Osim v. Scott

• Decision Date: 18 May 2023
• Docket Number: 359770
• Parties: DAVID G. OSIM, Plaintiff-Appellant, v. JILL E. SCOTT, Defendant-Appellee
• Court: Court of Appeal of Michigan — District of US

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DAVID G. OSIM, Plaintiff-Appellant, v. JILL E. SCOTT, Defendant-Appellee

No. 359770

Court of Appeals of Michigan

May 18, 2023

UNPUBLISHED

Crawford Circuit Court LC No. 11-008659-DO

Before: GADOLA, P.J., and PATEL and MALDONADO, JJ.

PER CURIAM.

Plaintiff David Osim (husband) appeals the trial court's order (1) requiring him to pay defendant Jill Scott (wife) one-half of his monthly gross social security benefits pursuant to the parties' contracted property settlement, and (2) modifying spousal support to award wife $1,000 monthly support. Because such action is prohibited by law, the trial court erred by dividing husband's social security benefits. The court also erred by setting July 1, 2017, as the effective date of its order; it should be effective April 3, 2017, which is the date husband moved to modify spousal support. While the court did not abuse its discretion in its modification of spousal support, its error concerning the property division could affect the amount of support warranted. We affirm in part, reverse in part, and remand to the trial court for further proceedings consistent with this opinion.

I. BACKGROUND We previously summarized the initial facts of this case as follows:

The parties divorced in 2012 after nearly 35 years of marriage. They entered into a consent judgment and a property settlement that disposed of their marital assets, but they were unable to agree on spousal support. [Husband] had worked for AT&T for over 20 years, while [wife] had not worked during the marriage. [Wife] was a stay-at-home mother and also has significant health problems. The property settlement gave [wife] half of the value of [husband]'s 401(k) plan, half of their joint checking and savings accounts, half of [husband]'s Social Security benefits, and half of the stocks they owned. The parties agreed that [wife] would keep the marital home (free and clear of any liens), while [husband] would keep his pension. The parties could not agree on how much spousal support [husband] should pay [wife], so they submitted the issue to the trial court for resolution. The trial court calculated a monthly support payment of $2,000, which was permanent (until [wife]'s death or remarriage) and modifiable, and added this provision to the consent judgment, which the parties subsequently signed. This monthly support payment was more than [wife] originally requested and was ordered due to [her] health concerns. The trial court notified the parties that [husband] could ask to modify the spousal support obligation when he retired. [Husband] retired in December 2016, and filed a motion to eliminate spousal support, arguing that his only source of income was the pension he received in full in the property settlement. After an evidentiary hearing, the trial court rejected [husband]'s argument and reduced [his] monthly spousal support obligation to $961.50 to reflect his reduced income.

In its opinion modifying the spousal support, the trial court opined that, based on the evidence, neither party had the ability to continue working in more than a part-time capacity. It found the property awarded to each party in the divorce as a compelling reason for modification of the spousal support award. The trial court stated that at the time of the divorce, the marital home awarded to [wife] was "somewhere between the [husband]'s appraisal of $115,000 and the [wife]'s submission of the SEV based value of $86,258." It noted that no party provided direct evidence of the value of [husband]'s pension at the time of the divorce, but that because the value of [husband]'s lump sum pension payout was $441,303.96 at the time of his December 2016 retirement, "there can be little question . . . that its value in 2012 was significantly higher than that of the home." The trial court concluded that, "in terms of the amount of property awarded in the judgment of divorce, the [husband] received significantly more value by receiving his entire pension than the [wife] did by receiving the home." It further concluded that the predecessor judge who conducted the pro confesso hearing and entered the judgment of divorce was clearly not aware of this disparity, did not take it into account, and that the initial spousal support award was based on an assumption that marital home and pension were equal in value. [Osim v Scott, unpublished per curiam opinion of the Court of Appeals, issued October 31, 2019 (Docket No. 342237), pp 1-3.]

