Coffey v. Coffey
2016 SD 96
| S.D. | 2016Background
- Debra and Michael Coffey divorced in 2010 after entering a written property-settlement Agreement incorporated into the divorce decree; Debra’s attorney drafted the Agreement.
- Paragraph 2 assigned the marital residence to Michael, allocated the first mortgage (Bank of America) to Debra with the length of the loan to pay or refinance, and included a "save and hold harmless" clause protecting Michael from liability on that mortgage.
- Paragraph 2 also provided: if the Defendant (Michael) sold the home before either mortgage was paid, then the mortgages "will be paid in full first out of the proceeds of the home."
- In April 2015 Michael sold the home and used sale proceeds to pay both mortgages, including $56,040.35 to satisfy the outstanding first mortgage; he then sought reimbursement from Debra, who refused.
- Michael moved for an order to show cause (contempt) and for judgment against Debra for the mortgage amount, prejudgment interest, and fees; the circuit court found the Agreement unambiguous, denied reimbursement and contempt, and Michael appealed.
Issues
| Issue | Plaintiff's Argument (Michael) | Defendant's Argument (Debra) | Held |
|---|---|---|---|
| Whether the Agreement unambiguously requires Debra to reimburse Michael after he used sale proceeds to pay the first mortgage | Exhibit 1 (spreadsheet) is incorporated and shows Debra bore the first-mortgage liability; equity and the exhibit require reimbursement | Paragraph 2 plainly conditions Debra’s obligation on Michael’s continued possession and, upon sale, sale proceeds must be applied first to mortgages — no reimbursement obligation | Court: Agreement unambiguous; plain meaning does not require reimbursement |
| Whether ordering reimbursement would impermissibly modify the final property settlement | Reimbursement is consistent with the parties’ equalized division reflected in Exhibit 1 | Requiring reimbursement would modify the final, determinate property division | Court: Reimbursement would impermissibly modify final property settlement; not allowed |
| Whether Debra could be held in contempt for refusing to reimburse | Michael: Debra willfully disobeyed an order incorporated in decree by not reimbursing him after he satisfied the mortgage | Debra: No duty to reimburse under the Agreement after sale proceeds were used; therefore no contempt | Court: Denial of contempt proper — no willful disobedience because no duty to reimburse existed |
| Whether the spreadsheet exhibit is incorporated into the Agreement and creates ambiguity | Exhibit 1 is referenced multiple times and must be treated as part of the contract, creating inconsistency with Paragraph 2 | Even if incorporated, Agreement’s plain language controls and contains no reimbursement term; conditional sale clause controls | Court: Did not need to decide incorporation; even if incorporated, result unchanged — Agreement controls and no reimbursement required |
Key Cases Cited
- Hisgen v. Hisgen, 554 N.W.2d 494 (S.D. 1996) (divorce stipulations governed by contract rules; courts ascertain parties’ intent)
- Gloe v. Union Ins. Co., 694 N.W.2d 252 (S.D. 2005) (contracts interpreted as whole; words given plain and ordinary meaning)
- Pesicka v. Pesicka, 618 N.W.2d 725 (S.D. 2000) (ambiguity exists only when an agreement is reasonably capable of more than one meaning)
- Hiller v. Hiller, 866 N.W.2d 536 (S.D. 2015) (property division in a divorce decree is not subject to later modification)
- Talbert v. Talbert, 290 N.W.2d 862 (S.D. 1980) (elements required to establish civil contempt)