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Court of Appeals reduces alimony obligation for downsized ex-husband

In the August 15, 2012 opinion of Holmes v. Holmes, 399 S.C. 499, 732 S.E.2d 213 (Ct. App. 2012), the Court of Appeals does what the trial court refused to do: reduce the alimony obligation of a downsized ex-husband.

In November 2006 Husband agreed to pay his wife $600.00 per month in alimony, $400.00 per month in child support and 20% of his gross annual bonus.  At that time he was earning $72,000 per year, and he received a $16,500 bonus while Wife’s annual income was $34,000.  Both children subsequently emancipated.

In 2009, Husband’s position was eliminated and in 2010 he filed an alimony reduction action.  On a temporary basis the family court reduced Husband’s alimony obligation to $150.00 per month.  At trial, the family court reinstated Husband’s $600.00 per month alimony obligation but eliminated the bonus provision.  At that time, Husband showed a gross income of $41,016 per year and Wife showed a gross income of $42,096 per year.  The family court’s reasoning in keeping Husband’s alimony obligation at $600.00 per month was:

[A]t the time of the divorce decree, Husband’s child support and alimony obligations equaled 16.7% of his gross income, excluding bonuses.  The court further found, based on Husband’s current gross monthly income, a $600 monthly alimony payment would constitute 17.6% of Husband’s gross income.  The court noted this was an increase of 0.9%.  If the January 2011 bonus was not included in Husband’s income, the family court found a $600 monthly payment would constitute 19.6% of Husband’s gross income.  The court noted this was an increase of 2.9%. Based on the above calculations, the family court held these increases were not substantial and Husband should be required to pay Wife $600 per month in alimony.  The family court further found Husband failed to show he was unable to pay Wife $600 per month.

The Court of Appeals held this approach failed to follow statutory requirements of S.C. Code § 20-3-170 and 20-3-130(C) finding:

[B]ased upon a consideration of the statutory alimony factors, Husband has demonstrated an unanticipated substantial change in circumstances that justifies a reduction in his alimony payment.  After being laid off and finding other employment, Husband’s annual income decreased from $88,500 to $41,016.  In addition, according to his 2011 financial declaration, Husband’s monthly expenses totaled $4,078.79 while his gross monthly income was $3,418.  At the family court hearing, Husband testified that even after the court reduced his alimony obligation to $150 in its temporary order, it was still a “strain” to meet his expenses.  Although normal decreases in income may not be enough to warrant a decrease in alimony, here, Husband’s change in financial situation is material enough to warrant a decrease in his alimony obligation, especially considering Husband is making less than half of his income from 2007.  We note that while Husband’s financial situation has worsened since 2007, Wife’s financial situation has improved.  Pursuant to her 2011 financial declaration, Wife’s annual income increased from $34,000 to $42,096.  Additionally, Wife’s monthly expenses totaled $4,629, and she saved $866 per month.  The purpose of alimony is to place the supported spouse, to the extent possible, in the position she enjoyed during the marriage, and the record contains no evidence that Wife was saving over $800 per month during the parties’ marriage.

Based on this finding, the Court of Appeals reduced Husband’s alimony obligation to $275.00 per month.

As I have noted before, alimony determinations in South Carolina have a “luck of the draw of the judge” element to them.  Too often family court judges fail to explicitly utilize the statutory factors in deciding or modifying alimony.  These statutory factors contain sufficient discretion to justify a wide range of outcomes but failure to follow the factors, or utilizing calculations not authorized by these factors–as the trial judge did in Holmes–leads to a greater possibility of reversal on appeal.  I would also note that this opinion requires Husband to continue paying alimony to an ex-wife who is earning more than he does.

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