Duval v. Duval

• Docket Number: 21-P-94
• Decision Date: 23 September 2022
• Citation: 101 Mass.App.Ct. 752,196 N.E.3d 346
• Parties: Candace M. DUVAL v. Shane A. DUVAL.
• Court: Appeals Court of Massachusetts

101 Mass.App.Ct. 752

196 N.E.3d 346

Candace M. DUVAL

v.Shane A. DUVAL.

No. 21-P-94

Appeals Court of Massachusetts, Worcester.

Argued April 5, 2022

Decided September 23, 2022

Nicholas J. Plante, Worcester, for the husband.

Sean J. Gallagher for the wife.

Present: Meade, Englander, & Grant, JJ.

MEADE, J.

In 2017, Shane A. Duval (husband) and Candace M. Duval (wife) executed a separation agreement providing that the wife would have primary physical custody of the parties’ two children, the husband would pay unallocated support of $850 per week, and the parties would contribute to the children's future college expenses "to the extent that each is able." In 2018, the husband filed a complaint for modification, seeking a reduction in his unallocated support obligation based on the wife's increased income and his increased parenting time (the elder child was living primarily with him, and the younger child was spending equal time in each party's home). A trial was held in June 2019, by which time the eldest child was attending college. In August 2019, a judgment of modification (modification judgment) entered. The judge, treating the husband's unallocated support obligation as alimony (and thus unaffected by the changes relating to the children), reduced the husband's weekly payments to $648 based on the wife's increased income only, and ordered both parties to contribute to the children's college expenses prospectively (while declining to order the wife to reimburse the husband for the first year of college expenses that he had already paid). The parties cross-appealed.

We conclude that it was error to treat the unallocated support order as purely alimony rather than a hybrid of alimony and child support. Because this error affected the judge's analysis relating to unallocated support and college contribution, we vacate so much of the modification judgment as pertains to unallocated support and college expenses and remand the case for further proceedings consistent with this opinion.

Background. The parties were married on December 26, 1998. In December 2015, the wife filed a complaint for divorce, which was served on the husband on January 5, 2016. At that time, the wife was earning minimal income as a substitute teacher, while the husband was the primary income earner, receiving a weekly salary and dividend income from his business, Brighter Horizons Environmental Corporation (BHE), a closely held corporation that he founded with his business partner in 2005.

On May 19, 2017, the parties executed a separation agreement containing six exhibits, three of which -- exhibits B, C, and D -- are relevant here. Exhibit B divided the parties’ personal property, including the fair market value of the husband's fifty percent shareholder interest in BHE. The parties agreed that the husband would retain his interest in BHE and would execute a promissory note requiring him to make a series of payments to the wife totaling $287,569, to equalize the property division. Exhibit C provided that the wife would have primary physical custody of the parties’ two children. Exhibit D provided that the husband would pay "unallocated support" to the wife of $850 per week, until the earliest to occur of the death of the husband, the death of the wife, or January 1, 2031. The term "unallocated support" was not defined in the agreement. Exhibit D further provided that the parties would contribute to the cost of the children's college education "to the extent that each is able." The agreement was incorporated into the divorce judgment; exhibit B survived and retained independent legal significance, whereas exhibits C and D were merged with the divorce judgment and did not survive. See DeCristofaro v. DeCristofaro, 24 Mass. App. Ct. 231, 235, 508 N.E.2d 104 (1987).

Soon after the divorce, in December 2017, the parties’ elder child (who was about to turn eighteen and entering his final semester of high school) began residing primarily with the husband. In April 2018, the husband filed a complaint for modification seeking (1) joint physical custody of the parties’ younger child; and (2) termination, reduction, or recalculation of his unallocated support obligation based on the elder child residing with him full time, the wife's increased income, and any change to the custody arrangement for the younger child resulting from the modification action. The wife filed an answer and counterclaim in October 2018, seeking an order establishing an appropriate amount of child support to be paid by the husband. In 2019, the parties executed a partial agreement for judgment, which was incorporated into the modification judgment, agreeing to a parenting plan for the younger child under which each parent would have approximately equal parenting time, but the wife's home would remain the child's primary residence.¹ By that point, the parties’ elder child had already completed his first year of college and was residing primarily with the husband when not at school. The total out-of-pocket cost for his first year of college was $9,051, which the husband paid without contribution from the wife. The parties agreed to submit to the judge for resolution the disputed issues of (1) the amount and character of support to be paid by the husband, and (2) the parties’ respective contributions to the children's college expenses.

