Sowers v. Sowers , 109 N.E.3d 690 ( 2018 )

[Cite as Sowers v. Sowers, 2018-Ohio-1057.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
MIAMI COUNTY
AMANDA SOWERS :
:
Plaintiff-Appellee : Appellate Case No. 2017-CA-19
:
v. : Trial Court Case No. 2015-DR-166
:
MATTHEW SOWERS : (Domestic Relations Appeal from
: Common Pleas Court)
Defendant-Appellant :
:
...........
OPINION
Rendered on the 23rd day of March, 2018.
...........
CRAIG M. SAMS, Atty. Reg. No. 0089716, 10532 Success Lane, Dayton, Ohio 45458
Attorney for Plaintiff-Appellee
SCOTT D. RUDNICK, Atty. Reg. No. 0000853, 121 West Third Street, Greenville, Ohio
45331
Attorney for Defendant-Appellant
.............
WELBAUM, P.J.
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{¶ 1} In this case, Defendant-Appellant, Matthew Sowers (“Matthew”) appeals
from a judgment denying his motion for an increase in child support to be paid by Plaintiff-
Appellee, Amanda Sowers (“Amanda”). According to Matthew, the trial court erred in
concluding that Amanda’s child support obligation was not 10% greater than the
obligation calculated at the time of the final decree.
{¶ 2} Matthew further contends that the trial court erred in finding that he failed to
establish that Amanda was fully employed and was earning more than the current
minimum wage in Ohio. And finally, Matthew contends that the trial court abused its
discretion when it refused to make a child support award.
{¶ 3} We conclude that the trial court erred in requiring Matthew to establish a 10%
deviation in the child support obligation and to also establish a substantial change of
circumstances that was not contemplated at the time of the divorce decree, before the
court would allow modification of child support. We further conclude that the trial court
erred in finding that Amanda was not earning more than the current minimum wage in
Ohio. In addition, the trial court erred by deviating from the calculated child support
obligation without following the statutory requirements in R.C. 3119.22 and R.C. 3119.23.
{¶ 4} The court did not err in its conclusion about the amount of Matthew’s gross
income that was due to his wages from employment. However, the court did err in
including mileage reimbursements in Matthew’s gross income without considering
whether the reimbursement caused Matthew, effectively, to have a higher income.
Accordingly, the judgment of the trial court will be affirmed solely with respect to the
calculation of Matthew’s gross income from wages, will be reversed on all other grounds,
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and will be remanded for further proceedings.
I. Facts and Course of Proceedings
{¶ 5} In May 2015, Amanda filed a divorce complaint against Matthew. The
complaint indicated that the parties had two children, R.S. and E.S., who were then,
respectively, 10 and nine years old. Amanda was given temporary custody of the
children, and Matthew was ordered to pay child support. However, in September 2015,
the court granted Matthew emergency temporary custody based on a motion filed by a
guardian ad litem that the court had appointed.
{¶ 6} A final divorce decree was filed on January 12, 2016, and was based on the
parties’ agreement. The decree designated Matthew as the residential parent and legal
custodian of the children. Amanda was given reasonable visitation time, and was
ordered to coordinate visitation with the administrator at the Family Health Center.
Amanda was unemployed at the time of the divorce, and zero child support was ordered,
per the parties’ agreement. In addition, the decree granted the federal tax exemptions
for the children to Matthew; however, the decree stated that Amanda would be entitled to
claim E.S. as a dependent if her household income rose to a level allowing her to take
advantage of a child dependence exemption.
{¶ 7} A document entitled “Form DR16” was also filed on January 12, 2016, and
was incorporated into the divorce decree. The decree provided that if any conflict existed
between the decree and the DR16, the DR16 would control.
{¶ 8} The DR16, itself, ordered Amanda to seek work. The court also attached a
child support computation worksheet to the divorce decree, and for purposes of the
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worksheet, imputed $16,375 in income to Amanda. According to the worksheet,
Amanda’s annual child support obligation would have been $3,630.87, or $302.50 per
month. However, as was noted, the decree ordered zero support.
{¶ 9} In April 2016, Matthew filed a motion to correct the judgment and a motion
for relief from judgment, based on his overpayment of child support that was supposed to
be returned to him. By mistake, this provision had not been included in the divorce
decree. The parties then filed an agreed entry in July 2016, which awarded Matthew a
judgment of $1,070 in overpaid child support. Amanda agreed to begin paying $30 per
month beginning August 1, 2016, and Matthew agreed to accept a reduced sum of $800
if the amount was paid in full on or before June 30, 2017.
