Title: HOUGH v. HOUGH
Citation: 2004 OK 45, 92 P.3d 695
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: June 8, 2004

HOUGH v. HOUGH Annotate this Case HOUGH v. HOUGH 2004 OK 45 92 P.3d 695 Case Number: 96862 Decided: 06/08/2004 THE SUPREME COURT OF THE STATE OF OKLAHOMA CHARLES H. HOUGH, Plaintiff/Appellant, v. ASHLEY H. HOUGH, Defendant/Appellee. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION III APPEAL FROM THE DISTRICT COURT OF WASHITA COUNTY HONORABLE CLARK E. HUEY, TRIAL JUDGE ¶0 This domestic case arises out of the trial court's appointment of a special master to control discovery, valuation and preservation of the marital estate at issue in the parties' divorce and subsequent award of fees and costs to the special master, such fees and costs to be paid by Plaintiff/Appellant Charles H. Hough (hereinafter "Husband") from the marital estate. The divorce case was settled on September 8, 2000, with the issue of attorneys fees and costs reserved. On September 15, 2000, special master filed his application for fees with the trial court. Husband thereafter filed his Chapter 13 Bankruptcy Petition in the United States Bankruptcy Court in March, 2001. On September 4, 2001 the trial court ordered a judicial lien in the amount of such fees and costs over all property awarded to husband for the purpose of securing payment of the special master's fees and costs. Additionally, on that date, the trial court determined that special master's fees and costs and the order awarding a judicial lien over husband's property to the special master were in the nature of support to Defendant/Appellee Ashley H. Hough (hereinafter "Wife") and thus, non-dischargeable in Husband's bankruptcy. Husband appealed the September 4, 2001 order to the Court of Civil Appeals (hereinafter "COCA"), which affirmed the trial court's order awarding special master fees and costs, but vacated the trial court's determination that such fees and costs were in the nature of support of Wife and further vacated the portion of the trial court's order providing the judicial lien is non-dischargeable in bankruptcy. Special master filed a Petition for Writ of Certiorari. Upon certiorari previously granted, THE COURT OF CIVIL APPEALS' OPINION IS VACATED; JUDGMENT OF THE TRIAL COURT IS AFFIRMED. B. David Sisson of Norman, Oklahoma, for Plaintiff/Appellant. George H. Brown and Lee F. Peoples of Klingenberg & Associates, P.C., of Oklahoma City, Oklahoma, for Special Master/Appellee. Lavender, J. ¶1 The issue in the present cause is whether the trial court abused its discretion in determining that its order requiring Husband to pay the fees and costs of the special master and the order awarding a judicial lien to special master to secure such payment, were intended to provide support for the wife and thus, non-dischargeable in bankruptcy. We hold that the trial court did not abuse its discretion in making such determinations in this case and the COCA erred in vacating the portion of the trial court's order denominating the special master's fees as support for the wife and the portion of the order providing the judicial lien is non-dischargeable. I FACTS AND PROCEDURAL HISTORY ¶2 Husband filed for divorce from Wife on February 12, 1997. This case involves a complicated marital estate, which included the parties' co-ownership of two businesses (A-C Air and A-C Rentals, Inc. ¶3 Evidence reflects that throughout the course of this litigation, Husband was generally uncooperative in discovery and in compliance with the trial court's orders ¶4 Given Husband's misconduct, Wife filed a motion to appoint a special master "to oversee all matters relating to the marital estate of the parties . . . to determine the value of the marital estate, to conduct discovery regarding the estate, to control the Husband's ability to further dissipate the estate, to determine the Husband's prior dissipation of the marital assets and all other such matters regarding the estate." ¶5 The trial court ultimately entered the following Order: [A]ppointment of a special master will be of benefit to the Court in matters relating to discovery, valuation and preservation of the marital estate . . . [and such special master] shall have control of all matters relating to discovery, valuation and preservation of the marital estate (including the two businesses); shall control Plaintiff's ability to expend the marital estate and to determine