Braun v. Greenblatt

Braun v. Greenblatt (2005-318)

2007 VT 53

[Filed 15-Jun-2007]


       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.


                                 2007 VT 53

                                No. 2005-318


  Sheila Braun                                   Supreme Court

                                                 On Appeal from
       v.                                        Chittenden Family Court


  Marc Greenblatt                                January Term, 2007


  Ben W. Joseph, J.

  Brian K. Valentine and Caryn E. Waxman of Downs Rachlin Martin PLLC,
    Burlington, for Plaintiff-Appellee.

  Susan M. Murray and Erin Miller Heins of Langrock Sperry & Wool, LLP,
    Burlington, for Defendant-Appellant.


  PRESENT:  Reiber, C.J., Dooley, Johnson and Skoglund, JJ., and 
            Davenport, Supr. J.,  Specially Assigned

        
       ¶  1.  DAVENPORT, Supr. J., Specially Assigned.   Husband appeals
  from a family court post-judgment modification order that tripled his
  monthly spousal maintenance obligation and extended its duration
  indefinitely.  Husband argues that the court committed numerous reversible
  errors, including failing to find a real, substantial, and unanticipated
  change of circumstances and ordering an amount and duration of maintenance
  that constitute an abuse of discretion.  We reverse and remand. (FN1)

       ¶  2.  The parties married in December 1995 when both were thirty-four
  years old.  Earlier that year, wife quit a graduate school program and left
  a job where she was earning $41,000 per year as a computer programmer in
  Washington, D.C. in order to move to Vermont where her husband had been
  offered a position as a research physician at Fletcher Allen Medical Center
  and the University of Vermont.  Within a year of their wedding, the parties
  had their first child.  While husband continued to advance his career in
  oncology, wife assumed the role of primary caregiver and did not work
  outside the home.  A second child was born in August 1999, by which time
  the parties had separated.  After wife filed for divorce in September 1999,
  the parties negotiated a settlement agreement that provided for wife to
  continue as the children's primary caregiver.  The agreement contemplated
  the possibility that wife would home school the children and earn minimal
  or no income. 
   
       ¶  3.  At the time the stipulation was finalized and the divorce
  granted in December 2000, husband was earning an annual salary of
  $121,574.96 and wife had no earnings.  Under the terms of the agreement,
  wife was to receive spousal maintenance, child support, and maintenance
  supplement.  Although the marital home was awarded to husband, the parties
  agreed that wife could remain in the marital home after the divorce for up
  to thirteen months.  While she remained in the marital home, she was to
  receive $2,650 per month in spousal maintenance.  Once she moved out of the
  home, an event that was to occur no later than March 31, 2002, the
  obligation decreased to $2,350 per month.  

       ¶  4.  The current dispute over maintenance focuses on a troublesome
  provision regarding the renegotiation of the maintenance obligation after
  divorce:   

      The parties will renegotiate commencing May 1, 2004 what, if
    anything, shall be paid in spousal support after August 31, 2004. 
    It is the parties' intention that there be no presumption either
    in favor of or in opposition to the continuation of rehabilitative
    spousal support based on this Stipulation.  The parties
    specifically intend to defer this issue to 2004 and take a fresh
    look at it at that time, when they will have better information
    regarding their income and expenses at that time.  If the parties
    cannot reach agreement on this without assistance, they shall
    mediate this issue in good faith for not less than 5 sessions
    before requesting the assistance of the court. 

  The parties failed to reach any agreement as to what amount, if any,
  husband should pay in spousal maintenance after August 2004.  In December
  2004, after negotiation and mediation had failed, husband moved to
  terminate the obligation.  Wife filed a cross motion to continue
  maintenance at a level to be determined by the court and to enforce other
  provisions of the final order.  The family court heard two days of
  testimony in January and March 2005.  In addition to testimony by the
  parties, wife presented two expert witnesses: an accountant to analyze
  husband's income from 2000 to 2004, calculate arrears, and assess tax
  implications; and a career advisor to explain wife's career and education
  options for reentering the workforce.  At the end of the hearings, the
  court invited the parties to submit proposed findings of fact and
  conclusions of law. 
   
