Leas v. Leas

Leas v. Leas (97-452); 169 Vt. 364; 737 A.2d 889

[Filed 25-Jun-1999]


       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. 97-452


Sandra Felice Leas	                             Supreme Court

                                                     On Appeal from
     v.		                                     Chittenden Family Court

James Marc Leas	                                     November Term, 1998


Amy M. Davenport, J.


       John J. Bergeron of Bergeron, Paradis, Fitzpatrick & Smith,
  Burlington, for Plaintiff-Appellee.

       Susan M. Murray of Langrock Sperry & Wool, Middlebury, for
  Defendant-Appellant.

PRESENT:  Dooley, Morse, Johnson and Skoglund, JJ, and Katz, Supr. J.,
  Specially Assigned.


       DOOLEY, J.  Father appeals from a Chittenden Family Court divorce
  decree that  includes a monthly maintenance supplement payable by father to
  mother pursuant to 15 V.S.A.  § 661.  The decree also incorporates the
  parties' agreement that each shall have physical custody  of the parties'
  two minor children for exactly 50 percent of the time.  Because we agree
  with  father that § 661 does not authorize the award of a maintenance
  supplement in such circumstances,  we vacate in part and remand for
  reconsideration of the economic issues resolved in the original  decree. 
  We also address father's contention that, in dividing the marital estate,
  the court  improperly sought to take into account any increase or decrease
  in the value of certain assets  between the date of the final hearing and
  the date of asset transfer.

 

       Upon their divorce, mother and father entered into an agreement to
  split parental rights  and responsibilities equally.  This agreement calls
  for the children to spend 50 percent of their  time at mother's home and 50
  percent of their time at father's home.  The family court found that,  upon
  moving to Vermont, mother left behind a lucrative career editing academic
  textbooks, which  she can  pursue only on a limited basis while remaining
  in Vermont.  By contrast, the family's  move to Vermont was motivated in
  part by the availability of a position with IBM for father.  At  the time
  of the divorce decree, father could have expected to earn at least $64,000
  per year while  mother's income was only $27,444.  The family court noted
  that both parties would have to make  some "downward adjustments" in
  standard-of-living as a result of the divorce.  However, the  court further
  determined that, "[w]ithout spousal maintenance or maintenance supplement, 
  [mother's] standard of living will be reduced to a far greater extent than
  [father's] even after child  support is factored into the equation."  As a
  result, the court awarded mother four years of spousal  maintenance under
  15 V.S.A. § 752 as well as a maintenance supplement under § 661, in
  addition  to child support.  The family court also divided the marital
  estate, requiring father to transfer to  mother the sum of $103,358, using
  specified assets from three specific accounts held under  father's name,
  plus a proportionate share of any appreciation or depreciation of the three
  accounts  that occurred between the date of the final hearing and the date
  of transfer.

       Father contends that a maintenance supplement is inappropriate because
  the statute  authorizing such awards contemplates only a situation where
  there is one custodial parent and one  noncustodial parent, as opposed to
  situations where, as here, parents share custody equally.  The  family
  court rejected this argument, reasoning that such a "narrow" interpretation
  of § 661 would  be inconsistent with the statute's purpose.  That purpose
  is "to correct any disparity in the 

 

  financial circumstances of the parties if the court finds that the
  disparity has resulted or will result  in a lower standard of living for
  the child than the child would have if living with the noncustodial 
  parent."  15 V.S.A. § 661(a).  While we share the family court's concern
  about a result that limits  the court's ability to correct a relevant
  disparity in the financial circumstances of some divorcing  parents, we
  agree with father that the plain meaning of the enactment dictates such a
  result.