Following a trial, the judge issued the modification judgment and findings in August 2019, reducing the husband's unallocated support obligation to $648 per week, and ordering the husband to pay one-third, and the wife to pay one-sixth, of the children's future college expenses.² The judge declined to order the wife to contribute to the elder child's first year of college expenses.

The judge made the following relevant rulings and findings. With respect to the husband's unallocated support obligation, the judge interpreted exhibit D of the separation agreement as evidencing the parties’ intent for unallocated support to be in the nature of alimony, rather than a hybrid of alimony and child support. Because the judge concluded that the husband's unallocated support obligation was purely alimony, he found that the husband's increased parenting time and financial responsibility for the children did not constitute a material change in circumstances warranting modification of the unallocated support order.³

Instead, the judge applied alimony principles and determined that modification was warranted in light of the increase in the wife's income since the divorce. The judge found that the wife's gross weekly income (excluding unallocated support) had increased from $140.34 at the time of divorce, to $1,228.95 at the time of the modification trial, representing a material change in circumstances.⁴ By contrast, the judge found no material change in the husband's financial circumstances since the divorce, with his gross weekly income from BHE totaling $4,813.75 ($2,500 salary and $2,313.75 dividend income) at the time of the divorce, and $4,636 ($2,500 salary and $2,136 dividend income) at the time of the modification trial.⁵

The judge found that the husband had the ability to pay alimony while also maintaining the former "upper-middle class" marital lifestyle, whereas the wife -- notwithstanding her increased income -- remained in need of support to maintain the former marital lifestyle. Although the wife's financial statement revealed a weekly deficit of $1,172.18 after deducting her claimed expenses from her earned income, the judge did not address the wife's asserted need in his findings.⁶ Instead, he found that "the parties agreed, in the [s]eparation [a]greement, that [the wife's] need for support was equal to 18.54% of the difference in the parties’ respective incomes," because the original agreed upon amount of unallocated support ($850 per week) was mathematically equivalent to 18.54 percent of the difference in the parties’ incomes at the time of the divorce. The judge arrived at this conclusion despite the fact that the agreement neither contained that percentage figure nor provided a calculation method for the $850 per week unallocated support order. The judge ultimately reduced the husband's unallocated support obligation to $648 per week, representing the 18.54 percent delta between the parties’ incomes at the time of the modification trial. In calculating this amount, the judge considered both the husband's salary and dividend income from BHE. The present cross appeals followed.

Discussion. On appeal, both parties challenge the modified unallocated support order. The husband also challenges the college expense provision of the modification judgment. We address each issue in turn.

1. Unallocated support. a. Parties’ intent. As a threshold matter, we must determine whether the judge, in interpreting the separation agreement, correctly concluded that the parties intended the unallocated support order to be in the nature of alimony, rather than a hybrid of both alimony and child support.

Here, the judge found that the

"[s]eparation [a]greement contained no provision for child support. The unallocated support for which the [s]eparation [a]greement did provide is in the nature of alimony. It expressly provides for a series of termination events that are unrelated to the children.... The termination events recited in the parties’ [s]eparation [a]greement are directly related to those provided in the alimony statute, namely the death of either party or a date certain which relates to the durational limits of G. L. c. 208, § 49. Essentially, the [s]eparation [a]greement provided for [the wife] to receive her division of property and alimony, termed unallocated support, in the amount and duration that she did in exchange for not receiving child support." (Footnote omitted.)⁷

The judge further found that "[a]lthough the issues related to the children were considered in setting the unallocated support amount, the amount was primarily set based on [the wife's]...