

evidence. Wife argued parol evidence was necessary as the
Settlement was vague, particularly

its use of the term "refinance." The trial court
allowed the testimony.

When wife asked for interest on the payments due under the
Settlement, husband argued

the Settlement did not include a provision for interest. The
court found interest was warranted.

Husband requested permission from the court to examine wife
regarding her "obstructionist"

behavior, which allegedly prevented him from refinancing the
properties. The court did not

allow the examination.

Wife argued husband should not collect the ten percent
management fee because the

partnership agreements had never been amended. Husband argued,
if he could not collect the ten

percent fee, then he should not be required to provide documents
and make reports as required

by the Settlement.

On May 7, 1999, the trial court entered an order finding husband
in contempt on the rule

to show cause, but continued the case to June 18, 1999, to give
husband the opportunity to pay

the money he owed wife under the Settlement and to purge the
contempt finding. The court

ordered that husband pay interest on this money, with an accrual
date of May 22, 1995, the day

the final decree of divorce was entered. The court also ordered
that husband cease taking the

management fee, that he consult with wife on the partnerships,
and that he provide her with all

relevant partnership documents.

3. Wife’s attorney prepared the order incorporating the
foregoing rulings. Notice of the

presentation of this order to the trial court was sent to
husband on May 3, 1999. However, a

copy of the order was not attached to the notice. The order was
presented to and entered by the

court on May 7, 1999, without the presence or signature of
husband’s counsel. On May 21,

1999, husband filed a motion to vacate the May 7, 1999 order.
The trial court heard the motion a

week later and denied it. Husband then filed an appeal of the
May 7, 1999 order with this Court.

4. On June 29, 1999, husband filed a "Motion to Vacate Oral
Ruling of June 18, 1999 and

Release Complainant." The trial court apparently had
sentenced husband from the bench on

June 18, 1999, to 90 days in jail for contempt of the final
decree of divorce. However, no written

order or transcript from the June 18, 1999 hearing is in the
record.

Husband’s appeal to this Court of the May 7, 1999 order was
dismissed as premature on

November 4, 1999. Klein v. Klein, Rec. No. 1303-99-4
(unpublished). This Court found the

order was not final nor an appropriate interlocutory order for
appeal. In a footnote, this Court

said, "We note, however, that the record before us does not
contain a written order

memorializing the June 18, 1999 oral ruling. . . . Lacking a
written order memorializing the June

18, 1999 oral ruling, husband is effectively unable to appeal
the ruling." Id. at 3 n.1.

5. On September 28, 2001, wife filed a new Notice and Motion for
Entry of a Rule to Show

Cause, asking that the trial court find husband in contempt for
violation of the "May 7, 1998"[4]

order and all subsequent orders of the court. On January 24,
2002, the court heard this show

cause. From the bench, the court ordered that husband turn over
a box of documents, formerly in

the possession of Ms. Mahoney (a.k.a. Ms. Byrne), as well as
other documents related to the

partnerships. The trial court also ordered that husband remove
wife’s name from a deed to

Florida property and that he pay the previously ordered fees and
costs related to wife’s motion to

compel discovery. The court found husband in contempt, but the
finding was withheld and no

sanctions were imposed at that time. No written order was
entered to memorialize the trial

court’s pronouncements.

On September 25, 2002, wife filed a motion to impose sanctions
for the contempt finding

of January 24, 2002, requesting the motion be heard on October
4, 2002. Although the parties

apparently were in the courthouse on that day, no transcript,
written order, or agreement of the

parties relevant to that day is in the record. While at the
courthouse, the parties apparently

negotiated a Memorandum of Understanding (Memorandum), which
gave husband ninety days

to pay wife $800,000 for her interest in the partnerships,[5]continued
the contempt case to

November 15, 2002, and allowed the "instant motion to be
dismissed" if all the requirements in

the Memorandum were fulfilled.[6]
The Memorandum included a release clause that gave husband

two weeks to determine whether he could raise the $800,000 to
purchase wife’s interest in the

partnerships.

On November 4, 2002, wife again filed a notice and motion,
asking that the trial court

impose the January 24, 2002 "suspended finding of
contempt" and enforce the Memorandum. A

hearing on this motion was held on November 15, 2002.[7]
No transcript of this hearing is in the

record, and no written order was entered memorializing the trial
court’s findings or rulings.

