Nicholene Nelson v. Carey O'Neil McKenzie ( 2022 )

SECOND DIVISION
RICKMAN, C. J.,
MILLER, P. J., and PIPKIN, J.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
https://www.gaappeals.us/rules
June 28, 2022
In the Court of Appeals of Georgia
A22A0199. NELSON v. MCKENZIE.
PIPKIN, Judge.
We granted this discretionary appeal to review the trial court’s order modifying
the child support obligation owed by Appellee Carey O’Neil McKenzie (“Father”) to
Appellant Nicholene Nelson (“Mother”) for the benefit of their minor child. On
appeal, Mother asserts that the trial court erred by failing to account for all of Father’s
income, by applying a downward deviation for visitation-related travel expenses, and
by concluding that the child’s private-school tuition could be classified as a
nonspecific deviation. For the reasons set forth below, we reverse the judgment of the
trial court in part, vacate it in part, and remand this matter for further proceedings.
1. Mother first argues that, while the trial court correctly calculated Father’s
base income and bonuses,1 the trial court failed to consider income that Father
receives as part of his employer’s Long Term Incentive Plan (“LTIP”).2 Specifically,
Father, who is a senior vice president at his company, testified at the hearing on the
modification petition that, in 2018, 2019, and 2020, he received LTIP “equity grants”
consisting of approximately $75,000 (CAD) worth of company stock; according to
Father, the award is “what [his employer] give[s] to the folks at [his] level as an
incentive to stick around.” While Father testified that a “very complicated formula”
determines how and when LTIP awards can be withdrawn,3 he also testified that he
withdrew his available LTIP in 2019 and 2020; Father’s testimony coupled with
Mother’s exhibits reflect that the 2019 payment totaled approximately $26,000, and
1
The trial court determined that Mother has a gross monthly income of
$10,419.45, while Father has a gross monthly income of $27,724.24.
2
While modification of child support is warranted pursuant to OCGA §
19-6-15 (k) (1) only where “there is a substantial change in either parent’s income
and financial status or the needs of the child,” (citation and punctuation omitted)
Park-Poaps v. Poaps, 351 Ga. App. 856, 864 (4) (833 SE2d 554) (2019), neither
party disputes that modification is warranted here; since the entry of the original order
resolving child support in May 2017, both parties’ income has increased significantly.
3
Father testified that LTIP is awarded at the discretion of “the Board,” and he
explained that some LTIP awards vest within three years, while other LTIP awards
are not available until retirement.
2
the 2020 payment totaled approximately $129,000. At the hearing on the petition for
modification, Father was adamant that the LTIP withdrawals were “not pay” and that
he merely “cashed in assets to take care of expenses”; he also testified that, as of the
time of the hearing, he had “depleted” all LTIP awards that were available for
withdrawal. In its final order, the trial court credited Father’s testimony that he
currently has “no vested interest in LTIP” and, thus, that “no portion of the LTIP is
actually available for child support purposes.” Mother contests this conclusion on
appeal.
“In Georgia, determining each parent’s monthly gross income is the first step
that a court must take in calculating child support under our child support guidelines.”
(Citation and punctuation omitted.) Cousin v. Tubbs, 353 Ga. App. 873, 880 (3) (a)
(i) (840 SE2d 85) (2020). “Gross income . . . shall include all income from any
source, before deductions for taxes[.]” (Emphasis supplied.) OCGA § 19-6-15 (f) (1)
(A). Even inconsistent income must be considered by a factfinder. Specifically,
OCGA § 19-6-15 (f) (1) (D) provides that
[v]ariable income such as commissions, bonuses, overtime pay, military
bonuses, and dividends shall be averaged by the court or the jury over
a reasonable period of time consistent with the circumstances of the case
and added to a parent’s fixed salary or wages to determine gross income.
3
Adherence to these provisions is mandatory. Evans v. Evans, 285 Ga. 319, 319 (676
SE2d 180) (2009). The trial court’s factual findings in this regard are reviewed under
a clearly erroneous standard, while the trial court’s legal conclusions are reviewed de
novo. Cousin, 353 Ga. App. at 880 (3) (a).
