Thomas v. Thomas , 2014 Del. LEXIS 448 ( 2014 )

IN THE SUPREME COURT OF THE STATE OF DELAWARE
CALVIN B. THOMAS, §
§ No. 439, 2013
Defendant-Below, §
Appellant, §
§ Court Below:
v. § Family Court of the State
§ of Delaware, in and for
STACEY L. THOMAS, § New Castle County
§
Plaintiff-Below, § File No. CN11-06308
Appellee. §
Submitted: September 17, 2014
Decided: October 1, 2014
Before STRINE, Chief Justice; HOLLAND, RIDGELY, and VALIHURA, Justices;
and DAVIS, Judge∗, constituting the Court en Banc.
Upon appeal from the Family Court of the State of Delaware. AFFIRMED, in
part, and REVERSED, in part, and REMANDED.
Gary L. Smith, Esquire, Gary L. Smith, Attorney At Law, Newark, Delaware,
Attorney for Defendant-Below, Appellant.
David J. J. Facciolo, Esquire, Minster & Facciolo LLC, Wilmington, Delaware,
Attorney for Plaintiff-Below, Appellee.
HOLLAND, Justice:
∗
Sitting by designation under Del. Const. art. IV, § 12.
On December 15, 2011, Stacey L. Thomas (the “Wife”) petitioned the Family
Court for a divorce from Calvin B. Thomas (the “Husband”), which was granted on
February 16, 2012. Thereafter, the Family Court rendered final decisions on several
ancillary matters. The Husband raises six issues in this appeal: first, the Family Court
erred by not equally dividing the marital property; second, the Family Court erred by
determining that the Wife was dependent and therefore entitled to alimony; third, the
Family Court erred by applying a 2.5 percent interest rate to calculate the Wife’s income
from her inheritance, instead of some higher interest rate; fourth, the Family Court erred
when it refused to retroactively modify the amount of the interim alimony award; fifth,
the Family Court imposed an impermissible punitive fine when it found the Husband in
contempt of its interim alimony order; and sixth, the Family Court erred when it awarded
the Wife a portion of her attorney’s fees.
We have concluded that the Family Court erroneously applied the alimony statute
in making its final award. We have also determined that the other issues raised by the
Husband are without merit. Therefore, the judgment of the Family Court is affirmed, in
part, and reversed, in part. The matter is remanded to the Family Court for further
proceedings in accordance with this opinion.
Facts
The Husband is an independent contractor for Schmidt Baking Company, with an
income that the Family Court found to be approximately $60,000 per year. The Wife
works two part-time jobs at an hourly wage, with a total income of $16,700 per year. On
2
March 8, 2012, the Wife filed a motion for interim alimony. In her motion, the Wife
acknowledged that she had inherited $450,000.
The parties agreed that the inheritance was considered to be separate property
under 13 Del. C. § 1513(b)(1) and it was not divided as a marital asset. On that basis, the
Husband argued, in his answer, that the Wife’s motion for interim alimony should be
denied because “[the Wife] is not dependent upon respondent for support when she has
$500,000 in the bank that could be used for that purpose.” On April 30, 2012, the Family
Court awarded the Wife interim alimony of $2,018 per month, a calculation that was
based, in part, on interest income earned on an inheritance valued at $450,000 at an
interest rate of 2.2 percent.
The Husband filed a motion for reargument on May 7, 2012. In the motion, the
Husband pointed out that when the Wife filed her Rule 16(c) financial report, she
disclosed that she actually had $629,359 in that account, as well as $5,115 in a different
account. The Husband requested, among other things, that the Family Court recalculate
the interim alimony based on this new amount, because the additional $184,474 would
generate more interest income. The Family Court denied the motion on May 30, 2012,
noting that “[t]his figure was not available to the Court at the time the Order was issued”
and that “the Court has no information regarding the source of these funds.”
On August 23, 2012, the Wife filed a rule to show cause petition because the
Husband stopped making his interim alimony payments. The Family Court held a
hearing on the final distribution of marital assets and the rule to show cause petition on
February 7, 2013. Both the Husband and the Wife testified at the hearing. During his
3
testimony, the Husband admitted that he was living with and paying all of the expenses
for his girlfriend, who had been out of work. These expenses included the mortgage,
utilities, and the cost of five cats.
The Family Court entered its final order on alimony and the division of marital
property on May 6, 2013. The Family Court divided the marital property 60/40 in favor
of the Wife, because the marital residence was a gift from the Wife’s parents and the
Husband had a higher income. The Family Court also determined that — despite her
sizeable inheritance — the Wife was dependent on the Husband, and ordered the
Husband to make alimony payments of $949 per month. The money from the inheritance
was in a money market account, so the Family Court used a 2.5 percent interest rate to
calculate that the Wife would receive $15,725 in interest income each year from the
inheritance, or about $1,310 per month.
