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Cowger v. Cowger

Supreme Court of West Virginia

February 28, 2018


          Submitted: January 16, 2018

         Appeal from the Circuit Court of Webster County The Honorable Richard A. Facemire, Judge Civil Action No. 15-D-24

          Dominque Razzook, Esq. Legal Aid of West Virginia Charleston, West Virginia Attorney for the Petitioner.

          Jared S. Frame, Esq. Sutton, West Virginia Attorney for the Respondent.


         1. "In reviewing a final order entered by a circuit court judge upon a review of, or upon a refusal to review, a final order of a family court judge, we review the findings of fact made by the family court judge under the clearly erroneous standard, and the application of law to the facts under an abuse of discretion standard. We review questions of law de novo." Syllabus, Carr v. Hancock, 216 W.Va. 474, 607 S.E.2d 803 (2004).

         2. "'A finding is clearly erroneous when, although there is evidence to support the finding, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. However, a reviewing court may not overturn a finding simply because it would have decided the case differently, and it must affirm a finding if the circuit court's account of the evidence is plausible in light of the record viewed in its entirety.' Syl. Pt. 1, in part, In re Tiffany Marie S., 196 W.Va. 223, 470 S.E.2d 177 (1996)." Syl. Pt. 3, Estate of Bossio v. Bossio, 237 W.Va. 130, 785 S.E.2d 836 (2016).

         3. "Under the clearly erroneous standard, if the findings of fact and the inferences drawn by a family [court judge] are supported by substantial evidence, such findings and inferences may not be overturned even if a circuit court may be inclined to make different findings or draw contrary inferences." Syl. Pt. 3, Stephen L.H. v. Sherry L.H., 195 W.Va. 384, 465 S.E.2d 841 (1995).

         4. "Questions relating to alimony and to the maintenance and custody of the children are within the sound discretion of the court and its action with respect to such matters will not be disturbed on appeal unless it clearly appears that such discretion has been abused." Syllabus, Nichols v. Nichols, 160 W.Va. 514, 236 S.E.2d 36 (1977).


          Workman, Chief Justice.

         This is the appeal of Petitioner Gloria Cowger ("the Wife") from the January 10, 2017, order of the Circuit Court of Webster County, West Virginia, reducing the amount of permanent alimony to be paid to her by Respondent Dennis Cowger ("the Husband"). The family court, after hearing the evidence, ordered the Husband to pay permanent alimony to the Wife in the amount of $1, 500 per month. But the circuit court, upon the Husband's appeal, reversed the permanent alimony award and remanded the case to the family court for calculation of spousal support "in accordance with" its order. On remand, the family court recalculated the permanent alimony award, ordering the Husband to pay the Wife $439.02 per month. The Wife appealed the reduced permanent alimony award to the circuit court, which refused the petition by order entered January 10, 2017. The Wife contends that 1)"[t]he Circuit Court erred when it forced the Family Court to find that Husband's business earned zero cash income, when Husband admitted a substantial portion of his business' income was received in cash[;]" and 2)"[t]he Circuit Court erred in holding that the Husband's testimony about his unrecorded labor costs must be accepted despite the Family Court's multiple findings of the Husband's fraudulent representations and lack of credibility." Based upon a review of the parties' briefs and arguments, the appendix record, and all other matters submitted before the Court, we reverse the circuit court and remand the case for reinstatement of the family court's December 16, 2015, order setting the permanent alimony award to be paid by the Husband to the Wife at $1, 500 per month.

         I. Factual and Procedural History

         The permanent alimony award was the only issue litigated before the family court.[1] The parties were married for almost thirty-four years. [2] They separated on April 18, 2015, and were granted a divorce by the family court, based upon irreconcilable differences. The Wife has a GED and only worked outside the home for a period of about four years during the course of the marriage. Her jobs were part-time, minimum wage and sporadic. The Wife had been out of the workforce for eleven years at the time of the divorce. She testified that she had been a stay-at-home mom when their children were minors. Since that time she continued her work around the home, which included mowing the lawn, stacking hay, paying the bills, doing laundry and taking care of her horses. The Wife's only income at the time of the final divorce hearing was the $500 a month she was receiving in temporary alimony as she had been unable to find employment despite her efforts. Nevertheless, the family court found that the Wife "has the ability to earn a minimum wage income of $1, 386.67 gross per month (or about $1, 178.67 net per month), which minimum wage income should be imputed to her in the determination of her need for alimony from" the Husband. The family court also found the Wife's monthly expenses to be $2, 531.56. Thus, the family court found that the Wife still had a need of at least $1, 352.89.[3]

         The Husband has worked as a school bus driver for the Webster County Board of Education ("Board") for over thirty-two years, a job he performs ten months of the year. In 2015, the Husband earned $32, 532.50 (gross)from his job with the Board, which, after deductions, netted a monthly income of $1, 592.35 or total yearly net of $19, 108.18.[4] The family court found the Husband's monthly expenses to be $2, 670. The Husband also has operated his business D.C. Services, which does all types of construction services, for the past twenty-eight years.

