Carl O. Patton v. Linda Giuliano Patton ( 1997 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Annunziata and Senior Judge Duff
Argued at Alexandria, Virginia
CARL O. PATTON
MEMORANDUM OPINION *
v. Record No. 1851-96-4 BY JUDGE CHARLES H. DUFF
JULY 8, 1997
LINDA GIULIANO PATTON
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Michael P. McWeeny, Judge
William K. Dove, II (William K. Dove &
Associates, P.C., on briefs), for appellant.
Marcia M. Maddox (Heather Ann Cooper; Law
Office of Marcia M. Maddox, on brief), for
appellee.
Carl O. Patton (father) contends that the trial judge erred
by (1) denying his petition to modify his child support
obligation because his workers' compensation benefits had been
terminated; and (2) not crediting his child support payments with
the lump sum Social Security disability benefit received by Linda
Giuliano Patton (mother) on behalf of the children. We find no
error and affirm the judgment of the trial judge.
Background
The parties were married in 1982 and their Final Decree of
Divorce was entered on June 15, 1990. Two children were born of
the marriage, and custody of the two minor children was awarded
to mother. Father agreed to pay spousal and child support
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
pursuant to the parties' Separation Agreement which was
incorporated into the final decree of divorce.
On June 24, 1994, father was involved in an employment
related traffic accident, resulting in permanent brain injury.
He received workers' compensation payments, and he sought Social
Security disability benefits for himself and his children. A
February 1, 1996 letter from the Social Security Administration
indicates that mother was to receive Social Security benefits in
the amount of $219 for each child for December 1994, $222 per
child starting in January 1995, and $228 per child starting in
December 1995.
On June 14, 1995, the parties entered into a Consent Order,
addressing child and spousal support, and insurance premium
arrearages owed by father to mother. Effective March 1, 1995,
the Consent Order provided that these arrearages were reduced to
judgments against father in favor of mother. The Consent Order
further provided that the judgments constituted "judgment
lien[s]" against father's anticipated personal injury award and
included interest.
The Consent Order also confirmed the continuing,
non-modifiable nature of father's spousal support obligation. In
addition, the parties agreed to a temporary reduction of father's
child support obligations from $1,000 per month to $900 per
month. The Consent Order further provided that, of the $900 per
month child support due, father would pay only $800 per month
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until receipt of the personal injury award or his return to
employment, whichever first occurred. The $100 per month not
paid by father would accrue as additional arrearages,
constituting additional judgment liens against his anticipated
personal injury award.
On November 9, 1995, father was awarded $300,000 in his
personal injury action. On November 17, 1995, mother requested a
payment of $18,521.34 from father as satisfaction of the
judgments established in the Consent Order.
On January 5, 1996, mother filed a "Petition for Rule to
Show Cause" due, inter alia, to father's refusal to satisfy the
judgments pursuant to the Consent Order. The circuit court
entered a "Rule for Contempt" against father on January 11, 1996.
Father filed a "Response to Rule to Show Cause" on January
26, 1996. In the response, he stated that he had paid mother
$13,362.34 pursuant to the Consent Order prior to her filing the
Petition for Rule to Show Cause. He also indicated that he was
withholding $5,328 as a credit to him based upon pending Social
Security disability payments to be paid to the parties' children
on his behalf. Father more fully set forth this argument in his
"Petition for Entry of Order to Implement Consent Order." In
that petition, father contended that mother had received a lump
sum payment of $5,328 in Social Security benefits on behalf of
the children, which was retroactive through the period of time
covered by the Consent Order, and which compensated mother for
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the monthly Social Security payments beginning December 1994.
Father asserted that he was entitled to a credit against the lien
set forth in the Consent Order in the amount of $5,328.
Also in that petition, father asked the trial judge to
recalculate his child support obligation, crediting him with the
$444 per month in Social Security benefits received by the
children, resulting in a reduction of $444 per month in his child
support payments.
On February 16, 1996, the trial judge held a hearing on the
outstanding motions. On February 27, 1996, the judge issued an
opinion letter, finding that father had no right to an offset
against the child support arrearages for Social Security
disability benefits "potentially due" to the children on his
behalf. The judge noted that the language of the June 14, 1995
Consent Order was "clear and unambiguous" in requiring that the
judgment for arrearages be paid out of father's personal injury
recovery.
