Young v. Young

• Decision Date: 06 March 2017
• Docket Number: SJC-12240
• Citation: 478 Mass. 1,81 N.E.3d 1165
• Parties: Derek L. YOUNG v. Joy G. YOUNG (and a Consolidated Case ).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

478 Mass. 1

81 N.E.3d 1165

Derek L. YOUNG

v.Joy G. YOUNG (and a Consolidated Case ¹ ).

SJC-12240

Supreme Judicial Court of Massachusetts, Norfolk..

March 6, 2017

September 25, 2017

David H. Lee (Jessica M. Dubin also present) for the husband.

David E. Cherny (Erin M. Shapiro also present) for the wife.

W. Sanford Durland, III, & Glenn M. Schley, amici curiae, submitted a brief.

Jennifer C. Roman & Johnathan P. Diggin, for Women's Bar Association, amicus curiae, submitted a brief.

Present: Gants, C.J., Lenk, Hines, Gaziano, Lowy, & Budd, JJ.²

GANTS, C.J.

The Probate and Family Court judge in this divorce action made two rulings that are the primary subjects of this appeal. First, the judge found that, where the husband's income from his employment was "on an upward trajectory," the wife may only maintain a standard of living "consistent with the marital lifestyle (which was one where the parties['] needs expanded in accordance with the increasingly available income)" by an award of general term alimony that increases commensurate with the increase in the husband's income. Second, the judge found that, because of "the complex nature of [the husband's] compensation over and above his base salary and bonus," and because of "the constantly shifting nature of [the husband's] compensation," "it is reasonable and fair in the circumstances" to award alimony to the wife in the amount of thirty-three per cent of the husband's gross income, rather than a fixed amount.

We conclude that, where the supporting spouse (here, the husband) has the ability to pay, the need for support of the recipient spouse (here, the wife) under general term alimony is the amount required to enable her to maintain the standard of living she had at the time of the separation leading to the divorce, not the amount required to enable her to maintain the standard of living she would have had in the future if the couple had not divorced. We also conclude that, although there might be circumstances where it is reasonable and fair to award a percentage of the supporting spouse's income as general term alimony to the recipient spouse, those circumstances are not present in this case. We therefore remand the case to the Probate and Family Court with instructions to reevaluate the alimony judgment in light of our opinion and enter a new judgment accordingly.³

Background. Derek L. Young (husband) and Joy G. Young (wife) had been married for nearly twenty-four years when the husband filed a complaint for divorce in the Probate and Family Court in January, 2013. The wife filed a complaint for divorce one week later, and the two actions were effectively treated as one. In October, 2013, the judge ordered the husband to pay temporary alimony in the amount of $48,950 per month. After a four-day trial, the judge made voluminous findings of fact and issued an amended judgment of divorce on September 25, 2015. We summarize only those findings relevant to the issues on appeal.

The judge found that the husband works as a "high level executive" with a financial institution who receives substantial compensation in various forms. Apart from his annual base salary (which was $350,000 in 2014) and an annual bonus (which was $1.6 million in 2013), he receives compensation through at least seven different compensation programs or share plans, including several types of stock options, a special bonus program, investor entity units, and opportunities to purchase shares of common stock at a discount. The compensation programs vary in how consistently they produce income and in the amount of income they produce. Some investment assets that are earned are liquid and immediately transferrable, and some may not be transferred or converted to cash until sometime in the future. The amount earned, above and beyond the base salary and annual bonus, through these compensation programs is both considerable and variable. The husband's gross income from 2008 through 2012 was approximately $1.53 million in 2008, $2.07 million in 2009, $3.81 million in 2010, $7.96 million in 2011, and $7.76 million in 2012.

The judge found that the parties agreed early in their marriage that the husband would work and the wife would "be a stay-at-home parent and not be employed outside the home." As a result, the wife has not worked outside the home since 1992, and the judge found that she "has no ability to be employed at a level to allow her to maintain a lifestyle post divorce similar to that maintained during the marriage without alimony."

The husband's substantial compensation package allowed the parties to enjoy "an affluent, upper-class station in life and marital lifestyle during their marriage." The couple's expenses increased as the husband's income increased during the course of his employment. Before the separation, the parties were living in a lavish, eight-bedroom home, driving luxury vehicles, and regularly dining out three to four times a week at expensive restaurants. They had purchased a summer home in Nantucket, were spending "tens of thousands of dollars on articles of clothing and handbags" from designer stores, and regularly enjoyed expensive vacations.

