Reuter v. Reuter
| Decision Date | 01 September 1994 |
| Docket Number | No. 527,527 |
| Citation | 649 A.2d 24,102 Md.App. 212 |
| Parties | Michael S. REUTER v. Nancy S. REUTER. , |
| Court | Court of Special Appeals of Maryland |
Joel Marc Abramson and Harry B. Siegel, Columbia, for appellee.
Argued Before FISCHER, DAVIS and HARRELL, JJ.
Michael S. Reuter (Mr. Reuter) appeals from a judgment of limited divorce entered by the Circuit Court for Anne Arundel On December 27, 1993, Mrs. Reuter filed a petition for contempt, alleging that Mr. Reuter was in arrearage for his support obligations under the pendente lite order. The contempt and limited divorce proceedings were consolidated, and a trial was held on February 23, 1994. At the close of trial the court granted the limited divorce, awarded Mrs. Reuter both alimony and child support, and ordered Mr. Reuter to pay both the arrearage and attorney's fees. A judgment of divorce was entered on March 15, and Mr. Reuter's motion to alter or amend that judgment was denied on March 25.
County (Lerner, J.). On March 17, 1993, Nancy Swisher Reuter (Mrs. Reuter) filed a complaint for limited divorce. The complaint requested relief pendente lite, and a hearing on those issues was held April 26. On May 20, the court (Goudy, J.) issued a pendente lite order which provided for Mr. Reuter's payment of child support and alimony.
Mr. Reuter presents five questions for our review, which we have restated and renumbered for clarity:
I. Did the trial court err in finding that husband had voluntarily impoverished himself, and that he was capable of earning $45,000, when it failed to consider husband's last three years of income?
II. Did the trial court err when it awarded alimony to wife, when wife is the financially superior spouse, and when wife had refused without good cause to refinance the mortgage on the family home at a lower monthly rate?
III. Did the trial court err when it established husband's child support obligation?
IV. Did the trial court err when it awarded wife a $2,200 judgment for child support arrearage, when it failed to modify husband's pendente lite child support obligation to the amount required by the child support guidelines?
V. Did the trial court err when it awarded wife attorney fees and costs, when wife is the financially superior spouse with over $160,000 in available assets, and
when the trial court found that husband lacked the financial resources to pay the award promptly?
Nancy Swisher Reuter and Michael S. Reuter were married on July 11, 1981. They presently have two sons: Stephen (age 7) and Kevin (age 4). While the parties disagree about the circumstances surrounding their separation, it is not disputed that Mr. Reuter announced his intention to end the marriage relationship in November, 1992, and left the family home on January 23, 1993.
At the start of their marriage, Mrs. Reuter was employed full-time as a registered nurse. After Stephen was born in January, 1987, Mrs. Reuter returned to work part-time until 1988. Kevin was born in December, 1989, and Mrs. Reuter returned to work part-time in 1990. At the time of trial, Mrs. Reuter continued to work 10 hours per week as a nurse, at a rate of $16 per hour. In addition to her wages, Mrs. Reuter also receives a substantial amount of income from investments, and periodically has received income from a trust established by her father. Mrs. Reuter testified that the value of her assets was between $160,000 and $170,000, while the total taxable and tax-free income from those assets exceeded $7,000 per year.
In support of her decision to continue working part-time after the separation, Mrs. Reuter testified that Kevin was having difficulty adjusting to the separation. A clinical psychologist also testified about Kevin's emotional difficulties, and concluded that spending a full day in day care would not be in Kevin's best interest at this time.
Mr. Reuter began the marriage employed as a police officer. He attended law school in the evening, and was admitted to the bar in 1983. Between 1984 and 1991 Mr. Reuter was employed by a small law firm, first as an associate and later as a partner. In 1991, Mr. Reuter and Malik Tuma started the firm of Reuter & Tuma (the firm). In 1993, the firm added a In 1994--just prior to trial--Mr. Reuter executed a "buy-sell agreement" in which his interest in the firm was sold to his partners for a net loss. 1 Mr. Reuter continued to work for the firm as an employee, and the firm has continued to use the name "Reuter, Tuma & Davis." 2 The buy-sell agreement carefully sets out Mr. Reuter's compensation for different types of cases, based on how the case is billed, and states that Mr. Reuter is not paid for his work until the firm receives payment.
third partner and additional office space. Mr. Reuter's income from the firm was $39,366 in 1992, and $31,775 in 1993.
