-: SJC 13473, Amy Sue Openshaw v Glenn Romney Openshaw.
Justice Budd: Okay, whenever you're ready,
Attorney Owens.
-: Good morning, Your Honor.
Jason Owens appearing on behalf of Glenn Openshaw,
may it please the court.
The case before the court today is dealing with
a question of that we're calling savings alimony
and whether or not savings alimony
should be permitted in Massachusetts.
That's sort of the first tranche of the question
and the second part is even if savings alimony
should be permitted in Massachusetts,
is it appropriate in this case
given the evidence that was put into trial.
Savings alimony in a nutshell is that
historically in the lengthy jurisprudence
that the state has had with respect to
determining the need for alimony,
we look at the lifestyle that the parties enjoyed
during the marriage.
And historically, by exclusion we can look at
our cases talking about lifestyle
and those cases have historically
focused on affirmative spending.
What people are actually purchasing,
the trips they're taking, the vehicles they're buying,
things of that nature.
When we talk about savings alimony the question is
whether need, that lifestyle, should include savings?
So, not affirmative spending on flights
and stuff that people are buying,
but instead on the more passive act of accumulating-
-: Why shouldn't it?
Why shouldn't it include savings?
-: So, there's a couple things.
So, there's been several states
that have adopted savings alimony,
and when you look at those states
there's important differences
between Massachusetts and those states.
The main reason that we shouldn't be
adopting savings alimony is because
our asset division statute section 34
specifically takes into account one party's
inferior ability to accumulate assets in the future
and enables our judges to make a
disproportionate division of assets,
which are the assets that were actually saved
and accumulated during the marriage
at the time of the divorce, to account for
that party's weaker ability
to accumulate assets in the future.
When we look at some of the states
that have adopted savings alimony,
California, Wisconsin, Arizona, these are states
that are called community property states,
and they have a much narrower conception
of the asset division.
In those states, community property is assets acquired
during the marriage by either party
and it is 50/50 division, and there's very little discretion
to deviate from that.
So, premarital assets is continued separate property,
inherited assets is typically separate property,
it's what was acquired during the marriage 50/50,
very little leeway, such that if there is a party
that has an inferior ability to accumulate assets,
alimony is really their only tool.
They look to alimony-
-: And in those states, 'cause you seem to know them,
is that the reason that they allow savings alimony
because their division of assets does not allow them
to consider the inferior ability to accumulate assets,
as you say?
-: I don't think that would be fair to say
that they define their law in the context
of what other states do. I think that-
-: What is the reasoning that those states use
to allow savings alimony.
-: So, the reasoning is that that is the mechanism,
savings alimony is the mechanism to address the problem
of one party having the inability to acquire future assets
that can't be addressed
through the division of assets, not easily.
-: Can I ask that question in a different way?
Of those 14 states, are any of them
non-community property states?
-: Yes, so, the three I just listed
are community property states,
California, Wisconsin, and Arizona.
Nearly all of the other states though,
also have an important distinction from Massachusetts,
which is they- -: So, 11?
-: Yes, I believe with the amicus brief,
I saw a new state come down.
So, yeah, believe 11.
Well, so, two of those- -: Even I can do that math.
So, we get 11, right? -: So, two of those states,
Florida and Hawaii do not allow savings alimony.
So, we have the remaining states
that are not community property states
or disallow community property,
so, that is 14 minus five, equals nine.
Those remaining states, I believe all of them,
exclude what's called separate property,
which is that they do not allow
for the division of premarital assets
or inheritances that come in during the marriage,
that the division of marital assets is typically restricted
to assets acquired during the marriage,
which we don't have in Massachusetts.
In Massachusetts on section-
-: Our asset allocation is broader
than any of these other states,
so, we don't need savings alimony?
-: I believe so, Your Honor.
I think I say with a little bit of caution
when we're talking about 14 states.
Is it broader than every single one?
There may be an outlier,
but it is broader than nearly all of them.
