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2004-UP-153 - Walters v. Walters

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

David Thomas Walters,        Appellant,

v.

Margaret Smith Walters,        Respondent.


Appeal From Richland County
Walter B. Brown, Jr., Family Court Judge


Unpublished Opinion No. 2004-UP-153
Submitted November 3, 2003 – Filed March 9, 2004


AFFIRMED


Walter B. Todd and J. Derrick Jackson, both of Columbia, for Appellant.

Gene Trotter, of Columbia, for Respondent.

PER CURIAM:  In this domestic action, David Thomas Walters (“Husband”) sued Margaret Smith Walters (“Wife”) for divorce and equitable distribution of marital property.  The family court granted the divorce, divided the marital property, and awarded Wife alimony and attorney’s fees.  Husband appeals, arguing the alimony award was excessive, the classification of certain personal property as non-marital was erroneous, the modification of the property distribution was made sua sponte, and the award of attorney’s fees to Wife was improper.  We affirm.

FACTUAL/PROCEDURAL BACKGROUND

Husband and Wife were married in July 1976.  They have two children, an emancipated son and a daughter in her final year of college. 

In July 2000, Husband filed an action for divorce and equitable distribution of marital property.  The court issued a temporary order, requiring Husband to pay alimony to Wife.  In March 2001, Husband was held in contempt of the court’s order requiring payment of temporary alimony to Wife. 

In March 2002, the family court issued a divorce decree imputing $150,000 annual income to Husband, ordering Husband to pay $3,000 per month permanent periodic alimony and $10,000 of Wife’s attorney’s fees, and dividing the marital estate.  Both Husband and Wife filed timely motions to reconsider pursuant to Rule 59(e), South Carolina Rules of Civil Procedure.  The family court denied Husband’s request for re-hearing on the issues of imputed income, alimony, and attorney’s fees.  However, the family court altered the distribution of property to award Wife a linen press initially granted to Husband. [1]   Husband appeals.      

STANDARD OF REVIEW

“[A]n appellate court reviewing a family court order may find facts in accordance with its own view of the preponderance of the evidence.”  Sharps v. Sharps, 342 S.C. 71, 79, 535 S.E.2d 913, 917 (2000).  However, this broad scope of review does not require an appellate court to disregard the findings of the family court, who saw and heard the witnesses and was in a better position to evaluate credibility and assign comparative weight to the testimony.  Greene v. Greene, 351 S.C. 329, 335, 569 S.E.2d 393, 397 (Ct. App. 2002).  “[W]hen an appellate court chooses to find facts in accordance with its own view of the evidence, the court must state distinctly its findings of fact and the reason for its decision.”  Dearybury v. Dearybury, 351 S.C. 278, 283, 569 S.E.2d 367, 369 (2002).

LAW/ANALYSIS

I.          Alimony

Husband argues the family court’s award to Wife of $3,000 per month permanent periodic alimony was excessive because: 1) the court improperly imputed income to Husband; 2) it was based on Wife’s inflated expenses; 3) it was based on a lifestyle neither party could afford; and 4) it serves as a disincentive for Wife to improve her employment.  We disagree.

“An award of alimony rests within the sound discretion of the family court and will not be disturbed absent an abuse of discretion.”  Allen v. Allen, 347 S.C. 177, 183-84, 554 S.E.2d 421, 424 (Ct. App. 2001).  “An abuse of discretion occurs when the court is controlled by some error of law or where the order, based upon factual findings, is without evidentiary support.”  Kelley v. Kelley, 324 S.C. 481, 485, 477 S.E.2d 727, 729 (Ct. App. 1996). 

Alimony is a substitute for the support which is normally incident to the marital relationship.  Nienow v. Nienow, 268 S.C. 161, 171, 232 S.E.2d 504, 510 (1977).  “Ordinarily, the purpose of alimony is to place the supported spouse, as nearly as practical, in the position of support . . . enjoyed during the marriage.”  Johnson v. Johnson­, 296 S.C. 289, 300, 372 S.E.2d 107, 113 (Ct. App. 1988).  However, alimony should not serve as a disincentive for a spouse to improve his or her employment potential or to dissuade the spouse from providing, to the extent possible, for his or her own support.  Id. at 303, 372 S.E.2d at 115.    

