Marriage of Sunderman

23CA1237 Marriage of Sunderman 07-03-2024

COLORADO COURT OF APPEALS

Court of Appeals No. 23CA1237

Larimer County District Court No. 21DR1024

Honorable Susan Blanco, Judge

In re the Marriage of

Pamela Sunderman,

Appellee,

and

Steven Sunderman,

Appellant.

JUDGMENT AFFIRMED AND CASE

REMANDED WITH DIRECTIONS

Division I

Opinion by JUDGE WELLING

Schock and Berger*, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)

Announced July 3, 2024

Paige Mackey Murray LLC, Paige Mackey Murray, Boulder, Colorado, for

Appellee

Fischer Law Group, P.C., Erik G. Fischer, Ashleigh Bravo, Fort Collins,

Colorado, for Appellant

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.

VI, § 5(3), and § 24-51-1105, C.R.S. 2023.

1

¶ 1 In this post-dissolution of marriage case, Steven Sunderman

(husband) appeals the district court’s order adopting a magistrate’s

judgment that imposed remedial contempt sanctions. We affirm the

judgment and remand the case for further proceedings on wife’s

request for appellate attorney fees.

I. Background

¶ 2 Husband and Pamela Sunderman (wife) executed a separation

agreement that, as relevant here, divided their marital estate. They

submitted their agreement to the court, and, a few months later, a

magistrate incorporated it into the decree dissolving their marriage.

¶ 3 Concerning their investment accounts, the separation

agreement identified a J.P. Morgan account and a Charles Schwab

account that husband had acquired before the marriage. The

parties agreed that “as of October 31, 2021,” the value of the J.P.

Morgan account was “$337,472” and that it had appreciated

“$165,441” during the marriage. For the Schwab investment

account, the parties agreed that “[t]he value of the account as of

October 31, 2021[,] [was] $2,298,108” and that it had appreciated

“$959,679” during the marriage. The separation agreement then

2

directed the following allocation from the Schwab investment

account:

The marital appreciation of $959,679 shall be

divided equally between the parties. Wife shall

receive an additional $82,721 which is one-

half of the marital appreciation from [the] J.P.

Morgan Chase Brokerage account . . . . In

addition, [h]usband owes [w]ife $32,238 [which

represented a portion of his equalization

payment] . . . . In order to equitably divide the

account, [h]usband shall transfer securities to

[w]ife in similar proportion to those held in the

entire account on October 31, 2021.

¶ 4 The separation agreement also identified multiple retirement

and pension accounts. It provided that “[i]n order to equitably

divide the marital portion of the party’s retirement/pension

accounts, [w]ife shall receive as a sum certain the amount of

$1,049,544 from [h]usband’s Charles Schwab Rollover IRA” and

that he “shall transfer an additional $21,492 to [w]ife as a sum

certain,” which represented the remaining balance of his

equalization payment.

¶ 5 About nine months after the decree, wife filed a motion for

remedial contempt. She alleged that, under her interpretation of

the separation agreement, she was entitled to $594,798 from

husband’s Schwab investment account and $1,071,036 from his

3

Schwab IRA but that he transferred her only $480,132 from the

Schwab investment account and $827,467 from the Schwab IRA.

At the contempt hearing, husband disagreed with wife’s

interpretation. He explained that the parties intended to equally

divide the accounts’ gains or losses after they executed the

separation agreement and that the amount he transferred to wife in

September 2022 adjusted wife’s allocation for the losses in the

accounts up to that date.

¶ 6 The magistrate agreed with wife’s interpretation of the

separation agreement and concluded that husband was obligated to

transfer a specific value of assets from the Schwab investment

account ($594,798) and the Schwab IRA ($1,071,036). The

magistrate determined that husband undisputedly violated this

obligation and found him in contempt. As a remedial sanction, the

magistrate directed husband to transfer to wife the additional

$114,666 from the Schwab investment account and $243,568 from

the Schwab IRA. The magistrate also awarded wife $3,274 for the

attorney fees she incurred in connection with the contempt

proceeding.

4

¶ 7 Husband petitioned the district court to review the

magistrate’s contempt judgment, and the court adopted the

magistrate’s ruling.