The Family Court also held the Husband in contempt of the April 30, 2012 order
and ordered the Husband to pay the Wife the outstanding balance of $10,126. The
Family Court refused to retroactively modify the amount of the temporary alimony
award, even though it determined in the final order that the amount of the interim award
was more than the Husband was able to pay. Finally, the Family Court ordered the
Husband to pay the Wife’s attorney’s fees and costs associated with the April 30, 2012
4
order.1 The Husband filed a motion for reargument on May 16, 2013, which the Family
Court denied on July 22, 2013.
Marital Property
The Family Court has broad powers under 13 Del. C. § 1513 to distribute property
following a divorce, and under 13 Del. C. § 1512 to determine what, if any, alimony is to
be awarded.2 The usual standard of review of an alimony award is whether the Family
Court abused its discretion.3 The scope of the review “extends to a review of the facts
and law as well as to a review of the inferences and deductions made by the Trial
Judge.”4 The Family Court’s rulings “will not be disturbed on appeal if: (1) its findings
of fact are supported by the record; (2) its decision reflects due consideration of the
statutory factors found in section 1512; and (3) its explanations, deductions and
inferences are the product of a logical and deductive reasoning process.”5
In the Family Court, the Wife argued that the marital property should be divided
70/30 in her favor, and the Husband argued that the marital property should be divided
60/40 in his favor. The parties’ principal asset was their marital residence, which was
worth $221,000. The Wife’s father purchased the marital residence in 1990, and initially,
the deed was in the Wife’s parents’ names and the parties’ names. The Wife’s parents
transferred the property to the Wife and the Husband in 1996, and then it was deeded
1
Including the Wife’s motion for temporary alimony, her response to the Husband’s motion for
reargument, her response to the Husband’s motion to stay, her response to the Husband’s
application for certification of interlocutory appeal, and her petition for rule to show cause.
2
R. E. T. v. A. L. T., 410 A.2d 166, 168 (Del. 1979).
3
Gray v. Gray, 503 A.2d 198, 201 (Del. 1986) (citing R. E. T., 410 A.2d at 168).
4
Gray, 503 A.2d at 201 (quoting Wife (J.F.V.) v. Husband (O.W.V., Jr.), 402 A.2d 1202, 1204
(Del. 1979)).
5
Id.
5
jointly. The parties never had to make mortgage payments on the property. Because of
the Wife’s parents’ contribution to the purchase of this asset and because of the
Husband’s greater income, the Family Court determined that a fair and equitable division
of the marital property, including the marital residence, would be 60/40 in the Wife’s
favor.6
On appeal, the Husband argues that the Family Court abused its discretion and
should have divided the marital property equally. The Husband argues that the Wife’s
parents’ contribution of the marital residence was not a reason to depart from a 50/50
split because it was gifted to them both equally or, alternatively, that the Husband’s
higher income was not a reason to depart from a 50/50 split because of the Husband’s
inferior economic position once the Wife’s inheritance is taken into account.7
Section 1513 of Title 13 excludes certain property from the definition of marital
property that is subject to equitable distribution, but the statute does not exclude property
that was jointly acquired by gift.8 Because the home was jointly gifted to both the
6
The Family Court stated that “[g]iven the disparity in income, the Court finds that Husband
enjoys opportunity for greater earnings than Wife and, therefore, this factor favors granting Wife
a slightly larger percentage of the marital estate.” Family Court’s Decision on Alimony (May 6,
2013). The Family Court also stated that “the Court finds that it is fair that Wife receives a
disproportionate percentage of the former marital home in light of her family’s contribution.” Id.
7
The Husband does not cite any cases to support his position, but merely cites the statute
governing disposition of marital property, 13 Del. C. § 1513.
8
13 Del. C. § 1513(b) provides that: “For purposes of this chapter only, “marital property”
means all property acquired by either party subsequent to the marriage except:
(1) Property acquired by an individual spouse by bequest, devise or descent or by gift,
except gifts between spouses, provided the gifted property is titled and maintained in
the sole name of the donee spouse, or a gift tax return is filed reporting the transfer of
the gifted property in the sole name of the donee spouse or a notarized document,
executed before or contemporaneously with the transfer, is offered demonstrating the
nature of the transfer.
