Lussier v. Lussier

Lussier v. Lussier (2001-416); 174 Vt. 454; 807 A.2d 374

[Filed 21-June-2002]

                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2001-416

                               JUNE TERM, 2002


  Catherine Lussier	               }	APPEALED FROM:
                                       }
                                       }
       v.	                       }	Chittenden Family Court
                                       }
  Francis Lussier	               }
                                       }	DOCKET NO. 502-6-00 Cndm

                                                Trial Judge: Linda Levitt

             In the above-entitled cause, the Clerk will enter:

       Plaintiff Catherine Lussier appeals from an order of the Chittenden
  Family Court declaring void plaintiff's "entitlement order" drawn on a
  trust account created by her former husband, Francis Lussier, demanding
  that the corpus of the trust be transferred to her; enjoining plaintiff
  from attempting to obtain control of defendant's assets in the trust
  account; and ordering plaintiff to pay defendant's legal fees.  Plaintiff
  argues that the family court was without jurisdiction to hear this matter,
  that she was entitled to exercise control over defendant's account, and
  that because the court erred in its order below, the payment of attorneys'
  fees ought to be reversed.  We affirm.

       The parties were divorced pursuant to a final order of the Chittenden
  Family Court on December 15, 2000.  The final order provided, in part, that
  defendant pay plaintiff maintenance in the amount of $75,000 per quarter
  until 2012.  The maintenance obligation would not terminate in the event of
  defendant's death, but would terminate in the event of plaintiff's death. 
  To secure the maintenance, the original divorce order required defendant to
  establish a trust account of sufficient value, in which plaintiff would
  hold a perfected lien.  Automatic distributions were to be made to
  plaintiff according to the schedule set by the order.

       To fulfill the Family Court's order, the parties executed several
  documents.  First, defendant established the Lussier Trust, a revocable
  trust containing assets in an account held by Salomon Smith Barney
  sufficient to pay defendant's obligations under the final order.  To
  perfect plaintiff's lien on the account, a Security Agreement signed by
  both parties gave plaintiff a first and exclusive security interest in the
  trust account.  The trust also executed an Account Control Agreement that
  set out in greater detail the assets in the account, Salomon Smith Barney's
  responsibility to pay on demand, and the plaintiff's ability, as the
  secured party, to give Salomon Smith Barney entitlement orders to the
  account.
   
       On July 13, 2001, relying on a provision in the Account Control
  Agreement, plaintiff issued an entitlement order to Salomon Smith Barney
  ordering it to transfer all of the assets in the trust 

 

  account, approximately $3.5 million, to an account in her name.  Defendant
  was not in default under the terms of the final order.  After defendant
  filed several motions to prevent this transaction, the Family Court issued
  a temporary order declaring the entitlement order null and void, and
  ordering plaintiff not to take any actions to obtain possession or title to
  the assets in the account.  The family court ruled that defendant had not
  defaulted on his maintenance obligation, and that plaintiff was not
  entitled to accelerate the maintenance award to a lump sum payment rather
  than the quarterly awards ordered by the court.  On August 7, 2001, the
  court made that order final following a hearing.  Plaintiff appeals.

       Plaintiff argues that the Account Control Agreement was an independent
  contract entered into after the divorce was final and therefore outside the
  jurisdiction of the family court.  Plaintiff also claims that the plain
  language of the Account Control Agreement gives her the exclusive right to
  control the account by issuing entitlement orders to Salomon Smith Barney. 
  The entitlement order that she issued directing that the account be turned
  over to an account in her name, she contends, was part of that Agreement. 
  She claims the family court erred in construing the Account Control
  Agreement as only a security agreement that is part of the final divorce
  order.  Finally, she argues that the court erred in ordering her to pay
  attorneys' fees.

       When parties to a divorce stipulate to the terms of the dissolution of
  their marriage, we will  honor the agreement under the ordinary rules of
  contract.  Duke v. Duke, 140 Vt. 543, 546, 442 A.2d 460, 462 (1982).  As
  such, the agreements must be interpreted according the parties' intent as
  expressed in the writing.  Hamelin v. Simpson Paper (Vermont) Co., 167 Vt.
  17, 19, 702 A.2d 86, 88 (1997).  We find no support in the facts of this
  case for plaintiff's claim that the Account Control Agreement gives
  plaintiff a right to control the assets of the trust account independent of
  the provisions of the final order of the Family Court, and is therefore
  outside the jurisdiction of the court.  The final order describes in detail
  the financial mechanism by which plaintiff's maintenance would be provided. 
  That order includes the requirement that defendant establish an account at
  Salomon Smith Barney in which plaintiff would hold a perfected lien, and
  that each party execute whatever documents are "necessary to establish and
  maintain such account and security interest."  To comply with the order,
  the parties executed the Security Agreement to ensure that plaintiff will
  continue to receive her maintenance payments in the event defendant
  defaults or dies before the end of the period specified in the divorce
  order.  The Security Agreement specifically references the final divorce
  order, the provisions of which impose the obligation to provide plaintiff
  with maintenance through a secured interest in a trust account.  Further,
  the Security Agreement states that the Account Control Agreement was
  created to further describe the account and the security interest and to
  perfect the security interest.
   
