Opinion
16-P-126
08-17-2017
Mary LARKIN-THOMSON v. James B. THOMSON.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The defendant, James B. Thomson (husband), appeals from a judgment of divorce nisi entered by the Probate and Family Court, claiming the judge erred in ordering that (1) certain real estate owned by the husband be sold; (2) the marital estate be divided largely in favor of his former wife, Mary Larkin-Thomson; and (3) monthly alimony be awarded to his former wife based on the husband's total gross income. We affirm, essentially for the reasons well explained in the trial judge's careful and detailed findings and rationale.
Background. The parties were married in September, 1989, and separated in June, 2011—a marriage of more than twenty-one years. The parties' only child was nineteen years old, a freshman in college, at the time of trial. The child lives with his mother when he is not at school and she is his sole source of financial support. Throughout the marriage, the husband was the primary financial provider, although for many years the wife was employed in an upper-level position at Fidelity Investments; she has received disability payments since approximately 1998 or 1999. In addition, the wife was the child's primary caretaker. During the marriage, the parties were able to accumulate a substantial marital estate of approximately $5 million, and enjoyed an upper middle class lifestyle. The husband, without the wife's knowledge, simultaneously enjoyed a similar lifestyle with his girl friend and the child he fathered with her.
In 1998 or 1999, shortly after learning of the husband's lengthy extramarital affair, the wife went on short-term disability leave from Fidelity Investments. In 2000, the wife applied for and received long-term disability payments and the Social Security Administration determined that she was totally disabled. She has not worked outside of the home since 2000.
In the fall of 2000, while on a family vacation with the wife and the parties' child, the husband left a note describing himself as a "horrible husband and horrible father" and disappeared from the family for approximately five weeks. The judge found that the husband's double life, which produced a child with his girl friend, was a significant factor leading to the weakened emotional health of the wife, and also had a negative impact on the minor child, who required counseling for a brief period.
The husband has enjoyed a successful career in commercial real estate, generating annual income ranging from $300,000 (in the early years of the marriage) up to $1.6 million in 2007. In the four years before the wife filed the divorce complaint (in June, 2011), the husband's adjusted gross income averaged $734,690.75; in 2011, he earned approximately $948,000. The husband's employer testified at trial that the husband was an "extremely successful broker, probably the top broker at the firms he had worked with." Despite the husband's substantial income, however, the judge found him to be "an extravagant spender, often to the detriment of the marital estate," leading to large-scale "waste and dissipation of marital assets." The judge also found that for much of the marriage, the husband led a "double life" greatly contributing to the "waste and dissipation of significant marital assets and the accumulation of very substantial debt.
The judge noted examples of the husband's extravagant spending during the marriage, including his purchase with his girl friend of a $1.6 million single-family home on Woodland Road in Brookline (the "Brookline property"), the cash purchase of a $400,000 boat, and week-long Caribbean vacations costing up to $70,000, some of which were taken with the husband's girl friend during the marriage. The judge specifically found that, "[i]n all, Husband's waste and dissipation beginning during the last several years of the Parties' marriage and continuing through the time of Judgment amounts to approximately $2,375,000."
At the start of the trial, the real estate owned by the parties included four condominium units on Commonwealth Avenue (units 16, 22, and 24, and unit 21, the marital home); tandem parking spaces also located on Commonwealth Avenue; a single-family home in Harwich Port; and the Brookline property (where the husband lived with his girl friend). Additional assets included real estate investment funds, a thirty-six foot Boston Whaler boat, a sixteen-foot Boston Whaler boat, and various retirement accounts each party owned individually.
In 2007, without his wife's knowledge, the husband used marital funds (approximately $400,000) for the down payment on the purchase of the Brookline property. Initially, he held the property individually; however, a few days after the purchase, the husband transferred the property into a realty trust, naming himself the trustee, and himself and his girl friend as beneficiaries.
The judge found that the husband "deliberately misled Wife" on numerous occasions to prevent discovery of his continuing extramarital affair. The husband led the wife to believe that he had ended the affair years ago and that, when he was away from the marital home, he was either visiting his parents or traveling on business. Eventually, however, in 2011, the wife learned that the husband had purchased the Brookline property and that he was cohabitating with his girl friend and the child he fathered with her. The wife filed for divorce and, afterwards, the husband essentially stopped meeting any financial needs of either the wife or their minor child: he stopped making mortgage payments on the marital home, and stopped paying the child's private high school tuition. He also stopped paying the first and second mortgages on the Brookline property. The judge found that these actions "caused an even further expansion of his debt, and a related dissipation of assets that would have otherwise been subject to equitable division." The judge found that his overspending "only exacerbated once he began accruing significant tax debt."
