Domestic Relations – Alimony & Child Support – Estate Depletion – Contempt – Imputation of Income – Attorney’s Fees

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The equities of the parties’ situations (the wife’s smaller estate and her decreased spending compared to the husband’s much larger estate and his freer-spending ways) support the trial court’s requirement that the husband deplete his estate to continue to pay alimony during his period of unemployment; however, the trial court could not order the husband to deplete his estate in order to pay his child support obligations.

We affirm the trial court’s modification of alimony and its modification of child support beginning June 2015. We reverse (1) the modification of child support for the period from 2012 to June 2015, (2) the contempt portion of the order, (3) the award of attorney fees. On remand, the trial court shall (1) correct a mathematical error in alimony arrears, (2) clarify whether it is imputing income to the husband during specific time periods, (3) address whether the husband is still in contempt after changes on remand, and (4) enter a new order on attorney fees setting forth the amounts of fees awarded for each component of the case.

Imputation of Income

When the defendant-husband (Husband) lost his job in 2012, the trial court was initially supportive of his attempts to find an executive or engineering job. At some point, the trial court reversed course on this issue.

In its 2016 order, the trial court found fault with Husband’s unemployment lasting from 2012 to 2015. Yet, the fact that Husband’s job search took a long time does not mean it was in bad faith.

We must remand for several reasons, including a correction of the trial court’s mistaken impression that the husband delayed settling his lawsuit against his former employer for more than a year after several of his claims had been dismissed. In fact, the settlement occurred only 11 days after the dismissal.

Furthermore, while there are findings of fact that might support imputation of income – the husband unilaterally reduced his support payments from $8,000 per month to $300 per month when, in 2013, he started a new relationship and bought a new BMW convertible – the reason for imputation in 2012 is unclear.

On remand, the trial court shall correct the findings regarding the date of settlement and make any additional findings it deems fit based upon the correct date. In addition, the trial court shall clarify whether it imputed income to Husband from January 2012 until July 2015 and make any additional findings it deems fit regarding imputation of income, if the trial court is basing the support obligations upon imputation of income based upon bad faith or suppression of income.

Estate Depletion

Although a supporting spouse will not usually be required to deplete his estate to pay alimony, he may be required to do so if the circumstances make it fair.

In considering Husband’s 10-year alimony obligation, it was fair for the trial court to consider his new job and earnings, which allow him to continue paying alimony with little if any ongoing depletion of his estate. He also has the ability to pay accrued alimony without an unreasonable depletion of his estate.

In comparison, the plaintiff-wife (Wife) has already depleted much of her estate, despite her reduction in her living expenses. Since her income is not sufficient to meet her reasonable needs, she would quickly deplete the remainder of her estate and still could not maintain herself without alimony as ordered.

The trial court correctly considered the comparison of the estates of the parties for purposes of modification of alimony and did not abuse its discretion in modifying alimony effective back to the date of Husband’s motion to modify alimony based upon depletion of his estate.

However, we cannot find any cases allowing an award of child support based solely on depletion of the payor’s estate absent bad faith or suppression of earning capacity. Therefore, the trial court was not authorized to base the child support modification – prior to Husband’s new job in 2015 – solely upon depletion of his estate, and we must remand for additional findings to clarify whether the trial court is actually imputing income for purposes of child support, and if so, the basis for imputing income for each time period.

We note that Husband paid $8,000 in alimony for which he was not given credit in the trial court’s order. On remand, the court should correct this mathematical error.

Contempt

According to G.S. § 5A-21(a), “Failure to comply with an order of a court is a continuing civil contempt as long as: (1) The order remains in force; (2) The purpose of the order may still be served by compliance with the order…”

Husband argues that he cannot be held in contempt of a prior order simultaneously with the modification of that prior order. The parties have not cited any cases directly relevant to this argument.

Although a payor has the right to file a motion to reduce his obligation, as Husband did in 2012, and to have that reduction relate back to the date of filing, he does not have the right to entirely avoid his support obligation until the motion is heard simply by moving for modification. Thus, the trial court did not err by holding Husband in contempt of the prior orders while also setting his arrears owed based upon the modified alimony obligation.

Attorney’s Fees

The trial court awarded Wife a lump sum attorney’s fee of $50,000, without specifying what amounts were related to child support, alimony, or contempt.

G.S. § 50-13.6 provides in part, “Before ordering payment of a fee in a [child] support action, the court must find as a fact that the party ordered to furnish support has refused to provide support which is adequate under the circumstances existing at the time of the institution of the action or proceeding…”

We cannot find any case which specifically defines the phrase “at the time of the institution of the action or proceeding.” But many cases refer to the dates when various types of actions or proceedings were instituted; invariably, the cases use the date when a pleading or motion bringing a claim or seeking a particular type of relief was filed as the date of the “institution of the action or proceeding.”

We simply cannot read the phrase “under the circumstances existing at the time of the institution of the action or proceeding[,]” to refer to a period of time extending from the date of a filing of a pleading to the date of the trial – here, several years. We must consider a particular date of filing.

Since we are now addressing an attorney fee award for modification of child support, the date of the institution of the action for purposes of determining entitlement to attorney fees under § 50- 13.6 is based upon the filing of Husband’s motion to modify child support.

Since Husband was still paying his full child support obligation “at the time of the institution of the action or proceeding,” he did not “refuse” to “provide support which is adequate” at that time. He did stop paying the full child support obligation later, but that is not the question under § 50-13.6.

The trial court therefore erred to the extent it awarded attorney fees for the modification of child support based upon § 50- 13.6, since Husband was still paying his full obligation at the time of institution of both motions to modify child support.

We vacate the attorney’s fee award. On remand, the trial court should make the required findings of fact and conclusions of law for the attorney fee award on each component of the award and determine the appropriate amount of fees for each claim.

Affirmed in part, reversed in part, and remanded.

Hill v. Hill (Lawyers Weekly No. 011-309-18, 50 pp.) (Donna Stroud, J.) Appealed from New Hanover County District Court (Melinda Crouch, J.) Christopher Behm and Linda Sayed for plaintiff; Jonathan McGirt and Deborah Sandlin for defendant. N.C. App.