Bojilov highlights importance of a good record and accurate financial declarations

Posted Tuesday, October 16th, 2018 by Gregory Forman
Filed under Alimony/Spousal Support, Attorney's Fees, Child Custody, Equitable Distribution/Property Division, Of Interest to Family Court Litigants, Of Interest to Family Law Attorneys, South Carolina Appellate Decisions, South Carolina Specific

The September 19, 2018 Court of Appeals opinion in Bojilov v. Bojilov, 425 S.C. 161, 819 S.E.2d 791 (Ct. App. 2018), doesn’t establish any novel legal issues but does highlight important recurring issues in South Carolina Family Law. Bojilov stems from a divorce, with the primary issues on appeal being child custody, Husband’s right to travel with the child to Bulgaria, alimony, equitable distribution, and attorney’s fees.

Although Wife’s income, inclusive of non-marital investment income, was greater than Husband’s, the trial court still awarded her $200 per month in permanent periodic alimony. Husband appealed this issue and the Court of Appeals affirmed. In affirming, the Court of Appeals noted that Husband’s financial declarations understated his income by failing to include income from side jobs and vastly overstated his expenses. It further noted that Wife was invading her non-marital funds to support herself and the parties’ special-needs child and that she had reduced her expenses during the litigation period. Husband’s adultery and habitual deceit led to the marital breakdown. The Court of Appeals justified the alimony award as a way of slowing Wife’s need to use non-marital funds to support herself and the parties’ minor child. I believe Bojilov is the first reported South Carolina case to establish (rather than simply not eliminate) alimony for a spouse with greater monthly income than the spouse paying alimony.

The family court granted Wife sole custody of the parties’ minor child and did not require her to obtain a passport to allow Husband to travel with the child to Bulgaria (his place of birth and where his parents still lived). The Court of Appeals upheld the family court. It noted numerous facts supporting the conclusion that Wife was the child’s primary caretaker and numerous disputes between the parties regarding the child’s medical care, sleep, and diet, with Husband often being a disruptive or divisive influence on these disputes. A number of witnesses testified to Husband’s disruptive behavior.

Husband raised two specific objections on the custody issue: the admission of hearsay by the guardian and Wife’s attorney’s attempt to pit the guardian against a medical witness. On the hearsay issue, the Court of Appeals found Husband waived this objection by allowing the admission of the guardian’s report:

A GAL’s testimony and report, which contains evidentiary materials such as hearsay statements from persons interviewed by the GAL, is admissible if the report is made available to the parties and the testifying witnesses are subject to cross-examination.

The Court of Appeals found Wife improperly asked the GAL to comment on the veracity of Dr. Poon’s testimony by asking the GAL to compare Dr. Poon’s in court testimony against Dr. Poon’s previous statements to the GAL. Nonetheless, it found that Husband was not unfairly prejudiced by this testimony:

The GAL’s testimony was cumulative to other properly-admitted evidence illustrating that Husband was aggressive and disruptive. Without objection, the GAL’s report was placed into evidence; the report included accounts from numerous witnesses that stated Husband physically intimidated medical and educational providers. In addition, without objection, the GAL testified she observed the same behavior that other witnesses complained of—“the overbearing physical presence; standing up during meetings; authoritative assertion of his position”—at Husband’s deposition. Dr. Poon testified medical staff at the facility reported that Husband tried to intimidate them by showing up without an appointment. We find that any error in regard to pitting was not unfairly prejudicial to Husband and find no reversible error.

Citation omitted.

The Court of Appeal further found that Husband was not entitled to travel with the minor child to Bulgaria. It noted that Husband had repeatedly lied about his circumstances in Bulgaria, had appeared to have hidden assets in Bulgaria during the marriage, and had informed numerous witnesses of his plans to bring the child to Bulgaria and leave him there.

Husband also argued that the family court should not have awarded Wife an additional $30,000 in attorney’s fees at trial. The Court of Appeals found that the family court considered the appropriate factors in awarding Wife attorney’s fees, including that Wife prevailed on the issues of primary custody of Son and equitable distribution. Additionally, during its discussion of attorney’s fees in the final order, the family court specifically found Husband was uncooperative during discovery, in settlement negotiations, and at trial. Thus it affirmed the trial court’s order.

Wife cross appealed the denial of $1,350 in attorney’s fees she incurred in defending Husband’s 54-issue motion for reconsideration. The Court of Appeals awarded her these fees, finding she had achieved beneficial results in defending this motion and that these results had been sustained on appeal.

Husband appealed the family court’s determination that funds he deposited into a bank in Bulgaria were marital, claiming that they were actually held in trust for his parents. The Court of Appeals affirmed the trial court’s determination. It noted that Husband had repeatedly failed to disclose the existence of this account in sworn statements and had lied numerous times about this account. His parents’ names were not on the account and he provided no documentation that the funds to open the account had come from his parents. Further Husband made numerous deposits and withdrawals into this account during the marriage. Based on this, the Court of Appeals held Husband failed to carry his burden of proving this account was non-marital.

