Opinion
CN20-04261 CPI 23-21197
07-23-2024
N.R., Petitioner v. F.R., Respondent
Attorney: Megan A. McGovern, Esq. Attorney: Marie Crossley, Esq.
Date of Hearings April 10, 2024, April 23, 2024.
Attorney: Megan A. McGovern, Esq.
Attorney: Marie Crossley, Esq.
Before the HONORABLE JENNIFER B. RANJI, JUDGE of the Family Court of the State of Delaware:
ORDER
JENNIFER B. RANJI, Family Court Judge. This is the Court's decision following hearings on April 10, 2024 and April 23, 2024, to address a Rule to Show Cause Petition filed by N-----R------("Ms. R------"), represented by Megan A. McGovern, Esq., against F----R----------("Mr. R---------"), represented by Marie Crossley, Esq. The Petition is filed regarding an Ancillary Order entered on May 3, 2022.
PROCEDURAL HISTORY
On May 3, 2022, the undersigned issued an Ancillary Order requiring Mr. R--------- - to pay $877 per month in alimony to Ms. R------to address her dependency. Approximately 6 months later, in November 2022, Mr. R---------filed a Petition for Alimony Modification and Termination, asserting that his income had decreased and that Ms. R------was cohabiting. In April 2023, Mr. R----------informed Mr. R------and the Court that he would not be pursuing modification based on his income reduction, but he intended to move forward with the cohabitation claim. The trial on that termination request was held on June 30, 2023.
On September 7, 2023 - prior to issuance of the Court's decision regarding alimony termination - Mr. R----------filed another Petition for Alimony Modification, this one based on his claim that he had lost employment. On September 19, 2023, the Court issued an Order finding that Mr. R----------had not proven cohabitation. As such, the Petition for Alimony Termination was denied.
On September 28, 2023, Ms. R------filed the pending Rule to Show Cause, asserting that Mr. R----------had stopped paying alimony as ordered in July 2023.
On October 3, 2023, Ms. R------filed a Motion to Reargue the September 19th Order, requesting reconsideration of an attorney fee award. On that same date, Mr. R---------filed a
Notice of Appeal related to the September 19th Order.
The Court held a Case Management Conference with counsel on October 18, 2023, to address the procedural posture of the Petitions for RTSC and Alimony Modification, the pending appeal, and the Motion to Reargue. Following that CMC, the Court issued a Letter Decision and Order reflecting that Mr. R----------agreed to stay his appeal until the Court addressed Ms. R------'s Motion to Reargue. Mr. R----------planned to re-notice the appeal once the Motion to Reargue had been addressed by the Court.
Regarding the Petitions for RTSC and to Modify Alimony, the Court noted that the latter petition would be stayed pending resolution of the appeal regarding the termination of alimony. Ms. Crossley argued on behalf of Mr. R---------that the RTSC should be stayed as well, asserting that Mr. R----------would be prejudiced by staying the alimony modification while moving forward with the RTSC. The Court noted that there is a valid order requiring the payment of alimony and Ms. R------had the right to enforce that Order. The undersigned noted that the matters could be heard separately and that the standard for the RTSC would be Mr. R----------'s inability to pay, rather than considering whether a substantial change in circumstances has occurred. The question of interim relief for Mr. R----------was not raised at that or any other point. Mr. R-------- - -'s only argument was that the Court should delay hearing the RTSC until Mr. R----------'s alimony modification would be heard.
On November 8, 2023, the Court issued an Order denying Ms. R------'s reargument request. The Court scheduled the hearing regarding Ms. R----- -'s RTSC for April 10, 2024, and Mr. R----------re-noticed the appeal of the September 19th Order.
TESTIMONY AND DOCUMENTARY EVIDENCE
Trial in this matter was held on April 10, 2024, but testimony was not completed and a final hearing was held on April 23, 2024.
