Russell v. Russell

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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
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                                No. 89-564


Janet D. Russell                             Supreme Court

                                             On Appeal from
     v.                                      Chittenden Superior Court

James V. Russell                             March Term, 1991


David A. Jenkins, J.

William E. Roper of Neuse, Smith, Roper & Venman, Middlebury, for
  plaintiff-appellee

John J. Bergeron and Norman C. Smith of Bergeron, Paradis, Coombs &
  Fitzpatrick, Burlington, for defendant-appellant


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


     MORSE, J.   This appeal from a divorce judgment entered eighteen
months after the hearing on the merits presents such a procedural morass
that a remand is necessary to reach an outcome in a manner consistent with
the civil rules.
     Following a divorce hearing held May 2, 1988, the trial court filed, on
August 18, 1988, a document entitled, "Findings of Fact, Conclusions, and
Notice of Decision."  In it, the court directed the husband's counsel to
prepare a judgment.  The decision divided the parties' net equity in marital
property relatively equally and awarded the wife $300 a week in maintenance.
For a pension distribution, the court stated:
           The parties shall share equally in pension pay when
         payment is received by [the husband].  Any pension which
         [the wife] may become entitled to through her employment
         or earnings shall be considered in any calculation or
         formula.  [The husband] shall be required to pay or
         cause to be paid such portion of his pension as will
         enable [the wife] to have no less pension income than
         [the husband], including social security payments.  [The
         husband] shall preserve [the wife's] interest so as to
         best accomplish equal pension payments when both are
         retired and living.

The parties had addressed whether the husband would provide the wife's
health insurance, but the notice of decision was silent on that issue.
     Although no judgment was prepared as ordered, on August 24 and August
29 the husband and the wife respectively filed V.R.C.P. 52(b) motions to
amend the notice of decision.  These motions were argued orally, without
additional evidence, on September 13, 1988.  Neither of the parties nor the
court acknowledged that Rule 52(b) applies only post judgment ("after entry
of judgment").  On November 2, 1988, the court filed a second "Notice of
Decision upon Motions" amending its original notice of decision and, among
other things, providing the wife with health insurance as additional
maintenance.  The court stated,
         The insurance shall continue not only for the three-year
         period requested but until she remarries, is covered by
         Medicaid or its equivalent, or regularly lives with
         another as a spouse.

     On December 1, 1988, the husband submitted a proposed judgment order to
the court.  The wife objected to portions, and the husband responded to the
objections.  A conference was held to discuss the proposed final order on
February 22, 1989.  The day before, February 21, the wife filed a motion to
"reconsider" under V.R.C.P. 60(b)(2) and 15 V.S.A. { 554.  This motion
alleged that the wife had quit her job due to a worsening diabetic
condition and needed more maintenance.  At the February 22 conference, the
court scheduled the motion to reconsider for evidentiary hearing.  On July
14, 1989, that hearing was held, and on September 6, 1989, the court filed a
"Memorandum of Decision upon Further Hearing."  The court increased
maintenance from $300 to $400 a week, but temporarily increased it by $800 a
month "while [the husband] has no substantial college expenses to meet for
the children of the parties," to end in any event on July 1, 1993.  The
court also added a provision that the husband pay the wife $10,000 in trust
to be applied toward the purchase of a home.  On November 2, 1989, the court
filed a "Final Order and Decree of Divorce."
     The husband raises six issues on appeal.
                                    I.
     The husband claims the court abused its discretion in awarding the wife
permanent, rather than rehabilitative, maintenance.
     The parties were married in December 1963, shortly after the wife
graduated from high school, and raised four children.  During the marriage,
the wife was primarily a homemaker.  She had some experience with home
decorating and as a secretary.  At the time of the first divorce hearing,
the wife worked at the Medical Center Hospital of Vermont as a secretary,
earning $7.50 per hour.  The husband was then 51 years old, the wife 44.
The court found the wife's health during the summer of 1988 to be as
follows:
         She is diabetic to the extent that she suffers
         depression and her eyesight is diminished and she
         suffers blurriness at times.  She is overweight.  She is
         participating, since September 1987, in an experimental
         diabetic research program associated with the University
         of Vermont College of Medicine.  She is not dependent
         yet on the drug insulin, but she is on a severe diet.