6
Husband and the Wife, the home was held as a tenancy by the entirety. Generally, upon
the dissolution of a marriage, a tenancy by the entirety devolves as a matter of law into a
tenancy in common between the former spouses, with each owning a one-half interest.9
But 13 Del. C. § 1513(a) provides that “upon request of either party, [the Family
Court shall] equitably divide, distribute and assign the marital property between the
parties without regard to marital misconduct, in such proportions as the Court deems
just.”10 “Under [13 Del. C. § 1513(c)], the Family Court is empowered to divide and
assign marital property regardless of how title is held . . . .”11 The Family Court is
instructed to consider “all relevant factors,” including eleven that are specifically listed.12
Thus, the Family Court is not required to award half of the marital property to each party,
and may determine that it is more equitable to divide the marital property in unequal
(2) Property acquired in exchange for property acquired prior to the marriage;
(3) Property excluded by valid agreement of the parties; and
(4) The increase in value of property acquired prior to the marriage.”
9
Mitchell v. Wilmington Trust Co., 449 A.2d 1055, 1059 (Del. Ch. 1982), aff’d sub nom.
Wilmington Trust Co. v. Mitchell, 461 A.2d 696 (Del. 1983); Wife W. v. Husband W., 307 A.2d
812 (Del. Super. 1973), aff’d., 327 A.2d 754 (Del. 1974).
10
13 Del. C. § 1513(a).
11
Husband R.T.G. v. Wife G.K.G., 410 A.2d 155, 159 (Del. 1979). 13 Del. C. § 1513(c)
provides that “[a]ll property acquired by either party subsequent to the marriage is presumed to
be marital property regardless of whether title is held individually or by the parties in some form
of co-ownership such as joint tenancy, tenancy in common or tenancy by the entirety.”
12
13 Del. C. § 1513(a). Those factors are: “(1) The length of the marriage; (2) Any prior
marriage of the party; (3) The age, health, station, amount and sources of income, vocational
skills, employability, estate, liabilities and needs of each of the parties; (4) Whether the property
award is in lieu of or in addition to alimony; (5) The opportunity of each for future acquisitions
of capital assets and income; (6) The contribution or dissipation of each party in the acquisition,
preservation, depreciation or appreciation of the marital property, including the contribution of a
party as homemaker, husband, or wife; (7) The value of the property set apart to each party;
(8) The economic circumstances of each party at the time the division of property is to become
effective, including the desirability of awarding the family home or the right to live therein for
reasonable periods to the party with whom any children of the marriage will live; (9) Whether
the property was acquired by gift, except those gifts excluded by paragraph (b)(1) of this section;
(10) The debts of the parties; and (11) Tax consequences.” Id.
7
percentages, so long as its decision is supported by the factors contained in § 1513(a) and
any other relevant factors.13
One of the factors listed in the statute that the Family Court is directed to consider
when it is deciding how to equitably distribute property is “[w]hether the property was
acquired by gift.”14 The statute does not provide any additional guidance about whether
or how to consider the identity or intent of the giver, or even whether the gift was given
jointly such that it immediately became marital property or separately such that it only
later became marital property through transmutation.15 When determining the equitable
distribution of marital assets, Delaware courts have given extra weight to the party whose
family contributed the gift, including by increasing the percentage of the asset that is
allocated to that party.16 Because the statute instructs the Family Court to consider “all
13
Wife (L. R.) v. Husband (N. G.), 406 A.2d 34, 35 (Del. 1979) (“To the extent that the Trial
Court’s order takes away any such interest and assigns it to the husband, then the Court’s reason
for doing so must be supported under the criteria stated in § 1513.”).
14
13 Del. C. § 1513(a)(9); ARNOLD H. RUTKIN, 3 FAMILY LAW AND PRACTICE § 37.04(3)(b)(ii)
(2006) (noting that “one factor that a court must consider in making equitable distribution is
whether property was acquired by gift”).
15
Transmutation is the process whereby parties can modify the status of the property they own
from separate property into marital property.