The trial judge further stated that the terms of the Consent
Order were not subject to retroactive modification. The judge
found that "the disability benefits received by the children
should be included in the computation of the ongoing support
obligation and credited against that obligation." The judge set
father's revised child support obligation at $861 per month, with
a credit or offset of $444 per month for the Social Security
benefits, resulting in a net obligation of $417 per month.
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The parties filed several motions, including father's
"Petition for Modification of Support Order and for Computation
of Credit Against Spousal Support or Refund." In this petition,
father asserted that, on March 8, 1996, his workers' compensation
payments were terminated. He asked to modify his child support
obligation because these benefits had been terminated. He also
renewed his request for a credit for the lump sum Social Security
disability payment made to his children on his behalf.
On May 24, 1996, the parties presented their respective
motions to the trial judge. At the hearing, a claims adjuster
from the workers' compensation carrier testified that the carrier
terminated father's workers' compensation payments on March 8,
1996 due to father's receipt of the third-party personal injury
award.
On May 28, 1996, the trial judge issued an opinion letter,
finding that the monthly Social Security payments constituted
father's income for child support purposes. The judge also found
that the change in the source of father's income from workers'
compensation to the personal injury recovery was not a material
change in circumstance. Therefore, the judge denied father's
request for modification of his child support obligation.
Finally, the judge denied father's request for a credit for the
lump sum Social Security disability payment against his child
support or spousal support obligations. The judge reasoned that,
although father presented no evidence that such payment was
5
received by mother, any lump sum benefits, "if proven, would be
the periodic payments accrued prior to the February 16, 1996
hearing," and that this was a benefit that the children should
have been receiving at the rate of $444 per month, "the exact sum
used both to compute [father]'s gross income and to serve as a
credit against his obligation."
On June 28, 1996, the trial judge entered an order
memorializing his May 28, 1996 opinion letter. Father appeals
from that order.
Workers' Compensation Benefits Issue
"Where the trial court's decision is based upon an ore
tenus hearing, its determination will not be disturbed on appeal
unless it is plainly wrong or without evidence in the record to
support it." Schoenwetter v. Schoenwetter, 8 Va. App. 601, 605,
383 S.E.2d 28, 30 (1989).
Father first argues that the trial judge erred in denying
his petition for modification of his child support obligations
when his workers' compensation benefits were terminated.
Code § 65.2-309 provides for an employer's right of
subrogation against a third party when the employer has paid
compensation to an employee who was injured as a result of the
negligence of the third party. The claims adjuster for the
insurance carrier testified that his company ceased paying
workers' compensation benefits to father when he obtained the
personal injury award, stating that the carrier had a lien on
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this award. Mother disputes that father proved he no longer
receives workers' compensation payments. However, the trial
judge found that the evidence "clearly demonstrate[d]" that the
insurance company terminated father's temporary total disability
payments.
The trial judge then found that the workers'
compensation benefits were considered "'gross income'" under Code
§ 20-108.2(C), and that, because the personal injury award
replaced the workers' compensation award, "the alteration of the
source of the workers' compensation benefit d[id] not constitute
a change in circumstance."
Code § 20-108.2(C) defines "gross income" as "all income
from all sources," including "workers' compensation benefits."
Clearly, father's workers' compensation benefits constituted part
of his gross income. However, father argues that the trial judge
erred in finding that the personal injury award replaced the
workers' compensation award. Father contends that the result of
the judge's findings is to require payment of child support from
the proceeds of the personal injury award, which is in
contradiction of Code § 34-28.1, providing for an exemption for
personal injury awards from creditor process.
Father cites Whitaker v. Colbert, 18 Va. App. 202, 442
S.E.2d 429 (1994), as authority for the position that a personal
injury award is not income for purposes of Code § 20-108.2(C).