         The primary focus of the evidence introduced before the family court was directed at D.C. Services and how much income the Husband actually realized from his business. The Husband did not keep records regarding either his costs expended or income generated with his business.

         The Wife testified that she previously helped with the business, "[a]nd then he just refused to let me help." She did not assist at all with the finances of the business. The Wife testified that the Husband's business income was paid by both cash and check and was deposited into a checking account established for the business only. The Husband had sole access to the account, as the Wife was not named or a signatory on the account.[5] The Wife testified that she received an allowance from the Husband of $300 per week in cash, which was corroborated by the Husband's testimony that in 2015 [6] he was giving the Wife "roughly three hundred a week." [7] This allowance did not come from their joint checking account, according to the Wife.

         The Wife also provided an expert witness, C. Page Hamrick, who testified about the Husband's business. Mr. Hamrick essentially took the monthly deposits into the account for D.C. Services in calendar years 2011, 2012, 2013 and 2014, and multiplied those yearly deposits byfifty percent to arrive at the yearly income (after business deductions) from D.C. Services. According to Mr. Hamrick, the fifty percent total was "a very typical . . . percentage for a small business like this." But the family court found much of the Wife's expert's report and testimonynot credible because the expert failed to interview the Husband, who was the only person who operated and kept records for D.C. Services, failed to review actual deposits and withdrawals from the D.C. Services bank account and failed to support using a fifty percent formula to calculate what the Husband's net income was in the years examined. The family court, however, did find reliable the expert's recognition that the income for D.C. Services was underestimated because the Husband never reported his expenses and labor costs, that the records for the Husband's business were sparse and the numbers were "utterly inaccurate[, ]" and that the parties had inaccurately reported income from the business to both the state and federal governments.

         After hearing the expert's testimony and recognizing the quagmire that existed regarding the Husband's business income due to the woefully incomplete and inaccurate records, the family court directed the Husband to submit the bank statements from his business, showing all deposits and withdrawals for the business account for 2013.[8] That year was not in dispute by the parties, as the family court found it to be "the last year . . . [the Wife] signed the joint tax returns filed by the parties . . . ." [9] According to the family court, it simply could not "be determined with any certainty as to whether . . . [the Husband] deposited all of his gross receipts, both checks and cash, into the D.C. Services account." Nonetheless, the family court "believe[d] the detailed review of the 2013 records (as well as the detailed review of the 2015 records through April, 2015) produce[d] a clearer (though still clouded) picture of . . . [the Husband's] income from D.C. Services."

         The Husband testified that he had reviewed the bank statements and "believe[d] that the 2013 bank account statements are an accurate reflection of the business that D[.]C[.] Services did in 2013[.]" The Husband testified that he paid his employees in cash. According to the Husband, he had four employees in 2013, three of whom earned $12 an hour and one who earned $10 an hour; however, there were no records regarding how many hours these individuals worked or how much money they were paid for the work they did. Further, in 2013, the Husband submitted a letter to the Contractor's Licensing Board in which he claimed that he only had part-time employees and that two individuals, who during hearing the Husband testified to being his employees, "'occasionally volunteer to help Dennis Cowger as they are all good friends.'" The Husband confirmed that the letter was his company's means of informing the agency that two of his employees were not paid in 2013 and that he did this to protect his employees. Further, the Husband testified that he did not identify any contract labor expenses or expenses for supplies for his business in his taxes for 2013. The Husband also testified that there were no 1099's or W-4's that were prepared by or for his employees. The Husband also did not file a Wage Bond Affidavit Status about his employees with the Department of Labor. But the Husband also testified that he paid his employees in cash and that his labor costs were $25, 087 in 2013, or about 46.45 percent of his net income. [10] During cross-examination when the Husband was questioned, "But . . . now that[] it[']s more in your favor you want to change your mind and say that you do have employees and you have had them since 2012[, ]" he responded, "Correct."

         Additionally, the Husband testified that he kept, on the average, about $400 a week in cash from his business for himself. Even though the Husband maintained that he was earning less in 2015, only taking home about $300 a week from the business, the family court found this unsupported testimony not credible.[11] Despite the Husband's testimony, he indicated on his financial statement submitted as part of the divorce action that his self-employment income each month was $0. The Husband also stated ...

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