Chaker v. Chaker

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, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 88-357


Ann L. Chaker                                Supreme Court

                                             On Appeal From
     v.                                      Chittenden Superior Court

Mouhanad Chaker                              May Term, 1989


Alden T. Bryan, J.

Jarvis and Kaplan, Burlington, for plaintiff-appellee

Paul R. Morwood, Burlington, for defendant-appellant


PRESENT:  Allen, C.J., Peck, Gibson, Dooley and Morse, JJ.


     DOOLEY, J.   This divorce action is here for the second time.  Follow-
ing our reversal of the 1985 order, the matter was heard on the merits
during July and August of 1987, resulting in extensive findings and an order
and decree resolving the property and maintenance issues presented by the
parties.  Defendant, Mouhanad Chaker, appeals, alleging two errors in the
award of maintenance:  (a) the court abused its discretion in including a
maintenance escalation clause based solely on defendant's income; and (b)
the court abused its discretion in awarding permanent maintenance.  Defend-
ant also argues that the court committed error in calculating the arrearages
owed by defendant and in ordering defendant to pay plaintiff's attorneys'
fees.  We affirm the maintenance and attorney fees award but vacate and
remand the arrearage and related property award.
     The following is a summary of the relevant facts, based on extensive
findings made by the trial court.  Neither party has challenged these
findings.
     Plaintiff Ann Chaker, who is now fifty-five years of age, met defend-
ant, now age thirty-nine, when he was attending an English language program
at the University of Oklahoma as a foreign student from Syria.  At the time
the parties met, plaintiff owned and ran a rooming house for university
students.  They were married in July of 1975 (her fifth marriage, his first)
and lived in Oklahoma until they moved to Pittsburgh, Pennsylvania in 1977
so that defendant could pursue a graduate degree.  In 1979, they came to
Burlington, Vermont where defendant started a job with IBM.  They separated
in 1984 and had no children.
     The parties have never had great income or owned extensive property
although defendant made about $45,000 per year when the divorce hearing was
held in 1987.  The trial court concluded that each party had contributed
"approximately equally to the marital estate since the date of the
marriage."  Plaintiff's main contribution appears to be the proceeds from
the sale of her Oklahoma rooming house.  Defendant's main contribution
appears to be his income since he became employed in 1979.
     At the time of the marriage, the main asset of the parties was a home
in Burlington, valued at $88,000, with an equity of about $45,000.  Defend-
ant was entitled to a pension at IBM but it had not yet vested and there was
no evidence of its value.  Similarly, defendant had available a life insur-
ance policy of uncertain value.  The only other assets of the parties were
personal property, including two automobiles.
     Although she is a college graduate, plaintiff has not worked outside
the home, but she helped defendant during his education, particularly with
typing.  At the time of the separation, plaintiff had an independent income
of $670 per month, the bulk of which is a social security disability
payment.  Despite her receipt of disability benefits, plaintiff is capable
of working and earning an income of approximately $1200 per month.  Her
monthly living expenses are about $1500 per month, including mortgage
payments on the Burlington home.
     Defendant's gross income from IBM of $45,000 per year is expected to
increase in the future.  His monthly living expenses at the time of the
divorce hearing were about $1600 per month.
     Plaintiff commenced this divorce action in 1984.  A temporary hearing
was held in September of 1984, resulting in an order giving plaintiff
possession of the house and requiring defendant to pay the mortgage, taxes
and insurance payments for the house.  The order also required defendant to
pay temporary maintenance of $625 per month, to cover plaintiff on his IBM
health insurance policy and to maintain plaintiff as beneficiary on his IBM
life insurance policy.
     The final hearing was held in 1985 and resulted in a final order in May
of that year.  The order awarded the house to plaintiff and required
defendant to pay maintenance at the rate of $1000 per month.  It required
defendant to maintain health insurance coverage for plaintiff and to
maintain plaintiff as the beneficiary of the life insurance policy.  It
concluded that defendant had failed to pay $4883.31 under the temporary
order and assessed this as an arrearage.  It required defendant to pay
plaintiff's attorney fees of about $5000.
     Defendant appealed the final order, arguing that the court committed
reversible error in allowing his counsel to withdraw during the merits
hearing.  This Court agreed and reversed and remanded for a new trial.
Chaker v. Chaker, 147 Vt. 548, 520 A.2d 1005 (1986).  The retrial was held
in 1987 and resulted in a new order and decree on June 16, 1988.  Plaintiff
was awarded the Burlington home, but defendant was awarded a half interest
in the equity or $22,500.  Plaintiff was awarded maintenance of $700 per
month for life or until she remarried or cohabited with an unrelated male.
The maintenance award was increased yearly by the same percentage as
defendant's gross annual income increased.  Defendant was required to
maintain plaintiff as his sole beneficiary on his life insurance policy and
to cover plaintiff through his IBM health insurance policy.