       ¶  5.  The family court's July 2005 decision adopted in large
  measure the proposed findings, conclusions, and order submitted by wife. 
  The court modified maintenance by increasing the monthly obligation to
  $6,300 per month plus "an amount to cover [wife's] monthly tax obligation" 
  for a five-year period retroactive to September 1, 2004.  After the five
  years, husband's obligation was to decrease dollar for dollar based on
  wife's actual income.  The order also provided that, for so long as
  maintenance continued, husband's obligation would increase based on either
  the percentage increase in his income, including investment income, or an
  annual cost-of-living adjustment.  The court further ordered that husband
  pay accumulated arrears owing from an income-increase provision in the
  final order, pay arrearages in the children's extracurricular and
  educational expenses, make deposits into one of the children's savings
  accounts, and pay the fees of wife's attorneys and expert witnesses. 
  Husband argues that the court erred first by failing to find a real,
  substantial, and unanticipated change of circumstances that would support
  an exercise of subject matter jurisdiction and then by making a series of
  errors in modifying maintenance and enforcing the final order.  We first
  address the maintenance award and then the issues related to the
  calculation of the spousal maintenance arrearage, the enforcement of the
  provision related to the children's savings accounts and the award of
  attorney fees. 

                        I.  Spousal Maintenance Award
   
       ¶  6.  Spousal maintenance may be modified only "upon a showing of a
  real, substantial, and unanticipated change of circumstances."  15 V.S.A. §
  758.  In the absence of the required change,  the court is without
  jurisdiction to modify a maintenance order.  Golden v. Cooper-Ellis, 2007
  VT 15, ¶ 57, __ Vt. __, __ A.2d __; Taylor v. Taylor, 175 Vt. 32, 36, 819 A.2d 684, 688 (2003).  There are no fixed standards for determining what
  meets this threshold, and the determination of whether a particular change
  is substantial must be made in the context of the surrounding
  circumstances.  Golden, 2007 VT 15, ¶ 57 (citing Taylor, 175 Vt. at 36,
  819 A.2d at 688).  The trial court's ruling is discretionary and will not
  be disturbed "unless the discretion was erroneously exercised, or was
  exercised upon unfounded considerations or to an extent clearly
  unreasonable in light of the evidence."  Taylor, 175 Vt. at 36, 819 A.2d  at
  688. 

       ¶  7.  Wife argues that husband waived any jurisdictional argument by
  failing to raise it below.  Husband's motion requested "enforcement" of the
  final order, rather than modification, and wife's cross motion sought an
  order "establishing spousal maintenance"; the change-of-circumstances
  requirement was consequently unaddressed.  The failure to raise the issue
  of subject matter jurisdiction below does not preclude its consideration on
  appeal, however.  "It is axiomatic that lack of subject matter jurisdiction
  . . . may be raised for the first time on appeal."  Town of Charlotte v.
  Richmond, 158 Vt. 354, 358, 609 A.2d 638, 640 (1992).  We may thus properly
  consider whether the court had subject matter jurisdiction.

       ¶  8.  The trial court made substantial modifications to the nature
  and the amount of the spousal maintenance obligation that had been in place
  since the final order.  Not only did the court order husband to pay more
  than triple the amount he was required to pay under the stipulated final
  order, but it effectively converted a rehabilitative award into a permanent
  award.  At the time of the divorce in 2000, the parties agreed that the
  purpose of alimony was rehabilitative.  The purpose of rehabilitative
  maintenance is to allow the recipient spouse to become self-supporting. 
  Strauss v. Strauss, 160 Vt. 335, 339, 628 A.2d 552, 554 (1993). 
  Rehabilitative maintenance is, by its nature, time limited.  Id.  By
  requiring husband to continue to pay spousal maintenance until wife's
  earnings exceeded the amount of the obligation, the trial court extended
  alimony for an indefinite period, effectively transforming it into a
  permanent award and eliminating any incentive for wife to become
  self-supporting.      
   
       ¶  9.  The trial court made these changes without any reference to
  changed circumstances.  The court concluded that it had subject matter
  jurisdiction based on the maintenance-renegotiation provision of the final
  order and the family court's exclusive jurisdiction to hear and dispose of
  all enforcement-of-support proceedings in divorce cases.  See 4 V.S.A. §
  454(3), (4).  It interpreted the renegotiation provision as an agreement by
  the parties to defer the court's determination of spousal support.  In
  short, the court did not address the issue of changed circumstances because
  it concluded that the parties had stipulated the issue away.

       ¶  10.  "[S]ubject matter jurisdiction cannot be conferred by
  agreement or consent of the parties when it is not given by law."  Columb
  v. Columb, 161 Vt. 103, 110, 633 A.2d 689, 693 (1993) (quotations omitted)
  (rejecting argument that party waived subject matter jurisdiction in child
  custody case).  Just as parties may not waive the ability to seek
  modification if there is a change of circumstances, Taylor, 175 Vt. at 39,
  819 A.2d  at 690 (citing 15 V.S.A. § 758), they may not waive the
  jurisdictional prerequisite that there be a change in circumstances prior
  to a modification of maintenance.  Modification of the purpose of the
  alimony award and the amount of the obligation cannot be made absent a
  finding of a real, substantial, and unanticipated change in circumstances. 
  Failure to address this jurisdictional threshold was error.      
   