According to testimony at a later hearing, after a hearing on
November 15, 2002, the trial court

found husband in contempt and sentenced him to jail.

On December 19, 2002, husband filed a motion to reconsider the
November 4, 2002

ruling "ordering him to remain incarcerated until he paid
the sum of $800,000 to [wife] pursuant

to the October 4, 2002 Memorandum of Understanding." The
motion argued that no evidence

was introduced at the November hearing, that the trial court
lacked the authority to enforce the

Memorandum, and that the court lacked the authority to find him
in contempt before the payment

was due under the Memorandum.[8]

On December 20, 2002, the court conducted a hearing on husband’s
motion to reconsider.

Husband’s attorney argued the November hearing did not proceed
on proffers, as the court

believed it had. Wife’s attorney disagreed, arguing husband
did not object to the procedure at

the time. The trial court noted, in response to wife’s
attorney, "And that was your understanding,

but out of an abundance of caution, the ruling is going to
stand." The court then said, "I made a

ruling based on what I thought was proffered evidence. There is
no official record of it. What

I’m going to do, I’m not changing my ruling." When
husband objected, the court said, "See,

that’s an appealable issue. What I want to give you is the
complete record so that you can appeal

it."

Although the trial court seemed to find the November 15, 2002
oral contempt order was

not based on the presentation of evidence or proffers,
nevertheless, it did not rescind the order

jailing husband. Instead, the court required that husband remain
incarcerated. The trial court set

another hearing for the presentation of evidence on the contempt
allegations for December 23,

2002.

At the December 23, 2002 hearing, husband testified he told wife
he could not raise the

$800,000 as required by the clause in the Memorandum. He
acknowledged he had since raised

the money by selling two tracts of property to the person who
owned a business on one of the

parcels.[9]

Although husband was ordered to provide partnership documents to
wife, wife claimed

she had not received all the documents requested. She testified
she received only four small

boxes (described as "french fry" boxes) and one manila
envelope. None of the documents she

received related to particular transactions conducted by husband
with partnership money or to

notes receivable by one of the four partnerships. Husband
claimed he had turned over all the

partnership documents he had in his possession.

The trial court found husband was not a credible witness and
held him in contempt for

failing to pay wife under terms of the Memorandum. His attorney
objected to the contempt

finding, contending the money was not due until January 2, 2003.
Husband admitted he had a

$800,000 check in court that day in his attorney’s possession.

The court then entered an order on December 23, 2002, finding
husband in contempt,

based on the evidence from the January 24, 2002 hearing and the
November 15, 2002 hearing.

The court found husband refused to disclose partnership records
to wife, that the Memorandum

was entered into as a means to resolve the contempt proceedings
and was enforceable, and that

husband failed to abide by the terms of the Memorandum. The
court required husband to either

produce the missing box of documents or abide by the terms of
the Memorandum. Until he did

one or the other, the court remanded him to jail.

6. Evidently, husband paid wife the money he owed her under the
Memorandum at the

conclusion of the December 23, 2002 hearing. Apparently, he also
complied with the Settlement

and the May 7, 1999 order at some point, including paying the
interest as ordered by the trial

court.[10]

II. ARGUMENTS RELATED TO THE MAY 7, 1999

AND THE JUNE 18, 1999 ORDERS

Husband argues the trial court erred when it accepted parol
evidence to interpret the

Settlement, when it interpreted the terms of Settlement, when it
disallowed payment of the

management fee, when it refused evidence to support his defense
of obstructionist behavior by

wife, and when it waived the notice requirements of Rule 1:13.
We first address whether these

issues are ripe for appeal.

All of these arguments relate to an interlocutory order entered
on May 7, 1999, which

held the adjudication of contempt in abeyance. This contempt
finding, unlike the contempt

finding of December 23, 2002, was based on husband’s failure
to abide by the Settlement

provisions of the final divorce decree. Husband’s first five
issues all concern the earlier

contempt finding. Specifically, husband objects to rulings on
the admission of parol evidence

allegedly used to interpret the Settlement. He objects to
rulings that excluded evidence regarding

wife’s behavior, which he alleges interfered with his ability
to comply with the Settlement’s

conditions. Husband also objects to the court’s interpretation
of the Settlement. He objects to

the trial court’s ruling in the May 7, 1999 order that
disallowed the management fees. He objects

to the entry of the May 7 interlocutory order without proper
notice or endorsement by counsel.