     The court found that since the 1985 order was reversed by this Court,
arrearages should be calculated under the prior temporary order.  On this
basis, the court found that defendant owed an arrearage of $22,352.  Since
this amount was close to the value of defendant's equity in the Burlington
house, the court offset one against the other.  Thus, if defendant failed to
pay the outstanding arrearage within thirty days, defendant's interest in
the home was extinguished.  Finally, defendant was required to pay plain-
tiff's attorney fees of $9,388.47 accrued up through the final hearing.
     We start with the maintenance issues and consider first defendant's
challenge to the award of permanent maintenance.  On this point, defendant
argues that the court abused its discretion in awarding permanent main-
tenance of $700 per month in view of its findings that plaintiff's reason-
able living expenses were between $1500 and $1600 per month and she was
capable of earning $1200 per month.
     The relevant statute allows an award of maintenance, either rehabili-
tative or permanent, to a spouse where the court finds:  (1) the spouse
lacks sufficient income and/or property to "provide for his or her reason-
able needs" and (2) the spouse is unable to support himself or herself
"through appropriate employment at the standard of living established during
the marriage."  15 V.S.A. { 752(a).  The maintenance must be in the amount
and for the duration the court deems just, based on the consideration of
seven non-exclusive factors.  See 15 V.S.A. { 752(b).  Part of the purpose
of the statute is to provide spousal support in relation to the standard of
living established during the marriage.  See Klein v. Klein, 150 Vt. 466,
473-74, 555 A.2d 382, 387 (1988) (Klein I); McCrea v. McCrea, 150 Vt. 204,
207, 552 A.2d 392, 394 (1988) (reasonable needs as set forth in { 752(a)(1)
are determined in relation to the standard of living established during the
marriage).  Another purpose is to recompense a homemaker for contributions
made during the marriage.  We have also recently held that the statute is
flexible enough to allow its use in appropriate cases "to balance equities
whenever the financial contributions of one spouse enable the other spouse
to enhance his or her future earning capacity."  Downs v. Downs, 1 Vt. L.W.
142, 144 (April 6, 1990).
     Once the trial court finds grounds for awarding maintenance, it has
broad discretion in determining the duration and amount.  See Klein I, 150
Vt. at 472-73, 476, 555 A.2d  at 386, 388.  A maintenance award will be set
aside only if there is no reasonable basis to support it.  See Quesnel v.
Quesnel, 150 Vt. 149, 151, 549 A.2d 644, 646 (1988).  In Downs v. Downs, 1
Vt. L.W. at 144, we emphasized the breadth of the trial court's power in
concluding that it could consider the increased earning capacity of a
professional degree in determining an award of maintenance where the
spouse's contribution to obtaining the degree is not reflected in the
property award.
     The breadth of the trial court's discretion is further demonstrated by
two cases with facts similar to this case.  In Buttura v. Buttura, 143 Vt.
95, 463 A.2d 229 (1983), we affirmed an award of permanent alimony in the
face of an argument that plaintiff was meeting her reasonable needs through
employment.  In doing so, we relied upon "the vast inequality between the
parties' financial positions."  Id. at 99, 463 A.2d  at 231.  In Belanger v.
Belanger, 148 Vt. 202, 204-05, 531 A.2d 912, 914 (1987), we affirmed time-
limited rehabilitative maintenance in similar circumstances where the trial
court's purpose was to give plaintiff the opportunity to establish herself
financially since she had marketable skills.
     A number of factors support the award of permanent maintenance in this
case.  Although the court found that plaintiff is capable of employment, she
is 55 years of age and has not worked outside the home for many years.  See
15 V.S.A. { 752(b)(5).  She has a back problem for which she receives social
security disability payments.  The trial court found that plaintiff would
lose her social security disability benefits if she went to work.  It also
found that defendant's earning capacity was "easily three times that of
plaintiff" and would become "easily . . . five times that of the plaintiff."
In addition, plaintiff was the homemaker and supported defendant's efforts
to learn English and become educated in the United States to obtain the
earning capacity he now enjoys.  The trial court evaluated each of the
factors in { 752(b) and determined that its maintenance award was necessary
to keep plaintiff in the standard of living established during the
marriage.  We conclude that the trial court acted within its discretion in
awarding permanent maintenance to plaintiff in the amount it did.
     Defendant next challenges the escalation clause in the maintenance
award.  It required an annual increase in the maintenance award by the same
percentage as the increase in defendant's gross income, exclusive of capital
gains from investments.  Defendant argues that the provision represents an
improper, annual modification of the maintenance award without showing a
real, substantial and unanticipated change of circumstances.
     We have considered the validity of escalation clauses in Roya v. Roya,
145 Vt. 488, 494 A.2d 132 (1985).  In Roya, the escalation clause applied
both to child support and to maintenance and was based on increases in the
cost of living.  This Court noted that the Legislature had specifically
authorized the courts to consider "inflation with relation to the cost of
living" in making maintenance awards.  Id. at 490, 494 A.2d at 133-34; see
