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Stephanie M. v. John M.

Supreme Court of Appeals of West Virginia

January 13, 2020

Stephanie M., Petitioner Below, Petitioner
John M., Respondent Below, Respondent

          (Kanawha County 00-D-1154)


         Petitioner Stephanie M., by counsel Richard L. Vital, appeals the Circuit Court of Kanawha County's November 20, 2018, order terminating her permanent alimony award. Respondent John M., by counsel Nigel E. Jeffries, filed a response in support of the circuit court's order.

         This Court has considered the parties' briefs and the record on appeal. The facts and legal arguments are adequately presented, and the decisional process would not be significantly aided by oral argument. Upon consideration of the standard of review, the briefs, and the record presented, the Court finds no substantial question of law and no prejudicial error. For these reasons, a memorandum decision affirming the order of the circuit court is appropriate under Rule 21 of the Rules of Appellate Procedure.

         The parties were married in 1981. They separated in 2000, and a final divorce order was entered on November 24, 2003, in the Circuit Court of Kanawha County.[1] Relevant to this appeal, petitioner was awarded permanent alimony in the amount of $2, 500 per month, which, under the divorce order, "is modifiable by a change of circumstances and shall terminate upon death of the respondent or remarriage of the petitioner."[2] The order further provided that petitioner agreed to waive any interest in the marital home and respondent's law practice and that respondent assumed all outstanding marital indebtedness (excluding debts incurred by the parties after separation). Neither party appealed this order.

         On May 1, 2014, respondent filed a petition to terminate or reduce the alimony award. Following a hearing, the family court granted the petition and reduced the award to $1, 000 per month because respondent's business income had decreased while petitioner's income had increased. Petitioner appealed, and the circuit court reversed and reinstated the $2, 500 monthly alimony award. This Court affirmed the circuit court's decision. See John M. v. Stephanie M., No. 15-0656, 2016 WL 3175806 (W.Va. June 3, 2016) (memorandum decision).

         Meanwhile, during the pendency of the foregoing appeal, respondent filed a second petition to terminate or modify the alimony award based upon a substantial change in circumstances - i.e., his decrease in income and petitioner's increase in income. A hearing was conducted on October 18, 2016, during which the family court ordered the parties to provide additional financial disclosures, including their 2015 tax returns. The petition to terminate/modify was later denied by the family court in an order entered on December 23, 2016.

         Respondent appealed the family court's December 23, 2016, order to the circuit court. Following a hearing, the circuit court remanded the matter for further proceedings, directing the family court to make a written finding regarding whether respondent's recent adoption of the parties' minor grandchild[3] had any effect on his claim that he had a substantial change in circumstances. The court also directed the family court to review all pertinent financial information, including the parties' 2015 tax returns, before ruling on the petition to terminate/modify.

         On remand, a family court hearing was conducted on May 26, 2017. By order entered on May 30, 2017, the family court terminated the $2, 500 monthly alimony award. Petitioner appealed that order to the circuit court.

         At a September 1, 2017, hearing before the circuit court on appeal, respondent advised the court that he was now caring for two grandchildren in addition to the one he already adopted.[4] The circuit court again remanded the matter and directed the family court to (1) hold an evidentiary hearing for the purpose of ascertaining the reasonable expenses respondent has incurred in connection with caring for the parties' grandchildren, (2) make a finding as to whether these expenses constitute a substantial change in circumstances, and (3) if they do constitute such a change in circumstances, then determine to what degree the alimony obligation should be modified.

         Upon remand, the family court heard evidence regarding the reasonable expenses incurred by respondent in caring for the grandchildren and also on collateral issues such as the parties' income. By order entered July 20, 2018, the family court ordered the $2, 500 monthly alimony award terminated based upon respondent's expenses regarding the grandchildren, the parties' respective abilities to pay, and their respective financial needs.

         In its order, the family court found that there was a substantial change of circumstances based upon specific testimony from respondent's accountant regarding respondent's decrease in income and current financial status - that is, in 2016, respondent's adjusted gross income was $161, 000 and taxable income was $125, 000; in 2017, his adjusted gross income was $83, 904 and his estimated taxable income was $45, 816. Though respondent's first quarter earnings for 2018 were $23, 000 greater than for the same period in 2017, his accountant testified that first quarter receipts are not a reliable indicator of annual receipts, particularly for a law practice. Respondent's accountant also testified that respondent met his office and personal expenses with a continuous bank loan. Additionally, the family court heard testimony from respondent's employee that respondent missed work in order to care for the adopted grandchildren. She further testified that respondent carries no health or malpractice insurance in an effort to reduce expenses, that his law practice has continued to suffer financially, and that she has suggested that he consider filing for bankruptcy. The family court's order also relied on the testimony of a local attorney, who stated that respondent's income-earning ability in the area of DUI defense (respondent's area of primary focus) had become less lucrative since the enactment of certain legislation in 2013.

         According to the family court's order, respondent testified regarding unspecified expenses associated with raising his special-needs grandchildren and also routine costs such as diapers, cleaning supplies, birthday gifts, daycare, and the like. Respondent acknowledged that he receives $600 per child from the State and that the children receive Medicaid benefits. Petitioner's evidence included that her 2016 adjusted gross income was $115, 334, that her 2017 adjusted gross income was $71, 131, and that she was forced to retire in May of 2017, for health reasons, including back trauma, shoulder surgeries, and carpal tunnel syndrome. However, the family court specifically found that petitioner failed to submit corroborating medical records or the name of a physician who advised her to retire, that her testimony was not credible, and that her retirement ten days before the family court hearing "was without just cause and . . . in contrivance to forestall modification of her alimony payments and keep the same intact." In 2018, petitioner received Social Security income in the amount of $1, 562, and pension income in the amount of $1, 378, for a total monthly income of $2, 940. The family court found that petitioner was attempting to obtain Social Security Disability benefits, that petitioner's purported monthly expenses of $3, 411 were inflated, and that, at the time of her retirement, she was earning more wages per month than respondent and had "more than enough financial resources to meet her monthly needs." Ultimately, the family court imputed petitioner's average pre-retirement wages based upon her "bad faith" retirement immediately prior to the May of 2017 family court hearing (i.e., $6, 297.33 per month, or $75, 568 per year).

         Petitioner appealed the family court's order terminating her $2, 500 per month alimony award. By order entered on November 20, 2018, the circuit court affirmed, noting that the family court's findings were largely based on credibility determinations, to which much deference is given. See ...

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