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Roof demonstrates confused nature of South Carolina’s “substantial change of circumstances” jurisprudence

In South Carolina, child support, child custody and permanent periodic alimony can all be modified upon a showing of “substantial change of circumstances.”  However, there is an exception to this general principle: if the change of circumstances was anticipated at the time of the previous final order, then the change of circumstances is not a basis for modification.  As the courts would express it, only unanticipated changes of circumstances allow for modification.  Yet there is an exception to this exception: an anticipated change of circumstance will still allow for modification it that anticipated change could not be dealt with adequately at the time of the last final order.

In practice this exception, and the exception to the exception, allow much mischief in family court.  A judge can deny a modification by claiming the change of circumstance was anticipated.  A judge can allow the modification by claiming the anticipated change of circumstance could not adequately be dealt with at the time of the previous final order.

Early in my career, I lost a child support modification case in which I represented a father who had recently left the military to become a full time student.  I asked the judge to reconsider, noting that my client would have had reduced BAH and BAQ after he and his ex-wife (the mother) divorced, and that he was entitled to some reduction on that basis alone.  The judge denied my request by noting their divorce was an anticipated change of circumstances (though I do not see how it could have adequately been dealt with at the time of the previous final order as no one could anticipate the circumstances at the time of their divorce).  Shortly thereafter that same judge was affirmed by the Supreme Court in Sharps v. Sharps, 342 S.C. 71, 535 S.E.2d 913 (2000), for increasing an ex-wife’s alimony after the children emancipated, with the Supreme Court finding that the change of circumstances, while anticipated, could not adequately be dealt with at the time of their divorce.

While I adore that judge, it has been my impression that he (and many other family court judges) sometimes determine the result they want and then decide which exceptions to apply on the change of circumstances jurisprudence to reach that result.  I believe our Supreme Court did something similar in Floyd v. Morgan, 383 S.C. 469, 681 S.E.2d 570 (2009).  There the Supreme  Court denied mother a reduction in child support despite the elimination of a $544 per month day care expense because it was anticipated that the children would eventually be out of day care, without ever explaining how this anticipated change of circumstance could adequately be dealt with at the time of the previous final order.  By that same logic no one should be entitled to a reduction in child support when the oldest child emancipates because it is anticipated that the oldest child will eventually emancipate.

The December 14, 2011 Court of Appeals opinion in Roof v. Steele, 396 S.C. 373, 720 S.E.2d 910 (Ct. App. 2011), demonstrates the convoluted nature of this “change of circumstance” jurisprudence.  Roof  involved an alimony increase action brought by (Ex-)Wife after she lost her ability to remain on (Ex-)Husband’s employer-provided health insurance.  By the time of their divorce Wife had been diagnosed with multiple sclerosis and required extensive health care services.  The parties agreed that Husband would pay $300 per month in permanent periodic alimony and further that:

[Husband] shall maintain health, dental and optical insurance on [Wife] through the group policy with his current employer so long as it is available to him. Any premium paid by [Husband] for [Wife’s] health, dental and optical insurance shall be considered alimony, and shall be taxable as income to [Wife], and shall be deductible by [Husband]. Currently, the premium is $87.74.

Eventually Husband’s employer changed its policy and would no longer allow Wife to remain on his health insurance. She would become eligible for nine months of comparable coverage under COBRA at a monthly premium of $462.60 but thereafter the only coverage available to her was through the South Carolina State Health Insurance Pool at a premium of $1,193.93 per month, which subsequently increased to $1,247.65 per month.

Wife filed an action to increase her alimony based on this change of circumstance.  Husband first argued that he had no obligation to assist Wife with her health insurance premium because their agreement was only that he would maintain her health insurance so long at it was available to him through his employer.  Husband argued that he has included this limitation in their agreement because he was aware of the possibility of Wife having large health insurance expenses if his employer ended coverage, and that he did not want to be obligated for such expenses.  He further argued that, since this coverage was no longer available through his employer, he had no further obligation for Wife’s health insurance coverage.  The family court and the Court of Appeals rejected this argument by noting the parties’ divorce decree stated that “any future modification of alimony are reviewable by the Court based upon a showing of a substantial change of condition.”

Husband also argued that this change of circumstance–his employer no longer allowing Wife to remain on its coverage–was clearly anticipated by the agreement and therefore this change of circumstance did not allow for modification.  The Court of Appeals rejected this argument because “any attempt by the court in 2006 to quantify the financial impact to Wife of the potential loss in coverage in 2010—or beyond—simply would have been ‘arbitrary.’”

While finding that Wife was entitled to an alimony increase, it remanded the matter back to the family court because the family court’s modification was to simply replace Husband’s obligation to pay Wife’s employer-provided insurance premium with a requirement that he pay her Insurance Pool premium:

We find that the family court’s reliance on the cessation of Wife’s health coverage through Husband’s employer, combined with findings that Wife’s income had decreased while Husband’s income had increased, was sufficient to support a determination that Wife had successfully demonstrated a substantial change in circumstances that warranted an increase in alimony. Furthermore, we find the family court properly determined that Husband has the financial ability to provide additional alimony to Wife. These findings satisfy the statutory guidelines for alimony modification, as stated in § 20-3-170.

In our view, however, the family court’s method of determining the amount to modify Wife’s alimony was improper. While we agree that an increase in alimony is warranted, we do not believe the amount of the modification should be tied to the ever-changing market value of Wife’s health insurance coverage—especially in light of Husband’s valid argument that his obligation to pay Wife’s health insurance premiums ended after coverage was no longer available through his employer. Our review of the court’s pendente lite orders in this case demonstrates just how fluid such a basis for alimony modification becomes when tied to adjustments in Wife’s health insurance premiums. Moreover, tethering the modification of alimony to an adjustment of insurance premiums provides a disincentive to Wife to control her health care costs.

Accordingly, we affirm the family court’s determination that Wife demonstrated a substantial change in circumstances that warrants the modification of alimony; however, we reverse the family court’s order requiring Husband to pay Wife’s health insurance premiums. Instead, we remand the case to the family court to determine the appropriate monetary modification of alimony that reflects both the substantial change in the parties’ circumstances and Husband’s financial ability to pay alimony.

While I agree with the Court of Appeals’ analysis in Roof, I believe this case highlights just how convoluted South Carolina’s change of circumstances jurisprudence is.  Given my past experience–and I would note that the Sharps case was heavily discussed and relied upon in Roof–it is easy to imagine the Roof court reversing Wife’s increase in alimony by simply finding the change in her health insurance was anticipated at the time of divorce.  Rather than creating a uniform rule such as “any change of circumstance not specifically addressed in the final order allows for modification,” South Carolina’s jurisprudence invests courts with tremendous discretion to allow or disallow modifications through the application of exceptions to the general rule and exceptions to the exception.  While this gives our courts tremendous flexibility–and power–it often leads to an unjust lack of uniformity. I defy anyone to harmonize the results in Floyd and Sharps.

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