Day v. Sterrett

ROBERT EUGENE DAY, JR. v. KIM MICHELLE STERRETT

No. 2148

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2013

October 15, 2015

UNREPORTED

Eyler, Deborah S., Arthur, Kenney, James A., III (Retired, Specially Assigned), JJ.

Opinion by Arthur, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

In connection with a judgment for absolute divorce, the Circuit Court for Howard County ordered Robert Eugene Day Jr. to pay child support, alimony, and counsel fees to Kim Michelle Sterrett. On appeal, Mr. Day contends that the circuit court erred by imputing income to him of $299,115.00 per year and that the court abused its discretion in determining the awards of child support, alimony, and counsel fees. We affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Demise of the Parties' Marriage

Mr. Day and Ms. Sterrett were married in 1990. Three children were born of the marriage: one son in 1992, a daughter in 1996, and another son in 1998.

Throughout the marriage, Ms. Sterrett served as the primary child-care provider. She also worked part-time, under 30 hours per week, as a software engineer for the Johns Hopkins Applied Physics Laboratory. The family used her salary of around $60,000.00 per year to cover the cost of private school tuition for the children.

Mr. Day served as the primary wage earner. He worked full-time and traveled extensively as a specialist in marketing and international sales. He eventually became an executive at Smith Micro Software, a California-based software company. He earned a base salary of around $190,000.00, plus commissions, bonuses, stock options, and other compensation, for an average yearly income of $363,000.00 from 2009 through 2011.

The couple began to experience serious marital problems as early as 2004, based in part on conflicts in their approaches to parenting and disagreements about the cost of private school education. Ms. Sterrett became unhappy in the marriage and experienceddepression. Mr. Day was unwilling to engage in counseling or to provide emotional support.

The parties separated in August 2010 when Ms. Sterrett moved out of the family residence. By that point, their oldest son had already reached adulthood. The two minor children initially lived with Ms. Sterrett during the separation, but their teenage daughter returned to live with Mr. Day at the family home a few months later.

B. The Action for Divorce

On October 20, 2010, Ms. Sterrett filed a complaint for limited divorce in the Circuit Court for Howard County. Her complaint included requests for physical and legal custody of the two minor children, child support, alimony, equitable division of marital property, and attorneys' fees. Mr. Day counterclaimed, also seeking sole custody of the two children and child support.

In January 2011, Ms. Sterrett filed a "Motion for Suit Money, Counsel Fees, and Costs." She asked the court to order Mr. Day to pay some of her expenses in prosecuting the divorce action. See Md. Code (1984, 2006 Repl. Vol.), Family Law Art. ("FL"), § 7-107(b) (authorizing court to order party to pay expenses of other party, including counsel fees, "[a]t any point" in divorce proceeding). On July 21, 2011, the circuit court awarded Ms. Sterrett $20,000.00 in "interim suit money and attorneys' fees." Mr. Day appealed, but this Court ultimately affirmed the order in an unreported opinion. Day v. Sterrett-Day, No. 1300, Sept. Term 2011 (filed Feb. 7, 2013).

In April 2011, the parties reached an agreement to share custody of the two minor children during the pendency of the divorce action and to follow a visitation schedule.Mr. Day agreed to pay Ms. Sterrett $3,500.00 per month in pendente lite child support. In a consent order documenting the parties' agreement, the court noted that it would reserve judgment on the issues of arrearages for child support and alimony.

In October and November 2011, Mr. Day and Ms. Sterrett amended and supplemented their pleadings, asking the court to grant an absolute divorce on the grounds of a one-year separation. Both parties continued to request sole custody of the minor children, child support, and equitable division of marital property. Ms. Sterrett continued to pursue alimony and counsel fees.

A bench trial commenced on January 30, 2012. The trial was originally scheduled for three consecutive days, but it continued for eleven trial days over the course of more than a year. The majority of testimony came from the parties themselves. Ms. Sterrett testified on her own behalf on three days at the end of January 2012 and on three days in June 2012. Mr. Day testified as part of his case on two days in December 2012 and, after the court granted a continuance so that his attorney could address a medical emergency, on two additional days in March 2013.