       The concept of a maintenance supplement appears to be unique to
  Vermont law, having  been created by the Legislature in 1986.  See 1985,
  No. 180 (Adj. Sess.), § 9.  In other states,  awards available for ongoing
  living expenses are limited to child support and spousal maintenance  (or
  alimony).   By its express terms, the maintenance supplement statute
  requires that the recipient  of the supplement be "the custodial parent." 
  15 V.S.A. § 661(a).  In the same act, the Legislature  defined the term
  "custodial parent," specifically for the purposes of eligibility for a
  maintenance  supplement:  "The parent having custody for the greater period
  of time shall be considered the  custodial parent for the purposes of
  section 661 of this title."  See 1985, No. 180 (Adj. Sess.),  § 5 (codified
  as 15 V.S.A. § 657(a)).  The Legislature thus clearly expressed its intent
  to limit the  availability of maintenance supplement to the "parent having
  custody for the greater period of  time."  Id.  We are required to apply a
  statute according to its terms.  See Carter v. Gugliuzzi,  ___ Vt. ___,
  ___, 716 A.2d 17, 21 (1998) ("where remedial legislation contains an
  express  limitation, we have generally declined to expand the exception
  beyond its plain terms").  Having  discerned an express limitation that is
  directly applicable here, our statutory construction task is  at an end. 
  See Harris v. Sherman, 167 Vt. 613, 614, 708 A.2d 1348, 1349 (1998) (mem.) 
  ("where legislative intent can be ascertained on its face, the statute must
  be enforced according  to its terms without resort to statutory
  construction."); cf. State v. Baldwin, 140 Vt. 501, 511, 

 

  438 A.2d 1135, 1140 (1981) (eschewing "literal interpretation" of
  "unartfully" drafted statute and  thus adopting construction that "will not
  leave the enactment ineffective or meaningless").

       In this instance, however, taking the next step and examining the
  relevant legislative  history reinforces the view that the Legislature made
  a conscious policy choice to limit the scope  of the maintenance supplement
  statute.  An aspect of a statute's history, which we have previously  found
  illuminating in other contexts, is the consideration at the committee level
  of proposed  statutory language.  See, e.g., State v. Forcier, 162 Vt. 71,
  77, 643 A.2d 1200, 1203 (1994)  (citing legislative committee discussion as
  "unequivocally demonstrat[ing]" that legislative intent  is consistent with
  meaning of words chosen).  The child support law we are applying here began 
  as S. 286 in the 1986 legislative session and went through extensive
  mark-up in the Senate  Judiciary Committee.  The maintenance supplement
  authorization was proposed by attorney  Kimberly Cheney on behalf of the
  Family Proceedings Advisory Committee, a legislatively-created study
  committee.  As discussed at a March 26, 1986 committee hearing, he offered
  an  amendment to require a court to award "an additional payment
  characterized as maintenance to  be paid while a child support obligation
  arising out of an action for divorce exists in cases where  the
  noncustodial parent has greater income or earning capacity than the
  custodial parent."  See  Draft No. 1, S. 286 (March 25, 1986); Hearings on
  S. 286 before Senate Judiciary Committee  at 50-74 (March 26, 1986).  This
  language was part of Draft 1 of a strike-all version of S. 286  produced
  for the Senate Judiciary Committee on March 25th in connection with
  Cheney's  testimony.  See Draft No 1, S. 286 at 8 (March 25, 1986).  After
  committee discussion, Janet  Ancel of the Legislative Council produced a
  Draft 2 on March 28th.  This draft changed the  obligation to award a
  maintenance supplement in cases "where one parent has greater income or 

 

  earning capacity than the other parent."  Draft No. 2, S. 286 at 8 (March
  28, 1986).  She  explained to the committee that she had made the change,
  after consulting with attorney Cheney,  to allow maintenance supplement in
  situations of shared custody because "[t]here really is no  noncustodial
  parent in shared physical custody."  Hearings on S. 286 before Senate
  Judiciary  Committee at 23-24 (March 27, 1986).

       The Senate Judiciary Committee rejected the change that would have
  allowed maintenance  supplement for noncustodial parents.  In Draft 3,
  dated April 1, 1986, the committee not only  returned the maintenance
  supplement language to the original version to limit availability to 
  custodial parents, but added the specific definition of custodial parent to
  require that this parent  have custody for the greater period of time.  See
  Draft No. 3, S. 286 at 6, 8-9 (April 1, 1986).  Through the rest of the
  legislative process, the bill remained as the committee drafted it,
  limiting  the availability of a maintenance supplement to a custodial
  parent.