In Whitaker, we held that the evidence did not prove that the
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personal injury settlement generated income for the former
husband for purposes of determining child support. Id. at 205,
442 S.E.2d at 431. However, Whitaker is factually
distinguishable from father's case. In Whitaker, the disabled
parent did not receive workers' compensation benefits. His only
source of income was Social Security benefits. Id. at 204, 442
S.E.2d at 430. Because the personal injury award included an
income element and compensation for medical expenses, loss of
earning capacity, pain and suffering and other elements, the
trial court reasoned that it would be speculative to apportion
any part of the settlement to prior lost wages as opposed to
other elements of damages. Id. at 205, 442 S.E.2d at 431.
Father's personal injury award compensated for a work
related injury and the award temporarily replaced income he had
been receiving in the form of workers' compensation benefits.
Although his award presumably also contained elements such as
compensation for medical expenses and pain and suffering, the
trial judge did not have to speculate as to how much of the
personal injury award to attribute to the replacement of the
workers' compensation benefits. The claims adjuster from the
workers' compensation carrier testified that father received
bi-weekly workers' compensation payments of $902. These payments
were suspended pending the exhaustion of the carrier's right to
subrogation. Therefore, a definable portion of the personal
injury award, $902 per week, replaced the workers' compensation
8
payments which, by statute, are included in gross income for
purposes of the determination of child support. See Code
§ 20-108.2(C). Accordingly, the trial judge's ruling was not
plainly wrong or without evidence to support it.
"The moving party in a petition for modification of support
is required to prove both a material change in circumstances and
that this change warrants a modification of support."
Schoenwetter, 8 Va. App. at 605, 383 S.E.2d at 30. The trial
judge's ruling that the personal injury award was an "alteration
of the source of the workers' compensation benefit" was not a
ruling that the entire personal injury award should be included
in father's gross income. Only that portion of the personal
injury award which replaced the workers' compensation award was
included in the computation of father's gross income. Thus,
father's argument that the judge's ruling results in the payment
of child support in direct contradiction of Code § 34-28.1 is
without merit. Because a portion of the personal injury award
replaced the workers' compensation component of father's gross
income for the purpose of child support determination, father
failed to prove a material change in circumstance.
Lump Sum Payment Issue
Father next argues that the trial judge erred in not
crediting his child support payments with the lump sum Social
Security disability benefit received by mother on behalf of the
children.
9
In his February 27, 1996 opinion letter, the trial judge
found that there was no "right of offset" for disability benefits
"potentially due" with respect to the arrearages, stating that
the Consent Order was "clear and unambiguous" that the arrearages
were to be paid from the personal injury award. However, the
judge found that the Social Security disability benefits received
by the children should be included in the computation of the
ongoing support obligation and credited against that obligation,
citing Whitaker and Virginia Dep't of Social Servs. v. Skeens, 18
Va. App. 154, 442 S.E.2d 432 (1994). The judge then reduced
father's monthly support obligation by $444 per month, the total
amount of the monthly Social Security benefits payment received
by the children. The decision to reduce father's ongoing monthly
support obligation conforms with the holding in Whitaker, which
held that the child support obligation was properly credited by
the amount of Social Security benefits received by the children.
Whitaker, 18 Va. App. at 205-06, 442 S.E.2d at 431-32.
Skeens, however, addresses the applicability of Social
Security benefits previously paid as a credit against a child
support arrearage. In Skeens, after analyzing decisions in other
jurisdictions, we held:
[A] dependent's Social Security disability
benefits, although constituting an
independent entitlement, are in the nature of
support made in lieu of a disabled employee's
earnings. However, whether the trial court
credits the payment against an arrearage for
court-ordered support depends upon the
circumstances of each case and rests in the
sound discretion of the trial judge.
10
Skeens, 18 Va. App. at 156, 442 S.E.2d at 433-34 (footnote
omitted). The rationale behind such a rule is that a request for
a setoff against an arrearage "goes to the discharge procedure of
vested support payments and not to the modification of vested
support rights." Id. at 159-60, 442 S.E.2d at 435.
In our analysis, we stated:
The payment of money to the child's custodian
in the form of Social Security payments is an
indirect payment from the obligor parent for
which the parent should receive credit.
However, whether the obligor parent is
entitled to credit for such payments against
an accumulated arrearage presents a different
problem and will depend upon a number of
factors.
