Cole v. Cole

Melvin, J., delivered the opinion of the Court. In this appeal, the appellant William Sterling Cole, Jr., challenges an order of the Circuit Court for Anne Arundel County that increased the amount of alimony and child support he was required to pay under a prior divorce decree. The order was filed October 28,1978, and, in addition to the ordered increases in alimony and child support, dismissed appellant’s cross-petition for termination of alimony. After the appellant had filed his appeal from the October 28th order (Appeal No. 159), the appellee, Nancy B. Cole, petitioned the trial court to hold the appellant in contempt of court for failing to pay the increased award.

The court did so and by ⁴³⁷ order dated March 30,1979, directed the entry of “a monetary decree in favor of Nancy B. Cole against William Sterling Cole, Jr. for $10,125 (the arrearage to 23 March 1979) and costs.” The appellant then filed a timely appeal from that order (Appeal No. 519). The two appeals were consolidated and arguments thereon were heard on the same day. APPEAL NO. 159 I The parties were married on June 16, 1954, and had four children. On November 18, 1969, they separated due to “irreconcilable marital difficulties” and on November 24, 1971 entered into a property settlement agreement because they were, in the words of the Agreement, “sincerely and genuinely interested in reaching accord concerning alimony for WIFE, support for the aforesaid children of the parties and the equitable disposition of their jointly and severally owned properties.” The Agreement provided, among other things, for monthly payments to the appellee of $275.00 in alimony and $600.00 for the support of the four children, “being One Hundred Fifty Dollars ($150.00) per month per child.” The Agreement provided that the appellee agreed “to accept the alimony, child support sums and property settlement ... of this Agreement as adequate under the present financial circumstances of the parties.” The Agreement also provided, however, that “the entire matter of alimony and child support shall be subject to the further Order of any Court of competent jurisdiction.” Two months after the date of the Agreement, the appellee, on January 11, 1972, filed her bill of complaint for divorce in the Circuit Court for Anne Arundel County on the ground of voluntary separation.

The appellant, who was at that time a Commander in the U.S. Navy and a non-resident of Maryland, did not contest the proceedings. In her testimony before the Master on May 17, 1972, the appellee stated that she wished to have the Agreement “to the extent that the Court sees fit incorporated in these proceedings” and that “on a minimum basis” “the sums of money provided [in the Agreement] for ⁴³⁸ alimony and child support” were “adequate under the present circumstances.” The divorce was granted by decree dated July 19,1972. It awarded custody of the four children (William, age 15; John, age 11; Charles, age 7; and Katherine, age 5) to the appellee and, in accordance with the Agreement, provided for alimony of $275.00 per month and child support of $600.00 per month. On February 23,1977, the appellee petitioned the court for an increase in alimony and child support on the grounds that “since the passage of the [Divorce] Decree ... [she] has been unable to provide support and maintenance for the minor children of the parties and support and maintenance as alimony because of the great increase of prices and costs” and that she and three 1 of the minor children “are in need and suffer from want of support and care.” On April 19,1977, the appellant filed an answer to the modification petition and a cross-petition in which he denied that an increase was needed and further averred that since the divorce the appellee’s income had increased to the point that it was “sufficient to provide adequately for her own needs” and “to enable her to contribute to the support of the three minor children in her custody.” The cross-petition further alleged that appellant “has now remarried and acquired additional obligations which have reduced his financial ability to contribute to the support of the children.” In his cross-petition, the. appellant offered to accept custody of the children if the appellee, “by reason of her extravagance cannot manage on” the amount of child support she was receiving from appellant — which amount he alleged was “more than adequate to provide for their needs.” The cross-petition prayed that appellant’s “obligation for alimony be terminated.” 2 Testimony of the parties was taken in open court on September 18, 1978.

On October 28, 1978, the court filed its order awarding the appellee an increase of monthly alimony from $275.00 to $400.00 and an increase in monthly child ⁴³⁹ support from $150.00 per child to $250.00 “for the three children now living with her.” Both increases were to account from February 28,1977, the date on which appellee filed her petition for modification. As we have stated, the order also dismissed the appellant’s cross-petition. Both parties seem to agree that substantial changes in their respective circumstances have occurred since the date of their divorce on July 19, 1972. The appellant contends on appeal, as he did below, that the changed circumstances evidenced in the record do not support the chancellor’s order of October 28,1978, either with respect to sujinerease in alimony or with respect to the amount of increased child support.

