Payne v. Payne

• Decision Date: 15 December 1987
• Docket Number: Nos. 1359-86-2,1437-86-2,s. 1359-86-2
• Citation: Payne v. Payne, 5 Va.App. 359, 363 S.E.2d 428 (Va. App. 1987)
• Parties: Thomas H. PAYNE v. Karen M. PAYNE. and Karen M. PAYNE v. Thomas H. PAYNE. Record
• Court: Virginia Court of Appeals

Page 428

363 S.E.2d 428

5 Va.App. 359

Thomas H. PAYNE v. Karen M. PAYNE and Karen M. PAYNE v. Thomas H. PAYNE.

Record Nos. 1359-86-2, 1437-86-2.

Court of Appeals of Virginia.

Dec. 15, 1987.

W. Clyde Gouldman, II (Buck, Hogshire & Gouldman, Ltd., Charlottesville, on brief), for appellant.

R. Lecky Stone, Jr. (Wood & Stone, Charlottesville, on brief), for appellee.

Before BAKER, COLE and DUFF, JJ.

DUFF, Judge.

In his appeal, Thomas H. Payne challenges the chancellor's award of $1,400 per month spousal and child support, contending that it was an abuse of discretion because it exceeded his present ability to pay. (Record No. 1359-86-2). In her cross-appeal, Karen M. Payne challenges various aspects of the equitable distribution award. (Record No. 1437-86-2). Based upon our review of the record and the arguments and authorities presented, we hold that the chancellor's award of $1,400 spousal and child support was error and remand for further proceedings. We also affirm in part and reverse in part the equitable distribution award and remand for further consideration.

I. BACKGROUND

Thomas and Karen were married in 1969. Karen taught at Madison County High School while Thomas obtained a master's degree in business from the University of Virginia. Thereafter, Thomas worked for a national accounting firm and the couple moved to various locations over the next three years. Karen did not work full-time, but on occasion did some typing in their home on a part-time basis to earn extra income. In late 1974, Thomas was transferred to California. Two years later, he decided to change plans and pursue a career in counseling. With Karen's support, Thomas left his job with the accounting firm, went back to school part-time to obtain a degree in family counseling, and worked full-time as a hospital administrator. Karen also worked in the same hospital on a part-time basis.

In 1980, the couple began experiencing marital difficulties and in February 1981, they obtained an interlocutory divorce decree from a California court. The decree adopted a "Marital and Property Settlement Agreement" that provided for a division of the parties' property and a waiver of alimony by Karen. Thereafter, Thomas moved to Charlottesville, Virginia, intending to start a small financial counseling business. Karen elected to remain in California.

Shortly after arriving in Virginia, Thomas received a telephone call from Karen advising that she was pregnant. After more telephone calls, the parties decided to reconcile and pursue what was described as a "spartan" lifestyle. Karen returned to Charlottesville, and their son, Luke, was born in October 1981.

Thomas began his financial counseling business in 1982 with Karen's approval and support. They agreed that he would attempt to limit his work commitment to four days per week in order that he might spend more time with his family. Marital problems developed during the next several years, and in August of 1985, Thomas left Karen and moved into a house with his brother and sister-in-law.

The evidence taken at trial disclosed that Thomas's average net monthly disposable income from the counseling business was $1,569 in 1984, $2,083 in 1985, and $1,660 in 1986. He stated that the 1986 decrease was due to a severe curtailment of contractual business from Family Services, a United Way agency, and that this curtailment would continue in the future.

II. SPOUSAL AND CHILD SUPPORT

In the final decree of November 6, 1986, the chancellor awarded support of $1,400 per month to Karen ($1,000 in spousal support and $400 in child support). The decree then contained the following provisions:

Recognizing that Respondent Husband presently has net disposable income from his financial counseling business of approximately $1,600.00 per month and from that cannot pay at this time the combined child and spousal support of $1,400.00 per month, the court has decided to modify said award until October 1, 1987. This modification shall allow Husband to pay a reduced total monthly payment until October 1, 1987 of $1,066.00, or two-thirds (2/3) of his net disposable income from his business which should allow Husband a "breathing" period to find a different job or find other means of increasing his net disposable income ... payable bi-monthly in equal $533.00 increments on the 1st and 15th of each month. One-half of those payments shall be deemed child support and one-half spousal support unless the parties ... reach some alternate designation.

