Katz v. Katz, 99-P-71.

• Decision Date: 19 July 2002
• Docket Number: No. 99-P-71.,99-P-71.
• Citation: 772 N.E.2d 39,55 Mass. App. Ct. 472
• Court: Appeals Court of Massachusetts
• Parties: Charlotte KATZ v. Nathan KATZ.

772 N.E.2d 39

55 Mass. App. Ct. 472

Charlotte KATZ v. Nathan KATZ.

No. 99-P-71.

Appeals Court of Massachusetts, Norfolk.

Argued December 6, 2001.

Decided July 19, 2002.

Abbe L. Ross, Boston, for Charlotte Katz.

Phyllis K. Kolman, Cambridge, for Nathan Katz.

Present: LAURENCE, GILLERMAN, & GRASSO, JJ.

LAURENCE, J.

Charlotte Katz appeals from a Probate and Family Court judgment that effectively terminated her alimony from her former husband, Nathan Katz, on Nathan's second complaint for modification, by rapidly reducing it in periodic decrements from $450 per week to nothing over nineteen months. We conclude that this judgment reflected an abuse of discretion and remand.

Background. The facts underlying the judgment, as found by the probate judge and stipulated by the parties, are essentially undisputed. The Katzes were married in June, 1956, separated in May, 1970, and divorced in June, 1983, when Charlotte was forty-eight and Nathan fifty-one. The marriage produced three children, two of whom were minors at the time of the divorce. The divorce judgment provided, inter alia, that Nathan pay unallocated alimony and child support to Charlotte in the amount of $550 per week. No express time limit or conditions subsequent were placed upon Nathan's alimony obligation in that judgment, nor was there any agreement between the parties relating to alimony. Charlotte also received sole ownership of the marital home in Quincy, while Nathan retained a Brookline condominium that he had purchased some time in the 1970's (and at some later date placed in an undisclosed type of tenancy with the woman who became his second wife). In addition to other obligations, such as paying for the two minor children's education, Nathan was ordered to pay Charlotte's life and health insurance premiums and to give her a lump sum of $100,000 on January 31, 1993, pursuant to the terms of a $315,000 promissory note then payable to Nathan by his employer. At the time of the divorce, Nathan was employed in a family retail business, earning $86,000 per year. Charlotte was a homemaker and primary caretaker of the children, had not been employed in sixteen years, and had no marketable skills.

Nathan remarried in 1983, soon after the divorce. Over the next nine years, he complied with all of the terms of the 1983 divorce judgment. By 1991, he was earning $125,000 a year from the family business. In January, 1992, however, he was effectively forced out of the business and into early retirement at age sixty (although he remained a "consultant" receiving $96.15 per week from the business, plus a $3,000 per year "clothing allowance" and an all-expenses paid automobile, for the next five years). Alleging materially changed employment and financial circumstances, Nathan filed for modification of his support obligation that same month, seeking to reduce it to $175 per week.

He obtained a temporary order that cut his payment to $450 per week, all of which represented alimony (the youngest child having become emancipated). While earning interest and consultant income of approximately $520 per week, Nathan claimed weekly expenses of $1,288, including the cost of Charlotte's alimony ($450) and insurance ($54.03). Although his assets then totaled $732,470 (which included his interest IN the Brookline condominium, the outstanding mortgage for which was his only liability) and he had been living "a comfortable lifestyle," he contended that, with the significant reduction in his income, he had to begin using his assets to meet his expenses and that, without relief, he would deplete those assets in ten years.¹ Charlotte's assets then amounted to $196,000, consisting entirely of her equity in the marital home and an anticipated $100,000 lump sum payment from the promissory note (from which, the judge noted, she would be paying off her existing liabilities of $25,519, exclusive of mortgage debt). Her estimated income was $515 per week, consisting of the $450 alimony and interest income from the $100,000 payment, while her weekly expenses were $546. The net result had been a reduction in her standard of living to "a spartan lifestyle."²

In her March, 1993, decision on Nathan's first complaint for modification, the judge permanently reduced his alimony obligation to $450 per week. As rationale for rejecting the more drastic alimony decrease that Nathan desired, the judge noted that "Nathan's financial security is set for the foreseeable future" while "Charlotte is almost totally dependent upon Nathan for her support"; that Nathan will be enjoying financial benefits from his former employer for another four years; and, most significantly, that he "will be relocating to Florida where he expects the cost of living to be less expensive." She praised Nathan's "taking steps to preserve his resources by making such a move," while admonishing Charlotte that she "likewise has an obligation to maximize the use of her resource (although she recognized that Charlotte "has little opportunity for [acquiring] other income" or assets) and warning Charlotte that she "needs to plan now for the possibility of a further reduction" should Nathan "spend down his resources more quickly than I project."

