Diana Damschroder v. John Wallace Patterson ( 1999 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Coleman, Elder and Senior Judge Cole
Argued at Richmond, Virginia
DIANA DAMSCHRODER
MEMORANDUM OPINION * BY
v. Record No. 0889-98-2 JUDGE SAM W. COLEMAN III
APRIL 27, 1999
JOHN WALLACE PATTERSON
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
Randall G. Johnson, Judge
Robert W. Partin (Richard L. Locke;
Mezzullo & McCandlish, on brief), for
appellant.
Mary Burkey Owens (Cowan & Owen, on brief),
for appellee.
John Wallace Patterson petitioned the trial court to reduce
his spousal support obligation to his former wife Diana
Damschroder, based on a reduction in his earnings. After ore
tenus hearings, the trial court determined that Patterson lost his
employment involuntarily but was voluntarily underemployed.
Accordingly, the trial court imputed income to Patterson. Based
on its findings, the trial court ordered a reduction in spousal
support from $5,000 to $2,000 per month. On appeal, Damschroder
contends (1) that the trial court erred in determining that
Patterson’s unemployment was involuntary, (2) that a finding of
*Pursuant to Code § 17.1-413, recodifying Code § 17-116.010,
this opinion is not designated for publication.
involuntary underemployment required the court to deny Patterson’s
petition for reduction in spousal support obligations, and (3)
that the trial court erred by imputing an income not supported by
the evidence. Finding no error, we affirm the trial court.
I. BACKGROUND
On appeal, we view the evidence and all reasonable inferences
in the light most favorable to the prevailing party. See Alphin
v. Alphin, 15 Va. App. 395, 399, 424 S.E.2d 572, 574 (1992). At
the time of the final divorce decree, Patterson was an equity
partner in a large Richmond law firm earning $160,000 per year.
The trial court awarded spousal support to Damschroder at $5,000
per month. Soon after the divorce, the law firm’s executive
committee informed Patterson of their intention to terminate him
based on his low productivity. In accordance with Patterson’s
employment separation agreement, he continued to collect his usual
monthly pay for one year.
The managing partner of the law firm testified that he had
communicated concerns about productivity to Patterson before they
decided to terminate him. With the exception of one or two years
between 1989 and 1995, Patterson’s billable hours were lower than
what the firm considered normal for an equity partner. However,
when asked, the managing partner could not state that he had ever
explained to Patterson that the firm would end his employment if
he failed to increase his productivity. Additionally, Patterson
testified that the firm never advised him that he would face
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termination if he failed to increase his billable hours.
Patterson testified that the firm’s decision to end his employment
shocked him.
Shortly after the firm notified Patterson of his termination,
Patterson sought legal employment with one of his larger clients
based in Richmond. Although the former client never officially
rejected Patterson, Patterson determined that he would likely
receive no offer. He also sought legal employment through a
Washington, D.C. outplacement firm. Patterson applied for some
twenty-eight to thirty positions and received no offers. He
testified that he was willing to go almost anywhere and that he
had actively pursued positions in California and Kazakhstan. In
the Richmond area, Patterson sought leads from his former clients,
but received none. Patterson also contacted friends and
classmates, but to no avail. After being out of work for nearly a
year and having received no offers for legal positions, Patterson
explored other options and chose to open a cigar franchise in
Savannah, Georgia.
Several months later, Patterson filed a petition seeking a
termination or reduction in his spousal support obligation. After
hearing evidence ore tenus, the trial judge determined that
Patterson was not voluntarily unemployed. However, the trial
judge also determined that Patterson failed to show that he fully
exhausted potential employment opportunities in Richmond. The
judge also determined that Patterson could have found employment
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with a Richmond firm earning at least half his prior salary and
imputed that amount of income to Patterson. Accordingly, the
trial judge reduced the spousal support payments to comport with
the imputed income.
II. ANALYSIS
We will not disturb a trial court’s decision on appeal unless
plainly wrong or without evidence to support it. See Jennings v.
Jennings, 12 Va. App. 1187, 1189, 409 S.E.2d 8, 10 (1991).
Upon petition of either party, a trial court may alter spousal
support provided there has been a material change of circumstance.
