In this рost-divorce contempt action, we granted Appellant’s application for discretionary appeal to review the trial court’s order finding Appellant in contempt of three separate provisions of the parties’ divorce decree.
Brian and Maria Sutherlin (respectively, “Husband” and “Wife”) were divorced by a final judgment and decree entered in November 2012. The divorce decree incorporated a Separation and Property Division Agreement previously executed by both parties. Among other things, the Agreement provided for the division of the marital estate.
In November 2015, Wife filed a motion for contempt, contending thаt Husband had failed to comply with various provisions of the Agreement. Following a hearing, the court issued an order adjudging Husband in willful contempt of the divorce decree. Specifically, the trial court determined that Husband had violated the decree by (1) failing to make timely mortgage payments on the parties’ former marital residence; (2) failing to indemnify Wife for liabilities incurred with regard to past-due taxes owed by a family business awarded to Husband in the divorce settlement; and (3) failing to designate Wife as the beneficiary on a life insurance policy as required to secure Husband’s buyout obligations under the decree. In granting Husband’s application for discretionary review, we asked the parties to address the merits of the first two of these determinations and to
“The trial court in a contempt case has wide discretion to determine whether [its] orders have been violated.” Kaufmann v. Kaufmann,
I.
As part of the marital property division, the Agreement grants Husband “the sole right to occupy and enjoy” the parties’ former marital residence and further provides that
Husband shall be solely responsible for any and all indebtedness secured by that residence, as well as ad valorem taxes, insurance premiums and utility bills associated with that residence, and shall indemnify and hold Wife harmless as to the same.
The undisputed evidence adduced at the contempt hearing established that the mortgage on this residence was solely in Wife’s name. Wife also presented evidence that Husband had been late making the payments on this mortgage on multiple occasions in 2015 and 2016. Husband did not then, and has not ever, contested this fact. Nonetheless, Husband contends that he should not have been held in contempt because the language of the agreement requires only that he “be solely responsible” for the mortgage payments and that such responsibility does not encompass an obligation to make payments in a timely manner. We disagree. See, e.g., Floyd v. Floyd,
II.
As another facet of the parties’ property settlement, the Agreement provides for the ownership and control of three family-owned businesses established during the parties’ marriage, requiring Husband to buy out Wife and then retain full ownership of the businesses’ assets. Specifically, the Agreement requires Husband within a three-year period to pay Wife 30% of the “net value” of two of the three businesses — Sutherlin’s Carpet Care and Pressure Washing, Inc. and Just Plumbing, Inc. — as assessed by a specified accountant at a particular point in time. In exchange, Wife waives all claims to “any funds or assets of each of the corporations оn any basis and under any theory” Regarding the third business, Wife similarly “waives any claim to any of its assets and income.” And, as will become more relevant in the following section, Husband was required to maintain a $250,000 life insurance policy with Wife as beneficiary until he paid her the sums required to buy out her interests in the businesses. Also included within this section of the Agreement is the following provision:
Husband shall also indemnify and hold Wife harmless as to any corporate income tax liability for any of the three corporations named above, as Wife has had nearly no access to the financial records of those corporations until very recently, while Husband has had open access to the recordsand to the corporate accounts and funds.
More than two years after the entry of the divorce decreе in November 2012, the Internal Revenue Service (“IRS”) attempted to collect unpaid payroll taxes owed by the carpet care business for tax periods in 2013. At the contempt hearing, Wife testified that in April 2015 she received a notice of intent to levy from the IRS, which notified her of a payroll tax debt owed by the business — a subchapter S corporation under the federаl tax code, see26USC § 1361etseq.— in the amount of $44,705.38. Corporations electing “S corporation” status under the federal tax code are not taxed on their profits at the corporate level, and instead pass their profits and resulting tax liabilities through to shareholders. See 26 USC §§ 1362, 1366 (a) (1) (A); see also OCGA § 48-7-21 (b) (7) (B). Because Wife remained a shareholder of the carpet care business until Husband completed the buyout requirements, the IRS apparently determined that she was liable for a share of the company’s payroll tax debt. As a result, the IRS garnished Wife’s 2014 federal income tax refund and Wife ultimately was forced to hire counsel and negotiate a monthly installment payment plan for the balance.
In her contempt motion, Wife claimed that, by fаiling to satisfy the company’s payroll tax obligations such that Wife was then held responsible, Husband had violated that portion of the Agreement that required him to hold Wife harmless as to the “corporate income tax liability” of the family businesses. Husband does not dispute the payroll tax delinquency Still, Husband contends that the Agreement did not require him to assume sole responsibility for the сompany’s payroll taxes because that debt does not fall within its “corporate income tax liability.” The trial court, however, concluded that the payroll taxes in question were encompassed within the company’s “corporate income tax liability,” and ordered Husband to reimburse Wife for the sums she had already paid on this debt, as well as to assume respоnsibility for the remaining balance.
A.
