Enforcing Settlement Agreements Through Contempt

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Enforcing Settlement Agreements Through Contempt

Enforcing Settlement Agreements Through Contempt: What Moore v. Smith Means for South Carolina Divorce Cases
August 2023 Case Analysis
In a significant decision for South Carolina family law practitioners and divorcing parties, the Court of Appeals clarified an important procedural question: Can you use a rule to show cause for contempt to enforce the terms of a settlement agreement? In Moore v. Smith, 441 S.C. 261 (2023), the court answered with a resounding yes—and the decision has important implications for anyone navigating divorce in South Carolina.

The Background
Caroline Moore and Darren Smith were going through a divorce involving their marital residence, which had been purchased as an investment property. During the proceedings, the family court issued a Temporary Order that prohibited both parties from incurring debt that would make the other party responsible.

Despite this order, the husband obtained a commercial promissory note in April 2018 secured by a mortgage on the marital residence. When the parties finalized their settlement agreement in September 2018, the husband failed to disclose this debt on his financial declaration.

The Final Order incorporated their settlement agreement, which included a critical provision: any party who failed to disclose debt would be solely responsible for that debt and must “hold the other party harmless and indemnify the other party from any liability thereon, including attorneys’ fees and costs.”

When the marital residence was sold, the wife discovered the undisclosed $21,813.49 debt and had to pay it from the closing proceeds. She filed a rule to show cause seeking to hold her ex-husband in contempt and force him to reimburse her.

The Family Court’s Error
The trial court made a critical mistake. It told the wife that a rule to show cause was not the proper way to seek this relief. Instead, the court suggested she should either file a Rule 60(b) motion to set aside the entire settlement agreement or file a separate motion to enforce the warranty provision.

This put the wife in an impossible position: to get her money back, she would have to undo her entire divorce settlement.

The Court of Appeals Gets It Right
The Court of Appeals reversed, holding that a rule to show cause was exactly the right procedural tool for this situation. The court’s reasoning was straightforward:

Settlement agreements incorporated into court orders are enforceable through contempt proceedings. Once a family court approves a settlement agreement and makes it part of a final order, those terms become binding and enforceable—unless the agreement specifically denies the court jurisdiction to enforce it.

In this case, the Final Order did the opposite. It explicitly stated: “The parties shall strictly comply with the terms of the [settlement] agreement or risk the contempt powers of the court.”

The court found that Rule 14(a) of the South Carolina Family Court Rules specifically provides for rules to show cause “for contempt of court arising from failure to comply with the Court’s orders, decrees or judgments and for enforcement thereof.”

The Practical Result
The Court of Appeals ordered the husband to:

Pay the wife $21,813.49 to reimburse and indemnify her for the undisclosed debt
Pay the wife’s attorney’s fees and costs of $9,590.55 incurred in bringing the contempt action

This outcome vindicated the wife’s choice of remedy and avoided the need to unravel the entire settlement agreement.

Key Takeaways for Divorcing Parties
1. Disclosure obligations are serious. If your settlement agreement requires full disclosure of debts and liabilities, failing to disclose can have significant financial consequences. In this case, it cost the husband over $31,000.
2. Indemnification provisions have teeth. When you agree to hold your spouse harmless from undisclosed debts, courts will enforce that promise—including requiring you to pay your ex-spouse’s attorney’s fees for enforcing it.
3. You don’t need to set aside your entire divorce to fix one problem. This case confirms that when one party violates a specific provision of a settlement agreement, you can enforce that provision through contempt proceedings without having to challenge the validity of the entire agreement.
4. The “contempt powers of the court” language matters. If your settlement agreement includes language stating that parties must comply “or risk the contempt powers of the court,” this preserves the family court’s ability to enforce the agreement through contempt proceedings.

Important Legal Distinctions
The Court of Appeals made an important distinction in this case: while the husband was not technically held “in contempt” (because the wife didn’t prove he willfully refused to pay before she filed her action), the court still had the power to enforce the terms of the Final Order through the contempt proceeding.