In contrast, at the time of the 1988 hearing, the husband was earning
$82,000 a year as a manager at General Electric Company.  He also was being
treated for depression due to difficulties at work and the breakup of the
marriage.
     Although the evidence suggested that the wife desired to pursue
training in a decorating career, the prospects that she would remotely
approach the husband's earning capacity were slim.  Spousal maintenance is
designed to correct "'vast inequality between the parties' financial
positions'" resulting from divorce.  Klein v. Klein, 150 Vt. 466, 473, 555 A.2d 382, 386 (1988) (quoting Buttura v. Buttura, 143 Vt. 95, 99, 493 A.2d 229, 231 (1983)).  Therefore, the husband had a responsibility, within the
limits of his resources,
         "to maintain the wife's standard of living as nearly as
         possible at the same level she enjoyed during the
         marriage.  The husband, having entered one of the
         strongest and most fundamental relationships known to
         the law, must continue to bear its financial burden
         where he can reasonably do so and where it is necessary
         in order to prevent a relatively greater hardship to the
         wife."

Id. at 466, 555 A.2d  at 387 (quoting 2 H. Clark, The Law of Domestic
Relations in the United States { 17.5, at 254-55 (2d ed. 1987)).  Moreover,
in a long-term marriage, maintenance serves more than a rehabilitative
function; it also compensates the contributions of a homemaker to the
family's well-being.  Id. at 474, 555 A.2d  at 387.
     15 V.S.A. { 752(a) specifically provides for permanent maintenance and
does not demand any heightened standard for awarding it.  Rather, { 752(b)
permits the court to award maintenance "in such amounts and for such
periods of time as [it] deems just," after consideration of the statutory
factors.  No abuse of discretion in the award of permanent maintenance has
been shown.  See id. at 472, 555 A.2d  at 386 (trial court has considerable
discretion when ruling on maintenance and will be reversed only if no
reasonable basis supports its order).
                                    II.
     Next, the husband maintains that the court's decision to increase
maintenance was error.
     Review of this issue is complicated by the trial court's initial
failure to enter judgment, instead filing a notice of decision.  Nowhere in
our rules is "a notice of decision," as a term of art, defined.  The phrase
is used in V.R.C.P. 52(a) as the event that triggers a party's deadline to
request findings of fact and conclusions of law:

            In all actions tried upon the facts without a jury . .
          . the court shall, upon request of a party . . . made on
          the record or in writing within 5 days after notice of
          the decision, or may upon its own initiative, find the
          facts specially and state separately its conclusions of
          law thereon . . . .

(Emphasis added.)
     Shortly after trial, the parties requested findings.  Because the
parties had already initiated the requirement that findings be made, they
did not need to be notified that the period for requesting findings had
begun to run.  Instead, the court should have entered judgment as mandated
by Rule 52(a).  Rule 52(a) states that "judgment shall be entered pursuant
to Rule 58."  According to V.R.C.P. 58,
           Subject to the provisions of Rule 54(b) [default
         judgments], upon the verdict of a jury, or upon a
         decision by the court granting or denying relief, the
         clerk, unless the Presiding Judge otherwise orders,
         shall forthwith prepare the judgment without awaiting
         any direction by the court.  The Presiding Judge shall
         promptly approve and sign the judgment, and the clerk
         shall thereupon enter it.  A judgment is effective only
         when entered as provided in Rule 79(a).  Entry of the
         judgment shall not be delayed for the taxing of costs.
         Attorneys shall submit forms of judgment upon direction
         of the Presiding Judge.  A form of judgment submitted in
         accordance with this rule shall be served upon all
         opposing parties, who shall file any objections to the
         judgment proposed within five days of service upon them
         unless the Presiding Judge orders such objections to be
         filed earlier.