16
See, e.g., L.M. v. R.M., 2007 WL 3202334, at *8 (Del. Fam. Ct. Aug. 3, 2007) (“The Court
also took into consideration that Wife’s father provided the mortgage for the marital home and
ultimately forgave the principal on the mortgage. This significant gift now accounts for 78% of
the marital estate and is a major reason for Wife receiving 57% of said estate despite the parity in
the parties’ receipt of pension benefits.”) (internal citations omitted); Ercole v. Ercole, 1998 WL
918823, at *2 (Del. Fam. Ct. July 30, 1998) (“[S]ince the gifts were made to both Husband and
Wife, the Court will consider the $30,000 as jointly-owned marital property subject to equitable
division. Since the funds came from Husband’s family, however, the Court will take that fact
into consideration in allocating the percentage distribution.”) (internal citations omitted); Hanley
v. Hanley, 1993 WL 777367, at *3 (Del. Fam. Ct. Dec. 16, 1993) (“The important fact is that this
major contribution to the marital estate came from one of Husband’s parents. . . . Wife will now
share substantially in the equity in this property and receive a major benefit from this money
which she would receive no benefit from if it had it been strictly inherited, the Court balances
this significant financial contribution from Husband’s side of the family with Wife’s extra
8
relevant factors” and then explicitly instructs the Family Court to consider “whether the
property was acquired by gift,” and because Delaware courts have routinely made similar
considerations in the past, the Family Court did not abuse its discretion by considering
the fact that the marital residence was a gift from the Wife’s parents when determining
how to equitably divide the marital property. Although the Family Court should not
reflexively look behind the titling of a joint gift to spouses, here, the relevant factual
record supported the Family Court’s decision to make a moderate adjustment in favor of
the Wife because the gift seemed to have been motivated primarily by the desire of the
parents of the Wife to help her spend more time on her own parental duties and to help
their grandchildren live in better circumstances. And by making only a moderate
adjustment, the Family Court gave heavy weight to the joint nature of the gift.
Alimony Award
The Husband also argues that the Family Court should not have determined that
the Wife was entitled to alimony, because she does not meet the statutory requirement of
dependency. The Husband notes that the Wife possesses more than $629,000 in liquid
assets from an inheritance. The parties agree that the inheritance itself is not a marital
asset that should be equitably distributed, but they disagree about whether the inheritance
disqualified the Wife from dependency for alimony purposes. The Husband phrased this
issue as “not the amount or duration of alimony Wife may be entitled to but whether she
entitlement in the marital estate due to her inferior health condition.”); Voss v. Voss, 1992 WL
120270 (Del. Fam. Ct. Apr. 28, 1992) (“In allocating marital property, the Family Court is
required to give special consideration to property which one spouse has received in the form of
gifts or inheritance. . . . [T]he Family Court, in the exercise of discretion, may favor one party
by recognizing that certain property has its origin in a gift . . . .”) (internal citations omitted).
9
is entitled to any alimony at all, given the fact that she has a bank account that contains
$629,000 that is available to her for her own support.”17
In order to be awarded alimony, the Wife must demonstrate by a preponderance of
the evidence18 that she “[i]s dependent on the [Husband] for support” and that she
“[l]acks sufficient property, including any award of marital property made by the Court,
to provide for [her] reasonable needs.”19 The Wife bears the burden of proof to show that
she is dependent and that she is unable to support herself.20 Dependency is not defined
by the statute, but it “has been defined as a relative matter.”21 We have also interpreted
dependency to mean “more than a minimal existence or subsistence level.”22 The
meaning of dependency must be “measured against the standard of living established by
17
Husband’s Motion for Interlocutory Appeal (May 7, 2012).
18
Mart. v. Martin, 857 A.2d 1037, 1049 (Del. Fam. Ct. 2004); Gregory J. M. v. Carolyn A. M.,
442 A.2d 1373, 1375 (Del. 1982) (citing Husband B. v. Wife B., 295 A.2d 701 (Del. 1972))..
19
13 Del. C. § 1512(b) provides that: “A party may be awarded alimony only if he or she is a
dependent party after consideration of all relevant factors contained in subsection (c) of this
section in that he or she:
(1) Is dependent upon the other party for support and the other party is not
contractually or otherwise obligated to provide that support after the entry of a decree
of divorce or annulment;
(2) Lacks sufficient property, including any award of marital property made by the
Court, to provide for his or her reasonable needs; and
(3) Is unable to support himself or herself through appropriate employment or is the
custodian of a child whose condition or circumstances make it appropriate that he or
she not be required to seek employment.”
20
Ann Marie H. v. Joseph J.H., 456 A.2d 1233, 1234 (Del. 1983); ARNOLD H. RUTKIN, 2 FAMILY
LAW AND PRACTICE § 11.03(1)(a) (2006) (“The spouse seeking a maintenance award has the
burden of demonstrating the need for support. If a spouse cannot make an adequate showing of
need, support will be denied.”).
21
Adelaide A.G. v. Peter W.G., 458 A.2d 702, 705 (Del. 1983) (internal citation omitted) (noting
that “Wife’s assets (§ 1512(b)(2)) and employability (§ 1512(b)(3)) are clearly and expressly
relevant to a determination of her dependency. However, wife’s assets and income must then be
related to husband’s and their respective needs and goals of self-sufficiency.”); RUTKIN, at §
11.03(1) (“The relative economic circumstances of the parties and the ability to pay maintenance
are the primary considerations when setting interim spousal support.”).