II. Standard of Review

¶ 8 Our review of a district court’s order reviewing a magistrate’s

ruling is effectively a second layer of appellate review. In re

Marriage of Sheehan, 2022 COA 29, ¶ 22. We review de novo issues

of law and, like the district court, must accept the magistrate’s

factual findings unless they are clearly erroneous. Id.

III. Interpretation of the Separation Agreement

¶ 9 Husband contends that the district court erred by adopting

the magistrate’s interpretation of the separation agreement. He

argues that the magistrate’s interpretation was contrary to the

language of the agreement and improperly considered wife’s parol

evidence. We disagree.

A. Governing Legal Standards

¶ 10 A court’s interpretation of a separation agreement is a

question of law that we review de novo. See In re Marriage of

Crowder, 77 P.3d 858, 860 (Colo. App. 2003).

5

¶ 11 The primary goal when interpreting an agreement is to

determine and give effect to the parties’ intent based primarily on

the language of the agreement. Ad Two, Inc. v. City & Cnty. of

Denver, 9 P.3d 373, 376 (Colo. 2000); Crowder, 77 P.3d at 860-61.

We construe the agreement’s terms in accordance with their plain

and generally accepted meanings. Ad Two, 9 P.3d at 376. Absent

an ambiguity, a court may “not look beyond the four corners of the

agreement to determine” the parties’ intent. Id. at 376-77.

B. The Separation Agreement’s Plain Language

¶ 12 The magistrate determined that the plain language of the

separation agreement entitled wife to “specific value[s]” from the

Schwab investment account and the Schwab IRA. He explained

that the parties identified the marital value of their assets on

October 31, 2021, and set forth an exact value from the accounts to

which wife was entitled. And the magistrate observed that the

parties even clarified that wife shall receive a “sum certain” from the

Schwab IRA. The magistrate further explained that the parties

could have included language in the agreement for “a different

transfer arrangement, such as allocating gains or losses from

October 31, 2021[,] forward or awarding a percentage of the

6

account as of the transfer date, as [husband] now” argues, “but

they did not.” The magistrate also determined that although they

agreed that “[i]n order to equitably divide the [Schwab investment]

account, [h]usband shall transfer securities to [w]ife in similar

proportion to those held in the entire account on October 31, 2021,”

this language did “not speak to the value of securities to be

transferred, but rather the type of security” and the manner by

which he must transfer those securities to wife. The magistrate

noted that his interpretation was consistent with husband’s

testimony that the parties “drew a line on October 31, [2021],” and

that the value of wife’s marital property was “defined on that date.”

¶ 13 Upon our review of the separation agreement, we agree with

the magistrate and conclude that its plain and unambiguous

language entitled wife to $594,798 from the Schwab investment

account and $1,071,036 from the Schwab IRA. The agreement

defined a specific value that wife would receive from each of these

accounts, which included a set value (1) for the marital appreciation

of the investment accounts; (2) for her share of the retirement and

pension accounts; and (3) “to equalize the division of the” entire

marital estate. And even though the agreement acknowledged that

7

the date on which husband could transfer the assets may be

delayed, nothing within the plain language of the agreement

adjusted wife’s allocation for a later change to the value of the

Schwab investment account or the Schwab IRA. (Indeed, the

agreement directed that “the initiation of the division of all accounts

shall be done within 14 days after the issuance of the [d]ecree.”)

¶ 14 Husband disputes this interpretation, arguing that because

they agreed that he must transfer the securities from the Schwab

investment account “in similar proportion to those held in the entire

account on October 31, 2021,” the parties intended to adjust wife’s

allocation in accordance with the gains or losses until the date of

his transfer. But as the magistrate observed, this sentence

addresses the types of “securities,” not the value of wife’s allocation.

Moreover, wife testified that the type of securities transferred to her

could have significant tax implications. She explained that if

husband directed Schwab to transfer assets on a “first in, first out”

basis she “would receive the shares that most likely [had] the

highest capital gains” because they would be the shares held the

longest in the account. But if husband transferred securities in

proportion to the entire account’s holding (a “pro rata” transfer), the

8

later tax obligation would be shared proportionately. Husband

didn’t dispute this representation, and the record reveals that he

directed a “PRO RAT[A]” transfer to wife in September 2022.