Further, with respect to alimony only, the appellant contends that the chancellor erred in not either terminating, abating, or, at least, suspending it. It is, of course, well settled in this State that a court of equity may upon a proper petition to do so modify a decree for alimony or child support at any time if there has been shown a material change in circumstances that justify the action. Jackson v. Jackson, 272 Md. 107, 111 , 321 A.2d 162 (1974); Stansbury v. Stansbury, 223 Md. 475, 477 , 164 A.2d 877 (1960); Winkel v. Winkel, 178 Md. 489, 498-499 , 15 A.2d 914 (1940); Slacum v. Slacum, 158 Md. 107, 111 , 148 A. 226 (1930); Lott v. Lott, 17 Md. App. 440 , 302 A.2d 666 (1973). It is equally well settled that, as with an original award, the decision on the question of modification of the original award is left to the sound discretion of the chancellor and will not be disturbed unless that discretion was arbitrarily used or the judgment clearly wrong.

Lott v. Lott, supra. The changes that have occurred in the circumstances of the parties since the 1972 divorce are essentially not in dispute. Appellant’s gross annual income at the time of the divorce was $19,430.00. In July, 1973, he retired from the Navy and obtained civilian employment.

At the time of the modification hearing he had remarried and Ms gross annual income from all sources (Navy retirement pay, salary and investments) had risen to $57,980.00. With Ms increased income has come an ⁴⁴⁰ admittedly higher standard of living than he enjoyed at the time of the divorce. His listed weekly expenses, including alimony and child support, just about equals his net income. In addition to his income, he listed assets and liabilities reflecting a net worth of $95,594.00, most of which was developed after the divorce.

The appellee’s circumstances also changed. At the time of the divorce, she was unemployed and her only income was $277 per year from interest and dividends. After the divorce, she obtained employment as a travel agent and at the time of the modification hearing was earning a gross annual salary of $9,360.00 (about $7000.00 net after payroll deductions), plus unearned income of $1,764.00 per year from interest and dividends. The principal which yields this income is largely derived from her share of jointly held stock purchased during the marriage and her share of the proceeds from the post-divorce sale of the family home in California.

At the time of the hearing, as well as at the time of the divorce, she was living with her children in a four bedroom townhouse in Crofton, Maryland, that she rented from her father for $350.00 per month. There is no indication in the record that her standard of living had changed since the divorce. In her testimony, appellee showed that to maintain that standard her expenses for herself and the three children averaged $1343.62 per month, or approximately $16,128.00 per year. 3 She allocated these expenses between herself and the three children as approximately $4740.00 for herself and $11,378.00 for the children. To meet those combined needs she was receiving the following yearly amounts: 4 Alimony - $3,300 Child Support - 5,400 ($150 per month for 3 children) Salary (net), interest and dividends - 8,764 Total $17,464 ⁴⁴¹ We now consider separately appellee’s claim for increased alimony and child support.

Alimony The inquiry here is whether there has occurred such a material change in circumstances as to justify the chancellor in increasing the alimony set by the original decree in 1972. Stansbury v. Stansbury 223 Md. 475 , 164 A.2d 877 (1960). It is clear that the change in the appellee’s financial situation was such that no increase was warranted. Her income has risen from practically zero ($277 per year) to the point where at the time of the modification hearing it amounted to a net income of approximately $8700.00.

In addition, she was receiving $3300.00 per year in alimony, or a total annual income of approximately $12,000.00. In view of the lack of any evidence that her actual needs exceeded that figure, the question arises as to whether the increase in the appellant’s income, standing alone, is sufficient to justify the ordered increase. In the circumstances of this case, we hold that it is not. The appellee relies heavily on the case of Lott v. Lott, 17 Md. App. 440 , 302 A.2d 666 (1973).

