HOLLAND, Justice:
On December 15, 2011, Stacey L. Thomas (the "Wife") petitioned the Family Court for a divorce from Calvin B. Thomas (the "Husband"), which was granted on February 16, 2012. Thereafter, the Family Court rendered final decisions on several ancillary matters. The Husband raises six issues in this appeal: first, the Family Court erred by not equally dividing the marital property; second, the Family Court erred by determining that the Wife was dependent and therefore entitled to alimony; third, the Family Court erred by applying a 2.5 percent interest rate to calculate the Wife's income from her inheritance, instead of some higher interest rate; fourth, the Family Court erred when it refused to retroactively modify the amount of the interim alimony award; fifth, the Family Court imposed an impermissible punitive fine when it found the Husband in contempt of its interim alimony order; and sixth, the Family Court
We have concluded that the Family Court erroneously applied the alimony statute in making its final award. We have also determined that the other issues raised by the Husband are without merit. Therefore, the judgment of the Family Court is affirmed, in part, and reversed, in part. The matter is remanded to the Family Court for further proceedings in accordance with this opinion.
The Husband is an independent contractor for Schmidt Baking Company, with an income that the Family Court found to be approximately $60,000 per year. The Wife works two part-time jobs at an hourly wage, with a total income of $16,700 per year. On March 8, 2012, the Wife filed a motion for interim alimony. In her motion, the Wife acknowledged that she had inherited $450,000.
The parties agreed that the inheritance was considered to be separate property under 13 Del. C. § 1513(b)(1) and it was not divided as a marital asset. On that basis, the Husband argued, in his answer, that the Wife's motion for interim alimony should be denied because "[the Wife] is not dependent upon respondent for support when she has $500,000 in the bank that could be used for that purpose." On April 30, 2012, the Family Court awarded the Wife interim alimony of $2,018 per month, a calculation that was based, in part, on interest income earned on an inheritance valued at $450,000 at an interest rate of 2.2 percent.
The Husband filed a motion for reargument on May 7, 2012. In the motion, the Husband pointed out that when the Wife filed her Rule 16(c) financial report, she disclosed that she actually had $629,359 in that account, as well as $5,115 in a different account. The Husband requested, among other things, that the Family Court recalculate the interim alimony based on this new amount, because the additional $184,474 would generate more interest income. The Family Court denied the motion on May 30, 2012, noting that "[t]his figure was not available to the Court at the time the Order was issued" and that "the Court has no information regarding the source of these funds."
On August 23, 2012, the Wife filed a rule to show cause petition because the Husband stopped making his interim alimony payments. The Family Court held a hearing on the final distribution of marital assets and the rule to show cause petition on February 7, 2013. Both the Husband and the Wife testified at the hearing. During his testimony, the Husband admitted that he was living with and paying all of the expenses for his girlfriend, who had been out of work. These expenses included the mortgage, utilities, and the cost of five cats.
The Family Court entered its final order on alimony and the division of marital property on May 6, 2013. The Family Court divided the marital property 60/40 in favor of the Wife, because the marital residence was a gift from the Wife's parents and the Husband had a higher income. The Family Court also determined that — despite her sizeable inheritance — the Wife was dependent on the Husband, and ordered the Husband to make alimony payments of $949 per month. The money from the inheritance was in a money market account, so the Family Court used a 2.5 percent interest rate to calculate that the Wife would receive $15,725 in interest income each year from the inheritance, or about $1,310 per month.
The Family Court also held the Husband in contempt of the April 30, 2012 order and ordered the Husband to pay the
The Family Court has broad powers under 13 Del. C. § 1513 to distribute property following a divorce, and under 13 Del. C. § 1512 to determine what, if any, alimony is to be awarded.
In the Family Court, the Wife argued that the marital property should be divided 70/30 in her favor, and the Husband argued that the marital property should be divided 60/40 in his favor. The parties' principal asset was their marital residence, which was worth $221,000. The Wife's father purchased the marital residence in 1990, and initially, the deed was in the Wife's parents' names and the parties' names. The Wife's parents transferred the property to the Wife and the Husband in 1996, and then it was deeded jointly. The parties never had to make mortgage payments on the property. Because of the Wife's parents' contribution to the purchase of this asset and because of the Husband's greater income, the Family Court determined that a fair and equitable division of the marital property, including the marital residence, would be 60/40 in the Wife's favor.
On appeal, the Husband argues that the Family Court abused its discretion and should have divided the marital property equally. The Husband argues that the Wife's parents' contribution of the marital residence was not a reason to depart from a 50/50 split because it was gifted to them both equally or, alternatively, that the
Section 1513 of Title 13 excludes certain property from the definition of marital property that is subject to equitable distribution, but the statute does not exclude property that was jointly acquired by gift.
But 13 Del. C. § 1513(a) provides that "upon request of either party, [the Family Court shall] equitably divide, distribute and assign the marital property between the parties without regard to marital misconduct, in such proportions as the Court deems just."
One of the factors listed in the statute that the Family Court is directed to consider when it is deciding how to equitably distribute property is "[w]hether the property was acquired by gift."