     In this case, the correct procedure dictated that the husband's
counsel prepare the judgment as instructed by the presiding judge.  Instead,
no proposed order was prepared and served until December 1, 1988, a month
after the court's second notice of decision.  Due to protracted legal
wrangling, the judgment did not become effective until eighteen months after
the final divorce hearing, though it should have been effective much
earlier.  In short, the court and the parties allowed what should have been
a judgment entered within a reasonable time after the court's decision to
become an unnecessarily protracted dispute without any apparent end in
sight.
     Absent a judgment, all motions filed after the court's first (August
18, 1988) notice of decision were not authorized by the rules of civil
procedure.  The parties' motions to amend pursuant to V.R.C.P. 52(b),
seeking, in part, clarification of the maintenance order, were made without
an entry of judgment.  The wife's request for modification, which came in
the form of a V.R.C.P. 60(b) motion filed six months after the notice of
decision, was also directed to a nonexistent judgment.
     The court's request that the husband prepare a judgment, the parties'
subsequent filing of post-judgment motions under rules 52 and 60, and the
court's reaction to those motions reflected an understanding that the first
notice of decision was functionally a judgment of divorce.  Under the
circumstances of this case, we will treat it as such.
     Treating the August 18th notice of decision as a final order is also
consistent with our test that a judgment is final when "it makes a final
disposition of the subject matter."  Nevitt v. Nevitt, ___ Vt. ___, ___, 584 A.2d 1134, 1137 (1990).  In Nevitt, we held an oral notice of decision was
not final, and could be modified at the court's discretion, because the
divorce court had made only a custody award and explicitly left all the
remaining issues to a later hearing.  Id. at ___, 584 A.2d  at 1136-37.
Here, the court's notice of decision, issued with findings of fact and
conclusions of law, covered custody, child support, spousal maintenance, and
property division.  It made no mention of outstanding issues to be decided.
The parties sought clarification of a few details, raised but not included
in the order, by the appropriate post-judgment motion, a V.R.C.P. 52(b)
request to amend the judgment.
     Amendments were made to the August 18th order with the misconception
that the usual standards for modifying a judgment were inapplicable.  15
V.S.A. { 554, cited by the wife, was not authority to amend or for a new
trial because it too requires a judgment.  Although { 554 refers to a
"decree" rather than a "judgment," the two terms are virtually
interchangeable.  See Black's Law Dictionary 369-70 (5th ed. 1979) (decree
is a judgment entered by a court of equity and serves the same purposes;
with the merger of law and equity and the adoption of the rules of civil
procedure, "judgment" has generally replaced "decree").  The 1990 amendment
to { 554(b) acknowledges this interpretation: "A decree of divorce shall
constitute a civil judgment under the Vermont Rules of Civil Procedure."
     The "Memorandum of Decision upon Further Hearing," filed September 6,
1989, also reflected the misconception that the usual standard for modifying
judgments did not apply.  It begins with "[e]vidence was reopened" and does
not state any evidentiary standard of review except the one appropriate for
the hearing on the merits.  There is no recognition that the wife was
seeking a modification of maintenance.
     We note also that certain factual determinations in the decision are
puzzling.  The court found that medical necessity did not cause the wife to
quit her job at Medical Center Hospital of Vermont as she had claimed and
that her earning capacity of $15,000 had not changed.  Yet, the court
increased her maintenance anyway on the apparent ground that her financial
difficulties resulted from her mismanagement of money.  The court also,
"[a]s further property settlement," awarded the wife $10,000 in trust to
purchase a home.  Property settlements are not subject to modification
except pursuant to Rule 60(b).
     The court misapprehended its authority and may have viewed the case
differently had the proper procedures been followed.  We, therefore, remand
with directions that a final judgment of divorce be entered based on the
notice of decision filed August 18, 1988.  The parties may file any post-
judgment motions as authorized by the rules of civil procedure, and the
timeliness of any motion is to be determined from the date judgment is
entered.
                                   III.
     The husband claims the court abused its discretion in awarding the wife
permanent health insurance at his expense.  The procedural development of
this issue makes review problematic.
     The wife's diabetic condition and related employment problems were
explored at the merits hearing in May 1988, and in her initial request for
findings she asked that the husband would "be responsible for covering [the
wife] with health insurance for three years following divorce [the so-
called COBRA period] at a combined cost of $61/month."  In his post-trial
requests, the husband stated that he had "no objection to making whatever
arrangements are necessary to allow the [wife] to continue with the G.E.
[General Electric, his employer's] health insurance plan, but feels that if
she prefers to be on the G.E. plan versus the Medical Center Hospital Plan
[her employer's plan], she should pay the added cost of that coverage."  The
court's first notice of decision, however, made no provision for her health
insurance.
     In her August 29, 1988 motion to amend the notice of decision, the wife
requested that the husband be ordered to "continue to maintain and pay for
health insurance for [the wife] for the three-year period following the
divorce until [the wife] obtains health insurance coverage through her own
employment."  This motion, along with the husband's motion to amend, was
argued on September 13, 1988.  The court took no new evidence.  The wife
merely reiterated her request that her health insurance be covered "during
the eligible three year period" and that the husband be responsible for the
cost.  The husband stated he would "make sure that she can stay on the plan
if she chooses" but argued that she should pay the $60 per month out of her
maintenance.  The court asked if the wife would be eligible to remain on
his health insurance, and he responded "Yes, . . . for up to thirty-six
months after the divorce is granted."  This was the entire substance of the
discussion on this issue.  Subsequently, in its second notice of decision,
filed November 2, 1988, the court ordered:
         The insurance shall continue not only for the three-year
         period requested but until she remarries, is covered by
         Medicaid or its equivalent, or regularly lives with
         another as a spouse.

