Clapp v. Clapp

CLAPP_V_CLAPP.93-458; 163 Vt 15; 653 A.2d 72

[Filed 04-Nov-1994]

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P.
40 as well as formal revision before publication in the Vermont Reports. 
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
order that corrections may be made before this opinion goes to press. 


                           No. 93-458


Elizabeth W. Clapp                           Supreme Court

                                             On Appeal from
     v.                                       Chittenden Family Court

Michael B. Clapp                             May Term, 1994


Alden T. Bryan, J.

Nancy Corsones of Corsones & Corsones, Rutland, for plaintiff-
 appellee

William H. Quinn of Pierson, Wadhams, Quinn & Yates, Burlington,
 for defendant-appellant


PRESENT:  Gibson, Dooley and Johnson, JJ., and Peck, J. (Ret.),
 Specially Assigned


     DOOLEY, J.   Defendant, Michael Clapp, appeals a decision of the
Chittenden Family Court in the divorce action between him and his former
wife, Elizabeth Clapp, challenging both property and maintenance orders
contained therein.  We order stricken paragraph 17 of the court's order
requiring that defendant pledge his interest in his law firm or purchase a
life insurance policy of equivalent value in order to secure his
maintenance obligation to plaintiff in the event of his death before age
sixty-five; in all other respects, we affirm. 

     The parties were married in 1967 following defendant's first year of
law school.  When defendant graduated in 1969, the parties returned to
Vermont and he began his legal practice that continues to this day.  The
parties' son was born in 1970 and their daughter in 1972.  Plaintiff
remained home to care for the children full time until 1975, at which time
she began pursuing her master's degree in education.  In 1977, having
received her degree, plaintiff began work as a junior high school guidance
counselor.  In 1981, she became a high school guidance counselor and has
continued in that job to the present.  In 1987, after twenty years of
marriage, the parties separated.  Plaintiff filed for divorce in 1989.  In
1991, her annual income before taxes was 

 

$45,237; defendant's annual income before taxes was $137,600. 

     The parties were divorced by final order of the Chittenden Family
Court entered in February 1993.  At that time, both parties were
forty-eight years old.  The court found that the parties' assets totalled
$1,257,577, and their liabilities $498,773.  Finding that the merits of the
situation favored plaintiff wife slightly, the court ordered the parties'
assets to be split 60% to wife and 40% to husband.  In so decreeing, the
court awarded each spouse the respective homes, but required that both
homes be sold and the equity divided 60/40. 

     The court ordered defendant to pay maintenance and set the amount
temporarily at $2,000 per month.  Thereafter, it required a calculation of
maintenance based on an equalization of the parties' after-tax income from
June 1987 to the date of the divorce.  This maintenance amount had not been
calculated at the time of the appeal, and the parties had widely divergent
claims about the result of the calculation.(FN1)  Once calculated, the base
maintenance amount would be adjusted annually based on changes in the
Consumer Price Index. 

     On appeal, husband raises five arguments:  (1) the family court erred
in its determination that wife had established grounds for maintenance; (2)
the court's maintenance order exceeds its authority and is therefore an
abuse of discretion; (3) the court had no evidence upon which to base its
maintenance award to compensate plaintiff for her monetary and nonmonetary
contributions to the marriage; (4) the court exceeded its authority in
ordering defendant to sell his residence; and (5) the court erred in
requiring defendant to pledge his law firm interest or alternatively to
purchase life insurance in the amount of that interest to secure main-
tenance payments to wife in the event of defendant's death before age sixty-
five.  We find no merit in the first four arguments; we do, however, agree
with defendant's final contention, and modify the court's order to strike
the paragraph requiring defendant to pledge his interest in his law firm 

 

or purchase a life insurance policy of equivalent value to secure
payment of maintenance to plaintiff should defendant die before he reaches
sixty-five years of age. 

     We can combine defendant's first three arguments for purposes of
analysis.  Relying on 15 V.S.A.  752(a), defendant argues that the court
could not award maintenance unless plaintiff's reasonable needs are not met
by her income, including the income available from any assets awarded to
her.  In this case, defendant argues, plaintiff's reasonable needs were met
by her income, and no maintenance should have been awarded. Alternatively,
he claims that any maintenance award cannot exceed the amount necessary to
enable the obligee to meet her reasonable needs.  Specifically, he argues
that the family court has no discretion to increase the award above that
reasonably needed in order to compensate her for past contributions as a
homemaker because the statute does not allow for restitutionary or
compensatory awards based on past events.  In this case, he claims the
award clearly exceeded the amount reasonably needed even if an award of
some maintenance was appropriate. 