22
Gregory J. M., 442 A.2d at 1375.
10
the parties during their marriage.”23 The Family Court found here that “[t]he parties
enjoyed a middle class standard of living during their marriage.”24
When setting an order for alimony, 13 Del. C. § 1512(c) instructs the Family Court
to consider “all relevant factors,” including “[t]he financial resources of the party seeking
alimony, including the marital or separate property apportioned to him or her, and his or
her ability to meet all or part of his or her reasonable needs independently.”25 The
Family Court is also instructed to consider “[a]ny other factor which the Court expressly
finds is just and appropriate to consider.”26 Therefore, “[e]vidence that the spouse
23
Id. (quoting Husband J. v. Wife J., 413 A.2d 1267, 1269 n.2 (Del. Fam. Ct. 1979)).
24
Family Court’s Decision on Alimony (May 6, 2013), B218 at *14.
25
13 Del. C. § 1512(c)(1); see also Martin v. Martin, 857 A.2d 1037, 1049 (Del. Fam. Ct. 2004)
(“In making that threshold determination of dependency, the Court views the petitioning party’s
circumstances in light of the specific factors set forth in Title 13, Section 1512(c). The first (1st)
of those factors involves a review by the Court of the financial resources of the party seeking
alimony, as well as their ability to meet all or part of their reasonable needs independently.”).
26
13 Del. C. § 1512(c) provides that: “The alimony order shall be in such amount and for such
time as the Court deems just, without regard to marital misconduct, after consideration of all
relevant factors, including, but not limited to:
(1) The financial resources of the party seeking alimony, including the marital or
separate property apportioned to him or her, and his or her ability to meet all or
part of his or her reasonable needs independently;
(2) The time necessary and expense required to acquire sufficient education or
training to enable the party seeking alimony to find appropriate employment;
(3) The standard of living established during the marriage;
(4) The duration of the marriage;
(5) The age, physical and emotional condition of both parties;
(6) Any financial or other contribution made by either party to the education,
training, vocational skills, career or earning capacity of the other party;
(7) The ability of the other party to meet his or her needs while paying alimony;
(8) Tax consequences;
(9) Whether either party has foregone or postponed economic, education or other
employment opportunities during the course of the marriage; and
(10) Any other factor which the Court expressly finds is just and appropriate to
consider.”
11
seeking support has independent resources adequate to maintain his or her lifestyle can
demonstrate the absence of a need for maintenance.”27
Section 1512(c) does not define what “financial resources” are to be considered
when determining dependency, beyond broadly stating that it includes “the marital or
separate property apportioned to him or her.” This includes an inheritance, which is
defined as separate property under § 1513(b).28 Nevertheless, the Family Court decided
in this case that it would not require the Wife to dissipate the inheritance, and therefore it
would not count the principal of the inheritance toward the Wife’s financial resources.
Instead, the Family Court only included the interest income from the inheritance toward
the Wife’s financial resources when calculating whether the Wife was dependent.29 In
doing so, the Family Court committed legal error by adding an exception to the statute
that does not exist.
The fact that inheritances were carved out of the marital property subject to
equitable division in § 1513(b) demonstrates that the General Assembly treats
inheritances differently when it so desires. But the General Assembly did not craft any
provisions that would remove certain assets from the “financial resources” that should be
included when calculating alimony under § 1512. As other cases have recognized,
Delaware courts may consider “both the principal and income of such inheritances under
various provisions of § 1512(c) in fixing the amount of alimony” because § 1512(b)(2)
27
RUTKIN at § 11.03(1)(a)(iii).
28
13 Del. C. § 1513(b) provides that: “For purposes of this chapter only, ‘marital property’
means all property acquired by either party subsequent to the marriage except:
(1) Property acquired by an individual spouse by bequest, devise or descent or by gift . . . .”
29
Family Court’s Decision on Alimony (May 6, 2013).
12
and (c)(1) do not draw a distinction between principal and income.30 Indeed, Delaware
courts have included the full value of an inheritance when calculating whether a party is
dependent and entitled to receive alimony.31 Moreover, Delaware courts have not
excluded the full value of an inheritance when calculating a party’s ability to pay
alimony.32
The relationship between the two provisions further illustrates that it is important
not to extend the exception for inheritances contained in the provisions regarding
distribution of marital property in § 1513 to the alimony calculations in § 1512.