{¶ 10} Matthew then filed a motion for modification of child support in September
2016, and a hearing was held on January 4, 2017. Following the hearing, the magistrate
filed a decision, recommending that Matthew’s request be overruled, and that child
support remain at zero dollars. Matthew filed objections and supplemental objections,
which the trial court overruled in July 2017. This appeal followed.
II. Alleged Error Concerning Support Obligation
{¶ 11} Matthew’s First Assignment of Error states that:
The Trial Court Erred In Finding that the Appellee’s Support
Obligation Is Not Ten Percent Greater Than the Support Obligation Actually
Calculated at the Time of the Decree.
{¶ 12} Under this assignment of error, Matthew contends that because zero child
support was ordered at the time of the decree, the amount calculated in connection with
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modification (about $299 per month) met the 10% requirement for a substantial change
of circumstances in R.C. 3119.79(A). Matthew further contends that the trial court
incorrectly created new law by finding that if an obligor is required to seek work, ultimately
obtaining employment would not be a change of circumstances since it was contemplated
by the decree.
{¶ 13} We review child support decisions for abuse of discretion. Booth v. Booth,
44 Ohio St. 3d 142, 144, 541 N.E.2d 1028 (1989). “ ‘Abuse of discretion’ has been
defined as an attitude that is unreasonable, arbitrary, or unconscionable.” (Citation
omitted.) AAAA Enterprises, Inc. v. River Place Community Urban Redevelopment
Corp., 50 Ohio St. 3d 157, 161, 553 N.E.2d 597 (1990). However, the Supreme Court of
Ohio has stressed that “most instances of abuse of discretion will result in decisions that
are simply unreasonable.” Id. The court has also said that “[a] decision is unreasonable
if there is no sound reasoning process that would support that decision.” Id.
{¶ 14} R.C. 3119.79(A) provides that:
If an obligor or obligee under a child support order requests that the
court modify the amount of support required to be paid pursuant to the child
support order, the court shall recalculate the amount of support that would
be required to be paid under the child support order in accordance with the
schedule and the applicable worksheet through the line establishing the
actual annual obligation. If that amount as recalculated is more than ten
per cent greater than or more than ten per cent less than the amount of child
support required to be paid pursuant to the existing child support order, the
deviation from the recalculated amount that would be required to be paid
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under the schedule and the applicable worksheet shall be considered by
the court as a change of circumstance substantial enough to require a
modification of the child support amount.
{¶ 15} In finding that modification of support was not warranted, the trial court
concluded that Matthew was required to establish that Amanda’s support obligation was
more than 10% greater due to her change in income, and was also required to establish
that her change in circumstances was not contemplated at the time of the decree. Doc.
# 70, Decision & Entry Adopting Magistrate’s Decision and Order, p. 6. In this regard,
the court compared Amanda’s current support obligation of $299 with the $302 listed in
the Child Support Computation Worksheet attached to the divorce decree, and found that
her support obligation had not increased by more than 10%.
{¶ 16} The court also held that Matthew had not established the second
requirement either, because when the divorce decree was filed, the parties contemplated
that Amanda would obtain employment at some point. As a result, the court found no
change in circumstances that would permit modification of child support. In reaching
these conclusions, the trial court relied on our prior decision in Baire v. Baire, 102 Ohio
App.3d 50, 656 N.E.2d 984 (2d Dist.1995). Doc. #70, at p. 5.
{¶ 17} However, shortly before the trial court’s decision, we had concluded that our
decision in Baire was inconsistent with the decision of the Supreme Court of Ohio in
DePalmo v. DePalmo, 78 Ohio St. 3d 535, 679 N.E.2d 266 (1997). See Mossing-Landers
v. Landers, 2016-Ohio-7625, 73 N.E.3d 1060, ¶ 51-52 (2d Dist.). We stressed, among
other things, that DePalmo had not yet been decided when Baire was issued. Id. at ¶
52.