-: The question though is whether under section 53
this is a permissible consideration
when you're looking at the marital lifestyle
during the marriage.
And one of the cases, I can't remember the name,
said something like, we shouldn't penalize somebody
because they, during the marriage, have acquired stock
as opposed to fur coats.
And if the marriage, there was an agreement in the marriage
to have some sort of frugality,
maybe because someone might become a caretaker later on,
and that was sort of embedded into the relationship
during the marriage, what's the rationale
for it not to be included in alimony?
-: Well, I think there's two ways to answer that.
I think you can look at the statutes
and you see under section 34, one of the factors is
one party's inferior ability to accumulate future assets
and the absence of a corresponding factor
under section 53 in the alimony statute.
There is overlap between some of the considerations,
employability, ability to maintain the marital lifestyle,
but the alimony statute, the latter statute excluded
anything having to do with the acquisition of future assets.
And in fact, in the income definition for alimony,
it actually excludes income derived
from assets divided during the divorce.
And we have some case law from the Cooper case in 2004,
saying that it's inappropriate to enter an alimony order
that allows for the accumulation of assets
because that should fall under section 34.
So, in the hypothetical you're describing,
where there's a frugal lifestyle
and as a result there's substantial savings,
I would argue that section 34 provides,
okay, now we have a larger pot because of that frugality,
we have the ability to make a disproportionate division
in favor of the party who's not going to be able
to do that in the future.
-: I just don't know why,
and I wanna understand your argument.
53 says something like maintain marital lifestyle.
If the marital lifestyle is
we put this away for whatever reason,
one of us might get sick, the kid's education,
whatever it might be, and that's what happens
during the marriage, why couldn't a probate
and family court judge in his or her discretion say,
"Well, I'm gonna take this into account
as part of the alimony."
-: I think that if hypothetically a judge did that
without you doing a disproportionate division of assets,
then that would start to make sense.
-: But isn't it allotted under our statute
because the lifestyle, wouldn't it contemplate
basically the peace of mind
that married couples sometimes get to put away some money
because the washer breaks at the same time the dryer breaks
and the car breaks down.
And you know, now I've got a little bit of a float
because we have the savings.
That's part of people's lifestyles, isn't it?
-: I would respectfully say that a alimony order
that allows a party to maintain the affirmative spending,
the actual spending,
combined with the disproportionate division
that puts into that party's hands a surplus of the savings
that were actually acquired while they were married-
-: If we're looking at narrowly alimony in lifestyle,
would you agree that that peace of mind
that's intended to savings that couples routinely do,
could be considered part of a couple's lifestyle?
-: I think that in layman's terms, I think that makes sense.
I think that the way that the statutes are constructed,
we've sort of used section 34 to address that.
But I do think that's a jumping off point
to this particular case and whether or not, as you say,
if we are going to allow savings alimony
perhaps savings alimony is appropriate in concept.
Should it happen here?
And I think the critical question really in this case
is that we have some case law that makes quite clear
that when we're determining lifestyle and need,
we're to look at the lifestyle the parties lived
prior to the separation,
in contrast to their post-divorce lifestyles
three or four years later, which could be quite different.
They could be spending very differently.
In this case, there was a strategy at trial
taken by wife's counsel, which was to say explicitly
to the judge in the closing argument
and also in the evidence presented, that we do not,
we're asking you not to look at the lifestyle
that was enjoyed when the parties were intact.
Instead, we want you to look at
the wife's current financial statement.
So, what came in in terms of evidence
was uncontested evidence that the entire family
had spent an average of $165,000 a year
over the three years prior to the separation.
-: What do we do with the fact that the husband
also outspent the pace of spending
that he purported the whole family of eight spent
the prior three years?
-: And that's a good question.
I think that you do have to distinguish between
the payor and the recipient of alimony.
He left his house.
He is estranged for his children.
He can have what we might call a midlife crisis,
buys a sports car, starts spending a lot more.
