In a recent decision [Hoort v. Hoort, Mass. App. Ct., No. 12-P-1853, slip op (May 28, 2014)], the Massachusetts Appeals Court reversed a Probate and Family Court Judge's finding of civil contempt against a husband, when the husband was not found in contempt for the exact same issue in a prior contempt action brought by the wife only one year earlier.
The Appeals Court considered language in this case set forth in the Trial Court's temporary order that obligated the husband to pay to the wife "a sum equal to one-third of his year end distribution after taxes." By way of background, in early 2009, the husband received his 2008 year-end distribution, and after deducting an appropriate amount for taxes (i.e, 40.3% for his combined federal and state tax rate), the husband transferred to the wife one third of the remaining amount. The wife initiated a contempt action against the husband, arguing that the husband failed to transfer to her one-third of his year-end distribution. The Trial Court, however, held that the husband's deduction for taxes was appropriate, and accordingly, the husband was not guilty of contempt.
When the husband received his 2009 year-end bonus, he made the same tax calculation and deduction as he had previously, and transferred to the wife one third of the remaining amount. The wife initiated a second contempt action against the husband, again arguing that the husband's deduction for taxes was not appropriate and that the husband had failed to transfer to her one-third of his year-end distribution. Contrary to its ruling in the first contempt action, the Trial Court in the second contempt action did find the husband in contempt and ordered that the husband adjust his payment to the wife to be a full one-third of his year-end distribution without deduction for taxes. The husband appealed the Trial Court's contrary order, which the Appeals Court noted was issued by the same judge in two successive years.
Massachusetts courts have held that for a defendant to be found in civil contempt, there must be "a clear and unequivocal command and an equally clear and undoubted disobedience." Larson v. Larson, 28 Mass. App. Ct. 338, 340 (1990) citing to Nickerson v. Dowd, 342 Mass. 462, 464 (1961). In Hoort, the Appeals court considered the language of the temporary order and rejected the wife's contention that the timing of tax payments (i.e., the husband's prepayment of estimated quarterly taxes) must be considered in determining an "after-tax" amount. Instead, the Appeals Court held that the term "after taxes" is commonly understood to be an amount net of tax obligations. Moreover, the Temporary Order that the husband pay "a sum equal to one-third of his year end distribution after taxes" was considered a clear and unequivocal order. The Appeals Court found no evidence that the husband had willfully disobeyed that order and reversed the contempt finding.
The Hoort ruling reinforces the need for clarity in drafting language for proposed orders and/or agreements, in particular when it comes to complex financial transactions. As has often been said, "the devil is in the detail."