Opinion
File No.: CN14-01480 Petition No.: 15-14197 Petition No.: 14-03434
10-13-2015
Re: A--- P---- v. U--- P----
Patrick Boyer, Esquire ---- ------- ---- -----------, -- ----- Rachelle Cutrona, Esquire Rahaim & Saints ---- --------- ----, ----- --- ----------, -- ----- Gary Smith, Esquire ---- ------- -----, ----- --- ------, --
LETTER DECISION AND ORDER
Dear Mr. Boyer, Ms. Cutrona, and Mr. Smith:
This is the Court's decision on a Motion for Interim Distribution for Purposes of Payment of Private School Tuition ("Motion for Interim Distribution") in the above-captioned matter. The Motion was jointly filed by Patrick Boyer, Esquire ("Mr. Boyer") and Rachelle Cutrona, Esquire ("Ms. Cutrona") on behalf of A--- P---- ("Husband") on September 17, 2015. Gary Smith, Esquire ("Mr. Smith") filed a response on behalf of U--- P---- ("Wife") on September 25, 2015.
Mr. Boyer represents the Petitioner in the parties' custody matter, while Ms. Cutrona represents the Petitioner in the parties' ancillary matters. Although the instant motion pertains to ancillary relief, counsel represented that the Petitioner intends to be bound by the averments made therein for purposes of custody as well. Accordingly, counsel found it appropriate to file jointly on the Petitioner's behalf.
Procedural History
The Court commenced an ancillary hearing in this matter on April 2, 2015. Due to the parties' inability to complete the evidence in the time allotted, the remainder of the hearing was continued until September 2, 2015. The hearing was subsequently rescheduled for November 5, 2015 to allow counsel time to review and obtain independent vocational evaluations for Husband after he lost his job.
On April 23, 2015, the parties entered a stipulation for joint legal custody and shared residency of their minor child, S--- P---- ("S---"), born ----- --, 2003. The parties subsequently filed cross-Petitions to Modify Custody in August 2015, each seeking final educational decision-making authority for the child. At a teleconference on September 2, 2015, counsel represented that, at the time of the stipulation, the parties believed they could reach an agreement on S---'s school enrollment and the allocation of tuition payment for the 2015-2016 school year. However, they were unable to do so. Wife believes that S--- should continue to attend C------ Academy, where he has attended school since he was four years old. However, after losing his job over the summer, Husband does not believe payment of tuition in the amount of approximately $12,000 per year is financially prudent. Accordingly, Husband's position is that S--- should be enrolled in public school in the A------------ School District.
In light of the fact that the 2015-2016 school year was scheduled to begin on the day following the teleconference, the Court awarded Wife interim educational decision-making authority for purposes of enrolling S--- in C------ Academy for the present school year. However, the parties have been ordered to engage in Alternate Dispute Resolution ("ADR") pursuant to Family Court Rule of Civil Procedure 16.1 in regards to the issue of final educational decision-making authority.
Pursuant to Family Court Rule of Civil Procedure 16.1, (a) In any proceeding, the Court may upon motion by either party or sua sponte enter a scheduling order that either establishes or limits the time to engage in compulsory alternative dispute resolution ("ADR"), the format of which is to be agreed upon by the parties. Such ADR may include, but shall not be limited to, non-binding or, if agreed to by the parties, binding arbitration, mediation or neutral case assessment. If the parties cannot agree on the format of ADR, the default format shall be mediation unless otherwise ordered by the Court. Mediation as referred to in this rule is a separate process from the mediation required in Family Court Civil Rule 16(a) through 16(f). (b) In the event the parties cannot agree on an ADR Practitioner, they shall file a joint motion with the Court within thirty (30) days of the issuance of the scheduling order requesting that the Court appoint an ADR Practitioner for the parties. The Court may impose sanctions upon a party or both parties if it determines that the parties have not attempted to agree upon an ADR Practitioner in good faith. (c) The parties shall pay the ADR Practitioner in accordance with the allocation and amount of fees established by the ADR Practitioner and agreed to by the parties or ordered by the Court. The ADR Practitioner may apply to the Court for sanctions against any party who fails to comply with the terms of engagement established by the ADR Practitioner and agreed to by the parties. Sanctions may include, but shall not be limited to, dismissal of the action or default judgment. (d) The ADR Practitioner may not be called as a witness in any aspect of the litigation, or in any proceeding relating to the litigation in which the ADR Practitioner served, unless ordered by the Court. Nothing said by the parties participating during the alternative dispute resolution may be used against them in subsequent proceedings in any court. In addition, all ADR Practitioners, when serving as an arbitrator, mediator or neutral assessor, shall be immune from civil liability for, or resulting from, any act or omission done or made while engaged in ADR, unless an act or omission was made or done in bad faith, with malicious intent, or in a manner exhibiting a willful, wanton disregard of the rights, safety, or property of another. Each ADR Practitioner shall remain bound by any confidentiality agreement signed by the parties and the ADR Practitioner as part of the ADR. (e) The following definitions apply to this rule:
(1) "Arbitration" is a process by which a neutral arbitrator hears both sides of a controversy and renders a fair decision based on the facts and the law. If the parties stipulate in writing that the decision shall be binding, the case shall be removed from the Court's docket.
