Theise v. Theise

• Decision Date: 26 January 1996
• Docket Number: No. 93-395,93-395
• Citation: 674 A.2d 789,164 Vt. 577
• Parties: Elizabeth THEISE v. Jerome THEISE.
• Court: Vermont Supreme Court

Page 789

674 A.2d 789

164 Vt. 577

Elizabeth THEISE v. Jerome THEISE.

No. 93-395.

Supreme Court of Vermont.

Jan. 26, 1996.

On Appeal from Rutland Family Court; Silvio T. Valente, J.

Peter Langrock and William B. Miller, Jr., of Langrock Sperry & Wool, Middlebury, for plaintiff-appellee.

Eugene Rakow and Gregg M. Meyer of Biederman & Rakow, P.C., Rutland, for defendant-appellant.

Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

JOHNSON, Justice.

Both husband and wife appeal the maintenance provisions of the family court's divorce order. We strike the provision calling for a lump-sum maintenance payment from the proceeds of the husband's life insurance policy in the event he predeceases the wife; in all other respects, the order is affirmed.

The parties were married nineteen years and had two daughters, who were eighteen and fourteen years old at the time of the final amended divorce order. The wife was a homemaker throughout the marriage; she was considering renewing her teaching certification or going back to school to become a physical therapist. The husband is involved in the construction and sale of luxury homes; his average annual income over the seven years before the final divorce hearing was approximately $67,000. Before the final hearing, the parties stipulated that (1) the wife would keep two unencumbered Vermont properties worth at least $325,000, plus another $20,000 in various accounts and personal property; (2) the husband would keep all New York properties, his business assets and properties, and his personal accounts, worth altogether approximately $1,300,000; (3) the wife would have physical responsibility for the older daughter for the few months remaining before she reached her majority, while the husband would have physical responsibility, and waive child support, for the younger daughter, a developmentally disabled child who will most likely require care beyond her majority; and (4) the court would determine the appropriate maintenance award.

The court approved the parties' stipulation and ordered the husband to pay the wife temporary and permanent "maintenance" in the amount of $324,000 unless terminated sooner by the wife's death, with payments of $2000 per month for one year, $1000 per month for the next four years, and $500 per month thereafter, notwithstanding the wife's cohabitation or remarriage. The court also ordered the husband to name the wife, to the extent of maintenance payments due her, as the beneficiary on an existing "key man" life insurance policy in which one of the husband's corporations was the beneficiary. This provision awarded the wife a lump-sum "maintenance" payment from the proceeds of the policy in the event the husband predeceased her.

The husband first argues that the court erred by awarding the wife permanent maintenance when the evidence showed that she had sufficient income and property to provide for her reasonable needs as established during the marriage. In her cross-appeal, the wife argues that the court's maintenance award was an abuse of discretion, given the great disparity in the property division agreed to by the parties. Upon review of the record, we conclude that the court did not abuse its discretion regarding the monthly amounts and duration of its maintenance award. See Delozier v. Delozier, 161 Vt. 377, 381, 640 A.2d 55, 57 (1994) (family court has broad discretion in determining amount and duration of maintenance; court's award will be set aside only when there is no reasonable basis to support it).

We reject the husband's argument that the wife failed to make a threshold showing that she required maintenance to meet her reasonable needs and to maintain the standard of living established in the marriage. As we have stated before, "The longer the marriage, the more closely reasonable needs should be measured by the standard of living established during the marriage." Id. at 382-83, 640 A.2d at 58. The trial court adequately considered the relevant statutory factors in determining that, notwithstanding the potential income available to the wife from the sale of one of the Vermont properties, rehabilitative and permanent maintenance was appropriate. Regarding the wife's argument, we cannot conclude that the award was an abuse of discretion, given all the circumstances of the case, including the parties' financial needs and responsibilities as well as the nature and status of the assets awarded to each of them. As the court explained, most of the husband's assets were tied up in speculative businesses that were doing poorly, while the wife's assets were unencumbered and risk-free.

The husband also argues that the court erred by requiring him to secure post-mortem maintenance payments by naming the wife as beneficiary on his life insurance policy to the extent of the maintenance award. We agree that our recent case law precludes such a provision. In Justis v. Rist, 159 Vt. 240, 244, 617 A.2d 148, 150 (1992), we held that the family court has "no authority to order maintenance to continue beyond the life of the obligor spouse unless the parties have agreed otherwise." We extended this holding to life insurance policies in Narwid v. Narwid, 160 Vt. 636, 638, 641 A.2d 85, 87 (1993) (mem.), where we struck a court order requiring the obligor spouse to purchase and maintain a life insurance policy for the recipient spouse's sole benefit for as long as maintenance payments were owed. We stated that because the recipient spouse would realize benefits from the policy only upon the death of the obligor spouse, the benefits would "function as a form of continued maintenance to which [the recipient spouse] will be no longer entitled." Id.; see Clapp v. Clapp, 163 Vt. 15, 24, 653 A.2d 72, 78 (1994) ("We have rejected a requirement that one spouse purchase life insurance to ensure income to the other spouse after the death of the insured.").

Here, the family court expressly stated that the provision was intended to protect and preserve the wife's maintenance award should the husband predecease her. The family court is not authorized to accomplish such a purpose either directly or indirectly by securing post-mortem maintenance payments through a life insurance policy. Bell v. Bell, 162 Vt. 192, 200-01, 643 A.2d 846, 851 (1994) ("Vermont law does not ... require life insurance to effect indirectly what [15 V.S.A.] § 752 does not mandate directly--the continuation of maintenance after the death of either party."). While the court has the discretion to order a spouse to maintain an existing life insurance policy for the benefit of the other spouse, Quesnel v. Quesnel, 150 Vt. 149, 152, 549 A.2d 644, 647 (1988), in this case the court ordered the husband to name the wife as the new beneficiary of an existing policy that had been assigned to the husband in the parties' court-approved stipulation. The parties' stipulation awards the husband all interest in his businesses, which includes the insurance policy. The policy is a "key man" policy that provides benefits to one of the husband's corporations upon his death. Under these circumstances, the court's order cannot stand.

The wife points out that the court's order merely secures the husband's maintenance obligation and would not require the husband's estate to continue paying maintenance after the husband's death. Further, according to the wife, the order does not disturb the parties' stipulation because the wife will not receive anything unless...