Opinion
File No. CK15-17709
04-21-2017
J--------- P-------------, Petitioner, v. C--------- P-------------, Respondent.
JAMES G. MCGIFFIN, JR. JUDGE
Petition No. XX-XXX
ORDER
Petition to Rescind or Reduce Alimony
Before the HONORABLE JAMES G. McGIFFIN JR., JUDGE of the Family Court of the State of Delaware:
The Court has before it a Petition to Rescind And/ Or Reduce Alimony filed by J----- P------ ("Husband") against C-------- P-------- ("Wife") on June 10, 2015. The Court held a hearing on February 27, 2017. Husband was represented by counsel, Melissa Hopkins. Wife was represented by counsel, Edward Curley. The Court reserved decision. This Order is the Court's decision.
BACKGROUND
The parties were divorced by Final Decree on January 15, 2002. On November 6, 2002 the Court entered an Order against Husband that provided alimony to Wife at $2,500 per month. On November 13, 2008 the parties stipulated by consent order that effective November 1, 2008 Husband's alimony payments to Wife would reduce to $1,600 per month and effective January 1, 2010 payments would reduce to $1,550 per month. The stipulation provided that alimony may be modified upon a showing of real and substantial change of circumstances under 13 Del. C. §1519(a)(4).
Husband filed this Petition on June 10, 2015. Wife filed her Answer on September 21, 2015 opposing Husband's Petition and seeking attorney's fees.
Husband's Petition to Modify Alimony
Husband argues there has been a real and substantial change of circumstances to justify a modification of the alimony award. He argues that his annual income has decreased and that the alimony payment results in an undue hardship. He further argues that Wife's income has increased since the 2008 Order and that she unduly benefits from the payment of alimony.
At the time of the 2008 Order, Wife estimated that she earned $35,000 per year working at B---------'s D----------- Store in Dover. She testified that her monthly expenses in 2008 were less than her current monthly expenses. Wife is employed full time by B--------'s as the Department Manager of the ------ Department. Wife has earned an increase in income since the 2008 Order and she now makes $18 per hour or approximately $42,000 per year (with commissions). Husband's alimony payments to Wife are $1,550 per month or $18,600 per year. Wife's total annual income is $60,600.
Based on Wife's testimony and exhibits introduced, the Court finds Wife's monthly expenses to be:
| Mortgage: | $814.94 | Co-Pays: | $30 |
| Home Equity Loan: | $406.19 | Groceries: | $300 |
| Car Loan: | $212 | Gas: | $40 |
| Comcast: | $197 | Clothing: | $20 |
| Cell Phone: | $72 | Entertainment: | $15 |
| Oil: | $145 | Donations: | $15 |
| Gas: | $30 | Travel: | $200 |
| Car Insurance: | $68 | Misc: | $30 |
| Electric/Water/Trash: | $102 | Gifts: | $250 |
| Health Insurance: | $107 | Taxes: | $246 |
| PensionContribution: | $100 | TOTAL | $3,400.13 |
|---|
Wife's yearly expenses are $40,801. She cannot cover all of her expenses with her income of $42,000 per year because she takes home approximately $34,344 after taxes and insurance. Wife has a shortfall of $6,457 per year or $538 per month.
This information is from Wife's 2016 W2 Tax form.
Wife has significant money in retirement accounts, some of which she inherited from her own mother. She explained that she has $186,000 in her 401k with B---------'s, approximately $280,000 in an Edward Jones account, $35,000 in an IRA and approximately $168,000 in an account with B--- Investments. Wife contributes $200 per week to her 401k. Wife made contributions to her 401k at the time of the 2008 Order. She further testified that she has not drawn on her retirement accounts because of the prospect of large hospital bills.
Wife inherited the money in an Edward Jones account when her Mother passed away in March 2014.
Wife testified to being in good health; however, she is in remission from breast cancer (diagnosed in 2002) and she suffers from back issues and had a shoulder replacement.
At the time of the 2008 Stipulation and Consent Order, Husband was employed by A-- and earned an annual salary of $100,000. He testified that his 2008 monthly expenses were approximately $9,000, including his alimony payments to Wife. In 2015, Husband was laid off from A---- due to restructuring within the company. Husband's 2015 W2 form reflects an ending annual salary of $107,819 from his employment with A----.
In 2008, Husband's monthly alimony payments to Wife were $1,600.
Husband is employed as the Chief Financial Officer at C------- in Dover and earns an annual salary of $93,265. He is paid $1,800 weekly. He receives retirement from previous employment with H------ (P-----) of $410 per month or $4,920 per year and from previous employment with A----- of $434 per month or $5,208 per year for a retirement total of $10,128 per year. Husband's total income total is $103,393 annually.