In contrast, the contempt finding of December 23, 2002, was
based on different allegations and

evidence, related to the parties’ Memorandum and other court
orders.

This Court previously found the May 7, 1999 contempt order was
an unappealable

interlocutory order. Klein, Rec. No. 1303-99-4. This Court noted
that a final, written order

lifting the abeyance and finding husband guilty of contempt was
necessary before the case would

be ripe for appellate review. Id. at 3 n.1. Husband argues the
order of December 23, 2002 is

such a final order.

Code ? 17.1-405(3) grants this Court jurisdiction over
"[a]ny final judgment, order, or

decree of a circuit court involving . . . [d]ivorce."[11]
(Emphasis added.) The December 2002

order is the final decree for the issues in the May 7, 1999
order.

Although it does not explicitly lift the abeyance, the December
2002 order states, "[a]ll

other orders, including the first order adjudicating Mr. Klein’s
Contempt, remain in full force

and effect." The trial court also found in the December 23,
2002 order that:

The actions of [husband] as set forth in the Rule to Show Cause
are

contemptuous of the Final Decree of Divorce entered by this
Court

on May 22, 1995, the first Order Adjudicating Contempt of

[husband] on May 7, 1999 and the Court’s ruling on January 24,

2002 requiring [husband] to deliver to [wife’s] counsel
certain

documents about which the court found [husband] testified in

untruthful fashion.

The trial court then specifically adopted the findings it made
based on the January 24, 2002

hearing.

Although none of the evidentiary rulings or the contempt finding
of December 23, 2002,

appear based on the order of May 7, 1999, we find the language
of the December 2002 order was

sufficient to lift the abeyance and finalize the May 1999
interlocutory order. The December

2002 order explicitly states the May 7, 1999 order be "in
full force and effect," thus removing

the abeyance. We conclude, therefore, that we have jurisdiction
to consider the issues related to

the May 7, 1999 order.

A. Introduction of Parol Evidence and Interest Payments

Husband argues the trial court erred in accepting parol
evidence.[12] He contends,
because

this evidence was introduced, the court "wrote a new
contract for the parties" that included a

provision requiring husband pay interest on the Settlement
amount from the date the divorce

decree was entered.[13]
We find the trial court did not err in ordering that the interest accrue from

the date of entry of the divorce decree.

For the purposes of this appeal, we need not address whether the
trial court erred in

accepting parol evidence. Whether or not the parol evidence was
inappropriately admitted, the

trial court did not err in awarding interest beginning May 22,
1995. Although the Settlement did

not include a provision for interest, the trial court could
award prejudgment interest under

Virginia law. Wife does not claim the Settlement included a
provision for interest, but instead

contends interest is allowed under Code ?? 8.01-382 and
20-107.3(D). We agree with wife.

Code ? 20-107.3(D) provides, in part:

In addition . . . the court has the power to grant a monetary
award,

payable either in a lump sum or over a period of time in fixed

amounts, to either party. . . . An award entered pursuant to
this

subsection shall constitute a judgment within the meaning of

? 8.01-426 and shall not be docketed by the clerk unless the
decree

so directs. The provisions of ? 8.01-382, relating to interest
on

judgments, shall apply unless the court orders otherwise.

Code ? 8.01-382 allows the accrual of interest on a judgment or
decree:

In any action at law or suit in equity, . . . the judgment or
decree of

the court, may provide for interest on any principal sum
awarded,

or any part thereof, and fix the period at which the interest
shall

commence. The judgment or decree entered shall provide for such

interest until such principal sum be paid.

In Ragsdale v. Ragsdale, 30 Va. App. 283, 292-93, 516 S.E.2d
698, 702-03 (1999), this

Court addressed whether a spouse was entitled to interest under
Code ? 8.01-382 when the

decree of divorce did not provide for interest payments. The
Court explained the standard of

review:

As established by the Supreme Court of Virginia in Dairyland
Ins.

Co. v. Douthat, Code ? 8.01-382 "draws an important
distinction

between prejudgment and postjudgment interest." 248 Va.
627,

631, 449 S.E.2d 799, 801 (1994).