C. Evidence and Arguments Regarding Mr. Day's Loss of Employment

When Mr. Day resumed his testimony on March 4, 2013, the penultimate day of trial, he testified that he was no longer employed with Smith Micro. He offered into evidence a letter from Smith Micro's corporate controller, dated February 22, 2013, "advising concerned parties of Mr. Day's pending termination date." The letter contained a single sentence: "Please be advised that Rob Day has been given notice and that his final day of employment is February 28, 2013." The letter gave no reason for thetermination of Mr. Day's employment. Mr. Day offered no explanation other than to say that he had been "laid off."

Mr. Day testified that he had not received any compensation package upon his discharge. Mr. Day's attorney asked him to "explain for the Court why [he did] not have a severance package." He responded that he would need to evaluate how a non-compete provision in the severance agreement would restrict his ability to work for other employers. When the court asked for further clarification about his opportunity for severance, Mr. Day responded that, sometime "over the next few weeks," he planned to "negotiate with [his] boss" who had been "out of town when [Mr. Day] got laid off." During cross-examination, Mr. Day added that Smith Micro owed him "probably 6 weeks" of base salary for accumulated vacation days and paid leave. He admitted that his direct supervisor, Mr. Von Cameron, was his "best friend" whom he had known since college.

Mr. Day also testified that he had "filed for unemployment" and that he had "started contacting people" about finding a new job. According to Mr. Day: "the kind of job that I get is very rarely listed . . . , an executive level job. Usually these jobs come from word of mouth." He explained that he had searched online for "entry level positions" in his field, and that the "base salary" for those jobs was "between $100,000.00 and $150,000.00." He said that he was willing to take such a position paying a base salary of $100,000.00, far below his previous base salary of $190,000.00. He testified that, if he were unable to find a job within a short time, he could sustain himself for "eight months to a year" by taking "unemployment plus drawing off whateverassets," such as stock, that he owned. Based on his prior experiences, he opined that it would take an "average of 6 months to a year" for him to "find similar work."¹

Mr. Day also testified that, while he was unemployed, he planned to spend more time with his youngest son, who was fourteen at the time. He elaborated further about how he planned to discuss the job search with his children: "It's not the end of the world[.] . . . I've gotten a job in the past, I will in the future. . . . I use it as a learning experience [for the children] because they're all going to have to do it any way."

Ms. Sterrett testified as a rebuttal witness on the final day of trial. She described Mr. Day's boss and friend, Mr. Von Cameron, as the "number two guy" at Smith Micro. She testified that, before working at Smith Micro, Mr. Day had also worked for Von Cameron at two other companies and for "one of [Von's] friends" at another company. Based on her experiences from the previous ten years of the marriage, she commented that Mr. Day "usually has a job lined up so he gets double pay, . . . [severance] compensation plus his salary" and that his later jobs had always paid a "higher amount of money than the previous job that he left." She further testified that Smith Micro's shareholders report from the fourth quarter of 2012 made no mention of anticipated layoffs.

During closing argument, counsel for Ms. Sterrett asserted that Mr. Day's "odd and weird" testimony regarding his termination did not "pass the smell test." Counsel encouraged the court to "connect the dots," based on the timing of the job loss, Mr. Day's close friendship with his supervisor, and Mr. Day's demeanor while testifying. She asked the court to infer that Mr. Day had "another job or another form of compensation . . . waiting in the wings." Counsel suggested that "income needs to be imputed" to Mr. Day, using his average income from the past several years to estimate his potential earnings.

In response, counsel for Mr. Day pointed to the absence of direct evidence "that Mr. Day and his employer" had "conspire[d] to create a false lay off to avoid paying alimony and child support." Mr. Day's attorney argued that the court should believe Mr. Day's testimony about his layoff because it had "not been impeached." She submitted that, if the court were inclined to impute any income to him, the court should use a figure between $100,000.00 and $150,000.00, on the theory that Mr. Day would be "lucky to get an entry level position" making six figures. Counsel argued that the court should discount Ms. Sterrett's testimony regarding the "fantastic employment packages" that Mr. Day had negotiated during his prior job transitions, because "this...