Based upon Husband's testimony and exhibits introduced the Court finds Husband's monthly expenses to be:
| Mortgage: | $1,649.83 | Life Insurance: | $159 |
| WSFS Bank: | $485 | Car Insurance: | $123.15 |
| HOA fees: | $12.50 | Credit Cards: | $500 |
| Comcast: | $180 | General HomeMaintenance: | $160 |
| Electric: | $130 | Home Repairs: | $94 |
| Gas: | $75 | Groceries: | $600 |
| Cell Phones | $180 | Clothes: | $123 |
| Health Insurance: | $623.45 | Timeshare: | $250 |
| Dental: | $121.11 | Car Maintenance: | $50 |
| Out of Pocket | Bank Fees/Late Fees: | $150 | |
| Medical/ Dental: | $500 | ||
| IRA Contribution: | $100 | Entertainment: | $200 |
| Hair/ Barber: | $12 | PNC Loan: | $170 |
| Gas/Tolls/Parking: | $200 | College (Stepson): | $0 |
| Student Loan: | $121 | Legal Fees: | $100 |
| Car Loans: | $477 | Medical Bills: | $75 |
| Toys/ Presents: | $150 | Life Insurance forCurrent wife: | $52 |
| Cosmetics: | $25 | Partnership Taxes: | $350 |
| Charitable Donations: | $25 | TOTAL | $8,223.04 |
|---|
Husband's list of monthly expenses does not include the $1,550 alimony payment to Wife. The Court adjusted some of Husband's expenses to be consistent with Husband's testimony that the expenses he claimed were household expenses or joint expenses, not his personal expenses. Husband explained that the "Health Insurance" expense includes his current wife and her son (Husband's stepson). The "Out of Pocket Medical" expense also includes his stepson's medical bills. The "Car Loan" expense reflects payments for two cars. Husband testified that the "College" expense is for his stepson's benefit. He further testified that the "Hairdresser" expense included his current wife's hairdresser expense.
The Court reduced the following expenses based on Husband's testimony: Hair/ Barber: $160 to $12 Car Loans: $820 to $477 College (stepson) $221 to $0.
The Court did not reduce the "Health Insurance" expense or the "Out of Pocket Medical" expense because there is no way to determine what Husband's sole expense would be. Husband stated that his current Wife contributes toward household expenses, but her income only covers about 17% of the parties' expenses.
Husband asserts that he pays taxes on a partnership established by his father in 2007. Husband testified that the income he receives from the partnership is not liquid, but that he pays between $3,000 and $7,000 in partnership taxes annually. He further testified that he has a minimal amount in his savings account and that his Fidelity Retirement Account has $59,539. He testified that the account was over $100,000 at one time, but he withdrew money from the account to pay alimony to Wife and to afford his monthly expenses. He further testified that he can only contribute $100 a month into his retirement account. He testified that his expenses have increased because of medical and dental insurance and that he cannot afford to continue to pay alimony to Wife because of his salary decrease and increase in monthly expenses.
ANALYSIS
To modify an existing alimony obligation, the Court must find there has been a showing of real and substantial change in circumstances. To determine whether a real and substantial change of circumstances has occurred since the 2008 Order was entered, the Court must measure the parties' current economic circumstances against the economic circumstances at the time that the underlying order was entered, and also must compare the parties' relative economic circumstances then and now. The fact of a change in economic circumstances is insufficient. The change must be substantial so as to convince the Court that continuation of the original Order would produce an undue hardship on the obligor or provide an undue benefit to the obligee.
Woznicki v. Barnes, 1997 WL 728274, 2 (Del. Fam. 1997) at *4, aff'd by 1998 WL 67714 (Del. Supr. 1998); D.L. v. M.L., 2009 WL 6303023 at *5 (Del. Fam. Oct. 21, 2009); Husband, J. v. Wife, J., 413 A. 2d 1270 (Del. Fam. Dec. 18, 1979).
A.N. v. N.L., 2009 WL 1204994 at *3 (Del. Fam. Mar. 11, 2009); See B.T.G. v. P.W.G., 2005 WL 14115614 at *2 (Del. Fam. Apr. 8, 2005) Citing Husband, J. v. Wife, J., 413 A. 2d 1267, 1270 (Del. Fam. Dec. 18, 1979); See D.L. v. M.L., 2009 WL 6303023 at *5 (Del. Fam. Oct. 21, 2009).
Wife's annual income was $35,000 in 2008. Wife's current income is $42,000, approximately 20% more. Wife's expenses total $3,400 per month and she has a yearly shortfall of approximately $6,457 or $538 per month.
Husband's economic situation in 2008 was that he earned $100,000 annually and had monthly expenses of about $9,000, including alimony payments. Today, Husband earns $93,265 annually, plus he receives $10,128 per year in retirement benefits, for a total of $103,393 per year, which computes to a 3.3% increase in income from 2008. Husband's monthly expenses have increased to $8,223, plus the alimony payment to Wife of $1,550, for a total monthly expense of $9,773. When comparing Husband's 2008 monthly expense of $9,000, which included Wife's alimony payment, to his monthly expense of $9,773, Husband's expenses have increased by $773, or 8.6%.
Husband testified that he could not recall if he was receiving retirement from H------ (P----) in 2008.
The Court adjusted Husband's 2017 monthly expenses to reflect Husband's personal expenses and not "joint expenses."