     Much of defendant's argument is based on the statutory language, which
provides: 

      752.  Maintenance 

        (a) In an action under this chapter, the
     court may order either spouse to make
     maintenance payments, either rehabilitative
     or permanent in nature, to the other spouse
     if it finds that the spouse seeking
     maintenance:

          (1) lacks sufficient income, property,
     or both, including property apportioned in
     accordance with section 751 of this title, to
     provide for his or her reasonable needs, and

          (2) is unable to support himself or
     herself through appropriate employment at the
     standard of living established during the
     marriage or is the custodian of a child of
     the parties.

15 V.S.A.  752(a).  The argument specifically emphasizes  752(a)(1)
which requires a threshold finding that the prospective obligee lacks
income or property to meet "reasonable needs."  See Justis v. Rist, 159 Vt.
240, 245, 617 A.2d 148, 150-51 (1992) (court can award maintenance only
when  752(a) authorizes it). In defendant's view, the court must first
determine reasonable need without regard to the income available during the
marriage, or the 

 

obligor's current income, and award maintenance only if this need is not
met by the obligee's nonmaintenance income and property. 

     Defendant's argument involves an overly narrow reading of 
752(a)(1).  The statute is based on a concept of relative, not absolute,
need.  See Chaker v. Chaker, 155 Vt. 20, 25, 581 A.2d 737, 740 (1990)
(relying on Buttura v. Buttura, 143 Vt. 95, 99, 463 A.2d 229, 231 (1983),
court can award maintenance even though wife is meeting her needs through
employment where vast inequality in parties' financial position remains). 
Thus, we have held that reasonable need is not to be judged in relation to
subsistence.  See Klein v. Klein, 150 Vt. 466, 474, 555 A.2d 382, 387
(1988).  We have emphasized, on the other hand, that reasonable needs are
to be determined "in light of the standard of living established during the
marriage."  McCrea v. McCrea, 150 Vt. 204, 207, 552 A.2d 392, 394 (1988);
see also Coor v. Coor, 155 Vt. 32, 35, 580 A.2d 500, 502 (1990)
(reaffirming interpretation of "reasonable needs" in  752(a)(1) as
meaning needs determined in light of standard of living during marriage).
In Downs v. Downs, 154 Vt. 161, 166, 574 A.2d 156, 159 (1990), we went
further and held that the term "reasonable needs" allowed the court "to
balance equities whenever the financial contributions of one spouse enable
the other spouse to enhance his or her future earning capacity."  We have
also held that one purpose of maintenance under  752(a) is to compensate
a homemaker for contributions to family well-being not otherwise recognized
in the property distribution.  See Strauss v. Strauss, ___ Vt. ___, ___,
628 A.2d 552, 554 (1993). 

     We do not have to plunge deeply into the detail of plaintiff's
post-separation needs to affirm the award of maintenance in this case. 
According to the findings, the parties were living on an after-tax income
of approximately $130,000 per year and spending most of it.  Of this, about
$33,000 is attributable to plaintiff.(FN2)  Both parties had attained
maximum vocational skills 

 

and employability.  Defendant's earning capacity should, however, grow at a
faster rate as he approaches retirement. 

     It is clear given the differences in income that plaintiff would not
maintain the standard of living realized during the marriage on her share
of the marital income.  The court found that plaintiff needed an additional
amount of approximately $1,000 per month to meet reasonable expenses.  At
trial, defendant apparently agreed that plaintiff's income was inadequate
to cover legitimate expenses but calculated the shortfall at $775 per
month.  In light of the standard of living of the parties, the court acted
within its discretion in awarding maintenance in this case. 

     On a similar theory, defendant attacks the amount of maintenance
awarded.  As indicated above, the court found that the deficit in
plaintiff's income to pay expenses amounted to about $1,000 per month.  It
also recognized that plaintiff had made a significant nonmonetary
contribution to the marriage as a homemaker, and had reduced her earnings
over the years because of this contribution.  For the dual purpose of
avoiding "an adverse economic impact upon the plaintiff" and compensating
her for her nonmonetary contributions during the marriage, the court
ordered such permanent maintenance as would equalize after-tax income, as
calculated over the period from the date of separation to the date of
divorce.  Maintenance is not to be eliminated or reduced because plaintiff
cohabits with another person or remarries.  The amount is not adjusted on a
regular basis because of changes in either party's income, although it is
adjusted for inflation. 