the Plaintiff's prior expenditures and/or depletion of the marital assets; and shall control all other matters regarding the marital estate. Said fees and costs shall be paid by the [Husband] from the marital estate." Husband thereafter filed his Motion to Discharge Special Master ¶6 The parties' divorce proceedings ended in settlement on September 8, 2000, with the issue of attorney fees and costs expressly reserved in the Consent Decree of Divorce. Special master thereafter filed his Application for Attorneys Fees on September 15, 2000, seeking fees and costs in the amount of $43,404.98. Husband reiterated his objections to special master's Application for payment of fees and costs, arguing that "the initial referral to a special master was ultra vires in that there was no good cause for the appointment," the trial court's order granting the special master authority to conduct discovery was improper, vague and overly broad, and the fee was excessive. During the pendency of the trial court's consideration of the reserved issues of fees and costs including those of the special master, Husband filed his Chapter 13 Bankruptcy Petition in the U.S. Bankruptcy Court in March, 2001. ¶7 On September 4, 2001, the trial court granted special master's Application for Payment of Attorney's Fees and approved total payment of fees and costs in the amount of $48,703.40, and further granted special master a judicial lien in that amount over all property awarded to Husband from the marital estate, and determined such "judicial lien shall not be discharged by [Husband] in bankruptcy." Additionally, the trial court determined as follows: [t]he initial order requiring the [Husband] to pay the fees and costs of the Special Master from the marital estate and the order awarding a judicial lien to the Special Master, were intended to provide support to the [Wife] . . . by allowing her to use the money awarded to her for support instead of using the money for payment of the attorney's fees and costs of the Special Master. Finally, the trial court concluded "[t]hat substantially all efforts expended by the Special Master in ensuring compliance with discovery order, valuation and preservation of the marital estate, were necessitated by the [Husband's] hindrance, delay and general 'uncooperativeness' in this case; and that such an award as stated above is more than reasonable, considering the [Husband's] actions taken in this case." ¶8 Husband appealed, arguing the trial court erred in the following respects: (a.) the trial court improperly delegated judicial authority to the special master; (b.) the trial court's order was vague and overbroad in its appointment of special master to conduct "blanket discovery" in a case that does not present complex issues of accounting or valuation; (c.) the trial court erred in awarding special master fees in this case because there is no statutory basis for such award; (d.) the order surpasses the relief prayed for by improperly granting a judicial lien against Husband's property and finding that fees were intended for support of Wife and determining that the fees are not dischargeable in bankruptcy. COCA affirmed the order awarding special master fees and costs in the amount of $48,703.40, but vacated the portion of the order determining special master's fees as support for the Wife and further vacated the trial court's determination that the judicial lien was non-dischargeable in bankruptcy. Special master filed his Petition for Certiorari. II THE TRIAL COURT DID NOT ABUSE ITS DISCRETION IN CHARACTERIZING SPECIAL MASTER'S FEE AWARD IN THE NATURE OF SPOUSAL SUPPORT AND DETERMINING THAT JUDICIAL LIEN GRANTED TO SECURE HUSBAND'S PAYMENT OF SUCH FEE NON-DISCHARGEABLE IN BANKRUPTCY ¶9 As a starting point, we note that an action for divorce, alimony and division of property such as this one is one of equitable cognizance and in reviewing a case of equitable cognizance, the judgment of the trial court will not be disturbed unless the trial court abused its discretion or unless the court's finding was clearly against the weight of the evidence. Merritt v. Merritt, 2003 OK 68, ¶ 7, 73 P.3d 878 , 882, cert. denied, 124 S. Ct. 820 (2003); Creech v. Creech, 1956 OK 10, 292 P.2d 376 , 378; Tschauner v. Tschauner, 1952 OK 230, 245 P.2d 448 . In this case, the COCA concluded that the trial court abused its discretion in its determination that its Order requiring