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Braun v. Greenblatt (2005-318)
2007 VT 53
[Filed 15-Jun-2007]
NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.
2007 VT 53
No. 2005-318
Sheila Braun Supreme Court
On Appeal from
v. Chittenden Family Court
Marc Greenblatt January Term, 2007
Ben W. Joseph, J.
Brian K. Valentine and Caryn E. Waxman of Downs Rachlin Martin PLLC,
Burlington, for Plaintiff-Appellee.
Susan M. Murray and Erin Miller Heins of Langrock Sperry & Wool, LLP,
Burlington, for Defendant-Appellant.
PRESENT: Reiber, C.J., Dooley, Johnson and Skoglund, JJ., and
Davenport, Supr. J., Specially Assigned
1. DAVENPORT, Supr. J., Specially Assigned. Husband appeals
from a family court post-judgment modification order that tripled his
monthly spousal maintenance obligation and extended its duration
indefinitely. Husband argues that the court committed numerous reversible
errors, including failing to find a real, substantial, and unanticipated
change of circumstances and ordering an amount and duration of maintenance
that constitute an abuse of discretion. We reverse and remand. (FN1)
2. The parties married in December 1995 when both were thirty-four
years old. Earlier that year, wife quit a graduate school program and left
a job where she was earning $41,000 per year as a computer programmer in
Washington, D.C. in order to move to Vermont where her husband had been
offered a position as a research physician at Fletcher Allen Medical Center
and the University of Vermont. Within a year of their wedding, the parties
had their first child. While husband continued to advance his career in
oncology, wife assumed the role of primary caregiver and did not work
outside the home. A second child was born in August 1999, by which time
the parties had separated. After wife filed for divorce in September 1999,
the parties negotiated a settlement agreement that provided for wife to
continue as the children's primary caregiver. The agreement contemplated
the possibility that wife would home school the children and earn minimal
or no income.
3. At the time the stipulation was finalized and the divorce
granted in December 2000, husband was earning an annual salary of
$121,574.96 and wife had no earnings. Under the terms of the agreement,
wife was to receive spousal maintenance, child support, and maintenance
supplement. Although the marital home was awarded to husband, the parties
agreed that wife could remain in the marital home after the divorce for up
to thirteen months. While she remained in the marital home, she was to
receive $2,650 per month in spousal maintenance. Once she moved out of the
home, an event that was to occur no later than March 31, 2002, the
obligation decreased to $2,350 per month.
4. The current dispute over maintenance focuses on a troublesome
provision regarding the renegotiation of the maintenance obligation after
divorce:
The parties will renegotiate commencing May 1, 2004 what, if
anything, shall be paid in spousal support after August 31, 2004.
It is the parties' intention that there be no presumption either
in favor of or in opposition to the continuation of rehabilitative
spousal support based on this Stipulation. The parties
specifically intend to defer this issue to 2004 and take a fresh
look at it at that time, when they will have better information
regarding their income and expenses at that time. If the parties
cannot reach agreement on this without assistance, they shall
mediate this issue in good faith for not less than 5 sessions
before requesting the assistance of the court.
The parties failed to reach any agreement as to what amount, if any,
husband should pay in spousal maintenance after August 2004. In December
2004, after negotiation and mediation had failed, husband moved to
terminate the obligation. Wife filed a cross motion to continue
maintenance at a level to be determined by the court and to enforce other
provisions of the final order. The family court heard two days of
testimony in January and March 2005. In addition to testimony by the
parties, wife presented two expert witnesses: an accountant to analyze
husband's income from 2000 to 2004, calculate arrears, and assess tax
implications; and a career advisor to explain wife's career and education
options for reentering the workforce. At the end of the hearings, the
court invited the parties to submit proposed findings of fact and
conclusions of law.
5. The family court's July 2005 decision adopted in large
measure the proposed findings, conclusions, and order submitted by wife.
