Court Opinion

ID: 9962996
Source: CourtListenerOpinion
Date Created: 2024-04-24 14:05:40.663777+00
Date Added: 2024-06-11T08:20:44.808266
License: Public Domain

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23-P-55                                               Appeals Court

          MICHAEL A. TRETHEWEY    vs.   ROSALIA F. TRETHEWEY.

                              No. 23-P-55.

          Middlesex.      November 9, 2023. - April 24, 2024.

             Present:    Ditkoff, Englander, & Walsh, JJ.

Divorce and Separation, Judgment, Alimony, Attorney's fees,
     Division of property. Words, "Double dipping."

     Complaint for divorce filed in the Middlesex Division of
the Probate and Family Court Department on April 1, 2015.

     The case was heard by Mary Rudolph Black, J.

      Martin F. Kane (Robert E. Curtis, Jr. also present) for the
husband.
      David E. Cherny (Thomas D. Ritter also present) for the
wife.

     ENGLANDER, J.      The husband in this divorce case challenges

a judgment of divorce nisi issued by a judge of the Probate and

Family Court, principally on the ground that it reflects

impermissible "double dipping," or double counting, of one of

the spouse's assets –- treating the entire asset both as the
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husband's income for alimony purposes, and as a divisible asset

of the marital estate.   The husband contends that this double

counting produced significant inequity and that the divorce

judgment accordingly must be vacated.

    At the time the husband filed for divorce in 2015, he had

worked as a financial advisor for roughly twenty years.     During

trial, in mid-2018, the husband changed jobs and began working

for Wells Fargo Advisors (Wells Fargo).   When the husband began

working for Wells Fargo, he received a $5 million "Transitional

Bonus" as part of his compensation package.   The actual

structure of the $5 million was not a bonus, however; rather, it

reflected the advance payment of a portion of the husband's

anticipated income from Wells Fargo, which he could earn in the

amount of $51,550.04 per month over the ensuing nine-plus years

(112 months).   The husband simultaneously executed a $5 million

promissory note with Wells Fargo –- a debt that would be

incrementally forgiven at the same rate of $51,550.04 per month,

as long as the husband met certain business benchmarks.

    The alleged double dipping arises from the judge's

treatment of the $5 million Transitional Bonus.   On the one

hand, in calculating the husband's income for purposes of

alimony, the judge counted the approximately $51,000 per month

of loan forgiveness (over $600,000 annually) as income, as if

the husband were receiving a payment of that money on a monthly
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basis.    On the other hand, in determining the value of the

parties' marital assets, the judge also counted what remained of

the $5 million advance payment (approximately $3.2 million as of

the close of trial in July 2019), and divided that $3.2 million

account with the parties' other assets, awarding approximately

fifty-three percent of the total assets to the wife.    Also

relevant, the judge in essence separated this asset from its

associated liability under the promissory note and assigned the

entire liability under the note (well over $4 million as of the

close of trial) to the husband.

     On the record before us, it was error for the judge to

treat the $5 million advance in this fashion –- double dipping

or arguably even triple dipping -- thereby disadvantaging the

husband with respect to the Transitional Bonus threefold.

Because the resulting award was neither consistent with the

judge's stated rationale -- which did not address the double dip

-- nor equitable, we amend the divorce judgment to eliminate the

double dipping problem.1

     Background.   We summarize the relevant facts as found by

the judge, supplementing them with undisputed evidence in the

record.    See Pierce v. Pierce, 455 Mass. 286, 288 (2009).    The

     1 As discussed below, we also vacate the judge's award of
attorney's fees to the wife, because the husband did not have a
meaningful opportunity to respond to the wife's motion. We
otherwise leave the divorce judgment undisturbed.
                                                                   4

parties were married for over twenty years and had three

children together during the marriage.    As of the close of

trial, the two eldest children were emancipated and the youngest

child remained dependent on the parties for support.    In April

2015, the husband filed a complaint for divorce.    After

extensive pretrial proceedings and a nineteen-day trial, which

took place between November 2017 and July 2019, the judge issued

the divorce judgment on May 26, 2021, accompanied by eighty-

seven pages of findings of fact and conclusions of law.