¶ 15 Husband also argues that interpreting the agreement to

require that he pay wife $594,798 from the Schwab investment

account and $1,071,036 from the Schwab IRA established “a new

valuation date.” Not so. The parties determined an exact value of

marital assets allocated to wife from the Schwab investment

account and Schwab IRA as of October 31, 2021, and husband was

obligated to give wife that exact amount. This valuation date was

also consistent with the valuation and allocation of their other

marital assets, which they used to determine husband’s

equalization payment. It, instead, is husband’s purported

interpretation that attempts to create a new valuation date based

on the value of the accounts at the time he completed the transfer.

¶ 16 Still, husband argues that the parties intended to “equitably

divide” their marital assets and that it is inequitable to have him

bear the losses sustained in the accounts after October 31, 2021.

But the agreement’s plain language didn’t adjust the value of wife’s

allocation for any subsequent losses, and husband still agreed that

9

the terms of their agreement were “equitable” when he executed it.

Moreover, any losses realized after the dissolution decree wouldn’t

have been part of the equitable allocation of the marital estate. Cf.

In re Marriage of Hiner, 710 P.2d 488, 492 (Colo. 1985) (“[T]he

appreciation in value of each party’s [marital] equity . . . realized

after entry of the . . . decree should not have been treated as part of

a disposition of marital property . . . .”); In re Marriage of Collins,

2023 COA 116M, ¶ 26 (upholding a court’s decision that declined to

allocate losses in an investment account sustained after the

dissolution).

¶ 17 Husband further argues that the provision on the Schwab IRA

had language different than that used for the Schwab investment

account and interpreting both to require a specific amount from

husband renders certain language in the agreement meaningless.

See Moeller v. Ferrari Energy, LLC, 2020 COA 113, ¶ 25 (“We avoid

an interpretation of an agreement that would nullify any of its terms

or provisions.”). Specifically, he highlights that wife was entitled to

“a sum certain” from the Schwab IRA but that phrase was missing

from the Schwab investment account provision. However, we must

“give effect to the general purposes of a contract,” and in doing so,

10

“make due allowance for a common human failing . . . of being

careless in choosing words.” Ad Two, 9 P.3d at 377 (quoting

Hutchinson v. Elder, 140 Colo. 379, 383, 344 P.2d 1090, 1092

(1959)). Both provisions set forth wife’s entitlement to a specific

value from the accounts, and while the parties included the phrase

“a sum certain” when discussing the Schwab IRA, we don’t agree

that the absence of that phrase for the Schwab investment account

“defeat[s] the evident intentions of the parties” — that wife receive a

specific value from each account. Id. (quoting Hutchinson, 140

Colo. at 383, 344 P.2d at 1092).

¶ 18 Husband also complains that wife didn’t adhere to the

agreement when she unreasonably refused a previous attempt to

transfer the funds to her. However, he doesn’t explain how that

purported conduct alters our or the magistrate’s interpretation of

the parties’ intent when executing the separation agreement. See

Hefley Ranch, Inc. v. Stewart, 764 P.2d 415, 416 (Colo. App. 1988)

(“The interpretation of a contract requires the court to ascertain the

parties’ intent at the time the document was executed . . . .”). To

the extent he is suggesting that wife’s conduct excused his

noncompliance, the magistrate found, albeit implicitly, no reason to

11

do so, and the record supports that finding. See In re Parental

Responsibilities Concerning S.Z.S., 2022 COA 105, ¶ 23 (recognizing

that a court’s finding may be implicit in its ruling).

¶ 19 And although husband generally notes that the magistrate

denied wife’s previous contempt motion, he doesn’t develop any

legal or factual argument to explain why that ruling has any

bearing on the magistrate’s decision or our interpretation of the

separation agreement. See id. at ¶ 29 (declining to address a

party’s undeveloped argument).

¶ 20 The district court therefore didn’t err by adopting the

magistrate’s interpretation of the separation agreement.

C. Parol Evidence

¶ 21 Husband next contends that the magistrate improperly

considered parol evidence of the parties’ intent when the magistrate

allowed wife to testify that before executing the separation

agreement, she and husband agreed that her allocation from the

Schwab investment account and the Schwab IRA wouldn’t be

subject to an adjustment for the accounts’ subsequent gains or

losses. We discern no reversible error.