Nevertheless, what he does post divorce and post-separation
is a separate matter from the lifestyle
that you're looking at in order to maintain with alimony,
which does require you to go back.
So, what he spends, how they spend their money is
they can spend it however they want.
So, the wife files a financial statement
at the time of the divorce, says,
"I'm currently spending $400,000 a year."
That's far greater than what the entire family
had been spending.
She's allowed to do that.
She can spend as much as she wants.
Nevertheless, the court's analysis of alimony
should be constrained to maintaining the marital lifestyle.
Her counsel took the chance that we're gonna argue
don't pay attention to the lifestyle during the marriage,
we're going to argue, go ahead and focus
on the current financial statement.
That is not necessarily consistent with the law,
but it's not up for appeal and it was successful.
If you exclude the savings alimony, wife still receives
$210,000 in alimony from the judge
based on her current expenses,
and that exceeds the entire family spending
during the last three years of the marriage.
Our issue is that having done that,
having waived the examination of the marital lifestyle
and said expressly don't pay attention to that,
pay attention to the current spending of the wife,
does she get to go back and say,
"Well, while we were married we were frugal
and we had a lot of savings back when we lived
this very different lifestyle where we only spent
$160,000 a year for a family with six children.
Now I'm living this new lifestyle. I wanna be-"
-: Just remind me, what was husband's income
when he said they were spending 150 for a family of eight?
-: I don't have the exact figure,
but it was over a million dollars a year.
-: Okay, so, there was a lot of savings going on
as a family unit, right?
-: By the process of deduction- -: Yes.
-: You could say, yes, that there were savings going on.
But wife chose not to enter any of that testimony at trial
because that testimony about the frugality
with which they lived ran counter to her main argument,
which is that was a very constrained lifestyle,
I want you to calculate my current need for alimony
based on my new lifestyle at $400,000 a year.
That's where the waiver argument comes in.
It was an argument where she didn't want
that evidence to come in because then
they would've had to contend with how frugal it was
and how savings was just a component
of an otherwise frugal lifestyle.
Having done that, does she get to come back
and she says, "I now have a savings need of $1,000 a week,"
this round number, "that I'm tacking on
to this very, very different lifestyle today."
And without putting in any of the evidence
that we see in these other states, was there a pattern?
-: I mean, the question for us is not so much can she do it,
but whether it was clearly erroneous
or an abuse of discretion for the judge to consider it.
-: To the extent that we have the Young case telling us
that all of the need for alimony
should be based on the lifestyle prior to the separation.
It's very, very specific.
The court's use of the current spending of the wife
when it is twice the spending that the parties engaged in
is in and of itself wildly inconsistent with the standard,
and I would argue an abuse of discretion
to have calculated it that way.
We narrowed in on just the savings component,
but it is part of a larger examination in which the judge
disregarded the lifestyle during the marriage
and simply adopted from the wife's current expenses
those that he felt, you know, were justifiable
without concern for the historical pattern
of what they actually did.
What she's not doing is saying,
"I lived a frugal lifestyle then,
and there was a savings component
in addition to the frugal lifestyle.
And together with those two data points of what we spent
and what we saved, here's my need for alimony."
She didn't do that.
She made the argument, "disregard all of the lifestyle.
Focus on the current spending.
And then, I'm just gonna add on that I'd also like
to save $52,000 a year," based on her current spending.
And when you have, as we did in this case,
a disproportionate division of assets with a husband,
where the court has already given her
a 55/45 division of assets and a wildly disproportionate
division of debts, so that when you look at the net equity
in the marital estate, it was 59% to the wife
and 41% to the husband.
We would argue that that takes care of that question.
-: Can, I ask you just, Chief Justice?
-: Of course. -: Can you address briefly
the allocation of assets after paying down the debt?
-: So, the court has broad discretion
to order a disproportionate division of assets
for the basis that they did here.
In fact, the court said specifically in the rationale,
especially because of her inadequate ability
to earn assets in the future,
we're going to make a 55/45 division of assets.
