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Crater v. Oliver

Court of Appeals of The District of Columbia

February 14, 2019

Jeffrey Crater, Appellant,
Martha Oliver, Appellee.

          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.


         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.


         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] ...

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