(2) "Mediation" is a process by which a mediator facilitates the parties in reaching a mutually acceptable resolution of a controversy. It includes all contacts between the mediator and any party or parties until a resolution is agreed to, the parties discharge the mediator, or the mediator determines that the parties cannot agree.
(3) "Neutral case assessment" is a process by which an experienced neutral assessor gives a non-binding, reasoned oral or written evaluation of a controversy, on its merits, to the parties. The neutral assessor may use mediation and/or arbitration techniques to aid the parties in reaching a settlement.
(4) "ADR Practitioner" shall include the arbitrator, mediator, neutral case assessor or any other person engaged by the parties to facilitate ADR.
The parties were operating under a child support stipulation and order that required a 50/50 division of any mutually agreed-upon private school expenses. Wife was willing to pay her 50% share of the 2015-2016 tuition at the time of the teleconference, and it is the Court's understanding that Husband has remitted his 50% share since that date. A child support modification hearing was scheduled for October 2, 2015, at which point the parties intended to address the issue of tuition payment in regards to any child support obligation. However, prior to that date, Husband filed the instant motion requesting an interim disbursement from the marital estate to cover tuition expenses for the 2015-2016 and 2016-2017 school years pending completion of the ancillary hearing on November 5, 2015.
The Court notes that the parties entered into a stipulation resolving the child support modification petition without a hearing, as discussed below.
Legal Standard
Under 13 Del. C. § 1509(a)(1), upon the filing of a petition for divorce or annulment, a preliminary injunction is issued against both parties enjoining them from transferring, encumbering, concealing, or in any way disposing of any marital property except in the usual course of business or for the necessities of life. Section 1509(b)(2) permits a party to move for an interim order, pending the final division of property, restraining the other party from transferring, encumbering, concealing, or disposing of property in such a manner and requiring that the party notify the moving party of and account to the Court for any proposed extraordinary expenditures.
13 Del. C. § 1509(a) states, in pertinent part, "[u]pon the filing of a petition for divorce or annulment, a preliminary injunction shall be issued against both parties to the action, enjoining them from:
(1) Transferring, encumbering, concealing or in any way disposing of any property except in the usual course of business or for the necessities of life..."
Under § 1509(b)(2), "[p]etitioner in the petition for divorce or annulment, or by motion filed simultaneously with the petition, or either party by motion filed after the filing of the petition, may move for 1 or more of the following interim orders:
(2) Restraining a party from transferring, encumbering, concealing, or in any way disposing of any property except in the usual course of business, for the necessities of life, or as authorized under paragraph (a)(1) of this section and, if so restrained, requiring that party to notify the moving party of any proposed extraordinary expenditures and to account to the Court for all extraordinary expenditures made after the order is issued."
Husband's Position
Husband is requesting an interim disbursement from the marital estate in the amount of $26,000 for the 2015-2016 and 2016-2017 school tuition expenses. Husband proposes that the funds be transferred from the joint TD Ameritrade account into a separate account, to be held in trust by Husband for purposes of paying S---'s school tuition. Counsel cites In re Marriage of J.M.R. and K.J.R. in support of this position, wherein this Court found it appropriate to include a past-due tuition expense as a marital debt subject to ancillary division despite the fact that it was incurred post-separation. The Court in that case found that it was "equitable" to do so in light of the parties' "implicit agreement to [the child's] continued enrollment in private school." Since a post-separation tuition debt was included in the marital estate in that context, counsel argues that the tuition expense in the instant case can be eligible for payment by way of an interim disbursement from the marital estate pending the Court's final determination on property division.