     At the outset, we point out that the family court has broad discretion
in determining the amount of maintenance, and we will reverse only if there
is no reasonable basis to support the award.  See Delozier v. Delozier, ___
Vt. ___, ___, 640 A.2d 55, 57 (1994).  In determining the amount of
maintenance to award, the court must consider all relevant factors,
including seven statutory factors.  See 15 V.S.A.  752(b).  Most of the
statutory factors figured into the family court's decision, including the
ability of the obligee to meet her needs without maintenance, the standard
of living established during the marriage, the duration of the marriage,
the age and physical and emotional condition of each spouse, and the
ability of the obligor to 

 

meet reasonable needs while paying maintenance. The award was tailored to
maintain for plaintiff the standard of living during the marriage.  As
discussed above, it was clear that plaintiff was unable to maintain this
standard on her income alone.  This objective was supported by the length
of the marriage, twenty-five years.  See id. at ___, 640 A.2d  at 58.  It is
also supported in this lengthy marriage by the need to compensate plaintiff
for homemaker contributions to family well- being not otherwise recognized
in the financial awards.  See Strauss, ___ Vt. at ___, 628 A.2d  at 554. 

     It is important to recognize the difference between the income
equalization approach of this award and the approach we rejected in
Delozier.  In Delozier, the income equalization award was prospective and
permanent so each spouse was to receive half of their joint income for the
remainder of their lives.  On facts somewhat similar to those here,
involving a wife with good employment opportunities, we held that permanent
income equalization may "wind up being punitive rather than compensatory." 
Delozier, ___ Vt. at ___, 628 A.2d  at 60. 

     Here, income equalization was used as a method to calculate an
appropriate monthly maintenance award, but the amount of the award will not
change in the future because of changes in the income of either of the
parties.  In light of the court's conclusion that the gap between the
income of the parties would grow over time, this award equalized income for
only a year, with defendant keeping an increasing share of the combined
income in the future.  We believe the award equalized income for "an
appropriate period of time."  See id. 

     Defendant attacks the award because it gives to plaintiff an income
higher than her reasonable needs.(FN3)  Even if this were true, the statute
does not prohibit such a result because the obligee's need is only one of
the factors to be considered.  See 15 V.S.A.  752(b)(1).  It is not true
because need here should also be viewed in relation to the standard of
living 

  

established during the marriage, another statutory factor.  15 V.S.A. 
752(b)(3).  The main objective of the award was to maintain that standard
of living for plaintiff. 

     Defendant also attacks the award as based in part on a theory of
restitution for past homemaker contributions, a basis not authorized by 
752(b).  This basis was explicitly recognized in Klein, 150 Vt. at 474, 555 A.2d  at 387, a recognition that has been reaffirmed in a number of cases. 
See Strauss, ___ Vt. at ___, 628 A.2d  at 554;  Russell v. Russell, 157 Vt.
295, 299, 597 A.2d 798, 800 (1991);  Chaker, 155 Vt. at 25, 581 A.2d at ___
. We see no reason to abandon that recognition here. 

     Related to this attack is defendant's claim that consideration of this
factor was not warranted because there was no evidence of the extent of the
contribution.  The court found that plaintiff delayed her education and
entry into the job market in order to raise the parties' children while
they were infants.  Thereafter, the parties jointly decided that plaintiff
should work in a school system, rather than in other employment with higher
remuneration, in order to care for the children and manage the home.  This
also enabled her to stay in the home during the summer.  In comparison,
defendant consistently put in night and weekend hours at his law office. 

     Homemaker contributions are, by their nature, nonmonetary so they
cannot be quantified or put into a monetary formula to specify their impact
on the ultimate maintenance award.  The court's characterization of these
contributions as "significant . . . over many years" is probably as
specific as is possible.  The ultimate weighing process is judgmental,
which is part of the reason that we accord the trial court discretion in
performing it.  We find no error in the application of the nonmonetary
contribution factor. 

     In summary, we hold that the family court acted within its discretion
in awarding permanent maintenance to plaintiff, and the amount is also
within its discretion. 

