Schabauer v. Schabauer

SABERS, Justice

(dissenting).

[¶ 27.] The trial court awarded wife $2,450 per month in alimony for 12 years. This is an annual total of $29,400. The husband’s annual income exceeds $250,000 and the majority opinion wholly fails to show where the trial court erred. The reason is obvious-the trial court did not err.

[¶ 28.] In fact, the majority opinion does not even claim that annual alimony of $29,400 out of an annual income exceeding $250,000 is excessive. Nor can the majority opinion legitimately fault the trial court for failing to consider the pertinent factors delineated by this Court for determination of alimony awards. See majority opinion ¶¶ 8-14 (detailing the findings of fact and finding, “[t]here is ample evidentiary support in the record for all of the trial court’s findings of fact.”) Instead, the majority opinion faults the trial court for considering tax consequences and the relationship between alimony and child support. However, as the trial court noted, the relationship between alimony and child support is an extremely important factor as a matter of fiscal reality.

[¶ 29.] Our decision in Peterson demonstrates the necessary interplay between child support and alimony in its holding that the alimony recipient must count the alimony as income in determining child support. Peterson v. Peterson, 2000 SD 58, 610 N.W.2d 69. There can be no argument that the level of alimony directly affects the level of child support. The consequences of this interplay are felt by both payor and payee in every case.

[¶ 30.] The majority opinion comes to the conclusion that the trial court should be reversed by stretching the holding and giving undue weight to certain language in Price v. Price 278 N.W.2d 455 (S.D.1979). This over-reliance on Price leads to the holding that essentially, trial courts are barred from considering economic reality in the determination of child support and alimony awards. It is helpful to understand both the factual basis and the actual holding of Price.

[¶ 31.] In Price, the trial court awarded the wife approximately 3% of the marital property and custody of three minor children. Price, 278 N.W.2d at 458. The court gave the marital home and the remainder of the marital property to the husband. Husband’s take home pay was approximately $1,000 per month and he had approximately $4,000 in retirement benefits and another $4,000 in a savings account. Wife had no home, no cash, debts of approximately $800 since marital separation and was earning approximately $50 per week. With this minimal income, she was left with the impossible task of housing, feeding and educating the three children. The trial court gave the husband the option of paying a lump sum property settlement, plus child support, or alimony and child support. To his benefit, the husband chose to pay alimony and *281child support. The court awarded wife $400 per month alimony which would decrease by $100 per month as each child reached majority. We held:

The amount of the alimony award should not be governed by the number of minor children that are in the household, rather the amount should reflect what is required after an analysis of the factors prescribed in Guindon v. Guindon, for a suitable allowance to plaintiff. Inasmuch as the alimony award fluctuated with the child support, we must remand the alimony award to the trial court for further consideration based solely upon a suitable allowance to plaintiff independent of the child support considerations.

Price, 278 N.W.2d at 459 (emphasis supplied). We also remanded the child support award because the court did not primarily consider the needs of the children in setting the child support award. We held:

[Defendant’s parental responsibility to provide for the maintenance of his children on the basis of the Guindon factors should not be interwoven with his marital obligation to plaintiff to provide a suitable allowance for her support.

Id. In short, the trial court in Price abused its discretion by failing to take into consideration any of the applicable factors for determining alimony. The trial court effectively denied wife any alimony by awarding an amount conditioned on the number of children remaining in her home.

[¶ 32.] The present case is distinguishable from Price. First, in Price, there was an undeniably unjust property division, alimony and child support award. Second, Price was reversed and remanded because the purported alimony fluctuated with the child support. Third, at the time Price came before this Court, the statutory child support guidelines had not been created. Fourth, in Price, the trial court ignored economic reality and gave husband an option of how to pay the appallingly small award to the wife. Finally, the trial court in this case made careful findings with regard to every factor this Court has promulgated for alimony determinations.

