Opinion ID: 1924796
Heading Depth: 1
Heading Rank: 4

Heading: Custody and Maintenance Award

Text: ¶ 47. The family court has considerable discretion in ruling on maintenance, and the party seeking to overturn a maintenance award must show there is no reasonable basis to support the award to succeed on appeal. Sochin v. Sochin, 2004 VT 85, ¶ 10, 177 Vt. 540, 861 A.2d 1089 (mem.). Thus, this Court's review is limited to determining whether the family court's exercise of discretion was proper and whether a reasonable basis supports the award. See Kasser v. Kasser, 2006 VT 2, ¶ 16, 179 Vt. 259, 895 A.2d 134; Johnson v. Johnson, 155 Vt. 36, 40, 580 A.2d 503, 506 (1990). ¶ 48. Husband argues that the court made two errors in determining his annual income on which the maintenance and child support award was based. Generally, the family court concluded that husband's salary, including wages and bonuses but not including stock options, was $430,000 per year. It also concluded that husband will continue to be awarded stock options that would produce an income of roughly $60,000 annually, [5] creating a total income of $490,000. Husband claims first that the base amount is inconsistent with the evidence and the findings, and second, that the stock option income is speculative and represents double dipping on assets distributed as property. We begin with the first claim of error. ¶ 49. The court concluded that husband's base salary as of the conclusion of the hearing was $300,000 per year. The court further found that since husband's employment with BEA Systems, he has received both bonuses and stock options in addition to his base salary, and the base salary increased each year of his employment. The court found that husband had the potential to receive additional bonuses each year of 30% of base pay, and then from November 2001 to the present, he has had the potential to receive bonuses of up to 60% of his base pay. Although the court calculated that husband's average annual bonus from January 2000 through May 2004 was only $76,492, it also found that [h]is bonuses have shown a trend of significant increases each year. In fact, it found that should husband reach his potential of a bonus at the rate of sixty percent of his current base pay, this would amount to $180,000 in additional wages. Considering husband's increasing base salary and the increasing amount of bonuses, the court concluded that husband's annual income, excluding that from stock options, is $430,000. ¶ 50. The family court's finding of husband's annual salary at $430,000 is fully supported by the record. The court was not required to use either the average of prior bonus awards or the current base salary to determine husband's future income given the history of increases in both amounts. We find that the court's income determination, apart from the stock option income, was within its discretion. See Kohut v. Kohut, 164 Vt. 40, 44, 663 A.2d 942, 945 (1995) (court could determine obligor's future income in part on his begining a new job that would produce a better income). ¶ 51. We have already discussed the court's determination that husband would earn $60,000 annually on the sale of stock options, as well as our conclusion that this determination was low. We address here only husband's arguments that the court double dipped by counting the options as both assets and income, and that the court prematurely counted the income from future stock option awards. ¶ 52. As we said above, the court appeared to derive the $60,000 additional annual income from future stock option awards. Since the stock options had not yet been provided to husband, and were not part of the property distribution, his double dipping argument does not apply. ¶ 53. We add, however, that husband's double dipping argument is erroneous. In making it, he relies on a case that defined capital gains for child support purposes to ensure that obligors in similar circumstances were treated equally. See Mabee v. Mabee, 159 Vt. 282, 286, 617 A.2d 162, 164 (1992) (holding that capital gain resulting from appreciation in value of property received in asset distribution could not also be considered income for child support obligation). The situation is totally different here. Husband was awarded stock options worth over $1,400,000, many of which were vested, and it is reasonable to expect that these assets will earn income. This income must be considered in determining an appropriate maintenance award. See 15 V.S.A. § 752(b)(6). Indeed, the family court considered the availability of income from the assets awarded to wife in determining her need for maintenance. ¶ 54. Husband's other argument is that future awards of stock options cannot be considered income because, as the court found, there will be at least a year delay in husband's ability to exercise these options. This argument calls for a fine tuning of maintenance awards that is unrealistic and would keep the parties in court forever. As the court found, stock options were a normal part of husband's compensation package, and he received them on a regular basis. At the conclusion of the divorce proceeding, he was holding options worth over $1,400,000. It is reasonable to assume that he would generate at least $60,000 in income from these options in the short term while the stream of income from future awards was reestablished. See Hiett v. Hiett, 86 Ark.App. 31, 158 S.W.3d 720, 724 (2004) (stock options anticipated in the future represent income for purposes of setting an alimony level).