       It is within this context that the Account Control Agreement on which
  plaintiff relies was signed.  The document itself describes the security
  interest that has been created for plaintiff and states that the account
  control provisions are "in connection therewith."  By its terms, the
  Account Control Agreement is an extension of the security agreement between
  the parties, as required by the divorce order.  It describes the assets in
  the account and notes that the "[a]ssets are pledged according to the terms
  of the Security Agreement."  The provision at issue here, on which
  plaintiff asserts her right to the corpus of the trust, is to protect
  Salomon Smith Barney, as the administrator of the account, from liability
  for responding to a payment demand that may have been issued 

 

  wrongfully.  Thus, if Solomon Smith Barney had transferred the $3.5 million
  dollars in the account to plaintiff, it would not be liable to the trust,
  even if plaintiff's actions were in violation of the final divorce order. 
  Despite plaintiff's argument, the provision on entitlement orders was not
  intended, under the circumstances here, to create a right in plaintiff to
  the money in the account different from the rights she has under the final
  divorce order.  Indeed, it is clear that the trust was established to pay
  plaintiff's maintenance from the interest generated by the corpus, so that
  defendant's principal would remain at the end of his obligation.  Plaintiff
  had no right to the entire corpus of the trust at the time of her order. 
  Nor was the Account Control Agreement intended to  convey any authority to
  plaintiff outside the context of the security interest in the trust
  account.  Cf. In re Stacey, 138 Vt. 68, 72, 411 A.2d 1359, 1361 (1980) (in
  contract interpretation courts look to overall context and all material
  parts).  It is a mechanism to implement the terms of the final order and
  security agreement, should it be necessary to do so.

       It is telling that plaintiff's argument in support of her construction
  of the Account Control Agreement before the trial court could not explain
  why the trust had decided, generously, to make the corpus of the trust
  account available to her within three months of the stipulation and final
  order limiting her maintenance to $75,000 per quarter.  The trial court
  properly concluded, however, that the Security Agreement and Account
  Control Agreement were executed to implement the final order and not to
  grant plaintiff rights different from those to which the parties had so
  recently agreed.  In view of the fact that plaintiff's attempt was so
  vigorously contested by the creator of the trust, it can hardly have been
  the intent of the trust to change the terms of the agreement through the
  mechanism of the Account Control Agreement, the primary purpose of which
  was to perfect the security interest.  Moreover, if we were to adopt
  plaintiff's proposed construction of these documents, we would penalize
  defendant for complying with the final order.

       Once the factual background of the case is understood, it is apparent
  that no jurisdictional problem exists.  The family court has jurisdiction
  over its own orders.  Title 4 V.S.A. § 454(4) grants the family court
  exclusive jurisdiction over all divorce proceedings.  Where the final
  divorce order incorporates a stipulation agreement between the parties,
  that agreement becomes part of the divorce proceedings, and "[a]lthough an
  independent contract, . . . [it] is within the family court's
  jurisdiction."  Manosh v. Manosh, 160 Vt. 634, 634, 648 A.2d 833, 835
  (1993) (mem.).  Plaintiff's attempt to gain possession of all the assets in
  the trust account is an attempt to violate the terms of the stipulation in
  which defendant was to pay maintenance quarterly.  Nothing in the parties'
  stipulation, or the final divorce order, granted plaintiff the right to
  collect the entire sum of maintenance all at once.  The family court had
  jurisdiction in this case, therefore, to bar plaintiff's attempt to use the
  Account Control Agreement in a manner contrary to the final order.  See
  Schwartz v. Haas, 169 Vt. 612, 614, 739 A.2d 1188, 1191 (1999) (mem.).

       Finally, plaintiff claims that the court should not have awarded
  defendant attorneys' fees for this matter.  An award of attorney's fees in
  a divorce action is a matter of judicial discretion.  Kohut v. Kohut, 164
  Vt. 40, 45, 663 A.2d 942, 945 (1995).  Plaintiff's only argument is that
  because the court's order was erroneous, so was the award of attorney's
  fees.  Because we hold that the court's 

 
   
  order was not error, there was no abuse of discretion in awarding
  attorneys' fees.

       Affirmed.


                                       BY THE COURT:



                                       _______________________________________
                                       Jeffrey L. Amestoy, Chief Justice

                                       _______________________________________
                                       John A. Dooley, Associate Justice

                                       _______________________________________
                                       James L. Morse, Associate Justice

                                       _______________________________________
                                       Denise R. Johnson, Associate Justice

                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice