Hassey v. Hassey

85 Mass.App.Ct. 518

11 N.E.3d 661

Maryellen S. HASSEY

v.Edward P. HASSEY.

No. 13–P–864.

Appeals Court of Massachusetts, Essex.

Argued March 5, 2014.

Decided June 25, 2014.

John A. Macoul for Edward P. Hassey.

Joseph L. Doherty, Jr., for Maryellen S. Hassey.

Present: KAFKER, FECTEAU, & AGNES, JJ.

AGNES, J.

The Alimony Reform Act of 2011(Act) ¹ is “a comprehensive effort to address numerous issues in alimony law,” including the elimination of “any historical connection to gender status or outdated gender stereotypes,” clarification of various types of alimony, and recognition of durational limits on alimony awards. Kindregan, Reforming Alimony: Massachusetts Reconsiders Postdivorce Spousal Support, 46 Suffolk U. L. Rev. 13, 16, 18 (2013). In this case, we review the application of key provisions of the Act, which has received only limited appellate consideration.

The husband appeals from an amended judgment of divorce nisi entered August 30, 2012, by the Probate and Family Court, excluding the wife's interest in certain real property from the marital estate, and establishing a “self-modifying” alimony order. The husband contends that the alimony order does not comport with the guidelines of the Act, and that the exclusion of the wife's property from the divisible estate was plainly wrong. For the reasons that follow, we conclude it is necessary to vacate the amended judgment in part and remand for further proceedings.

Background. a. Evidence. The parties married on September 18, 1988, and lived together until December 28, 2009. Two sons, both in college at the time of trial, were born of the over twenty-year marriage. In 1982, the husband graduated from dental school and joined his father's practice, becoming an equal partner pursuant to a “buy-in” agreement prior to the marriage. The wife was a homemaker and primary caretaker of the children, while the husband was the sole wage earner. Although she earned a bachelor's degree and was briefly employed outside the home, the wife was laid off in early 1989 and has not been otherwise employed since before her first son was born. During the marriage, the family lived a “comfortable” lifestyle, with the husband working full time as a dentist and the wife tending to the home and children and volunteering to support their various activities, including sports, Cub Scouts, and private-school events.

In 1996, the wife acquired by inheritance a one-third share in Pond View Associates, a real estate partnership with her two siblings which holds title to a property in Chatham on Cape Cod.² The wife's parents had purchased the Chatham property and on it built their retirement home, now maintained by the wife and her siblings. When not rented out to vacationers, the three siblings and their families have used the Chatham property as a getaway. During the marriage, the parties and their children spent at least two weeks there each summer, where they maintained various memberships in the community.³

In 1997, the husband's father retired and gifted to the husband his one-half interest in the dental practice,⁴ simultaneously forgiving the $125,000 balance outstanding from their buy-in agreement. Another dentist subsequently joined the practice as a partner and entered into a similar buy-in agreement, with the husband receiving from it an additional $90,000 annually for five years ending in 2010. The partners began renovating and expanding the practice in 2008, prior to the initiation of divorce proceedings by the wife in October, 2009. At the time of trial in November, 2011, the husband reported gross annual income of $359,858 for the 2010 tax year,⁵ along with $22,000 in voluntary contributions to his 401(k) retirement account.⁶

b. Judge's findings of fact. The judge issued his findings and memorandum of decision on May 15, 2012.⁷ He found that the husband's income has been relatively stable since 2007, but that due to the additional $90,000 annual income no longer being owed by his partner after 2010, “[i]t would be inequitable to calculate an alimony obligation using the average income over the buy-in period unless the purchase monies were excluded.” The judge credited the husband's testimony that the debt he incurred while renovating and relocating the dental practice “ha[d] not resulted in any further net income to date[,] but as the debt is paid down, the investment should prove profitable.” The judge explained that the “self-modifying” alimony order ⁸ would allow the wife to “continue to realize some benefits for the investment in the [h]usband's practice made during the years of the marriage,” and to “share in any increased profitability” of the practice.

The judge also found that the wife's interest in the Chatham property “was never relied upon as a financial resource by the parties during the marriage,” and that its “impact on the taxes owed was negligible.” Thus, the interest in the Chatham property was assigned wholly to the wife and did not form part of the divisible marital estate.

c. Judge's rulings. The trial judge awarded the husband the stipulated value of his interest in the dental practice, which was $476,000. The wife was awarded her interest in Pond View Associates. The judge ordered the sale of the marital home, with the first $238,000 in net proceeds going to the wife (representing a fifty percent share of the husband's interest in the dental practice), and the remainder divided evenly between the spouses.

