Dolan v. Dolan

99 Mass.App.Ct. 284

165 N.E.3d 662

Lisa M. DOLAN

v.Shaun T. DOLAN.

No. 20-P-76

Appeals Court of Massachusetts.

Argued November 13, 2020.

Decided March 2, 2021.

William Sanford Durland, III, for the husband.

Miriam Goldstein Altman, for the wife.

Present: Henry, Sacks, & Englander, JJ.

SACKS, J.

Shaun T. Dolan (husband), the former spouse of Lisa M. Dolan (wife), appeals from a Probate and Family Court modification judgment that, although it reduced his alimony obligation, delayed the reduction's effective date until five months after the modification judgment issued.¹ The judge's decision to delay the implementation of the husband's reduced alimony obligation was based, in part, on the husband's receipt of capital gains income from the sale of an asset assigned to him in the divorce. The husband contends that the judge's consideration of such income ran afoul of G. L. c. 208, § 53 (c ) (1), enacted as part of the Alimony Reform Act (act), which provides that, "[w]hen issuing an order for alimony, the court shall exclude from its income calculation ... capital gains income and dividend and interest income which derive from assets equitably divided between the parties under [ G. L. c. 208, § 34 ]." We affirm.

Background. We summarize the relevant facts found by the judge, supplementing them with undisputed evidence in the record. See Pierce v. Pierce, 455 Mass. 286, 288, 916 N.E.2d 330 (2009). The parties were married in September 1988. During the marriage, the husband was the primary wage earner and the wife was principally responsible for managing the household and caring for the parties’ two children. The parties enjoyed an "upper class lifestyle" for most of the marriage, funded largely by the husband's income from his business, East Coast Benefit Plans, Inc. (ECBP). At the time of the divorce, the husband was both a coowner and an employee of ECBP, earning annual employee compensation of $481,233.

Pursuant to the amended divorce judgment dated June 6, 2016 (nunc pro tunc to December 22, 2015), the husband was required to pay "alimony to [the w]ife in the amount of $2,885 per week, payable as unallocated support in the amount of $12,501.67 per month." The amended divorce judgment provided that "nothing ... shall preclude either party from filing a complaint for modification upon a material change of circumstances." The marital estate was divided equally, with each party receiving assets worth approximately $3.9 million. Among the assets assigned to the husband was his fifty percent ownership interest in ECBP, which was worth $838,500 at the time of the divorce. For purposes of alimony, the divorce judge attributed an annual income of $31,200 to the wife, consistent with her part-time earning history. In calculating the alimony award, the divorce judge considered the various statutory factors under G. L. c. 208, § 53 (a ), including the marital lifestyle, the wife's need for support, and the husband's ability to pay. The divorce judge also ordered the wife to pay forty percent of the children's college expenses, and the husband to pay the remaining sixty percent, after essentially exhausting the children's educational accounts.

In August 2017, the husband and his business partner sold ECBP to Digital Insurance LLC (OneDigital).² Pursuant to the asset purchase agreement executed with OneDigital, the husband received an initial lump sum payment of $1,973,416.50 in August 2017, a second lump sum payment of $433,360.50 in August 2018, and twenty-four monthly instalments of $4,166.67 between August 2017 and July 2019. The agreement also provided for a potential third lump sum payment in August 2020, depending on the amount of OneDigital's earnings attributable to ECBP. The husband also executed an employment agreement with OneDigital, guaranteeing him annual compensation of $300,000 for the first two years (August 2017 to August 2019), subject to adjustment thereafter at OneDigital's discretion.

In September 2017, the husband filed a complaint for modification seeking a reduction in alimony, largely on the basis of his reduced salary resulting from the sale of ECBP. A two-day modification trial was held before a different judge (modification judge) in December 2018. The modification judgment, dated March 19, 2019, provided in relevant part that, "[c]ommencing August 1, 2019, [the husband] shall pay alimony to [the wife] in the amount of $1,680.00 per week, payable as unallocated support .... The Court intends that the unallocated support payment ... shall continue to be deductible to [the husband] and taxable to [the wife]" for purposes of the parties’ Federal income tax returns. The judgment thus reduced the husband's weekly support obligation by $1,205 per week.

