Two Important Family Law Cases Just Handed Down in South Carolina
Two important Family Law cases were handed down by the South Carolina Supreme Court and the Court of Appeals this month dealing with transmutation of non-marital property into marital property and the determination of income for the purpose of determining alimony.
The first case, Pittman v Pittman, involved a Husband who had started a landscaping business before his marriage to Wife and then tried to claim that it was separate, or non marital property, at the time of divorce. Husband argued that since he started the business prior to the marriage and was the sole owner, the value of his business should not be included in the valuation of the marital estate. Wife argued that she contributed to the growth of the business during the marriage by managing the books and helping with customers. She sometimes even helped with the landscaping work. The court noted as follow:
After the parties married in 2000, they agreed for Wife to take on an increased role and participation in the Business and work only part-time at the hospital. As the Business grew, Wife increased her commitment to the Business, often working 35-hour weeks, while ultimately decreasing her nursing job to one day per week. When the Business first began, the parties were sometimes unpaid for their work; however, by the time of separation, both Husband and Wife both drew a salary from the Business, with Wife receiving $4,200 per month. From the date of marriage to the date of separation, Wife’s income steadily increased each year. The parties agreed to raise Wife’s salary to increase her social security income because Wife was older than Husband —a decision the parties made for their mutual benefit so they would have more money during their retirement.
The Court found that these facts were sufficient to prove that the parties intended the landscaping business to be a marital asset, and held that the Family Court properly included the value of the landscaping business in the valuation of the parties marital estate.
In the second case, Burgess v Burgess, the trial court imputed a $100,000 per year income to Husband. Husband was in the real estate business and had an income of over $380,000 in 2007. In 2008, after the real estate crash, he claimed an income of only $32,000. Wife was requesting alimony and asked the trial court to find Husband could earn significantly more than $32,000. The trial court found that:
Based on Husband’s education, training, experience, age, health, and other factors, the family court imputed a gross annual income of $100,000 to Husband. The court noted it was mindful of the deteriorated state of the commercial real estate market, but found that considering Husband’s skill set and experience, he should be able to find employment either as a commercial real estate broker or as a property manager. The family court further noted Husband had a proven history of “putting together real estate deals with little or no money invested on his part,” and, based on his testimony, he was inclined to continue pursuing such deals.
However, the Court of Appeals found that “(w)hile the family court considered several factors in imputing income to Husband, including his work history and occupational qualifications, the court failed to consider prevailing job opportunities and earning levels in the community“. Even though the issue was Husband’s earning potential for the purpose of determining an award of alimony to Wife, the court relied on the South Carolina Child Support Guidelines for guidance:
The Guidelines provide, “[i]n order to impute income to a parent who is unemployed or underemployed, the court should determine the employment potential and probable earnings level of the parent based on that parent’s recent work history, occupational qualifications, and prevailing job opportunities and earning levels in the community.”
The court has made it abundantly clear that there can be no determination of income for child support or alimony awards without a consideration of prevailing job opportunities and earning levels in the community. It would appear, then, that whenever a party desires to impute income to spouse, a vocational expert must be retained as an expert witness to speak to these additional factors.