The Husband also argues that the Family Court should not have determined that the Wife was entitled to alimony, because she does not meet the statutory requirement of dependency. The Husband notes that the Wife possesses more than $629,000 in liquid assets from an inheritance. The parties agree that the inheritance itself is not a marital asset that should be equitably distributed, but they disagree about whether the inheritance disqualified the Wife from dependency for alimony purposes. The Husband phrased this issue as "not the amount or duration of alimony Wife may be entitled to but whether she is entitled to any alimony at all, given the fact that she has a bank account that contains $629,000 that is available to her for her own support."
In order to be awarded alimony, the Wife must demonstrate by a preponderance of the evidence
When setting an order for alimony, 13 Del. C. § 1512(c) instructs the Family Court to consider "all relevant factors," including "[t]he financial resources of the party seeking alimony, including the marital or separate property apportioned to him or her, and his or her ability to meet all or part of his or her reasonable needs independently."
Section 1512(c) does not define what "financial resources" are to be considered when determining dependency, beyond broadly stating that it includes "the marital or separate property apportioned to him or her." This includes an inheritance, which is defined as separate property under § 1513(b).
The fact that inheritances were carved out of the marital property subject to equitable division in § 1513(b) demonstrates that the General Assembly treats inheritances differently when it so desires. But the General Assembly did not craft any provisions that would remove certain assets from the "financial resources" that should be included when calculating alimony under § 1512. As other cases have recognized, Delaware courts may consider "both the principal and income of such inheritances under various provisions of § 1512(c) in fixing the amount of alimony" because § 1512(b)(2) and (c)(1) do not draw a distinction between principal and income.
The relationship between the two provisions further illustrates that it is important not to extend the exception for inheritances contained in the provisions regarding distribution of marital property in § 1513 to the alimony calculations in § 1512. "Generally equitable distribution should be considered [before alimony]. It would be difficult to determine the needs of the recipient-spouse or child and the supporting spouse's ability to pay before a tentative equitable distribution award has been determined."
Moreover, when dependency is examined as a relative matter, the Wife appears to have sufficient property to meet her needs independent of alimony from the Husband. The Wife earns an annual income
The statutory rationale for considering the full amount of the inheritance — not merely the interest income —in the dependency calculation is amplified by the record in this case, where the inheritance consists of liquid assets in a money market account. If the inheritance had been set up as a trust, under terms where the Wife was only to receive the interest income during her lifetime, then it would be logical not to include the principal in the dependency calculation, because the Wife would not be able to access it. But here, the Wife has ready access to over $629,000 in cash.
The Family Court improperly excluded any consideration of the principal of the inheritance from the Wife's financial resources. The complete exclusion of those substantial funds from the calculation of the Wife's dependency was contrary to the alimony statute and constituted an error of law. Therefore, this matter must be remanded to the Family Court for further proceedings in accordance with this Court's opinion.
On April 30, 2012, the Family Court ordered the Husband to make interim alimony payments of $2,018 to the Wife. The Husband paid the full amount from May 2012 through July 2012. After that time, the Husband paid $1,000
The Husband argues that he should not be held in contempt because he was not able to pay the full amount of the alimony payments. The Husband notes that the final alimony order determined that he was only able to pay $948 per month, or a total of $8,532. Because the Husband paid more than $8,532 in interim alimony, he argues that he was not in contempt of the order. The Husband also argues that the Family Court should have retroactively modified the interim alimony order to match the final alimony order, so that he would not be in contempt of the order.
This Court has explained that "[t]hree criteria must be met to support a finding of contempt: 1) there must exist a valid. . . order; 2) the [respondent] must have had the ability to abide by the valid . . . order; and, 3) the [respondent] must have, in fact, disobeyed the . . . order. . . . [The petitioner] must show a violation . . . by clear and convincing evidence."
Furthermore, the Husband's argument that the interim order was incorrect because the payments were too high is unavailing. "[T]he court will not listen to an excuse for the contemptuous action based upon an argument that the order in question was imperfect or erroneous."
Rather, if he genuinely could not pay, the Husband should have informed the court of that, made an appropriate motion to modify, and paid as much as he was able. The Husband appears to have met part of this responsibility by moving to modify the interim order, but was unable to get that motion considered by the Family Court before the hearing on the final award itself.
But rather than continue to pay what he could, the Husband failed to pay anything at all for three months. Although a different judge might have concluded otherwise, the Family Court was within its discretion to conclude that this self-help was inconsistent with the Husband's responsibilities to honor a court order. Accordingly, the Family Court properly exercised its discretion when it found that the Husband was in contempt of the interim alimony order, refused to retroactively modify the award, and required the Husband to pay the Wife the overdue payments.
The record reflects that the Family Court ordered the Husband to pay the $10,126 in interim alimony that was owed to the Wife. The Husband argues that this sanction for civil contempt was an impermissible punitive fine. This Court has explained that "whether a contempt is civil or criminal turns on the `character and purpose' of the sanction involved."
The Family Court ordered the Husband to pay the Wife's attorney's fees and costs associated with the April 30, 2012 interim alimony order.
The Family Court has broad discretion in deciding whether to award attorney's fees and costs.
The purpose of § 1515 is "to provide a financially disadvantaged spouse with the financial resources to prosecute or defend a [divorce] action."
In this case, the Family Court ordered the Husband "to pay Wife's counsel fees and court costs associated with Wife's requests for interim alimony and enforcement thereof."
The judgment of the Family Court is affirmed, in part, and reversed, in part. This matter is remanded for further proceedings in accordance with this opinion.