And that's what they did.
What he then did was he did a division
of the marital liabilities where there was
approximately $300,000 in the husband's name
in the form of federal tax debt from the last two years,
compared to $5,000 in credit card debt in the wife's name.
And the court said, with the division of liabilities,
I'm gonna assign each of you what's in your names.
-: Maybe I just misread it because the tax,
he filed personally?
-: Yeah, the wife filed individually.
And the court said that's okay,
she doesn't have to file jointly.
-: But I guess, the penalty for him filing individually
was he owned the debt.
-: He owned the debt and certainly, you know,
that was saved up and it was divided and it was income.
So, you know, the question there is whether or not
the judge who made the findings
supporting a 55/45 division of assets,
but made no such findings about the liabilities.
Just simply said, I find it's equitable to do it this way.
Well, that moves the needle.
It ends up being a 59/41 overall division.
-: Was that a discretionary call by him?
-: I think that it's a discretionary call,
but it still falls within the factors under section 34.
And if all of your factors that you described,
the findings that you make are all focused on 55/45,
then you need to probably make some additional factors
when you're gonna do something very different
on the liabilities.
-: [Justice Wendlandt] Chief, can I ask one more question?
-: Yep. -: Thank you.
-: So, he doesn't say 55/45, he says, "Approximately."
And that is the response that's given
by the wife in her brief.
Can you address that?
Because it's not like the other cases that you cite
where the judge says it should be this
and then it ends up being different.
Here, how approximately close to 55/45 is 59/41?
-: Okay, so, the division of assets in the judgment
was split pretty carefully 55/45.
-: Right, it's the division of debts that
results in the 60/40 split.
-: Right, and so, that's just a matter of
essentially taking $4.7 million in assets
and then acknowledging that there is a little over
$300,000 in debt, of which 95% of that
is gonna come out of the husband's share,
bringing his share down while really not moving-
-: So, I understand the math and you're running outta time.
So, my question is about approximately.
You know, he doesn't say, I wanna absolutely do 55/45.
He says approximately.
And is 60/40 close enough?
-: And I think that I would answer that
it's not close enough.
That's essentially doubling the disproportionality.
I mean, it's coming very close.
You've supported a 5% difference from a 50/50 division.
Going up to 9% is a very substantial jump
without any additional findings.
And I would also say that I think that
if the court were to say that savings alimony is unsupported
because of the disproportionate division of liabilities
and not just assets, I think my client would waive,
you know, his position
on the disproportionate division of debts.
He would say, "Okay."
-: Not surprisingly, -: But, if the courts say
savings alimony stays in place and there's a remand,
he would reserve the right to also argue
the liabilities issue.
If there's no further questions, Your Honor.
-: Okay. -: Thank you.
Justice Budd: Thank you.
Attorney Spencer.
-: Good morning, Your Honors, may it please the court.
Sean Spencer for the appelli, Amy Openshaw.
I'd like to start with the discussion of the term need
in our alimony statute, because it's important.
There's a connotation you could read into the word need
that involves necessity, bare minimum,
some sort of evaluation of the marital lifestyle.
And that is not the law,
of the common law. -: But need
in Young versus Young is somewhat focused
and arguably narrow.
-: So, the question on need, Your Honor, in all of our cases,
including Young, is what's the cost today
to meet the shortfall between the wife's current income,
post-divorce, and the marital lifestyle,
maintain that marital lifestyle today.
And that goes to actually the evidentiary question
that's raised in my brother's argument.
Not only is it appropriate to consider the evidence
that the wife submitted
about what her current lifestyle costs,
it could be error to not consider that cost
if the test is what's necessary to maintain
the recipient spouse in the marital lifestyle today?
If I look back to what I was spending four years ago
on gas and groceries, I can't do that today.
There are all sorts of reasons, every case is unique,
but there are lots of justifications in a given case
to look at what's the, at the time of the divorce.
