MCNAMARA v MCNAMARA
Docket No. 101037
Court of Appeals of Michigan
Submitted October 14, 1988. Decided July 17, 1989.
178 Mich. App. 382
Leave to appeal applied for.
The Court of Appeals held:
1. Given the relative earning capacities of the parties, the testimony as to plaintiff‘s health problems and plaintiff‘s employment prospects, it was an abuse of discretion for the trial court to grant an alimony award of $1,200 per month for only five years. As a matter of equity, the alimony award is amended to an award of $1,200 per month until plaintiff dies or remarries.
2. It was an abuse of discretion for the trial court to fail to make findings as to why defendant‘s interest in the limited partnership should not be considered to be a marital asset and to fail to determine the value of, and plaintiff‘s interest in, defendant‘s law practice. The matter is remanded to the trial court to determine the value of the limited partnership and the value of the law practice and the trial court shall thereafter award plaintiff a one-half interest in each.
3. It was an abuse of discretion to make plaintiff pay a
4. The trial court‘s determination as to the payment of witness fees is reasonable when the adjustments mandated on appeal are made.
Reversed and remanded.
C. W. SIMON, JR., J., dissented. He would hold that the trial court did not abuse its discretion. He would affirm.
1. DIVORCE — ALIMONY — APPEAL.
An award of alimony is discretionary with the trial court and the Court of Appeals will not modify an alimony award unless it is convinced that, sitting in the trial court‘s position, it would have reached a different result.
2. DIVORCE — ALIMONY.
Factors to be considered in determining whether alimony should be awarded in a judgment of divorce include: the past relations and conduct of the parties; the length of the marriage; the ability of the parties to work; the source of and amount of property awarded to the parties; the age of the parties; the ability of the parties to pay alimony; the present situation of the parties; the needs of the parties; the health of the parties; the prior standard of living of the parties and whether either is responsible for the support of others; and general principles of equity.
3. DIVORCE — PROPERTY DIVISION — APPEAL.
The Court of Appeals reviews the division of the marital property in divorce cases de novo but will not modify the trial court‘s discretionary award of marital assets unless it is convinced that it would have reached another result if it had occupied the position of the trial judge.
4. DIVORCE — PROPERTY DIVISION.
The goal in the division of marital assets in a divorce is to achieve an equitable result in light of all the circumstances and shall include consideration of the length of the marriage, each party‘s contribution to the marital estate and each party‘s needs, health, earning ability, station in life, fault and past misconduct.
Prather, Harrington & Foley, P.C. (by Kenneth E. Prather and James R. Stearns), for plaintiff.
Kazul, Houston & Ferriby, P.C. (by Robert L. Ferriby, Jr.), for defendant.
WEAVER, P.J. Plaintiff appeals as of right from circuit court orders amending the parties’ judgment of divorce, denying plaintiff‘s motion for new trial, and granting in part and denying in part plaintiff‘s motion to amend the original divorce judgment. We reverse and remand.
FACTS
The parties are both forty-eight years of age and were married more than twenty-four years. At the time of the marriage in August, 1962, plaintiff wife held a bachelors degree in fine arts and was a teacher in the Warren Woods Public School System. Prior to the marriage plaintiff also worked toward a master‘s degree which she did not complete. Defendant husband, then an accountant, had completed approximately three-quarters of the requirements toward his bachelor‘s degree at the Detroit Institute of Technology. Both parties brought nominal assets into the marriage.
Three children were born to the parties during their marriage. Two years after the marriage, the parties’ first daughter was born. Their second daughter was born a year later. Plaintiff continued teaching until she became pregnant with the parties’ first child, resumed work after the child was born, and stopped teaching again when she became pregnant with the second child. After the birth of the second child, plaintiff returned to work for only one year, ending her public school teaching career in 1966. During this time defendant worked while pursuing his education on weekends and evenings, and his income continued
Plaintiff helped the family financially while defendant was in law school by earning enough to buy groceries and incidentals. In 1968 and 1969 plaintiff also taught at a craft shop for a couple of hours per week. For approximately fourteen years, from July, 1968, when plaintiff gave birth to their third child, until November, 1982, plaintiff mainly stayed at home performing the role of wife, mother and homemaker, but from 1971 to 1973 she also operated a craft shop. In 1980 she worked at decorating offices in defendant‘s medical complex, but did not work again until 1983 when defendant left the marital home.