While Father contends on appeal, as he did below, that his LTIP awards and
withdrawals are not “pay,”4 there is no indication that the trial court agreed with such
an unconvincing argument; indeed, such a conclusion would have been clearly
erroneous in light of the evidence that the two LTIP withdrawals appear as “earnings”
on Father’s pay stubs and as income on his W-2s.5 Instead, the trial court seemingly
excluded consideration of LTIP because there was no portion of LTIP available to
withdraw at the time of the hearing.6 While the trial court was undoubtedly trying to
accurately assess the relative financial position of both parties, the requirement is to
consider all income, even variable income, as part of calculating child support. See
4
Father’s argument on appeal is supported by a single citation of authority,
namely an inapposite decision reciting the general standard that a trial court’s
findings of fact are entitled to deference on appeal.
5
Father’s 2019 gross wages totaled approximately $350,000, and his 2020
gross wages totaled approximately $430,000.
6
While Father has depleted the available LTIP, he acknowledged that he had
retained and “reinvested” at least forty percent of the 2020 LTIP withdrawal.
4
OCGA § 19-6-15 (f) (1) (D). Thus, even if the award of LTIP is discretionary and the
withdrawal of those funds may be time and circumstance dependent, it is clear that
LTIP is a periodic source – and, in fact, a very recent source – of income for Father.
Accordingly, the trial court erred by failing to consider Father’s LTIP when
calculating his income for the purpose of modifying his child-support obligation, and
the trial court’s order is reversed to that extent.7 See Lutz v. Lutz, 302 Ga. 500, 503-
504 (3) (807 SE2d 336) (2017) (father’s prior-year annual bonus, while not a
guaranteed source of income, properly included when considering the child support
obligation of the parents); Evans, 285 Ga. at 319 (erroneous for trial court to refuse
to consider father’s overtime simply because it was “not guaranteed”).
2. Mother relocated to Illinois with the child shortly after the divorce, and
Father, who remains in Georgia, exercises visitation with the child in Illinois.
Following the modification hearing, the trial court granted Father’s requested
downward deviation of child support by $784.17 for visitation-related travel
7
We also reverse all portions of the trial court’s order which relied on the
erroneous calculation of Father’s income; consequently, we pretermit Mother’s other
enumerations of error which are premised on the incorrect calculation of Father’s
income. We also vacate the trial court’s ruling on the parties’ request for attorney fees
to allow the trial court an opportunity to reconsider the issue once Father’s income
is recalculated.
5
expenses, finding as follows: “Father travels at least twice a month to Illinois and,
taking into consideration the circumstances of the respective parents as well as which
parent moved and the reason for such move, the deviation is appropriate.” However,
as Mother correctly notes, while Father originally had twice-monthly visitation with
the child – along with visitation associated with major holidays and summer vacation
– Father’s visitation scheduled was changed by a modified permanent parenting plan
that was approved and filed by the trial court at the same time as the order modifying
child support. Indeed, Father acknowledged during his testimony that he would “no
longer have every other weekend visitation” but, instead, “would have a holiday
visitation and a summer visitation parenting schedule.”
Thus, while there is extensive evidence in the record concerning Father’s travel
expenses and while we understand that the trial court was attempting to offset
Father’s travel expenses, the trial court mistakenly failed to consider Father’s travel
expenses in the context of the modified parenting plan that alters Father’s visitation
schedule; accordingly, the trial court’s downward deviation for visitation-related
travel expenses is reversed, and, on remand, the trial court should evaluate any such
deviation in light of the modified parenting plan. See Park-Poaps, 351 Ga. App. at
6
871 (7) (a) (reversing deviation for visitation-related travel expenses when the
deviation was unsupported by adequate factual findings).
3. Although the parties share joint legal custody of the child, Mother has final
decision-making authority concerning the child’s education, and a key issue at the
modification hearing was the cost of the child’s private-school education. The trial
court learned that, under the terms of the parents’ original agreement, the cost of the
child’s day care was set at $2,000 per month, and Father’s prorated share of that cost
totaled $1,500 per month. The child apparently aged-out of her daycare facility in
2018, and Mother, in consultation with Father, moved the child to the British
International School of Chicago (“BISC”) for preschool and kindergarten, where she
remains enrolled. The record reflects that the annual cost of the child’s attendance at
BISC has been between $25,000 and $35,000 per year, and Mother sought an upward
deviation in child support to pay for the child’s schooling. During his testimony,
Father expressed his concerns with the expense of the school, characterized the
tuition as “a significant burden,” and explained that he believed that less-expensive
alternatives were available.
