A recent Pennsylvania case takes up a difficult issue: how should a paying spouse’s dramatic drop in income impact an award of alimony?
According to the article below from the Pennsylvania Law Weekly, the general rule in Pennsylvania seems to be that where that loss of in income is the result of alcohol abuse, an award of alimony should be based on the paying spouse’s higher earning capacity rather than the spouse’s lower actual income.
In the particular case reported on, however, while the the paying spouse did have an alcohol problem, the spouse seeking alimony did not prove that the paying spouse’s alcohol problem was truly the cause behind his pay cut. Instead, there appeared to be other factors that accounted for it or contributed to it. Therefore, in that particular case, the court based the alimony award on the paying spouse’s actual reduced income.
In certain cases, Florida courts also will look to a spouse’s earning capacity instead of actual income. In Florida, we call that imputing income to that spouse and courts may do it in a child support case as well as an alimony case.
But, unlike Pennsylvania, the Florida courts have not carved out a consistent general rule about loss of income from alcohol.
Family Law Allegations of Alcohol Abuse Fail to [sic] Reduce Alimony Obligation
Melissa Nann Burke; Special to the Pennsylvania Law Weekly
September 12, 2005
Without a finding that an alcoholic parent lost his job because of substance abuse, the alimony he must pay his wife and children should be assessed based on his earnings and not his earning capacity, a state appeals court has ruled.
So instead of having the alimony based on the six-figure income he had been earning earlier, it was based on his current earnings that were less than $20,000.
The court relied on a ruling from 2000 holding that an obligor who lost work due to drug or alcohol abuse is deemed to have voluntarily lost the employment.
In an unpublished ruling, the Superior Court concluded this wasn’t proved in Aungst v. Aungst, PICS Case No. 05-1417 (Pa. Super. Aug. 19, 2005) memorandum (12 pages).
a three-judge panel rejected the arguments of Suzanne Marie Hepfer Aungst, who claimed her husband lost his business and income of $120,000 to $150,000 a year because of a “deliberate” act – substance abuse.
She claimed her husband’s decrease in income – earning less than $500 a week – was, under the circumstances, voluntary.
She wanted the court to impose a support obligation based on her husband’s earning capacity rather than his current income, according to the opinion.
The Aungsts’ daughters are ages 14 and 16, and the couple have since divorced, said John A. Prodoehl, attorney for Suzanne Aungst.
“If you get drunk and lose your job, you still have to pay your mortgage,” said Prodoehl, who practices in Media, Pa. “If you get drunk and lose your job, you should still have to support your children.”
The appeals panel summarized the Superior Court opinion, Laws v. Laws, 758 A.2d 1226 (Pa. Super. 2000), this way:
“If an obligor loses his or her job due to drug or alcohol abuse, it is deemed to be a voluntary loss of employment. He or she will then be assessed a support obligation based on earning capacity rather than actual earnings.”
But the Delaware County trial court found last year that Aungst’s husband, William Harrison Aungst III, had not deliberately reduced his earning capacity.
The trial judge said Aungst’s business could have failed “maybe for reasons of alcohol problems,” but “that may be one of many, many reasons [that] it failed.”
Aungst also had an accident after losing his business.
According to the opinion, he came in contact with a bolt of electricity that caused him to fall nearly 40 feet from a ladder and suffer brain damage.
David DiPasqua, who represented Aungst, said: “Two things happened: He got electrocuted, and he tried to start his own business and failed, in part because of the drinking.”
The Superior Court panel said Aungst presented a factual distinction from the Laws case.
“The Laws holding was based on a factual finding that the applicant ‘lost employment because of alcohol addiction and substance abuse,'” the panel explained.
“Without such a finding, Laws is inapplicable.”
In so holding, the panel concluded the trial court had not abused its discretion when it based Aungst’s support obligation on his actual earnings instead of on what he made before his business failed.
Judges Maureen Lally-Green, Jack A. Panella and Senior Judge Stephen A. McEwen Jr. participated in the decision.
On appeal, Suzanne Aungst also had argued that the trial court should have considered her husband’s real estate assets, worth approximately $500,000.
According to the opinion, William Aungst owns six properties in Darby, Pa. – five stores and one house – valued at close to $500,000. After expenses, his income was about $900 a month, and his mother pays the property taxes and some of the other property expenses.
The Superior Court said Suzanne Aungst had waived the issue “for failure to develop any supporting argument.”
The court said Suzanne Aungst had also waived her argument that the court should have required her husband to provide medical insurance for the family.
William Aungst testified that his business ended in mid-2002.
Starting in 1999, he made $19,000 a year. According to the opinion, Aungst was living with his mother and has admitted to having a drinking problem.
Suzanne Aungst filed her petition for spousal and child support in January 2004.
Later that year, the trial court ordered William Aungst to pay $562 monthly to his wife and $831 monthly to support the children, according to the opinion.
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