-: But, you know, one of the problems I have
with the judge's findings is that he doesn't address
the husband's statements as to
what the family of eight spent
for the prior three years before the separation.
-: Well, I think the judge blows past it
because it's so much out of proportion
with what the parties are doing now.
-: But how do I know that?
I know that's what you think
and what you state in your brief,
but what's the basis for that?
-: Well, number one,
it's within the trial judge's discretion.
Number two, it's apparent from his findings.
He doesn't say I'm going to award future costs
regardless of need.
In two separate portions of the findings and rationale,
the judge refers specifically to the cost
to maintain the wife in the marital lifestyle.
So Judge Boyle is very much focused on
the standard that this court has articulated.
-: So, you think because he focused on the current spend
of the wife, necessarily he disbelieved
the husband's allegations as to their three years prior
to separation spend?
-: That's correct.
And I think that to hold otherwise would open the door
for a flood of appeals challenging failure to connect
every single dot in the opinion.
-: No, but this one's an important dot.
There's some balls you can drop but this one is important
to determine the lifestyle, the pre-divorce lifestyle.
-: Understood.
We know what the judge relied on.
-: Could he rely on the 2020 financial statement?
-: I mean that statement's out of date
by the time we get to 2021.
But I think he relied on
the most recent financial statement.
And in fact, you see in the findings
that he went through that with a fine tooth comb.
He looked at what the spending was.
He struck several items,
struck more than several items, I believe.
And then added a few that would be caused as a result of
the order he was entering.
I think this was a careful decision by the trial judge.
I'd like to turn to the question of whether savings
is part of the marital lifestyle.
I would urge the court not to create a carve out
from the marital lifestyle for three reasons.
First, it would create an alimony shelter.
It would allow for manipulation of financial affairs
to shelter, potentially decades of future income,
from the alimony determination.
Second, it would compound the economic injustice
suffered by spouses who have spent years
out of the workforce as full-time caregivers.
And third, it would rest upon what I think
is just an incoherent distinction
between two different types
of financial allocations by the parties.
And let me start with the last one.
As I'm thinking about how you could write the opinion
in this case to find for the husband.
So, there would have to be something different about savings
and I came up with two possibilities,
and I think neither one works.
So, maybe savings are different because they create value
which ultimately gets equitably divided.
That's the case for lots of the things
that this court has already very explicitly referenced
as part of the lifestyle, acquiring vacation homes,
acquiring expensive vehicles, all those things build value
and are divided.
The fact that that happens doesn't remove them
from the lifestyle the parties lived.
So, another possibility would be,
the savings have only an intangible benefit,
not some tangible benefit to the parties.
I think that fails for two reasons.
Number one, savings in fact, I mean, yes,
they create a feeling of security for me,
but that security is against calamities
that might come to pass.
I run out of funds in retirement.
I or a relative, a parent, gets sick
and I need to care for them.
When those calamities come to pass,
even if it's just the washing machine
and another appliance breaking at the same time,
now the benefit's tangible, just as tangible as if
it's a car that's driving during the marriage.
And there are plenty of items
that are traditional consumption spending
that this court's already talked about
as being within the marital lifestyle
that only have intangible benefit.
If I buy precious artwork and display it on my walls,
I don't use it, I don't wear it, I don't engage with it,
I enjoy it, I enjoy that I see it,
I enjoy that others see me having it on my walls.
Those benefits are intangible.
So, tangibility can't be a coherent dividing line.
-: What about the fact that section 34 specifically includes,
I forget, the inferior ability to accumulate assets
in the future and section 53 does not?
Or whatever the alimony statute is, sorry.
-: Well, but what it doesn't include
is the marital lifestyle. I don't think-
-: So, you think the statement in one doesn't preclude
its inclusion in the other because of the marital lifestyle
-: Yes, for sure. -: language?
-: For sure.
-: Is charity different?
-: Thank you for bringing that up.
I forgot to mention it at the start.