See Code § 20-109. “The moving party in a petition for
modification of support is required to prove both (1) a material
change in circumstances and (2) that this change warrants a
modification of support.” Reece v. Reece, 22 Va. App. 368, 373,
470 S.E.2d 148, 151 (1996). Without question the termination of
Patterson’s employment constituted a material change in
circumstances. The dispositive issue is whether Patterson’s
change in circumstance warranted a modification of his support
obligation.
A. VOLUNTARY TERMINATION
1. LEGAL STANDARD
In determining whether an adverse change in circumstances
warrants a diminution in a support obligation, the trial court
must consider, among other things, whether the changed
circumstances arose from the obligor’s voluntary actions. Where
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the changed circumstances result from the obligor’s misconduct or
neglect, the Supreme Court has held the changed circumstances are
the product of the obligor’s voluntary actions. See Edwards v.
Lowry, 232 Va. 110, 112-13, 348 S.E.2d 259, 261 (1986) (citing
Hammers v. Hammers, 216 Va. 30, 31-32, 216 S.E.2d 20, 21 (1975);
Crosby v. Crosby, 182 Va. 461, 466, 29 S.E.2d 241, 243 (1944)).
For example, where an obligor’s income changed when his employer
terminated him, the change in circumstances did not warrant
modifying the support obligation because the employer fired the
obligor for theft. See Edwards, 232 Va. at 112-13, 348 S.E.2d at
261.
Damschroder contends that the trial court misunderstood and
misapplied the proper legal standard. Damschroder argues that the
trial judge focused solely on the element of misconduct to the
exclusion of negligent or voluntary acts. We agree with
Damschroder that simply showing that an obligor’s loss of job did
not result from misconduct is insufficient to warrant a change in
the obligor’s spousal support obligation. However, Damschroder
mischaracterizes the trial judge’s holding and rationale for that
holding.
Having heard the evidence, the trial judge concluded that
Patterson’s termination was not for misconduct and was not
voluntary. The trial judge stated that the evidence was in
conflict as to whether Patterson neglected the opportunities he
had to increase his production. The managing partner testified
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that Patterson “probably” could have increased his billable hours.
Alternatively, Patterson testified that he had no control over his
billable hours because they rose and fell with the fortunes of his
clients. The trial judge noted the absence of evidence showing
that Patterson neglected his clients and found that, on the
contrary, the evidence showed that his clients were very satisfied
with his work. Additionally, there was evidence that Patterson
had never been a “rainmaker” for the firm, and there was no
testimony that he refused or ignored opportunities to solicit new
clients. Thus, the trial court considered the evidence and
determined that the evidence showed that Patterson had not
neglected his professional activities.
In his letter opinion, although the trial judge devoted
considerable attention to the difficult issue of whether Patterson
lost his job because of misconduct, he also considered whether
Patterson lost his job due to neglect or other voluntary actions.
Accordingly, we find that the trial court applied the correct
standard in determining whether Patterson’s loss of employment
warranted a change in spousal support.
2. BURDEN OF PROOF
Damschroder contends that the trial judge erroneously placed
the burden on her to prove that Patterson lost his job due to
misconduct. As support for her argument, Damschroder states that
Patterson failed to carry his burden of demonstrating that his
termination was involuntary, and therefore, the trial judge must
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have reached his conclusion based on an erroneous application of
the burden of proof. We disagree.
Absent specific evidence to the contrary, we presume that the
trial court based its decision on the evidence presented and
properly applied the law. See Williams v. Williams, 14 Va. App.
217, 221, 415 S.E.2d 252, 254 (1992).
The burden is on the moving party to establish that the
change in circumstances was not voluntary. See Antonelli v.
Antonelli, 242 Va. 152, 154, 409 S.E.2d 117, 119 (1991). The
trial judge stated in his letter opinion that he placed the burden
of proof on Patterson, and we find that Patterson produced
sufficient evidence to support the trial judge’s conclusion that
he proved by a preponderance of evidence that his termination was
not voluntary.
We have previously referred to much of the evidence which
Patterson presented to satisfy his burden of proof. Patterson
testified that he never refused work, that the firm never informed
him that a failure to increase production would result in
termination, that his billable hours were out of his control, that
firm management had ulterior motives in terminating him, that he
performed substantial administrative and other functions for the
firm, and that the firm’s decision to terminate him came as a
complete surprise. Although the managing partner warned Patterson
about his low productivity at least twice and opined that
Patterson “probably” could have increased his hours, Patterson
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produced sufficient evidence to establish that his loss of
employment was not voluntary or the result of wrongful conduct.
