Opinion ID: 1156814
Heading Depth: 3
Heading Rank: 2

Heading: Post Trial Issues

Text: Jay argues that the superior court erred in failing to grant relief from judgment under Alaska Civil Rule 60(b)(6). On November 6, 1987, Jay sought relief under 60(b)(6) on the grounds that his former attorney committed malpractice in gathering evidence and violated the Code of Professional Responsibility. Jay argues that his attorney represented his girlfriend's husband in a divorce action and that this developed into a conflict when Patricia sought to call the husband as a witness. The superior court denied the motion, finding that the motion should have been brought under 60(b)(1) but that Jay did not qualify for relief because the conduct of his attorney did not constitute excusable neglect. Jay argues on appeal that his motion was appropriately made under 60(b)(6). This court will not overturn the superior court's denial of a motion under Rule 60(b) absent an abuse of discretion. Allen v. Allen, 645 P.2d 774 (Alaska 1982). In O'Link v. O'Link, 632 P.2d 225, 229 (Alaska 1981), this court made clear that clause (6) and the first five clauses are mutually exclusive. [7] Relief under clause (6) is not available unless the other clauses are inapplicable. Moreover, clause (6) is reserved for extraordinary circumstances not covered by the preceding clauses. Time-barred relief under the first five clauses is not allowed under clause (6). Patricia argues that relief from judgment under clause (1) is inappropriate because Jay's attorney's conduct did not constitute excusable neglect. [8] We agree. As this court stated in Rill v. State, Dep't of Highways, 669 P.2d 573, 576 (Alaska 1983), [a]n attorney's failure to act responsibly toward his or her clients when the attorney could be expected to do so constitutes inexcusable neglect. The Rill court noted that the client's appropriate remedy is an action for malpractice. Rill, 669 P.2d at 576 n. 1. As commentators have noted, [o]utside the default setting, negligent errors of counsel are treated less sympathetically and relief frequently denied on the grounds that the negligent act was inexcusable. J. Friedenthal, M. Kane, A. Miller, Civil Procedure 572 (1985). The grounds for Jay's 60(b) motion are that his former attorney failed to act responsibly towards him by not conducting needed discovery and failing to recognize a prejudicial conflict of interest when he reasonably could have been expected to do so. These allegations present inexcusable neglect not entitled to relief under 60(b)(1). As to relief under the catch-all provision of 60(b)(6), this court has stated that only extraordinary cases are subject to relief under this section. O'Link, 632 P.2d at 230. This case simply does not present an extraordinary case for relief under 60(b)(6). Both parties forcefully contested the issues in this case and it is highly questionable whether Jay's attorney's alleged malpractice  even assuming that the conduct was malpractice  appreciably affected the result. Relief under 60(b)(6) is inappropriate when a party takes a deliberate action they later regret as a mistake. See O'Link, 632 P.2d at 229-30 (quoting Wright and Miller). As Professor Moore notes, a party who takes deliberate action with negative consequences, or who makes an informed choice as to a particular course of action will not be relieved of the consequences when it subsequently develops that the choice was unfortunate. 7 J. Moore, Moore's Federal Practice § 60.22, at 60-182 (1985). Jay's allegation that his attorney's negligence led him into accepting an unfair child custody agreement is also not a ground for relief under 60(b)(6). Jay was presented with an informed choice, the fact that he chose what he now regards as a poor deal does not justify relief under 60(b)(6). In conclusion, the court's denial of relief under 60(b) does not leave us with the firm conviction that a mistake was made. Accordingly, we affirm the denial of Jay's claim for relief under Rule 60(b).
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.