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{¶ 18} Like the case before us, DePalmo involved a situation where a father had
waived child support when the parties’ divorce decree was filed. Mossing-Landers at
¶ 56, citing DePalmo at 535-536. In DePalmo, the father subsequently moved for a
support order, and the mother argued that the court should use what was called the “dual
threshold test.” This test restricted use of the 10% threshold test, and “allowed
modification only where a change in circumstances had occurred so that the custodial
parent could no longer provide the total amount of support that was reasonable, or where
the non-custodial parent's circumstances had substantially changed so that the trial court
could find, in its discretion, that support from the noncustodial parent was in the children's
best interests.” Mossing-Landers at ¶ 57, citing DePalmo at 538. The Supreme Court
of Ohio rejected the use of this test, however. Id. at ¶ 58.
{¶ 19} We made the following observations about the court’s rejection of the dual
threshold test:
First, the court stated [in DePalmo] that whether a support order is currently
in existence “is a distinction without a difference and is immaterial to
whether child support should be calculated according to the statutory
guidelines.” [DePalmo, 78 Ohio St.3d] at 539, 679 N.E.2d 266. As was
noted, the court then stated that “[i]f a support order already exists, the only
test to determine whether child support shall be modified is set forth by R.C.
3113.215(B)(4) [now R.C. 3119.79] * * *.” (Emphasis sic.) (Parenthetical
material added.) Id.
The court went on to stress the requirement of strictly complying with
the Child Support Guidelines, and stated that “[o]bviously, when the amount
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of child support provided by the noncustodial parent is zero, but the Child
Support Guidelines clearly establish that the noncustodial parent owes
support, then that ten percent difference is clearly met.” DePalmo, 78 Ohio
St.3d at 540, 679 N.E.2d 266. Notably, the court did not consider whether
the change in circumstances was contemplated at the time of the original
order, and did not agree with the obligor's argument that support (or rather
the order of no support) should not be modified because “circumstances at
the time of the hearing were substantially similar to those on * * * the date
of the original agreement.” Id. at 536-537, 679 N.E.2d 266.
Ultimately, the Supreme Court of Ohio stated that “[w]hen the court
is modifying a preexisting order for the payment of child support, the court
must apply the ten percent test established by R.C. 3113.215(B)(4) [now
R.C. 3119.79(A)] in the Child Support Guidelines and the standards set out
in Marker [v. Grimm, 65 Ohio St. 3d 139, 601 N.E.2d 496 (1992)].”
(Parenthetical material added.). DePalmo at 540–541, 679 N.E.2d 266.
As a result, the trial court was required to recalculate the support
and, if the difference were more or less than 10 percent, that would
constitute a substantial change in circumstances. This is not to say that
the trial court has no discretion at all in the matter. R.C. 3119.22
specifically allows courts to deviate from the amount of support calculated
if that amount “would be unjust or inappropriate and would not be in the best
interest of the child.” In this situation, however, the trial court must comply
with Marker by including “findings of fact to support such determination.”
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Marker, 65 Ohio St. 3d 139, 601 N.E.2d 496, at paragraph three of the
syllabus.
(Emphasis added; footnote omitted.) Mossing-Landers, 2016-Ohio-7625, 73 N.E.3d
1060, at ¶ 58-61.
{¶ 20} The facts in the case before us indicate that the decree and the order
attached to the divorce decree ordered zero child support. In calculating the child
support for purposes of the requested modification, the trial court attributed $16,925 to
Amanda, which resulted in an actual annual support obligation of $3,589.09, or $299.09
per month. See Ex. A attached to Doc. #70. This was clearly an increase of over 10%
and the trial court, therefore, erred in concluding that modification was unwarranted under
R.C. 3119.79. Mossing-Landers at ¶ 33-65. Accord Schilling v. Ball, 11th Dist. Lake
No. 2016-L-072, 2017-Ohio-5511, ¶ 16-18 (trial court was not required to find a
substantial change in circumstances not contemplated by the prior decree when it ordered
appellant to pay $356 per month in child support despite prior agreement to deviate
support to zero; 10% deviation in support amount was sufficient under DePalmo).
{¶ 21} A point we did not specifically mention in Mossing-Landers is the wording
of R.C. 3119.79(A) itself, which finds a substantial modification sufficient to require
modification if the recalculated amount “is more than ten per cent greater than or more
than ten per cent less than the amount of child support required to be paid pursuant to
the existing child support order.” (Emphasis added.) This statute does not refer to the
amount of child support calculated as potentially payable in a prior child support
computation worksheet; it refers to the amount required to be paid under the existing
order. This statement is not ambiguous. Clearly, when the prior order requires zero
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dollars to be paid, a recalculated amount of $299.09 is more than a 10% increase.
