Supreme Court drops burden to modify support agreements; holds requirement to maintain health insurance is a form of modifiable alimony despite parties’ waiver of alimony

Posted Tuesday, May 31st, 2011 by Gregory Forman
Filed under Alimony/Spousal Support, Of Interest to Family Court Litigants, Of Interest to Family Law Attorneys, South Carolina Appellate Decisions, South Carolina Specific

The May 31, 2011 South Carolina Supreme Court opinion in Miles v. Miles, 393 S.C. 111, 711 S.E.2d 880 (2011),  remedies what many South Carolina family law practitioners, including myself, considered a misguided decision in the case of Floyd v. Morgan, 383 S.C. 469 , 681 S.E.2d 570 (2009) to increase the burden of modifying support when support was previously set based upon an agreement.  The Miles opinion was written by Justice Hearn, who replaced Justice Waller since Floyd was decided.  Her opinion notes:

Prior case law has indicated that a party faces a heightened burden when seeking to prove a substantial change in circumstances from a court order approving an agreement. This principle has had the effect of chilling the litigants’ desire to resolve their disputes by agreement, which is contrary to this Court’s longstanding preference in favor of settlement.  Accordingly, we take this opportunity to expressly disavow the line of cases that articulate an even higher burden on the party seeking modification when an agreement is involved.  Today, we clarify that while the burden to prove entitlement to a modification of spousal or child support is a substantial one, the same burden applies whether the family court order in question emanated from an order following a contested hearing or a hearing to approve an agreement.

Citations omitted.

The primary issue on appeal in Miles was whether the family court had authority to modify a provision of the parties’ divorce agreement in which Husband agreed:

[T]o maintain health and dental insurance on [Wife] through his place of employment until such time as [Wife] remarries or until [Wife] attains employment which provides health insurance to employees as part of its fringe benefits package; both [Husband] and [Wife] waive alimony.

Wife had not remarried or obtained employment in which she was provided health insurance.  She argued that because both parties had waived alimony, this health insurance requirement was in the nature of property division and not subject to modification.  While the family court and the Court of Appeals agreed with Wife’s position, the Supreme Court disagreed, finding this provision was in the nature of spousal support and was therefore modifiable:

As to whether Husband’s obligation is an incident of support, the maintenance of health insurance has the hallmark of spousal support: it provides the receiving spouse a benefit which is normally incident to the marital relationship. Additionally, our courts have previously awarded health insurance as a form of support.  Awards of spousal support do not become property divisions, and therefore non-modifiable, absent something more.

Here, the agreement simply states Husband will provide health and dental insurance for Wife.  It does not indicate Wife surrendered property rights in exchange for it, nor does the agreement provide any indication that Husband’s obligation is anything other than support.  Additionally, this requirement terminates automatically upon Wife’s remarriage or her obtaining employment that provides similar coverage, both instances in which she would be able to obtain this benefit through means other than Husband.   The language creating Husband’s obligation in the agreement even appears in the same paragraph as the language pertaining to alimony.  In fact, it is in the same sentence.  Looking squarely at the face of the agreement, we cannot find it is unclear or susceptible to more than one interpretation.  Therefore, although we agree with the family court and the court of appeals that the agreement is unambiguous, we hold that it unambiguously creates a support obligation.

Wife argues that her decision to waive alimony unambiguously demonstrates the insurance obligation is not an incident of support.  However, alimony is not the only form of support available in a divorce. See S.C. Code Ann. § 20-3-130 (Supp. 2009) (discussing the different forms of alimony and “[s]uch other form of spousal support . . . as appropriate under the circumstances”).  Wife and the family court have placed too much emphasis on the language that the parties “waive[d] alimony.”  Such semantic distinctions have been abolished in family law. As we said in Moseley v. Mosier, 279 S.C. 348, 306 S.E.2d 624 (1983)],

[t]he parties’ intent is rarely revealed from the agreement’s words of art.  Generally, those terms are used without intending or implying any particular legal consequences.  Later, courts impose the consequences upon the unsuspecting parties.  Today, we overrule those cases which hold that words of art make a major distinction in the operation of divorce law.

The mere fact the parties waived alimony—i.e., permanent and periodic, lump sum, rehabilitative, and reimbursement alimony—does not lead to the inescapable conclusion they accordingly waived all other forms of support.  Such a result is contrary to the common sense approach to extrajudicial agreements advocated in Moseley.

Therefore, we hold the agreement unambiguously provides a modifiable incident of support in the form of health and dental insurance as a matter of law.  Thus, the family court committed an error of law in denying Husband a modification

Citations omitted.

Finding Husband’s significantly deteriorated earning capacity and health problems and Wife’s increased income were a substantial change of circumstances, the Supreme Court remanded the matter back to family court for an adjustment of Husband’s support obligation.

In his partial concurrence, partial dissent, Justice Pleicones continued to express his view, first noted earlier this month in Lewis v. Lewis, 392 S.C. 381, 709 S.E.2d 650 (2011), that the Supreme Court, when reviewing orders on certiorari from the Court of Appeals, only corrects errors of law and does not have jurisdiction to make its own findings of fact.  He would have remanded the matter back to the family court without making a determination that Husband had proven a substantial change of circumstances.