Virginia Family Law Appeals

Alimony change not guaranteed even when payor's income down, payee's up

Virginia's Court of Appeals upheld the denial of alimony modification in Jones v. Jones, July 7, 2020, Unpublished. The payor husband had changed jobs -- from $185,000 to $55,000 a year -- because he thought the fault allegations in the divorce case would be fatal to his security clearance. 

The wife's earnings had increased from about $12,500 to $45,000, and the increase was partly because she worked multiple jobs due to the husband not paying alimony until garnished, and the difficulty of getting her share of his retirement annuity payments. In the Court's view, she was still struggling.

Even though the husband had less income, he still had the ability to pay the original award, because he could draw on his Thrift Savings Plan, the Court said. He had in fact complained that he had already found it necessary to do that.

The Court saw both parties'' financial problems as partly the husband's fault, and apparently found that significant and proper to consider.

Reservation of alimony jurisdiction means no change in circumstances needed, trial judge rules

A Fairfax Circuit Court judge has ruled that modification of spousal support, under a Property Settlement Agreement’s provision for a reservation of jurisdiction to do so, does not require a showing of a change of circumstances. Jurczuk v. Sessions, 6/11/19, CL2009-7181 and CL-2009-15967. Va. Lawyers Weekly 6/24/19, p. 8. This is not an appellate decision and is not even binding on future rulings of this 15-judge circuit court in other cases, but it is important for people to know about it as it could affect the negotiation and wording of separation agreements and divorce orders.  In the judge’s view, the various “change of circumstances” thresholds for alimony modification under different parts of Code §20-109 do not apply when there is a “reservation of jurisdiction” to award or modify alimony. It reasons that the statutes authorizing modification after a change of circumstances grant new jurisdiction to reopen an issue that has been fully concluded, but a reservation leaves the issue not finally concluded. “The legislative intent is thus clear that ‘reservations’ are not subject to the requirement of a ‘material change in circumstances.’”

When facing this argument in other cases, it may help to point out the context in which the legislature decided to allow reservations. Before it did so, alimony set by a separation agreement could never be modified, while alimony set in a contested trial could always be modified based on a change of circumstances.

If this judge’s view were widely adopted, it would be especially transformative because of the doctrine that it is always error not to grant a reservation to either party, which means that if a party insists on a reservation in negotiation, they get it, or get to trade something for it. It becomes a much more valuable bargaining chip if it is a license to reopen the alimony issue at any time. This will also make potential payors much less willing to agree to reservations, though. People who intend them to only be available after a change of circumstances will spell that out in their agreements; but judges in the future may or may not honor such restrictions.

Court of appeals reverses agreed retroactive modification of a lump sum spousal support award.

Guan v. Ran, 2017 Va. App. LEXIS 30 (February 7, 2017)

The Court of Appeals reversed a circuit court's decision to modify a lump sum spousal support award, which the Court of Appeals concluded was a vested right once the final order of divorce was entered. A vested right is a right belonging unconditionally to a person as a property interest which cannot be taken away. The final order of divorce, which had incorporated the parties' property settlement agreement, required the husband to pay a lump sum payment of spousal support. Pursuant to the property settlement agreement, the husband was given the option to pay over five consecutive years. A year after, the parties entered into an amended property settlement agreement. The amendment waived the wife's right to spousal support. Under the authority of Va. Code 20-109(C) the trial court incorporated the amended agreement on May 13, 2016. In doing so, the circuit court held that the wife had waived the lump sum spousal support from the property settlement agreement and the final order of divorce. The court of appeals held that all of the support was vested once the final order of divorce was entered. Thus, the circuit court erred by retroactively modifying the support. While husband was given the option to pay over five consecutive years, the language of the final order of divorce required that he pay a "lump sum" of spousal support. Thus, the day the order was entered the wife had a fully vested right to spousal support. Once spousal support has vested, the circuit court may not modify the vested portion of the spousal support.

 

Pendente lite support can't be changed retroactively, but needn't be maintained to keep up innocent spouse's unaffordable "lifestyle"

A trial court correctly refused to retroactively reduce the pendente lite support it had ordered, even though it found the amount unaffordable and the failure to pay it non-willful, the Court of Appeals says in Everett v. Tawes, unpublished 7/10/2018. The husband argued that "while Code § 20-107.1(H)(6) states that an unpaid support obligation creates a judgment, there is no similar language in the pendente lite statute, Code § 20-103, and thus the legislature intended that pendente lite support be treated differently." But

The law is settled that support payments vest as they accrue and may not be modified retroactively. See Cofer v. Cofer, 205 Va. 834, 839, 140 S.E.2d 663, 666 (1965); Smith v. Smith, 4 Va. App. 148, 152, 354 S.E.2d 816, 818 (1987).