In that case, it was argued that a substantial change in the circumstances of both parties since the original award is a prerequisite to increasing an origina,! award of alimony and child support. We rejected that argument and affirmed an increased award even though the former wife’s needs had not substantially changed since the date of the original award. Speaking for the Court in that case, Judge Carter said: “It seems clear from the principles enunciated in the above cited cases and text that a substantial increase in the husband’s income alone can, under appropriate circumstances, be legally sufficient to justify an increase in the amount of alimony even though the wife’s needs continue as they existed at the time of the initial award. Whether or not an increase is justified in such a situation, however, is to be determined by an application to the changed ⁴⁴² conditions of all the relevant principles that are applied in fixing the amount of the original award of alimony.” (Emphasis added).

(Footnotes omitted). The important phrase in the above quotation is “under appropriate circumstances.” In Lott , the husband was a doctor who deserted his wife and child and disappeared with his paramour for approximately nine months. At the time of the desertion the parties enjoyed a rather high standard of living from his then “lucrative practice.” When the husband returned nine months later, his wife obtained a divorce from him on the ground of adultery. At the time of the divorce, he was beginning anew the practice of medicine that he had lost during his absence.

The alimony and support awarded the wife in the divorce decree reflected his comparatively low income at the time. Following the divorce, his income substantially increased approximating his income at the time of his desertion. Approximately one year after the divorce his former wife petitioned for an increase in alimony and child support. The chancellor ordered, and this Court affirmed, an increase in direct proportion to the increase in the doctor’s net earnings before taxes since the original decree.

It is apparent that the justification for the increased award in Lott was the fact that it was needed by the former wife to maintain the standard of living to which she was entitled at the time of the original decree. The original award did not meet that need because of the husband’s temporarily reduced income at the time. Thereafter, his income rose to the point that permitted the need to be met. Thus, the circumstances were “appropriate” for increasing alimony “even though the wife’s needs continue[d] as they existed at the time of the initial award.” Lott v. Lott, supra, at 447.

Lott does not mean that irrespective of the former wife’s needs she is entitled to an increase in alimony so as to keep pace with the former husband’s standard of living. All that was meant in Lott was that when, as there, a husband was directed to pay alimony, based on his income, and which did not meet the needs of the wife, a substantial increase in the former husband’s income, alone, would justify an increase in alimony so as to satisfy the original “needs” of the wife. ⁴⁴³ In the case now before us, even though the former husband’s income has substantially increased since the divorce, there is nothing in the record to indicate that the initial award was not commensurate with the standard of living to which the appellee was then entitled; nor indeed, is there anything in the record to indicate that the initial award together with her own resources are now inadequate to enable the appellee to maintain that standard. The circumstances of the instant case are therefore not “appropriate,” 5 as they were in Lott , for basing an increased award solely upon an increase in the former husband’s income. 6 A divorced spouse is entitled to alimony only to the extent that “the spouse’s income is insufficient to care for his or her needs.” Md. Code, Art. 16, § 5 (1957, 1973 Repl. Vol., 1977 Cum.

Supp.). An important factor in determining “needs” is the station in life of the parties at the time of the divorce or enforced separation. Waters v. Waters, 191 Md. 436 , 62 A.2d 250 (1948). The “needs” of the obligee spouse do not ordinarily include the “need” or the right to have his or her standard of living keep pace with that of the other spouse after a final divorce.

Absent “appropriate circumstances,” the rule in other jurisdictions that have considered the precise question (i.e., whether an increase in the obligor spouse’s income, standing alone, will justify an upward modification of an original alimony award) seems to be as expressed by the Court of Appeals of Arizona in Sheeley v. Sheeley, 10 Ariz. App. 318 , 458 P.2d 522, 525 (1969): “We are aware that a change in the financial ⁴⁴⁴ circumstances of the parties involved are [sic] one of the totality of circumstances which should be considered by the trial court in considering a modification of a divorce decree. An increase in the earning capacity of the husband after the divorce, standing alone, however, is not sufficient. A former wife has no continuing right to share in future accumulations of wealth by her divorced husband.” (Citations omitted).

(Emphasis supplied). See also Arnold v. Arnold, 332 Ill. App. 586 , 76 N.E.2d 335 (1947), where one of the issues was whether an increase