{¶ 22} We further note that nothing in the divorce decree prohibited either party
from seeking modification of child support. Mossing at ¶ 65. Accordingly, the trial court
erred in requiring Matthew to show a substantial change of parental circumstances in
addition to the 10% change in the amount of child support. The First Assignment of
Error, therefore, is sustained.
III. Determination of Wages
{¶ 23} Matthew’s Second Assignment of Error states that:
The Trial Court Erred in Determining that the Appellant Failed to
Establish that the Appellee Is Fully Employed Earning More than
$16,952.00 (the Current Minimum Wage in Ohio).
{¶ 24} Under this assignment of error, Matthew contends that the trial court erred
in concluding that he failed to establish that Amanda was earning more than $16,952, or
the current Ohio minimum wage. In this regard, Matthew notes that Amanda filed an
affidavit of income and expenses, in which she stated that her gross annual wages were
$22,048. He also notes that Amanda testified at the hearing that she was earning $10.60
per hour at Meijer, which would equate to $22,048 in gross income per year.
{¶ 25} Matthew has attached an affidavit to his brief, but there is no file-stamp on
the affidavit, and it is not docketed in the trial court record. As a result, we will not
consider it.1 Nonetheless, Amanda did testify during the hearing, which was held in early
1Matthew’s counsel did question Amanda at the hearing about an affidavit that the court
had ordered her to prepare, and that Amanda had sent to him. Transcript of
Proceedings, pp. 24-29. We assume this may be the same affidavit, but it was not
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January 2017, that she was currently earning $10.60 per hour.2
{¶ 26} Amanda claimed at the hearing that she was “part-time,” but admitted that
she had worked 40 hours per week at Meijer ever since she was hired in early June 2016.
She also said that Meijer was currently scheduling her 40 hours per week. Transcript of
Proceedings, pp. 23-24. According to Amanda, Meijer had threatened to cut hours in
January and February and had said that it had to “cut so many hours every week out of
each department.” Id. at p. 24. Amanda then stated, “I don’t know how that’s going to
work.” Id.
{¶ 27} Although Amanda claimed she was part-time, she had also consistently
worked 40 hours per week since she was hired, and her testimony about the probability
of receiving less hours was mere speculation. This is not a credibility decision to which
we would normally defer; the court’s calculation of Amanda’s gross income at a minimum
wage level was based on speculation. However, even at the minimum wage level used
by the trial court, a 10% change in the amount of support existed.
{¶ 28} Based on the preceding discussion, the Second Assignment of Error is
sustained.
IV. Abuse of Discretion in Refusing to Order Child Support
{¶ 29} Matthew’s Third Assignment of Error states that:
specifically identified at the hearing, nor was it made an exhibit.
2 The magistrate used an incorrect hourly wage of $10.40 in its decision. See
Magistrate’s Decision, Doc. #63, pp. 2-3. In contrast, Amanda testified at the hearing
that she had received a raise to $10.60 per hour. Transcript of Proceedings, p. 23.
Based on Amanda’s testimony, there is no question that if Amanda worked 40 hours per
week, her yearly gross income would be $22,048.
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The Trial Court Erred and Abused Its Discretion in Refusing to Make
an Award of Child Support.
{¶ 30} Under this assignment of error, Matthew contends that the trial court erred
in failing to comply with requirements for ordering a deviation from the guidelines for child
support, and, therefore, abused its discretion.
{¶ 31} As was noted, we review support orders for abuse of discretion, which most
often occurs when a trial court’s decision is based on unsound reasoning. Booth, 44
Ohio St. 3d at 144, 541 N.E.2d 1028; AAAA Enterprises, Inc., 50 Ohio St. 3d at 161, 553
N.E.2d 597.
{¶ 32} R.C. 3119.22 allows a court to deviate “from the amount of child support
that would otherwise result from the use of the child support guidelines and the applicable
worksheet if the court determines that the actual annual obligation would be unjust or
inappropriate and would not be in the child's best interest.” (Citations omitted). In re
C.S.M., 2d Dist. Greene No. 2015-CA-28, 2015-Ohio-4608, ¶ 24.