The award of prejudgment interest is discretionary, a matter

committed to the trier of fact, "who ‘may provide for’
such interest

and fix the time of its commencement." Id. See Marks v.
Sanzo,

231 Va. 350, 356, 345 S.E.2d 263, 267 (1986) (stating that

"whether interest should have been awarded and, if so, from
what

date interest should run, were matters within the sound
discretion

of the chancellor"). . . .

["]The award of prejudgment interest is to compensate
Plaintiff for

the loss sustained by not receiving the amount to which he was

entitled at the time he was entitled to receive it, and such
award is

considered necessary to place the [plaintiff] in the position he

would have occupied if the party in default had fulfilled his

obligated duty.["] Marks, 231 Va. at 356, 345 S.E.2d at 267

(quoting Employer-Teamsters, Etc. v. Weatherall Concrete, 468 F.

Supp. 1167, 1171 (1979)).

Id. at 292, 516 S.E.2d at 702. See also Marks, 231 Va. at 356,
345 S.E.2d at 267 ("[W]hether

[prejudgment] interest should have been awarded and, if so, from
what date interest should run,

[are] matters within the sound discretion" of the trial
court.). In Ragsdale, this Court found:

no abuse of discretion in the trial court’s failure to award
interest to

wife on her share of husband’s medical practice before the
entry of

the court’s amended final decree of divorce. Husband had no

obligation to pay wife her share of the [medical] practice until
the

court made its equitable distribution award and ordered him to

make payment in accordance with it. See Decker v. Decker, 22

Va. App. 486, 493, 471 S.E.2d 775, 778 (1996) (stating that a
court

may speak only through its written orders).

Ragsdale, 30 Va. App. at 292, 516 S.E.2d at 702. In an earlier
case, this Court found that a trial

court could award prejudgment interest even where the decree did
not include a specific date by

which payments were due. Jones v. Jones, 18 Va. App. 52, 441
S.E.2d 360 (1994) (finding a

trial court did not abuse its discretion by awarding prejudgment
interest on a divorce decree that

did not specify the date on which the division of assets would
occur). Even without a "time is of

the essence" provision, "[t]he rule in Virginia has
been long established that ‘when a contract is

silent as to the time within which an act is to be performed,
the law implies a reasonable time.’"

Id. at 55, 441 S.E.2d at 361 (quoting Grossmann v. Saunders, 237
Va. 113, 120-21, 376 S.E.2d

66, 70 (1989)).

Here, the trial court did not abuse its discretion in finding
wife was entitled to interest

from entry of the final decree of divorce. The Settlement
requires husband make the payments to

wife in installments as the properties are refinanced, but does
not establish a date certain on

which the funds should be paid. However, the Settlement also
indicates "time is of the essence,"

including this phrase twice in paragraphs discussing the entire
amount due wife. Manifestly,

husband could not indefinitely delay the refinancing of the
properties and the payment to wife of

her settlement.

The trial court determined May 22, 1995, the date of the final
decree of divorce and

approximately seven months after the parties signed the
Settlement, was the appropriate due date

for the final payment owed wife under the Settlement. We find
the evidence supports this ruling.

The language of the Settlement explicitly indicates wife needed
the money promptly. Seven

months to refinance the properties and make the payments to wife
is a reasonable interpretation

of the "time is of the essence" provision. The date of
entry of the final decree was, therefore, a

reasonable deadline for the conclusion of the payments. Wife is
entitled to compensation in the

form of interest for the loss of use of those funds. See
Ragsdale, 30 Va. App. at 292, 516 S.E.2d

at 702. We cannot find the trial court abused its discretion in
reaching this determination.

B. The Management Fee

Husband argues the trial court erred by prohibiting him from
taking a ten percent

management fee, which he argues was allowed under the terms of
the Settlement. Wife

conceded during oral argument that husband was entitled to a
fee, but not in the amounts that he

previously claimed. Because the parties agree that husband is
entitled to the management fee,

we reverse the trial court’s ruling that denied husband
receipt of the ten percent fee. However,

the parties disagree about which revenues provide the basis on
which the ten percent fee should

be calculated. Therefore, we remand the case for the trial court
to resolve this evidentiary

dispute.

C. Prohibition of a Defense Strategy

The trial court refused to allow husband’s examination of wife
regarding her "refusal to

cooperate in the refinancing and/or sale of the
properties." Husband argues this holding was in

error. We disagree.

