Supreme Court At-a-Glance Contributor Scott A. Wanner, Obtained his J.D. from the University of Illinois. Practices in Portsmouth, New Hampshire.

No. 2020-0080

July 14, 2021

Affirmed in part, vacated in part, and remanded.

 

  • Whether the trial court erred in ordering automatic modifications of child support based upon future tax returns.
  • Whether the trial court erred by adjusting the property distribution to account for one party’s use of marital funds to pay legal fees, but not the other party’s similar expenditures of marital funds on attorney fees.
  • Whether the trial court erred by ordering a “slightly uneven” property distribution where Husband had acquired property from his family through inheritance and relied upon it for his livelihood.

 

Husband and wife cross appealed their final divorce decree issued by the Circuit Court.  Under review for an unsustainable exercise of discretion or an error of law, the Supreme Court affirmed much of the lower court’s rulings for property division and support, but vacated the court’s orders related to attorney fees and remanded the alimony awarded to Wife due to ambiguities in the record.

Husband challenged automatic increases to his child support obligations in the final decree that the trial court based upon his future tax returns.  The Court, upon reviewing precedent, found “escalation clauses” not per se invalid.  Because the trial court based the escalation upon future changes to parties’ income, the Court found it consistent with the statutory scheme set forth in RSA 458-C:4, acknowledging a rebuttable presumption in favor of future computations that follow the child support guidelines.  As such, they are not considered a modification of an existing order but rather the terms of the final order itself.  Husband also argued the “escalation clause” infringed upon his opportunities to challenge future automatic modifications, to raise special circumstances or to have decreases in his income also impact his obligations.  The Court denied Husband’s challenge, observing that Husband may yet avail himself of the modification process by moving the court in the future when substantial changes in circumstances warrant adjustments from the “escalation clause.”

Husband also challenged the final decree’s property division adjustment to the extent it was based upon his use of marital funds to pay attorney fees related to the divorce.  The record reflected that Wife similarly used marital funds to pay her attorney fees, leading the Court to vacate that aspect of the final decree.

Finally, Husband challenged the trial court’s temporary decree, issued after Husband filed his initial appeal, that ordered him to share property taxes on the marital home awarded to Wife.  Husband alleged the substantial change to the terms of the final decree was required by law to be stayed pending his appeal.  As a general rule, timely appealing a trial court’s final order stays it from taking effect.  However, as an order involving on-going expenses under Fam. Div. R. 2.29(B), the Court ruled that it constituted a “status quo preservation ruling” enforced through temporary decree rather than a modification of the final decree.

Wife cross-appealed that the trial court committed reversible error by: (1) under counting Husband’s gross income for purposes of child support; (2) dividing the marital estate unequally in favor of Husband; and, (3) awarding final alimony with an amount and duration inconsistent with its own findings. However, the Court found no inconsistency based upon the entirety of the record before the trial court.  While Husband’s testimony regarding his income was found not credible, the trial court’s final decree accounted for discrepancies between Husband’s asserted and actual income by: (1) adjusted Husband’s income to reflect higher rents collected than reported on his financial affidavit; (2) treated a $40,000 purported loan as actual income; and, (3) ordered Husband to pay an arrearage based upon its recalculations.  Further, the “escalation clause” ordered by the trial court protected Wife from similar discrepancies going forward.

Wife’s challenge to the “slightly uneven” property distribution award of 55% to Husband and 45% to Wife was also unsuccessful.  The Court observed that the trial court found the undisputed record established that the bulk of assets were inherited by Husband from his family and also that the assets were the basis of his livelihood.  The Court gave deference to the broad discretion of the trial court when applying the enumerated factors of RSA 458:16 to depart from the presumption of equal division when appropriate and equitable.

Finally, addressing Wife’s cross claims regarding the amount and duration of her alimony award, the Court vacated and remanded it for reconsideration due to ambiguities in the evidentiary record and findings of the trial court before it.

 

Orr & Reno (Jeremy D. Eggleton and Judith A. Fairclough on the brief, and Mr. Eggleton orally), for the petitioner. Sheehan Law Office (Patrick J. Sheehan on the brief and orally), for the respondent.