This distinction matters because it means you don’t necessarily need to prove willful disobedience to enforce a settlement agreement provision—you may be able to simply enforce the terms of the order itself.

What This Means for Your Case
If you’re going through a divorce in South Carolina, this case reinforces several best practices:

For those negotiating settlements:

Ensure your settlement agreement includes comprehensive disclosure requirements
Include clear indemnification language for undisclosed debts
Consider including explicit language preserving the court’s contempt powers
Make sure attorney’s fees provisions cover enforcement actions

For those enforcing settlements:

A rule to show cause is an appropriate and efficient way to enforce settlement agreement provisions incorporated into a final order
You don’t need to set aside your entire settlement to enforce specific provisions
Document your damages and attorney’s fees carefully—the wife’s detailed affidavit of fees helped secure her award

For those tempted to hide assets or debts:

Don’t. The consequences can be severe and expensive
Undisclosed debts will likely be discovered, especially at closing when the marital home is sold
You’ll end up paying not only the debt but also your ex-spouse’s attorney’s fees

Conclusion
Moore v. Smith provides important clarity on enforcement procedures in South Carolina family law. It confirms that parties can efficiently enforce settlement agreement provisions through contempt proceedings when those provisions are incorporated into court orders. This protects parties who negotiate in good faith and provides a streamlined remedy when their ex-spouses fail to honor their obligations.

If you’re dealing with a situation where your ex-spouse has violated the terms of your divorce settlement—whether through failure to disclose debts, failure to pay support, or other violations—you may have options to enforce your rights through a rule to show cause.

The information provided in this blog post is for educational purposes only and does not constitute legal advice. Every case is unique, and outcomes depend on specific facts and circumstances. If you need assistance with a family law matter in South Carolina, please consult with a qualified attorney.
Klok Law Firm LLC | Family Law Attorney | Charleston, South Carolina

By Suzanne Klok|2025-11-12T17:07:48+00:00September 30th, 2023|Equitable Distribution/Property Division, Rule to Show Cause|Comments Off on Enforcing Settlement Agreements Through Contempt

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Enforcing Settlement Agreements Through Contempt: What Moore v. Smith Means for South Carolina Divorce Cases
August 2023 Case Analysis
In a significant decision for South Carolina family law practitioners and divorcing parties, the Court of Appeals clarified an important procedural question: Can you use a rule to show cause for contempt to enforce the terms of a settlement agreement? In Moore v. Smith, 441 S.C. 261 (2023), the court answered with a resounding yes—and the decision has important implications for anyone navigating divorce in South Carolina.

The Background
Caroline Moore and Darren Smith were going through a divorce involving their marital residence, which had been purchased as an investment property. During the proceedings, the family court issued a Temporary Order that prohibited both parties from incurring debt that would make the other party responsible.

Despite this order, the husband obtained a commercial promissory note in April 2018 secured by a mortgage on the marital residence. When the parties finalized their settlement agreement in September 2018, the husband failed to disclose this debt on his financial declaration.

The Final Order incorporated their settlement agreement, which included a critical provision: any party who failed to disclose debt would be solely responsible for that debt and must “hold the other party harmless and indemnify the other party from any liability thereon, including attorneys’ fees and costs.”

When the marital residence was sold, the wife discovered the undisclosed $21,813.49 debt and had to pay it from the closing proceeds. She filed a rule to show cause seeking to hold her ex-husband in contempt and force him to reimburse her.

The Family Court’s Error
The trial court made a critical mistake. It told the wife that a rule to show cause was not the proper way to seek this relief. Instead, the court suggested she should either file a Rule 60(b) motion to set aside the entire settlement agreement or file a separate motion to enforce the warranty provision.

This put the wife in an impossible position: to get her money back, she would have to undo her entire divorce settlement.

