Article by Richard Crouch, Attorney at Law,
Crouch & Crouch, Arlington, Virginia; (703)
528-6700;
Originally Published in Family Law News, a Va. State Bar Publication,
Fall 1992 Issue
Disclaimer: Items are not to be considered legal advice or to create
any lawyer-client relationship. Most articles include some obsolete information.
In addition, taking any legal information out of context, i.e., using it
in a different court or a subtly different kind of case, or without the
training to understand all of what it means or doing research to verify
it, usually has disastrous consequences.
Crouch & Crouch home page | Family Law Information | Family Law Articles IndexAll over Virginia, whole towns are laid off, people are taking pay cuts, and you can hardly find a service station or car dealership without plywood windows. Meanwhile, factories are closing and your favorite store goes under while the discount stores fill up with cheap goods from the folks who brought you Tiennamen Square. Construction workers who are lucky enough to hear about a job will jump on it, but merely as an excuse to get out of the house, since 10 to 1 they won't get paid. An ad for the most trivial of jobs has been known to produce 400 overqualified resumes, and businessmen actually acknowledge that business is bad. Bankruptcy discharge notices flood the mail, foreclosures bloat the legal section of the classifieds, and lawyers can't pay their bills because clients won't pay theirs.
But through all of this there is one happy segment of society whose incomes are secure, and who can if they wish remain blithely unaware that there is a depression out there: the judiciary. Let's see how the appellate courts of Virginia have been reacting to the current economic distress in the area of support obligations and support modification. Of course any analysis must begin with the unusual case of Mr. Antonelli.
But first, let's digress and look at how the recession is playing out at the trial court level. Consider some all-too-familiar hypotheticals:
AT THE TRIAL LEVEL
Sporadically Employed Construction Worker Number One -- let's call him Clarence -- has been separated for many years from his former common-law wife. The Virginia Department of Social Services sua sponte contacts this lady and asks if she would like to sue him for back child support. She says she had never thought of doing that over the years, but if it will not cost her any money, trouble or time, it's O.K. with her. DSS says oh no, no trouble: all you have to do is sign here. They will calculate the support due and bring suit, and she will hear from them. Next thing this worker knows, he is presented by DSS with a bill for $28,000.00. Clarence tells them they have about as much chance of getting $28,000.00 as he does, which is zero. DSS suggests that they know how to do it.
Bemoaning his state, construction worker suggests that it is a cruel irony, given the history of this case. The ex-mate said on several occasions that she never wanted any of his money, that she wanted him completely out of her life and that he should neither support the kids nor ever see them again. However, not very long after that, she asked him to take the kids off her hands. She also wrote him letters saying she wanted no parts of the children, and he would have to take them and support them -- which he did for years. But how could you ever prove all that ancient history now? The children, who are now adults and unemployed construction workers themselves, suggest that between their father's and their mother's old papers, they can probably find every one of those old letters. Within a few days, Clarence has in his hands a number of letters signed by the mother stating exactly what her positions were. He feels greatly relieved, but of course counsel has to advise him that a Virginia court will hold that none of these documents makes the least bit of difference. DSS will still come after him for $28,000.00 worth of support arrearages for those same children who were living with and supported by him for all those years, and they will get it.
Sporadically Employed Construction Worker Number Two, or Daryl, is under a support order he finds it impossible to pay. It all started in juvenile court when his alcoholic wife got him thrown out of the house in the usual way: fabricated charges of abuse to support an ex parte kick-out order. There was a subsequent hearing, but of course by that time the court didn't want to hear all that recriminatory melodrama. It was able to observe, with admirable pragmatism and detachment, that since husband, who had been the primary caretaker of the children for years, had no house and no steady job, he was not qualified for custody. Wife would always be assured of having living quarters, however, because husband was ordered to pay support, which will help her to afford the rent. With his support obligation he is never going to get enough ahead of the game to rent quarters of his own, so he subsists on the charity of relatives. Thus he does not even have a place of his own to accommodate the children for visitation.
THE BEST OF TIMES
On the matter of the support amount, it is of course determined by guideline. However, Daryl works only irregularly, making good money when he is able to work and none when there is no construction job. But, when they went to court on temporary support and temporary custody he was making a weekly wage, which, if it continued all year, would amount to $30,000.00. The judge uses 1/12 of $30,000.00 for husband's monthly gross income in calculating the guideline formula. Though husband urges that guideline support should take into account the fact that he will not be making that much all year, and will not make $30,000.00 this year unless he gets similarly lucrative work every week of the year with no vacation and no periods of unemployment, the judge says that he has to fix party income at the amount the husband is making at just this moment, and cannot "speculate" about the future at all. Daryl sees trouble coming but there is nothing he can do about it.