Ms. R------testified that Mr. R----------paid his $877 monthly alimony obligation from June 2022 through June 2023. In July 2023, however, Mr. R--------- reduced the amount paid to $270. Mr. R----------did not notify Ms. R------that he would be paying a reduced amount or provide an explanation for the reduction. From August 2023 through November 2023, Mr. R----------further reduced his alimony payments to $200 per month. Beginning in December 2023, he further reduced his payments to $50 per month through March 2024. which was the last month before the trial.
Ms. R------testified that Mr. R----------pays $57 per month in child support for the parties' minor son, N---. This amount, however, was based on Mr. R----------and Ms. R------having a shared custody arrangement and Mr. R----------paying private school tuition. Neither of those assumptions is accurate currently, as N---lives full-time with Ms. R- -----and no longer attends private school.
Ms. R------testified that she cannot meet her needs without alimony, and she has had to borrow approximately $4,500 from family members and incur credit card debt. She averred that she has had to reduce her expenses such that she can no longer enjoy such activities as taking N---to the movies or dinner. Ms. R------asserted that she has not had a haircut in approximately one year and she has reduced their utility usage as a cost saving measure.
Mr. R----------has multiple bank accounts through which funds are transferred. Ms. R------entered a summary of those bank accounts and their balances for the months of July through October 2023 into evidence, with some of the balances provided for November 2023 and December 2023. One of the bank accounts is held jointly with Mr. R----------'s wife, but the remaining accounts are in Mr. R----------'s name alone. Ms. R------averred that Mr. R----------'s bank statements and expenditures show he has sufficient funds to pay alimony as ordered. She requests a lump sum payment for the alimony owed, attorneys' fees, and that any future reduction in Mr. R----------'s alimony obligation based on his pending Petition for Alimony Modification not apply retroactively to the months when he was in contempt of this Court's Order.
Petitioner's Exh. 2.
Mr. R----------testified that he had been the Director of Operations for Extreme Reach warehouse facilities, which is a company that securely stores film, scripts, and other items for commercials. Mr. R----------does not have a college degree and he worked his way up from his starting position in the warehouse to his director position earning $125,000 per year. Mr. R----------asserted that there were cutbacks in the company due to the surge of digital media, and he was laid off on November 15, 2022, with no advance notice. Mr. R---------- received a 16-week severance package at full pay, which was paid as a lump sum in December 2022. The severance payments provided Mr. R------- - - - with full income until March 8, 2023. Mr. R----------'s 2022 W-2 reflects income of $167,128, which he asserted included his severance pay. Mr. R----------was paid unemployment from April 2023 until he obtained employment with the State of Maryland on June 14, 2023, with his current position paying $63,000 per year. He offered into evidence a pay stub from his current employment, reflecting net pay of $1,583 for a 2-week pay period. He received $5,200 in unemployment payments while he was unemployed. Mr. R----------asserts that he engaged in a significant job search, offering into evidence a job application spreadsheet over 20 pages in length, but he was unable to find employment at his prior salary level. He noted that jobs similar to his prior position often require a bachelor's degree.
Respondent's Exh. 2.
Respondent's Ex. 5.
Respondent's Exh. 3.
Respondent's Exh. 6.
Respondent's Exh. 7.
Respondent's Exh. 4.
Mr. R----------asserted that he relied on savings and his severance to be able to pay alimony until July 2023 and that his savings has been drastically depleted.
Mr. R----------also entered a list of monthly expenses indicating that his expenses have reduced from approximately $6,175 per month at the time of the ancillary order to $4,262 per month, after exclusion of alimony and personal loan payments. The largest expense reduction since the ancillary order is the removal of over $500 per month in private school tuition, in addition to a reduction in child-related medical expenses and a reduction in house-related expenses since he now shares those expenses with his wife. Mr. R----------s expenses still include amounts for vacation, entertainment, subscriptions, a car payment of over $600 per month, and an even split of the housing expenses despite Mr. R----------'s wife's adult son living in the residence. Mr. R----------testified that he remanded in June 2022 and at that time, he entered into a promissory note with his wife under which he is to buy into 50% of the equity in the residence, which appears to be a total of $115,000, within 5 years. Mr. R----------did not enter the promissory note into evidence and its terms are therefore not clear, but he asserts that he has paid $40,000 towards the promissory note with the most recent payment in June or July 2023, and that he has $75,000 left to pay.
