DocketNumber: No. 13-P-864
Citation Numbers: 85 Mass. App. Ct. 518
Judges: Agnes
Filed Date: 6/25/2014
Status: Precedential
Modified Date: 6/25/2022
The Alimony Reform Act of 2011 (Act)
The husband appeals from an amended judgment of divorce nisi entered August 30, 2012, by the Probate and Family Court, excluding the wife’s interest in certain real property from the marital estate, and establishing a “self-modifying” alimony order. The husband contends that the alimony order does not comport with the guidelines of the Act, and that the exclusion of the wife’s property from the divisible estate was plainly wrong. For the reasons that follow, we conclude it is necessary to vacate the amended judgment in part and remand for further proceedings.
Background, a. Evidence. The parties married on September 18, 1988, and lived together until December 28, 2009. Two sons, both in college at the time of trial, were bom of the over twenty-year marriage. In 1982, the husband graduated from dental school and joined his father’s practice, becoming an equal partner pursuant to a “buy-in” agreement prior to the marriage. The wife was a homemaker and primary caretaker of the children, while the husband was the sole wage earner. Although she earned a bachelor’s degree and was briefly employed outside the home, the wife was laid off in early 1989 and has not been otherwise employed since before her first son was born. During the marriage, the family lived a “comfortable” lifestyle, with the husband working full time as a dentist and the wife tending to the home and children and volunteering to support their various activities, including sports, Cub Scouts, and private-school events.
In 1996, the wife acquired by inheritance a one-third share in Pond View Associates, a real estate partnership with her two siblings which holds title to a property in Chatham on Cape
In 1997, the husband’s father retired and gifted to the husband his one-half interest in the dental practice,
b. Judge’s findings of fact. The judge issued his findings and memorandum of decision on May 15, 2012.
The judge also found that the wife’s interest in the Chatham property “was never relied upon as a financial resource by the parties during the marriage,” and that its “impact on the taxes owed was negligible.” Thus, the interest in the Chatham property was assigned wholly to the wife and did not form part of the divisible marital estate.
c. Judge’s rulings. The trial judge awarded the husband the stipulated value of his interest in the dental practice, which was $476,000. The wife was awarded her interest in Pond View Associates. The judge ordered the sale of the marital home, with the first $238,000 in net proceeds going to the wife (representing a fifty percent share of the husband’s interest in the dental practice), and the remainder divided evenly between the spouses.
The husband was ordered to pay base alimony in the amount of $8,500 per month, and “additional alimony equal to thirty (30%) percent of his gross income in excess of $250,000.00, from all sources . . . payable quarterly.” To facilitate this “self-modifying” alimony order, the husband was directed to provide quarterly documentation of his income to the wife. Under the terms of the order, alimony is to. continue until the first of four events: the wife’s remarriage or cohabitation; the wife’s death; the husband’s death; or the “[hjusband’s retirement as defined in the Act. . ., as it may be amended.”
d. Alimony Reform Act of 2011.
Three aspects of the Act are at issue in the instant case. First is the statutory formula providing that “the amount of alimony should generally not exceed the recipient’s need or [thirty] to [thirty-five] per cent of the difference between the parties’ gross incomes established at the time of the order being issued,” G. L. c. 208, § 53(¿>), and the grounds for deviation from that
Discussion. Under prior law, St. 1974, c. 565, which was in effect (with occasional amendments) from October 19, 1974, to March 1, 2012, an award of alimony had to be based on the so-called mandatory and discretionary factors set forth in G. L. c. 208, § 34, although there was recognition that judges had “a large measure of discretion.” Rice v. Rice, 372 Mass. 398, 400 (1977). See Bianco v. Bianco, 371 Mass. 420, 422-423 (1976) (confirming that under 1974 law, judges had broad discretion provided that they considered all statutory factors and made required findings of fact). Alimony and property division were closely connected, as evidenced by the fact that they were “governed by the same controlling factors” enumerated in § 34. Kindregan, Reforming Alimony: Massachusetts Reconsiders Postdivorce Spousal Support, 46 Suffolk U. L. Rev. 13, 23 (2013). “The new Alimony Reform Act of 2011 separates these factors into different sections of [c. 208], but keeps a connection by amending [§ 34] to provide that in addition to other factors, the court is to consider the ‘amount and duration of alimony’ when dividing property.” Ibid. See note 10, supra.