15 V.S.A. { 752(b)(7).  We held that the escalation clause did not
constitute an "invalid modification" of the order.  Id.  Rather, we found it
to be a practical method of assuring that buying power continued over time.
We noted that the clause results in judicial economy, reduces expenses for
attorney fees and does not interfere with the ability of either party to
seek modification.  Id. at 490-91, 494 A.2d  at 134.  On this basis, we
upheld the use of the escalation clause.
     Defendant argues that this case is not governed by Roya because the
annual increase is based on defendant's income and not on the cost of
living.  Thus, in defendant's view, it goes beyond the authorization to
consider the cost of living in { 752(b)(7) and represents an invalid
authorization for a prospective modification without a showing of change of
circumstances.
     Whatever terms are used for an escalation clause, Roya answers defend-
ant's modification argument.  If an escalation clause based on one factor is
not an authorization for an improper prospective modification, then an
escalation clause based on another is not such a modification.  The
modification argument goes to the fact of an escalation clause, not to the
adjustment factor used in such a clause.  Thus, we must evaluate the
escalation clause under our traditional standard of review for maintenance
orders and determine whether the inclusion of the clause was an abuse of the
wide discretion accorded the trial judge.  See Klein I, 150 Vt. at 472-73,
555 A.2d  at 386.
     As Roya emphasizes, the advantage of an escalation clause keyed to the
cost of living is that it assures that the recipient's buying power will be
maintained over time.  Roya, 145 Vt. at 490, 494 A.2d  at 134.  On the other
hand, use of cost of living alone does not assure that the payor's income
will rise to enable him or her to make the payments.  Thus, while it
considers one factor, it wholly ignores another that may be crucial in a
particular case.
     An escalation clause based on increases in income has the same type of
advantages and disadvantages although the impact is different.  Such a
clause ensures that increases in maintenance will mirror increases in the
payor's income, but does not ensure that these increases are caused solely
by the cost of living.  As defendant argues, some courts have refused to
accept escalation clauses based on increases in the payor's income although
they have endorsed escalation clauses based on the cost of living.  See,
e.g., Brevick v. Brevick, 129 Ariz. 51, 54, 628 P.2d 599, 603 (Ariz. Ct.
App. 1981).  Others, however, have endorsed escalation clauses based on
income increases while criticizing those based on cost of living as not
ensuring the ability to pay.  See, e.g., Mills v. Mills, 417 So. 2d 298, 299
(Fla. App. 1982); Edwards v. Edwards, 99 Wash. 2d 913, 918-19, 665 P.2d 883,
886 (1983).  We find most persuasive the opinions that allow escalation
clauses based on income increases in appropriate cases.  See Lawler v.
Lawler, 16 Conn. App. 193, ___, 547 A.2d 89, 91-92 (1988); Heinze v. Heinze,
122 N.H. 358, 361, 444 A.2d 559, 562 (1982); Petersen v. Petersen, 85 N.J.
638, 643-44, 428 A.2d 1301, 1303 (1981).  For two reasons, we believe that
the use of an escalation clause based on income was appropriately within the
trial court's discretion in this case.
     First, the parties have been locked in continuous litigation for years,
and defendant has rarely abided by any of the maintenance awards imposed
upon him.  There is every reason to believe that if inflation erodes the
value of plaintiff's maintenance award or defendant has a substantial
increase in income, the parties will be back in court locked in another
protracted, acrimonious battle.  Thus, the gains in terms of judicial
economy and reduction in attorney fees are more than hypothetical given the
history of this litigation.  Of course, defendant can seek to modify the
maintenance order if he believes its operation over time becomes unfair.
The escalation clause gives plaintiff a secure starting point from which
defendant must argue that a change of circumstances has occurred.
     Second, this is a case where the maintenance award is and must be based
on more than plaintiff's support needs.  Plaintiff's contribution to
defendant's education, as well as her service as a homemaker, entitle her to
some share of his enhanced earning capacity.  Since the maintenance award is
intended in part to enhance plaintiff's standard of living in relation to
that of defendant, it is appropriate that the escalation clause be based on
increases in defendant's income.
     The next issue deals with the calculation of the maintenance arrearage.
In the trial court, the parties argued about the outstanding arrearage based
on their respective views of the effect of the 1985 final order.  The trial
court found that the final order had no effect because it had been over-
turned by this Court.  The trial court further found that since the earlier
final order was not in effect, the rights and liabilities of the parties
were determined by the temporary order of October, 1984.  This order
required the defendant to pay temporary maintenance of $625 per month plus
the ongoing cost of the house, including the mortgage, taxes and insurance
(totaling $630 per month).  When payments were credited, the court calcu-
lated an outstanding arrearage of $22,352, almost twice the amount sought by
the plaintiff.  Defendant challenges the arrearage calculation arguing that
the temporary maintenance order had no force after the issuance of the final
order of May, 1985.
     The court's power to award temporary maintenance is contained in 15
V.S.A. { 594a.  The statute authorizes such an order "pending final hearing