Although not explicitly stated, the Court assumes Father is proposing that the 2016-2017 tuition be held in trust for future tuition payment, as tuition has already been paid for the 2015-2016 school year.
In re Marriage of J.M.R. and K.J.R., 2013 WL 8181480 at *5 (Del. Fam. 2013).
Counsel further contends that the cost of S---'s tuition is an exception to the injunction set forth in § 1509(a), as it is a "necessity of life." Counsel submits that Wife conceded as much by maintaining a position that S--- continue to be enrolled private school. Thus, counsel argues that funds from the marital estate can be used to cover this necessary expense.
Counsel also indicates in the motion that, if the cost of tuition is paid with a disbursement from the marital estate rather than by way of inclusion in the child support calculation, Husband will waive his objection to S---'s enrollment in private school for the 2015-2016 and 2016-2017 school years, thus resolving the parties' custody dispute.
Wife's Position
Wife believes that the issue of payment of S---'s 2015-2016 school year tuition is moot; she asserts that Husband already paid his 50% share, as did she, and the issue therefore has been resolved. In regards to the cost of tuition for the 2016-2017 school year, Wife's position is that it should be included in the child support calculation in conjunction with the child support action rather than paid by way of a disbursement from the marital estate. Mr. Smith asserts that, by requesting an interim disbursement from the marital estate pending a final property division determination, Husband is attempting to obtain a 50/50 division of a $26,000 debt rather than allocation in accordance with the overall percentage for estate division determined at the ancillary hearing.
Mr. Smith contends that 13 Del. C. § 1509, which applies to interim relief in a divorce action, is inapplicable, since a payment of future, post-divorce private school tuition is a child support issue which should be addressed in that forum.
Mr. Smith also seeks an award of attorneys fees and costs related to filing his response on Wife's behalf, as Wife contends that Husband's motion was not filed in good faith.
Decision on Interim Disbursement
For the reasons discussed below, the Court declines Husband's request to issue an interim order allowing disbursement from the marital estate for payment of S---'s 2015-2016 and 2016-2017 school tuition expenses.
The Court first emphasizes that allocation of tuition payment for a minor child is typically a child support issue and should be addressed in that forum. The provisions of Title 13, Chapter 15 of Delaware law apply to proceedings on divorce and annulment. Specifically, 13 Del. C. § 1509(a) prohibits parties to such proceedings from transferring or disposing of any marital property pending a final ancillary determination except "in the usual course of business or for the necessities of life."
The Court notes that tuition for the 2015-2016 school year has already been paid pursuant to the applicable child support order at the time, which required a 50/50 allocation between the parties. This expense was incurred in September 2015, which was subsequent to the dissolution of the parties' marriage in July 2014. The cost of S---'s 2016-2017 tuition is also clearly not a debt of the marriage, as that expense has not even been incurred yet. Thus, tuition expenses for the years at issue are not marital in nature and will not be addressed in conjunction with the ancillary proceedings.
As noted above, the parties' child support action is the proper forum for any claims related to payment of post-separation school tuition. If either party is unsatisfied with the allocation of the 2015-2016 tuition expense, which was paid on a 50/50 basis in accordance with the applicable child support order, that party may seek relief through retroactive support modification. Allocation of any future tuition costs, if and when they are incurred, shall also be governed by the child support proceedings at the appropriate time.
The Delaware Supreme Court has held that parents are not required to set aside funds for the possible long-range, future needs of their children, and it is not appropriate for the Family Court to consider the need for advance financial planning for a child's future educational training. See Taylor v. Taylor, 608 A.2d 730 (Table) at *3 (Del. 1991).
The Court also will not address the issue of where S--- shall attend school in subsequent years, therefore determining whether the cost of future tuition is incurred, in this ancillary matter. There is a pending custody action pursuant to which final educational decision-making authority will be determined, if it is not resolved through ADR.
