Alimony award reversed where wife was underemployed and RSUs counted for support

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The South Carolina Court of Appeals reversed a family court‘s award of permanent periodic alimony to the wife, finding the record showed she had the education, experience and earning capacity to support herself without ongoing payments from the husband. The court otherwise affirmed the inclusion of the husband’s vested restricted stock units, or RSUs, as income for child support purposes and upheld the denial of the wife’s request for attorneys’ fees.

The court said alimony was unnecessary because the wife was underemployed and had not made a good-faith effort to maximize her earnings. Although she earned about $77,000 a year through military reserve work, the evidence showed she held a law degree, had substantial military experience and had opportunities to seek fuller employment in more than one jurisdiction. The court stressed that alimony is meant to help a spouse maintain the marital standard of living, not improve it or reward a failure to pursue available work. It also noted the parties had lived a modest, middle-class lifestyle during the marriage and that the wife’s financial condition had improved during the litigation because of temporary support.

On child support, the court agreed that the husband’s vested RSUs were properly treated as income. Once vested, the court said, the units function like compensation, appear on tax documents and are available for the recipient’s use. That made them sufficiently similar to earned income to be included in support calculations. The court rejected the husband’s claim that this amounted to improper double counting or that the units should be excluded because they were nonmarital property.

The court also found no abuse of discretion in requiring each side to pay its own attorneys’ fees and costs. Both parties had received more than $800,000 in equitable distribution, and both had helped prolong the litigation.

The 12 page opinion is Scherba v. Scherba, Lawyers Weekly No. 001-015-26.