Case Title: Tracey v. Gaboriault

Citation: 166 Vt. 269, 691 A.2d 1056

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1997-02-21T00:00:00Z

Document:
Tracey v. Gaboriault  (95-639); 166 Vt. 269; 691 A.2d 1056

[Filed 21-Feb-1997]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                     No. 95-639

Joadi Tracey (Gaboriault)                              Supreme Court

                                                       On Appeal from
     v.                                                Washington Family Court

Thomas Gaboriault, Jr.                                 January Term, 1997

Mary Miles Teachout, J.

       Mary G. Kirkpatrick and Christiana A. Jensen of Lisman & Lisman,
  Burlington, for plaintiff-appellant

       M. Jerome Diamond and Earl F. Fechter of Diamond & Associates, P.C.,
  Montpelier, for defendant-appellee

PRESENT:   Gibson, Dooley, Morse and Johnson, JJ., and Allen, C.J.
           (Ret.), Specially Assigned

       JOHNSON, J.   In this appeal of a final divorce order, plaintiff wife
  challenges the family court's distribution of marital property, its child
  support and maintenance awards, and various aspects of its contempt
  sanction against defendant husband.  Husband cross-appeals, also raising
  issues pertaining to the contempt sanction.  We modify the contempt
  sanction slightly and reverse the child support determination, but
  otherwise affirm the order.

                                   I.

       The parties, both forty-four years old at the time of the final
  divorce hearing in June 1995, had been married for twenty-two years when
  they separated in September 1993.  They have two daughters, the first born
  on May 10, 1979 and the second born on May 31, 1982.  The parties met in
  college and married shortly after husband obtained an associate's degree in
  hotel and restaurant management.  Wife did not finish her degree.

       The year after their marriage, the parties moved to Vermont and
  purchased a restaurant and inn, which they operated for ten years before
  turning the building into a residential care

 

  home.  The parties worked long hours but struggled financially during the
  first ten to fifteen years of their marriage.  Wife worked outside the
  business during three separate time periods when the parties needed extra
  money -- twice as a bookkeeper and once selling cosmetics.  By 1987, the
  parties' business was beginning to prosper.  In 1994, the final full year
  before the divorce, the business's cash flow exceeded $115,000.

       During their marriage, the parties worked as a team.  Wife handled the
  bookkeeping and other financial matters, while husband managed the
  business's day-to-day operation -- overseeing the staff and interacting
  with the residents.  Wife was generally more responsible for the care of
  the children, but husband was also involved in caring for the girls.  After
  their separation, the parties continued to run the business together.

       In July 1994, the parties stipulated to a temporary order regarding
  debt obligations and child support for wife, who was to have custody of the
  children.  A companion agreement, also incorporated into the temporary
  order, made husband responsible for (1) paying himself and his wife
  specified monthly salaries as well as rent for the business's use of the
  commercial real estate and the parties' van, and (2) dividing between the
  parties the business's accounts receivable.  The parties found it more and
  more difficult to work together, however, and in January 1995, husband
  fired his wife and discontinued her salary and certain rent payments.

       A three-and-one-half-day final divorce hearing took place in June
  1995.  The family court issued a sixty-one-page decision in which it (1)
  divided the parties' $650,000 in marital assets equally, with wife keeping
  the marital residence and husband retaining the business while having to
  pay wife one-half the value of the commercial real estate over a ten-year
  period at a 6% interest rate; (2) awarded wife temporary rehabilitative
  maintenance beginning at $20,000 annually for the first two years and
  decreasing to $18,000 in the third year, $16,000 in the fourth year,
  $14,000 in the fifth year, $10,000 in the sixth year, and $5000 in the
  seventh year; (3) ordered husband to pay wife $1029 per month in child
  support; and (4) found husband in contempt and required him to pay wife
  $10,387 for failing to make payments to her in accordance with the
  stipulation incorporated into the July 1994 temporary order.

 

       On appeal, wife claims that the court erred in (1) not requiring
  husband to pay her an additional five and one-half months of van rent
  payments as part of the contempt sanction; (2) failing to value and
  distribute as marital property the equity derived by husband from real
  estate purchased by his father before the parties divorced; (3) failing to
  award her permanent maintenance; and (4) determining husband's gross income
  for purposes of calculating his spousal and child support obligations by
  first deducting payments that he was required to make to wife pursuant to
  the court's distribution of property.  In his cross-appeal, husband argues
  that the court erred in (1) finding that he had the financial ability to
  comply with the July 1994 temporary order, and (2) requiring him to pay
  wife's full salary under that order during a period for which she had
  collected unemployment compensation.

