805 N.W.2d 453
Mich. Ct. App.2011Background
- Divorce finalized October 8, 2003; spousal support set at $2,500/month, modifiable, payable until death or remarriage, based on plaintiff’s $90,000 annual income and defendant imputed $15,000; support secured by defendant’s interest in life insurance proceeds.
- Property division awarded plaintiff life-insurance policy value and Metal Prep Technology interests; defendant received marital home, half of plaintiff’s IRA, and a portion of Metal Prep Technology profits.
- January 3, 2005 motion to reduce spousal support denied after an August 12, 2005 evidentiary hearing; court found no significant change in circumstances and that plaintiff could still pay the ordered amount.
- February 2006 stipulation to resolve by binding arbitration; plaintiff sold his Metal Prep Technology interest; last Metal Prep paycheck received September 15, 2006; October 30, 2007 arbitration report recommended abating spousal support to zero but reserving future adjudication of any future obligation.
- Estate substituted as plaintiff in February 2008 after plaintiff’s December 12, 2007 death; March 21, 2008 Order adopted arbitration award and abated spousal support to December 31, 2006, while reserving future support adjudication.
- April 3, 2008 defendant moved to increase spousal support; Judge Skutt denied, noting support may be modified postpayor death but balancing equities and recognizing life-insurance assets as the principal estate source.
- Judge Cholack granted reconsideration, finding palpable error in Skutt’s ruling and ordering an evidentiary hearing to determine appropriate support amount; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the grant of reconsideration was proper | Challenging palpable error; Skutt’s rationale was sound | Cholack properly found palpable error and room to adjust due to changed equities | Reversed; no palpable error by Skutt warrants reconsideration |
| Whether spousal support could be increased after abatement to zero | Skutt’s decision to abate to zero could not be reversed after death | Statutory modifiability and reserved future-amount language permit modification | Abatement to zero followed by potential future modification is permissible; not error per se |
| Whether the estate had means to pay spousal support and whether assets vs. income matters | Estate income/assets should be considered to determine ability to pay | Estate assets were primarily life-insurance proceeds; invasion of asset awards not required | Court can consider estate assets vs. awarded marital assets; not abuse to decline invasion of assets |
| Whether trial court correctly applied the general principles of equity in deciding modification | Equities favored increasing support after debtors’ death | Equities did not justify increasing support given prior arbitration and asset structure | Skutt’s equity assessment was within discretion; encompasses ability to pay and needs |
Key Cases Cited
- Flager v Flager, 190 Mich App 35; 475 NW2d 411 (1991) (allows modification post-death where appropriate and not alimony-in-gross)
- Ackerman v Ackerman, 197 Mich App 300; 495 NW2d 173 (1992) (change in circumstances required for modification)
- Braffett v Braffett, 308 Mich 506; 14 NW2d 129 (1944) (death of payor may require modification of alimony)
- Seibly v Ingham Circuit Judge, 105 Mich 584; 63 NW 528 (1895) (reserved alimony for future order upon payor’s death when appropriate)
- Torakis v Torakis, 194 Mich App 201; 486 NW2d 107 (1992) (consideration of marital assets in determining alimony modification)
- Zecchin v Zecchin, 149 Mich App 723; 386 NW2d 652 (1986) (use of marital asset awards in determining support needs)
- Woodington v Shokoohi, 288 Mich App 352; 792 NW2d 63 (2010) (factors for determining alimony including assets and needs)
- Berger v Berger, 277 Mich App 700; 747 NW2d 336 (2008) (role of property division in alimony determinations)
- Lee v Lee, 191 Mich App 73; 477 NW2d 429 (1991) (list of factors for alimony awards)