When the wife initially learned of the husband's extramarital affair she filed for divorce, later reconciling when the husband convinced her that the affair had ended. Thereafter, between 2000 and 2011, the husband continuously professed his love for his wife with love letters, flowers, and lavish Caribbean vacations; as late as April, 2011, the parties made an offer of $1.55 million for a new family home on Commonwealth Avenue in Boston.
The wife paid for one year of the child's tuition from her savings and used funds from an educational account that she had set up for him shortly after his birth, for the child's senior year of high school tuition ($40,000); she used the remaining $49,000 to make installment payments for his college education. The husband has not contributed to any of the child's high school or college education costs.
The judge found that the husband "began accumulating the tax debt in 2008, [although] he and Wife had been filing separate returns since in or around 1992 when Wife discovered that Husband had incurred significant tax debt that resulted in the garnishment of Wife's wages from Fidelity."
In issuing her findings, the judge noted specifically that the husband's credibility was "repeatedly called into question during these proceedings." He was found in contempt of a number of court orders, some of which "incorporated agreements that Husband had entered into freely and voluntarily." He was "evasive, misleading, unresponsive, and inconsistent with prior testimony"; he failed to comply with the wife's discovery requests, in addition to continuously misleading her as to his ongoing extramarital affair and purchase of the Brookline property. In contrast, the judge found the wife's testimony to be "forthright, responsive and credible."
The wife's September, 2013, financial statement was found to contain an accurate listing of her current liabilities.
The division of the marital estate appears to be a fifty-five to forty-five percent distribution in favor of the wife. However, the judge made it clear in her findings that the "Husband will actually receive approximately twenty-five percent (25%) of the remaining equity in the marital estate. The Court sets off to Husband those assets which he has sold or have been sold to meet his obligations because of debts he incurred.[ ] The Court has taken into consideration Husband's dissipation of assets in awarding the overwhelming bulk of debt to Husband.[ ] Husband is essentially being left with the liabilities that he created. Wife is receiving the bulk of assets that remain and her retirement is secure."
The judge also charged against the wife's portion of the marital estate the cost of certain personal property that she had sold. The property, valued at approximately $59,631, included the wife's engagement ring and other jewelry, along with wedding china, crystal and silver, an automobile, and a bed.
The judge specifically found that "Husband's tax debt was his sole responsibility at the time that he incurred it and continues to be Husband's sole responsibility as of the date of Judgment." She charged the reduction in the husband's tax debt through the forced sale of marital assets against his share of the marital estate.
In addition, the judge ordered the sale of the Brookline property, based on the credible trial testimony that the husband and his girl friend are unable to carry the costs of the property, and "[i]t is a significant asset and potential source of funds for Husband going forward." In lieu of weekly child support the husband was ordered to pay two-thirds of the child's future college education costs. The wife was awarded monthly alimony in the amount of $7,259, ending on January 1, 2023, the date the husband will reach full retirement age. The husband timely appealed.
In June, 2014, the judge reopened the evidence to allow the husband to present documentation relating to his newly stated eligibility for Social Security disability income benefits, and to address the wife's motion to sell the Brookline property. At that hearing, however, the husband, in "willful disobedience of the June 25, 2014, Order," failed to produce required documentation supporting his claim—leading the judge to conclude that "if the documents were produced they likely would have revealed evidence that was detrimental to Husband['s] claims of total disability and ability to pay the carrying costs for [the Brookline property]."
Discussion. 1. Sale of the Brookline property. The husband first argues that the judge erred in ordering the sale of the Brookline property because that order adjudicated rights of a third party, the husband's girl friend, who was not a party to this action or to the separate equity action brought by the wife. However, according to the affidavit of the wife's attorney, on April 7, 2016, the Brookline property was sold at a foreclosure auction; the judge's order to sell the property was unrelated to the foreclosure sale. Because the husband no longer has a personal stake in the Brookline property, the claim he raises relating to the order for sale of this real estate is now moot. See LaChance v. Commissioner of Correction, 475 Mass. 757, 766 (2016).