The Court cites several cases in which pendente lite support that had been paid could not be ordered reimbursed, even if the divorce case was dismissed and the marriage found to be void, and apparently is satisfied that they likewise protect accrued but unpaid payments.

[Though the Court does not point this out, § 20-107.1(H) on the contents of spousal support orders says that "an order directing the payment of spousal support" shall contain the language. It does not limit itself to "final" orders. Though § 20-107.1 as a whole begins by authorizing spousal support "upon the entry of a decree", or in an alimony case begun in juvenile court, that limiting language is in another subsection of 107.1, numbered (A). It is not in framing language whose sentence structure reads onto all the subsections. The statute has no such framing language.]

The wife also appealed, claiming that when the trial court awarded permanent alimony that was far lower than the pendente lite figure, it mismeasured income, failed to consider tax consequences, and improperly considered the property division that the wife received in the divorce, and that as the blameless party, she should keep the "upper middle class lifestyle" she had during the marriage. Affirming, the Court notes the trial court's finding that the couple had lived beyond their means, its proper consideration of the husband's ability to pay, its consideration of expert testimony on how tax payment patterns reduced cash flow and made incomes smaller than they appeared. The statutes not only make property division an explicit factor to consider when awarding alimony, but also encourage and facilitate that by having courts divide property and debt before determining support, it says. The consideration of property division in this support determination was unusually clear, because the monetary award was broken down into monthly payments, and the trial court considered those when measuring both parties' incomes.

Doctor can reduce work hours and alimony payments at 66; complex property settlement FUBAR by unforeseen events

The Court of Appeals upholds a reduction in alimony for a 66-year-old anesthesiologist who reduced his brutal work hours and planned to fully retire, and who testified that that was consistent with other anesthesiologists his age, in Gadpaille v. Gadpaille, unpublished 7/10/2018.

The trial court in that case also dealt with marital home sales proceeds that were supposed to be offset against a retirement account division and other sums under the PSA, but which ended up being "a deficiency", apparently a negative number, after accounting for repair costs, fire damage, and reduced insurance coverage. The appeals court finds that the trial court did not rewrite the PSA, but rather, correctly "considered the totality of the parties’ agreement as expressed" in the PSA and in a later consent order, and applied that agreement to the unforeseen circumstances.

Unilateral sales violating pendente lite order were waste, though apparently in good faith and necessitated by marital debt

The Court of Appeals upholds a finding of waste against a husband sold many items during the ten-year separation, though there was a court order saying not to, in Moret v.  Moret 5/08/2018. He argued that the parties' overwhelming marital debts justified it.

 “[T]he burden is on the party who last had the funds to establish . . . that the funds were used for living expenses or some other proper purpose. If the party is unable to offer sufficient proof, the [trial] court must value the property at a date other than the date of the evidentiary hearing so as to achieve an equitable result.” Clements v. Clements, 10 Va. App. 580, 588, 397 S.E.2d 257, 261 (1990).

The Court upholds an "alternate valuation date" to account for these sales, and the use of husband's loan application to determine those alternate values, even though the items sold for less than those values. The trial court found that he "failed to realize the best price for personal property upon sale, resulting in a significant wasting of marital assets.” It thus ordered him to pay the wife half the values given on the loan application. When he objects that the actual sales were a better measure of value, the Court responds that "the linchpin of the problem" with all of it was his failure to get the wife's agreement to the sales.

"Although the sales do not appear to be illegitimate, that is not a mitigating factor under Code § 20-107.3(E)(10) that either the trial court or this Court must consider, thus appellant’s reliance on his alleged good faith business dealings carries no weight."

The Court likewise upholds the trial court's refusal to give husband any credit for reducing the marital debts with the proceeds of these sales.

It also upholds imputation of income from a business, a spousal support award, and a refusal to recalculate arrearages back to before a pendente lite modification. 

Late-filed appeal of support order makes timely appeal of arrears case moot

Marriott v. Anderson, 2017 Va. App. LEXIS 43 (February 21, 2017)

When a party appeals a case from the juvenile and domestic relations court, he or she must file the appeal within ten days or the appeal will be dismissed.The Court of Appeals reversed the circuit court after it had accepted several de novo appeals from the juvenile and domestic relations court, one of which was filed after the ten-day appeal period. On May 14, 2015, the JDR court had entered two separate orders. One resolved the father's arrearages to the mother ("arrearages order"). The other required the mother to pay child support ("child support order"). The mother appealed the arrearages order on May 21, 2015, which was filed timely. However, she appealed the child support order on May 27, 2015, which was filed late. The father moved to dismiss the child support case because of the late appeal. He also moved to dismiss the arrearages case on the basis that it was moot without the child support appeal. The circuit court denied his motions to dismiss. The court of appeals agreed with the father and reversed the circuit court on both matters.