In reviewing a property division under G. L. c. 208, § 34, or an alimony award under G. L. c. 208, §§ 48-55,
a. Alimony order. 1. Amount and form. The Act makes no change in the fundamental purpose of alimony, which is to provide for postdivorce economic support of a spouse who was financially dependent during the marriage. Gottsegen v. Gottsegen, 397 Mass. 617, 623 (1986). See G. L. c. 208, § 48. Pursuant to the Act, a judge determining the form, amount, and duration of an alimony award must consider “the length of the marriage; age of the parties; health of the parties; income, employment and employability of both parties . . .; economic and non-economic contribution of both parties to the marriage; marital lifestyle; ability of each party to maintain the marital lifestyle; lost economic opportunity as a result of the marriage; and such other factors as the court considers relevant and material.” G. L. c. 208, § 53(a). Although the Act creates express guidelines to aid judges in fashioning alimony orders, it does not alter the principle that the central issue relevant to a
General Laws c. 208, § 53(6), sets forth a formula for determining the amount of the alimony order, which, “[ejxcept for reimbursement alimony or circumstances warranting deviation for other forms of alimony, should generally not exceed the recipient’s need or [thirty] to [thirty-five] per cent of the difference between the parties’ gross incomes established at the time of the order being issued” (emphasis supplied). Our responsibility is to interpret the Act as written, assigning to each word and phrase its ordinary meaning unless the context requires otherwise and attaching significance to every word unless it produces an irrational result. See Hinckley v. Retirement Bd. of Gloucester, 316 Mass. 496, 500 (1944); Holmes v. Holmes, 467 Mass. 653, 659 (2014). See also G. L. c. 4, § 6, Third. The Legislature’s decision to use the emphasized word “or” in this provision of the Act means that, “except for reimbursement alimony or circumstances warranting deviation for other forms of alimony,” an alimony award that is equivalent to thirty to thirty-five percent of the difference between the parties’ gross incomes as determined when the order issues will be deemed reasonable and lawful. G. L. c. 208, § 53(6). Furthermore, § 53(e) provides that when establishing an initial alimony award or in approving a modification of a prior alimony award, a judge may deviate from the “duration and amount limits” for general term alimony or rehabilitative alimony only if the judge makes “written findings that deviation is necessary.” G. L. c. 208, § 53(e). Any such order deviating from the requirements of § 53(6) must be based on one or more of the first eight factors listed in § 53(e) or, “upon written findings, any other factor that the court deems relevant and material.” G. L. c. 208, § 53(e)(9).
In reviewing the alimony order in this case, we first examine whether the judge considered all relevant factors required by § 53(a). The judge appropriately made reference in his findings to the over twenty-year length of the marriage, the spouses’ ages, and their respective incomes, employment, and employ-ability; however, it is not clear that he considered the ability of
It is undisputed that the wife has no income of her own, and we infer that the trial judge, in his discretion, determined the husband’s annual income to be $250,000.
Furthermore, we are unable to uphold the so-called “self-modifying” portion of the alimony order. See Grubert v. Grubert, 20 Mass. App. Ct. 811, 811 (1985) (“[T]he financial arrangement, taken as a whole, did not adequately take into account traditional alimony considerations and resulted in an inequitable award”). It appears that the judge intended this
Moreover, there are two features of the judge’s self-modifying order that cannot be reconciled with the Act.
Second, the order is inequitable because it requires only the husband to disclose quarterly income to the wife, but imposes no reciprocal duty on the wife.
2. Duration. As created by the Act, G. L. c. 208, § 49, sets forth presumptive time limits for orders of general term alimony, based upon the length of the marriage.