B. IMPUTATION OF INCOME
1. Legal Standard
When a spousal support obligor suffers a reduction in
income resulting from a voluntary employment decision, that
reduction in income will not warrant a corresponding reduction
in the support obligation. See Stubblebine v. Stubblebine, 22
Va. App. 703, 708, 473 S.E.2d 72, 74 (1996) (en banc).
“Accordingly, a court may impute income to a party who is
voluntarily unemployed or underemployed.” Id. (internal
quotation marks omitted). The trial court determined that
Patterson’s loss of employment was involuntary but that
Patterson’s job search in Richmond was insufficient to avoid
imputation of income. The trial court imputed income equal to
half of Patterson’s prior salary. Based on the amount of
imputed income, the trial judge calculated the amount to reduce
Patterson’s support obligation. Damschroder argues that upon
finding that Patterson was voluntarily underemployed it was
error for the court not to dismiss Patterson’s request for a
reduction in support. We disagree.
In support of her argument, Damschroder cites Edwards, 232
Va. 110, 348 S.E.2d 259, Antonelli, 242 Va. 152, 409 S.E.2d 117,
and Commonwealth, Dept. of Soc. Services ex rel. Ewing v. Ewing,
22 Va. App. 466, 470 S.E.2d 608 (1996). In each of the cited
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cases, obligor’s request for reduction in support obligations
was denied. However, in each case, the entire loss of income
resulted from the obligor’s voluntary actions. Here, the trial
court found that Patterson was involuntarily unemployed but
incurred approximately half the reduction in his income
voluntarily. The underlying standard reflected in the three
cited cases is that in order to warrant a reduction in his
support obligation, Patterson “must show that his lack of
ability to pay is not due to his own voluntary act or because of
his neglect.” Hammers, 216 Va. at 31-32, 216 S.E.2d at 21; see
Antonelli, 242 Va. at 154, 409 S.E.2d at 119; Edwards, 232 Va.
at 112-13, 348 S.E.2d at 261; Ewing, 22 Va. App. at 470-71, 470
S.E.2d at 610-11. Applying this standard, the trial court
reduced Patterson’s support obligation only to the extent that
his reduction in income was voluntarily incurred. Accordingly,
the trial court applied the proper legal standard.
2. Calculation of Imputed Income
Based on the record, the trial court determined that it
would be unrealistic to assume that Patterson could have moved
to another firm and maintained the same level of pay he had
previously enjoyed. However, the court determined that a
Richmond law firm would have paid Patterson at least half of
what he had earned in order to reap the benefits of his
experience and his “very satisfied” clients. The record upon
which the trial court based that determination included evidence
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of Patterson’s age, the nature of his legal expertise, and the
type of clients that he had. Additionally, there was testimony
that Patterson could have brought to another firm approximately
$50,000 gross receivables, and testimony that the amount of
gross receivables would depend on the particular year, for
example, one client generated business that ranged from $5,000
to $100,000 depending on the year.
Patterson, who prevailed in obtaining a support reduction,
does not appeal the imputation of income to him of $62,064.
However, Damschroder contends that the evidence does not support
the trial court’s calculation of imputed income. We disagree.
A spouse’s entitlement to an award and the amount of that
award are matters committed to the sound discretion of the trial
court. See Stubblebine, 22 Va. App. at 707, 473 S.E.2d at 74.
In modifying a spousal support order, Code § 20-109 instructs
the trial court to consider the factors set forth in subsection
(E) of Code § 20-107.1. These include earning capacity,
education, skills, training, and age. See Code § 20-107.1. We
find that there was sufficient evidence in the record for the
trial court, by applying the factors of Code § 20-107.1 to
impute $62,064 of income to Patterson.
In sum, we find that the trial court properly determined
that Patterson lost his job involuntarily and that the trial
court had sufficient evidence to impute $62,064 of income to
Patterson. Accordingly, we affirm the trial court’s decision
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reducing Patterson’s spousal support obligation from $5,000 to
$2,000.
Affirmed.
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