Charity's not at all different.
And I'd point out, first of all, charity is not disputed
in this case.
The charitable contributions, the record is clear,
were simply the party's tithing
as part of their religious observation.
No one disputes that it was happening or the amounts
and it's not been raised on appeal.
I don't think it's any different from savings.
I certainly don't think it should be
something that's carved out.
I think that's just not, it's not a good look for a rule
that this court could adopt,
saying that we're gonna value consumption spending
and conspicuous consumption,
but we're not gonna value prudent savings
or contributions to charity.
If those are part of the way that
the parties before the judge lived,
those are fair to include.
-: Can I ask you about debt and why it was not erroneous
to saddle the husband with essentially 99% of the debt?
-: Well, because it's well within
the trial judge's discretion
to not make an equal distribution.
And it's clear that there's no mistake,
-: But his aim was to get close to 55/45.
-: His aim was approximately 55/45,
but it's not a case like the home equity line of credit case
where there's just a massive mistake.
There's a $90,000 swing in what the trial judge said
was to be a precise 50/50 split.
Here we know exactly what the trial judge was doing.
There were four very specific ways
to implement the 50/50 split.
It surely didn't escape Judge Boyle's notice
that the math didn't come out to exactly 55/45,
the approximately 55/45.
-: But there's no explanation other than
everybody takes their own debt
in that paragraph in his findings.
And I'm struggling with why husband should take
99% of the debt other than it's in his name
for the family income taxes that he filed.
-: Sure, one possibility is cashflow
and that would be a reasonable
consideration for the trial judge.
But, I also don't know that it's Judge Boyle's burden
to put that explicit explanation in the findings
whether he said 45/55, 55/45, or 59/41,
all of those are within his discretion.
I think the question on that point, Your Honor,
is whether Judge Boyle made a demonstrable mistake
and whether that mistake was big enough to justify reversal.
There have been cases where, I think one of them was
an attempt at 50/50 and it came out to be 47% to the wife
and that was not reversible error.
Mathematical precision's not required.
-: What about appellant's argument
that the wife's spending is just so much more now
and that this really isn't about
lifestyle during the marriage,
but it's more about, not his word,
but profligate spending enabled
by an additional thousand dollars.
-: Yeah, I don't think that Judge Boyle credited
that all of the expenses that husband put together
and claimed were all that they spent
during the marriage was accurate.
I don't think Judge Boyle found that to be the case.
And I do think it's important to point out
that I wasn't trial counsel,
but I know from reading the transcript,
trial counsel did not accept those (indistinct) that came in
and that were put forward in the trial
as proof of exactly what was spent.
The section that my brother's brief refers to,
if you go back and read it, trial counsel's referring
to those dismissively
and is pointing to the cost today
as what Judge Boyle should rely upon.
What the wife's lifestyle, which is similar
to what she lived in before, the house she lived in before,
there's not some change to what the parties are doing.
The cost today is what has to be the standard.
I do also wanna point out what evidence there was
of savings in the record because I think that's important.
The wife is clear, and this is at page 408,
and 414 of the transcript.
She's clear that this was a monthly practice.
This happened each month.
And the husband's testimony,
even if you didn't have to rely solely on the wife's,
the husband's testimony is
that he would look out a month or two or three,
see what expenses were coming
and move funds that were available to investments.
The parties agree there was savings in this case.
-: What's the support though for the number?
-: The only support in the evidence is the wife's submission
of financial statements, which came into evidence
of $1,000 a week.
Now, if you look back through the transcript,
husband's trial counsel never cross examinees
about that amount, although he cross examinees
about other aspects of the statement.
And I'd suggest one possibility is the reality that
it was much more than that.
I mean, this is a huge income,
an accumulation of a really significant estate.
My submission is that's probably an under counting
by the wife of what happened during the marriage,
although that's certainly not, I'm not raising
an issue on appeal on that point.
If the court has nothing further, I rest on my brief.