     The husband was employed as a financial advisor throughout

the trial.   Pursuant to the June 2018 employment contract that

the husband signed with Wells Fargo, his compensation package

included the $5 million Transitional Bonus -- which, as

described above, would be earned in the amount of $51,550.04

over the ensuing 112 months, contingent on the husband meeting

an annual revenue threshold.2   The husband, in turn, executed a

$5 million promissory note to Wells Fargo "payable in 112 equal

monthly installments."   Wells Fargo wired the $5 million to the

husband in July 2018.    The husband's receipt of the $5 million

was tied to the debt created through the promissory note such

     2 The $51,550.04 per month for 112 months included interest
the husband owed on the $5 million loan. As indicated, this
arrangement is not a bonus in the traditional sense of
additional compensation that had been fully earned. See Jones
v. Jones, 101 Mass. App. Ct. 673, 681-682 (2022) (discussing
various types of "bonuses").
                                                                     5

that, as the husband earned each installment of approximately

$51,000, his debt under the note was reduced by that same

amount.   This arrangement allowed the husband immediate access

to $5 million that he would earn over the next nine years at

Wells Fargo, amounting to additional annual income of

approximately $600,000.    Importantly, if the husband's

employment with Wells Fargo ended before the note was satisfied,

Wells Fargo was entitled to deem the outstanding balance on the

note immediately due.

    The judge expressly included the monthly loan forgiveness

of the Transitional Bonus when calculating the husband's income

for alimony purposes.     As of the final day of trial, the judge

found that the husband's total gross annual income was

$1,282,684.   Roughly half of this amount was traditional income,

but the Transitional Bonus income represented approximately

$600,000 of the $1,282,684.    The divorce judgment provided the

wife with alimony in the amount of $35,499 per month or $425,988

annually, which represented approximately thirty-three percent

of the husband's total gross income, inclusive of the income

from the Transitional Bonus.

    In dividing the marital estate, the judge stated that it

was her intention that the wife "receiv[e] a slightly larger

portion of the marital estate than [the] [h]usband."     The judge

itemized each of the parties' assets and their respective values
                                                                    6

as of the last day of trial, and found that the parties'

combined assets totaled $8,421,857.82.   This total included the

balance of the husband's Wells Fargo brokerage checking account,

which held what remained of his $5 million Transitional Bonus.

As of the last day of trial, the balance of this account was

$3,223,415.   The judge divided this $8.4 million in combined

assets between the parties; all told, the husband was allocated

forty-seven percent, and the wife fifty-three percent, of the

$8.4 million.3,4

     In summary, the judge treated the Transitional Bonus both

as a divisible asset and as income for purposes of calculating

alimony.   The judge also allocated the liability associated with

the promissory note to the husband in its entirety, even though

     3 As is common, the judge catalogued and assigned the
parties' assets to one spouse or the other. Then, to reach the
desired fifty-three/forty-seven split, the judge ordered the
husband to pay the wife an additional sum of $675,000, payable
in three installments of $225,000. We note an apparent
typographical error in the divorce judgment, which states that
"[the] [h]usband shall pay to [the] [w]ife the sum of $775,000."
The judgment elsewhere repeatedly affirms that each of the three
installments would be in the amount of $225,000, totaling
$675,000.

     4 The husband argues that the relative proportions of the
estate allocated to each party change dramatically when the
parties' liabilities are taken into account. The judge ordered
that "each party shall be solely responsible" for their own
liabilities. As of the final day of trial, the husband still
owed well over $4 million under the promissory note (in addition
to other liabilities) and the wife carried total liabilities of
$488,799.70.
                                                                    7

this liability arose from the $5 million advance, and even

though the wife received a portion of that advance (fifty-three

percent of the $3.2 million) through the asset division.

    Discussion.   1.    Double dipping.   We first address the

husband's argument that the financial provisions of the judgment

must be reversed or vacated due to the double dipping as to his

Transitional Bonus.    "In reviewing a property division under

G. L. c. 208, § 34, or an alimony award under G. L. c. 208,

§§ 48-55, an appellate court conducts a two-step analysis."