{¶ 33} “If the court enters a child support order that deviates from the calculated
amount, ‘the court must enter in the journal the amount of child support calculated
pursuant to the basic child support schedule and the applicable worksheet, through the
line establishing the actual annual obligation, its determination that that amount would be
unjust or inappropriate and would not be in the best interest of the child, and findings of
fact supporting that determination.’ ” In re S.H., 2d Dist. Montgomery No. 23382, 2009-
Ohio-6592, ¶ 46, quoting R.C. 3119.22. Accord C.S.M. at ¶ 24; Lenoir v. Paschal, 2d
Dist. Montgomery No. 23732, 2010-Ohio-2922, ¶ 7.
{¶ 34} We have stressed that under the decision of the Supreme Court of Ohio in
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Marker, “any court-ordered deviation from the applicable worksheet and the basic child
support schedule must include findings of fact to support the determination.” C.S.M. at
¶ 24, citing Marker, 65 Ohio St. 3d at 143, 601 N.E.2d 496. R.C. 3119.23(A)-(O) lists 15
specific factors that courts may use in deciding whether to grant a deviation under R.C.
3119.22. Additionally, R.C. 3119.23(P) is non-specific and lets courts consider “[a]ny
other relevant factor.”
{¶ 35} In the case before us, the trial court concluded that the deviation issue was
moot because Matthew failed to establish both a 10% deviation in the amount of support,
and also failed to show a change of circumstances. The court then stated that:
In any event, the parties agreed that it was in the best interests of the minor
children to deviate to no child support at the time of the Decree. The Court
specifically finds that the reasons to deviate child support to $0.00 are as
true today as they were when child support was set by the parties.
Doc. # 70, p. 7.
{¶ 36} Although the court indicated the issue of deviation was moot, it nonetheless
considered it, while failing to either make findings under R.C. 3119.22 or refer to any
factors listed in R.C. 3119.23. Furthermore, the trial court’s remark that the reasons for
deviating were as true in 2017 as they were in 2015 when the parties agreed to waive
support, is simply not supported by the record. The divorce decree mentioned only that
Amanda was unemployed. In contrast, at the time of the modification hearing, Amanda
was employed and had been fully employed for several months. Accordingly, the trial
court abused its discretion to the extent that it deviated from the appropriate amount of
support without complying with R.C. 3119.22 and R.C. 3119.23.
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{¶ 37} In his brief, Matthew also contends that the trial court erred in calculating
his income. We disagree, in part. In the first place, Matthew’s gross earnings were not
$32,000 as he contends. The exhibit Matthew submitted indicates that his gross
earnings in 2016 were $35,566.09, which is the figure the trial court used. See
Defendant’s Ex. 1 and Doc. #70, pp. 2-3. Matthew’s net earnings were $31,708.02,
which is close to the figure he claims. However, the statute and worksheet refer to
“gross,” not “net” income. See R.C. 3119.022. Thus, the trial court did not err in this
regard.
{¶ 38} Furthermore, we do not completely agree that the court erred with respect
to the healthcare premiums. Contrary to Matthew’s assertion, these amounts were not
included in his gross income; the court simply did not credit him with payments for
healthcare. The trial court noted that Matthew’s employer paid the premiums and stated
that it was impossible to determine if Matthew had paid any money for the premiums.
See Doc. # 70, p.3, citing Defendant’s Ex. 1. At the hearing, Matthew indicated that
Defendant’s Ex. 3 showed the cost of his health insurance monthly; he claimed that he
paid a total of $830.85 per month, and that $493.24 of this amount was for his children’s
health coverage. Transcript of Proceedings, p. 11. However, this is inconsistent with Ex.
1, which indicates a possible yearly deduction from his wages of around $3,131.16 for
health and dental coverage, or about $260.93 per month.3 Since this matter is being
reversed and remanded, the trial court can decide on remand what amount, if any, should
3 We say “possible” because Matthew did not testify about these amounts on Ex.1 at trial,
and the deductions on that exhibit merely state “Dent 125” and “H 125.” For purposes of
discussion, we assume these may be deductions for health and dental coverage, as it
seems clear that is what the amounts represent.
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be credited toward premiums, since it appears that Matthew did pay some amount for the
children’s healthcare.
{¶ 39} The trial court also added $8,544.96 in mileage reimbursements and other
payments to arrive at a figure of $44,110 for Matthew’s gross income. See Doc. #70, p.