By 1976 or 1977 defendant had become financially successful enough to purchase a home in Florida. The Florida home was later deeded to plaintiff‘s father to secure a debt on the house which plaintiff‘s father built for them in Grosse Pointe Shores. Plaintiff assisted in drawing the plans for the house and in construction. This house, the marital home at the time of divorce, was completed in 1979.
Defendant developed a drinking problem during the 1970s. He spent a great deal of time away from the marital home, kept late hours and would often come home flushed, smelling of alcohol, and then would be sick. Plaintiff tried to help defendant by attending a dozen Al Anon meetings at St. John Hospital, but defendant would not cooperate. In 1974 defendant promised to change his ways but he did not. The parties attended marriage counseling sessions for approximately three years, but discontinued the sessions in 1980 because they
After defendant left the marital home, the phone and utilities were shut off. In 1983 and 1984, plaintiff and the children received only sporadic financial support from defendant, a total of about $3,400 each year. Defendant stopped making regular payments on the two mortgages for the home, and plaintiff‘s financial situation was so difficult that she could not make them. Liens and encumbrances were placed against the home due to the parties’ failure to pay both income and real estate taxes. Because plaintiff did not sign defendant‘s 1983 federal tax return and the IRS could not find a basis upon which to hold plaintiff liable, the IRS ultimately released plaintiff from the 1983 liability after initially holding her partly responsible. In July of 1985 the friend of the court ordered defendant to pay $400 per month in child support and $1,200 per month in alimony.
From February, 1983, until October, 1985, plaintiff attempted to work but was fired four times. Although plaintiff now performs freelance interior decorating work on a sporadic basis, she has been unable to secure permanent employment despite her attempts to do so. Plaintiff testified that she is incapable of returning to work as a school teacher because she has memory lapses and is unable to concentrate.
Defendant is in good health, whereas plaintiff is in poor health. Medical records and reports introduced at trial indicate that plaintiff suffers from a prolapsed mitral valve, chest pains, palpitation and shortness of breath, high stress for which Valium has been prescribed, persistent anxiety,
During the divorce proceedings, the parties agreed to sell the house, and a court order authorizing the sale was issued in 1985. However, the house was ultimately foreclosed upon for nonpayment of the mortgages, with the parties obtaining a sales price of $350,000. After deductions for taxes, interest and mortgage payments, the balance was placed in an escrow account.
Given the facts of this case, we believe that the trial court abused its discretion in awarding alimony and distributing the marital estate. Accordingly, we reverse.
ALIMONY AWARD
Although plaintiff testified that her monthly financial needs came to $3,229, the trial court awarded her $1,200 per month for a total of five years. Utilizing the necessary evaluative factors as
This Court will not modify a trial court‘s discretionary award of alimony unless convinced that it would have reached a different result. Zecchin v Zecchin, 149 Mich App 723, 733; 386 NW2d 652 (1986). In exercising its discretion, the trial court is to consider the parties’ ages and the length of their marriage, their prior relations, conduct, and standard of living, their needs, health and present situation including responsibility for the support of others, their ability to work and pay alimony, the source and amount of property to be awarded, and general principles of equity. Id.
The trial court recognized that defendant‘s net profit from his law practice for the years 1981 through 1985 was as follows: (1) 1981—$76,179; (2) 1982—$25,259; (3) 1983—$65,806; (4) 1984—$76,405; and (5) 1985—$75,952. These figures include $600 per month for managing FAM (a limited partnership in which defendant owns an interest), and $80 to $100 per month for managing a medical condominium. From an approximate total net spendable income of $319,601 during these five years, this amounts to an average net spendable income of $63,920 per year.1 This does not account for the fact that defendant was able to utilize an approximate gross income of $592,163 during this same five-year period to provide himself with a car and “business” entertainment.2 Further, he was able to shelter income, utilize depreciation and reduce his income taxes.
The trial court did not discuss plaintiff‘s net
In light of the foregoing, we are convinced that this Court would have reached a different result had it been in the lower court‘s position. None of the applicable factors weigh heavily in favor of defendant, and the balance of equities suggests that a more favorable award of alimony would have been appropriate.
