Supreme Court Seal
Supreme Court Seal
South Carolina
Judicial Department
2008-UP-433 - Edwards v. Edwards


In The Court of Appeals

Douglas Jay Edwards, Respondent/Appellant


Frances L. Edwards, Appellant/Respondent

Appeal From Greenville County
�Aphrodite K. Konduros, Family Court Judge

Unpublished Opinion No.� 2008-UP-433
Submitted March 1, 2008 � Filed August 4, 2008


William N. Epps, Jr., of Anderson, for Appellant-Respondent.

Robert M. Rosenfeld, of Greenville, for Respondent-Appellant.

PER CURIAM:� In this domestic action, Frances Edwards (Wife) appeals the family court�s order reducing alimony payments of Douglas Edwards (Husband).� Husband cross-appeals arguing the family court erred in finding him in contempt, imposing a contempt sanction, awarding Wife attorney�s fees, and allowing evidence of previous testimony.� Husband also contends a state court lacks jurisdiction, outside the realm of alimony, to interfere with repayment of his debts pursuant to Chapter 13 bankruptcy.� We affirm the reduction in alimony and hold the remaining issues in abeyance due to Husband�s bankruptcy action.[1]


Husband and Wife were married in 1966.� In 2000, Wife filed for divorce.� The family court granted Wife a divorce on the ground of adultery and awarded Wife $1,673 per month in regular periodic alimony.� Prior to the divorce hearing, Husband and Wife had reached a settlement agreement involving the equitable division of their real and personal property through two letters between counsel.� The family court approved this settlement agreement and merged and incorporated these letters by reference into the divorce order.� This agreement involved the equitable division of a family business, Central Catering and Caf� (the Caf�), and a business vehicle owned by the Caf�.�

After their divorce, Husband accepted a severance package and retired from his job with Michelin in 2002.� Thereafter, he began focusing entirely on the Caf� and wished to expand the business.� However, after losing a longtime lease, Husband began losing money in the Caf�.� Additionally, Arvidia�s Deli, an expansion restaurant Husband opened, failed a year after its opening.� Based on these events, Husband petitioned the family court for a reduction in his alimony obligation.� Wife counterclaimed, arguing Husband�s changed circumstances did not warrant a reduction in his alimony obligation and sought immediate payment of all equitably divided marital property.� Additionally, Wife alleged Husband was in willful contempt of court for his failure to pay Wife her portion of their marital estate pursuant to the original divorce decree.�

On June 6, 2005, the family court issued an order reducing Husband�s monthly alimony obligation from $1,673 to $400 based on his changed circumstances.� The family court also found Husband in contempt for failing to pay Wife her share of the marital property, Cobra benefits, and attorney�s fees and costs pursuant to the original divorce decree.� The family court ordered Husband to pay Wife $34,411.77 within 30 days, and if he failed to pay, to serve 90 days in the Greenville County Detention Center.� Additionally, the family court ordered Husband to pay Wife $7,000 in attorney�s fees which Wife incurred during the contempt case.�

Husband unsuccessfully sought a stay of the contempt order from the family court and this court.� He subsequently filed Chapter 13 bankruptcy.� The federal bankruptcy court established a payment schedule under which Husband would pay back his creditors, including paying debts he owed to Wife.�


On appeal from a family court order, the appellate court has authority to correct errors of law and find facts in accordance with our own view of the preponderance of the evidence.� E.D.M. v. T.A.M., 307 S.C. 471, 473, 415 S.E.2d 812, 814 (1992).� However, �[q]uestions concerning alimony rest with the sound discretion of the [family] court, whose conclusions will not be disturbed absent a showing of abuse of discretion.�� Kelley v. Kelley, 324 S.C. 481, 485, 477 S.E.2d 727, 729 (Ct. App. 1996).� The family court abuses its discretion when factual findings are without evidentiary support or a ruling is based upon an error of law. �Smith v. Doe, 366 S.C. 469, 474, 623 S.E.2d 370, 372 (2005).


I.� Wife�s Appeal

A.� Modification of Alimony

Wife argues Husband has not proved a substantial change in circumstances has occurred such that a reduction in alimony is warranted.� We disagree.�

The party seeking the change in alimony has the burden to prove an unforeseen change in circumstances warrants a modification.� Kelley v. Kelley, 324 S.C. 481, 486, 477 S.E.2d 727, 729 (Ct. App. 1996).� �Several considerations relevant to the initial determination of alimony may be applied in the modification context as well, including the parties� standard of living during the marriage, each party�s earning capacity, and the supporting spouse�s ability to continue to support the other spouse.�� Penny v. Green, 357 S.C. 583, 589, 594 S.E.2d 171, 174 (Ct. App. 2004).