The income and financial status of the parties is crucial to most of the questions presented in this case, and we discuss Mr. Reuter's employment history, as well as Mrs. Reuter's income and assets, in greater detail where appropriate.
Under the pendente lite order, Mr. Reuter's obligations for alimony and child support were $200 and $1,100 per month, respectively. Mr. Reuter paid the full amount at first, but in November, 1993, he began to make smaller payments, and by the February trial date he was $2,200 in arrears.
In granting Mrs. Reuter's petition for divorce, the trial court found that Mr. Reuter was voluntarily impoverished, and concluded that his potential income was $45,000. The court then ordered that Mr. Reuter pay $1,250 per month in child support, $100 per month in alimony, $4,000 in attorney's fees, and $203.50 in costs. Mr. Reuter was also ordered to maintain health insurance for Mrs. Reuter and both of the children. With regard to the $2,200 child support arrearage, Mr. Reuter
was ordered to make additional monthly payments until the arrearage was paid in full. The court requested--but did not order--that Mrs. Reuter supplement her income by increasing her work week from 10 hours per week to 15 hours or more.
As a preliminary matter, we reject Mrs. Reuter's assertion that the appeal should be dismissed for Mr. Reuter's failure to file a timely notice of appeal. On March 15, 1994, Mr. Reuter filed a motion to alter or amend the judgment pursuant to MARYLAND RULE 2-534. He then filed a notice of appeal on March 18--one full week before the court ruled on the earlier motion. Mrs. Reuter contends that the March 18th notice of appeal was ineffective because the court's judgment ceased to be final for purposes of appeal until the withdrawal or disposition of the Rule 2-534 motion. See Unnamed Attorney v. Attorney Grievance Commission, 303 Md. 473, 486, 494 A.2d 940 (1985). Mrs. Reuter's argument was correct under the former Rule 1012(d), but Maryland law on the point was changed in 1988 when Rule 1012 was amended and renumbered as Rule 8-202. Edsall v. Anne Arundel County, 332 Md. 502, 505-06, 632 A.2d 763 (1993). Under MARYLAND RULE 8-202, a timely notice of appeal filed prior to the disposition of a Rule 2-534 motion is effective. Id. Processing of the appeal is merely delayed until the withdrawal or disposition of the motion.
Mr. Reuter's challenge of various orders contained in the divorce judgment rests heavily on his assertion that the lower court erred in finding that he was voluntarily impoverished, and that his potential income was $45,000 per year. In considering that question, we look to certain provisions of the statutory scheme that governs child support in Maryland, as set forth in the FAMILY LAW ARTICLE (FL) OF THE MARYLAND ANNOTATED CODE (1991 Repl.Vol.).
When a court calculates a parent's financial obligations under the child support guidelines, the central factual issue is the "actual adjusted income" of each party. The court must consider the "actual income of a parent, if the parent is employed to full capacity," FL § 12-201(b)(1), or the "potential income of a parent, if the parent is voluntarily impoverished." FL § 12-201(b)(2). Before an award may be based on potential income, the court must hear evidence and make a specific finding that the party is voluntarily impoverished. John O. v. Jane O., 90 Md.App. 406, 423, 601 A.2d 149 (1992). Once a court reaches that conclusion, the court must then make findings regarding the factors related to potential income. Goldberger v. Goldberger, 96 Md.App. 313, 327-28, 624 A.2d 1328 (1993). Both issues are left to the sound discretion of the trial judge. The court's factual findings will not be disturbed unless they are clearly erroneous, In re Joshua W., 94 Md.App. 486, 491, 617 A.2d 1154 (1993), and rulings based on those findings must stand unless the court abused its discretion. John O., 90 Md.App. at 423, 601 A.2d 149.
In determining whether a parent is voluntarily impoverished, some factors to be considered include physical and mental condition, educational background, work history, efforts to find and retain employment, and the condition of the job market in the area where the parent lives. John O., 90 Md.App. at 423, 601 A.2d 149. Those same five factors may also be considered when establishing a parent's potential income. Goldberger, 96 Md.App. at 327-28, 624 A.2d 1328. In ruling on the issue of voluntary impoverishment, the court may also consider:
(1) the timing of any change in employment or other financial circumstances relative to the divorce proceedings;
(2) the relationship between the parties prior to the initiation of divorce proceedings, and
(3) whether or not the parent has ever withheld support.
John O., 90 Md.App. at 423, 601 A.2d 149.
In the present case, the court heard extensive testimony on Mr. Reuter's prior work history and earnings; the financial status of...
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