Though husband, who is now yoked to an impossibly high support order, needs to keep working and making unusually good money all year, it just does not happen. As in most years, and indeed even more so this year, jobs do not materialize with regularity or continuity. Husband seeks a downward modification of support but his plea is summarily thrown out with the observation that income is being imputed to him as required by statute, since he has demonstrated earning capacity at the $30,000.00 per year level.
ANTONELLI v. ANTONELLI, 242 Va. 152, 409 S.E.2d 117 (1991).
Imputed income is a concept that the appellate courts of Virginia have embraced with a vengeance. The theory that there are bad-faith changes of employment simply in order to escape support obligations would seem to imply that there can be good-faith changes of employment which either legitimately or unpredictably end up producing lower monetary rewards. Yet the Virginia Supreme Court in Antonelli emphasized that in its view, employment is strictly a matter of steady upward mobility, and the resulting support obligation is strictly a one-way ratchet. The Court of Appeals felt that they had at last seen a case of good-faith and legitimate under-employment when a stockbroker's employee quit a lucrative job in order to take a chance on making a higher income by going out on his own, but came along just in time for the 1987 Market crash and in fact did worse.
Thus the Court of Appeals decided against imputing the higher former income to the independent but poorer stockbroker, but the Virginia Supreme Court decisively and emphatically reversed. It is the Supreme Court's view -- and now the Court of Appeals' view after learning no end of a lesson -- that a husband is a guarantor and an insurer of the pre-separation style of life to which his wife and children had become accustomed. The courts have already, in Conway v. Conway, 10 Va. App. 653, 395 S.E.2d 464 (1990), pointed out that the children have a legitimate stake in the father's post-marital upward mobility and said that it would be conclusively assumed that the father wants to share it with them. But Antonelli makes clear that they do not have to take a chance on the possibility of his being less successful than before. The Antonelli opinion included a sua sponte fee award to the prevailing wife, and some other amazing relief that betrayed the Supreme Court's deep sense of personal outrage at the father's presumptuous argument.
So much for encouraging small business. The wage-slave working stiff is shackled forever to salaried employment with big business, which he leaves at his peril.
As the majority saw it, the reckless Antonelli "gambled with the children's ability to receive his financial support, and lost," and thus all the risk should be on him. To the lone dissenter, however, it seemed that indeed the risk probably falls on both the children and the payor parent for two reasons. First, Code §20-108 allows courts to modify support decrees "as the circumstances of the parents and the benefit of the children may require." Thus if the father's income had increased as a result of the job change, they could certainly have obtained a support increase. Secondly, if he had been a custodial parent, either in an intact family unit or after divorce, the children would have shared with him the risk of an upward or a downward turn in the family's financial fortunes.
Via v. Via, ___ Va. App. ___, 419 S.E.2d 431 (1992), was a case reminiscent of Antonelli in that the judge who found imputation-of-income theory less than attractive was very emphatically reversed, with a general award of fees for both trial and appeal to the ultimately-prevailing party.
In fact, the Court of Appeals is positively enamored of "imputation" theory. See Hur v. DSS, 409 S.E.2d 454 (1991), for a holding that to work part-time while attending college (if you are a 24-year-old illegitimate father) is to be voluntarily underemployed. So much for encouraging education.
JOB LOSS IRRELEVANT
Imputed income was also involved in the support-reduction case of Strailman v. Strailman, holding that not even loss of job is enough to constitute good-faith unemployment. It is not enough if husband lost two jobs in fact. He still must pay support at the higher amount he originally was ordered to pay. Under Strailman's standard a husband must show that he was not just unemployed but unemployable. The fact that he spent $10,000 during his period of unemployment showed the court that the husband involved there did not deserve a support reduction. Moral: don't try to support yourself or your family on savings.