In the present case, unless preceded by either party’s death or the wife’s cohabitation, the judge’s order directs the husband to continue paying alimony until his “retirement as defined in the Act Reforming Alimony of 2011, as it may be amended.” The judge did not make a written explanation of the precise intent of the order or suggest why he may have intended to deviate from the § 49(f) default that the order will terminate upon the husband’s reaching “full retirement age.” The trial transcript suggests to us that the judge was aware of the Act’s default duration and intended for it to apply in this case.
b. Assignment of property. Finally, we turn to the primary aspect of the division of the marital estate challenged on appeal, namely, the exclusion of the wife’s interest in the Chatham property from the divisible marital estate. A party’s estate includes all property to which she or he holds title, regardless of the source. Williams, 431 Mass, at 625. The Act does not alter the purpose of a property division under G. L. c. 208, § 34: “to recognize and equitably recompense the parties’ respective contributions to the marital partnership.” Kittredge v. Kittredge, 441 Mass. 28, 44 (2004), quoting from Heacock v. Heacock, 402 Mass. 21, 24 (1988). Also, under prior law as well as the Act, whether a spouse’s interest in property is part of the marital
Section 34 contains both mandatory and discretionary factors that must be considered, see Drapek v. Drapek, 399 Mass. 240, 243 (1987), and allows a judge to “assign to either husband or wife all or any part of the estate of the other.” In addition to the mandatory factors present in the prior version of § 34, the Act added for consideration “the amount and duration of alimony, if any.” St. 2011, c. 124, § 2. These factors “reflect a view of marriage as an implied partnership for the purposes of distribution of property.” Savides v. Savides, 400 Mass. 250, 252 (1987). Since the adoption of the Act, we have reiterated that “[t]he parties’ respective contributions to the marital partnership remain the touchstone of an equitable division of the marital estate.” T.E. v. A.O., 82 Mass. App. Ct. 586, 597 (2012), quoting from Moriarty v. Stone, 41 Mass. App. Ct. 151, 157 (1996). When a judge has considered all the required factors and they are adequately reflected in his findings and rulings, they will not be disturbed on appeal unless they are “plainly wrong and excessive.” Bak v. Bak, 24 Mass. App. Ct. 608, 620 (1987), quoting from Redding, 398 Mass, at 107-108.
Between them, the spouses owned three principal assets with a total stipulated value of $1.4 million: the marital home ($670,000); the husband’s interest in his dental practice ($476,000); and the wife’s one-third interest in Pond View Associates, the partnership owning the Chatham property ($300,000). We note in passing that both the husband’s interest in the dental practice and the wife’s interest in the Chatham property were, at least in part, gifted to the respective spouses during the marriage by family members, and enjoyed by the family during the marriage. Though the husband was awarded his interest in the practice, the wife was duly compensated for her share of that interest with $238,000 in liquidated funds from the sale of the home. In contrast, the husband received no compensation for the wife’s interest in the Chatham property, which was excluded entirely from the marital estate. The judge’s reasoning was that the Chatham property “was never relied upon as a financial resource by the parties during the marriage.” The court further found that “[wjhile it was listed on a few of the joint income tax returns, the impact on the taxes owed was negligible.”
In view of the family’s enjoyment of the Chatham property during the marriage — contributed by the wife to the marital partnership •— the exclusion of the wife’s interest in the Chatham property cannot be sustained. We think the judge took too narrow a view of “financial reliance” upon an asset, evidently basing his analysis solely on the asset’s impact on the family’s tax obligations. It is undisputed that the parties and their children spent annual summer vacations at the Chatham property. The wife’s one-third share of Pond View Associates was valued at $300,000, which results in an approximation of the value of the
Conclusion. The comprehensive Alimony Reform Act of 2011 makes important changes in our law, without unduly limiting judicial discretion so long as judges make detailed subsidiary findings of fact. The judge here faced the formidable task of applying the new law without the benefit of appellate guidance. In this case, the order dividing the marital estate under G. L. c. 208, § 34, and the order awarding general term alimony under G. L. c. 208, §§ 48-55, must be reconsidered and revised in large part because the findings that might have supported such orders are absent. Paragraphs 6 and 16 of the amended judgment of divorce nisi are vacated. The case is remanded to the Probate and Family Court for further proceedings consistent with this opinion.
