The February 23, 2011 Court of Appeals opinion in Reiss v. Reiss, 392 S.C. 198, 708 S.E.2d 799 (Ct.App 2011) makes me question whether the appellate courts are taking the deference to family court judge’s credibility findings too far. In Reiss, Husband got beaten miserably at trial and he didn’t obtain any relief from this appeal.
Mr. Reiss started his separation with actions that would get any South Carolina husband in trouble with the family court: leaving his wife for another woman; removing items from the marital home while his wife was undergoing cancer treatment; surreptitiously selling marital real estate; transferring title to marital property to his girlfriend. It was like a perfect storm of things one shouldn’t do when separating from one’s spouse–it especially didn’t help that his wife was undergoing cancer treatment during this time–and Mr. Reiss got a perfect sh*t storm back from the family court. The family court valued the major asset it was proving him with at the highest valuation possible. It valued a large debt it was saddling the wife with at the highest value possible. It gave husband a higher earning capacity than he had ever earned and gave wife a very low one. It then resolved equitable distribution, alimony and attorney’s fees based on these credibility-based factual determinations.
A couple of the family court’s credibility determinations were explicable. It valued the fishing boat it awarded to Husband at $450,000 despite what Husband contended was “overwhelming evidence presented at trial [that] demonstrated its value was $100,000.” However, in a salvage action filed in the United States District Court for the District of South Carolina six months before Wife initiated this divorce action, Husband asserted the value of the boat was $450,000. The family court found Husband was judicially estopped from asserting a value different than $450,000. Since Husband failed to appeal the judicial estoppel issue, the Court of Appeals affirmed the $450,000 valuation.
The family court also found that Wife’s earning capacity was minimal because, even though her cancer was in remission at the time of trial, she faced several reconstructive surgeries shortly thereafter. The only evidence of Wife’s earning potential independent of the parties’ fishing business was Husband’s assertion Wife was earning between $70,000 and $80,000 per year at the time the parties married in 1990.
However a number of the family court’s credibility determinations were inexplicable. For example, the family court found that the costs of repairing water damage in the marital home was $269,000 and deducted this amount from the equity in the home that it was awarding to Wife. In reaching this amount the family court made two credibility determinations in which the supporting evidence was very questionable.
First, if based this $269,000 valuation on the listing in Wife’s financial declaration. Yet Wife testified that the estimated cost of the repairs was $221,000, while Husband testified that he found a contractor willing to do the repairs for $8,000. In upholding the family court’s $269,000 valuation on the repair costs the Court of Appeals noted the “family court may accept the valuation of one party over another” and “valuation of marital property will be affirmed if it is within the range of evidence presented.” However, there is no explanation as to why Wife’s financial declaration is more credible than her testimony that estimated the cost of repairs at $221,000. If the family court thought Wife’s testimony on the cost of repairs was inaccurate, why did she win that credibility battle over Husband? And why is the Court of Appeals even deferring to the family court’s credibility determination regarding a financial declaration? The usual deference to the family court’s credibility determinations is that the judge could witness a party’s demeanor while testifying. A financial declaration is simply writing on a piece of paper. I didn’t realize there was demeanor to observe.
There was a further dispute over whether a homeowners policy was in effect when the water damage occurred (husband, in violation of the temporary order, had let the policy lapse while the parties were in litigation). Husband contended that the water damage occurred before coverage lapsed. The Court of Appeals conceded that “Wife’s testimony is vague on the issue of exactly when she discovered the damage in relation to when the insurance policy lapsed.” However the Court of Appeals affirmed the family court’s finding that the water damage post-dated the policy lapse because Wife “was consistent in her testimony that she did not file an insurance claim because no insurance was in effect.” If Wife wasn’t clear when the water damage occurred, how could she be clear whether it occurred before the policy lapsed? Perhaps Wife couldn’t be bothered to file a claim? Husband was wrong in letting the policy lapse in violation of the court order but couldn’t the family court have ordered Wife to file an insurance claim and give Husband any proceeds from that claim?
Husband was further victimized by credibility determination on the his income. Admittedly, Husband’s evidence made it difficult for the family court to determine his income. In an affidavit filed in conjunction with the temporary hearing, Husband asserted he earned a gross income of approximately $250,000 per year. His financial declaration failed to expressly specify his income and merely stated “See Tax Returns.” His 2004 individual tax return stated a taxable income of $323,096. His 2006 individual tax return stated a taxable income of $0.00, with his fishing business reporting a net profit of $61,667 but another company he owned showing a net loss of the same amount. Based on this, the family court found Husband has the ability to earn $350,000 per year and the Court of Appeals affirmed this finding. I don’t see the evidence to support it.
Based on the valuations and earning capacities found by the family court and affirmed by the Court of Appeals, the family court ordered Husband to pay substantial alimony, retroactive support and attorney’s fees. These were all affirmed on appeal.
It is understood that Husbands who screw other women are likely to get screwed by the family court–especially when the Wife is particularly sympathetic. Mr. Reiss’ screwing appears particularly acute due to these seemingly unjustifiable credibility determinations.
Greg,
Your comments are on point in your analysis. Interestingly, one of the points argued in the appeal was that the wife inexplicably never bothered to file a claim with the insurance company although it was clear that the damage had occurred prior to the lapse of insurance coverage. Nevertheless, the Court considered it the husband’s problem and saddled him with the liability.