Smith v. Smith

• Decision Date: 26 September 1980
• Citation: 419 A.2d 1035
• Parties: Dolores G. SMITH v. Franklin R. SMITH.
• Court: Maine Supreme Court

Page 1035

419 A.2d 1035

Dolores G. SMITH v. Franklin R. SMITH.

Supreme Judicial Court of Maine.

Argued Sept. 12, 1980.

Decided Sept. 26, 1980.

Isaacson, Isaacson & Hark, Philip M. Isaacson, Robert S. Hark (orally), Lewiston, for plaintiff.

Pierce, Atwood, Scribner, Allen, Smith & Lancaster, Donald A. Fowler, Jr., Charles S. Einsiedler, Jr., Portland (orally), for defendant.

Before GODFREY, NICHOLS and ROBERTS, JJ., and DUFRESNE, A. R. J.

GODFREY, Justice.

The parties, formerly husband and wife, both appeal from a judgment of the Superior Court reducing Dr. Franklin R. Smith's alimony payments from $300 per week to $250 per week. We affirm the judgment and order below.

On May 7, 1976, Mrs. Smith obtained a divorce from Dr. Smith in Superior Court. In one provision of the decree Dr. Smith was ordered to pay Mrs. Smith $300 per week as alimony. Dr. Smith was then a practicing dentist earning about $29,000 per year. The property set aside to Dr. Smith at the time of the divorce included substantial assets available to satisfy the alimony. ¹

Dr. Smith remarried in September of 1977. Through the next two years he transferred to his second wife, Barbara Edwards, gifts of cash and personalty amounting in value to about $140,000. During that interval he also made charitable contributions in the amount of $26,000. While making gifts to charity and to Ms. Edwards, Dr. Smith was aware that his generosity might jeopardize his alimony payments to Mrs. Smith. He was likewise aware that his dental practice might be coming to a close. By 1979, his annual income from dentistry had declined to $21,000. He was sixty-four years old, and he testified that he suffered from high blood pressure, stomach complaints, leg cramps, gout, and allergies from his patients' cosmetics. His office was located in a building that was scheduled to be demolished. Motivated at least in part by his poor health and declining practice, Dr. Smith retired from dentistry on May 17, 1979. After his retirement his annual income was reduced to about $7,000, the amount of his social security benefits.

Five days after he retired from dentistry Dr. Smith filed in Superior Court a motion to modify the divorce judgment. He alleged that he had been forced to retire because of poor health and was now financially unable to pay alimony in the amount of $300 per week. Accordingly, he asked that the divorce judgment be amended to reduce the amount of his alimony payments. Promptly after filing his motion to modify, Dr. Smith ceased making alimony payments to plaintiff, who thereupon filed in Superior Court a motion for arrearage and contempt.

After three hearings, the Superior Court justice ruled on Mrs. Smith's motion for contempt and on Dr. Smith's motion to modify. Because the fact of Dr. Smith's arrearages was undisputed, the trial court requested the parties to prepare a supplemental order stating the amount of arrearage due. On the motion to modify, the court found that although Dr. Smith's earned income was reduced by his retirement, he still had assets from which the funds to pay alimony could be derived. The court also found that Dr. Smith had given Ms. Edwards gifts of considerable value while fully aware of his pre-existing alimony obligation. On these facts, the trial justice reduced Dr. Smith's alimony obligation prospectively from $300 per week to $250 per week. In addition, he awarded Mrs. Smith her counsel fees. Dr. Smith has paid his arrearages of alimony.

1. Dr. Smith's Retirement as a Ground for Reducing his Alimony Obligation

Mrs. Smith asserts that it was an abuse of discretion to reduce Dr. Smith's alimony obligation because he had voluntarily reduced his earnings by retiring. Dr. Smith contends that because his retirement was not motivated primarily by a desire to avoid his alimony obligation, the income reduction caused by his retirement was a proper ground for reducing his alimony payments.

As a general principle, a trial justice has discretion to modify an award of alimony on the ground of substantial change in the payor spouse's financial condition. See Bubar v. Plant, 141 Me. 407, 44 A.2d 732 (1945). The main issue on appeal is whether the trial justice abused his discretion in finding that Dr. Smith suffered a substantial adverse change in financial condition because of his voluntary retirement.