Husband's payment of special master's fee was "intended to provide support to [Wife]" and ordering that the judicial lien (granted to secure Husband's payment of special master's fees) shall not be discharged in Husband's bankruptcy. The COCA based its determination on the unsupported basis that "special master's fees and costs are not support for Wife. The fees were not paid to Wife for her use." The COCA further reasoned that 12 O.S. § 61913 does not provide that a referee's compensation be intended to support a party in a divorce action." Finally, the COCA concluded "[t]he trial court has no judicial authority to declare the judicial lien or special master's fees non-dischargeable in bankruptcy. This determination is for the bankruptcy court." ¶10 We disagree with the COCA's conclusions. Consistent with and pursuant to the exceptions to discharge section of the U.S. Bankruptcy Code, 11 U.S.C. § 523.(a)(5) (2000)14, Oklahoma courts recognize that an award in the nature of alimony, maintenance or support of the spouse or child may not be discharged in bankruptcy. Battles v. Battles, 1952 OK 2, 239 P.2d 794 ; Owens v. Owens, 1995 OK CIV APP 17, 897 P.2d 1145 (Released for publication by Order of the Supreme Court of Oklahoma). Oklahoma state courts have exercised their judicial authority in divorce actions to determine whether the nature of an obligation arising out of a divorce is intended for support and maintenance of the spouse and therefore, may not be discharged in bankruptcy as opposed to dischargeable property division. See, e.g., Battles, 239 P.2d at 796 (holding obligation arising out of a contract between husband and wife was substantially for maintenance and support of wife and therefore not discharged by husband's bankruptcy); Turman v. Turman, 1968 OK 33, 438 P.2d 488 (holding court-decreed obligation to pay attorneys' fees is in the same category as the obligation to pay alimony); Johnson v. Johnson, 1969 OK 142, 460 P.2d 954 (holding the purpose behind the divorce decree award to wife was to provide for her support and maintenance and is therefore, non-dischargeable in bankruptcy even though the decree did not expressly designate the award as in the nature of support); Davis v. Davis, 1979 OK 40, 593 P.2d 88 (holding state law governs the determination whether a decree-imposed obligation to pay a jointly incurred marital debt was in the nature of non-dischargeable spousal support or dischargeable property division); Owens, 897 P.2d at 1147 (holding divorce-decree imposed obligation to pay two mortgages on the parties' jointly held real property is in the nature of support and non-dischargeable in bankruptcy). While we recognize there is federal case law, which provides the determination of whether an obligation arising out of a divorce settlement is in the nature of alimony, maintenance or support is a matter of federal bankruptcy law, see, e.g., Sylvester v. Sylvester, 865 F.2d 1164, 1166 (10th Cir. 1989), our state courts have concurrent jurisdiction to determine this question. See Davis, 593 P.2d at 90; Owens, 897 P.2d at 1147; Riedel v. Riedel, 1992 OK CIV APP 166, 844 P.2d 184 , 186; see also In re Franklin, 179 B.R. 913, 920 (Bankr. E.D. Cal. 1995) (providing the general rule is that state and federal courts have concurrent jurisdiction to decide the issue whether a divorce-based debt is in the nature of non-dischargeable alimony or support). Additionally, federal courts look to state law for guidance in determining whether a particular obligation arising out of a divorce action is a non-dischargeable obligation in the nature of alimony, maintenance or support. See In re Lane, 147 B.R. 784, 786 (Bankr. N.D. Okla. 1992) (listing seven factors to be considered, the first of such factors being how the state court labeled the award). In this case, special master asserts that the Bankruptcy Court requested the trial court's determination as to whether Husband's obligation to pay special master's fees and costs was in the nature of support and therefore, non-dischargeable. Although we cannot confirm the veracity of special master's assertion because of the absence of evidence in the record regarding the Bankruptcy Court proceedings, we note Husband does not dispute this assertion. However, even if the Bankruptcy Court had not specifically requested the trial court's conclusions in this regard, we hold it was nonetheless proper for the trial court