     Neither party filed a motion objecting to this provision, but the
matter did not end there.  In December 1988, the husband submitted the
proposed final order, incorporating this provision.  On December 12, 1988,
the wife filed objections to the proposed order, asking that the husband be
instructed to provided health coverage for her even if he left his
employment at General Electric.  On February 22, 1989, the court held a
status conference, and the health insurance problem -- whether the wife
could continue on GE's plan after three years and what the cost of such
continued coverage would be -- was raised for the first time.  At the end
of the discussion, the husband asked for an opportunity to discuss the
matter further with the GE health insurance administrator and present the
information at another hearing (on the wife's motion to reconsider
maintenance).  The court responded that "This [the health insurance issue]
is a function of maintenance, so we ought to reconsider this."  At the July
1989 hearing, the husband testified that coverage could be provided and the
cost during the COBRA period would be $98 per month.  He also stated that
although the cost for continued coverage was unknown, he would agree to a
$100 per month cap on health insurance coverage for the wife.  In the final
divorce order, the court ordered the husband "to provide on an
uninterrupted basis health insurance, as additional maintenance, for [the
wife] equal to that now provided through his General Electric employment,
until such time as [the wife] remarries or is covered by Medicaid, or its
equivalent, or regularly lives with a spouse."
     The husband asserts that the court did not have any evidence of the
cost for health insurance beyond the three-year period.  He argues that,
when the cost of maintenance in the form of health insurance is unknown or
cannot be determined, the maintenance award cannot be made.
     Despite -- indeed because of -- the court's protracted treatment of
this issue, we must remand.  The trial court's manner of dealing with this
issue illustrates why it is important to adhere to the procedural rules
involving the rendering and amendment of judgments.  To proceed without the
mandated judgment order is to journey without a compass.  First, in light of
the procedural shortcomings already noted, we cannot simply review the end
result, because we do not know how the court got there.  Because we treat
the court's first notice of decision as the final judgment, we could
evaluate the wife's motion to amend that judgment as timely filed under
V.R.C.P. 52(b) and V.R.C.P. 6(a), and evaluate the husband's argument as of
that stage of the proceeding.  But, the court did not treat the wife's
motion that way.  It treated everything before the final divorce order as
interlocutory, issuing three notices of decision, beginning with general
statements and then making increasingly more specific orders, sometimes
without any notice to the parties of what was coming.  Everyone -- the
court, the lawyers, and the litigants -- seemed to be operating under the
assumption that the court's ruling on the motion to amend would have no more
finality than any other interlocutory ruling, an assumption born out by the
subsequent proceedings.
     The court treated health insurance as part of maintenance, and this
issue must be addressed along with the other maintenance issues on remand in
the context of post-judgment motions.


                                    IV.
     The husband claims the court used an erroneous so-called coverture
fraction in calculating the proportion of his pension to go to the wife.
The coverture fraction was first used in the September 1989 "Memorandum of
Decision upon Further Hearing" in modifying the pension provision in the
August 1988 notice of decision.  It is, therefore, not part of the final
judgment as we have defined it.  Because the issue will likely recur on
remand, we address it now.
     The parties agreed to distribute between them the husband's pension
when it became due.  In determining the shares, the court must apply a
coverture fraction to reflect the proportion of the entire pension
attributable to the marriage.  McDermott v. McDermott, 150 Vt. 258, 268, 552 A.2d 786, 789 (1988).  As stated in that case, "[t]he numerator of the
fraction is the number of months or years that the employee participated in
the plan during the marriage."  Id. at 261, 552 A.2d  at 789.  The parties
disagree upon what date the marriage should be deemed to have ended.  The
husband urges us to use the date of separation to measure the cutoff.
Because the parties were married in December 1963 and separated in December
1986, the husband  suggests 23 years is the proper numerator.  The court
used 25 years, reflecting a cutoff date after the first but before the
second evidentiary hearing.
     Courts of other jurisdictions use the date of separation in calculating
the coverture fraction.  Huddleson v. Huddleson, 187 Cal. App. 3d 1564,
1571, 232 Cal. Rpt. 722, 726 (1st Dist. 1986); King v. King, 332 Pa. Super.
526, 534, 481 A.2d 913, 917 (1984).  We think that date is most reflective
of the functional end of marriage and will be a relatively easy benchmark to
determine.
                                    V.
     A final point is raised about the interpretation of a provision
included in the November 1989 final divorce order, which reads:
           [M]aintenance obligations shall terminate . . . when
         [the wife] is receiving or eligible for both [the
         husband's] retirement benefits and social security
         benefits.

The husband points out that this provision may be read to say that the wife
will someday be eligible for some of the husband's social security
benefits.  The basis for the reference to social security in this provision
is unclear, because it is not apparent how the wife will be eligible, if at
all, for the husband's social security benefits.  If this or a similar
provision is included in an order on remand, it should be clarified.
                                    VI.
     The husband's objection to the requirement that he post a bond to
compensate the wife for any adverse income tax treatment for failure to
reinvest her share of the proceeds from the sale of the parties' residence
is moot because he did not post the bond and the wife never pursued the
point by moving for relief in the trial court.

     Reversed and remanded.
                                        FOR THE COURT:




                                        Associate Justice