12

¶ 22 A court may not consider extraneous evidence of the parties’

intent to interpret an agreement unless the terms of the agreement

are ambiguous. Crowder, 77 P.3d at 861. However, a court may

consider extrinsic evidence to determine whether an agreement is

ambiguous. Bledsoe Land Co. LLLP v. Forest Oil Corp., 277 P.3d

838, 843 (Colo. App. 2011).

¶ 23 When wife testified, the magistrate had not yet determined

whether the separation agreement was unambiguous. Thus, the

magistrate’s admission of the testimony at that time appeared to be

within his discretion. See In re Parental Responsibilities Concerning

A.M., 251 P.3d 1119, 1124 (Colo. App. 2010) (reviewing an

evidentiary ruling for an abuse of discretion).

¶ 24 But even if we were to assume that the court erred, we

disregard an error that doesn’t affect the parties’ substantial rights.

In re Parental Responsibilities Concerning E.E.L-T., 2024 COA 12, ¶

30; see C.A.R. 35(c). An error affects a party’s “substantial right

only if it substantially influenced the outcome of the case or

impaired the basic fairness of the trial.” E.E.L-T., ¶ 30.

¶ 25 The magistrate neither mentioned nor indicated that he

considered wife’s testimony when interpreting the separation

13

agreement. And as discussed above, the plain, unambiguous

language of the separation agreement established that the parties

intended to allocate wife a specific value of assets from the Schwab

investment account and the Schwab IRA. We thus aren’t

persuaded that any improper admission of wife’s testimony

warrants reversal. See In re Estate of DeWitt, 32 P.3d 550, 556-57

(Colo. App. 2000), rev’d on other grounds, 54 P.3d 849 (Colo. 2002)

(concluding that when the parties’ intent may be determined from

the face of the separation agreement, the court’s consideration of

extrinsic evidence was harmless).

IV. Remedial Contempt

¶ 26 We also reject husband’s contention that the evidence was

insufficient to support the judgment of remedial contempt.

¶ 27 Whether a party is in contempt lies within the court’s sound

discretion, and we won’t disturb the court’s decision absent a

showing that it acted in a manifestly arbitrary, unreasonable, or

unfair manner, or it misapplied the law. Sheehan, ¶ 23.

¶ 28 A court may hold a party in contempt for “disobedience or

resistance” to a lawful court order. C.R.C.P. 107(a)(1); see Sheehan,

¶ 24; see also In re Marriage of Meisner, 807 P.2d 1205, 1208 (Colo.

14

App. 1990) (explaining that a separation agreement incorporated

into a dissolution decree is an enforceable judgment). To impose

remedial sanctions, the court must find that the contemnor failed to

comply with the order, knew of the order, and has the present

ability to comply. In re Parental Responsibilities Concerning A.C.B.,

2022 COA 3, ¶ 24. The court must also specify the means by which

the contemnor may purge the contempt and find that the

contemnor has the present ability to satisfy that purge clause. In re

Estate of Elliott, 993 P.2d 474, 479 (Colo. 2000); see C.R.C.P.

107(d)(2).

¶ 29 Husband asserts that under his interpretation of the

separation agreement, he didn’t violate the order. But as explained

above, the agreement required him to transfer wife $594,798 from

the Schwab investment account and $1,071,036 from the Schwab

IRA. And the undisputed evidence showed that he didn’t comply

with his obligation. See Elliott, 993 P.2d at 479 (noting that a

court’s factual findings in support of contempt are binding on

review unless they are clearly erroneous).

¶ 30 Husband also asserts that there was no indication he was

aware that he would be subject to wife’s interpretation of the

15

agreement. Even if husband interpreted the agreement differently,

that doesn’t negate his knowledge of the order for purposes of

remedial contempt. See In re Marriage of Cyr, 186 P.3d 88, 94

(Colo. App. 2008). And the magistrate found, with record support,

that husband did “not dispute the existence of [a] lawful order[]” or

his “knowledge of the order.” See Elliott, 993 P.2d at 479.

