Edward J. Harshman v. Sheila C. Harshman , 2017 Me. LEXIS 61 ( 2017 )

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2017 ME 60 Docket: Kno-16-460
Argued: March 3, 2017
Decided: April 4, 2017
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
EDWARD J. HARSHMAN
v.
SHEILA C. HARSHMAN
GORMAN, J.
[¶1] Edward J. Harshman appeals from a divorce judgment entered in
the District Court (Rockland, Sparaco, J.) on his complaint against Sheila C.
Harshman. Edward challenges the court’s exclusion of evidence at trial as
well as its calculation of the parties’ respective incomes for child support and
spousal support purposes. We affirm the judgment.
I. BACKGROUND
[¶2] The court made the following findings, which are supported by
competent record evidence. Edward and Sheila were married in 2000. They
have two minor children.
[¶3] Edward has been a licensed physician since 1999. He has never
been board-certified and has no admitting privileges to any hospitals, but has
2
maintained his own medical practice for most of his career. While the divorce
was pending, Edward closed his medical practice, moved to Augusta, and
began working as an independent contractor performing health screenings.
He works two five-day weeks per month, but is physically able to work
full-time as a practicing physician.
[¶4] Edward has earned between $0 and $78,375 annually through his
employment as a physician. Although Edward states that he expects to earn
$44,000 per year in the coming years, Department of Labor statistics estimate
the average annual income for general medical practitioners in the Augusta
area at $186,240. Edward was voluntarily underemployed throughout the
marriage, and on a continuing basis, because “he has not needed to [work]
given the substantial income that he receives from family trusts.” He has long
received $6,000 to $9,000 per month or more in trust distributions; Edward
received more than $100,000 from the trusts in 2014 and again in 2015.
Although Edward does not have a right to demand distributions, his sister is
the trustee, and every time he has requested a distribution, she has provided
it. Edward and the family have relied on the trust distributions throughout
the marriage.
3
[¶5] The court found that Edward “has been deliberately attempting to
keep his income low and his expenses high during the pendency of the
divorce” and has “engaged in a concerted effort to manipulate and/or mislead
[Sheila] as to the resources and income available to him,” and that Edward
and his sister have colluded to artificially “adjust[]” the appearance of
Edward’s income stream to avoid spousal support. In 2015, the year that
Edward filed the divorce complaint, Edward did not request trust funds.
Edward also attempted to characterize the trust distributions as repayments
on a loan he made to the trust, a representation not supported by his tax
returns, financial statements, or logic. Edward’s trust income has not
decreased and is unlikely to do so, but if it did decrease, Edward could earn
more money through employment. The court calculated Edward’s income to
be $170,000 per year.
[¶6] With Edward’s agreement, Sheila has historically provided and
continues to provide full-time homeschooling for the parties’ children, and
therefore remains unavailable to work outside the home. Sheila has no
income other than the $5,700 per year generated by the rental of her
nonmarital property on Nantucket.
4
[¶7] Edward instituted divorce proceedings against Sheila on June 18,
2015. See 19-A M.R.S. § 901 (2016). Sheila counterclaimed for divorce.
[¶8] The court conducted a hearing on the divorce on June 1, 2016, and
August 5, 2016. On the first day of hearing, Edward moved for the admission
of various documents relating to his family trusts. In response to Sheila’s
objection, the court excluded those documents from admission at trial as
hearsay.
[¶9] On July 26, 2016, before the second hearing date, the court
conducted a conference on Edward’s request to discuss the admission of the
previously-excluded trust documents, this time on the ground that he had a
certification that rendered the documents self-authenticating “[c]ertified
domestic records of a regularly conducted activity” pursuant to M.R. Evid.
902(11).1 The court again excluded the documents, this time “in the interests
of justice” pursuant to Rule 902(11).
1 Maine Rule of Evidence 902(11) provides that
[t]he following items of evidence are self-authenticating; they require no extrinsic
evidence of authenticity in order to be admitted:
. . . .
(11) Certified domestic records of a regularly conducted activity. The
original or a copy of a domestic record that meets the requirements of Rule
803(6)(A)–(C), as shown by a certification of the custodian or another qualified
person that complies with a statute or a rule prescribed by the Maine Supreme
Judicial Court. Before the trial or hearing, the proponent must give an adverse party
5
[¶10] On the second day of hearing, Edward’s sister appeared and
testified, contrary to Edward’s representations throughout the litigation that
his sister would not attend the hearing. During her testimony, Edward sought,
for the third time, admission of the voluminous trust documentation.2 Sheila
did not object to testimony about the trust, or to any trust documents that had
been timely disclosed, but did object to the admission of underlying trust
financial data that was requested in discovery but had never been provided.
The court excluded those late-provided portions of the trust documents as a
discovery sanction.