Respondent's Exh. 14.
The total is the sum of the amounts Mr. R----------'s testified he has already paid and the amount still owed.
The documentary and testimonial evidence indicate that Mr. R----------transferred significant funds to his wife in the months between his lay-off in December 2022 and his asserted inability to pay alimony beginning in July 2023. These payments include a transfer of $19,000 to his wife in December 2022 and a transfer of $15,000 to his wife in March 2023. Mr. R----------testified that he believed the $19,000 was for some combination of his payment on the promissory note and repairs to the property due to water damage, and the $15,000 was to pay his portion of a car purchase for his wife. Documentation evidencing these obligations was not entered into evidence.
Respondent's Exh. 10.
Petitioner's Exh. 5.
In May 2023, Mr. R----------transferred $8,000 from his individual accounts to the joint account with his wife, and she then transferred that amount to her personal account. Mr. R---------also withdrew $4,000 in cash from his account and testified that he gave those funds to his wife. Mr. R----------again asserted, without submission of supporting documentation, that this $12,000 transfer of funds in a one-month period when he was unemployed and no longer receiving severance was for house repairs and payment on the promissory note.
Id.
Respondent's Exh. 10.
In June 2023, Mr. R-------- - deposited $8,000 from his accounts into the jointly held account, and his wife transferred those funds to her own account. And in July 2023, when Mr. R---------reduced his alimony payment to $275, he moved $6,000 and withdrew an additional $5,000 in cash, transferring those funds to his wife. Despite these withdraws from January 2022 through July 2023, Mr. R---------'s bank accounts reflect aggregate balances of over $12,000 in July 2023, increasing to almost $14,000 through September 2023, and reducing to $8,600 in October 2023, which is the last month for which all statements were provided. Mr. R----------testified that he retained those funds in his accounts rather than paying alimony because he had outstanding bills, he was holding onto those funds for an emergency, and he believed he would have a tax obligation to pay.
Petitioner's Exh. 5.
Id.
Respondent's Exh. 10.
Petitioner's Exh. 2.
Mr. R----------also averred that his debt has increased, and he entered into evidence credit card statements for numerous credit card accounts, reflecting monthly balances from December 2022 through September or October 2023. He further testified that he took a personal loan of $30,000 in July 2023 to pay his legal fees. Mr. R----------'s bank statements reflect the loan being deposited and payments of approximately $23,000 in legal fees and $7,600 towards credit card debt that month.
Respondent's Exh. 13.
Ms. R----------'s credit card statements reflect that he often charged attorneys' fees on a credit card.
On cross-examination, Ms. McGovern questioned Mr. R----------regarding an email exchange between counsel dated April 1, 2024, in which Ms. McGovern requested clarification regarding Mr. R----------'s position on the RTSC Petition. Ms. Crossley responded stating,
1. F----does not believe he is obligated to pay alimony due to your client's cohabitation.
2. F----does not believe he is obligated to pay alimony due to a substantial change in circumstances ie his loss of employment, your client's increase in income and
reduction in expenses.
3. F- —does not believe he is in Contempt of the Alimony Order by virtue of 1 and 2 above.
Mr. R----------agreed on cross-examination that this reasoning for his opposition to the RTSC Petition did not assert an inability to pay.
RULE TO SHOW CAUSE STANDARD
The purpose of civil contempt is to coerce compliance with a court order and remediate damages caused by the failure to comply. In order to bring the coercive power to bear on a respondent, three criteria must be met: (1) a valid order must be in existence, (2) the alleged contemptor must have had the ability to abide by the order, and (3) the alleged contemptor must have disobeyed the order. The burden of proof in applying these criteria originates with the petitioner showing by a preponderance of the evidence that a violation of a court order has occurred. The violation must not be a mere technical one, but must constitute a failure to obey the court in a "meaningful" way. Once the petitioner has shown that the respondent failed to abide by a valid court order, the burden to prove an inability to comply shifts to the respondent.