       To the extent it is helpful to speculate why the Legislature made such
  an unambiguous  choice, there is a myriad of plausible explanations for the
  decision to limit the availability of  maintenance supplement to custodial
  parents.  As pointed out above, maintenance supplement was  a new concept
  in 1986, untried anywhere in the United States, and the Legislature may
  have  decided to go slowly in adopting it.  Maintenance supplements were
  first authorized at the same  time the Legislature enacted a new child
  support law that significantly increased the financial  responsibility of
  many parents; the Legislature may have wanted to limit the extent of that 
  increase.  Legislatures operate in a practical world of compromise that
  intentionally creates  narrow and limited responses to problems.  As the
  United States Supreme Court has pointed out,  "[d]eciding what competing
  values will or will not be sacrificed to the achievement of a particular 

 

  objective is the very essence of legislative choice - and it frustrates
  rather than effectuates  legislative intent simplistically to assume that
  whatever furthers the statute's primary objective  must be the law." 
  Rodriguez v. United States, 480 U.S. 523, 526 (1987) (emphasis in
  original).  For this reason, although we agree with the trial court that
  the primary policy objective endorsed  by the Legislature would be
  furthered if we construed § 661 to authorize a maintenance  supplement in
  the circumstances of this case, we cannot do so without exceeding a clear 
  limitation.(FN 1)

       In these circumstances, the appropriate action is not simply to vacate
  the award of a  maintenance supplement but to remand for reconsideration of
  all economic issues.  The family  court explicitly determined that mother's
  need for additional income was not simply relevant to  the living standard
  to be enjoyed by the children but also "to permit [mother] to increase her 
  income from employment and enjoy a standard of living which is more closely
  aligned to the  standard of living she enjoyed during the marriage."  This
  can be an appropriate basis for an  award of spousal maintenance.  See 15
  V.S.A. § 752(a) (authorizing spousal maintenance upon  finding that
  receiving spouse "is unable to support himself or herself through
  appropriate  employment at the standard of living established during the
  marriage"); see also id. at (b) (setting  forth similar considerations as
  relevant in establishing amount of such maintenance award).   Because the
  family court acted under its understanding of the choices available to it,
  the court may  decide to modify other parts of the economic package in
  light of this opinion.  See Pearson v. 

 

  Pearson, ___ Vt. ___, ___, 726 A.2d 71, 76 (1999) (vacating property
  division where court  abused discretion in making related custody
  determination); DeGrace v. DeGrace, 147 Vt. 466,  470, 520 A.2d 987, 990
  (1986) (vacating property division in light of erroneously granted 
  maintenance award).  We reopen both the maintenance award and the property
  award "because  of the interrelationship of these two parts of the
  financial order."  Semprebon v. Semprebon, 157  Vt. 209, 216, 596 A.2d 361,
  365 (1991); see also Schwartz v. Seldin-Schwartz, 165 Vt. 499, 504,  685 A.2d 665, 668 (1996) (modification of property settlement necessitates
  reexamination of the  maintenance award).  Indeed, what the family court
  acknowledged here, and what is implicit in  cases like Pearson, DeGrace,
  Semprebon and Schwartz, is a principle also generally recognized  in other
  jurisdictions:  The economic aspects of a divorce decree are sufficiently
  inseparable so  that, in general, when one aspect of the package must be
  vacated on appeal the family court may  revisit the entire package as
  equity requires.  See, e.g., In re Casias, 962 P.2d 999, 1002 (Colo.  Ct.
  App. 1998) (trial court should reexamine "entire property division" on
  remand); Gregg v.  Gregg, 510 A.2d 474, 484 (Del. 1986) ("this Court
  recognizes that the entire issue of the division  of marital property must
  be considered anew" on existing record); Miller v. Miller, 478 A.2d 351,
  360 (N.J. 1984) ("equitable distribution is intimately tied to child
  support and alimony" so  trial court "should reconsider the entire
  financial arrangements between the parties" including  property
  distribution); Berry v. Berry, 350 S.E.2d 398, 403 (S.C. Ct. App. 1986)
  (not "feasible"  for trial court to correct specific errors in property
  division without remand of entire equitable  award); Jacobs v. Jacobs, 687 S.W.2d 731, 733 (Tex. 1985) (striking only portion of property  division
  "would be to make a new division of the estate of the parties, a matter
  within the  discretion of the trial court").