The court modified maintenance by increasing the monthly obligation to
$6,300 per month plus "an amount to cover [wife's] monthly tax obligation"
for a five-year period retroactive to September 1, 2004. After the five
years, husband's obligation was to decrease dollar for dollar based on
wife's actual income. The order also provided that, for so long as
maintenance continued, husband's obligation would increase based on either
the percentage increase in his income, including investment income, or an
annual cost-of-living adjustment. The court further ordered that husband
pay accumulated arrears owing from an income-increase provision in the
final order, pay arrearages in the children's extracurricular and
educational expenses, make deposits into one of the children's savings
accounts, and pay the fees of wife's attorneys and expert witnesses.
Husband argues that the court erred first by failing to find a real,
substantial, and unanticipated change of circumstances that would support
an exercise of subject matter jurisdiction and then by making a series of
errors in modifying maintenance and enforcing the final order. We first
address the maintenance award and then the issues related to the
calculation of the spousal maintenance arrearage, the enforcement of the
provision related to the children's savings accounts and the award of
attorney fees.
I. Spousal Maintenance Award
6. Spousal maintenance may be modified only "upon a showing of a
real, substantial, and unanticipated change of circumstances." 15 V.S.A.
758. In the absence of the required change, the court is without
jurisdiction to modify a maintenance order. Golden v. Cooper-Ellis, 2007
VT 15, 57, __ Vt. __, __ A.2d __; Taylor v. Taylor, 175 Vt. 32, 36, 819
A.2d 684, 688 (2003). There are no fixed standards for determining what
meets this threshold, and the determination of whether a particular change
is substantial must be made in the context of the surrounding
circumstances. Golden, 2007 VT 15, 57 (citing Taylor, 175 Vt. at 36,
819 A.2d at 688). The trial court's ruling is discretionary and will not
be disturbed "unless the discretion was erroneously exercised, or was
exercised upon unfounded considerations or to an extent clearly
unreasonable in light of the evidence." Taylor, 175 Vt. at 36, 819 A.2d at
688.
7. Wife argues that husband waived any jurisdictional argument by
failing to raise it below. Husband's motion requested "enforcement" of the
final order, rather than modification, and wife's cross motion sought an
order "establishing spousal maintenance"; the change-of-circumstances
requirement was consequently unaddressed. The failure to raise the issue
of subject matter jurisdiction below does not preclude its consideration on
appeal, however. "It is axiomatic that lack of subject matter jurisdiction
. . . may be raised for the first time on appeal." Town of Charlotte v.
Richmond, 158 Vt. 354, 358, 609 A.2d 638, 640 (1992). We may thus properly
consider whether the court had subject matter jurisdiction.
8. The trial court made substantial modifications to the nature
and the amount of the spousal maintenance obligation that had been in place
since the final order. Not only did the court order husband to pay more
than triple the amount he was required to pay under the stipulated final
order, but it effectively converted a rehabilitative award into a permanent
award. At the time of the divorce in 2000, the parties agreed that the
purpose of alimony was rehabilitative. The purpose of rehabilitative
maintenance is to allow the recipient spouse to become self-supporting.
Strauss v. Strauss, 160 Vt. 335, 339, 628 A.2d 552, 554 (1993).
Rehabilitative maintenance is, by its nature, time limited. Id. By
requiring husband to continue to pay spousal maintenance until wife's
earnings exceeded the amount of the obligation, the trial court extended
alimony for an indefinite period, effectively transforming it into a
permanent award and eliminating any incentive for wife to become
self-supporting.
9. The trial court made these changes without any reference to
changed circumstances. The court concluded that it had subject matter
jurisdiction based on the maintenance-renegotiation provision of the final
order and the family court's exclusive jurisdiction to hear and dispose of
all enforcement-of-support proceedings in divorce cases. See 4 V.S.A.
454(3), (4). It interpreted the renegotiation provision as an agreement by
the parties to defer the court's determination of spousal support. In
short, the court did not address the issue of changed circumstances because
it concluded that the parties had stipulated the issue away.
10. "[S]ubject matter jurisdiction cannot be conferred by
agreement or consent of the parties when it is not given by law." Columb
v. Columb, 161 Vt. 103, 110, 633 A.2d 689, 693 (1993) (quotations omitted)
(rejecting argument that party waived subject matter jurisdiction in child
custody case). Just as parties may not waive the ability to seek
modification if there is a change of circumstances, Taylor, 175 Vt. at 39,
819 A.2d at 690 (citing 15 V.S.A. 758), they may not waive the
jurisdictional prerequisite that there be a change in circumstances prior
to a modification of maintenance. Modification of the purpose of the
alimony award and the amount of the obligation cannot be made absent a
finding of a real, substantial, and unanticipated change in circumstances.