In determining an alimony award, the family court must consider the following factors: (1) duration of the marriage; (2) physical and emotional health of the parties; (3) educational background of the parties; (4) employment history and earning potential of the parties; (5) standard of living established during the marriage; (6) current and reasonably anticipated earnings of the parties; (7) current and reasonably anticipated expenses of the parties; (8) equitable apportionment; (9) custody of children; (10) marital misconduct or fault; (11) tax consequences; (12) prior support obligations; and (13) any other factors the court considers relevant.  S.C. Code Ann. § 20-3-130(C) (Supp. 2002).  No one factor is considered dispositive.  Lide v. Lide, 277 S.C. 155, 157, 283 S.E.2d 832, 833 (1981). 

A.          Imputed Income

Husband argues the family court erred by imputing $150,000 annual income to him.  We disagree.

Courts “will closely scrutinize the facts of any case wherein a    husband . . . voluntarily changes employment so as to lessen his earning capacity and, in turn, his ability to pay alimony . . . .”  Camp v. Camp, 269 S.C. 173, 174, 236 S.E.2d 814, 815 (1977).  “[I]f the obligor spouse has the ability to earn more income than he is in fact earning, the court may impute income according to what he could earn by using his or her best efforts to gain employment equal to his capabilities, and an award of alimony based on such imputation may be a proper exercise of discretion even if it exhausts the obligor spouse’s actual income.” 

Dixon v. Dixon, 334 S.C. 222, 240, 512 S.E.2d 539, 548 (Ct. App. 1999). When considering actual income versus earning capacity, the family court’s responsibility is to closely examine the payor’s good faith and reasonable explanation for the decreased income.  Kelley, 324 S.C. at 489, 477 S.E.2d at 731. 

During the marriage, Husband and Wife were joint owners of a family business, the Walters Company.  Husband is also a fifty-percent owner of Carolina Service Group, but reported he does not receive any income from this business.  However, the family court found Husband’s testimony concerning his income was not credible.

Husband was employed by the Walters Company at the time the divorce action was filed.  For purposes of the temporary hearing, Husband reported his income as $16,045 per month.  Conversely, at trial his financial declaration indicated his income was only $4,418 per month.  Husband testified his income decreased because the Walters Company lost an account that constituted sixty-percent of the company’s income.  In his cross-examination testimony, however, Husband stated the business had not lost any accounts and suffered no adverse conditions other than the divorce and the effects from the attacks on September 11, 2001. 

We conclude the discrepancies in Husband’s testimony regarding his income and the financial standing of the Walters Company, coupled with his inability to provide a reasonable explanation for his reported decrease in income, support the family court’s determination that Husband’s testimony was not credible. [2]   Therefore, we agree with the decision of the family court to disregard Husband’s asserted decrease in income and to impute income to him consistent with his historical earnings.  See S.C. Code Ann. §§ 20-3-130(C)(4) & 20-3-130(C)(6) (Supp. 2002) (requiring family court to consider “the employment history and earning potential of each spouse” and “the current and reasonably anticipated earnings of both spouses” when awarding alimony) (emphasis added).

Reviewing the five-year period immediately prior to separation, [3] the family court found the Walters Company income averaged $183,000, [4] and imputed income to Husband in the amount of $150,000 per year. [5]   As these findings are supported by the record, we conclude the family court did not abuse its discretion by imputing $150,000 annual income to Husband. 

B.          Wife’s Expenses

Husband argues the family court erred by awarding $3,000 per month permanent periodic alimony to Wife based on inflated expenses reported by Wife.  We disagree.

Although Husband claims that Wife’s expenses are inflated, he provides no evidence to support this assertion.  The family court found, and the evidence supports, Wife’s reported monthly needs of approximately $3,100 were reasonable.  Husband’s unsubstantiated claim to the contrary raises a question of credibility, and we defer to the family court on this issue.  See Dorchester County Dep’t of Soc. Servs. v. Miller, 324 S.C. 445, 452, 477 S.E.2d 476, 480 (Ct. App. 1996) (“Because the appellate court lacks the opportunity for direct observation of the witnesses, it should accord great deference to trial court findings where matters of credibility are involved.”). 

C.          Lifestyle Financed by Debt         

Husband argues the family court erred by awarding $3,000 per month permanent periodic alimony to Wife based on the parties’ lifestyle maintained during the marriage because it was beyond their means.  We disagree.

Husband claims the family court was penalizing him for both parties’ excessive lifestyle as evidenced by the family court’s statements “that’s the way he let her live…” and “I made him accept responsibility.”  We disagree with this interpretation.  Reviewing these statements in context, the family court was merely responding to Husband’s assertion that he should not be responsible for paying the debt incurred by the parties during the marriage because he was unaware of Wife’s expenditures.  These statements reflect the family court’s belief that Husband was not only aware of Wife’s expenditures, but he contributed to the exorbitant amount of debt incurred and should be required to pay a portion of it. 