[¶11] By decision dated September 2, 2016, the court adopted the
parties’ agreement as to parental rights and contact and therefore awarded
Sheila sole parental rights to the children. In addition, the court divided the
parties’ assets and debts, and calculated Edward’s child support and spousal
support obligations.3 Edward appeals.
reasonable written notice of the intent to offer the record—and must make the
record and certification available for inspection—so that the party has a fair
opportunity to object to the authenticity of the record or on the basis of hearsay. In
the event of an adverse party’s objection to a record offered under this paragraph,
the court may in the interests of justice refuse to accept the certification under this
paragraph and require the party offering the record to provide appropriate
foundation by other evidence.
2 The court noted that Edward sought to introduce “four inches of documents.”
3 In addition, the court stated that Edward would be ordered to contribute toward Sheila’s
attorney fees and costs because Edward is better able to absorb the costs of litigation and because
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II. DISCUSSION
[¶12] The calculation of each spouse’s income is a key component in
the court’s consideration of child support and spousal support issues in a
divorce matter. 19-A M.R.S. § 951-A(5)(E) (2016) (stating that one of the
factors the court “shall consider” in awarding spousal support is “[t]he income
history and income potential of each party”); 19-A M.R.S. § 2006(1) (2016)
(providing that child support is calculated relative to each party’s annual
gross income). Here, the court found that Edward’s annual income is
$170,000 and Sheila’s is $5,700. Contrary to Edward’s contentions, there was
ample record evidence to support both findings. See Efstathiou v. Aspinquid,
Inc., 2008 ME 145, ¶¶ 48, 52, 956 A.2d 110 (stating that we review the court’s
findings of fact in its income determinations for clear error, and we will not
disturb those findings if there is any competent evidence in the record to
support them).
his actions had driven up the costs of the litigation. See 19-A M.R.S. § 105 (2016); Conlogue v.
Conlogue, 2006 ME 12, ¶ 24, 890 A.2d 691. Because the court has not yet issued a final order fixing
any amount of fees and costs, however, Edward’s challenge to that portion of the court’s judgment
is not ripe for our review. See Ne. Inv. Co., Inc. v. Leisure Living Cmtys., Inc., 351 A.2d 845, 848
(Me. 1976).
We note that the trial court retained jurisdiction to award attorney fees notwithstanding the
pending appeal. See M.R. App. P. 3(b)(2); M.R. Civ. P. 54(b)(3). The court also could have awarded
costs while the appeal was pending if we had granted leave for it to do so, see M.R. App. P. 14(c);
M.R. Civ. P. 54(d); Flaherty v. Muther, 2011 ME 32, ¶ 90, 17 A.3d 640, but neither party requested
the leave. Both such actions would have best served the interest of judicial economy in that they
would have allowed our consideration of the entire matter, rather than creating a potentially
piecemeal appeal process.
7
[¶13] The court’s calculation of Sheila’s income is supported by the
evidence of the amount she has received from the rental of her Nantucket
property—an amount Edward does not dispute. We discern no error or abuse
of discretion in the court’s denial of Edward’s request to impute additional
income to Sheila. See Carolan v. Bell, 2007 ME 39, ¶ 19, 916 A.2d 945. Sheila
is the full-time teacher for the parties’ homeschooled children, a role she and
Edward agreed that she would fulfill. Thus, the court reasonably declined to
find that Sheila is voluntarily unemployed. On this record, the court also
appropriately refused to speculate as to what income Sheila might be able to
obtain by selling her nonmarital property and investing the proceeds. See
Warner v. Warner, 2002 ME 156, ¶ 48, 807 A.2d 607 (stating that “spousal
support awards may not be based on speculative predictions of future
economic circumstances” and holding that such calculations are “unduly
speculative” when “there is no evidence from which the court could determine
the likely value” of property); see also Steeves v. Bernstein, Shur, Sawyer &
Nelson, P.C., 1998 ME 210, ¶ 27, 718 A.2d 186; Sweeney v. Sweeney, 534 A.2d
1290, 1291 (Me. 1987); cf. 19-A M.R.S. § 2007(3)(N) (2016) (allowing, but not
requiring, the court to impute income to a parent based on ownership of
“nonincome-producing” assets in some circumstances).
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[¶14] As to Edward’s income, the court’s calculation is supported by the
testimony and exhibits of an accountant hired by Sheila as an expert witness.
We are not persuaded by Edward’s contentions that the accountant’s
testimony was flawed by various computation errors; such alleged errors go
to the weight and credibility of the evidence, and were therefore matters for
the trial court’s determination alone. See Sloan v. Christianson, 2012 ME 72,
¶ 33, 43 A.3d 978 (“The trial court is not bound to accept any testimony or
evidence as fact, and determinations of the weight and credibility to assign to
the evidence are squarely in the province of the fact-finder.”). Edward
cross-examined the accountant extensively about the asserted errors; the
court was aware of Edward’s contentions on these points and simply was not
persuaded by them.
[¶15] Edward’s argument that his trust fund distributions do not
qualify as income is similarly misplaced. Title 19-A M.R.S. § 2001(5)(A)
(2016) expressly defines “[g]ross income” to include trust fund distributions:
“Gross income includes income from an ongoing source, including, but not
limited to, salaries, wages, commissions, royalties, bonuses, dividends,
severance pay, pensions, interest, [and] trust funds . . . .” Edward argues that
because he receives discretionary disbursements to which he has no legal
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entitlement, and because the trust distributions are unlikely to continue given
evidence that the trusts have lost ninety percent of their value, those amounts
do not constitute an “ongoing source” within the meaning of section
2001(5)(A). We disagree.