As part of the sanctions for husband’s failure to comply with
discovery orders, he was

"estopped from arguing the issue of impossibility with
regard to the payment of these funds and

it is established that [husband] has, and has had, at his
disposal, at all times relevant hereto,

sufficient funds to pay [wife] in satisfaction of his
responsibilities" under the Settlement.

Husband does not argue this order was in error. At the hearing
on April 20, 1999, however,

husband argued the sanction did not exclude a defense of
impossibility based on wife’s failure to

cooperate with the refinancing of the properties. The trial
court refused to allow husband to

present testimony from wife on this defense.

At the conclusion of the evidence, the trial court, the
attorneys, and the parties discussed

the reasons for husband’s failure to refinance the properties.
Wife and her attorney agreed that

she had not cooperated with husband because he had not prepared
the appropriate deeds for

escrow which would protect her interests. Husband’s attorney
agreed the deeds were not

prepared, but claimed he was not responsible for preparing those
deeds.

The trial court found husband in contempt for not refinancing
and making the required

payments and gave him sixty days to purge the contempt. Husband
agreed that sixty days was

adequate time to prepare the deeds and list the properties for
sale. On June 18, 1999, the trial

court held a hearing and apparently found husband had not purged
the contempt finding. The

record does not include a transcript of this hearing or a
written order memorializing the

proceedings of June 18, 1999.

Although the trial court excluded the testimony on wife’s lack
of cooperation with the

refinancing, it did consider husband’s arguments and
representations, as well as wife’s

admissions, made at the conclusion of the hearing. During that
argument, husband conceded that

wife’s failure to cooperate was based on his failure to draft
the appropriate documents.

Therefore, even if the trial court erred, it considered the
evidence husband intended to present.

Any error in excluding the evidence was harmless and does not
justify overturning the court’s

finding. See Williams v. Commonwealth, 4 Va. App. 53, 78-79, 354
S.E.2d 79, 93-94 (1987)

(explaining that harmless errors, errors that do not effect the
outcome of a case, do not provide a

basis for overturning a trial court’s finding).

D. Rule 1:13

Husband argues he did not receive "reasonable notice"
of the presentation of a proposed

order to the trial court on May 7, 1999, as required by Rule
1:13. Husband’s counsel did not

endorse or waive endorsement of the order nor was he present
when the order was entered.

Husband argues the trial court erred in denying his motion to
vacate this order. We disagree.

Rule 1:13 requires that "[d]rafts of orders and decrees
shall be endorsed by counsel of

record, or reasonable notice of the time and place of presenting
such drafts together with copies

thereof shall be served . . . to all counsel of record who have
not endorsed them." The rule does

not specifically define "reasonable notice."

Husband acknowledges he received notice of the expected
presentation four days prior to

the presentation date. While he contends a copy of the proposed
order was not attached to the

notice, in his "Motion to Quash Notice," which he
filed with the court the day before the

presentation, he admits wife sent him a copy of the proposed
order. He also states "changes [in

the proposed order] were requested by counsel for
[husband]."

Husband received notice of the time and place for the
presentation of the draft order and

received a copy of the order. He does not argue that he was
confused or misled about the order

or its relation to the notice. He does not contend he had
insufficient time to review the order. He

admits he had time to request a continuance. Even if the rule
were violated, we do not perceive

any prejudice resulted from the failure to attach a copy of the
proposed order to the notice.

Because any error was harmless, the trial court did not abuse
its discretion in dispensing with

compliance of this rule. Rule 1:13. We will not vacate the order
entered by the court.

III. ISSUES REGARDING THE DECEMBER 23, 2002 ORDER

Wife contends all of these issues are waived because husband
voluntarily paid the

$800,000. In support of her argument, she cites Carlucci v. Duck’s
Real Estate, Inc., 220 Va.

164, 166, 257 S.E.2d 763, 765 (1979), which states, "The
general rule is that the payment of a

judgment deprives the payor [sic] of the right of appeal only if
payment was made voluntarily."

We do not agree with wife that husband’s payment of the
$800,000 was voluntary.

At the time husband paid the $800,000, he faced immediate
imprisonment if he did not

either produce the missing box of documents or make the payment.
This type of choice does not

suggest voluntary action. We find this circumstance constituted
proceedings "to execute on the

judgment," not a voluntary payment. Citizens Bank &
Trust Co. v. Crewe Factory Sales Corp.,

254 Va. 355, 355, 492 S.E.2d 826, 826 (1997). Husband was not
deprived of his right to appeal

by making the payment.