Furthermore, in awarding alimony, the family court expressly considered the relevant factors as set out in South Carolina Code Annotated section 20-3-130(C) (Supp. 2002).  Specifically, the court considered the unpaid debt incurred by the parties in maintaining their high standard of living during the marriage, the fact the parties were married for twenty-five years, and that Wife is forty-seven years old and earns twelve dollars per hour, while Husband has the ability to earn more than $150,000 per year. [6]  

D.          Alimony as a Disincentive

Husband argues the family court erred by awarding $3,000 per month permanent periodic alimony to Wife because it will act as a disincentive for Wife to contribute to her own support.  Husband contends Wife’s failure to seek a better paying job is evidence of her lack of incentive to provide for her own support. 

Wife is employed at Blue Cross-Blue Shield, earning twelve dollars per hour.  Wife obtained this job in January 2000, shortly before the separation, so the parties would have health insurance.  After reviewing Wife’s monthly income and expenses, the family court found Wife’s needs of $3,100 per month reasonable.  The family court also considered the length of the marriage, the age of the parties, and the disparity of income between the parties.  Husband admitted that Wife had been a good wife, mother, and homemaker, and that throughout the marriage, he frequently traveled on business while Wife remained home caring for their two children. 

Because the lifestyle enjoyed by the parties during their marriage far exceeded $3,000 per month, Wife is forced to contribute to her own support if she is to maintain any semblance of it.  As the purpose of alimony is to place the supported spouse in the position of support enjoyed during the marriage, we find Husband’s argument to be without merit.  Johnson­, 296 S.C. at 300, 372 S.E.2d at 113.

We conclude the family court did not abuse its discretion by awarding Wife permanent periodic alimony in the amount of $3,000 per month.  This amount, together with her own income, should be sufficient to allow Wife to attain some semblance of the lifestyle she enjoyed during the marriage.  See Johnson­, 296 S.C. at 300, 372 S.E.2d at 113 (holding “the purpose of alimony is to place the supported spouse, as nearly as practical, in the position of support she enjoyed during the marriage”).                    

II.          Identification of Marital Property

Husband argues the family court erred by classifying certain personal property as nonmarital.  We disagree. 

Marital property is “all real and personal property which has been acquired by the parties during the marriage and which is owned as of the date of filing or commencement of marital litigation.”  S.C. Code Ann. § 20-7-473(1) (Supp. 2002).  However, “property acquired by either party by inheritance, devise, bequest, or gift from a party other than the spouse” is considered nonmarital property.  Id.  Apportionment of marital property is within the discretion of the family court and will not be disturbed on appeal absent an abuse of discretion.  Greene, 351 S.C. at 340, 569 S.E.2d at 399.

“[N]onmarital property may be transmuted into marital property if it (1) becomes so commingled with marital property as to be untraceable;  (2) is titled jointly;  or (3) is utilized by the parties in support of the marriage or in some other manner so as to evidence an intent by the parties to make it marital property.”  Calhoun v. Calhoun, 339 S.C. 96, 106, 529 S.E.2d 14, 20 (2000).  The spouse claiming transmutation must produce objective evidence demonstrating that, during the marriage, the parties themselves regarded the property as common property of the marriage.  Hatfield v. Hatfield, 327 S.C. 360, 368, 489 S.E.2d 212, 217 (Ct. App. 1997).   

The property at issue, including a dinette, sterling silver, and children’s furniture, were gifts to Wife from her relatives.  Husband claims Wife’s testimony regarding the family’s use of the property clearly establishes an intent to treat it as marital property.  Although this property was used in the marital home, Wife testified she did not intend for it to become marital property.  Therefore, the evidence supports the family court’s conclusion that no transmutation occurred.  See Murray v. Murray, 312 S.C. 154, 157, 439 S.E.2d 312, 315 (Ct. App. 1993) (holding mere use of separate property, without additional evidence of intent to treat it as marital property, is not sufficient to establish transmutation).  Thus, the family court did not err by classifying the property as nonmarital.

III.          Modification

Husband argues the family court erred by modifying the divorce decree sua sponte and awarding Wife the linen press when neither party asked for the relief granted.  We disagree.