The subject of imputing income did come up before, in slightly more prosperous times, in the inscrutable case of the Asian marriage in Srinivasan, 396 S.E.2d 675 (Va. App. 1990), an opinion so confusing that it is a perilous business for any commentator to go about trying to extract any general principles from it. When the idea of imputing income to a support-seeking wife came up, the Court of Appeals cautioned that before it can do that a trial court must give a wife "a reasonable time to secure employment." The idea seems instead to be that when you "impute" income to a support-seeking wife, it can only be done post-hoc and retroactively, as a sort of springing executory dispossesory possibility of reverter -- though surely the ex-husband who comes in a year or two later to say "OK Judge now she's dis-proved herself: now it's time to impute" will be told that "No, it says right here in the statute that imputation as a §20-107.1 factor is to be supplied back at the time of the divorce." Or, even more likely, he'll be told "No modification because no change of circumstances: she wasn't working then and she isn't working now." (Incidentally, this opinion actually contains the sentence: "Previously, however, we have held that the court, in setting support awards, must look to current circumstances and what the circumstances will be 'within the immediate or reasonably foreseeable future,' not to what may happen in the future.")
Did all this mean that rehabilitative alimony is all right? Maybe and maybe not. The reason for this period of grace is supposedly that the statute makes earning capacity one of the alimony factors. The husband in that case got an expert witness to testify about the many job opportunities open to the wife, but the appellate court held that imputation evidence must show that a wife has "unreasonably refused" employment -- a finding which some judges certainly would have been tempted to make here -- and which if it can't be found here will never be found anywhere.
ONWARD & UPWARD
Men who work two jobs should be sure that they enjoy paying support at the two-job level, because they can never go back: the courts will hold them to it. Cochran v. Cochran, 419 S.E.2d 419, Va. App. (1992), was a case in which the husband who had been working two full time jobs was not allowed to quit one of them. The Court of Appeals held that it was error for the trial judge to say "I'm not going to force him to work two jobs." In this great country of ours, in 1992, a judge not only can but must do exactly that. The court told Cochran he had no right to quit the second job since his wife and children had the right to rely on continuation of that higher income.
For another example of a husband who lost his job being laughed out of court when asking for alimony reduction see the unpublished case Jordan v. Jordan, 6 VLW 978 (VCA 2/11/92) (reversed on other grounds at 402 S.E.2d 246). The Jordan case at the trial level was one in which the judge pointed out that the husband had been making twice the wife's salary when he lost his job. And, accordingly even though the unemployment was no fault of his own, his earning potential was still twice that of the wife and accordingly he was ordered to pay $550 a month alimony. Q.E.D. (After all, as Antonelli says, good faith or bad faith, recession or no recession, it's earning capacity that determines your liability: not whether you have a job or not.) On the other hand those seeking upward modification find that the sanctity of the original decision is not so rigid after all, nor is the standard of the possibility of increased needs to be strictly enforced.
So connoisseurs of irony can find some real Theater of Cruelty out there. The blind goddess in her majestic impartiality can hardly deign to notice that there is an economic depression happening to some people (or even Those People, or You People). That would be like having a statute that says you modify support obligations for changed circumstances. Indeed the recession-proof judicial industry has always assumed that husbands go to work and enjoy a steadily rising income -- except for a few of the lying scoundrels who appear in the divorce courts. (Those few have devised clever stratagems to try to cheat their wives out of the legitimate expectation of being supported post-divorce in the style to which they would like to have become accustomed; the rest of the scoundrels are still enjoying the rising income but are just lying about it.) Make no mistake: the courts assume that any man who wants a job -- at not just the income level of last job but slightly more -- can always have it just by picking up the phone and accepting it. One expects that next the appellate courts will even reject the basic assumptions of retirement. A man who retires does not do so because he is old and tired, because he has earned that retirement as a legitimate expectation of the American system, or because he wants to spend some time with the family as he has not done in years. No, he retires in order to take not only another job but a better job, and anyone who does otherwise is trying to cheat his wife out of alimony. One wonders if these courts' enchantment with imputation theory will reach its apogee in an extension of these perverted assumptions to retirements on disability. In any event, the appellate courts seems permeated by the assumption that you can put a price tag on everything, that maximum financial opportunism is the universal rule; that every man has a lawyer, a CPA, a stockbroker and a Swiss bank account; and that all men are hustlers, usurers and liars. Trial judges who assume otherwise are quickly whipped into line. Perhaps that is what Thomas Jefferson had in mind when he spoke of the day in which we would totally "descend into European conditions."
AGREEMENTS & GUIDELINES -- THE KEY IS. . .