The husband, in direct violation of the court's order, failed to make the mortgage payments on the Brookline property, resulting in foreclosure proceedings. The divorce judgment specifically ordered the husband, pending the sale of the property, to continue paying the mortgage and costs to maintain the property; he was prohibited from further encumbering the property. Upon sale of the property, he was to receive the remaining net proceeds after the balances owed on the first and second mortgages were satisfied, the wife's attorney's fees were paid, and $386,000 was paid to his girl friend, representing her contributions to the purchase and renovation of the property.
At the time the divorce judgment was entered, the judge found the value of the Brookline property to be $3 million; the wife's attorney personally attended the auction, witnessing the successful bid of $1 million by Hunneman, through its president, Stuart Pratt, the husband's former employer and holder of the second mortgage on the Brookline property.
2. Division of the marital estate. The husband next argues that the portion of the divorce judgment awarding the bulk of the marital estate to the wife is plainly wrong. He contends that the judge focused specifically on one, rather than all, of the G. L. c. 208, § 34, factors—the husband's inability to secure a lump sum alimony award—and that, as a result, the award was wrong and excessive. He maintains that awarding the wife the bulk of the property actually results in her increased need for alimony. We disagree.
Review of a judgment equitably dividing the marital estate in accordance with G. L. c. 208, § 34, requires a two-step analysis, considering (1) whether all relevant § 34 factors were weighed by the judge, and (2) "whether the reasons for the judge's conclusions are ‘apparent in [her] findings and rulings.’ " Adams v. Adams, 459 Mass. 361, 371 (2011), quoting from Redding v. Redding, 398 Mass. 102, 108 (1986). "The appropriate weighing and balancing of the ... § 34 factors, and the resulting equitable division of the parties' marital property, is left to the judge's broad discretion [,] ... [and] will not be reversed ‘unless it is plainly wrong and excessive.’ " Salten v. Ackerman, 64 Mass. App. Ct. 868, 873 (2005), quoting from Kittredge v. Kittredge, 441 Mass. 28, 43-44 (2004). See G. L. c. 208, § 34.
"Consistent with that requirement, dissipation can be considered as part of the ‘conduct of the parties during the marriage’ (which the judge must consider under § 34 ), and it can also be considered in the assessment of a spouse's ‘contribution’ to ‘the acquisition, preservation or appreciation in value’ of assets (which the judge may consider under § 34 ). ‘Conduct’ that has harmed the marriage or the marital estate may be viewed negatively, and considered as a factor that would diminish that spouse's equitable share of marital property." Kittredge, 441 Mass. at 38. "[A] finding of dissipation is fact specific, considering the allegedly improper or wasteful expenditure in the context of the marriage as a whole, and then weighing it along with all of the other factors." Id. at 39.
This was a long-term marriage. Based on the evidence, the judge reasonably found that, after the divorce, the wife, whose sole source of income is Social Security disability income benefits, will not have the ability to maintain the same upper middle class lifestyle she enjoyed during the marriage. The judge also found the wife's opportunity for future acquisition of assets is unlikely; as a result, she is dependent on assets awarded to her in this action. Granting the wife exclusive ownership of the two Commonwealth Avenue condominium units (numbered 16 and 24) provides her with rental income, in addition to alimony income received from the husband.
In contrast, the judge found "[t]here was no credible evidence presented either at the initial trial or upon the re-opening of evidence which would indicate that Husband's health has a present impact on his earning capacity." She found "that Husband is a sophisticated businessman, is very experienced in the commercial real estate industry and has a number of valuable business relationships within that field. Husband's average earnings during the last several years of the Parties' marriage was $332,377.00.... [B]ased on all the evidence presented at trial, Husband's earning potential for the rest of his working years is a minimum of $332,377.00 annually. If the commercial real estate market in the greater Boston area continues to improve, so too should Husband's earning capacity." As a result, the judge found that the husband will likely enjoy a similar upper middle class lifestyle after divorce.