The judge found that, after the parties separated, the wife maintained a level of spending similar to what she spent during the marriage. According to the wife's October 8, 2013, financial statement, the wife's weekly expenses totaled $8,728 (or $453,856 per year) after subtracting expenses related to the children's college tuition and room and board. However, according to the wife's September 10, 2014, financial statement, the wife's weekly expenses had increased to $12,575.77 (or $653,940 per year). The judge found that "many of [the] wife's expenses" were supported by the evidence at trial, but she lacked "personal knowledge regarding her own expenses," certain expenses were "overstated," and her "representations of expenses on her financial statements [were] not an accurate reflection of her needs." The judge did not make a finding regarding her actual weekly or annual expenses or needs.

The wife sought alimony in the amount of $713,781.49 per year. After considering the husband's ability to pay, the wife's needs, and the other factors required by G. L. c. 208, § 34, the judge did not set a fixed amount of general term alimony but instead ordered the husband to pay the wife each year alimony in the amount of thirty-three per cent of his annual gross income.⁴ The judge included within the husband's gross income the husband's base salary and annual bonus, as well as several of the additional components of the husband's compensation package, including but not limited to the husband's deferred bonus, special bonus, special retention bonus, special dividends, and distributions for payment of taxes.⁵ The judge reasoned, "Because the parties lived with the expectation and reality that [the husband's] bonus level is on an upward trajectory, and given the fact that their needs historically followed this upward trajectory, and due to the complex nature of [the husband's] compensation over and above his base salary and bonus, it is reasonable and fair in the circumstances to use a percentage for the future alimony particularly given the constantly shifting nature of [the husband's] compensation." The judge appointed a special master to oversee compliance with the judgment and to assist in resolving disputes that might arise.

The husband appealed, and we transferred the case to this court on our own motion.

Discussion. 1. Determination of need for support. "Alimony" is defined in the Alimony Reform Act of 2011, St. 2011, c. 124 (act), as "the payment of support from a spouse, who has the ability to pay, to a spouse in need of support for a reasonable length of time, under a court order." G. L. c. 208, § 48. Neither "ability to pay" nor "need of support" is a defined term under the act. Rather, the act identifies a number of factors that a judge must consider in "determining the appropriate form of alimony and in setting the amount and duration of support," and gives the judge the discretion to consider other factors that the judge deems "relevant and material." G. L. c. 208, § 53 (a ).⁶ "A judge has broad discretion when awarding alimony under the statute," Zaleski v. Zaleski, 469 Mass. 230, 235, 13 N.E.3d 967 (2014), citing Heins v. Ledis, 422 Mass. 477, 480-481, 664 N.E.2d 10 (1996), but the act establishes presumptive parameters: the amount of general term alimony "should generally not exceed the recipient's need or [thirty] to [thirty-five] per cent of the difference between the parties' gross incomes established at the time of the order being issued." G. L. c. 208, § 53 (b ).

A judge must consider and weigh all the relevant factors, but where the supporting spouse has the ability to pay, "the recipient spouse's need for support is generally the amount needed to allow that spouse to maintain the lifestyle he or she enjoyed prior to termination of the marriage." Pierce v. Pierce, 455 Mass. 286, 296, 916 N.E.2d 330 (2009). See Heins, 422 Mass. at 480, 664 N.E.2d 10, quoting Inker, Alimony and Assignment of Property: The New Statutory Scheme in Massachusetts, 10 Suffolk U. L. Rev. 1, 8 (1975) (noting "the inherent limitation of alimony that it be only for ‘the amount necessary to support the wife in the manner of living to which she has been accustomed’ "); Grubert v. Grubert, 20 Mass.App.Ct. 811, 819, 483 N.E.2d 100 (1985) ("The standard of need is measured by the ‘station’ of the parties—by what is required to maintain a standard of living comparable to the one enjoyed during the marriage"). Two of the statutory factors in § 53 (a ) are "marital lifestyle" and the "ability of each party to maintain the marital lifestyle." Both focus on the spouses' lifestyle during the marriage. See Zaleski, 469 Mass. at 243, 13 N.E.3d 967 ("Because ‘need’ is a relative term for purposes of the act, it must be measured in light of mandatory considerations that...