Edwin Clyde Neelly, IV v. Lisa Leatherman Neelly ( 2016 )


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  •          IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
    NO. 2015-CA-00438-COA
    EDWIN CLYDE NEELLY, IV                                                      APPELLANT
    v.
    LISA LEATHERMAN NEELLY                                                        APPELLEE
    DATE OF JUDGMENT:                          01/30/2015
    TRIAL JUDGE:                               HON. MILLS E. BARBEE
    COURT FROM WHICH APPEALED:                 LEE COUNTY CHANCERY COURT
    ATTORNEY FOR APPELLANT:                    JOE M. DAVIS
    ATTORNEYS FOR APPELLEE:                    JASON D. HERRING
    MICHAEL SPENCER CHAPMAN
    NATURE OF THE CASE:                        CIVIL - DOMESTIC RELATIONS
    TRIAL COURT DISPOSITION:                   GRANTED CITATION FOR CONTEMPT;
    DENIED MOTION TO MODIFY DIVORCE
    DECREE
    DISPOSITION:                               AFFIRMED - 10/11/2016
    MOTION FOR REHEARING FILED:
    MANDATE ISSUED:
    BEFORE LEE, C.J., WILSON AND GREENLEE, JJ.
    GREENLEE, J., FOR THE COURT:
    ¶1.    Edwin Neelly appeals the Lee County Chancery Court’s order finding him in contempt
    of a divorce and separation agreement for failure to reimburse his ex-wife for certain
    expenses related to their minor children and denying his request to modify the original decree
    to allocate to him tax-exemption benefits. Finding no error, we affirm.
    FACTS AND PROCEEDINGS BELOW
    ¶2.    Edwin and Lisa Neelly divorced in 2005. The divorce decree incorporated a
    Separation and Property Settlement and Child Support and Custody Agreement
    (“Agreement”) relating to their four minor children. The Agreement provided in part that
    Edwin be responsible for one-half of all uncovered medical care (including dental and
    optical), one-half of automobile expenses for the minor children, and all reasonable college
    expenses.
    ¶3.    In May 2012, the court issued an order finding Edwin in contempt of certain
    provisions of the Agreement. Edwin was ordered in part to reimburse Lisa for $3,500 in
    medical and automobile expenses, to provide proof of life insurance, and to provide the
    minor children a fuel card or a credit card for the exclusive use of fuel. By agreement of the
    parties, the contempt order also directed that Lisa send the bills for quarterly reimbursement
    to Edwin through his attorney at the time, rather than send them directly to Edwin. The
    purpose of this arrangement was to minimize the need for Lisa and Edwin to communicate
    with each other, given the strained nature of their relationship.
    ¶4.    Lisa filed a second motion for contempt in January 2013, asserting that Edwin had
    accrued more than $17,000 in arrearage for failure to reimburse his share of qualified
    expenses. Edwin counter-petitioned, requesting in part that the trial court modify the original
    Agreement to allow him to claim certain tax benefits related to the dependent children.
    ¶5.    The court held a hearing.1 Edwin testified that he paid all bills that were forwarded
    to his former attorney. The former attorney testified that she understood her role as
    1
    At the time of the 2013 motion for contempt, the original chancellor, Talmage
    Littlejohn, was no longer sitting on the bench. The Mississippi Supreme Court appointed
    senior status judge Mills Barbee to preside after multiple other local chancellors recused due
    to professional or personal relationships with the parties.
    2
    intermediary to include screening whether the expenses submitted by Lisa were reasonable
    and in accordance with the Agreement. Lisa submitted as evidence a list of the unreimbursed
    expenses along with receipts. Edwin had been personally sent a copy of these expenses and
    acknowledged having access to the record of them. The submitted medical and automobile
    expenses totaled $19,577.67, with $9,788.84 constituting the half Edwin would owe. The
    college expenses included $953.08 for a computer and $6,700 for the couple’s freshman
    daughter renting an apartment off of campus. Edwin expressed dissatisfaction that he was
    not involved in the decision-making process of certain expenses, such as the purchase of a
    $6,400 vehicle, the $935.08 laptop, and the cost of the freshman daughter renting an
    apartment instead of living on campus or commuting from home. He also testified that
    modification of the original order to permit him to claim some of the minor children as
    dependents on his taxes would help him pay for his reasonable share of these expenses.
    ¶6.    The court found Edwin to be in contempt and established an instalment timeline for
    him to pay the $14,073.92 arrearage. The court found him liable for only one-half of the off-
    campus apartment expense, instead of for the whole amount. Edwin’s request for
    modification to receive the tax benefits was denied. The court vacated the provision of the
    previous contempt order directing that bills be sent to Edwin through his former attorney.
    ¶7.    Edwin appeals.
    DISCUSSION
    ¶8.    An appellate court will not disturb a chancellor’s findings related to domestic matters
    unless they are manifestly wrong or clearly erroneous, or the chancellor applied an erroneous
    3
    legal standard. Louk v. Louk, 
    761 So. 2d 878
    , 882 (¶8) (Miss. 2000).
    I.     The trial court did not abuse its discretion in denying Edwin’s
    request for modification relating to tax benefits.
    ¶9.    Edwin argues that the chancellor erred in refusing to modify the original agreement
    to permit him to claim some of the children as dependents on his tax return. He cites largely
    to the Mississippi Supreme Court’s decision in Nichols v. Tedder, 
    547 So. 2d 766
    (Miss.
    1989), in which the court held that a chancellor has the authority to order a custodial parent
    to execute a tax-dependency waiver in favor of the noncustodial parent. The court held:
    The decision to allocate [the tax exemption to the noncustodial parent] is to be
    made on a case-by-case basis in the exercise of the chancellor’s wide
    discretion, and where the equities of the case require an allocation and order
    of waiver, the custodial parent’s obligation to execute the release is to always
    be contingent on the receipt of all due and owing payments related to the care
    and maintenance of the dependent children.
    
