Argued
January 9, 2019
Appeal
from the Superior Court of the District of Columbia
(DRB-3364-09) (Hon. Michael O'Keefe, Trial Judge).
Edouard J.P. Bouquet, with whom Shuaa Tajammul, was on the
brief, for appellant.
Martha
Oliver, pro se.
Before
Glickman, Thompson, and Easterly, Associate Judges.
THOMPSON, ASSOCIATE JUDGE
The
parties in this case, Jeffrey Crater and Martha Oliver, were
divorced in 2011, with the Superior Court merging into the
divorce decree a Term Sheet negotiated by the parties. In
2015, after Mr. Crater was involuntarily terminated from his
job as a lobbyist, he moved in March of that year to modify
the alimony amount ($5, 000 per month) that the divorce
decree required him to pay Ms. Oliver in accordance with the
Term Sheet.[1] See Crater v. Oliver, No.
16-FM-1256, Mem. Op. & J. at 2 (D.C. May 22, 2018) (the
"May 2018 MOJ"). Ruling on the motion to modify and
citing Mr. Crater's greatly reduced income beginning in
2015, the Superior Court ordered that Mr. Crater would be
required to pay Ms. Oliver eleven percent of his gross income
each year as alimony.[2] In a separate appeal resolved by the May
2018 MOJ, Mr. Crater successfully challenged the Superior
Court's reliance solely on the eleven percent formula,
which this court held failed to take into account "both
parties' current circumstances . . . ."
In the
instant appeal, Mr. Crater appeals from a July 26, 2017,
judgment of the Superior Court, entered before the May 2018
MOJ was issued, in which the Superior Court applied the
eleven percent formula to what the court determined to be Mr.
Crater's 2016 gross income, to establish the amount of
alimony Mr. Crater was obligated to pay Ms. Oliver for 2016.
There is no dispute that the Superior Court was required,
pursuant to the May 2018 MOJ, to revisit its ruling on the
amount of alimony; the Superior Court did so, and its
modified ruling is the subject of a separate appeal now
pending in this court in consolidated Appeal Nos. 17-FM-1426,
17-FM-1456, and 18-FM-0726. But the instant appeal requires
us to address a narrow issue that is independent of the
issues that must be decided in those consolidated appeals.
Specifically, the question before us is whether, as Mr.
Crater argues, the Superior Court abused its discretion in
ruling, with respect to the gains Mr. Crater realized in 2016
from the exercise of stock options[3] granted to him by his
(former) employer, that the gains must be included in
calculating Mr. Crater's gross income for 2016 for
purposes of determining the amount of spousal support he was
required to pay for that year. For the following reasons, we
conclude that the Superior Court did not abuse its discretion
in that regard.
I.
On May
1, 2017, and July 21, 2017, the Superior Court held hearings
on the alimony issue. Following the July 21 hearing, the
court issued its order that is the subject of this appeal,
ruling that for purposes of alimony, Mr. Crater's 2016
gross income for alimony concerns was $317, 545, an amount
that the court found resulted in required alimony of $34, 930
(11% of $317, 545) for 2016. The court arrived at that amount
by including in Mr. Crater's 2016 gross income
approximately $63, 000 Mr. Crater realized from exercise of
his stock options.
"There
are no fixed rules for determining . . . in what amount
alimony should be awarded." Leftwich v.
Leftwich, 442 A.2d 139, 142 (D.C. 1982). Rather,
"[a] trial court has a considerable measure of
discretion in determining the appropriate amount of alimony[,
]" and "that determination will not be disturbed on
appeal unless the court clearly abused its discretion."
Ford v. Castillo, 98 A.3d 962, 965 (D.C. 2014)
(quoting Araya v. Keleta, 65 A.3d 40, 48 (D.C.
2013)) (internal quotation marks omitted). In reviewing an
alimony award (like any other judgment) for abuse of
discretion, we "must determine whether the decision
maker failed to consider a relevant factor, whether he relied
upon an improper factor, and whether the reasons given
reasonably support the conclusion." Johnson v.
United States, 398 A.2d 354, 365 (D.C. 1979) (internal
quotation marks omitted).
Neither
the divorce statute nor this court's case law has set
firm parameters for what may be treated as income for
purposes of alimony. Here, in exercising its discretion, the
Superior Court was advised about and properly looked to a
number of factors in arriving at its decision to treat Mr.
Crater's gains from the exercise of stock options in 2016
as part of his gross income for that year.
First,
the court looked to the District of Columbia Child Support
Guideline, See D.C. Code § 16-916.01 (2012
Repl.). The parties agree that the Guideline provisions are a
helpful reference.[4] Mr. Crater emphasizes that §
16-916.01 (d)(1)(P) includes "[c]apital gains from a
real or personal property transaction" in "gross
income" only "if the capital gains represent a
regular source of income" (emphasis added). See
also Lasche v. Levin, 977 A.2d 361, 370 (D.C. 2009)
("[I]n the case of investment capital, . . . payouts, if
to be included in gross income, must be made on a regular
basis so as to be the equivalent of income payouts.").
However, the Guideline also declares that "[f]or the
purposes of this section, the term "gross income"
means income from any source, including," for
example, severance pay, bonuses, lottery or gambling winnings
that are received in a lump sum, and prizes or awards.
See id., §§ 16-916.01 (d)(1)(C), (E), (U),
and (V) (emphasis added); see also, e.g.,
Slaughter v. Slaughter, 867 A.2d 976, 976 (D.C.
2005) (concluding that the trial court did not abuse its
discretion in ruling that a portion of a settlement amount
paid to the wife "should be included in [her] gross
income for the purpose of calculating the parties'
respective support obligations"). These examples, most
of which typically are not regular sources of income,
afforded the Superior Court a reasonable basis for concluding
that it was not required to exclude from Mr. Crater's
2016 income his gains from his exercise of stock options in
that year.
Moreover,
the Superior Court had before it evidence that permitted it
to infer that, for Mr. Crater, gains from the exercise of
stock options were a regular source of income. The
court took "judicial notice of all the evidence" it
had heard in earlier proceedings in the matter, and recalled
that Mr. Crater had exercised stock options in 2013 and
2014.[5] In addition, Ms. Oliver told the court
that Mr. Crater had regularly "over the years"
received stock options as part of his compensation from his
(former) employer; that "every year[, ] when [Mr.
Crater] received three different types of stock," he
received for each one a statement explaining that he would
"recognize income upon the exercise . . . in accordance
with the tax laws of the [relevant] jurisdiction"; that
Mr. Crater's (former) employer considered the stock
options income and issued W-2 earnings statements reflecting
that income; that Mr. Crater once rejected the offer of a
salaried job "because it didn't have stock
options"; that Mr. Crater did not make "a onetime
sale of stock" in 2016 but (having exercised no stock
options in 2015, the year he sought a reduction in
alimony)[6] "started selling on the first
business day of 2016," and sold stock "on multiple
occasions."[7] Ms. Oliver also told the court that if the
gain from Mr. Crater's exercise of stock options in 2016
was not to be treated as income, the court and the parties
would have to "go back and start at . . . the very
beginning[, ] because [Mr. Crater] certainly considered [gain
from the exercise of stock options] when he was talking about
the point from which [his earlier] ...