On appeal, Thomas contends that the trial court erred by: (1) fixing the amount of support at $1,400 per month when the evidence showed a monthly income for 1986 of $1,660; (2) assuming he could increase his income to a level at which he would be able to pay the award, although there was no evidence supporting that assumption; and (3) failing to consider Karen's earning capacity as required by Code § 20-107.1. We agree with these contentions, reverse the award of child and spousal support, and remand for further determination of the support issue.

Spouses "entitled to support have the right to be maintained in the manner to which they were accustomed during the marriage, but their needs must be balanced against the other spouse's financial ability to pay." Dukelow v. Dukelow, 2 Va.App. 21, 26, 341 S.E.2d 208, 210 (1986). Code § 20-107 authorizes courts "to consider not only earnings but also 'earning capacity.' " Jacobs v. Jacobs, 219 Va. 993, 995, 254 S.E.2d 56, 58 (1979). However, the award must be based upon the circumstances in existence at the time of the award. An award "premised upon the occurrence of an uncertain future circumstance ... ignores the design and defeats the purpose of the statutory scheme." Id. at 995-96, 254 S.E.2d at 58. Further, the amount of "support ... is a matter within the discretion of the court and will not be disturbed on appeal unless it is clear that some injustice has been done." Dukelow, 2 Va.App. at 27, 341 S.E.2d at 211 (citing Oliver v. Oliver, 202 Va. 268, 272, 117 S.E.2d 59, 62 (1960)).

In the present case, we find that the spousal support award constituted an abuse of discretion. The record reveals that the award left Thomas with approximately $200 per month to meet his monthly expenses. In Robertson v. Robertson, 215 Va. 425, 211 S.E.2d 41 (1975), the Court set aside the nearly $20,000 per year alimony award as unreasonable when such an award would leave the husband with approximately $11,000 at the time of the hearing to meet his expenses. The Court found that the amount left to the husband was substantially less than what he needed to meet his personal expenses and to discharge his other financial obligations. Id. at 429, 211 S.E.2d at 45.

In the present case, the chancellor denied Thomas's motion to reconsider, stating that he was "expecting his income to change because he's capable of making more money than that." The chancellor's award appears to be based upon the belief that Thomas had the capacity to earn more money but was not utilizing that capacity. In an appropriate case, such reasoning might be valid. Here, however, we find insufficient evidence that Thomas could increase his income, or to establish the amount of such increase. In fact, the chancellor observed that "the good Lord himself doesn't know" how much more money Thomas can earn.

Our decision does not suggest that a spouse may purposely choose to pursue a low paying career which operates to the detriment of the other spouse and children. In Butler v. Butler, 217 Va. 195, 227 S.E.2d 688 (1976), the court refused to modify a decree on the basis of the husband's inability to pay because the husband conceded that "he could double his income" by leaving his present staff position and engaging in private practice. In Taylor v. Taylor, 203 Va. 1, 121 S.E.2d 753 (1961), the court affirmed an award that was based on the amount earned by the husband the previous year in a job he left after the parties separated, one to which he could return later if he desired. We find that these cases are not applicable to the facts in the present appeal. In Butler and Taylor the evidence showed that the spouse ordered to pay support had occupational alternatives and that his occupational choice was solely his decision. However, the evidence in the record before us shows that the establishment of Thomas's counseling business was with Karen's approval and support. Further, no evidence suggests that Thomas could seek other fields of employment that would yield a higher income.

An award of child support must also be based on current circumstances. See Keyser v. Keyser, 2 Va.App. 459, 345 S.E.2d 12 (1986). Accordingly, we vacate the award of spousal and child support and remand the case for further proceedings. Upon remand, the chancellor must also consider Karen's earning capacity as required by Code § 20-107.1. See Dodge v. Dodge, 2 Va.App. 238, 246, 343 S.E.2d 363, 367 (1986).

III. EQUITABLE DISTRIBUTION

In her cross-appeal, Karen challenges the trial court's equitable distribution award. The issues she presents may be summarized as follows: (1) whether the trial court erred in determining that an equal division of the marital property was equitable; and (2) whether the terms of Code § 20-107.3(D) authorize the trial court to require a party to accept property in satisfaction of a monetary award and also assume payment of its lien obligation....