See Delaware State Bar Ass 'n v. Alexander, 386 A.2d 652, 665 (Del. 1978).
Watson v. Givens, 758 A.2d 510, 512 (Del. Fam. Ct. 1999).
TransPerfect Glob., Inc. v. Pincus, 278 A.3d 630, 644 (Del. 2022), reargument denied (June 21, 2022), cert, denied, 143 S.Ct. 574, 214 L.Ed.2d 340 (2023).
Palmigiano v. DiPrete, 700 F.Supp. 1180, 1191 (D.R..I. 1988).
Watson v. Givens, 758 A.2d 510, 516 (Del. Fam. Ct. 1999). See also Thomas v. Thomas, 102 A.3d 1138, 1149 (Del. 2014).
As is often the case, the parties do not dispute that an alimony order entered by this Court was and remains in effect, or that Mr. R----------has failed to comply with it. Further, the court finds the violation to be a meaningful one, as Mr. R----------is paying less than 10% of the alimony required by the Order and Ms. R------testified to the negative impact this reduction in funds has had on her.
The only question before the Court, therefore, is whether Mr. R----------was unable to pay as ordered.
Given some of the evidence offered and arguments made, the Court reiterates this point further. There is no question that Mr. R----------'s income reduced from $125,000 per year 8 to $63,000 per year beginning in March 2023 or that Mr. R----------'s bank account balances have reduced over time since that change. The question is not whether compliance with the existing order has become more difficult, or whether there has been a change of circumstances that may ultimately justify an alimony modification. And the question is certainly not whether Mr. R----------believes that the alimony order in place is fair, or whether he assesses it as likely to be modified when his Petition to Modify Alimony is heard. "[T]he court will not listen to an excuse for the contemptuous action based upon an argument that the order in question was imperfect or erroneous." The relatively narrow question before this Court is whether Mr. R----------'s current financial situation made him unable to comply with this Court's mandate that he pay $877 per month in alimony to Ms. R
DISCUSSION
Ms. R------noted significant expenditures in the months between Mr. R---------'s loss of employment and his reduction in alimony payments, which Mr. R---------asserted were payments on a promissory note that is not due to be paid off for several years, payment for house repairs, and a contribution of $15,000 towards a vehicle for his wife. These significant and undocumented transfers of funds out of Mr. R----------'s individual accounts occurred at a time when he was unemployed, uncertain of when he may be re-employed, and carrying numerous financial obligations, including the court-ordered one to Ms. R------.
While these transfers were made prior to Mr. R----------beginning to reduce his alimony payments in July 2023, an inability to pay alimony must be the result of circumstances beyond the payor's control. Mr. R----------'s financial situation in July 2023 - at which point he asserts he was unable to pay alimony - was certainly caused in part by his decisions to transfer thousands of dollars out of his accounts in the months leading up to that decision, including the $15,000 he transferred to his wife to buy a vehicle just four months before reducing his alimony payments. The Court does not begrudge Mr. R----------and his wife the opportunity to have a second vehicle for her employment purposes, but Mr. R----------did not convince (or even attempt to convince) the Court that his wife needed a vehicle at a price point that would make his $15,000 payment only a portion of the vehicle's cost. Perhaps, for example, Mr. R----------could have contributed half that amount to the vehicle and used the remaining $7,500 to pay over nine additional months of alimony to Ms. R-------a time period which would quite likely have gotten him through a hearing on his alimony modification, or at least much closer to it. Under this reasoning, a court might find that the car payment rebuts Mr. R----------'s inability to pay defense, as spending $15,000 in cash for a portion of a vehicle's purchase price just three months before Husband's asserted inability to pay alimony strikes as creating the exact circumstance that he avers justified his non-compliance with the alimony order.
The Court, however, finds a much more direct basis for its conclusion that Mr. R---------- failed to prove his inability to pay alimony.