“Generally equitable distribution should be considered [before alimony]. It would be
difficult to determine the needs of the recipient-spouse or child and the supporting
spouse’s ability to pay before a tentative equitable distribution award has been
determined.”33 The $600,000 inheritance was not equitably distributed because it was not
considered to be marital property subject to division under § 1513. In other words, the
Husband already was not entitled to receive a 50/50 share of the inheritance equal to
30
In re Marriage of Tweedale v. Tweedale, 1996 WL 861492 (Del. Fam. Ct. Dec. 17, 1996),
aff’d sub nom. Tweedale v. Tweedale, 703 A.2d 645 (Del. 1997) (citing Grant v. Grant, File No.
CN88-9362, Wakefield, J. (Del. Fam. Ct. Dec. 15, 1989)).
31
T.L. D. v. K.J.D., 2007 WL 4793914 (Del. Fam. Ct. June 27, 2007) (noting that the “Wife has
liquid assets available to her to assist her with her monthly needs” that were partially from an
inheritance, despite Wife’s argument “that she should not have to use her inherited and
premarital funds to pay for day-to-day living expenses”); In re Marriage of Suloff, 1996 WL
798763, at *2 (Del. Fam. Ct. Sept. 17, 1996) (where Wife used inheritance to purchase a sports
car, the court noted that “[h]ad Wife . . . purchased a car for $11,000 (rather than one for almost
$21,000), she would have $10,000 or approximately $278 per month over the three years during
which she is eligible for alimony to (in part) meet her claimed expenses of $1,108 per month”
and counted that $278 toward the wife’s income when determining dependency).
32
D.E. v. D.E., 2012 WL 4857191, at *8 (Del. Fam. Ct. Aug. 17, 2012) (recognizing that an
inheritance could be used to pay alimony obligations and including it in the analysis of whether a
party could pay alimony under § 1512(b)(7)).
33
ARNOLD H. RUTKIN, 3 FAMILY LAW AND PRACTICE § 38.06.
13
$300,000, or even a 60/40 share equal to $240,000 — money that the Husband could
have used to pay alimony. But for the Family Court to extend that exclusion of the
inheritance through the alimony calculations performed under § 1512 would essentially
apply the exclusion a second time, because that inheritance also would not be counted
toward the Wife’s financial resources, which she could use to support herself.
Moreover, when dependency is examined as a relative matter, the Wife appears to
have sufficient property to meet her needs independent of alimony from the Husband.
The Wife earns an annual income of $16,700 and the Family Court found that she had
annual expenses of approximately $36,050. A 50-year-old woman is expected to live for
33 years, or until age 83.34 If the Wife, who is currently age 50, withdrew $19,350 per
year from her inheritance to make up the difference, the principal would last over 32.5
years, even if she earned no interest at all. With interest included, even at only the 2.5
percent interest it is currently earning in a money market account, her inheritance would
last even longer. It would be inequitable to require the Husband to pay alimony to the
Wife while those assets remain untouched. This is particularly true where those alimony
payments put the Husband in a situation where he can barely cover his own expenses.35
The statutory rationale for considering the full amount of the inheritance — not
merely the interest income —in the dependency calculation is amplified by the record in
this case, where the inheritance consists of liquid assets in a money market account. If
34
Actuarial Life Expectancy Table, SOCIAL SECURITY ADMINISTRATION,
http://www.ssa.gov/OACT/STATS/table4c6.html (2009).
35
Family Court’s Decision on Alimony (May 6, 2013), (noting that “[a]n alimony award set at
this amount leaves Husband with no excess income; however, it does not require Husband to
suffer a monthly shortfall for his expenses”).
14
the inheritance had been set up as a trust, under terms where the Wife was only to receive
the interest income during her lifetime, then it would be logical not to include the
principal in the dependency calculation, because the Wife would not be able to access it.
But here, the Wife has ready access to over $629,000 in cash.
The Family Court improperly excluded any consideration of the principal of the
inheritance from the Wife’s financial resources. The complete exclusion of those
substantial funds from the calculation of the Wife’s dependency was contrary to the
alimony statute and constituted an error of law. Therefore, this matter must be remanded
to the Family Court for further proceedings in accordance with this Court’s opinion. 36
Contempt Sanction
On April 30, 2012, the Family Court ordered the Husband to make interim
alimony payments of $2,018 to the Wife. The Husband paid the full amount from May
2012 through July 2012. After that time, the Husband paid $1,00037 in some months, but
nothing for at least three months.38 On August 23, 2012, the Wife filed a rule to show
cause petition. The Family Court held a hearing on both the final distribution of marital
assets and the rule to show cause petition on February 7, 2013. The Husband claimed
that he could not afford to make the payments. But during his testimony, the Husband
admitted he was living with and paying all of the expenses for his girlfriend, who had
36
If the Family Court determines that the Wife is not dependent on the Husband on the basis of
her substantial inheritance, then the interest rate earned on the inheritance is no longer a relevant
issue in the case. The interest rate was only used to calculate the Wife’s income for the purpose
of determining her monthly shortfall, which was then used to calculate the amount of alimony
the Husband would be required to pay.