to make such a determination in this case that Husband's obligation arising out of the divorce action to pay the fees and costs of special master was in the nature of support and non-dischargeable in bankruptcy. ¶11 Turman v. Turman and Owens v. Owens further clearly demonstrate there is no requirement that the payments pursuant to an award arising out of an Oklahoma divorce action be paid directly to the spouse in order to constitute an obligation in the nature of alimony, maintenance or support. In Turman, the obligation deemed in the nature of alimony was not to be paid directly to the former spouse, but rather, directly to her attorney for fees for legal services in representing the former spouse in the subject divorce action she instituted. Turman, 438 P.2d at 490. The obligation in Owens, which was determined there to be in the nature of support was the husband's divorce-decree imposed obligation to pay two mortgages on the parties' jointly held real property including the marital home. Owens, 897 P.2d at 1147. In both Turman and Owens, while the former spouse in each respective case was the recipient of the benefit of the award in that she was spared the burden of having to pay a debt arising out of a divorce, it was a third-party, namely the former spouse's attorney in Turman and the mortgagee in Owens, which actually received direct payment. We further note the reasoning in Turman v. Turman is notably applicable in this instance. In Turman, we recognized "the necessity of the services of [the former spouse's] attorney, and that the provisions for payment for said services is a necessary cost, or expense, in an action for divorce and alimony, and to Insure . . . the 'efficient preparation' and 'prosecution or defense of such an action.'" Turman, 438 P.2d at 490 (citations omitted). Finally, we determined that "the obligation to pay the attorney fee assessed against the bankrupt for such services is an 'accessory' to the alimony and 'follow(s) the nature of the liability' therefor, just as truly as do the costs of the action." Id. (quoting Smith v. Smith, (D.C., W.D., N.Y.) 7 F. Supp. 490 , 491). In this case, the record is clear the trial court's appointment of a special master was necessitated by the recalcitrant actions of Husband (in dissipating marital assets and his defiant, uncooperative discovery tactics) and by the complex nature of the marital estate. The trial court expressly provided in its order of September 4, 2001, that the order requiring Husband to pay special master's fees and costs and the judicial lien granted to special master over Husband's property to secure such payment were intended to provide support to the [Wife] "by allowing her to use the money awarded to her for support instead of using the money for payment of the attorney's fees and costs of the special master." Given the complexities of the accounting matters of the case and the particular need for special master's control over the marital estate to prevent Husband's dissipation thereof, the necessity of the services of the special master in this case was no less compelling than the necessity of the services of the former spouse's attorney in the divorce at issue in Turman. Further, just as the attorneys' fee in Turman was deemed an accessory to alimony, the obligation to pay the special master's fees and costs assessed against the bankrupt Husband for such services in this case is likewise akin to an accessory to the alimony and follows the nature of the liability therefor. Therefore, the COCA erred in its determination that because special master's fees "were not paid to Wife for her use," they may not be categorized as in the nature of support. We hold the trial court properly exercised its judicial discretion in its determination that its order requiring Husband to pay special master's fees and costs from the marital estate and the order awarding a judicial lien to special master were intended to provide support to Wife and therefore, non-dischargeable in Husband's bankruptcy. III SPECIAL MASTER'S MOTION FOR APPEAL-RELATED ATTORNEY'S FEES ¶12 Special master filed his "Motion for Appellate Attorney's Fees" pursuant to 12 O.S. § 696.4(C), such motion having been separately identified and contained within his Answer Brief on appeal. In addition to citation to 20 O.S. § 15.115 and one COCA case construing § 15.1, special master additionally argues "compelling and overriding