Following the 1993 modification, Nathan purchased a condominium in West Palm Beach, Florida, utilizing $112,000 of his investment funds (because of his claimed inability to qualify for a mortgage without a steady source of employment income).

As he had eventually done with the Brookline condominium, Nathan took the West Palm Beach residence as a co-tenant with his second wife (the record does not indicate the exact nature of that concurrent ownership). He did not, however, fully "relocate" in Florida, as had been envisioned during the 1993 modification hearing, but continued to maintain his Brookline home. He and his second wife lived eight months of the year in West Palm Beach, then spent the remainder of their year (June through September) in Brookline. Nathan said that he went to Florida for health reasons³ and returned to Brookline for health reasons, "plus ... to spend time with" his second wife's mother, who lived in the Boston area.

Nathan filed a second complaint for modification, requesting "reducing or terminating" his alimony obligation to Charlotte, in September, 1996. The complaint was heard over a year later by the same judge who had presided over the 1993 modification and who made the following findings. Since the 1993 modification and the purchase of the West Palm Beach condominium, Nathan's assets had decreased to $478,293.29 (which included his " ½ interests" in the Brookline and West Palm Beach condominiums, the total equity in which was $307,700). His weekly income was now $515.58, of which $297.28 was from interest income on his investments and $218.30 from Social Security benefits. His weekly expenses were $1,450.07, includ the $450 per week alimony to Charlotte and $54.03 per week for her health insurance (an obligation that was, however, to expire in eighteen months when Charlotte would turn sixtyfive). Nathan's nonmortgage liabilities had gone from zero to $26,600, all reflecting credit card debt; his mortgage balance on the Brookline condominium had declined to $23,000. Nathan had to withdraw funds from his investments in each of the years since 1993 to support himself and his second wife and meet his obligations to Charlotte;⁴ and if that rate of withdrawal persisted, the judge concluded, "his retirement assets will be depleted in or within four years."

Charlotte's assets as of the 1997 hearing were $176,066.24, $129,217.37 of which consisted of her equity in the Quincy home and $34,364.21, the remainder of the $100,000 she had received in 1993. Her weekly income was then $575.80 ($450 in alimony, $106.15 in Social Security benefits, and $19.65 in interest income). Her weekly expenses had increased to $622.75 ($174.81 of which were her continued mortgage payments on a mortgage balance of $60,382.63). Her liabilities, exclusive of the mortgage debt, consisted of $5,500 owed on several credit cards and $5,000 owed to her lawyers.

On these facts, the judge found that Nathan's lifestyle had "declined" to the level of "modest," while Charlotte's had not changed since 1993. The judge noted that Charlotte (then almost sixty-four) as well as Nathan (then almost sixty-six) continued to have "serious health problems" (hers including asthma, "Deceuvrans Feno Sinuvitis" [a hand condition], severe back problems, and migraines) and found both of them to be unemployable. With respect to Nathan's continued maintenance of both the West Palm Beach and Brookline residences, the judge found that keeping the Brookline condominium was less expensive for Nathan than would be paying for a motel room or renting an apartment in Boston when he and his current wife came north during the summer months.

The judge praised Nathan's frugality in the face of the decline in his lifestyle⁵ but was unremittingly critical of Charlotte's money management, citing her opting to collect Social Security benefits at age sixty-two, rather than awaiting a larger benefit at sixty-five; spending over $56,600 of the $100,000 from the promissory note over the prior four years⁶ rather than "most efficiently manag[ing] the funds she received"; refinancing her home but inexplicably achieving a net saving of only approximately $10 per month; carrying a credit card balance at "high finance charges" while retaining a savings account that the judge assumed "yields a significantly lower rate of interest"; allowing her adult daughter, Dayle, who worked and was capable of paying rent, to continue living with her rent-free⁷; and not being willing to rent a room in her house in order to obtain additional income and help defray expenses.

The judge concluded that Nathan had suffered a substantial change in circumstances since 1993 and ordered his alimony obligation to Charlotte to be terminated as of July,...