When comparing the economic positions of the parties then and now, this Court has held that a "17% change in the relative economic position of the parties does not constitute a substantial change in circumstances that would warrant an alimony modification." The Court has also concluded that a 15% increase in income would not justify a modification decreasing an alimony award nor would a 15% decrease in income justify a modification increasing alimony.
A.N. v. N.L., 2009 WL 1204994 at *3 (Del. Fam. Mar. 11, 2009); Forbes v. Forbes, 1998 WL 1035243 at *3 (Del. Fam. Dec. 2, 1999). Citing Husband, J. v. Wife, J., 413 A. 2d 1217 (Del. Fam. Dec. 18, 1979).
A.N. v. N.L., 2009 WL 1204994 at *3 (Del. Fam. Mar. 11, 2009); Forbes v. Forbes, 1998 WL 1035243 at *3 (Del. Fam. Dec. 2, 1999). Citing Jones v. Jones, CN92-8955 (Del. Fam.). See R.D.P. V. M.P., 2009 WL 1204946 at* 4-6 (Del. Fam. Feb. 11, 2009).
Husband is in essentially the same financial position as he was in 2008. His income has increased by 3.3% or $238 per month and his expenses have increased by 8.6% or $773 per month. Husband's alimony obligation has not become unduly burdensome because of any change in his income or expenses.
Wife has experienced a 20% increase in income since 2008, an improvement in her financial position. This change does not rise to the level of "real and substantial," standing alone. The statute requires the Court to consider the "circumstances" of the parties, a broader question than the income and expenses. The Court's analysis does not stop after a comparison of the parties' incomes and expenses in 2008 and now. The Court must also consider the parties' entire circumstances and must consider whether enforcement of the original order would be an undue hardship to the obligor or an undue benefit to the obligee.
See Husband, J. v. Wife, J., 413 A. 2d 1267, 1270 (Del. Fam. Dec. 18, 1979).
Continuing the 2008 alimony award would constitute an undue benefit to Wife and would be inequitable for Husband. Wife has approximately $669,000 in retirement and investment accounts, some amount of which was inherited from her mother after the divorce. Wife's inheritance, considered with her 20% income increase and her conscientious money saving practice, is significant enough to constitute a real and substantial change of her circumstances. Wife's economic situation can be distinguished from B.T.G. v. P.W.G., where wife suffered a monthly deficit despite a $100,000 inheritance and a $619 per month alimony payment from husband. Here, Wife has inherited some money but also has an additional $389,000 in retirement accounts.
B.T.G. v. P.W.G., 2005 WL 1415614, at *5 (Del. Fam. Apr. 8, 2005).
This case can be also be distinguished from Husband J v. Wife J., 413 A. 2d 1267 (Del. Fam. Dec. 18, 1979) where the Court held that Wife's 98% increase in income did not justify modification of the alimony award and $100 per month did not constitute an undue benefit for Wife. In this case, Wife has experienced a 20% increase in income and has a $758 monthly benefit from Husband's alimony payments, which far exceeds a $100 a month surplus.
CONCLUSION
Husband has demonstrated by a preponderance of the evidence the existence of a real and substantial change of Wife's circumstances since the 2008 alimony award entered. Wife's increase in income, coupled with her substantial inheritance and the growth of her retirement accounts, renders enforcement of the 2008 award an undue benefit to Wife. Wife remains dependent on Husband for support for the $538 shortfall in her monthly expenses. Therefore, Husband's monthly obligation to Wife shall be reduced from $1,550 to $538 beginning March 1, 2017.
Attorney's Fees
Delaware law provides for an award of counsel fees. The purpose of 13 Del. C. §1515 is to equalize the parties' positions by providing a financially disadvantaged party with the financial means to prosecute or defend an action. The Court considers the financial circumstances of the parties in determining any award of counsel fees. The standard for awarding fees equitably under 10 Del. C. §925(15) is for the moving party to demonstrate "bad faith, willful disobedience, vexatious or wanton behavior for oppressive aims or some equivalent conduct." Wife must show Husband acted in such a manner to equitably justify an award of attorney's fees. Wife could not show that Husband acted in bad faith or engaged in other improper conduct in filing his Motion to Modify Alimony, and therefore her request for attorney's fees is denied.
M.W. v. S.W., 2002 WL 31445227, at *1 (Del. Fam. Apr. 1, 2002).
Id.
In re McClellan, 1999 WL 33100133, at *2 (Del. Fam. Dec. 17, 1999). --------
IT IS HEREBY ORDERED that Husband's Petition to Modify Alimony is GRANTED and Husband's alimony payments to Wife shall be reduced from $1,550 per month to $538 per month effective March 1, 2017.
IT IS FURTHER ORDERED that Wife's request for attorney's fees is DENIED. Each party is responsible for their own attorney's fees.
IT IS SO ORDERED this 21st day of APRIL, A.D. 2017.
/ JAMES G. McGIFFIN, JR. /
JAMES G. MCGIFFIN, JR., JUDGE JGM/ksw cc: Melissa Hopkins
Edward Curley