Id. at 158, 442 S.E.2d at 435. The factors
includ[e] but [are] not limited to the extent
to which the original support award was
sufficient or deficient in meeting the
child's needs, whether any modification of
the support award has been made based upon
the parent's disability, or a change in the
child's needs, or the parents' abilities to
provide support independent of the Social
Security payments, and whether both parents
have acted in good faith.
Id. at 160, 442 S.E.2d at 436.
Here, the trial judge relied on the "clear and unambiguous"
wording of the Consent Order that the arrearages would be paid
out of the proceeds of father's personal injury award.
Accordingly, there was no need for the trial judge to exercise
discretion in weighing the various factors set out in Skeens.
The parties had specifically agreed that the funds to be used
11
were to come from the personal injury award. Their contract,
exemplified by the consent decree thus displaced the need for
application of the Skeens factors. We find no error in the trial
judge's ruling.
Finally, we deny mother's request for attorney's fees.
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For these reasons, we affirm the judgment of the trial
judge.
Affirmed.
13
Benton, J., concurring and dissenting.
I concur in the majority's decision to affirm the trial
judge's ruling that Carl O. Patton, the father, failed to show a
material change in circumstances justifying a modification in his
child support obligation. I dissent, however, from the
majority's conclusion that the trial judge did not err in
refusing to use the lump sum Social Security payment received by
the children to reduce the total amount of child support
arrearages due.
In his opinion letter, the trial judge stated the following,
in pertinent part:
The central issue in each of these motions
is the asserted "right of offset" for
disability benefits potentially due the
dependent children. The Court finds that
with respect to the arrearages there is no
such right. The Consent Order of June 14,
1995, reads in part: ". . . [The father] is
hereby ordered to cause disbursement of all
principal and interest accrued as a result of
this judgment for arrearages to be made
directly to [the mother] out of any such
personal injury award to which [the father]
is entitled." The language is clear and
unambiguous, and the Consent Order is not
subject to retroactive modification. In
addition, at the time this offset was
asserted there had been no payments of
disability payments to the dependent
children.
(Emphasis added). That ruling was an erroneous application of
the law. In Virginia Dep't of Social Servs. v. Skeens, 18 Va.
App. 154, 442 S.E.2d 432 (1994), this Court ruled as follows:
Of those jurisdictions that have
disallowed a credit, most have done so on the
theory that application of Social Security
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payments to reduce a child support arrearage
constitutes a retroactive modification of the
child support award. We consider this . . .
approach to be unsound.
When a trial court grants credit to a
payor parent for Social Security benefits
received by his children on account of his
disability, the court does not alter the
amount of child support that the parent has
been ordered or is required to pay. The
court simply allows a source of funds,
indirectly attributable to a parent, to be
used to satisfy the parent's court-ordered
support obligation. Thus, a circuit court
does not retroactively modify a child support
award or forgive an accumulated arrearage by
crediting a dependent child's Social Security
benefits to satisfy a support obligation.
Id. at 159, 442 S.E.2d at 435 (citations omitted) (emphasis
added).
The majority concludes that because the parents had already
entered into the agreement contained in the Consent Order, the
trial judge was not required "to exercise discretion in weighing
the various factors set out in Skeens." I disagree.
"When addressing matters concerning a child . . . the
paramount consideration of a trial [judge] is the child's best
interests." Logan v. Fairfax County Dep't of Human Dev., 13 Va.
App. 123, 128, 409 S.E.2d 460, 463 (1991). Trial judges are
vested with discretion to render decisions that protect the
child's best interests. See id. "[P]arents cannot, by agreeing
upon the amount or conditions, prevent a court from exercising
its authority to determine child support." Watkinson v. Henley,
13 Va. App. 151, 157, 409 S.E.2d 470, 473 (1991); cf. Kelley v.
15
Kelley, 248 Va. 295, 298, 449 S.E.2d 55, 56 (1994) (holding that
a child support agreement, which effectively eliminated one
spouse's responsibility to support the child and diminished the
court's power to determine support, was void). Accordingly, I
disagree with the majority's assertion that the parents'
"contract, exemplified by the consent decree . . . displaced the
need for application of the Skeens factors."
Because the record clearly reveals that, rather than apply
the Skeens factors, the trial judge arrived at a legally
erroneous conclusion, I would remand the case to the trial judge
for reconsideration of the refusal to allow an offset.
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