The modification judge found "several material changes of circumstances" since the parties’ divorce, including (1) the sale of ECBP, "resulting in [the husband's] receipt of a large lump sum and time-limited monthly payments from the sale but also resulting in a decrease in his employment income"; and (2) the children's enrollment in college (both children were in high school at the time of the divorce trial). The modification judge found that, with respect to the children's college expenses, the husband was contributing $50,000 per year and the wife was contributing $33,000 per year.

The modification judge found that both parties continued to enjoy an upper class standard of living, although their postdivorce lifestyles reflected a slight decline from the marital lifestyle. The modification judge found that both parties "continue[d] to have significant assets," although they had decreased in value somewhat since the divorce.³ The modification judge affirmed the prior attribution of income to the wife of $31,200 per year ($600 per week), and found her expenses to be $4,444 per week (although they would decrease to $4,100 by August 2019 due to the parties’ eldest child graduating from college). The modification judge determined that the wife "continue[d] to have a need for support" from the husband.

With respect to the husband, the modification judge found that his reported gross weekly income of $15,064.20 -- which included both his OneDigital salary and payments received from the sale of ECBP -- represented a "significant increase" from his income at the time of the divorce. However, the modification judge found that "beginning in August 2019, it is expected that [the husband] will have a single source of income, namely, his employment at OneDigital," resulting in his income "decreas[ing] by more than [thirty-five percent] as compared with the time of the divorce." The modification judge found that "in light of the above, [the husband] has the ability to continue to pay his current alimony obligation through July 2019." The modification judge reduced the husband's alimony obligation to $1,680 per week commencing on August 1, 2019, finding that the modified alimony award achieved a "fair balance of sacrifice" between the parties. Pierce, 455 Mass. at 296, 916 N.E.2d 330. The present appeal by the husband followed.

Discussion. 1. Consideration of income from assets. The husband principally contends that the modification judge's decision to treat his ECBP sale proceeds as income available to continue paying the existing alimony order, and thus to delay the implementation of his reduced alimony obligation until the ECBP instalments concluded in July 2019, was in direct contravention of G. L. c. 208, § 53 (c ) (1). The husband argues that because the ECBP payments derived from an asset assigned to him at the time of the divorce, considering that income in connection with his request for a downward modification of alimony was error.

The wife, however, contends that a downward modification of alimony involves a two-step process under the act: (1) the judge must make a threshold determination that the payor has met his or her burden of demonstrating a material change in circumstances, pursuant to G. L. c. 208, § 49 (e ) ; and (2) the judge must then calculate the modified alimony award pursuant to the parameters set forth in G. L. c. 208, § 53 (b ) - (c ). The wife argues that the husband has improperly conflated § 53 (c ) (1), which excludes certain income from consideration during the second step of the modification process, with the separate and distinct threshold inquiry under § 49 (e ), i.e., whether there has been a material change in circumstances warranting modification.

Because this case "involves a question of statutory interpretation, ... we review [it] de novo." Duff–Kareores v. Kareores, 474 Mass. 528, 533, 52 N.E.3d 115 (2016). "Although we look first to the plain language of the provision at issue to ascertain the intent of the Legislature, we consider also other sections of the statute, and examine the pertinent language in the context of the entire statute." Id., quoting Chin v. Merriot, 470 Mass. 527, 532, 23 N.E.3d 929 (2015). Here, the provisions of the act at issue are § 49 (e ) and § 53 (c ) (1). Section 49 (e ) provides that "general term alimony may be modified in duration or amount upon a material change of circumstances warranting modification."⁴ Section 53 (c ) (1) provides that "[w]hen issuing an order for alimony, the court shall exclude from its income calculation ... capital gains income and dividend and interest income which derive from assets equitably divided between the parties under section 34" (emphasis added).

The husband urges us to construe § 53 (c ) (1) as prohibiting a judge from considering capital gains income derived from an asset received in the divorce when making the threshold material change in circumstances determination under § 49 (e ). Although it is clear that § 53 (c ) (1) excludes such income for purposes of calculating a modified alimony order during the second step, § 49 (e ) contains no language expressly excluding such income from consideration during the first step. Had the Legislature intended the...