and further order of the court."  Obviously, the intent of the statute is
that the temporary order will be replaced by a final order.  This is
consistent with the general law that temporary maintenance orders merge
into, and are superseded by, the final order.  See Wetmore v. Wetmore, 129
Vt. 583, 585, 285 A.2d 711, 713 (1971); see also Saunders v. Saunders, 140
Conn. 140, 146, 98 A.2d 815, 818 (1953) (order for alimony pendente lite is
interlocutory and terminates with the judgment which follows it); Button v.
Button, 222 A.2d 245, 247 (Me. 1966) (support and alimony decree pending the
action terminated on entry of the final decree).  At one time, however, the
final order was stayed pending appeal, creating the necessity for some sort
of temporary order during the appeal.  See Walker v. Walker, 123 Vt. 430,
431, 192 A.2d 460, 461 (1963); see also Jack v. Jack, 253 Pa. Super. 538,
543-44, 385 A.2d 469, 472 (Pa. Super. 1978) (since the filing of an appeal
stays the final decree, an award of alimony pendente lite remains in effect
during the appeal).  Since the advent of our rules of civil procedure, the
final order providing for maintenance has remained in effect during an
appeal.  See V.R.C.P. 62(a), (e).
     The trial court's position is consistent with the statute and the
proper effect of a temporary order only if the final order became effective
with respect to maintenance on the day it was issued -- that is, on June 16,
1988.  The argument in support of this position would be that there was no
final order from May, 1985 through June 16, 1988, since the one that existed
was reversed, and therefore nullified, by this Court.  The argument depends
on a conclusion that the trial court's 1988 order was prospective only.
     Our precedents do not establish an effective date for maintenance
orders, and the statutes are silent on the subject.  We have, however,
recently established how the effective date of a child support order must be
chosen.  In Towne v. Towne, 150 Vt. 286, 288-89, 552 A.2d 404, 406 (1988),
we held that an order modifying a child support award could be effective as
early as the date on which the motion to amend was filed.  We added,
however, that the trial court had discretion to chose any reasonable date
after the date of the filing of the motion based on a consideration of the
circumstances of the parties.  Id.  The Towne holding was applied in Klein
v. Klein, 1 Vt. L.W. 49, 50-51 (Feb. 2, 1990) (Klein II) where the issue was
the establishment of an initial support order.  The case had been before
this Court once before and we had held that the trial court erred in failing
to create a specific child support award.  By the time of the remand
hearing, the child had turned eighteen and the trial court found the child
support issue to be moot.  We concluded that the effective holding of Towne
v. Towne should be applied to the establishment of an initial award so that
the court could go back to the date the divorce was filed to award an
arrearage.  We reversed again because the record showed that the court had
failed to exercise any discretion in determining the effective date of a
child support award and in considering whether an arrearage was owed.  Id.
at 51.
     We see no reason to distinguish between maintenance awards and child
support awards for purposes of setting an effective date.  Thus, under Klein
II, the court here had discretion to make its final award retroactive at
least to the date of the initial hearing. (FN1) To the extent it made the
permanent maintenance award retroactive, the arrearage would be calculated
under that award and not under the temporary award.  As in Klein II, the
court here did not indicate that it had the power to make a retroactive
award of permanent maintenance and, thus, it did not exercise the discretion
available to it.  In the absence of the exercise of discretion, we must
remand for a further hearing on the arrearage issue.  See id. (FN2) Because
the court offset the arrearage against the amount plaintiff was required to
pay to defendant to extinguish defendant's equity in the house, we must also
hold the disposition of the real property in abeyance until the arrearage
issue is determined.
     The last issue deals with the award of attorney fees.  Defendant
contests both the amount, over $9000, and the use of an immediate wage
assignment to require payment at $500 per month.  He argues that he is
unable to pay both the attorney fee and maintenance award.
     The trial court had discretion in awarding attorney fees based on its
evaluation of the financial circumstances of the parties.  See Cleverly v.
Cleverly, 151 Vt. 351, 358, 561 A.2d 99, 103 (1989).  The findings and
conclusions indicate the court analyzed the capacity of each party to pay in
reaching its decision.  See Bissonette v. Gambrel, 152 Vt. 67, 72, 564 A.2d 600, 602 (1989).  We find no error in the findings, nor in the court's
conclusion that defendant has the ability to pay.
     Nor do we find error in the use of a wage assignment to secure payment.
Defendant has rarely made voluntary payments under the various orders issued
in this case.  Only through wage assignments has plaintiff been able to
obtain the benefit of the awards.  In view of this record, the court acted
within its discretion in making a periodic payment order enforceable by a
wage assignment.
     Except as it relates to the disposition of the real estate of the
parties and the calculation and payment of arrearage, the final order and
decree is affirmed.  The order with respect to the disposition of the real
property and the calculation and payment of arrearage is reversed and
remanded for further proceedings consistent with this opinion.