In addition, the judge's findings relating to the husband's waste and dissipation of the marital assets are amply documented in this record, and support the equitable division of property in the wife's favor. These findings include: the husband's withdrawal of substantial amounts of cash from the marital estate ($400,000 for the purchase and/or renovation of the Brookline property, and an additional $400,000 for the purchase of a thirty-six foot Boston Whaler boat); his extravagant spending on Caribbean vacations with his girl friend; his lack of support of the wife and the parties' child, in direct violation of court orders, including failing to pay the monthly mortgage on the marital home triggering foreclosure proceedings; his failure to contribute to the child's education costs; his accumulation of substantial debt, including tax debt owed to the Internal Revenue Service and Massachusetts Department of Revenue; and the forced sale of various marital assets undertaken to pay some of his accumulated debt. As a result of these and other actions, the husband's conduct substantially reduced the value of the marital estate, a particularly important § 34 factor properly considered in an equitable disposition of marital assets. In this case, as in Salten, 64 Mass. App. Ct. at 873-874, where the wife was awarded the bulk of the marital estate due to dissipation resulting from the husband's reckless investments, the wife was unaware of the husband's financial recklessness, which had the effect of depriving her and their son of a standard of living enjoyed during the marriage.
On several occasions during the pendency of this action, the husband was in arrears on his child support obligations, which were subsequently paid from the proceeds of the forced sale of marital property (condominium unit 22 and the tandem parking spaces, both located on Commonwealth Avenue). Also, the husband attempted to evade paying support by arranging for commissions earned to be diverted to pay personal debts incurred, thus drastically reducing his claimed income.
The husband incurred millions of dollars in personal loan debt during this divorce action; he borrowed from his employer, colleagues, friends, and family members of friends. At the outset of trial in 2013, the husband's personal liabilities, including tax debt, totaled approximately $1.9 million. In April, 2012, the husband sold one of the Commonwealth Avenue condominiums (unit 22) to satisfy a portion of his tax debt and to pay his attorney, in direct violation of a court order to deposit the net sale proceeds with the special master. In March, 2012, while the wife and child were away on college tours, the husband removed the sixteen-foot Boston Whaler (purchased for the child) and sold it without their knowledge; the husband later paid the wife $18,000 to purchase a replacement, which she failed to do.
After carefully considering the relevant § 34 factors, the judge found that "any Judgment which did not take [the husband's] dissipation and waste into account would be sharply inequitable to Wife." For that reason, the judge was warranted in according considerable weight to the husband's conduct during the marriage, including his significant dissipation and waste of various assets. While we recognize that the division is disproportionate, it is not excessively so. As a result, we see neither error, nor an abuse of the judge's broad discretion, in the division of the marital estate. See Salten, supra.
3. Alimony award. The husband does not challenge the annual gross income figure of $332,377 attributed to him and agrees that the order "requiring Husband to [pay] a portion of [the child's] net undergraduate costs was proper." However, he claims that his obligation to contribute two-thirds of the cost of the education obligation is equivalent to child support, and should have been deducted from his attributed gross income amount before calculating the alimony award. He posits the issue as one of first impression for this court and describes it as "whether Husband's undergraduate education support obligation, in the absence of a traditional child support order, constitutes a 'child support order' for the purposes of extrapolating a gross income amount to be excluded from the alimony calculation within the meaning of and pursuant to G. L. c. 208, § 53(c )(2)."
The statute, G. L. c. 208, § 28, as appearing in St. 1976, c. 279, § 1, provides that "[t]he court may make appropriate orders of maintenance, support and education of any child who has attained age eighteen but who has not attained age twenty-one and who is domiciled in the home of a parent, and is principally dependent upon said parent for maintenance." The Child Support Guidelines provide that, "[i]n establishing support orders for children over age 18, to the extent permitted by law [under c. 208, § 28 ], the Court shall exercise its discretion in ordering support and/or college contribution." Child Support Guidelines § II-F (2013) (Guidelines). "If a specific college contribution is ordered, this contribution shall be considered by the Court in setting the weekly support order, if any" (emphasis added). Ibid.
Contribution to college costs is not presumptive, but in considering an order under § II-F, the judge must look at several factors, namely: "the reason for the continued residence with and dependence on the Recipient, the child's academic circumstances, living situation, the available resources of the parents, the costs of post-secondary education for the child, the availability of financial aid and the allocation of those costs, if any, between the parties." Guidelines § II-F.
In support of his argument, the husband relies on Vedensky v. Vedensky, 86 Mass. App. Ct. 768, 775 n.9 (2014). This reliance is misplaced. In Vedensky, the parties did not raise the issue and we explicitly did "not decide the propriety of subtracting education expenses from gross income in a case where there is no child support order." Ibid. Nor do we do so here, where neither the Guidelines nor the statute required the judge to do so. See Guidelines § II-F; G. L. c. 208, §§ 28, 53(c )(2).