The Court of Appeals Gets It Right
The Court of Appeals reversed, holding that a rule to show cause was exactly the right procedural tool for this situation. The court’s reasoning was straightforward:

Settlement agreements incorporated into court orders are enforceable through contempt proceedings. Once a family court approves a settlement agreement and makes it part of a final order, those terms become binding and enforceable—unless the agreement specifically denies the court jurisdiction to enforce it.

In this case, the Final Order did the opposite. It explicitly stated: “The parties shall strictly comply with the terms of the [settlement] agreement or risk the contempt powers of the court.”

The court found that Rule 14(a) of the South Carolina Family Court Rules specifically provides for rules to show cause “for contempt of court arising from failure to comply with the Court’s orders, decrees or judgments and for enforcement thereof.”

The Practical Result
The Court of Appeals ordered the husband to:

Pay the wife $21,813.49 to reimburse and indemnify her for the undisclosed debt
Pay the wife’s attorney’s fees and costs of $9,590.55 incurred in bringing the contempt action

This outcome vindicated the wife’s choice of remedy and avoided the need to unravel the entire settlement agreement.

Key Takeaways for Divorcing Parties
1. Disclosure obligations are serious. If your settlement agreement requires full disclosure of debts and liabilities, failing to disclose can have significant financial consequences. In this case, it cost the husband over $31,000.
2. Indemnification provisions have teeth. When you agree to hold your spouse harmless from undisclosed debts, courts will enforce that promise—including requiring you to pay your ex-spouse’s attorney’s fees for enforcing it.
3. You don’t need to set aside your entire divorce to fix one problem. This case confirms that when one party violates a specific provision of a settlement agreement, you can enforce that provision through contempt proceedings without having to challenge the validity of the entire agreement.
4. The “contempt powers of the court” language matters. If your settlement agreement includes language stating that parties must comply “or risk the contempt powers of the court,” this preserves the family court’s ability to enforce the agreement through contempt proceedings.

Important Legal Distinctions
The Court of Appeals made an important distinction in this case: while the husband was not technically held “in contempt” (because the wife didn’t prove he willfully refused to pay before she filed her action), the court still had the power to enforce the terms of the Final Order through the contempt proceeding.

This distinction matters because it means you don’t necessarily need to prove willful disobedience to enforce a settlement agreement provision—you may be able to simply enforce the terms of the order itself.

What This Means for Your Case
If you’re going through a divorce in South Carolina, this case reinforces several best practices:

For those negotiating settlements:

Ensure your settlement agreement includes comprehensive disclosure requirements
Include clear indemnification language for undisclosed debts
Consider including explicit language preserving the court’s contempt powers
Make sure attorney’s fees provisions cover enforcement actions

For those enforcing settlements:

A rule to show cause is an appropriate and efficient way to enforce settlement agreement provisions incorporated into a final order
You don’t need to set aside your entire settlement to enforce specific provisions
Document your damages and attorney’s fees carefully—the wife’s detailed affidavit of fees helped secure her award

For those tempted to hide assets or debts:

Don’t. The consequences can be severe and expensive
Undisclosed debts will likely be discovered, especially at closing when the marital home is sold
You’ll end up paying not only the debt but also your ex-spouse’s attorney’s fees

Conclusion
Moore v. Smith provides important clarity on enforcement procedures in South Carolina family law. It confirms that parties can efficiently enforce settlement agreement provisions through contempt proceedings when those provisions are incorporated into court orders. This protects parties who negotiate in good faith and provides a streamlined remedy when their ex-spouses fail to honor their obligations.

If you’re dealing with a situation where your ex-spouse has violated the terms of your divorce settlement—whether through failure to disclose debts, failure to pay support, or other violations—you may have options to enforce your rights through a rule to show cause.

The information provided in this blog post is for educational purposes only and does not constitute legal advice. Every case is unique, and outcomes depend on specific facts and circumstances. If you need assistance with a family law matter in South Carolina, please consult with a qualified attorney.
Klok Law Firm LLC | Family Law Attorney | Charleston, South Carolina