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Lake v. Lake

August 03, 2000

BOBBIE CRIDER LAKE, APPELLANT,
V.
JAMES HOWARD LAKE, APPELLEE



Appeal from the Superior Court of the District of Columbia (Hon. Geoffrey M. Alprin, Trial Judge)

Before Steadman, Ruiz and Reid, Associate Judges.

The opinion of the court was delivered by: Ruiz, Associate Judge

Argued June 10, 1999

Bobbie C. Lake sued her husband, James H. Lake, for divorce. After a divorce trial held in 1997, the trial court entered an order granting the divorce and finalizing the distribution of property. Noting that both parties needed "to re-establish or develop careers and incomes," the trial court order reserved Ms. Lake's request for alimony for a later date "if the circumstances warrant[ed]." The following year, 1998, the trial court held a hearing on the issue of alimony and awarded alimony to Ms. Lake in the amount of $2,000 per month. At Mr. Lake's request, the trial court vacated the original alimony order and issued an amended order reducing the alimony to $1,000 per month. The trial court issued a further order in which it interpreted the initial order issued at the time of the divorce on property distribution requiring equal division of Mr. Lake's severance payment, to mean equal division after payment of income taxes. Ms. Lake appeals from both the amended order reducing alimony to $1,000 per month and the order regarding after-tax distribution of the severance payment. With respect to the alimony award, she asserts that the trial court abused its discretion in the alimony calculation by overstating her earning capacity from employment, by improperly considering her potential investment income, and by underestimating Mr. Lake's earning capacity. With respect to the ruling on the property distribution, she claims that the trial court erred in concluding that each party would receive an equal share after taxes. After reviewing the record, we conclude there is no abuse of discretion and affirm both the trial court's alimony award and its distribution of Mr Lake's severance pay on an after-tax basis.

I.

The Lakes married in October 1973 and separated in April 1993; there were no children from the marriage. Mr. Lake was the primary wage earner throughout the marriage.*fn1 During the five years prior to their separation, Mr. Lake earned approximately $1.2 million annually as a communications management consultant for Bozell Worldwide,*fn2 while Ms. Lake's maximum yearly earnings as a real estate agent were $35,000. Between the separation in April 1993, after the divorce, and up to October 1995, Mr. Lake provided voluntary financial support to Ms. Lake in the amount of $12,000 per month. In October 1995, Mr. Lake resigned from his employment at Bozell after refusing an offer of immunity from the independent counsel's office investigating improper political contributions which included pleading guilty to two misdemeanor counts of violating Federal elections law and a felony wire fraud count resulting from an improper $5,000 political contribution.*fn3 Mr. Lake was subsequently convicted on all three counts and sentenced to pay a $150,000 fine, write a monograph to be distributed to political action committees and farmer's cooperatives, and two years of probation. After resigning from his position, Mr. Lake terminated the monthly support payments to Ms. Lake. Mr. Lake was unemployed from October 1995 to May 1996, when he obtained a temporary consulting position with Burson-Marsteller, a global communications firm. After the first year, Mr. Lake became a full-time employee at a salary of $350,000 per year. He testified during the alimony trial that he did not anticipate receiving any significant increases in salary or bonuses from Burson-Marsteller. Mr. Lake's financial statement indicated that he had a net worth of approximately $551,000, including an interest in his residence, tangible personal property and his retirement plan.

Although Ms. Lake had been employed throughout the marriage,*fn4 her annual earnings were de minimis between the separation in 1993 and the alimony trial in March 1998. In 1995, Ms. Lake attended business administration classes at Mount Vernon College for a semester. At the January 1996 divorce trial, Ms. Lake indicated that she hoped to resume her court reporting career and, in October 1996, she received a $20,000 advance from the court-supervised marital funds escrow account to upgrade her court reporting skills. In December 1996, she purchased court reporting equipment, but did not receive training on the equipment until January 1998,*fn5 and had not begun looking for a court reporting position as of the March 1998 alimony trial.*fn6 At the alimony trial, Ms. Lake testified that she was working part-time at a jewelry store earning $334 per month. She also stated that she was in the process of trying to revive her real estate career by sending out periodic mailings on the real estate market,*fn7 and had spent considerable time marketing the parties' jointly-owned marital home, which was sold in May 1997. While Ms. Lake testified that her physical health was good, she indicated that she had been suffering from severe depression since the separation and that her "mental state" was a serious impediment to her efforts to gain full-time employment because she found it difficult to concentrate, was nervous, and was often unable to sleep.

On April 2, 1998, the trial court issued an order awarding alimony in the amount of $2,000 per month based partly on the fact that the parties had approximately the same net worth. After Mr. Lake observed that his net worth was significantly less than that of Ms. Lake, the trial court reduced its original alimony order after taking into account information regarding Ms. Lake's net worth which it "inadvertently failed to consider" when it issued the original order. Although Ms. Lake's financial statement reflected a net worth of $538,000, the trial court ruled that the evidence supported an actual net worth of $919,426. The trial court also ruled that Ms. Lake's earning potential was between $36,000 and $40,000 per year. On the issue of Ms. Lake's mental health, the court explained

While not doubting plaintiff's stated feelings of depression, the court notes that she presented herself well at trial, and there was no evidence establishing that plaintiff was unable to work.

The trial court issued an order on May 6, 1998, reducing the alimony award to $1,000 per month.*fn8 On June 4, 1998, the trial court issued another order which interpreted the divorce court's May 6, 1997, directive that "each be awarded one-half (½) share" of Mr. Lake's $200,000 severance payment from Bozell as meaning equal division after payment of income taxes.

II.

Alimony

"Decisions respecting the grant or denial of alimony are committed to the sound discretion of the trial court and will be disturbed on appeal only when the record manifests abuse of that discretion." McCree v. McCree, 464 A.2d 922, 932 (D.C. 1983). In exercising that discretion, the trial court should consider certain factors, such as "the duration of the marriage, the ages and health of the parties, their respective financial positions, both past and prospective, the [requesting spouse's] contribution to the family support and property ownership, the needs of the [requesting spouse] and the [other spouse's] ability to contribute thereto, and the interest of society generally in preventing [the requesting spouse] from becoming a public charge." McEachnie v. McEachnie, 216 A.2d 169, 170 (D.C. 1966). The objective of alimony is "to provide reasonable and necessary support." Id. An appellate court may reverse an alimony award only where the trial court's finding is "plainly wrong or without substantial evidence to support it." Id. at 171.

On appeal, Ms. Lake argues that the trial court abused its discretion in awarding alimony of $1,000 per month because it was based on an erroneous finding that she had an earning capacity of $36,000, improperly considered her potential ...


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