[¶16] The record contains ample support for the court’s finding that
Edward’s trust distributions are “ongoing” pursuant to section 2001(5)(A),
namely, the historical evidence that, despite his medical and business degrees,
Edward has supported his family not by his employment, but by utilizing the
trust distributions that he received throughout the marriage. Although the
court found that Edward “does not have an absolute right to demand a
distribution,” the court also relied on the evidence that Edward was given a
trust disbursement every time he requested one. Given the duplicitous
manner in which Edward and his sister conducted themselves during the
proceedings, the court did not credit Edward’s or his sister’s testimony
regarding the nature of prior trust distributions and the likelihood of future
trust distributions, nor, indeed, any of the evidence on which Edward relied to
argue that his annual income is considerably less than that found. See Sloan,
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2012 ME 72, ¶ 33, 43 A.3d 978. This was the court’s prerogative, and we do
not disturb the supported findings on this issue.4 See id.
[¶17] Nor did the court err by excluding the voluminous
documentation about the family trusts that Edward argues would have
contravened the court’s findings regarding his income and supported his
assertions about the nature of the trust’s payments to him and the future
viability of the trusts. The court is vested with substantial authority to
sanction a party for failure to comply with a discovery order, including by
excluding from evidence any documents that are withheld or delayed in
discovery. M.R. Civ. P. 37(b)(2)(B); Camp Takajo, Inc. v. SimplexGrinnell, L.P.,
2008 ME 153, ¶ 13, 957 A.2d 68. In fashioning a discovery sanction, “the court
should take into account the purpose of the specific rule at issue, the party’s
conduct throughout the proceedings, the party’s bona fides in its failure to
comply, prejudice to other parties, and the need for the orderly administration
4 In addition, although the court found that Edward is voluntarily underemployed, the court did
not impute any income to him on that basis. See 19-A M.R.S. § 2001(5)(D) (2016) (“Gross income
may include the difference between the amount a party is earning and that party’s earning capacity
when the party voluntarily becomes or remains unemployed or underemployed, if sufficient
evidence is introduced concerning a party’s current earning capacity.”). Thus, we need not consider
Edward’s challenge to the court’s finding that he is voluntarily underemployed, and we focus
instead on the court’s calculation of Edward’s actual income from employment and trust fund
distributions. To the extent the court imputed income to him based on his earning capacity if the
trust funds become no longer available in the future, the court’s findings are supported by
competent record evidence and we discern no abuse of discretion in that determination. See
Carolan v. Bell, 2007 ME 39, ¶ 19, 916 A.2d 945.
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of justice.” Baker’s Table, Inc. v. City of Portland, 2000 ME 7, ¶ 17, 743 A.2d
237. “Because the trial court must weigh these factors and is in a unique
position to understand the effects of the failure to comply, both general and
specific, we review the court’s decisions to impose sanctions for abuse of
discretion.” Id.; see Harris v. Soley, 2000 ME 150, ¶ 11, 756 A.2d 499.
[¶18] Here, the court reasonably excluded the proffered “four inches of
documents” on the ground that they were voluminous and contained detailed
financial data, yet were not disclosed to Sheila until the week before the
second of two trial dates (and well beyond the discovery deadline), despite
Sheila’s timely discovery requests. In doing so, the court specifically
addressed the factors relevant to a discovery sanction, including Edward’s
repeated attempts to seek the admission of the same information, the fact that
the trial would have been completed before his late disclosure but for
accommodations to Edward’s schedule, Edward’s various attempts to mislead
the court, the amount of documentation and the detailed nature of the
evidence at issue, and Edward’s poor excuses for not having produced the
documents earlier.5 In addition, contrary to Edward’s contention, Sheila did
argue that the admission of the documents at that time would cause her
5 Edward’s counsel argued that the documents were not timely disclosed because “they’re not
under our control” and because “some of the [trusts’] losses were a little embarrassing and [there
was] just a need for privacy in general.”
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prejudice, although the prejudice to a party by the admission of “four inches of
documents” containing detailed financial data that were not disclosed until
one week before the second day of a trial seems self-evident. Edward was also
allowed to present other evidence about the trust that he had timely
disclosed, as well as his sister’s testimony as to matters within her personal
knowledge—notwithstanding that he had represented to the court and to
Sheila that his sister would not be appearing as a witness. In these
circumstances, we discern no abuse of discretion in the court’s exclusion of
the trust financial records as a discovery sanction.
The entry is:
Judgment affirmed.
Stephen T. Hayes, Esq. (orally), Hayes Law Offices, Augusta, for appellant
Edward J. Harshman
Sarah Irving Gilbert, Esq. (orally), Elliott MacLean Gilbert & Coursey, LLP,
Camden, for appellee Shiela C. Harshman
Rockland District Court docket number FM-2015-113
FOR CLERK REFERENCE ONLY