The South Carolina Supreme Court has emphasized it, �will closely scrutinize the facts of any case wherein a husband and father voluntarily changes employment so as to lessen his earning capacity . . . .� �Camp v. Camp, 269 S.C. 173, 174, 236 S.E.2d 814, 815 (1977).� The Camp court held, �Where the husband has voluntarily relinquished a well-paying practice and has taken a position at a modest salary, the court may base the amount of alimony upon his capacity to earn money, or upon his prospective earnings.�� 269 S.C. at 175, 236 S.E.2d at 815.� Recently, the South Carolina Supreme Court held the motive behind a reduction in income may be a factor when courts consider earning capacity.� Arnal v. Arnal, 371 S.C. 10, 13, 636 S.E.2d 864, 866 (2006).� The court held the party �seeking to impute income to the other [party] need not establish a bad faith motivation to lower a support obligation in order to prove voluntary underemployment. The presence of bad faith is a factor in determining whether a [party] is voluntarily underemployed, but the lack of such bad faith does not preclude a finding of voluntary underemployment.�[2]Id.

In the present case, the family court found Husband proved a substantial change in circumstances warranting a reduction in alimony from $1,673 to $400 per month.� Husband�s substantial change in circumstances occurred after he terminated his employment with Michelin at the age of fifty-eight.� In September of 2001, Michelin sought to reduce its workforce and expenses.� Specifically, Michelin sought to reduce $275 million from their budget over a three-year span.� Husband testified his best option was to take an early retirement package Michelin offered and retire in 2002.� Husband made this decision based on his knowledge of events taking place at Michelin in addition to events happening in his own department.� Husband was making $54,000 per year at the time of the divorce.� However, the family court attributed this salary to Husband�s length of service at Michelin, rather than his earning capacity in the job market.� The family court stated Husband was �under qualified to earn what he was earning, but for his years of service.��

In addition to his severance package of eleven months pay, Husband received retirement benefits and sought to increase profits of the Caf�, his existing business.� Husband also wished to expand this business by opening a deli.� After retiring from Michelin, unforeseen events caused Husband�s income to diminish.� First, the Caf� was forced to relocate because Husband lost his lease.� Under the Caf�s new lease, monthly rent increased from $200 to $1,251.� In addition, Husband�s restaurant expansion, the Arvidia Deli, failed a year after opening.� We note Husband was legitimately concerned that he may have been fired if he had rejected Michelin�s severance package.� Furthermore, Husband�s loss of the Caf�s lease and his unsuccessful business venture with the Deli were all unforeseen and unanticipated changes in market conditions.�

Based on these unforeseen changed circumstances, we find the family court did not abuse its discretion in reducing Husband�s alimony obligation based on the above evidence and its finding that Husband made an �excellent effort� to supplement his income.� Accordingly, we affirm the family court�s decision to reduce alimony.�

B.� Amount of Alimony Reduction

Alternatively, Wife argues the family court erred in determining the amount of Husband�s reduced alimony obligation.� We disagree.

The family court initially ordered Husband to pay $1,673 per month in alimony to Wife after finding Husband earned $4,516 in gross monthly income from his job with Michelin, with a net monthly income of $2,915 after deductions.� Additionally in the divorce decree, the family court found Husband earned a profit of $29,884.55 from the Caf� during the first ten months of 2000.� At that time, the family court considered Husband�s two potential sources of income in its determination of alimony payments. �

In considering Husband�s request to decrease his alimony obligation, the family court recognized he is no longer receiving $4,516.00 in gross monthly income from his job with Michelin.� Additionally, the family court recognized �that a business [Husband] established, known as Arvidia�s [D]eli, has now failed and he no longer has sufficient funds with which to pay his alimony obligation.�� Consequently, Husband derives his sole source of income from the profit of the Caf�.�

The Caf�s 10 month income statement showed a net income of $21,076.14 as of October 31, 2004.� However, we note the Caf�s 11-month net income statement as of November 30, 2003, showed the business was operating at a net loss of $12,263.93 for 2003, and the October 2002 income statement showed the business producing a mere profit of $1,032 for 10 months in 2002.� In their testimony, Husband and his accountant, Gerald Saunders, corroborated these figures.� Moreover, net income from the Caf� pays off business loans and lines of credit and is used to acquire business assets; the net income does not all go directly to Husband as a salary.� Rather, Husband may take �distributions� for personal expenses.� Husband testified he had drawn only $3,578.19 from the Caf� during the first six months of 2004.� Based on this distribution, Husband estimated $596 was his monthly salary from the Caf�.� Saunders later testified Husband�s annual distributions were $9,150 in 2002; $1,000 in 2003; and $6,785 in 2004.� Though Husband�s tax returns are not included as part of the trial record, Saunders also testified $16,090.92 was Husband�s taxable income in 2004.� The cash flow statement for the Caf� showed $16,090.92 as �income per tax return� in 2004, but these figures were negative for 2002 and 2003.�

Due to the nature of Husband�s business, it is difficult to determine his exact annual salary.� Instead, Husband withdraws his income from the Caf� based on available income after meeting debt obligations and making necessary business purchases.� Moreover, the family court found �nothing improper in [Husband�s] record keeping or expenditures,� nor did the family court believe Husband was hiding personal expenditures behind the Caf� or that he was �living out of� it.� We additionally note Husband has drawn against his retirement account for living expenses and to make loan payments.�

While we note the family court drastically decreased Wife�s alimony, after examining the record, we find the amount she receives is in line with Husband�s decreased earning capacity.� Additionally, we note Husband�s decreased income is partly attributable to unforeseen changes in market conditions.� Therefore, if a situation arises where Husband�s earnings increase, Wife has the ability to petition the family court for an increase in her monthly alimony based on changed circumstances.� However, in the meantime, we find the family court did not abuse its discretion in reducing the amount of alimony Husband owes and affirm the family court�s revised calculation of alimony.�

II.� Husband�s Appeal

Husband argues the federal bankruptcy law stays enforcement of the family court�s orders regarding the payment of Wife�s division of the marital property relating to 1) the Caf�; 2) Dodge automobile; 3) Wife�s award for past due COBRA payments; 4) past due attorney�s fees; and 5) attorney�s fees for the present action.� We agree.�

The filing of a petition for bankruptcy operates as an automatic stay of most state court proceedings.[3] �11 U.S.C.A. � 362(a) (West 2004 & Supp. 2008).� �Once a bankruptcy petition is filed, the bankruptcy court takes custody of all property in the debtor�s possession.�� Bragg v. Bragg, 347 S.C. 16, 24, 553 S.E.2d 251, 255 (Ct. App. 2001).� Upon such a filing, the debtor�s property is under the jurisdiction of the bankruptcy court, and �no other Court, and no person acting under any process from any other Court, can, without the permission of the Bankrupt[cy] Court, interfere with it.� Bragg, 347 S.C. at 24, 553 S.E.2d at 255 (internal citations omitted).� Due to the bankruptcy court�s exclusive jurisdiction over Husband�s debts, no action can be maintained in a state court to enjoin assets within the bankruptcy court�s jurisdiction, nor can a state court issue an order that would interfere with the jurisdiction of the bankruptcy court. �Id. at 24, 553 S.E.2d at 255-56.

On September 23, 2005, Husband filed a petition for bankruptcy in the United States Bankruptcy Court for the District of South Carolina.� Thereafter, on March 14, 2006, the bankruptcy court issued its order confirming the Chapter 13 Plan and resolving motions.� In the Chapter 13 Plan, Wife was listed as a priority creditor. �The state courts no longer have jurisdiction over the debts owed Wife.� Accordingly, Husband�s appeal is held in abeyance.�


Accordingly, we affirm the family court�s decision to reduce Husband�s alimony obligation due to a substantial and material change in his circumstances and hold the remaining issues in abeyance.�



[1] We decide this case without oral argument pursuant to Rule 215, SCACR.

[2] Although the facts in Arnal involved reduction of child support payments, because voluntary underemployment occurs in the alimony arena as well, we find the situation analogous to alimony.�

[3]�An action for the establishment or modification of an order for domestic support obligations is not subject to the bankruptcy automatic stay.� 11 U.S.C.A. � 362(b)(2)(A)(ii) (West Supp. 2008).