     Defendant next challenges the court's order that he sell his
residence.  Following the parties' separation, defendant purchased a
lakefront home for $415,000, wholly financed.  At the time of divorce, the
court valued the home at that amount, but noted that the home was

 

encumbered by two mortgages totaling $413,000.  The mortgage loans
represent the vast majority of the parties' marital debt of $498,773.  The
court specifically found that payments on defendant's new home destroy any
chance of meeting expenses.  This finding is supported by evidence that
defendant's monthly expenses exceeded his income.  As a result, he was in
arrears in payment of temporary maintenance ($1,200 per month), a child's
college tuition, his Keogh contributions at his law firm, and income taxes.
 Defendant was making a monthly mortgage payment of $2,400 on one of the
mortgage loans for his new home; he had not paid anything on a smaller loan
secured by a second mortgage.  This payment was a major source of his
inability to pay expenses when due.  The court concluded that defendant
could afford the home only if he had to make no maintenance payment.  This
conclusion was supported by the findings. 

     The court ordered that both the marital home, occupied by plaintiff,
and the home occupied by defendant be sold.  Defendant argues that sale of
the marital home was justified to realize the equity in it for distribution
to the parties.  He contests the order to sell his home, however, because
it has no equity to distribute and the cost of sale will mean that
defendant will lose money on the sale.  He argues that he has a right to
possess property that cannot be impaired for no legitimate reason. 

     15 V.S.A.  751(a) provides for the equitable distribution of marital
property, including "[a]ll property owned by either or both of the parties,
however and whenever acquired."  The section is broad enough to bring
within the jurisdiction of the family court property acquired by a spouse
after the parties have separated.  See Nuse v. Nuse, 158 Vt. 637, 638, 601 A.2d 985, 986 (1991).  There is no question that defendant's house is
marital property, and the family court had jurisdiction over it.      We
have recently held that, "it is within the court's 

discretion to order that marital property held by one or both parties be
liquidated and immediately reduced to cash when the court finds it
necessary, as here, to meet immediate needs." Milligan v. Milligan, 158 Vt.
436, 440, 613 A.2d 1281, 1284 (1992).  Defendant argues that the power
exists in order to liquidate 

 

equity but not to reduce debt load to ensure maintenance is paid.  In our
view, this is a distinction without a controlling difference.  Just as the
house in which plaintiff resides is being sold to give defendant his
interest in it, defendant's house is being sold to give plaintiff her
interest in his income, an interest that cannot realistically exist as long
as so much of the income is diverted to a house payment.(FN4)  In essence,
the family court's order is reprioritizing the claims on defendant's income
to ensure that maintenance payments come first.  Although property sales
for the reasons similar to those applicable here may be rare, we note that
other courts have authorized them.  See In re Marriage of Gavend, 781 P.2d 161, 163 (Colo. Ct. App. 1989) (trial court could order personal property
sold in temporary order because of extreme financial circumstances of
parties and in order to generate funds to make mortgage payment); In re
Marriage of Sedlock, 849 P.2d 1243, 1254 (Wash. Ct. App. 1993) (over wife's
objection, family home ordered to be sold because wife could not afford to
maintain home and generate sufficient funds to buy out husband's interest).

     Finally, defendant challenges the provision in the court's order that
requires him to pledge his interest in his law firm or purchase a life
insurance policy in an equivalent amount in order to secure maintenance
payments to plaintiff in the event defendant dies before his retirement age
of sixty-five years.(FN5)  Defendant's partnership interest represents what
his estate 

  

would be paid in case of his death.  In February 1993, that value stood at
$256,569. 

     Defendant argues that the order is inconsistent with our decision in
Justis v. Rist, 150 Vt. at 245, 617 A.2d at ___, because it provides for
post-mortem maintenance.  In Justis, we held that the lack of explicit
authority for post-mortem maintenance in the statute, 15 V.S.A.  752, in
light of the common-law rule prohibiting such maintenance, meant that post-
mortem maintenance was not authorized in this state.  Id. at 244, 617 A.2d
at ___.  The decision was brought to the family court's attention in a
post-judgment motion following the divorce order. The court rejected its
application because there was no order to pay maintenance beyond
defendant's death; instead the intent was to provide income protection for
the plaintiff in the event of defendant's untimely death. 