In determining whether this conclusion was proper, we must decide whether the trial court’s construction of the term “corporate income tax liability” was a reasonable clarification of the Agreement or instead was so contrary to its apparent intention as to constitute an improper modification. See Kirkendall v. Decker,
To be sure, for some corporations, the term “corporate income tax” would have a plain meaning. But here, due to Sutherlin’s status as an S corporation, the corporation as an entity has no “corporate income tax liability” See 26 USC § 1366 (a) (1) (A); OCGA § 48-7-21 (b) (7) (B). Husband asserts that the term refers only to the tax owed by each corporation on its own income. Hоwever, none of the corporations owes any income taxes; instead, their shareholders do. As the trial court recognized, construing the term to mean what Husband claims it means would render it essentially without meaning, thus violating the maxim that “[t]he courts ‘should avoid any construction that renders portions of the contract language meaningless.’ ” Horwitz v. Weil,
In the face of this ambiguity, we must look to the entirety of the Agreement to determine the intent of the parties. Indeed, “[i]t is axiomatic that contracts must be construed in their entirety and in a manner that permits all of the terms contained therein to be consistent with one another.” Schwartz v. Schwartz,
Accordingly, rather than construing “corporate income tax liability” as referring to a liability that cannot exist, we construe that term to mean those tax liabilities that flow from the corporation. See Knott,
To be sure, this Agreement could have been more clearly drafted, and we caution parties to a divorce to ensure that their intentions are plainly expressed. But here, the complete text of the Agreement demonstrates that the parties intended for Husband to assume all tax liabilities of the businesses. We therefore conclude that the trial court’s construction of “corporate income tax liability” constituted a reasonable clarification of that term rather than an improper modification of the Agreement.
B.
Our agreement with the trial court’s construction of the term, however, does not end the analysis regarding the adjudication of contempt on this point. Because our interpretation stems from an explicit finding of ambiguity in the Agreement, we cannot find that the term in question is so clear and definite that Husband’s failure to comply with his obligations constitutes a willful violation of the Agreement. See Coppedge v. Coppedge,
III.
Another of the grounds Wife asserted in her contempt motion related to Husband’s failure to conduct the valuation required under the buyout provision. In the course of cross-examining Husband on that subject, Wife’s counsel asked Husband about a component of the buyout provision requiring Husband to mаintain a $250,000 life insurance policy, with Wife designated as beneficiary, until the amount due to Wife under the buyout was paid. Husband’s counsel objected to questioning on this topic, and the trial court overruled the objection. Responding to those questions — and to follow-up questions from the trial judge — Husband testified that he had obtained a $250,000 life insurance policy on which Wife was initially the named beneficiary, but had subsequently changed the beneficiary designation, naming the parties’ sons instead of Wife. On redirect examination by his own counsel, Husband stated that he did not object to the trial court considering the issue of the life insurance policy, and that he could reinstate Wife as beneficiary if necessary:
Q: Okay. So, if necessary, you could put [Wife] back on as benеficiary?
A: Yes.
Q: Okay And you don’t have any objection, should the Court find that this life insurance policy plays a role in today’s hearing?
A: No.
In its contempt order, the court found Husband in willful contempt for failing to maintain Wife as the named beneficiary on the life insurance policy pending payment of the amounts owed under the buyout provision. The court ordered Husband to immediately comply with this requirement and to provide Wife with proof of his compliance within 30 days.
In spite of his apparent consent to the court’s consideration of his failure to follow the Agreement’s directives on designating Wife as a life insurance beneficiary, Husband now asserts that the trial court erred in holding him in contempt on this issue, claiming that he was not afforded sufficient notice of this particular ground for contempt. See Brown v. King,
Under the circumstances presented here, we agree that contempt was available. To begin, the life insurance provision was part of the overall buyout scheme, which was clearly at issue in thе contempt proceeding. This is not a case where Husband had no advance notice that contempt was under consideration. Cf. Barnes,
Judgment affirmed in part and reversed in part.
Notes
We note that, because Wife filed her application and notice of appeal prior to the January 1, 2017 effective date of the Appellate Jurisdiction Reform Act, this Court — not the Court of Appeals — has jurisdiction over this case. See Ga. L. 2016, p. 883, §§ 3-1, 6-1 (c) (as of effective date, shifting subject matter jurisdiction over “[a]ll divorce and alimony cases” from this Court to the Court of Appeals).
This interpretation is strengthened by another portion of the Agreement, which states that
Husband shall indemnify and hold Wife harmless as to any and all liability for personal income taxes for any tax year as to which they have filed jointly, because in each such year, Wife had sufficient funds withheld from her income and paid to the Internal Revenue Service and Georgia Income Tax Division so that she would owe no taxes for any such years.
There is no reason to suspect that this failsafe, which was put in place for the years when the parties were married and filing jointly, would be removed so that Wife would be responsible for corporate taxes after the parties were divorced.
At least in some circumstances, however, “[a] trial court may sua sponte raise an issue of contempt” without prior notice. Chatfield v. Adkins-Chatfield,