37
These months included August 2012, September 2012, November 2012, and January 2013.
38
These months included October 2012, December 2012, and February 2013.
15
been out of work. These expenses included the mortgage, utilities, and the cost of five
cats. The Family Court issued a final order on May 6, 2013, that found the Husband to
be in contempt and determined that the Husband owed the wife $10,126 in total.
The Husband argues that he should not be held in contempt because he was not
able to pay the full amount of the alimony payments. The Husband notes that the final
alimony order determined that he was only able to pay $948 per month, or a total of
$8,532. Because the Husband paid more than $8,532 in interim alimony, he argues that
he was not in contempt of the order. The Husband also argues that the Family Court
should have retroactively modified the interim alimony order to match the final alimony
order, so that he would not be in contempt of the order.
This Court has explained that “[t]hree criteria must be met to support a finding of
contempt: 1) there must exist a valid . . . order; 2) the [respondent] must have had the
ability to abide by the valid . . . order; and, 3) the [respondent] must have, in fact,
disobeyed the . . . order. . . . [The petitioner] must show a violation . . . by clear and
convincing evidence.”39 In this case, it is undisputed that the Family Court entered an
interim alimony order on April 30, 2012. It also is undisputed that the Husband failed to
make sufficient alimony payments to the Wife as of the date of the hearing. Thus, the
only question is whether the Husband had the ability to abide by the order. This Court
39
Sparks v. Matthews, 2013 WL 6870007 at *1 (Del. Dec. 31, 2013) (quoting Watson v. Givens,
758 A.2d 510, 512 (Del. Fam. Ct. 1999) (citations omitted)).
16
has noted that “inability to pay may be a defense, but that the respondent has the burden
of proving his inability to pay.”40
Furthermore, the Husband’s argument that the interim order was incorrect because
the payments were too high is unavailing. “[T]he court will not listen to an excuse for the
contemptuous action based upon an argument that the order in question was imperfect or
erroneous.”41 In other words, the Husband cannot simply stop making payments because
he thought that the payments were too much—especially where he stopped making
payments before the Family Court made a final determination of the amount that would
be due.
Rather, if he genuinely could not pay, the Husband should have informed the court
of that, made an appropriate motion to modify, and paid as much as he was able. The
Husband appears to have met part of this responsibility by moving to modify the interim
order, but was unable to get that motion considered by the Family Court before the
hearing on the final award itself.42 The Husband also seems to have tried to pay what he
40
Id.
41
Mayer v. Mayer, 132 A.2d 617, 621 (Del. Ch. 1957) (“No person may with impunity disregard
an order of the court having jurisdiction over the subject matter and of the parties.”).
42
In addition to filing a motion for reargument and an interlocutory appeal to the Supreme Court,
both of which were denied, the Husband requested a hearing before the Family Court to
reconsider the amount of alimony on June 12, 2012, during the period of time he was still paying
the required amount. The Family Court scheduled a hearing for Sept. 5, 2012. But the Wife
filed a motion to remove that hearing because a separate ancillary hearing had been scheduled to
determine the final distribution of assets and final award of alimony on Dec. 11, 2012. The court
granted the Wife’s motion, noting that it would consider the Husband’s request to retroactively
modify the alimony order at the December hearing. The Wife then requested a continuance,
which the court also granted. The Husband’s motion to modify the alimony award was thus not
considered until Feb. 7, 2013, when the ancillary hearing took place. By that point, the Husband
had ceased to maintain his alimony obligations: he made payments of $1,000 in August,
September, November, and January, but no payments in October, December, and February.
17
could for some time after arguing to the Family Court that he could not afford to pay the
full amount the Family Court ordered as interim monthly alimony.
But rather than continue to pay what he could, the Husband failed to pay anything
at all for three months. Although a different judge might have concluded otherwise, the
Family Court was within its discretion to conclude that this self-help was inconsistent
with the Husband’s responsibilities to honor a court order. Accordingly, the Family
Court properly exercised its discretion when it found that the Husband was in contempt
of the interim alimony order, refused to retroactively modify the award, and required the
Husband to pay the Wife the overdue payments.
The record reflects that the Family Court ordered the Husband to pay the $10,126
in interim alimony that was owed to the Wife. The Husband argues that this sanction for
civil contempt was an impermissible punitive fine. This Court has explained that
“whether a contempt is civil or criminal turns on the ‘character and purpose’ of the
sanction involved.”43 “[A] contempt is civil in character when ‘instituted to preserve and
enforce the rights of private parties to suits, and to compel obedience to orders and
decrees made to enforce the rights and administer the remedies to which the court has
found them to be entitled.’”44 Here, the sanction was not a fine but was the amount due
to the Wife under the interim alimony order. Contrary to the Husband’s arguments, the
Although the court did modify the alimony award at the February hearing, it did not grant
retroactive relief to the Husband.