Hassey v. Hassey, 85 Mass. App. Ct. 518, 523 (2014).     We first

consider the trial judge's findings "to determine whether all

relevant factors were considered."    Id. at 524.   Second, "we

decide whether the rationale underlying the judge's conclusions

is apparent and whether these 'flow rationally from the findings

and rulings.'"   Id., quoting Williams v. Massa, 431 Mass. 619,

631 (2000).   Here, we are concerned with the second step in the

§ 34 analysis, because the judge's rationale does not discuss

the double dip, and thus does not attempt to explain or

rationalize how it could be equitable.

    The term "double dipping" describes "the seeming injustice

that occurs when property is awarded to one spouse in an

equitable distribution of marital assets and is then also

considered as a source of income for purposes of imposing

support obligations."   Sampson v. Sampson, 62 Mass. App. Ct.
                                                                      8

366, 374 (2004), quoting Champion v. Champion, 54 Mass. App. Ct.

215, 219 (2002).    A paradigm of double dipping would include

when an asset –- for example, one spouse's retirement account --

is divided as part of the marital estate, but all of the income

from the retirement account is still considered income of the

supporting spouse for alimony purposes.     But although our case

law eschews double dipping, the cases also reveal that the

principle is not easily applied.     See Sampson, supra at 377

(vacating judgment based on what "appear[ed]" to be "double

counting").    We have said that what constitutes double dipping

"is not easily defined, and whether it is improper in a

particular case must be carefully assessed."     Wasson v. Wasson,

81 Mass. App. Ct. 574, 579 (2012).

    Part of the difficulty in identifying and defining double

dipping arises from the wide range of financial structures that

can be both an asset and a source of future income for alimony

purposes.     Sometimes, after an asset is separated by division in

a divorce judgment, the portion of the asset remaining with the

supporting spouse can still be a source of income for alimony

purposes.   The Supreme Judicial Court recognized this point in

Dalessio v. Dalessio, 409 Mass. 821, 828 (1991), S.C., 413 Mass.

1007 (1992):

    "So long as it is possible . . . to identify separate
    portions of a given asset of a divorcing spouse as the
    separate bases of the property assignment and any
                                                                    9

     alimony or support obligations (thus avoiding
     redistribution by an alimony or support order of
     specific assets that already have been equitably
     assigned), there is nothing improper about including a
     particular asset within a spouse's assignable estate,
     assigning part of it, and then counting its remainder
     for alimony . . . purposes."

     In Dalessio, the husband asserted an alleged double dip

where the trial judge assigned a portion of the husband's

interests in the proceeds of a personal injury lawsuit to the

wife and then based the husband's child support order on a

portion of the proceeds that remained with the husband.

Dalessio, 409 Mass. at 827-828.   The court concluded that

because the proceeds of the lawsuit had already been divided and

the child support order was based only on a portion of the

proceeds that had been assigned to the husband, there was no

impermissible double dipping.   Id. at 828.   See Adams v. Adams,

459 Mass. 361, 394 (2011), S.C., 466 Mass. 1015 (2013) (making

same point where division of assets involved one spouse's

partnership interest in financial services firm).5

     5 Compare Sampson, 62 Mass. App. Ct. at 375-377 (possible
inequitable double dipping where wife's business interest was
included in marital estate and her business income, which was
used to calculate support, was not excluded from business
valuation for property division purposes), with Champion, 54
Mass. App. Ct. at 221-222 (no inequitable double dipping where
support order was based on husband's projected future earnings
from business, which earnings were not considered in
establishing business's value for property division purposes).
                                                                    10

     The facts of the instant case, however, are materially

different from Dalessio and Adams.     Here, the judge considered

the portion of the $5 million Transitional Bonus earned each

month as income for alimony purposes.    This determination was

appropriate as regards alimony –- the $5 million was being

incrementally earned in the amount of approximately $600,000 per

year.    But the judge erred in also treating what remained of the

unearned portion of the $5 million as an asset of the marital

estate, that was then divided with the wife.    The wife received

fifty-three percent of the $3.2 million that remained in the

husband's Wells Fargo account (approximately $1.7 million).6

That money, however, had not yet been earned by the husband.