The award was not a reasonable provision for a woman who, after devoting most of her adult life primarily to caring for others in the traditional role of wife, mother and homemaker, is now nearing age fifty in such poor health that she cannot keep a job and is without the skills, earning capacity or job security which defendant enjoys. During the marriage, plaintiff held only part-time jobs or jobs of insignificant duration and earning capacity and, as a result, in effect now has no career to sustain her as she embarks on her declining years. See Zecchin, supra at 734. Her present employ-
Upon a review of the record and a consideration of the equities in this case, we believe that plaintiff should have received an award of $1,200 per month as permanent alimony, for the duration of her life or until she remarries.
DIVISION OF THE MARITAL ESTATE
This Court will not modify the trial court‘s discretionary award of marital assets unless convinced that it would have reached another result if occupying the position of the trial court. Parrish v Parrish, 138 Mich App 546, 558; 361 NW2d 366 (1984). This Court reviews property settlements in divorce cases de novo. Ackerman v Ackerman, 163 Mich App 796, 807; 414 NW2d 919 (1987). The goal is an equitable property distribution in light of all the circumstances, including length of the marriage, each party‘s contribution to the marital estate, and each party‘s needs, health, earning
Here, the property distribution was clearly inequitable in light of all the circumstances. This was a twenty-four year marriage with each party bringing approximately the same assets into the marriage. Plaintiff contributed significantly to defendant‘s success by not pursuing her own career opportunities and by providing the comfort and support, financial and otherwise, needed for defendant‘s well-being while he was climbing a professional and financial ladder. After achieving success and financial stability, defendant became an alcoholic, refused to seek help, neglected his family and then left his wife in dire financial straits, refusing even to pay the mortgage and income and real estate taxes.6 Consequently, their valuable property and major asset was lost and a large percentage of any profits from the sale of that property was devoured by the debts he incurred. Therefore, even though defendant was ordered to pay over $40,000 in debts, he was primarily responsible for these debts and certainly has the earning capacity to pay them, whereas plaintiff does not have such earning capacity and probably never will. At nearly age fifty, accustomed to a fairly high standard of living but in poor health, plaintiff now finds herself alone, nearly destitute and without a career, having been fired four times from recent jobs and with poor future financial prospects.
The trial court abused its discretion when failing to make specific findings of fact indicating why the marital estate was divided the way it was.
1. Limited Partnership. Without any discussion, reasoning or findings of fact, the trial court dismissed plaintiff‘s interest in the limited partnership by merely stating that defendant “shall keep any and all monies from FAM.” Given plaintiff‘s financial plight and the fact that this was one of the few substantial assets remaining from the marriage, the court‘s division was inequitable and a clear abuse of discretion.
Valuation of the limited partnership ranged from approximately $76,000 to over $2 million. Even assuming that the limited partnership was worth the lower figure, the trial court should have made a finding of fact and weighed the partnership‘s worth in settling the marital estate. Considering plaintiff‘s inferior financial position and future prospects, together with defendant‘s good position and excellent prospects, even including the debt obligations which defendant must assume, at the very least plaintiff should have received an interest in half of $76,000, or $38,000. Therefore the question of valuation of the limited partnership is remanded to the trial court with instructions to determine and award to plaintiff her interest.
2. Law Practice. Again without discussion or reasoning, the trial court refused to evaluate defendant‘s law practice, stating only: “This Court cannot reasonably place a value on the law practice. Therefore, since the Court has not placed a value, there is no money to be awarded from the law practice.” In its amended judgment the trial court further stated that the law practice had no “readily ascertainable market value.”
Had the matter come before this Court, we are convinced that this Court would have reached a different result than that reached by the lower court. Therefore we find that the trial court abused its discretion in failing to assign a value to the law practice when dividing the marital estate. See Kowalesky v Kowalesky, 148 Mich App 151, 155; 384 NW2d 112 (1986), lv den 425 Mich 876 (1986).
Because the trial court did not utilize any method for evaluating the law practice, this Court cannot review the trial court‘s method of evaluation. Therefore we remand to the trial court for a determination of the value of the law practice. Similar to what transpired in Kowalesky, there is nothing in the record to support the assumption that defendant will discontinue his law practice. Thus a valuation of the practice should amount to its value to defendant as a going concern, Id. at 157, and plaintiff should be awarded a one-half interest.