Husband argues the trial court erred in finding the Memorandum
enforceable, in refusing

to release him from jail on December 20, 2002, and in finding
him in contempt for failure to pay

the $800,000 before it was due and for failing to turn over a
box of documents. We agree, in

part, with husband.

A. Enforceability of the Memorandum

Husband contends one of the conditions precedent to the
enforcement of the

Memorandum was not met, i.e., he never told wife that he could
raise the $800,000. Wife argues

the condition was met because, although husband informed wife he
could not raise the funds, he

told her at the same time that he had access to substantial
equity, attempted to renegotiate the

deal, and eventually did raise the $800,000 "in a
relatively brief period of time." In effect, wife

argues husband’s actions demonstrate bad faith dealings under
the Memorandum.

The Memorandum provided that husband would pay wife $800,000 in
ninety days, plus

sign over his interest in a particular piece of real estate. In
return, wife would sign over all her

interest in the couples’ various partnerships[14]and
agree to the dismissal of the contempt

proceedings. However, the Memorandum allowed husband two weeks
"to determine if he

[could] raise the cash." All parties agree that husband
informed wife that he could not raise the

funds. However, wife contends this representation was knowingly
untruthful.

While no explicit provision in the Memorandum provides for the
use of good faith in this

agreement, our case law does impose an implied duty of good
faith on contracts between private

parties. The Supreme Court of Virginia in 1916 noted the
"correct statement of the rule in this

State:"

"When the defendant proved a complete sale, the law
implied, in

the absence of further proof, good faith and honesty in the
contract.

In every transaction lawful in itself, the law supports a

presumption of honesty and good faith. He who asserts the

existence of fraud or bad faith asserts the existence of that
which is

out of the common course of things, and the onus is cast
upon him

to make proof of his averments, and, as I understand it, the
burden

of proof on such an issue never changes."

Aronhime v. Levinson, 119 Va. 394, 398-99, 89 S.E. 893, 894
(1916) (quoting Farrington v.

Harrison, 44 N.J. Eq. 232, 236, 15 A. 8, 9 (1888)). See also A
& E Supply Co. v. Nationwide

Mut. Fire Ins. Co., 798 F.2d 669, 676 (4th Cir. 1986) ("All
contracting parties owe to each other

a duty of good faith in the performance of the agreement.
Restatement (Second) of Contracts

? 205 (1981)."). Given this implied requirement of good
faith, husband must have made his

claim that he could not raise the $800,000 in good faith in
order to claim the Memorandum is not

enforceable.

The trial court heard husband’s testimony and found him
"anything but a credible

witness." The court also noted, "I believe [the
Memorandum]’s enforceable and I believe it was

done in an attempt by [husband] to purge himself of the
contempt, and he’s had second thoughts

about it." The trial court, as fact finder, had the
responsibility to determine the credibility of the

witnesses, which this Court will not second-guess. Marable v.
Commonwealth, 27 Va. App. 505,

509-10, 500 S.E.2d 233, 235 (1998). Clearly, the trial court
found husband made his claim of

inability to raise the funds in bad faith. If the evidence
supports this finding, we will not reverse

it on appeal. Snow v. Commonwealth, 33 Va. App. 766, 774, 537
S.E.2d 6, 10 (2000).

The evidence, viewed in the light most favorable to wife, see
id., supports the trial court’s

conclusion that husband acted in bad faith. First, while
contending he could not raise the $800,000

for the Memorandum deal, he presented a counter-offer to buy his
wife’s interest for $900,000.

This counter-offer suggests he believed he could raise the
necessary funds. Second, by the time of

the hearing, husband had raised the $800,000 by selling two
parcels of land. The purchaser of the

parcels was known to husband when he claimed he could not raise
the funds required by the

Memorandum, as he owned a business that rented one of the
parcels.[15] Third, the trial
court did not

believe husband’s testimony that he could not raise the funds.
Husband provided no additional

evidence to support his claim. Overall, the evidence was
sufficient to prove husband acted in bad

faith when he attempted to use the release clause in the
Memorandum. The Memorandum,

therefore, is enforceable.