 

 

What looks like "imputing" income can actually be determining probable actual income, though undocumented; fee award for "chutzpah" in post-divorce litigation

One useful legal holding from Wilson v. Slivka, Va. Ct. App. unpub. 4/3/18, an opinion that mostly just illustrates how miserable, solitary, poor, nasty, brutish and long divorce can be. The opinion also uses the word "chutzpah" as a routine term, without making a big deal of it, putting it in quotes, giving a definition or an example, etc.

On the not-actually-imputation, explaining why the trial court did not fail to calculate the presumptive support using a finding of actual income before proceeding to "impute", the Court explains:

This Court’s holding in Floyd v. Floyd, 17 Va. App. 222, 436 S.E.2d 457 (1993), is noteworthy in the calculation of actual gross income instead of imputation of income. Floyd argued that the trial court imputed income to him before calculating the presumptive amount. Id. at 224, 436 S.E.2d at 458. This Court indicated that Floyd “mischaracterized the proceedings;” what the trial court did was calculate Floyd’s actual gross income. Id. at 229, 436 S.E.2d at 461. The trial court indicated that it found his annual income to be $45,000 “based on the depositions of prior years, the statement in testimony and the statement of money taken out of the business.” Id. at 225, 436 S.E.2d at 459. The trial court first considered that Floyd engaged in a “systematic scheme to hide assets,” had cashed and spent $70,000 in checks, and then determined his child support obligation pursuant to the guidelines. Id. at 229, 436 S.E.2d at 461.

While the trial court is permitted to deviate from the presumptive amount, it did not do so here. The trial court simply calculated appellant’s gross actual income and adhered to the corresponding presumptive amount of child support. This is analogous to Floyd, 17 Va. App. at 222, 436 S.E.2d at 457. The record leaves little room for doubt that the trial court found appellant’s representations less than credible. It noted his “poor track record” and highlighted his chutzpah in asking for an outright elimination of his support obligation in light of the trial court’s extensive familiarity with this case and its facts. Based on the evidence before it, the trial court concluded that appellant’s last known salary of around $141,600 constituted an “accurate reflection of his worth.” Accordingly, the trial court did not “impute” income; rather, it weighed the evidence and credibility to determine appellant’s income. The trial court properly applied the statutory steps and did not deviate from the presumptive amount. Accordingly, no written findings were required.

On fees, "the trial court’s passing reference to appellant not being the 'prevailing party'” -- not the proper standard for a fee award in this type of case -- does not make the fee award error, because it looks from the record as if the judge must have been considering the history of the case, which she recited in other contexts, and which included many facts that properly would justify a fee award, determined "as equity and justice may require.”

It cited a case about fees in "a divorce case and its ancillary proceedings" -- which adds that “This discretionary authority also extends to related post-divorce proceedings.” but which only cited statutes about fees in divorce cases, §§ 20-79 and 20-99. Tyszcenko v. Donatelli, 53 Va. App. 209, 222, 670 S.E.2d 49, 56 (2008), cited in  Mayer v. Corso-Mayer, 62 Va. App. 713, 733, 753 S.E.2d 263, 272 (2014). The present case was a post-decree enforcement and modification case.

But as as for fees on the appeal,

We decline to award attorney’s fees on appeal as the litigation “addressed appropriate and substantial issues and that neither party generated unnecessary delay or expense in pursuit of its interests.” Hackler v. Hackler, 44 Va. App. 51, 75, 602 S.E.2d 426, 438 (2004).

Mom quits 2nd job; no imputation despite admitting support change was one reason; needn't punish honesty

The Va. Court of Appeals upheld a decision not to impute income to a mother from a second job that she had quit. The reasons she gave included child care, children's illness, spending time with children, healing a troubled relationship with one child, and how it would affect her child support. The trial court didn't err in not penalizing the mother for her honesty about that last reason, the Court says. The trial court had also inferred that divorce litigation expenses had been a reason for taking the job in the first place. Illetschko v. Illetschko, 9/12/2017.

Court can require proof of income & exercise of shared-custody time, but can't pull numbers out of air.

A trial court in a support modification may use a previously-used income figure when it finds no credible evidence of changed income; and may use the sole custody guidelines when a father does not prove that he is exercising his court-ordered parenting time that would otherwise justify the shared-custody guidelines; but may not decide to use a higher income figure without citing any evidence that it was the father's income or his earning capacity, the Va. Court of Appeals rules in Hatcher v. Matthews, unpublished, 9/5/17. The father had been found non-credible in earlier child support proceedings, and did not present evidence to document his claims, and this justified deference to the trial court's discretionary decision not to simply take him at his word.