Chapter 14: The Judgement
The judge handed down his decision on June 31, 2015, four months after the trial’s end. I did particularly well in the distribution of our marital assets. My alimony was disappointing and frankly confusing.
After the equal split of our assets, Scott would repay half of the dissipation amount as we had agreed before trial. I took this $202,000 repayment partly by retaining sole ownership of our Arizona property, with the remainder taken as a cash payment ($202,000 less the value of his share of the property). I had initially maintained he should repay his family the entire amount he spent on mistresses, sugar babies and prostitutes. It was a moral, not a legal position so I was not surprised he would only pay back half.1
Scott was ordered to repay me, in cash, the money I personally had contributed to our outstanding 2014 tax obligation. The judge awarded me this in recognition of Scott unilaterally taking his year-end bonus, which otherwise would have been used to make the tax payment. I suspect loaning $60,000 of the bonus to his girlfriend was a factor in the judge’s decision. This payback to me was as much as $150,000 by my accounting, though the judge had not specified an actual dollar amount.
Scott was also ordered to pay the taxes associated with ALL of his 2015 income, even though we were still married for the first half of 2015, with our finances co-mingled. My alimony didn’t begin until 7/1/2015. We would both file individually and I was required to pay taxes on the six months of alimony and any other income I earned during 2015. I estimated this represented another $75,000 benefit to me.
Finally, Scott was ordered to reimburse me $11,000 in attorney fees and expenses.
He owed me A LOT of money! The 2014 tax payback to me and 2015 tax obligation to Scott were a big bonus. When you rolled it all up, I had certainly done well in the division of assets!
As to alimony, the judge awarded me an amount that “represented 30% of the difference between Husband’s income and Wife’s income at the time of trial.” I would get an additional amount for eighteen months as I worked to rebuild my business. The judge then imputed on me a judgement of what my income should be. But when I looked at the weekly alimony he calculated, it just didn’t add up. Intuitively, I felt I was getting shorted, so I investigated how he had arrived my alimony.
Specifically, when I used Scott’s income, as reported in our recently filed 2014 tax returns, subtracted my imputed income, then applied the 30% alimony figure, the weekly payment I calculated was significantly higher than the number given by the judge. Had he made an error?
Patrick and I used Scott’s Financial Statement to back out the value the Judge had used for Scott’s income. We noted Scott reported as his income an amount 29% below his actual income as filed on our 2014 tax return. We also noted he labeled his income number an “estimate” and included a buried but not referenced footnote on the last page of his financial statement. The footnote listed the value of his 2014 cash earnings (not his full earnings which would be an even higher number). Even his 2014 cash earnings were 13% higher than the total income estimate on the first page.
In short, Scott had either inadvertently or willfully misrepresented his income on his Financial Statement, which the judge used for the alimony calculation. I was betting he diliberately obfuscated his income, but of course couldn’t prove it. Further, the judge hadn’t even used the footnoted number! This resulted in an alimony value 29% lower than what I would have expected, given his actual income, as reported to the tax authorities.
My first action was to email Scott and let him know the amount I believed he owed me, including the value of my personal contributions to the 2014 tax payments. His response: I was wrong in my interpretation of the judgement and he wouldn’t be making any tax-related payback to me.
I then met with my attorneys about the alimony confusion and Scott’s refusal to pay. Regarding the alimony question, they advised we could ask the judge to relook at his decision, specifically at Scott’s income and my calculated alimony. Regarding Scott’s refusal to repay me, they suggested we file a Contempt Order, requesting the judge force Scott to repay me the money corresponding to the 2014 taxes. We would also ask the judge to specify how much Scott owed me.
These two actions were not without costs, specifically the attorney’s fees associated with both of the court filings and court appearances. However, the issues represented significant amounts of money for me and we had a strong case on both counts. Once I balanced a rough estimate of attorneys’ fees against the potential alimony and cash to be gained, moving forward on both issues was clearly worth It to me financially.
We filed the appropriate paperwork and a court date was scheduled in late August, 2015. Scott sent me a $95,000 check four days before our court date – his calculation of the 2014 tax repayment. Of course he was attempting to avoid the court appearance and minimize his losses.
I still had significant upside if we argued our case to the judge. I believed the amount Scott owed me was higher than “his calculation.” This additional tax payback and the alimony revision were worth paying Patrick and Marianne for their court appearance, so we kept our court date and argued our case.
In December, the judge’s amended ruling was delivered. He required Scott to pay me an additional amount against the 2014 taxes (though not the full amount I had requested). He also revised my alimony amount, calculating the alimony from the cash earnings number Scott had listed in his buried footnote. This represented a 13% increase in alimony. Not the 29% increase I had hoped, but significant nonetheless. Further, his responsibility was attached to the date of our first divorce judgement (June 31, 2015), so he owed me a significant cash payment of back alimony as well.
All in all, the additional attorneys’ fees were a small price to pay to win the increase in alimony and over $100K in additional cash Scott was ordered to pay me.
- I continue to maintain my moral position on his extracurricular spending. I have told my girls I got my half of his dissipation through legal means and I believe he still owes each of them ¼ of what he spent. One of them has gotten the money from him, through a horse he purchased and financially supports for her. Though I think it is unlikely, I am hopeful my other daughter will get repaid as well.