The ratchet effect is similarly obvious when it comes to the law of guidelines and separation agreements. In Alexander v. Alexander, 12 Va. App. 691, 406 S.E.2d 666, a case was reversed for failure to resort to the guidelines before determining that the parties' recent written separation agreement controlled as to the child support amount. The Court of Appeals seemed to indicate that upon remand the separation agreement could be considered as a factor in deciding whether or not to vary from the guideline amount -- but in Scott v. Scott, 12 Va. App. 1245, 408 S.E.2d 579 (1991), it appears to say that a separation agreement cannot even be a factor, and must be entirely disregarded in favor of the strict guideline formula. Now those cases involved attempts to invoke a separation agreement to keep support at the agreement level from being raised to guideline level. When, however, honoring the separation agreement would have the effect of raising the father's child support above guideline, as pointed out in Watkinson v. Henley, 13 Va. App. 151, 409 S.E.2d 470 (1991), the agreement does control. As a Circuit Judge pointed out in Hickman v. Hickman, 7 VLW 591 (1992), the crucial distinction that will reconcile these seemingly irreconcilable cases' reasoning is simply that agreements can always be used to raise support or keep it high, but are never to be applied in favor of a lower-than-guideline support amount.
Of course another feature of the current deep depression that divorce lawyers see is the vast number of ex-spouses who years ago made foolish alimony commitments in separation agreements that only in the best of times was it possible for them to meet. Right or wrong the inflexible Virginia law on this is unlike that of most states. With an agreement, as we all well know, there is no way out -- nor over, under, roundabout nor through.
It was held in Lambert v. Lambert, 395 S.E.2d 207 (Va. App. 1990), that in considering alimony it was wrong to consider the fact that the wife was getting child support. There, consideration might have affected her adversely. It turns out to be all right to consider the child support when she is losing it. In Furr v. Furr, 403 S.E.2d 72 (Va. App. 1992), it was held that the fact that the wife got a 200% increase two years ago does not mean all of the increased expenses that she now raises could have been foreseen then. Nor does forseeability itself count. It does not mean that upward modification should have been denied. The Conway reasoning applies to alimony as well, and the fact that ex-husband has begun to earn more, while the ex-wife has no income, combined with the fact that wife is about to lose money because child support is coming to an end, is enough to grant her an upward modification. See Houston v. Porter, 6 VLW 704 (unpublished, VCA 11/19/91).
MORE EQUAL THAN OTHERS
Of course when you come right down to it and all of it has been sifted out, the only distinction that really seems to matter, being the only one consistently adhered to, is sex.
Coincidentally, sex is the difference that makes a difference. It is different when a support-paying mother seeks downward modification. Thus a mother who showed "100% unemployment" because she lost her job actually was allowed a downward deviation from the guidelines. And when it came to the idea of imputing income, the Court of Appeals explained in O'Brien v. Rose, 420 S.E.2d 246 (1992), that a court can hold that unemployment was voluntary, and impute income, but then must "make clear both the fact of such holding and the evidence supporting it." (Remember the principle of Antonelli, and Jordan, that voluntariness has nothing to do with imputation?) The trial judge, following established precedent from the unemployed fathers' cases, had considered the unemployment and found "no circumstances which justify a modification of the child support and maintenance. " But that approach, it turns out, was wrong here.
The Court of Appeals did, however, show some of its old anti-deadbeat fire -- or ice -- when it observed in O'Brien that "Finally, with respect to appellant's contention that the trial court erred when it suggested that appellant could borrow money in order to meet her child support obligation, we note that, if a support order is valid, how the obligor obtains the funds is an issue for the obligor. The mere suggestion that she borrow the money does not constitute error."
Are the appellate courts really prejudiced? Of course not. It is only wicked and perverse coincidence that makes them appear to be swayed, or inflexibly governed, by pure considerations of what those who disdain good English usage now call "gender." Given the chance, by the right fact pattern coming up through the fortuitous caprice of the appellate system, they are sure to find a case in which some innocent support-paying sucker deserves an even break. And in that day a majority opinion will sagely observe that loss of income can occasionally result not from individual sin but from general and impersonal economic forces that are bigger than and beyond the control of most individuals. This will perhaps happen along about the time that (a) so many females are paying child support that one of them ends up with a support obligation, no job, and the financial ability to appeal; and (b) The Economy has fully turned around.