To preserve an issue raised by an order in response to a post-trial motion, the complainant must make a successive motion to alter or amend the new judgment.  See Pelican Bldg. Ctrs. v. Dutton, 311 S.C. 56, 60, 427 S.E.2d 673, 675 (1993) (holding that “although the appellant learned for the first time upon receiving the order on a post-trial motion that the respondent would be granted certain additional relief, the appellant must move under Rule 59(e), SCRCP, to alter or amend the judgment to preserve the record for appeal”).  “[A] second motion for reconsideration is appropriate only if it challenges something that was altered from the original judgment as a result of the initial motion for reconsideration.  In such a case, a new judgment has replaced the previous judgment and the party aggrieved by the alteration may move for reconsideration.”  Coward Hund Const. Co., v. Ball Corp., 336 S.C. 1, 3, 518 S.E.2d 56, 58 (Ct. App. 1999).

In her motion for reconsideration, Wife generally asked for a reconsideration of the allocation of personal property.  At the hearing, Wife’s counsel specifically requested that Wife be given the linen press in exchange for crediting Husband for alimony or paying him cash.  The family court granted Wife’s motion to modify the allocation of personal property by awarding Wife the linen press.  Although the family court awarded Wife the linen press, it did so in lieu of a refund generated from the return of a cherry secretary to the seller rather than in exchange for alimony credit or cash as requested by Wife.  Husband contends, by providing this unrequested relief, the family court modified the divorce decree sua sponte

However, Husband did not object or make a motion for reconsideration in response to the new allocation of property judgment.  As Husband failed to make a motion for reconsideration from this ruling, this issue is not preserved for appellate review. See Coward Hund Const. Co., 336 S.C. at 3, 518 S.E.2d at 58 (holding a second motion for reconsideration is necessary if it challenges something that was altered from the original judgment as a result of the initial motion for reconsideration). 

IV.          Attorney’s Fees

Husband contends the family court erred by requiring him to pay $10,000 of Wife’s attorney’s fees.  We disagree.

The award of attorney’s fees is left to the discretion of the family court and will not be disturbed on appeal absent an abuse of discretion.  Smith v. Smith, 308 S.C. 492, 496, 419 S.E.2d 232, 234-35 (Ct. App. 1992).  The factors to be considered in awarding reasonable attorney fees and costs include the:  (1) nature, extent, and difficulty of the case;  (2) time necessarily devoted to the case;  (3) professional standing of counsel;  (4) contingency of compensation;  (5) beneficial results obtained;  and (6) customary legal fees for similar services.  Glasscock v. Glasscock, 304 S.C. 158, 161, 403 S.E.2d 313, 315 (1991).

In considering the award of attorney fees, the family court found that Wife’s attorney is a long-standing practitioner in the family court, beneficial results were obtained, the fees were reasonable in relation to the complexity of the case, and there was a substantial disparity of income between the parties.  In light of the factors enumerated in Glasscock, the family court did not abuse its discretion by awarding attorney’s fees.

CONCLUSION

For the foregoing reasons, the decision of the family court is

AFFIRMED.

HEARN, C.J., HOWARD, and KITTREDGE, JJ., concurring.


[1] Husband did not file a motion to reconsider this ruling. 

[2] The family court also noted that Husband claimed only one-half of the Walters Company net income in 2000 ($58,000), reporting the other one-half as income to Wife, due to her ownership interest in the company.  However, no distribution of the income was made to Wife and Husband retained the entire $116,000 income.

[3] Husband argues the family court erred by considering outdated and unreliable income figures for the Walters Company from the years 1995 through 1999.  He argues these figures are unreliable but gives no basis for the assertion other than they were five years old at the time of trial.  However, the family court concluded the recent figures reported by Husband were unreliable and we agree with this conclusion.  Thus, we see no error in the consideration of the income reported by the Walters Company over the five-year period in question.

[4] Husband argues the family court erred in calculating the Walters Company income for this five-year period.  The family court found the average gross income for the years 1995-1999 was $183,000.  Conversely, Husband claims the actual average for this time period was $164,460.  However, the family court only imputed $150,000 to Husband as annual income.  Assuming, without deciding, the family court erred in its calculation, the imputation of $150,000 annual income is still well below Husband’s calculation of the average income for this time period.  Thus, we find no reversible error.

[5] In addition to this income, the family court concluded that Husband owns a fifty percent share of Carolina Service Group, Inc., which had gross sales of $900,000 in the year 2000.

[6] Husband argues the family court failed to consider his expenses in relation to his earning capacity.  However, the family court order is replete with evidence of the court’s consideration of both parties’ income and expenses.  Therefore, we find this argument to be without merit.