3 and Ex. A attached to Doc. #70. 4 This amount was taken from Matthew’s pay
statement. See Defendant’s Ex. 1. As support for its decision, the trial court cited two
cases: Neal v. Halsey, 2d Dist. Greene No. 95-CA-22, 1995 WL 765964 (Dec. 20, 1995),
and Lyons v. Bachelder, 5th Dist. Morrow No. 2004AP0017, 2005-Ohio-4966. Doc. #70,
p. 6.
{¶ 40} Neal involved a decision on the gross income of an independent insurance
salesman who had claimed various business expenses on his tax return, including
deductions for the standard mileage rate and specific expenses for maintenance and
repair of his car. In calculating his income for purposes of child support, the trial court
accepted all of his business expenses other than the deduction for the automobile
expenses (including mileage). Neal at *1.
{¶ 41} After the opposing party appealed, we considered R.C. 3113.215(A)(2),
which defined “gross income,” R.C. 3113.215(A)(3), which defined “self-generated
income,” R.C. 3113.215(A)(4)(a), which defined “ordinary and business expenses
incurred in generating gross receipts,” and R.C. 3113.215(A)(4)(b), which defined items
like depreciation and other noncash items that may be deducted under federal tax returns
but not as ordinary and necessary business expenses incurred in generating gross
4 The actual total for the wages and reimbursements is $41,111.05, but this slight
difference is irrelevant for purposes of our discussion.
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receipts. Id. at *2.5
{¶ 42} We also considered federal tax law, which allowed deduction of expenses
incurred in carrying on a trade or business and traveling expenses while an individual is
away from home in pursuit of a trade or business. Id. at *3, citing 26 U.S.C. 162(a). At
the time, the standard business mileage rate was $.29 a mile, which included a
depreciation amount of $.12 per mile. Id.
{¶ 43} After considering these matters, we concluded that the trial court erred by
failing to deduct any of the business mileage expenses from the obligor’s gross income.
We allowed the amount of mileage the obligor claimed to have driven for business, using
the standard mileage rate; however, we also held that “for purposes of child support
calculation, a parent is not entitled to the type of depreciation included within the standard
mileage deduction. R.C. 3113.215(A)(4)(b). Therefore, twelve cents per mile must be
deducted from the twenty-nine cent standard rate.” Id.
{¶ 44} Our comments in Neal do not support a requirement for inclusion of mileage
reimbursements within gross income for purposes of calculating child support, nor do they
eliminate a need for analysis. Under our decision in Neal, the following amounts may be
added to an obligor’s gross income: (1) the amount attributable to depreciation, using the
standard mileage allowed by the Internal Revenue Service for business travel; and (2)
any part of reimbursed mileage that was used for personal, rather than business travel.
Consequently, including the total amount and also failing to use any analysis for including
particular amounts would be incorrect.
5 These sections were later re-codified, respectively, as R.C. 3119.01(C)(7), R.C.
3119.01(C)(13), R.C. 3119.01(C)(9)(a), and R.C. 3119.01(C)(9)(b). There was no
pertinent change in the definitions.
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{¶ 45} Lyons involved a doctor’s assertion that he should receive a deduction from
his calculated income for business mileage in the amount of $4,635 for two vehicles. The
doctor drove one vehicle, and his wife drove the other. Lyons, 5th Dist. Morrow No.
2004AP0017, 2005-Ohio-4966, at ¶ 41 and 48-59. The doctor’s medical corporation,
which was titled in his name, had deducted expenses in the amount of $4,635.00 for the
use of motor vehicles driven for business-related miles. Id. at ¶ 45. During trial, the
doctor testified that the amount of his personal use of the auto had been factored into his
W-2 form. However, he failed to testify as to any particular amount that had been
included in his taxable income. Id. at ¶ 49. Based on the doctor’s testimony, the court
of appeals held that the trial court did not abuse its discretion by failing to deduct the
business mileage expense from the doctor’s income. The court of appeals noted that
the doctor had not offered evidence to the contrary. Id. at ¶ 71. Again, this fact-based
holding does not justify a blanket statement that mileage reimbursements from an
employer are properly included in gross income for child support calculation purposes.
{¶ 46} Neal differs somewhat from the case before us in that it involved self-
generated income, which is statutorily defined to include “expense reimbursements * * *
if the reimbursements are significant and reduce personal living expenses.” R.C.
