$350,000 alimony award must be changed

[Brent]

$350,000 alimony award must be changed

JOE KAFKA- Associated Press
Posted on Thu, Dec. 18, 2003  

PIERRE, S.D. - A judge confused child support with alimony when deciding that a Rapid City heart doctor should pay his ex-wife $2,400 in monthly alimony, the state Supreme Court has decided.

Thursday's ruling came on an appeal filed by Alexander Schabauer, who was divorced last year from Terri Holts Schabauer after being married 13 years and having two children.

Circuit Judge John Delaney determined that the doctor makes more than $250,000 a year and should pay monthly child support of $1,473.

Marital assets of $444,660 were evenly split. As part of the property settlement, the couple's home was to be sold and the first $134,335 in profits went to Terri. The remaining proceeds from the home sale were to be evenly split.

Alimony payments were to continue for 12 years or until Schabauer's former wife remarried or died.

Contesting the $352,800 alimony award, Alexander Schabauer said the judge mistakenly considered the comfortable lifestyle that the former couple's children enjoyed before the divorce.

The doctor said child support should not be awarded under the guise of alimony, adding that his annual income had declined by $60,000 and it would likely be trimmed even more by new Medicare regulations.

The circuit judge had decided that the children's lifestyle could not be maintained without a significant alimony award or substantial deviation from state child-support guidelines. In ordering hefty alimony payments, Delaney noted that the doctor could deduct them from his taxes but could not do the same with child-support payments.

Even without consideration for the tax advantages, the alimony payments would allow the doctor's former wife to maintain both her standard of living and that of the children, the circuit judge said.

Overruling the alimony award, the Supreme Court said Delaney improperly mixed alimony and child-support considerations.

"The amount of Terri's alimony should not have been governed by the presence of children in her household or their needs and standard of living," Justice Judith Meierhenry wrote.

The children's needs and lifestyle, however, are proper considerations when setting the level of child support, the justices said, instructing Delaney to also refigure the doctor's child-support obligation.

"Alimony and child support must be considered separately, and Alex's parental responsibility to provide for the maintenance of his children on the basis of factors applicable to setting child support should not have been interwoven with his marital obligation to provide a suitable allowance for Terri's support," Meierhenry continued.

Sending the case back to Delaney, the justices said he must refigure both alimony and child support.

Once alimony is determined, child support must be calculated with consideration for the incomes of both parties, the high court said. The alimony payments must be considered as a deduction from the doctor's income and an addition to his former wife's income when setting the amount of child support, the justices said.

Justice Richard Sabers, who cast the lone no vote, said the alimony award should stand. It defies logic to ignore economic realities in divorce cases, including comparison of the tax consequences of alimony and child support, he said.

"Trial courts should not be prevented from undertaking legitimate analysis of the financial ramifications for each party in their alimony awards," Sabers said.

"This (decision) returns the calculation of alimony by trial courts to the middle ages," he continued. "It rejects any consideration of a practical, intelligent analysis of the real economic situation of the parties."
 
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