Mr. R----------'s alimony obligation is $877 per month. As of July 2023, when Mr. R- - --------reduced his alimony payment by over 70%, he had over $12,000 in his bank accounts. His account balances increased to almost $14,000 through August and September 2023, at the same time Mr. R----------further reduced his alimony payments, such that he was paying less than 25% of the amount owed to Ms. R------.In October 2023, which is the most recent month for which all account balances were provided, Mr. R----------'s cash available in bank accounts totaled $8,600, when he reduced his alimony to only 6% of the amount he is ordered to pay.
Petitioner's Exh.2.
Id.,
Id.
For each of those months, Mr. R----------'s readily available cash was sufficient to have paid the $877 per month in alimony as ordered. Even the month of December 2023, for which only two of Mr. R----------'s six bank account balances was provided, those two accounts alone reflect that Mr. R---------had $3,600 available from which he could have paid alimony. Mr. R----------'s explanation for the retention of those funds in his accounts while asserting he was unable to pay Ms. R------varied, but in general he averred that he was holding onto those funds for an emergency, he had upcoming bills that were due, and he believed he would have a tax obligation to pay. Mr. R----------agreed on cross-examination, however, that he has a 401k account with over $40,000 in it as well as an IRA with an unknown balance. Mr. R----------therefore had the opportunity to utilize those accounts if an emergency arose.
Id.
In sum, as of the trial date, Mr. R----------owed Ms. R------a total of $6,466 in alimony, covering July 2023 through March 2024. The Court was provided bank statements for each of Mr. R----------'s bank accounts for just four months in this time period, and for every one of those months, Mr. R----------had sufficient funds in his accounts to pay not only that month's obligation, but the entire amount owed through the date of trial. Again, the burden was on Mr. R----------to prove to the Court that he was incapable or lacking capacity to pay as ordered, and the Court finds that he failed to do so.
$600 for July 2023, $677 for the months of August 2023 through December 2023. and $827 for January through March 2024.
It is important to note that while Mr. R----------had sufficient cash to pay alimony in his bank accounts, the available cash was not maintained at the expense of burgeoning debt he incurred for everyday living expenses. The balances for his submitted USAA, Capital One QuikSilver. Bank of America, Home Depot, and Apple credit card statements totaled approximately $8,000 as of December 2022, at the time he lost employment, and that total balance increased relatively modestly to $11,700 as of the October and November 2023 statements. Of note in considering this increase, however, is the evidence found in the credit card statements indicating that the attorneys' fees charged to those credit cards in that same period totaled over $19,000. As such, Mr. R---------would have actually reduced the debt on his credit cards while maintaining the balances cited in his bank accounts were it not for the addition of his attorneys' fees. Similar, while Mr. R----------took a $30,000 personal loan in that timeframe, that again was used largely if not exclusively to pay attorneys' fees.
Pet. Ex. 6 and Resp. Ex. 13.
Id.
Id.
CONCLUSION
The Merriam-Webster dictionary defines "unable" as "incapable," which is in turn defined as "Lacking capacity, ability, or qualification. Having considered the parties testimony, evidence, and legal arguments, the Court finds that Husband failed to meet his burden of proving to the Court that he was unable to comply with this Court's alimony order based on any of those terms. He lacked neither the capacity nor the ability to pay Ms. R------as ordered, as he had sufficient funds available in his accounts to pay the amount owed every month for which his full set of bank account balances was provided, and to do so while leaving funds in his accounts. He was able to maintain those balances without incurring debt beyond that attributable to his attorney fees.
Unable, Merriam-Webster Dictionary (2024).
