ALIMONY – MODIFICATION – PAYOR’S RETIREMENT AND INCOME REDUCTION – ABILITY TO PAY – PROPERTY HOLDINGS - LIQUIDATION OF PRINCIPAL. Appellate courts are always going on and on about how sacred the dichotomy between income and property is, especially as a rationale for double-dipping awards, where the asset or income stream can be characterized as both at the same time, and thus be hit twice to suit the desires of the awarding court. It seems illogical and arbitrary to some, but after all, when it comes to alimony, the criteria in the statute include payor assets as an element of “ability to pay.” That’s right. We have seen the appellate courts look to the interest that could be made on property holdings that belong to the payor, but a new opinion from the Court of Appeals makes plain that the assets don’t have to be throwing off income to be charged as an alimony pay-ability source, and indeed the opinion seems to say that a court can even require the drawdown or liquidation of principal to satisfy alimony obligations – though it is more clever and more subtle than to say exactly that. (See below.) This holding issued in a case where it was the payor seeking modification by reason of his greatly reduced payor income, so of course he had a several-pronged burden of proof to meet, and that may distinguish this case from other situations. The holding sustained by the Court of Appeals in Driscoll v. Hunter, ___ Va. App. ___, ___ S.E.2d ___, 26 VLW 617 (10/25/11), is distinguishable from cases that come up in a different procedural configuration. Meaning, of course, that the result could be the same, but the means of getting there might be different. The husband in this case, who retired from his oral surgery business for health reasons, had relied at first on the wording of an agreement that didn’t say exactly that he had to show a material change in circumstances to come in to seek a support reduction. But that agreement, the Court of Appeals points out, was a temporary agreement, and it was swallowed up in the final divorce litigation and divorce decree and that there was no dispensing now with that proof requirement. The trial judge did not hold that retirement did not constitute a material change of circumstances, though the Court of Appeals hints that it would have been fine with them if he had – a fairly dire warning for the ex-husbands out there. Assuming change in circumstances, the trial court held that even though Husband’s income went down drastically, he still had the ability to pay because he had plenty of money in investments (as indeed he admittedly did). The Court of Appeals doesn’t care where he gets his money to pay the unchanged alimony obligation, but says it would have been O.K. to liquidate principal to do it. The ex-wife had worked for only a very short time after divorce and quit, deciding she just didn’t like working and would rather have the time. So the husband’s counsel tried an imputation argument. Now we all know how hard payee imputation is to get, or at least for it to survive appellate review, but the more frightening thing about the Court of Appeals treatment of it here is its statutory analysis. That analysis indicates that when a petitioner seeking alimony reduction has not satisfactorily proved he lacks the ability to pay, all those “equitable factors” like payee imputation can’t even be looked at. And weren’t we recently told that imputation is a deviation/variation factor, but a mandatory one? Well of course that would have to have been payor imputation (and that was probably a child support case anyway).