¶ 31 Husband further argues that it wasn’t established that he had

the then-present ability to purge the contempt. The magistrate

ordered husband to transfer wife an additional $114,666 from the

Schwab investment account and $243,568 from the Schwab IRA to

purge his contempt. The magistrate determined that husband had

“the present ability to comply, he maintain[ed] sufficient securities

in the account[s] and indicated at the hearing that he could and

would comply with” the magistrate’s interpretation of the separation

agreement. The record supports the magistrate’s findings. See id.

And husband doesn’t otherwise explain how the magistrate’s

findings didn’t establish his ability to purge the contempt.

¶ 32 Additionally, husband asserts that “there is no indication that

the funds remaining after the transfer would be sufficient to

support equitability.” The magistrate wasn’t required to make a

16

finding of “equitability” to impose remedial contempt sanctions, and

husband doesn’t further develop this argument. See S.Z.S., ¶ 29.

¶ 33 The record thus supports the magistrate’s imposition of

remedial contempt sanctions.

V. Attorney Fees Award

¶ 34 Husband argues that the magistrate erred by awarding wife

her reasonable attorney fees because her motion for contempt

asserted no legal authority for such a request. But he neither

raised this issue to the magistrate in opposition of wife’s request for

attorney fees nor to the district court in his petition for review. We

therefore won’t address the issue for the first time on appeal. See

People in Interest of K.L-P., 148 P.3d 402, 403 (Colo. App. 2006)

(holding that an issue not raised in a petition for district court

review may not be raised for the first time on appeal); cf. Valentine

v. Mountain States Mut. Cas. Co., 252 P.3d 1182, 1188 n.4 (Colo.

App. 2011) (“A party’s mere opposition to its adversary’s request . . .

does not preserve all potential avenues for relief on appeal.”).

¶ 35 But even if we were to assume that husband preserved this

argument, the magistrate didn’t abuse his discretion by awarding

fees. See Collins, ¶ 51 (reviewing award of attorney fees for an

17

abuse of discretion). A court “may” deny a motion if the moving

party fails to include legal authority in the motion, but nothing

requires it to do so. C.R.C.P. 121, § 1-15(3); see A.S. v. People,

2013 CO 63, ¶ 21 (The “use of the term ‘may’ is generally indicative

of a grant of discretion or choice among alternatives.”). Thus, even

though wife’s motion for remedial contempt didn’t include legal

authority in support of her attorney fees request, the magistrate

reasonably determined that C.R.C.P. 107(d)(2) permitted him to

award wife the fees she incurred in connection with the remedial

contempt proceeding.

¶ 36 Husband additionally argues that because the magistrate

erred by entering the remedial contempt judgment, we must also

reverse the award of attorney fees. But because we have rejected

his contentions of error, we necessarily reject this argument.

¶ 37 The district court therefore didn’t err by upholding the

magistrate’s attorney fees award.

VI. Appellate Attorney Fees and Costs

¶ 38 Wife requests an award of her appellate attorney fees pursuant

to C.R.C.P. 107(d)(2) because she incurred these fees in connection

with the contempt proceeding. Such an award of fees may be

18

assessed within the court’s discretion, and we, therefore, remand

this issue to the district court to determine wife’s entitlement to and

the amount of her appellate attorney fees, if any. See id.; In re

Marriage of Dean, 2017 COA 51, ¶ 33; Madison Cap. Co., LLC v. Star

Acquisition VIII, 214 P.3d 557, 562 (Colo. App. 2009).

¶ 39 Wife also requests attorney fees under section 13-17-102,

C.R.S. 2023. Though a close call, we don’t agree that husband’s

appeal lacked substantial justification and, thus, deny this request.

See Glover v. Serratoga Falls LLC, 2021 CO 77, ¶ 70 (recognizing

that an award of attorney fees under section 13-17-102 is

appropriate only in clear and unequivocal cases of egregious

conduct where no rational argument is presented).

¶ 40 Costs are taxed in accordance with C.A.R. 39(a)(2).

VII. Disposition

¶ 41 The judgment is affirmed. The case is remanded to the district

court to consider wife’s request for C.R.C.P. 107(d)(2) attorney fees.

JUDGE SCHOCK and JUDGE BERGER concur.