While the Court recognizes that Mr. R----------considers this an inequitable result given his pending alimony modification, the Court notes that he has not been without remedy -he has only failed to pursue it. Mr. R----------could have moved forward with the initial Petition to Modify Alimony filed at the time he petitioned to terminate based on cohabitation such that the issue would have been considered at that hearing in Spring 2023, but he chose not to do so. He could have requested interim relief when he filed the Petition for Modification in September 2023, but he did not do so. He could have requested interim relief following the Case Management Conference in October 2023, when the Court made clear that it would be moving to trial with the RTSC and not the modification petition, but he did not do so. And while Ms. Crossley asserted at trial that the reason Husband did not pursue interim relief based on his changed circumstances was due to an impression the Court would not grant it, the Court secs no basis for such an assumption. Husband's only request at the CMC was that the Court stay both the alimony modification and the RTSC until resolution of the appeal - an arrangement that would have left Ms. R------'s right to enforce an existing order unheard by the Court for a potentially extended and unknown period of time, while Mr. R---------enjoyed the opportunity to not pay alimony as ordered, based on his own assessment of his ability to pay. The fact that the Court was not willing to follow that course towards final resolution of the pending petitions does not mean it would not have considered a request for interim relief. Furthermore, a litigant who takes action based on assumptions about how the Court will rule does so at their own peril.
A similar set of facts was considered by the Delaware Supreme Court in Thomas v. Thomas, in which Wife filed a RTSC Petition based on Husband's failure to pay interim alimony as ordered. In that case, the RTSC was consolidated with the final ancillary hearing, at which the Family Court reduced Husband's alimony obligation from that which had been mandated in the interim order while also holding Husband in contempt for his failure to pay interim alimony as ordered.
1 02 A.2d 1138 (Del. 2014).
Husband argued, inter alia, that since he had actually paid more in interim alimony than the amount the final ancillary order required him to pay, he should not be found in contempt. The Family Court disagreed, and the Supreme Court affirmed that decision. As cited above, the Supreme Court held that a party's belief that an order is erroneous, even when ultimately determined to be so, does not justify a failure to comply with the order. The Supreme Court further stated, "In other words, the Husband cannot simply stop making payments because he thought that the payments were too much - especially where he stopped making payments before the Family Court made a final determination of the amount that would be due."
Id. at *1149.
As it relates to the Family Court's decision to sanction Husband by refusing to retroactively modify the alimony award, the Supreme Court stated, "[T]he Family Court properly exercised its discretion when it found that the Husband was in contempt of the interim alimony order, refused to retroactively modify the award, and required the Husband to pay the Wife the overdue payment." And as stated by this Court in L.F v. C.F., "Even though the Court may very well modify his alimony obligation retroactive[ly], he still had an obligation to pay until this Court determined whether he was due a modification or termination of his alimony obligation... While it may seem inconsistent to modify Husband's alimony obligation retroactive to the date of his petition and, yet, hold him in contempt of Court for his failure to pay, the Courts of this jurisdiction have long held that 'self-help' is not a remedy when there's an existing Court Order."
Id. at *1150.
L.F. v. C.F., CN07-05905 (Del. Fam. 3/27/13).
The Court agrees. Mr. R----------'s assertions throughout this proceeding and the April 2024 email exchange between counsel indicate his seeming belief that since he has determined that he is due an alimony modification, he may choose not to pay his alimony. Such "self-help" remedies are not permissible.
Accordingly, the Court enters the following ORDER:
1. Mr. R----------is in contempt of this Court's May 30, 2022, Ancillary Order.
2. Mr. R----------owes Ms. R------the full amount due from July 2023 through September 2023, when he filed his Petition to Modify Alimony.
3. For the time period from October 2023 to the issuance of this Order, Mr. R----- - - - - -'s sanction will be determined following the hearing regarding the Modification of Alimony. Even if the Court determines at that hearing that a substantial change in circumstances occurred to justify an alimony modification, Mr. R----------will be sanctioned some amount for these months.
4. Going forward. Mr. R----------may file a Motion for Interim Relief if he wishes to avoid sanctions for payment of less than the $877 per month required under the current Alimony Order. While the Court received significant information during the RTSC trial, the Court does not wish to limit the ability of Mr. R----------, or Ms. R------in Response, to provide brief additional argument or information related specifically to a request for an interim modification. In the alternative, Mr. R----------may pay the full amount each month, with the understanding that any alimony modification would be given retroactive effect at least until the date of this Order.
5. Husband shall pay 15% of Wife's attorney fees incurred in prosecuting this matter.
IT IS SO ORDERED.