So ordered.
See St. 2011, c. 124, codified at G. L. c. 208, §§ 34, 48-55.
The parties stipulated that the wife’s share in Pond View Associates is valued at $300,000.
The record indicates that any rental income from the Chatham property did not exceed the costs of maintenance and upkeep, resulting in no net income to the wife.
The parties stipulated that the husband’s share of the dental practice is valued at $476,000.
For reasons we explain in the next paragraph of the text and in note 13, infra, we conclude the judge found that the husband’s annual income after 2010 was $250,000.
Both parties entered in evidence extensive financial documents and expert testimony, including eighty-nine exhibits and fifteen uncontested facts.
The original judgment of divorce nisi issued on this day. Though the husband appeals from the subsequent amended judgment, no further findings were issued, and the terms of both judgments are materially identical as relates to this appeal.
The judgment ordered the husband to pay base alimony in the amount of $8,500 per month, plus “additional alimony equal to thirty (30%) percent of his gross income in excess of $250,000.00, from all sources . . . payable quarterly.”
See St. 2011, c. 124, §§ 1-7, codified at G. L. c. 208, §§ 34, 48-55. In this opinion, unless otherwise specified our citations to G. L. c. 208, § 34, are to that section as amended by St. 2011, c. 124, §§ 1, 2, and our citations to G. L. c. 208, §§ 48-55, are to those sections as appearing in St. 2011, c. 124, § 3.
The mandatory factors for property division are now “the length of the marriage, the conduct of the parties during the marriage, the age, health, station, occupation, amount and sources of income, vocational skills, employ-ability, estate, liabilities and needs of each of the parties, the opportunity of each for future acquisition of capital assets and income, and the amount and duration of alimony, if any, awarded under [G. L. c. 208, §§ 48-55], In fixing the nature and value of the property to be so assigned, the court shall also consider the present and future needs of the dependent children of the marriage.” (Emphasis supplied.) G. L. c. 208, § 34. The discretionary factors are “the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates and the contribution of each of the parties as a homemaker to the family unit.” Id.
“General term alimony” is defined as “the periodic payment of support to a recipient spouse who is economically dependent.” G. L. c. 208, § 48. See note 14, infra.
The purposes and underlying principles of property division and alimony are distinct. D.L. v. G.L., 61 Mass. App. Ct. 488, 508 (2004). However, in keeping with the 2011 amendment to § 34 expressly recognizing alimony as a mandatory factor to be considered for purposes of equitable distribution of the marital estate, we assess the fairness of “the financial arrangement as a
The record indicates, and the parties agree, that in the year prior to trial, the husband’s annual income declined significantly from what it had been in prior years, due in part to the fact that the “buy-in” payments from his new partner, which had provided an additional $90,000 of income each year for a five-year period, ended in 2010. There also was evidence that the husband’s dental practice generated declining income in 2010 and 2011 as a result of the economic recession, and that the salaries paid to the husband and his partner were lower in 2011 compared to 2010. Our inference that the judge impliedly found the husband’s annual income at the time of the order to be $250,000 is based on these considerations, representations made by counsel during the oral argument, and the judge’s decision to set $250,000 as the threshold for self-modification of the alimony order.
“General term alimony” is defined as “the periodic payment of support to a recipient spouse who is economically dependent.” G. L. c. 208, § 48.
“Rehabilitative alimony” is defined as “the periodic payment of support to a recipient spouse who is expected to become economically self-sufficient by a predicted time, such as, without limitation, reemployment; completion of job training; or receipt of a sum due from the payor spouse under a judgment.” G. L. c. 208, § 48.
“Reimbursement alimony” is defined as “the periodic or one-time payment of support to a recipient spouse after a marriage of not more than [five] years to compensate the recipient spouse for economic or noneconomic contribution to the financial resources of the payor spouse, such as enabling the payor spouse to complete an education or job training.” G. L. c. 208, § 48.
“Transitional alimony” is defined as “the periodic or one-time payment of support to a recipient spouse after a marriage of not more than [five] years to transition the recipient spouse to an adjusted lifestyle or location as a result of the divorce." G. L. c. 208, § 48.