    Id. at 780.
    The court referenced with approval examples from other jurisdictions of when
    allocation to the noncustodial parent is appropriate, emphasizing that income-tax exemptions
    are typically most valuable to the party in the higher tax bracket and can be worthless to a
    party with little or no income. 
    Id. at 776.
    Chancellors can construct an order for child support
    that equitably takes into consideration which party received the benefit of the tax advantage,
    while maximizing the overall income available to benefit the child. Id; see also 
    Louk, 761 So. 2d at 884
    (¶17) (enumerating various factors chancellors can consider when allocating
    tax exemptions, including noneconomic contributions by the custodial parent, the value of
    the exception at the marginal tax rate of each parent, the income of each parent, the age of
    the child and how long the exemption will be available, the percentage of the cost of
    4
    supporting the child borne by each parent, and the financial burden assumed by each parent
    under the property settlement in the case).
    ¶10.   Here, Edwin is not challenging the allocation of tax exemptions with a direct appeal
    from a chancellor’s original decree. When the request to transfer a tax exemption is pursuant
    to a request to modify a prior decree, a material and adverse change in circumstances must
    occur to transfer to one parent a tax exemption that was previously awarded to the other
    parent. Peters v. Ridgely, 
    797 So. 2d 1020
    , 1024 (¶18) (Miss. Ct. App. 2001). For example,
    in Peters, this Court affirmed the modification of an original decree transferring tax
    deductions to the custodial parent following a significant and unexpected increase in medical
    expenses for minor children coupled with the custodial parent’s need to purchase medical
    insurance due to the noncustodial parent’s failure to maintain a policy. 
    Id. at 1024-25
    (¶20).
    The noncustodial parent had also “abused the dependent deductions in a manner [which
    violated] Internal Revenue Service regulations.” Id.; see also Laird v. Blackburn, 
    788 So. 2d 844
    , 852 (¶14) (Miss. Ct. App. 2001) (affirming tax-allocation modification where chancellor
    took into consideration various considerations including party’s employment status).
    ¶11.   Outside of Edwin’s testimony that the tax benefit would help him pay some of his
    arrearage, the record does not reflect that Edwin argued or presented evidence below that any
    of the parties’ circumstances had materially changed so that “equity requires” allocation to
    him of one or more of the tax exemptions under the principles of Nichols and Louk. While
    Edwin states that evidence was never presented to the trial court of Lisa’s financial condition
    5
    due to her failure to disclose her Uniform Chancery Court Rule 8.05 form, the record does
    not reflect that Edwin ever requested an 8.05 form from her or that he called the matter to the
    court’s attention. Edwin’s accrued arrearage stemming from the agreed terms and foreseeable
    circumstances of the original decree does not constitute a material change in circumstances
    warranting transfer of the tax exemption.2
    II.    The trial court did not err in finding Edwin in contempt for failure
    to reimburse his share of qualified expenses related to the minor
    children.
    ¶12.   Edwin argues that Lisa’s refusal to involve him in the decision-making process on
    major expenses violates an implicit duty of sharing joint legal custody. In Laird, this Court