 

       Finally, although it is not necessary in light of our disposition, we
  address father's  challenges to the court's property order provision that
  allocates to mother a share of appreciation  or depreciation in certain
  investment accounts that occurs between the date of the final order and 
  the date of the transfer of shares in these accounts.  Specifically, he
  asserts that the court's  decision to take post-judgment appreciation or
  depreciation of assets into account contravenes the  principle that marital
  assets should be valued as of the date of the final hearing.  See Kanaan v. 
  Kanaan, 163 Vt. 402, 411, 659 A.2d 128, 134 (1995) (court's property
  disposition should be  based on valuation as close to date of trial as
  possible); Cleverly v. Cleverly, 151 Vt. 351, 354-55, 561 A.2d 99, 101
  (1989) ("It is an abuse of discretion for the trial court to premise its
  division  of marital property on outdated valuations of the assets
  involved.").  No post-judgment valuation  of the assets is occurring in
  this case, however.  The situation presented here is more similar to  one
  in which a sum of money that is owed is placed in an escrow account until
  the time it is  transferred.

       In Williams v. Williams, 158 Vt. 574, 613 A.2d 200 (1992), we reversed
  a property  award that gave a husband $25,000 of the value of the marital
  home, but delayed distribution until  the wife sold the home, she remarried
  or the daughter of the parties turned eighteen years.  We  held:

     It is axiomatic that the present value of a fixed sum to be paid at a 
     future date is smaller than the face amount of the sum, and that the 
     value decreases the longer the delay until payment.  Had the court 
     provided a reasonable rate of interest during the waiting period or 
     divided the award on a percentage basis so that the impact of 
     inflation on the respective interests of the parties would have been 
     equal, it could have avoided the inequity.

  Id. at 578-79, 613 A.2d  at 202; see also Kanaan, 163 Vt. at 415, 659 A.2d 
  at 136-37 (same).  We  recognize that Williams requires the family court to
  account for inflation in a delayed asset 

 

  distribution only if a lengthy delay is involved.  See Williams, 154 Vt. at
  578, 613 A.2d  at 578  (up to fourteen years); Johnson v. Johnson, 163 Vt.
  491, 497, 659 A.2d 1149, 1153 (1995) (ten  or eleven years).  We think,
  however, that as part of the broad discretion the family court has in 
  distributing marital property, see Renaud v. Renaud, ___ Vt. ___, ___, 721 A.2d 463, 468  (1998), the court generally has the discretion to account
  for changes in value of assets between  the time that the court orders
  their distribution and the distribution actually occurs.

       As we noted in Williams, the court can deal with changes in value by
  distributing an asset  on a percentage basis.  Here, the court could have
  awarded a specified number of shares in the  three accounts equal in value
  to the amount to be received by mother on the hearing date, and any 
  appreciation or depreciation in the assets would have automatically gone
  with the award.   Although the route the court chose was more complicated,
  it achieved the same objective of  equalizing the risk and opportunity in
  post-judgment gain or loss up until the time of distribution.  We see no
  abuse of discretion.

       Finally, father argues that it is unfair that his assets are subject
  to a post-judgment  revaluation while mother's are not.  As discussed
  above, the order that father transfer the  appreciation on the amounts
  designated for mother does not represent a post-judgment revaluation,  but
  an equal sharing of the risk between the parties.  In any event, the court
  has discretion to  determine what assets require such treatment and which
  do not.  By their nature, the investment  accounts are subject to swings in
  value, up or down, and no unfairness occurs in singling out these  assets
  for distribution of post-judgment appreciation or depreciation.

       The divorce decree is vacated in part and remanded for consideration
  of issues related to  spousal maintenance, maintenance supplement and
  division of property.  The judgment in all other 

 

  respects is affirmed.

                                        FOR THE COURT:



                                        _______________________________________
                                        Associate Justice


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                                  Footnotes


FN1.  Accordingly, it is not necessary to consider father's alternative
  argument that the family  court was without authority to award a
  maintenance supplement because mother did not request  one in her
  complaint, her hearing testimony or her proposed findings of fact.