                                  II.

       We first consider the court's contempt sanction.  The court found that
  the July 1994 order, among other things, obligated husband to pay his wife
  $250 per month for the business's use of their van.  The court also found
  that there was no termination date for the arrangement under the order, and
  that in February 1995 husband unilaterally, without good cause, stopped
  making the required payments.  The court then determined that husband owed
  wife $500 for not making the van rent payments in February and March. 
  Although the court explained why other payments would be calculated for a
  limited time period, it failed to explain why the van payments would be
  calculated for only the two months.

       On appeal, wife argues that she was entitled to an additional five and
  one-half months of van payments as part of the contempt sanction to
  compensate her for the lack of payments from April 1995 until the court's
  final order.  Husband counters that wife did not present evidence of his
  failure to make the payments after March 1995, and that the court exercised
  its discretion by not requiring him to make payments beyond April 18, 1995,
  the date he filed his motion to modify the temporary order.

       Neither of husband's arguments holds up.  Wife explicitly requested
  that the court award van rent payments for the entire period that the
  temporary order was in effect, up to the time of

 

  the court's final order.  Further, the evidence plainly demonstrated that
  husband had made no van payments to her after January 1995.  Nor can
  husband prevail on this issue by claiming that the court had the discretion
  to limit the award to the date he filed his motion to modify.  The court
  denied husband's motion before the final hearing was held, and further, in
  its September 1995 decision, denied his motion to reconsider that ruling. 
  The court stated that the appropriate contempt sanction was for husband to
  pay wife the sums due under the temporary order, which was in effect until
  the court's final decision in September 1995.  The court's failure to
  include the additional five and one-half months of van payments appears to
  have been an oversight, and in any case payment was required by the court's
  own findings and conclusions.  Accordingly, we conclude that payment to
  purge the contempt sanction must be increased by $1375.

       We reject husband's cross-appeal argument that the court erred by
  concluding that he had the ability to make the payments at the time they
  were due.  The court found that the business was in good shape during the
  period in which husband failed to make the required payments to his wife,
  that his willful failure to make those payments resulted from his
  misperceived concerns over finances rather than his inability to pay, and
  that in fact he had the ability to make the required payments.  These
  findings are supported by the evidence.

       We also reject husband's second cross-appeal argument that $9185 in
  unpaid salary awarded to wife as part of the contempt sanction should have
  been reduced by $4620, the amount of unemployment compensation wife
  received during the period in question.  We agree with the trial court that
  whether wife is required to repay the unemployment compensation she
  received following the court's award is a matter between her and the
  Department of Employment and Training.  See 21 V.S.A. § 1347 (any person
  who receives remuneration in wages for period in which unemployment
  benefits were received is liable for amount of overpaid benefits).

                                  III.

       We now move to the property distribution.  Wife argues that the court
  erred by failing to value and distribute husband's alleged theft of the
  business's opportunity to purchase adjoining real estate.  We disagree.

 

       In May 1993, four months before they separated, the parties placed a
  bid on a duplex that adjoined their commercial property.  Although the
  duplex was assessed at $87,000 and listed for $69,000, the parties' bid was
  between $25,000 and $30,000.  As part of the compensation for the property,
  the parties offered to name the duplex "The Mary Baird House" and use it
  for elderly housing.  The offer was rejected.  As early as August 1993,
  husband discussed with his father purchasing the house; two months later,
  husband's father purchased the property for $48,000 with the same
  conditions previously offered by the parties.  Having recently separated
  from wife, husband moved into one side of the duplex, paid rent to his
  father, and began to care for an elderly couple that rented the other side
  of the duplex.

       Wife asked the family court to treat a component of the value of the
  Baird House -- the difference between its listing price and sales price
  ($21,000) as an asset of the marriage.  The court rejected this request,
  stating that the sale was an arms-length transaction, and that the parties'
  business acquired no enforceable interest from the sale.  We find no abuse
  of discretion.

       We disagree with wife that this situation is similar to situations in
  other cases where one spouse had placed assets in third persons' names to
  avoid distribution to the other spouse.  See Soutiere v. Soutiere, 163 Vt.
  265, 270-71,