[¶ 33.] The majority opinion. implies that Price stands for the proposition that the trial court is not permitted to mention child support and alimony in the same breath by bemoaning the “linkage” of the child support and alimony issues. This is a misapprehension of the case, which held that the amount of alimony received by the spouse should not be contingent on the number of children in the home. Here, the trial court’s decision was based on analysis of the applicable alimony factors and consideration of the tax consequences for husband. The court’s specific findings on each factor remove the premise for the majority opinion’s conclusion that the trial court abused its discretion by failing to consider the appropriate factors.

[¶ 34.] The majority opinion also cites Watson-Wojewski v. Wojewski in support of its holding. Watson-Wojewski, 2000 SD 132, 617 N.W.2d 666. In Watson-Wojewski, this Court reversed a child support award in excess of $4,000 per month because the budget submitted by the custodial parent included items that were solely for her benefit, rather than for the benefit of the child. We also noted that the trial court failed to make specific findings regarding the child’s actual needs and standard of living. Neither error is present in this case. Here, the trial court made specific findings regarding alimony and child support and there is no indication that the child support award is being used as a back door to an otherwise taper-*282missible alimony award.2

[¶ 35.] The majority opinion goes on to note that the trial court compounded its purported error by focusing on tax considerations and supports its holding of error by asserting that “tax considerations are not a recognized factor in awarding alimony or child support.” Majority opinion, ¶ 18. The factors courts must consider in determining alimony are vital to equitable alimony awards. However, those factors are of no use when they are used to obstruct solid economic analysis. This is especially so when the trial court’s economic analysis leads to no error. By implication, the majority opinion holds that the trial court is not permitted to consider anything outside the factors we’ve enumerated in the past. This holding defies both logic and reality. Trial courts should not be prevented from undertaking legitimate analysis of the financial ramifications for each party in their alimony awards. Furthermore, it is clear that the trial court did not base its decision solely on the tax consequences. The trial court noted:

The court finds that the use of alimony allows [Terri] to maintain, not improve, her standard of living and include the children therein. It seems the far more equitable approach even without consideration of the marked tax savings it generates.

(emphasis supplied.)

[¶ 36.] The majority opinion does a disservice to the parties and trial court by simply reversing the trial court without any indication that the amount of alimony is either unreasonably high or unreasonably low.3 In doing so, the majority opinion gives no guidance to the trial court other than to make it clear that the court may not 1) consider the tax ramifications of the alimony and child support awards; or 2) mention child support and alimony in the same sentence. Maybe there should be a law that requires an appellate court to set forth a reasonable sum for alimony when reversing.

[¶ 37.] This holding returns the calculation of alimony by trial courts to the middle ages. It rejects any consideration of a practical, intelligent analysis of the real economic situation of the parties and lends support to a “stab in the dark” or “shoot from the hip” philosophy. I reject this approach, or lack of approach, and dissent.

[¶ 38.] There is no showing of error. There is no abuse of discretion. We *283should affirm the trial court and award the wife $2,000 in attorney fees.

. We also noted that "the indirect financial benefit a custodial spouse receives cannot serve as a justification for denial of support to children whose actual needs and standard of living warrant a particular award.” Watson-Wojewski, 2000 SD 132, ¶ 21, 617 N.W.2d at 671 (additional citation omitted). The majority opinion's concern that the trial court based its decision on the standard of living of the children and the wife is not warranted given our consistent statements that the former spouse and the children’s standard of living are primary considerations in alimony and child support awards.

This concern is further invalidated when one considers the reality that a child support award will always indirectly affect the custodial parent’s standard of living and an alimony award will always indirectly affect the children's standard of living. There is nothing inherently wrong with this reality.

. Nor would a holding that the alimony is unreasonably high be warranted by the facts. Based on the award, wife will pay income taxes on her alimony and husband can deduct the entire amount from his income for federal tax purposes. In fact, according to the trial court's calculations, the $29,400 paid by husband in alimony would actually cost him $17,640 as a result of deductions for federal income and Medicare taxes. This annual amount is clearly reasonable when compared with husband’s pre-tax annual income exceeding $250,000.