Furthermore, because the money had not yet been earned, it was

also a liability of the marital estate, and the judge left that

liability entirely with the husband.     In essence, the judge

treated the money in the Wells Fargo account both as an asset

that had already been earned (for purposes of dividing the

marital estate) and as a nonasset (i.e., income) that would be

earned at approximately $51,000 per month (for alimony

purposes).

     6 The wife argues that the husband was assigned the entire
remaining $3.2 million advance because he retained his Wells
Fargo account in the asset division, but that is misdirection.
The $3.2 million account balance was included in the judge's
computation of the marital estate assets, and the marital estate
was divided fifty-three percent to the wife.
                                                                    11

    Accordingly, while we are mindful that a judge "has broad

discretion when awarding alimony and dividing marital assets,"

Heins v. Ledis, 422 Mass. 477, 480-481 (1996), here the judge's

award of the $1.7 million to the wife from the Wells Fargo

account amounts to an error of law.    Indeed, this is not just a

case where the wife was awarded a portion of a marital asset,

where the income generated by the wife's portion was also

treated as the husband's income for alimony purposes.     As

discussed above, such would be classic double dipping, which is

disfavored and unlikely to be valid even if the judge provides a

rationale.   See Adams, 459 Mass. at 394.    In this case, however,

the inequity ran even deeper; the money transferred to the wife

should not have been regarded as part of a divisible marital

asset free from its liability, as the money was in fact

anticipated but as yet unearned income, not an asset of the

estate free and clear of an equal liability owed.    See Openshaw

v. Openshaw, 493 Mass. 599, 614-615 (2024) (trial judge erred in

assigning majority of marital debt to one spouse, where

resulting "net division" of marital estate was inconsistent with

judge's intended asset division).     The result was, in essence,

the same problem identified in Dalessio -- redistribution, by

the assignment of assets, of money already allocated to support.

    Finally, we note that upon considering the equities in this

case, the double counting at issue does not "flow rationally
                                                                    12

from the [judge's] findings and rulings."    Hassey, 85 Mass. App.

Ct. at 524, quoting Williams, 431 Mass. at 631.     As noted, the

judge's detailed findings do not "demonstrate that [s]he

considered whether double dipping had occurred, and whether

h[er] orders were consistent with the principles enunciated in

[Dalessio]."   Sampson, 62 Mass. App. Ct. at 377.   The decision

to include the $3.2 million in the marital estate was error, and

the award of fifty-three percent of that amount to the wife

($1.7 million) is accordingly reversed.

    2.   Dates of identification and valuation.     The husband

argues that the judge also erred in determining the date of

identification of the assets in the marital estate and the date

of valuation of the marital estate.   As to the date of

identification, the husband suggests that the date the parties

first separated (in 2015) "may well be" the proper date.     And as

to the date of valuation, he argues that certain assets should

have been valued as of the date of judgment (in 2021), rather

than the end of trial (in 2019).

    Neither argument has merit.    The argument that the assets

should have been identified on the date of separation does not

include any contentions as to what the specific alleged error

was, how the husband was harmed by it, or what remedy (assuming

error) might be appropriate.   The argument regarding the date of

valuation is only slightly more supported.   Both parties seem to
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agree that the judge's date of valuation of the marital estate

was as of the end of the divorce trial, consistent with

established practice in Massachusetts.    See Caffyn v. Caffyn, 70

Mass. App. Ct. 37, 44 (2007); Moriarty v. Stone, 41 Mass. App.

Ct. 151, 154 (1996).   The only exception to this date of

valuation pertained to certain retirement accounts, which would

be valued "as of the date of Judgment."    The husband now argues

that certain other assets should have been valued as of the date

of judgment, but considering the well-settled practice of

valuing the marital estate as of the date of trial, and the

discretion held by trial judges as to dates of valuation,

Savides v. Savides, 400 Mass. 250, 253 (1987), we are not

convinced that the judge's determinations here produced a

division that was "plainly wrong and excessive."    Redding v.

Redding, 398 Mass. 102, 107 (1986), quoting Ross v. Ross, 385

Mass. 30, 38 (1982).

    3.   Attorney's fees.   Next, the husband argues that the

judge's award of $130,200 in attorney's fees to the wife

violated his due process rights, because he was not afforded a

meaningful opportunity to be heard before the fees were awarded.