3119.01(C)(13). Self-generated income is also limited to “gross receipts received by a
parent from self-employment, proprietorship of a business, joint ownership of a
partnership or closely held corporation, and rents minus ordinary and necessary
expenses incurred by the parent in generating the gross receipts.” Id.
{¶ 47} In contrast, “gross income” (which applies here) is defined by R.C.
3119.01(C)(7) as “the total of all earned and unearned income from all sources during a
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calendar year * * *.” The statute does not include expense reimbursements within the
listed examples of “income.”
{¶ 48} Recently, in Morrow v. Becker, 138 Ohio St. 3d 11, 2013-Ohio-4542, 3
N.E.3d 144, the Supreme Court of Ohio considered whether a trial court erred in including
within gross income certain employer-paid benefits like the value of a car, car insurance,
and a cellular telephone. Id. at ¶ 7. The obligor argued that these items should “be
considered part of gross income only if the recipient is self-employed, a proprietor of a
business, or a joint owner of a partnership or closely held corporation.” Id. at ¶ 12. In
support of this proposition, the obligor reasoned that because “the only statutory
reference to company cars and other in-kind items is in the context of ‘self-employment,
proprietorship of a business, joint ownership of a partnership or closely held corporation,’
the General Assembly meant to exclude such items from gross income when they are
received outside that context.” Id. at ¶ 12-13, referring to the definitions of “gross
income” in R.C. 3119.01(C)(7) and “self-generated income” in R.C. 3119.01(C)(13).
{¶ 49} The Supreme Court of Ohio disagreed, however, commenting that:
We find nothing in the statutory scheme to support that conclusion.
To be sure, R.C. 3119.01(C)(13) states that “self-generated income”
includes company cars. That is a far stretch from stating that company
cars cannot be part of gross income unless they are from self-generated
income.
The record indicates that Morrow [the obligor] did not have a car, car
insurance, or phone, other than the car, car insurance, and phone provided
to him by his employer. Based on that understanding, the trial court, after
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reviewing case law, concluded that “it was reasonable to include the value
of these benefits in the Plaintiff's gross income.” We agree. If his
employer did not provide a car, Morrow would have had to purchase or
lease one on his own, using his own funds. Accordingly, it is sensible to
conclude that the provision of a car is no different from the provision of funds
to buy or lease a car. Either way, the person receiving the benefit
effectively has a higher income.
Morrow, 138 Ohio St. 3d 11, 2013-Ohio-4542, 3 N.E.3d 144, at ¶ 14-15.
{¶ 50} The issue, therefore, appears to be the same whether a parent is an
employee or fits within the particular categories outlined in R.C. 3119.01(C)(13).
Specifically, a court should consider whether a “reimbursement” or benefit caused a
parent, effectively, to have a higher income. An example of this can be found in Parrick
v. Parrick, 3d Dist. Hancock No. 5-12-12, 2013-Ohio-422. In that case, the court of
appeals found no error in a trial court’s decision to exclude an employee’s income mileage
reimbursements from her employer as part of her gross income for child support
purposes. The court commented that the employee’s “expense reimbursements from
her employers were merely repaying her for the money that she had spent, as required
by her job.” Id. at ¶ 33.
{¶ 51} In the case before us, the record does not indicate whether Matthew’s
reimbursement caused him to effectively have a higher income, and the trial court did not
consider this issue. Instead, the court included the total reimbursement within Matthew’s
gross income, while offering no reasoning and citing cases that do not support blanket
inclusion. Accordingly, since this case is being reversed and remanded, the court should
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reconsider this issue in view of the above authority, and should allow the presentation of
further evidence.
{¶ 52} Based on the preceding discussion, the Third Assignment of Error is
sustained in part and overruled in part.
V. Conclusion
{¶ 53} Matthew’s First and Second Assignments of Error having been sustained,
and his Third Assignment of Error having been sustained in part and overruled in part,
the judgment of the trial court is affirmed solely with respect to the court’s decision on the
amount of Matthew’s gross income from wages. In all other respects, the judgment is
reversed, and this cause is remanded for further proceedings consistent with this opinion.
.............
DONOVAN, J. and TUCKER, J., concur.
Copies mailed to:
Craig Sams
Scott D. Rudnick
Hon. Jeannine N. Pratt