43
DiSabatino v. Salicete, 671 A.2d 1344, 1349 (Del. 1996) (quoting United Mine Workers v.
Bagwell, 512 U.S. 821 (1994)).
44
City of Wilmington v. Gen. Teamsters Local Union 326, 321 A.2d 123, 125 (Del. 1974); see
also DiSabatino, 671 A.2d at 1350 (quoting United Mine Workers v. Bagwell, 512 U.S. 821
(1994) (“A fine is ‘considered civil and remedial’ if it either ‘coerce[s] the defendant into
compliance with the court’s order, [or] ... compensate[s] the complainant for losses sustained.’”).
18
sanction was not designed to “punish” him for his failure to pay, but rather, it was only
intended to compel him to obey the order, make the payments, and bring the account
current.
Attorney’s Fees Award
The Family Court ordered the Husband to pay the Wife’s attorney’s fees and costs
associated with the April 30, 2012 interim alimony order.45 The Husband argues that the
Family Court abused its discretion when it ordered him to pay the Wife’s legal fees
because it did not properly consider the Wife’s financial resources, including her
substantial inheritance.
The Family Court has broad discretion in deciding whether to award attorney’s
fees and costs.46 13 Del. C. § 1515 provides:
The Court from time to time after considering the financial resources of
both parties may order a party to pay all or part of the cost to the other
party of maintaining or defending any proceeding under this title and for
attorneys’ fees, including sums for legal services rendered and costs
incurred prior to the commencement of the proceeding or after the entry of
judgment.47
The purpose of §1515 is “to provide a financially disadvantaged spouse with the financial
resources to prosecute or defend a [divorce] action.”48 The Family Court will consider
whether a party’s excessively litigious conduct had an adverse financial effect on the
45
Including the Wife’s motion for temporary alimony, her response to the Husband’s motion for
reargument, her response to the Husband’s motion to stay, her response to the Husband’s
application for certification of interlocutory appeal, and her petition for rule to show cause.
46
Julin v. Julin, 787 A.2d 82, 84 (Del. 2001); Wheeler v. Wheeler, 636 A.2d 888, 892 (Del.
1993); Lynam v. Gallagher, 526 A.2d 878, 885 (Del. 1987); Gray v. Gray, 503 A.2d 198, 204
(Del. 1986).
47
13 Del. C. § 1515.
48
Mays v. Mays, 1988 WL141148, at *2 (Del. Nov. 23, 1988) (citing Gray, 503 A.2d at 204).
19
other party.49 Family Court Civil Rule 88 also permits the Family Court to assess a party
the reasonable counsel fees of any other party “where there is a legal or equitable basis
therefor.”50 An award of attorney’s fees and costs “must not be made arbitrarily and must
be supported by the evidence.51
In this case, the Family Court ordered the Husband “to pay Wife’s counsel fees
and court costs associated with Wife’s requests for interim alimony and enforcement
thereof.”52 But in that same paragraph, the Family Court stated: “[a]s to the balance of
Wife’s legal fees, she has substantial assets out of which she can pay those expenses.”53
In Mays, this Court upheld an award of attorney’s fees because the Family Court had
determined that the “excessively litigious conduct” of one spouse had an “adverse
financial effect” on the other.54 In this case, as in Mays, the Family Court looked to the
litigious aspects of the Husband’s conduct that led to the finding of contempt for failing
to pay interim alimony55 but determined that the Husband and Wife would pay their own
attorney’s fees for the remaining aspects of the litigation.56 This reasoning reflects that
the Family Court properly exercised its discretion in awarding the Wife a portion of her
attorney’s fees and costs.
49
Id.
50
Fam. Ct. Civ. R. 88 (“In every case where there is a legal or equitable basis therefor the Court
may assess a party the reasonable counsel fees of any other party.”).
51
Lynam, 526 A.2d at 885.
52
Family Court’s Decision on Alimony (May 6, 2013), B218 at *21.
53
Family Court’s Decision on Alimony (May 6, 2013), B218 at *21.
54
Mays v. Mays, 1988 WL 141148, at *2 (Del. Nov. 23, 1988).
55
Id.
56
Id.
20
Conclusion
The judgment of the Family Court is affirmed, in part, and reversed, in part. This
matter is remanded for further proceedings in accordance with this opinion.
21