Both parties appealed the family court’s distribution of the marital home. The parties purchased this home seven years prior to separating with Wife contributing $100,000 in proceeds from the sale of a pre-marital home and Husband contributing $15,000. The trial court awarded Wife 60% of the equity. On appeal, Wife argued for 70% and Husband argued for 50%. The Court of Appeals agreed with Wife. It found her greater contribution to the acquisition of this asset, her role as primary homemaker caretaker to the parties’ son, and Husband’s marital misconduct, “resulted in an unfairly low apportionment to Wife in light of the aforementioned circumstances.”

Wife also appealed the family court’s failure to equitable apportion funds that Husband withdrew from his Bank of America account during the marriage that he either transferred to Bulgaria or could not account for. The Court of Appeals affirmed the family court. It found that some of these funds had been equitable divided when the family court divided Husband’s Bulgarian bank account. It further found that Wife could not establish fraud by Husband that was necessary to have these funds be considered part of the marital estate:

[D]espite the family court’s finding that Husband’s financial testimony was not credible, Wife failed to provide clear and convincing evidence that established how the funds were used—whether for marital or nonmarital purposes—after the funds were withdrawn and liquidated. Without further evidence to contravene Husband’s assertion that he may have utilized the funds for marital purchases, we find Wife failed to provide clear and convincing evidence of Husband’s fraud.

Wife also appealed the provision of the family court order that required her to pay Husband’s equitable distribution award in cash, rather than through a transfer of retirement assets. She noted her two main assets in equitable distribution were the marital home, which the family court’s order intended her to keep, and her 401(k). Wife argued she would either need to borrow against the home or liquidate her 401(k) to pay this equitable distribution award in cash and thus the family court’s order failed to properly consider tax consequences. The Court of Appeals affirmed, finding “the [family court] order does not contemplate the sale of the marital residence or the liquidation of Wife’s 401(k). We find no error and affirm the family court on this issue.”

For a number of reasons, I don’t blog on my own appeals until remittitur issues. First, I don’t want to give opposing counsel or the appellate court my honest view of what was decided in my client’s favor that perhaps was questionable. Second, I don’t want to be critical of an appellate court when it is still considering that appeal. Bojilov may be the appeal I am most proud of. Although I have handled over forty appeals in my career, this is the first case I have handled from the initial pleadings to the remittitur. I’m disappointed to have lost the “hidden assets” issue: if Husband has these funds hidden in a safe deposit box or under a mattress somewhere, he has committed a fraud and the courts, despite acknowledging his deceit, have allowed this to happen. Otherwise, we couldn’t have gotten a better result. The ability to control the record on appeal, especially the handling of my client’s own financial declaration, has convinced me more than ever of three points that I would reemphasize for all my South Carolina family law colleagues.

First, Bojilov confirms the importance of accurate financial declarations. I currently have cases on appeal in which my ability to achieve favorable results for my clients is undermined by financial declarations that were clearly not scrutinized by their trial counsel prior to submission. The most important exhibit in most divorce trials is the financial declaration. This document should harmonize with the parties’ financial exhibits and the client’s trial testimony. I will typically fill out page one with my client so we can insure each item is accurate. For child support cases, I will have the client obtain health insurance rate sheets and day care expense records to verify those expenses. Where equitable distribution is at issue, I will have my client provide documentation for the value of every asset and debt subject to equitable distribution to corroborate the accuracy of these values. If a page-two expense appears out of line with the parties’ incomes and socioeconomic status, I will suggest obtaining records documenting these expenses. Treating financial declarations as a nuisance that can be handled by a paralegal, or by the client with minimal or no guidance, is malpractice.

Second, Bojilov confirms my view that every full-time trial attorney should be a part-time appellate attorney. While aware of my reputation for “overtrying” cases, with Bojilov I had exactly the record I wanted for the appeal–all 1,096 pages of it. It is much easier to defend an appeal when one can point to multiple pieces of evidence that sustain the trial court and much easier to obtain reversal when one can point to multiple pieces of evidence that demonstrate error. Making a record is more than mere error preservation at trial: it requires thinking about what one wants to be part of the court record when preparing for trial. There’s nothing like combing through a trial record for factual support of an appeal brief to demonstrate the importance of this task. Every trial attorney should be doing an appeal at least once every few years.

Finally, Bojilov convinces me that in our post-Stoney universe a family court attorney should be thinking “victory or appeal” at the start of every trial. The fees and costs Ms. Bojilov incurred in preparing for and trying a 4 ½ day case were more than double those for defending this appeal and pursuing her cross-appeal. Any litigant who believes his or her dispute is sufficiently important to proceed to trial has a dispute sufficiently important to appeal if these goals are not met at trial. Outside of credibility determinations, the appellate courts are no longer deferring to family court factual findings. The ability to win (or have victory snatched away) on appeal is substantially greater than it was just a year ago.

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