     Plaintiff argues here that the order involves a property award -- that
is, defendant's partnership interest that would otherwise go to his estate
-- and not a maintenance award.  She claims that there is no prohibition in
the property distribution statute, 15 V.S.A.  751, of awards vesting at
the death of the other spouse. 

     We have rejected a requirement that one spouse purchase life insurance
to ensure income to the other spouse after the death of the insured.  See
Bell v. Bell, ___ Vt. ___, ___, 643 A.2d 846, 851 (1994).  We stated in
Bell that "Vermont law does not . . . require life insurance to effect
indirectly what  752 does not mandate directly -- the continuation of
maintenance after the death of either party."  Id. 

     We recognize that the line between property distributions and
maintenance awards can 

 

be indistinct, see Boisselle v. Boisselle, No. 90-321, slip op. at 3 (Vt.
June 24, 1994), especially where the nature of an asset is such that it
produces ongoing maintenance support for a substantial period.  For
example, we view a pension as property although its purpose is to provide
income support during retirement.  We would, however, accept a complete
evasion of the prohibition on post-mortem maintenance if we upheld this
order.  The wording of the court's conclusions makes clear that the sole
purpose of the disputed order is to ensure that wife receives maintenance
income after the death of obligor husband, should he die before age sixty-
five.  The only property interest created is a security interest in
defendant's partnership share "to secure future maintenance payments" until
plaintiff's death.  Alternatively, the property interest is the beneficiary
interest in a life insurance policy ordered to be purchased to provide
post-mortem maintenance.  As in Bell, this order attempts "to effect
indirectly what  752 does not mandate directly," and we cannot uphold it.

     The error is solely in the maintenance award and does not affect the
amount of that award.  Accordingly, we believe we can strike the offending
provision here with no need for a remand to reconsider either the
maintenance or property award. 

     Paragraph 17 of the Chittenden Family Court order of February 10, 1993
is stricken; in all other respects, the court's decision is affirmed. 

                              FOR THE COURT:



                              _______________________________________
                              Associate  Justice



------------------------------------------------------------------------------
                             Footnotes


FN1.    In a filing in January of 1994, plaintiff claimed the correct amount of
 maintenance was $4,333.33 per month.  In a filing in February of 1994,
 defendant claimed the correct maintenance amount was either $2,460 per
 month or $2,720 per month.  Hearing on the motion to resolve the difference
 was delayed because plaintiff's counsel was recuperating from surgery. 
 There is no indication in the file that the disagreement has been resolved.

FN2.  The court found plaintiff's take-home income to be $2,550 per month after
 taxes and a retirement deduction of $100 per bi- weekly pay check.  We have
 added back in the retirement deduction. 

FN3.  Defendant also argues, on similar logic, that the award offends the
 freedom from servitude prohibition of Chapter I, Article 1 of the Vermont
 Constitution.  This challenge was not made below, and we do not consider it
 for that reason.  See Quesnel v. Quesnel, 150 Vt. 149, 150-51, 549 A.2d 644, 646 (1988). 

FN4.  After the divorce, defendant can, of course, purchase any property he
 desires, and the new property will not fall within the jurisdiction of the
 family court under 15 V.S.A.  751(a). Any new mortgage lender will,
 however, be aware of defendant's outstanding obligation to pay maintenance
 in determining whether defendant's income is adequate to meet his mortgage
 payments. 

FN5.    The disputed conclusion paragraph reads, in relevant part: 
                 The plaintiff [wife] should be awarded the
                 life insurance [policy worth $9,750] because
                 there is no other means of safeguarding a
                 maintenance award.  We decline to require the
                 defendant to purchase additional life
                 insurance.  The parties did not purchase such
                 protection during their marriage.  Had they
                 not separated, however, the defendant's
                 interest in his law firm would have been
                 there as a death benefit.  Consequently,
                 should the defendant die before his
                 retirement from the firm at age 65, his
                 interest in the firm should be paid to the
                 plaintiff as a partial benefit for his loss
                 of maintenance.  Defendant should execute
                 such documents as may be required to secure
                 his maintenance payments by his interest in
                 his law firm should he die before his
                 retirement age of 65.  If for any reason he
                 will not or cannot pledge his interest in
                 lieu of life insurance, he shall immediately
                 purchase life insurance in the amount of his
                 interest in the law firm ($256,569.00) with
                 plaintiff as beneficiary.