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Keywords

contractsettlementattorneyliabilityappealtrial
settlementattorneyliabilitytrialfiduciarybankruptcygood faith

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In re Marriage of Sievers, 78 Wash.App. 287, 897 P.2d 388

Facts

Joel Eisenberg and Rebecca Sievers were married in 1981 and filed for dissolution in 1990. During their marriage, Eisenberg managed a group of businesses generating significant income, while Sievers was a homemaker. They reached a property settlement agreement in July 1990, which included a clause about sharing tax liabilities. Disputes arose regarding the interpretation of this clause and the child support obligations, leading to appeals after the trial court's decisions.

Eisenberg and Sievers were married in 1981. The petition for dissolution of marriage was filed on April 30, 1990. The parties separated on May 9, 1990. At the outset of the marriage, Eisenberg had virtually no assets. He was unable to obtain credit on reasonable terms, due to a previous bankruptcy. Sievers did not have substantial assets, but she did have access to credit.

Issue

The main legal issues included the interpretation of the income tax liability clause in the property settlement agreement, the appropriateness of the child support award, and whether an equitable lien could be imposed on property awarded to the husband.

The trial court's interpretation of the income tax liability clause contained in the parties' property settlement agreement, the trial court's award to Sievers of $3,000 per month per child for the support of the parties' three children and the requirement that Eisenberg secure the child support with decreasing term life insurance, and the trial court's award to Sievers of $210,000 for attorney fees based in substantial part on findings that Eisenberg breached his fiduciary obligations and duties of good faith and fair dealing in promoting an interpretation of the tax liability clause which was inconsistent with the parties' actual settlement intent.

Rule

The court applied principles of contract interpretation, focusing on the parties' intentions at the time of the agreement, and assessed the reasonableness of child support based on the parties' financial circumstances.

The court ultimately found that when the parties settled their case on July 5 and sought court approval of the settlement on July 6, both intended that the tax liability for 1989 be shared equally, that the taxes due on the $550,000 dividend distributed before July 5, 1990, be shared equally and that Eisenberg would receive all the business income from and after July 5 and that he would assume, pay and hold Sievers harmless from all the tax liability on that income.

Analysis

The court found that both parties intended to share tax liabilities for the 1989 tax year and the $550,000 dividend received before the July 5, 1990 agreement. It ruled that Eisenberg would be responsible for taxes on income generated after that date. The court also determined that the child support award was justified based on the parties' substantial income and the children's needs.

The court observed that Eisenberg had disclosed real estate valued at $4.25 million and more than $2 million in stocks and bonds, exclusive of his interest in Megaquest and without taking into account any return on the tangible assets distributed to Eisenberg by the July PSA.

Conclusion

The court affirmed the trial court's interpretation of the property settlement agreement, the child support award, and the attorney fee award, while reversing the decision regarding the equitable lien. The case was remanded for further proceedings on the lien issue.

We affirm the trial court's interpretation of the property settlement agreement, its child support award and its attorney fee award.

Who won?

Rebecca Sievers prevailed in the case, as the court upheld the trial court's decisions that favored her regarding the interpretation of the tax liability clause, child support, and attorney fees.

We affirm the trial court's interpretation of the property settlement agreement, its child support award and its attorney fee award.

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