Opinion ID: 1156814
Heading Depth: 4
Heading Rank: 2

Heading: Did the Trial Court Err by Finding Jay Hartland in Contempt and Awarding Patricia Damages for His Delay in Transferring Certain Stocks?

Text: Jay argues that Judge Craske erred in finding him in contempt for two reasons: 1) the uncontroverted facts do not reveal contemptuous conduct since he was relying on the advice of his attorney; and 2) the use of the contempt power is inappropriate to enforce the non-support aspects of a divorce decree. Judge Craske issued his findings orally on October 31, 1986, awarding certain stock to Patricia. The written judgment was issued on March 25, 1987. The judgment awarded Patricia the PEP Boys stock, 534 shares of American Express and the Lenora Explorations stock. The judgment stated that: [t]he plaintiff shall immediately transfer to defendant all of the American Express stock shares which have already been held by the plaintiff long enough to avoid the recapture tax. The plaintiff shall then promptly transfer the remaining shares within one week after each share reaches the end of the holding period necessary to avoid the recapture tax. All 535 shares of the American Express stock shall be transferred to the defendant no later than 21 months after the date of the divorce decree in this matter... . The date of transfer of possession of all other items shall be November 15, 1986. After not receiving these stocks, Patricia filed a motion on May 18, 1987, for enforcement of the divorce decree. In response, Jay filed his first motion for a stay. In his May 8, 1987 affidavit, Jay stated that he was informed that the transfer of the American Express stock will take at least two months to complete. On July 17, 1987, the trial court issued a decision and order denying Jay's motion for a new trial and granting Patricia's motion for enforcement of the decree. The court ordered Jay to immediately transfer, and execute all documents necessary for such transfer, all of the American Express, PEP Boys, and Lenora Explorations stock. The court noted: The finding of this court on the material submitted both at the time of trial and in the moving papers since trial supports the court's finding that plaintiff has intentionally manipulated the parties' assets in a manner calculated to benefit himself and to the detriment of defendant. Plaintiff has not provided a satisfactory explanation as to why he has not complied with the decree of divorce. The offered explanation of waiting for a decision on the motion for new trial on the question of the present value of the retirement benefits is not persuasive. No stay was ever granted. Jay stated in an affidavit that he initiated the process of ordering up the stock certificates for transfer to Patricia within one week's time following the court's July 17 order. According to the deposition of Lori Stone, the operations manager of Shearson Lehman, Jay did not order up the PEP Boys stock until August 11, 1987 and the American Express stock until early September 1987. On August 21, 1987, Jay moved to stay the proceedings pending appeal and for the court's approval of an undertaking in lieu of a supersedeas bond. His affidavit of August 21 stated that the stocks were due in late September. On August 31, 1987, Patricia moved for an order to show cause why Jay should not be held in contempt for having failed to comply with the terms of the divorce decree and the court's order of July 17. On September 8, 1987, as part of his opposition, Jay filed an affidavit stating that Patricia has always had the ability to sell [the PEP Boys and Lenora stock] at any time, both before the trial and since. (Emphasis in original). After reading the affidavit, Patricia immediately called Deberah Fox at Shearson Lehman to inform her she wanted to sell her stock. She was told that the stock could not be sold while the stock certificates were being ordered up. A telephonic oral argument on Patricia's motion to show cause was held on September 11, 1987. On September 24, 1987, the superior court issued an order commanding Jay to show cause why he should not be held in contempt. The court also denied Jay's second motion for a stay of proceedings and the offered undertaking. Jay then filed the same motion with this court. We denied his motion on October 22. Prior to our denial of Jay's third motion for a stay, his counsel received the stock certificates for Lenora Explorations and PEP Boys. On October 13, 1987, Jay filed a response to the superior court's order to show cause. Jay's counsel delivered the stock certificates to Lenora Explorations and PEP Boys on October 19, 1987, four hours after the close of the New York stock exchange. On October 19, now referred to as Black Monday, the stock market dropped some 500 points. The American Express stock was not delivered until November 4, 1987. On February 11, 1988, Patricia moved for an evidentiary hearing on the issue of contempt. Jay filed an opposition motion. On March 9, 1988, the court concluded that an evidentiary hearing was appropriate to provide a factual basis for a decision on the contempt issue. Based on the parties' prior agreement to substitute the deposition of Lori Stone for an evidentiary hearing, the superior court reviewed the videotape deposition of Lori Stone. On April 13, 1988, the superior court found Jay in contempt for his willful and bad faith failure to transfer stock awarded to Patricia. It determined that Jay's willful and bad faith actions were the legal cause of $28,810 in financial losses suffered by Patricia, and that pursuant to AS 09.50.040, Jay was responsible for those losses and for her full attorney's fees and costs incurred in the contempt proceeding.