       ¶  11.  Wife contends that, even if jurisdiction is properly
  considered on appeal, the findings by the court are sufficient to support a
  conclusion of changed circumstances.  A determination of whether a
  substantial change of circumstances exists is a matter for the trial
  court's discretion, and our review of that determination is deferential. 
  Meyer v. Meyer, 173 Vt. 195, 197, 789 A.2d 921, 923 (2001).  Further,
  "[t]here are no fixed standards for determining what meets this threshold,
  and evaluation of whether or not any given change is substantial must be
  determined in the context of the surrounding circumstances."  Taylor, 175
  Vt. at 36, 819 A.2d  at 688 (quotations and ellipses omitted).  Therefore,
  absent an initial determination by the trial court, we decline to make a
  finding of changed circumstances on appeal.  Pill v. Pill, 154 Vt. 455,
  460, 578 A.2d 642, 645 (1990).  

       ¶  12.  Though the failure to address the jurisdictional threshold of
  changed circumstances is sufficient to warrant a remand on the issue of the
  spousal maintenance obligation after August 2004, we consider three issues
  related to the maintenance award that are likely to recur on remand.  See
  Agency of Natural Res. v. Godnick, 162 Vt. 588, 596, 652 A.2d 988, 993
  (1994) (considering issues not necessary to reach holding but likely to
  recur on remand).

       ¶  13.  Critical to the trial court's rationale for both the amount
  and duration of the new obligation was its conclusion that wife was
  entitled to compensatory alimony.  Compensatory maintenance 

    reflects the reality that when one spouse stays home and raises
    the children, not only does that spouse lose future earning
    capacity by not being employed or by being underemployed subject
    to the needs of the family, but that spouse increases the future
    earning capacity of the working spouse, who, while enjoying family
    life, is free to devote productive time to career enhancement. 

  Delozier v. Delozier, 161 Vt. 377, 382, 640 A.2d 55, 57-58 (1994).  In
  determining the compensatory component of a maintenance award, the length
  of the marriage is a critical factor because it is "often a major factor
  creating the disparity in the parties' earning capacities" and because it
  provides a "benchmark for determining reasonable needs."  Id. (citing Klein
  v. Klein, 150 Vt. 466, 477, 555 A.2d 382, 389 (1988)).   
   
       ¶  14.  The marriage in this case was a short-term marriage lasting
  only four and a half years.  The trial court concluded, however, that wife
  would be out of the job market for a period of time comparable to a
  ten-year marriage because of the parties' agreement that she would raise
  the children and even home school them after the divorce.  Meanwhile,
  husband's earning capacity continued to increase while his contribution to
  raising the children was negligible.   Based on these facts, the court
  concluded that wife was entitled to compensatory alimony.  The error in
  this analysis is that it focuses on the post-divorce period rather than the
  contributions of each spouse during the marriage.   The purpose of
  compensatory alimony is to compensate the recipient spouse for
  contributions made during the marriage, not after.  It is precisely for
  this reason that the duration of the marriage is such a critical factor.  


       ¶  15.  A second issue is the inclusion of wife's monthly tax
  obligation as part of the maintenance award.  In Delozier we indicated that
  we do not favor the use of formulas for determining maintenance awards and
  that such awards are susceptible to reversal unless they are "sensitive to
  the statutory criteria, including both parties' needs."  161 Vt. at 385,
  640 A.2d  at 59.  We recognize that the formula used in this case is
  different from the formula we considered in Delozier, which related to
  fixed-percentage maintenance awards.  Nonetheless, we find the present
  formula-a specific dollar amount plus tax consequences-similarly
  problematic.  The amount is tied only to the recipient's needs and not in
  any way to the needs of the payor.  Husband must pay wife's obligation
  whatever it is and to whatever degree it fluctuates, regardless of his
  needs.  While the court must consider the expenses of both spouses
  including their current tax obligations and estimates of their future tax
  obligations in setting the amount of the maintenance award, 15 V.S.A. §
  752(b)(1), (6), it cannot simply shift an expense from one party to another
  regardless of future fluctuations and call it spousal maintenance.
   