In its order modifying Father’s child-support obligation, the trial court
explained that, while “Mother has final decision making authority for education . . .
7
her decision to keep the child in the same school where the child attended [preschool]
is costly,” and the trial court concluded that, as a nonspecific deviation, Father should
continue to pay $1,500 per month towards the private-school tuition, which “only
covers 51.76% of school.” On appeal, Mother asserts that the trial court erred by
treating the cost of the child’s private-school education as a nonspecific deviation
under OCGA § 19-6-15 (i) (3)8 – which resulted in Father paying an arbitrary flat
amount toward that tuition – rather than treating the cost as a specific deviation for
extraordinary education expenses that is prorated pursuant to OCGA § 19-6-15 (i) (2)
(J) (i).9
“The presumptive amount of child support calculated pursuant to the statutory
child support guidelines is not conclusive.” Hardman v. Hardman, 295 Ga. 732, 737
(3) (b) (763 SE2d 861) (2014). Indeed, the trial court “has considerable discretion to
deviate from the presumptive child support amount based on the many specific
8
“Deviations from the presumptive amount of child support may be appropriate
for reasons in addition to those established under this subsection when the court or
the jury finds it is in the best interest of the child.”
9
“Extraordinary educational expenses may be a basis for deviation from the
presumptive amount of child support . . . . [and] include, but are not limited to, tuition
. . . and other reasonable and necessary expenses associated with . . . private
elementary . . . schooling that are appropriate to the parent’s financial abilities and to
the lifestyle of the child if the parents and the child were living together.”
8
deviations listed in the guidelines or on other grounds, but only after supporting any
deviation with written findings of fact.” Id. At issue here is whether the trial court
was permitted to treat the cost of the child’s private school as a nonspecific deviation
when the child-support guidelines expressly categorize extraordinary educational
expenses as a specific deviation.
While our Supreme Court in Parker v. Parker, 293 Ga. 300, 306 (2) (745 SE2d
605) (2013), has indicated that there is no “hard-and-fast rule” against such a practice,
that case involved a trial court exercising its discretion to craft an equitable balance
between parents in a split-parenting arrangement; indeed, the case involved a
nonspecific deviation afforded to both parents.10 Id. Here, on the other hand, the order
offers no insight into the trial court’s decision to use a nonspecific deviation over the
specific deviation. Indeed, we agree with Mother that the trial court’s use of a
nonspecific deviation to permit Father to continue to pay the same dollar amount that
he paid towards daycare – without any analysis or explanation other than a passing
notation that the child’s private school is “costly” – is arbitrary, especially in light of
the fact that the parties did not present evidence specifically addressing the cost of
10
The court in Parker also noted that “the better practice [is] not to include
within nonspecific deviations factors that are set forth in the statutory list of specific
deviations.” Id. at 306 (2).
9
private schooling in Chicago.11 Further, while the trial court’s order appears to mirror
Father’s ongoing concern with Mother’s choice of school, Father actually agreed to
an amended parenting plan shortly before the start of the modification hearing in
which Mother retained final decision-making authority over the child’s schooling.
We recognize that modifying child support generally requires the trial court to
strike a delicate balance, which is no easy task, and we do not mean to say that the
trial court must require Father to pay for Mother’s choice of school, no matter the
cost. Indeed, the plain language of the specific deviation for extraordinary educational
expenses reflects that such deviations must be “appropriate to the parent’s financial
abilities and to the lifestyle of the child if the parents and the child were living
together.” (Emphasis supplied.) OCGA § 19-6-15 (i) (2) (J) (i). Nevertheless, under
the facts of this case, the trial court committed reversible error by using the
nonspecific deviation to arbitrarily set Father’s contribution toward the child’s
private-school costs.
Judgment reversed in part and vacated in part, and case remanded. Rickman,
C. J., and Miller, P. J., concur.
11
While Father testified vaguely that he knew of “top” private schools in
Chicago that “are almost half the cost of what we pay for BISC,” he later
acknowledged that he had no evidence regarding those schools or the relevant tuition.
10