    affirmed the chancellor’s refusal to order the noncustodial parent to reimburse the custodial
    parent for various expenses incurred on behalf of the child, including clothing, school
    supplies, and a bicycle. 
    Laird, 788 So. 2d at 851
    (¶14). In that case, the original decree
    required consultation and mutual agreement between the parties prior to incurring expenses
    for education and similarly important matters. 
    Id. The parties
    did not communicate
    concerning the expenses, and many of the expenses were duplicated between the two
    households. 
    Id. ¶13. Here,
    the Agreement between Lisa and Edwin does not explicitly require consultation
    2
    And allocation of a tax exemption to Edwin would not immediately assist him in
    paying the arrearage under the Nichols rule that the custodial parent has no legal obligation
    to sign over the exemption waiver until the noncustodial parent has paid “all due and owing
    payments related to the care and maintenance of the dependent children.” Nichols, 
    547 So. 2d
    at 780.
    6
    and mutual agreement between the parties prior to incurring the expenses. With the exception
    of reasonable college expenses, each expense is divided equally between the two parties. The
    chancellor heard testimony concerning whether each expense was reasonable, and held in
    Edwin’s favor that he did not have to pay the entirety of the expense of his freshman
    daughter renting an apartment off-campus, even though the original decree provided that
    Edwin would be solely responsible for all reasonable college expenses. We cannot find that
    the chancellor abused his discretion in finding Edwin in contempt and ordering him to
    reimburse the qualified expenses of $14,073.92.
    ¶14.   Finally, in the initial 2012 contempt order, the court specified that Edwin provide a
    fuel card or a credit card designated exclusively for fuel expenses. The chancellor found
    Edwin in contempt of this provision and ordered him to come into compliance. Edwin argues
    that the provision of the contempt order requiring him to provide a fuel card up front is
    impermissible because it is outside of the terms of the original Agreement requiring him
    generally to pay for one-half of the automobile expenses. He argues that fuel is a
    “transportation” expense rather than an “automobile” expense. We agree with Lisa that the
    cost of fuel is within the concept of “automobile expenses” and that the trial court was within
    its authority to specify that Edwin pay for his half of the fuel expenses by this method of
    providing either a prepaid fuel card or a credit card designated exclusively for the purchase
    of fuel.
    CONCLUSION
    ¶15.   The chancellor did not abuse his discretion in determining that Edwin was in contempt
    7
    of the Agreement. Edwin failed to demonstrate a material change in circumstances that
    would warrant modification of the original order to grant him tax-exemption benefits.
    Finding no error, we affirm.
    ¶16. THE JUDGMENT OF THE CHANCERY COURT OF LEE COUNTY IS
    AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE
    APPELLANT.
    LEE, C.J., GRIFFIS, P.J., BARNES, ISHEE, CARLTON, FAIR, JAMES AND
    WILSON, JJ., CONCUR. IRVING, P.J. CONCURS IN PART AND IN THE RESULT
    WITHOUT SEPARATE WRITTEN OPINION.
    8
    

Document Info

Docket Number: NO. 2015-CA-00438-COA

Judges: Lee, Wilson, Greenlee, Griffis, Barnes, Ishee, Carlton, Fair, James, Irving

Filed Date: 10/11/2016

Precedential Status: Precedential

Modified Date: 10/19/2024