In his earlier appeal, husband argued that the trial court erred in its modification of spousal support by (1) improperly considering his pension as income for the purpose of calculating support, (2) improperly considering the spousal-support factors and determining support via an arbitrary formula, and (3) failing to impute an income to wife. Id. at 2, 6. We agreed with the first argument, and concluded that the trial court was bound to follow the parties' divorce settlement granting husband his entire pension as part of the contracted property division and thus the trial court erred by considering husband's pension when modifying support. Id. at 4-5.

Nevertheless, we elaborated that our ruling "does not necessarily mean that any consideration of the amount of [husband]'s pension for purposes of calculating an amendment to spousal support is precluded." Id. Because the parties' divorce settlement allowed modification of spousal support, we stated that the principles generally governing modification of spousal support applied. Id. "Thus, the current amount of the pension is relevant to the extent of how the award of the pension to [husband] now affects the incomes and needs of the parties. This consideration is part of the trial court's review of the spousal support factors in calculating the modified support amount." Id. at 5-6.

Notwithstanding the improper consideration of husband's pension, we found that the trial court did not otherwise err when modifying support. Ultimately, we found that the trial court properly concluded that spousal support should be reduced, but erred in its calculation of the modified support amount; accordingly, we remanded for further proceedings consistent with our opinion. Id. at 7.

On remand, wife asserted she was entitled to an increased support award because husband was receiving Social Security Disability Insurance (SSDI) benefits. She argued that she was entitled to half the SSDI benefits pursuant to the parties' property settlement. Husband countered that the parties' property division did not automatically entitle wife to half his benefits; rather, it simply allowed her to make her own claim for benefits based on his earnings record. He also maintained that support should be eliminated or reduced to a minimal amount.

The trial court ordered that husband continue paying support at a modified amount of $1,000 per month, and "remit to [wife] half of his social security benefits." However, "to balance the equities," the court ordered "that in any month in which half of [husband]'s social security benefits exceeds $1,000, [husband] shall simply pay that amount. In any month in which half of his social security benefits is less than $1,000, [husband] shall pay that amount . . . plus the difference between that amount and $1,000, so that [wife] shall not receive less than $1,000 in any given month." Lastly, because the social security payments were required by the parties' property settlement, the court awarded those amounts to be paid retroactively "to the first month [husband] began receiving social security benefits." The court determined that support should be permanent but still be modifiable on a proper showing of a change in circumstances.

Husband moved for relief from the trial court's order under MCR 2.612(C). The trial court acknowledged that the order should state that spousal support was "indefinite" rather than "permanent," but otherwise sustained its prior findings and ordered payments. The parties ultimately agreed that the social security division would be retroactive to June of 2017 and there would be direct payment of the benefits to the wife. The court entered an order requiring husband to pay wife half of his monthly gross social security benefits pursuant to the parties' contracted property settlement and modifying spousal support to award wife $1,000 per month in indefinite support (deducted by the amount of husband's social security benefits paid to wife in a given month, with no support owed for a given month where wife receives over $1,000 in social security benefits). The order was retroactively effective to July 1, 2017, "or the date which [husband] became eligible for Social Security benefits." This appeal followed.

II. STANDARDS OF REVIEW

We review a trial court's discretionary award of spousal support for an abuse of discretion. Loutts v Loutts, 298 Mich.App. 21, 25; 826 N.W.2d 152 (2012). "An abuse of discretion occurs when the trial court's decision falls outside the range of reasonable and principled outcomes." Id. at 26. We review a trial court's factual findings relating to the award or modification of spousal support for clear error. Smith v Smith, 328 Mich.App. 279, 286; 936 N.W.2d 716 (2019). "A finding is clearly erroneous if [this Court] is left with a definite and firm conviction that a mistake has been made." Id. When a trial court's findings are not clearly erroneous, we must then decide whether "the dispositional ruling was fair and equitable in light of the facts." Id. An award of support "must be affirmed unless this Court is firmly convinced that it was inequitable." Andrusz v Andrusz, 320 Mich.App. 445, 452; 904 N.W.2d 636 (2017) (cleaned up).

"A settlement agreement, such as a stipulation and property settlement in a divorce, is construed as a...