It is true that liability for attorney's fees may not be imposed

without due process, Phillips Petroleum Co. v. Shutts, 472 U.S.

797, 808 (1985); In re Nineteen Appeals Arising Out of the San

Juan Dupont Plaza Hotel Fire Litig., 982 F.2d 603, 614 (1st Cir.
                                                                      14

1992), and it appears, as well, that the husband was not

afforded a full opportunity to respond to the wife's fee motion.

The judge allowed the wife to file her motion for fees, but

rejected the filing of the husband's proffered opposition.      And

the judge declined to hold a hearing on the merits of the

motion.   One of the fundamental elements of due process is a

meaningful opportunity to be heard, Matter of Kenney, 399 Mass.

431, 435 (1987), citing Goldberg v. Kelly, 397 U.S. 254, 267

(1970), and we are not satisfied that the husband had such an

opportunity here.   Accordingly, although a judge has

considerable discretion in awarding attorney's fees and "[s]uch

an award is 'presumed to be right and ordinarily ought not to be

disturbed,'" Moriarty, 41 Mass. App. Ct. at 159, quoting Ross,

385 Mass. at 39, here we think the prudent course is to vacate

the fee award, so that the judge can revisit the question after

the husband responds to the fee request.

    4.    Denial of the stay pending appeal.   The husband's final

argument attacks the decisions of two Appeals Court single

justices that denied the husband's requests for a stay of the

divorce judgment pending appeal.   We do not address these

arguments as they are moot –- the case has now been presented to

this panel, and indeed, this panel has already granted the
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husband certain relief in its interim order of November 15,

2023.7

     Conclusion.8   In sum, the divorce judgment is erroneous in

that the money from the Transitional Bonus was counted for

purposes of alimony, and also divided in the property division

and a portion awarded to the wife.   The remedy for this error is

to reverse the award to the wife from the marital estate of what

amounted to approximately $1.7 million from the Wells Fargo

account.   With that award reversed, the divorce judgment no

longer suffers from double counting and the result is consistent

with the judge's rationale.9   We also vacate the award to the

     7 Shortly after this appeal was argued and while the matter
was under advisement, this panel entered a limited order
temporarily staying those provisions of the divorce judgment
that required the husband to transfer assets to the wife
(specifically excluding alimony), pending further order of this
court.

     8 The husband also noticed appeals from a contempt judgment
(issued the same day as the divorce judgment) and what he
acknowledged is likely a nonappealable interlocutory order
related to a subsequent complaint for contempt. He makes no
specific argument concerning the contempt judgment or the
subsequent interlocutory order, and he does not request any
relief in connection with either. Accordingly, the appeals from
the contempt judgment and the interlocutory order are waived (to
the extent that the latter was properly before us, which we do
not suggest). See Board of Registration in Med. v. Doe, 457
Mass. 738, 743 n.12 (2010).

     9 Ordinarily we would remand the issue of remedy for the
double counting to the trial judge, but in the particular
circumstances here we conclude that a remand for that purpose is
both undesirable and unnecessary. The parties and the judge
                                                                   16

wife of $130,200 in attorney's fees.    All other aspects of the

divorce judgment, including in particular alimony, remain

undisturbed by this decision.   We leave it to the Probate and

Family Court judge to determine the specific means for payment

of the $1.7 million, and we remand for that purpose,10 as well as

to revisit the wife's fee request.

     The appeals from the single justice orders dated January

23, 2023, March 15, 2023, and March 23, 2023, are dismissed as

moot.

                                     So ordered.

have already had nineteen days of trial. The judge's rationale
stated that her intent was to award slightly more than one-half
of the marital estate to the wife. The error here was in
counting the $3.2 million Wells Fargo account as part of the
marital estate when it was not free and clear of the
corresponding liability. The remedy we declare eliminates the
error, and results in a division of assets consistent with the
judge's stated intent.

     10We note that apparently, the husband never paid $450,000
of the $675,000 he was ordered to pay by the divorce judgment,
so that amount (plus any appropriate interest thereon) appears
to be available to the wife as an offset. Any other obligations
that the husband owes under the judgment but that remain unpaid,
including unpaid alimony, would also be available as offsets.