Further, the Court does not find that the circumstances in this case warrant a finding that the 2015-2016 and/or 2016-2017 tuition payments should be considered a part of the marital estate in accordance with the outcome of In re Marriage of J.M.R. and K.J.R. In that case, this Court found it equitable to include an outstanding, post-separation tuition debt as a part of the marital estate subject to ancillary division in light of the parties' "implicit agreement to [the child's] continued enrollment in private school." In the present case, the Court cannot find that such an "implicit agreement" existed. Husband is maintaining an objection to S---'s enrollment in private school notwithstanding his recent 50% payment of the 2015-2016 cost, which he remitted to avoid violating the child support order. It is also not necessary for the Court to include this debt in the parties' marital estate on the basis of equitability, as the matter can be addressed within the child support litigation.
The parties entered into a stipulation on October 2, 2015 in regards to Wife's pending petition for child support modification. That stipulation indicates that the parties "have paid the private school tuition and after school care for the 2015-2016 school year" and that they will "share equally in any...school related expenses, provided that the other party agrees to the expense prior to it being incurred." The Court notes that the attached child support calculation included a tuition expense. However, the stipulation states that the agreement is "without prejudice to any position the parties may take with regard to the inclusion of private school tuition [in] future child support calculations."
For the aforementioned reasons, the Court declines to issue an interim order permitting disbursement of funds from the marital estate for tuition payment. Husband's motion is DENIED.
Decision on Attorneys Fees
Wife asks that this Court award her attorneys fees for the cost of Mr. Smith's response to Husband's motion, as she believes the motion was not filed in good faith.
The general rule regarding payment of attorneys fees is that, apart from statute or contract, a litigant must pay his or her counsel's fee. However, under 13 Del. C. § 1515, the Court may order a party to pay all or part of another party's attorneys fees and costs "from time to time and after considering the financial resources of both parties." Additionally, Family Court Rule of Civil Procedure 88 allows the Court to assess a party the reasonable counsel fees of any other party "[i]n every case where there is a legal or equitable basis therefor." The Delaware Supreme Court has recognized certain situations in which there is an equitable basis for the Court to award attorneys fees and costs, including a showing of bad faith or other equivalent conduct.
Maurer v. Int'l Re-Insurance Co., 95 A.2d 827, 830 (Del. 1953).
Div. of Child Support Enforcement v. Smallwood, 526 A.2d 1353, 1356 (Del. 1987), citing Slawik v. State, 480 A.2d 636, 639 n. 5 (Del. Supr. 1984), in which the Court held that Delaware courts have inherent power to allow attorneys' fees for willful disobedience of a court order, or when the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.
In Wife's response, Mr. Smith submits that Husband's motive for filing his motion "has nothing to do with private school" but was merely "a way for [Husband] to obtain a 50/50 division of $26,000 of marital assets rather than what the Court will determine after the ancillary hearing." Mr. Smith contends that this motive is "even more improper because of the small amount of money at issue."
The Court does not find that Husband's actions in filing the instant motion justify a deviation from the general rule that parties are to pay their own counsel fees. Even if the Court did grant Husband's request for a disbursement from the marital estate, the 50/50 division of $26,000 in tuition expenses that would result would be no different than the child support order in existence at the time Husband's motion was filed, which Wife entered by way of voluntary stipulation. Notwithstanding his opposition to S---'s continued enrollment in private school, the Court notes that Husband paid his share of tuition in accordance with his child support obligation. Although the proper mechanism to address the issue of private school tuition payment is through child support modification, the Court does not find that Husband's actions in litigating this issue amount to bad faith such that an award of attorneys fees is warranted.
The Court also must consider the financial positions of the parties in determining whether to award attorneys fees under § 1515. However, information about the parties' current financial circumstances was not presented to the Court in this motion. Although the Court received some testimony in regards to the parties' respective income and finances on the first day of the ancillary hearing, the Court has not heard the full evidence and notes that, in any event, Husband's financial position has changed since that time.
See Husband B.W.D. v. Wife B.A.D., 405 A.2d 123 (Del. 1979). --------
For the above-stated reasons, the Court DENIES Wife's request for fees and costs associated with Mr. Smith's response.
IT IS SO ORDERED.
Very truly yours,
/ Michael K. Newell /
MICHAEL K. NEWELL, Chief Judge MKN/amn Date mailed: October 13, 2015