B. Continued Jailing of Husband

Husband argues the trial court imprisoned him for contempt on
November 15, 2002, without

hearing any evidence and should have released him from jail when
it realized its error. Wife argues

husband made no objection on November 15th; therefore, the issue
was not preserved under Rule

5A:18. Wife also argues this issue cannot be reviewed because
the record does not include a

transcript or a written statement of the November 15, 2002
hearing.

Generally, an objection must be made at the time of the ruling
in order to provide the court

with an opportunity to remedy the error. Rule 5A:18; Redman v.
Commonwealth, 25 Va. App. 215,

220, 487 S.E.2d 269, 272 (1997). In this case, the objection,
although made after the initial ruling,

was considered by the trial court as a motion to reconsider and
could have been corrected at that

time. Therefore, the objection was made in a timely matter, and
we will consider husband’s

argument. See Campbell v. Commonwealth, 12 Va. App. 476, 480,
405 S.E.2d 1, 2 (1991) (en

banc) ("[T]he trial court was adequately advised of the
defendant’s position, . . . it did consider

the issue raised, and . . . it had the opportunity to take
corrective action. Therefore, the purpose

underlying the contemporaneous objection rule was fulfilled . .
. .").

If the trial court did not hear evidence and did not accept any
proffers during the November

15th hearing, then this Court cannot affirm the court’s
jailing of husband. See Snow, 33 Va. App. at

774, 537 S.E.2d at 10 (noting that the evidence in the record
must support a trial court’s actions).

We do not know, however, if the trial court heard evidence or
accepted proffers because a transcript

of that hearing is not in this record.

Husband has the responsibility to present this Court with an
adequate record on which to

make its rulings. Woodward v. Commonwealth, 16 Va. App. 672,
677, 432 S.E.2d 510, 513

(1993). This record includes only a discussion on December 20,
2002, in which the parties

disagreed about the nature of the November 15th hearing. While
husband argued no proffers were

made, wife argued proffers were made and accepted by the trial
court. After this discussion, the

trial court "out of an abundance of caution" set a
hearing for December 23, 2002, to determine

again whether husband was in contempt of court.

This record does not include a transcript or a written statement
for the November 15, 2002

hearing, as required under Rule 5A:8. Because we cannot examine
the basis for the November 15,

2002 incarceration of husband, we cannot determine whether the
trial court erred by committing

husband to jail and keeping him there until December 23, 2002.
See Patterson v. City of Richmond,

39 Va. App. 706, 717, 576 S.E.2d 759, 765 (2003) ("Because
the appendix filed in this case does

not contain parts of the record that are essential to the
resolution of the issue before us, we will

not decide the issue.").

C. Finding of Contempt on December 23, 2002

Husband argues the trial court erred in finding him in contempt
because the Memorandum

did not require that he make a payment to wife until January 2,
2003,[16] approximately a week
after

the contempt hearing. Husband also argues the court
inappropriately found him in contempt for

failure to turn over a particular box of documents to wife. Wife
argues, since husband did not sign

the final order, his objection was not preserved under Rule
5A:18. Wife’s argument, however,

misstates the law, as appellate issues may be preserved in a
number of ways. See Lee v. Lee, 12

Va. App. 512, 515-16, 404 S.E.2d 736, 738 (1991) (en banc).

Husband objected during his closing argument to the trial court
finding him in contempt

prior to January 2, 2003. This objection was made at the time of
the ruling, and the trial court made

its decision after hearing this objection. See Weidman v.
Babcock, 241 Va. 40, 44, 400 S.E.2d 164,

166-67 (1991) (permitting an appeal of an issue where the party
made the argument to the trial

court, but signed the final order "Seen"); Campbell,
12 Va. App. at 480, 405 S.E.2d at 2. The issue

is preserved for appeal.