       ¶  16.  Finally, the conflicting escalation clauses in the
  modification order render future adjustments unworkable.  While the trial
  court must consider inflation with relation to the cost of living when
  fashioning a maintenance order, Bell v. Bell, 162 Vt. 192, 200, 643 A.2d 846, 851 (1994), the order must clearly articulate the formula for doing
  so.

                     II.  Spousal Maintenance Arrearage

       ¶  17.  Paragraph fifteen of the final order provided that from
  January 2001 until wife moved out of the marital home, husband would pay
  $2,650 per month in spousal maintenance.  The payments were to be made in
  three separate transactions: $700 directly to wife; $1,356.56 into an
  account held by wife and used to pay the mortgage; and the remainder to
  cover property taxes and insurance.  The $700 amount was to be adjusted
  upwards by ten percent whenever husband's income increased by ten percent. 
  Paragraph sixteen of the final order provided that husband would pay $2,350
  per month in support to wife following wife's move from the marital home. 
  In paragraph sixteen no similar allocation of the payments was made,
  presumably because wife would not be in the marital home and therefore
  would have discretion to spend as much or as little on her housing as she
  chose.  Paragraph sixteen also contained no provision for upward
  adjustment.
   
       ¶  18.  The family court found that husband had failed to adjust his
  maintenance payments despite his income increasing by more than ten
  percent.  However, rather than calculating arrears based on only the $700
  payment and only for the period when paragraph fifteen was in effect, the
  court interpreted the ten-percent-adjustment provision in paragraph fifteen
  to apply to the total maintenance amount in paragraph sixteen when that
  paragraph took effect.  Applying this interpretation, the court concluded
  that husband owed $8,952 in arrears based on his increases in income from
  2000 to 2004.  Husband argues, and we agree, that the court's conclusion is
  inconsistent with the plain language of the final order.  The ten-percent
  increase applied only to the $700 amount and only during the period when
  wife remained in the marital home.  The court's conclusion to the contrary
  was error.

                      III.  Children's Savings Account

       ¶  19.  Prior to the parties' divorce, a savings account was created
  for each child.  The final order provided that husband would "continue to
  contribute money to [the younger child's] savings account until the amount
  deposited in this account is equal to the amount deposited by the parties
  into [the older child's] account (approximately $42,000)."  The final order
  provided no deadline by which this was to be accomplished.  The family
  court nevertheless concluded that husband had to fulfill this obligation
  without delay and ordered husband to pay into the younger child's account
  within thirty days the difference between the balances of the two accounts.

       ¶  20.  The family court's order errs in two respects.  First, it
  ignores the final order's language that the amount deposited into the
  younger child's account shall equal the amount deposited into the older
  child's account, not the amount held in that account at a given time. 
  Second, the court imposed a short deadline for balancing the accounts when
  no deadline existed in the final order.  Though husband will certainly have
  to comply with the final order, requiring full compliance within a short
  period of time while the children are still relatively young exceeded the
  trial court's discretion.

                            IV.  Attorney's Fees
   
       ¶  21.  In divorce cases, the trial court may award attorney's fees
  at its discretion "where justice and equity so indicate."  Turner v.
  Turner, 2004 VT 5, ¶ 9, 176 Vt. 588, 844 A.2d 764 (mem.) (quotations
  omitted).  The primary consideration in making an award "is the ability of
  the supporting party to pay and the financial needs of the party receiving
  the award."  Id.  The trial court found that husband was able to pay his
  attorney's fees outright while wife had incurred substantial debt.
  Consequently, the court awarded wife $25,000 for attorney's fees, $1,750
  for the accountant, and $350 for the career counselor. 

       ¶  22.  A reversal of a support or maintenance order does not
  necessarily require a reversal of an award of attorney's fees.  Smith v.
  Stewart, 165 Vt. 364, 375, 684 A.2d 265, 272 (1996).  However, in light of
  the wholesale reconsideration of spousal maintenance required in this case,
  we conclude that a reconsideration of the parties' financial positions and
  their respective abilities to pay professional fees is warranted.  We thus
  remand the award of professional fees for reconsideration after a
  recalculation of maintenance and arrears.  

       Reversed and remanded for proceedings consistent with this opinion.


                                       FOR THE COURT:



                                       _______________________________________
                                       Superior Judge, Specially Assigned


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


FN1.  Husband moved to strike the contents of a post-oral-argument letter
  filed by wife's attorney that purported to correct factual misstatements
  made by both counsel at oral argument.  Because we did not consider the
  letter in reaching our decision, husband's motion is denied as moot.