Officially released September 17, 2019.
In Short: There is nothing short about this case. The most interesting issues involved (1) effective date of judgment where an ordering opening the judgment was reversed, and (2) subject matter jurisdiction over after-acquired assets.
The Facts: The parties were married in 1987, raised three children to adulthood were divorced via trial in 2012. The judgment assigned Husband an earning capacity of $2 million per year. The court heard testimony regarding comparable compensation on Wall Street but relied on a valuation model based on the profits of Husband’s companies. Wife was awarded $60,000 of alimony per month. The judgment included certain property transfers to Wife with terms for interest on such property and orders that Wife transfer her interest in certain companies to Husband.
The judgment was thereafter opened and modified based on Wife’s nefarious post-judgment conduct and its effect on Husband’s companies. That opening of the judgment was reversed and the judgment reinstated in a prior appeal. The judgment was reinstated with an effective date of 2015, the date of the reversal.
After some further post-judgment litigation, the trial court heard argument on Husband’s post-judgment motion to modify alimony, filed in 2014 and amended in 2015. The trial court granted Husband’s motion and Wife appealed. While the appeal was pending, the trial court heard additional motions filed by Wife. The trial court denied Wife’s motion for contempt regarding documents necessary to transfer her interest in the companies to Husband (wherein she alleged improper documents were provided to effectuate her transfer) and issued a remedial order regarding signing the documents. The trial court determined that it lacked jurisdiction over Wife’s motion requesting that the court order Husband to endorse two damage insurance checks for post-dissolution damage to the former home. Wife appealed and the appeals were consolidated.
The First Issue on Appeal was whether the trial court abused its discretion in finding that Husband had established a substantial change in circumstances justifying a modification of alimony. Wife argued that the trial court considered only changes in Husband’s earnings from the companies, whereas the judgment was based on Husband’s general earning capacity. The trial court heard testimony that Husband could not obtain another job on Wall Street and found that Husband’s earning capacity had been reduced from $2 million per year to $370,000 per year based on the profits of the companies from which Husband derived income. The Appellate Court held that there was no abuse of discretion. An earning capacity is not an amount a party can theoretically earn nor is it fixed at any one moment in a career. The findings of the trial court as to Husband’s earning capacity were not clearly erroneous.
The Second Issue on Appeal was whether the court abused its discretion in making its alimony modification order retroactive three years and ordering repayment of $1.3 million in alimony. Wife argued that retroactivity should be barred because the motion for alimony was predicated on findings in the decision opening the judgment, which was later reversed. The Appellate Court held that the change in circumstances cited in the alimony modification motion and amendment were consistent and supported by the evidence, and the decision as to retroactivity was not abuse of discretion.
The Third Issue on Appeal is whether the court lacked the legal authority to suspend Husband’s alimony payments as a condition of granting her motion for continuance and that the court erred by refusing to allow her to withdraw her motion for continuance and proceed with trial. The Appellate Court held this claim lacked subject matter jurisdiction on the ground of mootness. The court had taken into account he suspension in calculating the overpayment after ruling on the underlying modification.
The Fourth Issue on Appeal was whether the court erred in reinstating the financial orders of the judgment on the prior remand as of the date of remand rather than the date of the original judgment for purposes of accrual of interest. Interpreting a remand is a matter of law and subject to plenary review. The Appellate Court held that the order on remand to reinstate the original judgment was not an order to retroactively do so. “[I]f a trial court’s judgment is sustained, or the appeal dismissed, the final judgment ordinarily is that of the trial court…. When a judgment is reversed and a different judgment is directed, the effective date is the date of the appellate judgment.” This case was unique in that the decision reversing and remanding was re-imposing a prior judgment. Nevertheless, under the terms of the remand, the effective date was the date of the remand.
The Fifth Issue on Appeal was whether the court erred in ordering Wife to execute certain documents to transfer her interest in the companies, which included language not included in the dissolution decree. The standard of review for determining whether the orders were properly effectuating the judgment, as opposed to improperly modifying it, is plenary. The Appellate Court found the order to sign these particular documents was a permissible effectuation of the Judgment. The trial court properly relied on testimony of Husband’s expert as to what was necessary to include in the transfer documents in order to make the transfer as intended in the judgment.
The Sixth Issue on Appeal was whether the trial court properly determined that it lacked subject matter jurisdiction to order Husband to sign damage insurance checks for damage that occurred to the marital residence (awarded to Wife) post-judgment. Husband had continued to be named on the insurance policy and continued to make payments post-judgment and so was named on the checks. The Appellate Court held that proceeds of an insurance contract received post-judgment were after-acquired assets and the trial court properly determined that it lacked jurisdiction.