                                        FOR THE COURT:




                                        Associate Justice





FN1.    We need not consider on this record whether the court could estab-
lish a retroactive maintenance award covering the period for which the
temporary award was in effect and superseding that award.  We note that 15
V.S.A. { 606 gives the party entitled to temporary maintenance the right to
reduce any arrearage under the temporary maintenance order to a judgment
order, and the court may not reduce the amount owed.  See Forte v. Forte,
143 Vt. 518, 521, 468 A.2d 561, 562 (1983).  Neither party has sought
retroactive modification of the temporary award, and the original
determination of the arrearage under that order, made in May 1985, was
apparently uncontested.



FN2.    This case is a good example of why the trial court should have
discretion to determine the effective date of the permanent award and, as a
result, the termination date of the temporary award.  The differences in the
court orders have been influenced to a great degree by the disposition of
the house.  The temporary order could not determine title to the house and,
in the interim, required defendant to pay the mortgage, title and insurance.
Much of the arrearage results from his failure to make many of these
payments.  The 1985 final order awarded the house to plaintiff and removed
the requirement that defendant pay the expenses for a house he no longer
owned.  The 1988 order awarded the house to plaintiff but divided the equity
between the parties.  Again, defendant was not required to pay the expenses
of the house.
     The trial court's arrearage order, in effect, requires defendant to pay
for the expenses of the house from May of 1985 to June, 1988.  This may be a
fair allocation of financial responsibility since plaintiff has not been
able to obtain title to the house during the litigation.  On the other hand,
we cannot determine on this record the significance of the absence of
title.  Plaintiff has apparently had possession of the house and lived in it
during this period.