Assuming the trial court erred by finding husband in contempt
before the Memorandum

required the payment, we cannot hold the final order of contempt
was in error. As husband

acknowledged at the December 23, 2002 hearing and in his brief
on appeal, the trial court found

husband in contempt for his failure to pay wife $800,000 and for
his failure to turn over a box of

documents to wife. As long as the evidence supports one basis
for the contempt finding, this Court

will not reverse the trial court’s decision. Cf. Hudock v.
Virginia State Bar, 233 Va. 390, 392, 355

S.E.2d 601, 602 (1987) (to affirm a decision of the State Bar on
appeal, the Court need find only

one of the alternative bases for the decision was established);
Debroux v. Commonwealth, 32

Va. App. 364, 371-72, 528 S.E.2d 151, 155, aff’d, 34 Va. App.
72, 537 S.E.2d 630 (2000) (en

banc) (if the trial court addressed an issue, did not reject
the alternative ground for its decision,

and the factual record supports that decision, then the
appellate court can affirm). We find the

trial court did not err in holding husband in contempt for
failure to turn over particular documents.

The contempt finding is affirmed.

Husband argues he turned over enough documents to allow wife to
protect her interests. He

also argues he did not have the box of documents or any other
documents that wife requested.

However, the trial court did not believe husband’s testimony
that he did not have the box of

documents given to him by Ms. Mahoney. The court specifically
ordered husband to give that box

to wife, as well as other documents related to loans made to
private individuals using partnership

money. Wife testified that she did not receive the box or the
documents she requested. She also

testified that various documents, necessary to evaluate the
accounts receivable, were not included in

the papers provided by husband. Although husband claimed he did
not have any of these

documents or the box, the trial court did not believe him.

The trial court evaluates the credibility of the witnesses.
Marable, 27 Va. App. at 509-10,

500 S.E.2d at 235. Here, the court chose to believe wife and
disbelieve husband. Such a decision

was within the trial court’s discretion. Therefore, the
evidence supports the finding of contempt.

Although errors may very well have occurred during the course of
these proceedings, the

record as presented in this case is woefully inadequate. Thus,
we find no reversible error regarding

the December 23, 2002 finding of contempt.

IV. CONCLUSION

We find the trial court erred in prohibiting the payment of a
management fee to husband,

and we remand for further proceedings on that issue. On all
other issues, we affirm the trial court’s

rulings.

Affirmed in part; reversed

and remanded in part;

 

FOOTNOTES:

[1]Pursuant to
Code ? 17.1-413, this opinion is not designated for publication.

 

[2]No transcript
of the February 5, 1999 hearing on this issue is in the record.

 

[3]The Motion for
Relief and Sanctions was heard April 7, 1999. No transcript of this

hearing is in the record.

 

[4]Later
documents make clear the motion intended to refer to the May 7, 1999 order.

 

[5]These
partnerships are the same business entities mentioned in the Settlement. The

Settlement did not require husband buy wife’s interest in the
partnerships. Under the Settlement,

husband was only required to buy wife’s interest in particular
parcels of real estate. The

partnerships remained intact.

 

[6]This document
was not filed with the trial court on October 4, 2002, but instead appears

in the record as an attachment to a later motion and as evidence
presented at a later hearing.

 

[7]Although some
documents indicate the hearing was on the 16th, a later court order says

it was on the 15th.

 

[8]Under the
Memorandum, husband had ninety days to pay wife. As the document was

signed on October 4, 2002, husband had until January 2, 2003, to
make the payment.

 

[9]The buyer
testified he had a continuing business on one parcel, and the other parcel was

across the street from his business. He explained he heard
husband was in jail, which prompted

him to make an offer to buy the properties.

 

[10]Both parties
acknowledge in their briefs that all moneys have been paid.

 

[11]We also note
that the time for filing a notice of an appeal does not begin to run until

"after entry of final judgment or other appealable order or
decree." Rule 5A:6(a).

 

[12]Husband
never argued that the Settlement was unenforceable.

 

[13]Wife argues
husband did not "contemporaneously object" to Maddox’s testimony,

thereby failing to preserve this issue for appeal under Rule
5A:18. However, husband did object

to Maddox taking the stand, which was sufficient here to
preserve the issue for appeal.

 

[14]The
Memorandum does not explicitly state that wife will sign over her interest.

However, both parties and the trial court consistently expressed
the view that the Memorandum

required wife to relinquish her interest in the partnerships.

 

[15]Although a
logical person to approach about buying the properties, the purchaser

apparently did not know the land might be for sale until he
heard husband was in jail for

contempt.

 

[16]Under the
Memorandum, husband had ninety days to pay the $800,000. The

Memorandum was signed on October 4, 2002. Therefore, the last
day to pay wife was January 2,

2003. Wife does not argue the payment was due prior to that
date.


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