Failure to address this jurisdictional threshold was error.
11. Wife contends that, even if jurisdiction is properly
considered on appeal, the findings by the court are sufficient to support a
conclusion of changed circumstances. A determination of whether a
substantial change of circumstances exists is a matter for the trial
court's discretion, and our review of that determination is deferential.
Meyer v. Meyer, 173 Vt. 195, 197, 789 A.2d 921, 923 (2001). Further,
"[t]here are no fixed standards for determining what meets this threshold,
and evaluation of whether or not any given change is substantial must be
determined in the context of the surrounding circumstances." Taylor, 175
Vt. at 36, 819 A.2d at 688 (quotations and ellipses omitted). Therefore,
absent an initial determination by the trial court, we decline to make a
finding of changed circumstances on appeal. Pill v. Pill, 154 Vt. 455,
460, 578 A.2d 642, 645 (1990).
12. Though the failure to address the jurisdictional threshold of
changed circumstances is sufficient to warrant a remand on the issue of the
spousal maintenance obligation after August 2004, we consider three issues
related to the maintenance award that are likely to recur on remand. See
Agency of Natural Res. v. Godnick, 162 Vt. 588, 596, 652 A.2d 988, 993
(1994) (considering issues not necessary to reach holding but likely to
recur on remand).
13. Critical to the trial court's rationale for both the amount
and duration of the new obligation was its conclusion that wife was
entitled to compensatory alimony. Compensatory maintenance
reflects the reality that when one spouse stays home and raises
the children, not only does that spouse lose future earning
capacity by not being employed or by being underemployed subject
to the needs of the family, but that spouse increases the future
earning capacity of the working spouse, who, while enjoying family
life, is free to devote productive time to career enhancement.
Delozier v. Delozier, 161 Vt. 377, 382, 640 A.2d 55, 57-58 (1994). In
determining the compensatory component of a maintenance award, the length
of the marriage is a critical factor because it is "often a major factor
creating the disparity in the parties' earning capacities" and because it
provides a "benchmark for determining reasonable needs." Id. (citing Klein
v. Klein, 150 Vt. 466, 477, 555 A.2d 382, 389 (1988)).
14. The marriage in this case was a short-term marriage lasting
only four and a half years. The trial court concluded, however, that wife
would be out of the job market for a period of time comparable to a
ten-year marriage because of the parties' agreement that she would raise
the children and even home school them after the divorce. Meanwhile,
husband's earning capacity continued to increase while his contribution to
raising the children was negligible. Based on these facts, the court
concluded that wife was entitled to compensatory alimony. The error in
this analysis is that it focuses on the post-divorce period rather than the
contributions of each spouse during the marriage. The purpose of
compensatory alimony is to compensate the recipient spouse for
contributions made during the marriage, not after. It is precisely for
this reason that the duration of the marriage is such a critical factor.
15. A second issue is the inclusion of wife's monthly tax
obligation as part of the maintenance award. In Delozier we indicated that
we do not favor the use of formulas for determining maintenance awards and
that such awards are susceptible to reversal unless they are "sensitive to
the statutory criteria, including both parties' needs." 161 Vt. at 385,
640 A.2d at 59. We recognize that the formula used in this case is
different from the formula we considered in Delozier, which related to
fixed-percentage maintenance awards. Nonetheless, we find the present
formula-a specific dollar amount plus tax consequences-similarly
problematic. The amount is tied only to the recipient's needs and not in
any way to the needs of the payor. Husband must pay wife's obligation
whatever it is and to whatever degree it fluctuates, regardless of his
needs. While the court must consider the expenses of both spouses
including their current tax obligations and estimates of their future tax
obligations in setting the amount of the maintenance award, 15 V.S.A.
752(b)(1), (6), it cannot simply shift an expense from one party to another
regardless of future fluctuations and call it spousal maintenance.