equitable considerations created by Husband's delay, hindrance and general uncooperativeness" justifies the award of appeal-related attorney's fees to special master in this case. ¶13 The general rule is "[a]ppeal-related attorney fees are recoverable if statutory authority exists for their award in the trial court." Casey v. Casey, 2002 OK 70, ¶ 26 58 P.3d 763 , 772 (footnotes omitted). This case presents a unique question concerning a non-party's quest for appeal-related attorney's fees. We are unaware of express statutory authority for the recovery of a special master's attorney fees. However, statutory authority exists for the award of "compensation [to referees] for their services as the court may deem just and proper, which shall be taxed as part of the costs in the case." 12 O.S. § 619 (emphasis added).16 Further, § 619 has been interpreted to apply to compensation of special masters. Oklahoma Oil & Gas Exploration Drilling Program v. W.M.A. Corp., 1994 OK CIV APP 11, 877 P.2d 605 , 612. ¶14 In this case, the trial court ordered Husband to pay the fees and costs of special master and the COCA affirmed this award pursuant to 12 O.S. § 619. While we agree with the lower courts' determination that special master was entitled to recover fees and costs as compensation for his services in accordance with § 619, we disagree with the COCA's characterization of § 619 as statutory authority for an attorney fees award. Since § 619 does not authorize an attorney fees award in the trial court, it follows that 12 O.S. § 619 is likewise an improper basis for special master's recovery of appeal-related attorney fees. ¶15 Special master seeks recovery of appeal-related attorney fees pursuant to 20 O.S. § 15.1, which permits "the prevailing party [to] petition the court for an additional attorney fee for the cost of the appeal." We have construed this statute to permit the recovery of appeal-related attorney fees against an appealing party bringing a "patently frivolous appeal," which is an appeal with "absolutely no legitimate legal or factual basis." TRW/Reda Pump v. Brewington, 1992 OK 31, 829 P.2d 15 , 22. Based upon our review of the record, it cannot be concluded that Husband's appeal lacked any legitimate legal or factual basis, although Husband was ultimately unsuccessful. Since Husband's appeal cannot be characterized as patently frivolous, special master is therefore not entitled to recovery of his appeal-related attorney fees pursuant to 20 O.S. § 15.1. ¶16 Finally, to the extent special master's assertion of "compelling and overriding equitable considerations" equates to a demand for the balancing of judicial equities as between special master and Husband, special master cites no authority in support of the application of such a balancing of judicial equities test as between a non-party special master and a party to an underlying divorce action in support of recovery of appeal-related attorney fees.17 A proposition which is unsupported by citation to authority will not be considered on appeal. Witt v. Westheimer, 1938 OK 249, 79 P.2d 250 ; Mid-Continent Cas. Co. v. Jenkins, 1967 OK 54, 431 P.2d 349 ; see Vernor v. Poorman, 1916 OK 608, 158 P. 615 (providing "attorneys who present cases here have no right to place the burden upon this court and consume their time in a laborious research for authorities to support their argument."). In light of these authorities, special master's Motion for Appeal-Related Attorney's Fees is denied. IV SUMMARY ¶17 In sum, we hold the trial court did not abuse its discretion in characterizing the obligation arising out of this divorce action that Husband pay special master's fees and costs and judicial lien over Husband's property granted to special master to secure payment of such fees and costs as in the nature of support for the Wife and therefore non-dischargeable in Husband's bankruptcy and the COCA erred in determining the trial court lacked judicial authority to make such a determination in this case. The trial court's September 4, 2001 order awarding special master fees and costs in the amount of $48,703.40 is affirmed in its entirety. ¶18 Upon certiorari previously granted, THE COURT OF CIVIL APPEALS' OPINION IS VACATED; JUDGMENT OF THE TRIAL COURT IS AFFIRMED. ¶19 WATT, C.J., HODGES, LAVENDER, HARGRAVE, KAUGER, BOUDREAU, WINCHESTER and EDMONDSON, JJ., concur. ¶20 OPALA, V.C.J., concurs in part; dissents in part. FOOT