Because the husband failed to provide tax returns at trial, and his financial statement submitted to the court was found to be inaccurate, the judge utilized the husband's attributed annual income to calculate the alimony award; she also concluded that the husband "continues to be capable of earning a substantial living" having the potential for an increase in income with continued improvements in the commercial real estate market.
There are two considerations here. First, there is no dispute that the judge properly exercised her discretion in ordering the husband to contribute a larger portion of the child's education costs in lieu of a weekly child support obligation, given that the husband repeatedly had failed to fulfill that obligation during the pendency of this action. See Rosen v. Rosen, 90 Mass. App. Ct. 677, 695 (2016). The findings demonstrate that in so doing, the judge considered all of the factors outlined in the Guidelines, particularly the disparity in the parties' respective incomes. See Cabot v. Cabot, 55 Mass. App. Ct. 756, 765-766 (2002) (the husband's financial resources were "vastly superior" to those of the wife). The judge here also properly considered the fact that the wife had paid for two years of private secondary education and one year of college after the husband stopped contributing to his son's education. We see no abuse of discretion.
Second is the calculation of the alimony award itself. In reviewing an alimony award, we determine first whether the judge considered all relevant factors required under G. L. c. 208, § 53(a ), and, second, whether the order is equitable. See Hassey v. Hassey, 85 Mass. App. Ct. 518, 525-528 (2014). The Alimony Reform Act (Act) "creates express guidelines to aid judges in fashioning alimony orders" without altering "the principle that the central issue relevant to a financial award is the dependent spouse's need for support and maintenance in relationship to the respective financial circumstances of the parties." Id. at 524-525 (quotation omitted). See G. L. c. 208, §§ 48 - 55.
The Act, St. 2011, c. 124, §§ 1-7, amended G. L. c. 208, § 34, and inserted G. L. c. 208, §§ 48 -55.
Here, there was clear reference in the findings demonstrating that the judge considered each of the § 53(a ) factors, and the reasons for her conclusions were apparent. See Zaleski v. Zaleski, 469 Mass. 230, 236 (2014). Specifically, the judge determined that the wife's current income was not sufficient to meet her needs or allow her to maintain the lifestyle enjoyed during the marriage. In contrast, the husband was found to have the ability to support his former wife while still enjoying this same lifestyle with his girl friend and their child.
The Act also generally limits the amount of the award to "the recipient's need or 30 to 35 per cent of the difference between the parties' gross incomes." G. L. c. 208, § 53(b ). The husband challenges neither the annual income of $332,377 attributed to him, nor the wife's income figure of $42,000 utilized in the calculation. The resulting alimony award ($7,259 per month) is equivalent to thirty percent of the difference in income between the parties, making it "reasonable and lawful." Hassey, supra at 525. Because the parties' marriage lasted more than twenty years, the judge was permitted to "order alimony for an indefinite length of time." G. L. c. 208, § 49(c ). However, she chose instead to terminate the obligation at the husband's full retirement age, or January 1, 2023. The duration of the order does not deviate from the presumptive limits prescribed by the Act and, thus, does not require written findings. See G. L. c. 208, § 53(e ) ; Holmes v. Holmes, 467 Mass. 653, 658 (2014). Based on the foregoing, we see no abuse of discretion.
Under the Act, the judge is permitted to "attribute income to a party who is unemployed or underemployed." G. L. c. 208, § 53(f ).
The husband also argues that the judge erroneously considered the Brookline property as security for the alimony award; however, there is no evidence in this record to support his contention. It is clear from the findings that the husband had insufficient assets to secure a lump sum alimony award, which "is one of the factors the Court has taken into consideration in awarding Wife the bulk of the marital estate." According to the judge's rationale, she treated the value of the Brookline property, along with the value of the husband's other waste and dissipation of the marital estate, "as an advancement against Husband['s] share of marital assets under [G. L.] c. 208, § 34." In addition, the purpose of awarding the wife the bulk of the remaining marital assets (after the husband's significant dissipation and waste of so many) was to provide the wife with a resource to continue meeting her expenses in the event the husband fails to pay his monthly alimony obligation. This is especially evident in light of the judge's acknowledgement that the husband may fail in securing a life insurance policy in the amount of $300,000 naming the wife as beneficiary.
Judgment of divorce nisi affirmed.
November 5, 2014, postjudgment order affirmed.
The husband noticed an appeal from this order, but did not include the order or the underlying motions in the record appendix.
--------