16. Finally, the conflicting escalation clauses in the
modification order render future adjustments unworkable. While the trial
court must consider inflation with relation to the cost of living when
fashioning a maintenance order, Bell v. Bell, 162 Vt. 192, 200, 643 A.2d
846, 851 (1994), the order must clearly articulate the formula for doing
so.
II. Spousal Maintenance Arrearage
17. Paragraph fifteen of the final order provided that from
January 2001 until wife moved out of the marital home, husband would pay
$2,650 per month in spousal maintenance. The payments were to be made in
three separate transactions: $700 directly to wife; $1,356.56 into an
account held by wife and used to pay the mortgage; and the remainder to
cover property taxes and insurance. The $700 amount was to be adjusted
upwards by ten percent whenever husband's income increased by ten percent.
Paragraph sixteen of the final order provided that husband would pay $2,350
per month in support to wife following wife's move from the marital home.
In paragraph sixteen no similar allocation of the payments was made,
presumably because wife would not be in the marital home and therefore
would have discretion to spend as much or as little on her housing as she
chose. Paragraph sixteen also contained no provision for upward
adjustment.
18. The family court found that husband had failed to adjust his
maintenance payments despite his income increasing by more than ten
percent. However, rather than calculating arrears based on only the $700
payment and only for the period when paragraph fifteen was in effect, the
court interpreted the ten-percent-adjustment provision in paragraph fifteen
to apply to the total maintenance amount in paragraph sixteen when that
paragraph took effect. Applying this interpretation, the court concluded
that husband owed $8,952 in arrears based on his increases in income from
2000 to 2004. Husband argues, and we agree, that the court's conclusion is
inconsistent with the plain language of the final order. The ten-percent
increase applied only to the $700 amount and only during the period when
wife remained in the marital home. The court's conclusion to the contrary
was error.
III. Children's Savings Account
19. Prior to the parties' divorce, a savings account was created
for each child. The final order provided that husband would "continue to
contribute money to [the younger child's] savings account until the amount
deposited in this account is equal to the amount deposited by the parties
into [the older child's] account (approximately $42,000)." The final order
provided no deadline by which this was to be accomplished. The family
court nevertheless concluded that husband had to fulfill this obligation
without delay and ordered husband to pay into the younger child's account
within thirty days the difference between the balances of the two accounts.
20. The family court's order errs in two respects. First, it
ignores the final order's language that the amount deposited into the
younger child's account shall equal the amount deposited into the older
child's account, not the amount held in that account at a given time.
Second, the court imposed a short deadline for balancing the accounts when
no deadline existed in the final order. Though husband will certainly have
to comply with the final order, requiring full compliance within a short
period of time while the children are still relatively young exceeded the
trial court's discretion.
IV. Attorney's Fees
21. In divorce cases, the trial court may award attorney's fees
at its discretion "where justice and equity so indicate." Turner v.
Turner, 2004 VT 5, 9, 176 Vt. 588, 844 A.2d 764 (mem.) (quotations
omitted). The primary consideration in making an award "is the ability of
the supporting party to pay and the financial needs of the party receiving
the award." Id. The trial court found that husband was able to pay his
attorney's fees outright while wife had incurred substantial debt.
Consequently, the court awarded wife $25,000 for attorney's fees, $1,750
for the accountant, and $350 for the career counselor.
22. A reversal of a support or maintenance order does not
necessarily require a reversal of an award of attorney's fees. Smith v.
Stewart, 165 Vt. 364, 375, 684 A.2d 265, 272 (1996). However, in light of
the wholesale reconsideration of spousal maintenance required in this case,
we conclude that a reconsideration of the parties' financial positions and
their respective abilities to pay professional fees is warranted. We thus
remand the award of professional fees for reconsideration after a
recalculation of maintenance and arrears.
Reversed and remanded for proceedings consistent with this opinion.
FOR THE COURT:
_______________________________________
Superior Judge, Specially Assigned
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Footnotes
FN1. Husband moved to strike the contents of a post-oral-argument letter
filed by wife's attorney that purported to correct factual misstatements
made by both counsel at oral argument. Because we did not consider the
letter in reaching our decision, husband's motion is denied as moot. |