The husband was ordered to pay base alimony in the amount of $8,500 per month, and “additional alimony equal to thirty (30%) percent of his gross income in excess of $250,000.00, from all sources ... payable quarterly.” To facilitate this “self-modifying” alimony order, the husband was directed to provide quarterly documentation of his income to the wife. Under the terms of the order, alimony is to continue until the first of four events: the wife's remarriage or cohabitation; the wife's death; the husband's death; or the “[h]usband's retirement as defined in the Act ..., as it may be amended.”

The husband's motion to stay the judgment was denied, and this appeal followed entry of the amended judgment.

d. Alimony Reform Act of 2011.⁹ The Act modified G.L. c. 208 by essentially removing the substance of the alimony determination from G.L. c. 208, § 34, and placing it under new alimony provisions, G.L. c. 208, §§ 48 to 55. Section 34, as before the Act, continues to govern property division, by providing that a court with personal jurisdiction over the parties may, upon divorce or in an action thereafter, assign to either husband or wife “all or any part of the estate of the other, including but not limited to” enumerated “benefits, rights and funds accrued during the marriage.” G.L. c. 208, § 34, as amended by St. 1990, c. 467. The Act also retains the feature of the prior law in which there are specific, mandatory factors that the judge must consider in making such a property division, as well as specific, discretionary factors that the judge may consider.¹⁰ The Act altered neither the fundamental purpose nor the basic definition of alimony: “the payment of support from a spouse, who has the ability to pay, to a spouse in need of support.” G.L. c. 208, § 48.

Three aspects of the Act are at issue in the instant case. First is the statutory formula providing that “the amount of alimony should generally not exceed the recipient's need or 30 to 35 per cent of the difference between the parties' gross incomes established at the time of the order being issued,” G.L. c. 208, § 53( b ), and the grounds for deviation from that formula, G.L. c. 208, § 53( e ). Second is the amendment to G.L. c. 208, § 34, governing property division, deeming “the amount and duration of alimony awarded under [§§ 48 to 55]” to be an additional mandatory factor now relevant to the equitable property distribution. Third is the interrelationship between the Act's presumptive time limits for alimony orders as determined by the length of the marriage, G.L. c. 208, § 49( b ), its provision that “general term alimony” ¹¹ must “terminate upon the payor attaining the full retirement age,” G.L. c. 208, § 49( f ), and the grounds for deviation from these presumptions, G.L. c. 208, § 53.

Discussion. Under prior law, St. 1974, c. 565, which was in effect (with occasional amendments) from October 19, 1974, to March 1, 2012, an award of alimony had to be based on the so-called mandatory and discretionary factors set forth in G.L. c. 208, § 34, although there was recognition that judges had “a large measure of discretion.” Rice v. Rice, 372 Mass. 398, 400, 361 N.E.2d 1305 (1977). See Bianco v. Bianco, 371 Mass. 420, 422–423, 358 N.E.2d 243 (1976) (confirming that under 1974 law, judges had broad discretion provided that they considered all statutory factors and made required findings of fact). Alimony and property division were closely connected, as evidenced by the fact that they were “governed by the same controlling factors” enumerated in § 34. Kindregan, Reforming Alimony: Massachusetts Reconsiders Postdivorce Spousal Support, 46 Suffolk U. L. Rev. 13, 23 (2013). “The new Alimony Reform Act of 2011 separates these factors into different sections of [c. 208], but keeps a connection by amending [§ 34] to provide that in addition to other factors, the court is to consider the ‘amount and duration of alimony’ when dividing property.” Ibid. See note 10, supra.

In reviewing a property division under G.L. c. 208, § 34, or an alimony award under G.L. c. 208, §§ 48–55,¹² an appellate court conducts a two-step analysis. Adams v. Adams, 459 Mass. 361, 371, 945 N.E.2d 844 (2011). First, we examine the trial judge's findings to determine whether all relevant factors were considered (and whether irrelevant factors were disregarded). See Rice v. Rice, supra at 401–402, 361 N.E.2d 1305; Bowring v. Reid, 399 Mass. 265, 267, 503 N.E.2d 966 (1987). Next, we decide whether the rationale...