In L.A.M. v. State, 547 P.2d 827, 831 (Alaska 1976), this court set forth the following requirements for a contempt order: (1) the existence of a valid order directing the alleged contemnor to do or refrain from doing something and the court's jurisdiction to enter that order; (2) the contemnor's notice of the order within sufficient time to comply with it; and in most cases, (3) the contemnor's ability to comply with the order; and (4) the contemnor's wilful failure to comply with the order. Jay argues that he did not willfully fail to comply with the court's order because he did so on advice of counsel. This argument is without merit. In McKnight v. Rice, Hoppner, Brown & Brunner, 678 P.2d 1330, 1334 (Alaska 1984), this court noted: Once a party is ordered by a court to assign a claim, that party has a duty to comply with the order forthwith. If the party ignores the order and assigns the claim to a third person, his act would be both wrongful and contemptuous.2 2 If his attorney had advised such a course of conduct the attorney would share complicitly in the wrong. (Citations omitted). Implicit in the McKnight court's statement in footnote 2 is the proposition that advice of counsel is not a shield when a party ignores a court order. [9] The fact that Jay's counsel was seeking to exhaust all potential avenues of relief from enforcement of the judgment does not justify his failure of more than one year to comply with the court's order to transfer the stock. There was no confusion over the meaning of the court's order to transfer the stock. Both attorney and client were clearly put on notice that their delay tactics were inappropriate when the court issued the July 17, 1987 order. [10]
Secondly, Jay argues that the use of the contempt power is not available to enforce non-support aspects of a divorce decree. Patricia argues that Jay's argument misconstrues the court's order as somehow involving the enforcement of a money judgment. Alaska Civil Rule 70 provides: If a judgment directs a party to execute a conveyance of land or to deliver deeds or other documents or to perform any other specific act and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party by some other person appointed by the court and the act when so done has like effect as if done by the party... . The court may also in proper cases adjudge the party in contempt. Under Rule 70, Judge Craske had the authority to hold Jay in contempt for his failure to comply with the court orders directing the transfer of the stock to Patricia. He was not acting to enforce a money judgment. Rather, he directed the transfer of specific property awarded by the decree. The court awarded Patricia $28,810 in damages for Jay's willful failure to transfer the stock pursuant to the authority in AS 09.50.040. [11] However, we are unable to ascertain from the record whether all the stock was sold at one time, or if it was ever sold at all. In order to recover actual damages, Patricia must have sold the stock within a reasonable period after she received it from Jay. In other words, she cannot recover a paper loss and then retain the stock hoping for an increase in its value. Such a scenario would potentially allow for a double recovery. The appropriate measure of damages is the difference in the stock's value when Patricia would have sold it had Jay complied with the court's order and its value when she actually sold it within a reasonable time of receiving the certificates from Jay. We remand the issue to the superior court for its determination of the proper award of damages. In conclusion, we affirm the superior court's contempt finding but vacate the court's award of damages for the delay in transferring the stock and remand the issue back to the trial court.
On November 13, Patricia obtained a writ of execution and served it on Shearson Lehman Brothers. On November 20, Jay moved to quash the writ of execution seeking to have Patricia accept certain assets instead of a money payment. On the same day, he also moved for expedited consideration under Rule 77. Patricia opposed the motions arguing that the present motion was a not so veiled fourth attempt to obtain the same relief which plaintiff has already been denied three times. On December 1, 1987, a telephonic hearing was held on the motion to quash. Jay offered to make the motion moot by paying the $9,800 due on the judgment. On December 2, the court issued its order quashing the writ of execution conditioned on Jay's payment of $9,800. The court also stated that it would consider Patricia's motion for the attorney's fees generated by the expedited motion. The court later awarded Patricia all her fees, or $2,060.10, stating that Jay's motion was repetitive, frivolous and abuse of proper court procedure. Jay argues that the court erred in awarding Patricia fees since the motion to quash was justified and an appropriate use of court procedures. In response, Patricia argues that the court made an appropriate award of fees under Rule 77( l ). Civil Rule 77( l ) states: The presentation to the court of frivolous or unnecessary motions ... which unduly delay the course of the action proceeding ... for the purpose of delay where no reasonable ground appears therefor subjects counsel presenting or filing such, at the discretion of the court, to imposition of costs and attorney's fees to the opposing party. A pleading is `frivolous' when it is clearly insufficient on its face, and does not controvert the material points of the opposite pleading, and is presumably interposed for mere purposes of delay. Black's Law Dictionary 601 (Fifth ed. 1979). In the case at bar, Jay sought to quash Patricia's writ of execution on the grounds of financial hardship and to offer to satisfy the obligation with alternative assets. In the alternative, Jay again sought a stay of the proceedings to enforce the judgment under Rule 62(b). These are not defenses to a properly issued writ of execution. See AS 09.35.010-09.35.330; Alaska R.Civ.P. 69. Since the motion did not facially raise a valid defense, the motion to quash had no function other than as a delay tactic. As a result, Judge Craske was within his authority under Rule 77( l ) in awarding attorney's fees to Patricia for her opposition to the frivolous motion. In conclusion, we reverse the court's division of the marital estate and remand the case to allow the court to recapture any dissipated marital assets and then determine the appropriate division using the Merrill factors. We remand the issue of Jay's retirement benefits for the court's recalculation of their value using a present valuation method. The court is free to reconsider any related issue and take such further evidence as it deems appropriate. We reverse the court's exclusion of certain commissions earned by Jay but not paid until after the date of divorce because of his employer's probation program. The court should determine the exact amount of these commissions and divide them accordingly. As to the court's contempt holding, we vacate the damages award and remand the issue back to the court for its determination of the appropriate amount of damages. We affirm the court's determination as to the remaining issues. AFFIRMED in part, REVERSED in part, and REMANDED for proceedings consistent with this opinion.