Supreme Court completely reverses Court of Appeals and reinstates family court’s alimony, property division and attorney fee award

The July 2, 2014 Supreme Court opinion in Crossland v. Crossland408 S.C. 443, 759 S.E.2d 419 (2014), completely reverses the prior Court of Appeals opinion and reinstates family court’s alimony, property division and attorney fee award.

The family court had awarded Wife permanent periodic alimony. The Court of Appeals remanded the alimony award back to the family court because the family court hadn’t considered Social Security retirement benefits that Wife was entitled to apply for. The Supreme Court reversed and reinstated the family court’s alimony award. It did so because, at trial, Wife had testified that, although she was eligible to apply for Social Security retirement because she had turned age sixty-two, she intended to delay applying until age sixty-five so that she would get a higher benefit amount. Given this, the Supreme Court did not believe it appropriate to impute Social Security income to her for setting alimony:

Wife seems to ask this Court to create a rule that income should never be imputed on the basis of eligibility for government benefits; however, a bright-line rule is not only unnecessary in light of existing case law, but also inadvisable. Indeed, the family court may, but is not in all cases required to, consider eligibility for government benefits, and under the circumstances of this case, the family court did not commit reversible error.

Thus, the court of appeals erred in finding the family court was required to impute income to Wife based on social security benefits she is eligible to receive at age sixty-two. Although voluntary decreases in income may prompt a family court to consider a party’s earning capacity instead of actual income, it is clear that the failure to reach earning capacity, by itself, does not automatically equate to voluntary underemployment such that income must be imputed. … Here, there is no evidence of any bad faith on Wife’s part, and Wife articulated a rational reason for delaying her application for social security benefits—namely, that she will receive a greater benefit if she postpones her application until she reaches age sixty-five. Accordingly, the family court did not err in declining to impute wife’s eligibility for social security benefits at age sixty-two.

Emphasis in original; citations omitted

The Supreme Court noted that Husband was entitled to seek a reduction in his alimony obligation when Wife turned age sixty-five and begins receiving Social Security retirement.

The Supreme Court also reversed the Court of Appeals’ reduction of Wife’s equitable distribution award. The Court of Appeals had reduced the portion of the marital estate awarded to Wife from 40% to 30% based on findings that Husband made disproportionately greater contributions to the marriage than Wife, and Wife brought no assets to the marriage and brought in no assets during the marriage. The Supreme Court found the Court of Appeals had overly relied upon direct financial contributions in modifying equitable distribution, and further found that the Court of Appeals had undervalued some of Wife’s financial contributions and had not considered Husband’s fault in the breakup of the marriage.

The Court of Appeals opinion in Crossland is one of the few recent published opinions dividing a marital estate more extremely than 60/40. While South Carolina is not a community property state, this Supreme Court opinion should make the family court less likely to award either spouse more than 60% of a marital estate.

Finally, the Court of Appeals had remanded the award of attorney’s fees to Wife because it had modified Wife’s successful results in the family court on appeal. Because the Supreme Court reinstated the family court’s awards on alimony and equitable distribution, it also reinstated the family court’s attorney fee award.

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