As explained earlier, the alimony award in this case cannot stand because it is neither based on a judicial determination of need, see Heins, 422 Mass, at 484, nor within the thirty to thirty-five percent range set forth in G. L. c. 208, § 53(b). However, a general term alimony award established as a percentage of income and not as a fixed amount may be valid in some circumstances. See Wooters v. Wooters, 42 Mass. App. Ct. 929, 930 (1997) (“[T]he health of the husband and the fluctuations in his income were the reasons why the judge made a percentage award"). Likewise, in a “special case,” a general term alimony award containing a “self-executing formula” that is based on the recipient spouse’s needs may be permissible. See Stanton-Abbott v. Stanton-Abbott, 372 Mass. 814, 817 (1977) (upholding self-executing formula related to retail price index in case where one party resided in United States and other party resided in England).
Although the judge declined to attribute income to the wife, her recent real estate coursework and fundraising certification were evidence that she has the potential for future earnings that could materially influence the husband’s alimony obligation. Yet under the terms of the current order, the wife is under no obligation to disclose any such earnings to the husband.
“Length of the marriage” is defined by the Act as “the number of months from the date of legal marriage to the date of service of a complaint or petition for divorce or separate support duly filed in a court of the commonwealth or another court with jurisdiction to terminate the marriage; provided, however, that the court may increase the length of the marriage if there is evidence that the parties’ economic marital partnership began during their cohabitation period prior to the marriage.” G. L. c. 208, § 48. By this definition, the length of the marriage here was twenty-one years, from the date of marriage, September 18, 1988, to the date of the filing of the wife’s complaint for divorce, October 28, 2009.
The judge said the following during a discussion with the wife’s counsel:
“[T]he general alimony is still limited, correct? ... To his normal retirement age. . . . [Alimony] terminates as of his presumptive retirement date of whatever it may be, whether it’s 66 or 67, as defined by the statute. And then it becomes [the wife’s] burden to then show that there has been a change in circumstances. And even if [the husband is] working, there has to be a significant change of circumstances.”
In making the determination of what property is included in the marital estate, we have “not been bound by traditional concepts of title or property,” Adams v. Adams, 459 Mass. 361, 373 (2011), quoting from Baccanti v. Morton, 434 Mass. 787, 794 (2001), but “we have drawn a line around certain interests that are so speculative as to constitute nothing more than expectancies,” Adams, supra at 374. See and compare Drapek v. Drapek, 399 Mass. 240, 244 (1987) (“[T]he present value of future earned income is not subject to equitable assignment under G. L. c. 208, § 34”), with Baccanti, supra at 798, 799 n.7 (addressing status of “stock options” and stating that [1] “[s]tock options, as property to which a spouse holds title, must be treated the same as other marital property and considered part of the marital estate even if given for past services performed prior to the marriage”; and [2] if “the options were given for efforts to be expended after the marriage, in order to include them in the marital estate, the judge must determine whether the options were nonetheless given for efforts attributable to the marital partnership”), and Adams, supra at 375 (“[A]n interest in an established partnership, though subject to degrees of uncertainty and the contingency of future performance, has more than theoretical value”; “a partnership interest is akin to other inchoate or uncertain assets we have assigned to the marital estate consonant with § 34”). See also Wooters v. Wooters, 74 Mass. App. Ct. 839, 841-843 (2009) (explaining complexity of properly characterizing “stock options,” and concluding that exercised stock options were part of payor’s “gross annual employment income” under alimony provision).
The Chatham property has potential to generate significant rental income. We take notice of the fact that Chatham is a popular tourist destination on Cape Cod with many attractive recreational venues.
Nothing in this opinion prevents the judge from altering other paragraphs of the amended judgment as appropriate to achieve an alimony and property division scheme that complies with the Act and this opinion, including further consideration of the decision to award to the wife all of the personalty she inherited during the marriage and the decision to treat monies from the husband’s profit sharing plan as an offset to account for the wife’s use of liquid marital assets during the pendency of the divorce.