In jurisdictions that have addressed the issue, the traditional view is that, absent a substantial showing of good faith, a voluntary reduction of income or self-imposed curtailment of earning capacity does not constitute such a change of circumstances as warrants modification of an alimony decree. See, e. g., Tydings v. Tydings, 349 A.2d 462 (D.C.App.1975); Blowitz v. Blowitz, 75 Ill.App.2d 386, 221 N.E.2d 160 (1966); McKey v. McKey, 228 Minn. 28, 36 N.W.2d 17 (1949); Crosby v. Crosby, 182 Va. 461, 29 S.E.2d 241 (1944); Lambert v. Lambert, 66 Wash.2d 503, 403 P.2d 664 (1965). However, the wide range of fact patterns makes application of the rule difficult. When the payor spouse retires at an early age though able to work, reduction in alimony payments may be properly denied. See, e. g. Commonwealth ex rel. Saul v. Saul, 175 Pa.Super. 540, 107 A.2d 182 (1954). At the extreme, an intermediate Missouri court went so far as to deny reduction of alimony to a 62-year-old man who had had a malignant kidney removed and could not find employment in the industry in which he had worked all his life. See Sifers v. Sifers, 544 S.W.2d 269 (Mo.App.1976). We think the rule should not be so remorselessly applied.

The difficulty in applying the rule stems partly from the lack of precision in the concept "substantial showing of good faith." One decision has attempted to sharpen the focus of the rule by holding that voluntary retirement will be a ground for reduction of alimony if it is not done for the sole purpose of reducing the funds available for alimony payments. Commonwealth ex rel. Burns v. Burns, 232 Pa.Super. 295, 331 A.2d 768 (1974). Under such a formula, however, the payor spouse would nearly always be able to cite at least one legitimate purpose for his retirement; the danger of pretext is great.

The better rule appears to be that retirement of the payor spouse for the primary purpose of avoiding alimony does not of itself bring about the substantial change in the payor's circumstances needed to justify a reduction in alimony. Such a rule does not place an undue burden on the payor spouse who retires in complete good faith. On the other hand, as compared with the sole-purpose rule, the primary-purpose rule allows a more searching inquiry into the financial circumstances of the retiring party and makes it more difficult for a parsimonious payor spouse to disguise his motives for retiring. As was said in In re Marriage of Smith, 77 Ill.App.3d 858, 862-63, 33 Ill.Dec. 332, 336, 396 N.E.2d 859, 863 (1979):

It is important to note that the husband's use of the word 'retirement' to describe his voluntary leaving of his job and subsequent reduction of his income does not automatically confer some preferred status upon his actions.

Whether a spouse may voluntarily retire or cut back on his income depends on the circumstances of each case. Relative factors are the age, health of the party, his motives in retiring, the timing of the retirement, his ability to pay maintenance even after retirement and the ability of the other spouse to provide for himself or herself.

In the present case the trial justice took Dr. Smith's retirement into account in reducing his alimony obligation but made no express factual finding concerning Dr. Smith's purposes in retiring. Neither party requested specific findings of fact or conclusions of law pursuant to M.R.Civ.P. 52(a). Therefore we must assume that the judge found all the facts necessary to support his decision. Conover v. Conover, Me., 403 A.2d 352, 353-54 (1979). Normally, such assumed findings, supported by credible evidence in the record, will be upheld. Id. Where the question is one of the modification of alimony or support, however, an even more deferential standard of review is applicable: Absent a violation of some positive rule of law, this Court will overturn the trial court's decision of such a question only if it results in a plain and unmistakable injustice, so apparent that it is instantly visible without argument. Small v. Small, Me., 413 A.2d 1318, 1321 (1980); Capron v. Capron, Me., 403 A.2d 1217, 1218 (1979).

On this record, the trial justice could have rationally found that Dr. Smith retired for the primary purpose of avoiding alimony. He retired after making large gifts to charity and to his second wife, well aware that his actions in combination might jeopardize his ability to pay alimony. Nevertheless, in view of Dr. Smith's advancing age, his asserted health problems, and the difficulties he foresaw in relocating his office, the trial judge could also have rationally concluded that Dr. Smith's retirement was not motivated primarily by a desire to reduce his alimony payments. The trial court's decision cannot be characterized as a plain and unmistakable injustice. Accordingly we must affirm the trial justice's decision to regard Dr. Smith's retirement as a ground for modifying the alimony decree.

2. The Role of Non-marital Property in Determining the Amount of Alimony Payments

Having persuaded the trial judge to consider his retirement as a valid ground for alimony modification, Dr. Smith objects to the court's failure to...