PLAINTIFF‘S DEBT OBLIGATIONS
1. 1983 Tax Liability. Plaintiff makes a good equity argument on this issue. Even assuming that plaintiff should accept liability for a portion of the tax liability because she contributed to the family income in 1983, it must be remembered that plaintiff‘s taxable income for that year was only
On this Court‘s de novo review, we find that it was an abuse of discretion for the trial court to make plaintiff pay $4,567 on the 1983 federal tax liability, or approximately twenty-five percent of the total owed. The trial court made no finding of fact on this issue, but merely ordered the sum assessed against plaintiff, despite the fact that an IRS special advisor testified that the IRS had released her from the obligation because there was no basis for holding her liable. Accordingly, the trial court‘s ruling is reversed.
2. Appraisal Fee of Robert Sfire, M.A.I. If plaintiff receives an award of $1,200 per month permanent alimony, percentage shares of the limited partnership and the law practice after proper evaluation, and if she is relieved of the 1983 IRS tax liability, then it would not be an abuse of discretion for the trial court to omit providing for payment of the $3,500 appraiser‘s fee. Because the trial court awarded payment of $2,200 for plaintiff‘s total expert fees and only $1,400 for defendant‘s total expert fees, and because the trial court also omitted to provide for defendant‘s $2,000 expert witness fee for James Hogan, C.P.A., the omission of plaintiff‘s M.A.I. fee would not constitute an abuse of discretion.
CONCLUSION
Considering plaintiff‘s age and poor health, her contribution to a lengthy marriage, her present impoverished financial condition and her poor financial prospects, and contrasting this with defendant‘s good health, his desirable professional status and financial success, plus his part in the
Accordingly, we reverse and remand to the trial court with instructions to order permanent alimony in the amount of $1,200 per month and to relieve plaintiff of the $4,567 tax liability. We also remand to the trial court for a reasoned determination of the value of the limited partnership and for entry of an award of a one-half interest in such valuation to plaintiff. We further remand to the trial court for a reasoned determination of the value of the law practice and for entry of an award of a one-half interest in such valuation to plaintiff. We retain jurisdiction.
MAHER, J., concurred.
C. W. SIMON, JR., J. (dissenting). I would affirm.
First, I cannot say that I would have reached a different result than did the trial court with regard to alimony. Vance v Vance, 159 Mich App 381, 387; 406 NW2d 497 (1987), lv den 429 Mich 870 (1987). In addition to ordering defendant to pay plaintiff alimony in the sum of $1,200 per month for five years, the trial court ordered defendant to pay all of plaintiff‘s reasonable medical, dental, hospital, optical and pharmaceutical expenses for that period and to pay training or tuition costs of not more than $2,000. While plaintiff has some health problems, the medical evidence shows that she is capable of working. Given the parties’ ages, present situation, abilities, needs, and the
Second, I would not have reached a different result than did the trial court with regard to division of the marital estate. Parrish v Parrish, 138 Mich App 546, 558; 361 NW2d 366 (1984). Evidence regarding the value of defendant‘s law practice varied: while plaintiff‘s expert valued the practice at $40,000, defendant‘s expert opined that the practice was not salable because there was little recurring work and was therefore essentially valueless. I am persuaded that the distribution was equitable.
Third, I am not persuaded by plaintiff‘s claim that the trial court erred by requiring her to pay twenty-five percent of the parties’ 1983 taxes because the Internal Revenue Service chose not to hold her liable for the assessment. Distribution of marital liabilities is fully within the equitable authority of the trial court in a divorce proceeding. Plaintiff did not file a separate return for the year 1983. Notwithstanding that defendant moved out of the marital home in February, 1983, the trial court was not precluded from assessing plaintiff a percentage of the 1983 joint tax liability. See Rethman v Rethman, 156 Mich App 74, 79; 401 NW2d 314 (1986), vacated in part on other grounds 429 Mich 868 (1987), elaboration of summary disposition 430 Mich 1201 (1988).
Nor am I convinced that the trial court abused its discretion by declining to order the expert witness fees in the amount of $3,500 for appraisal of defendant‘s limited partnership to be paid out of the escrow account. The appraiser‘s fee is exorbitant, i.e., unreasonable.
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