Carla S. Love v. Mauricio Bellido (mem. dec.)

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D), May 20 2016, 9:38 am
this Memorandum Decision shall not be CLERK
regarded as precedent or cited before any Indiana Supreme Court
Court of Appeals
and Tax Court
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEE
Kristi L. Fox Jeffrey K. Branstetter
Steven A. Gustafson Blanton, Branstetter & Pierce, LLC
Fox Law Offices, LLC Jeffersonville, Indiana
New Albany, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Carla S. Love, May 20, 2016
Appellant-Petitioner, Court of Appeals Case No.
22A01-1510-JP-1683
v. Appeal from the Floyd Circuit
Court
Mauricio Bellido, The Honorable J. Terrence Cody,
Appellee-Respondent. Judge
The Honorable Julie F. Flanigan,
Magistrate
Trial Court Cause No.
22C01-1109-JP-116
Bradford, Judge.
Case Summary
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[1] Appellant-Petitioner Carla Love (“Mother”) filed a petition to modify Appellee-
Respondent Mauricio Bellido’s (“Father”) child support obligation. The trial
court denied Mother’s petition. Mother argues that the trial court (1) erred by
considering her investment accounts as income, (2) abused its discretion in
denying her petition for modification, and (3) erred by not ordering Father to
pay a portion of the child’s uninsured medical expenses. We affirm the trial
court’s decision to include Mother’s investment accounts as income and
remand with instructions that the trial court (1) make additional findings or
complete a child support worksheet and (2) determine what amount of
uninsured medical expenses Father is obligated to pay.
Facts and Procedural History
[2] Mother and Father have one child together, born March 14, 2006. Mother
initiated a paternity action on September 20, 2011. On January 10, 2013, the
trial court approved an agreed order which provided that Father would pay
Mother $108 per week in child support. At the time of the 2013 order, both
Mother and Father lived in the southern Indiana area. In March of 2014,
Father accepted a higher-paying job in Washington, D.C.
[3] On September 25, 2014, Mother filed a petition to modify Father’s child
support obligation. On July 27, 2015, the trial court held a hearing on Mother’s
petition. At the hearing, Mother was questioned about the nature of investment
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income in excess of $80,0001 which she listed on her 2014 tax return but did not
include in the calculation of her weekly gross income on her child support
obligation worksheet. Mother testified that her family set up an investment
account for her retirement which was managed by a broker and the proceeds
automatically reinvested. Mother did not know whether the investment
account was an IRA, 401k, or some other type of account. Mother testified that
she does not draw from her account for day-to-day expenses and withdrew
$18,000 in 2014 to pay for the child’s medical expenses. The exact nature of the
investment account was unclear from Mother’s testimony, including whether or
not Mother could access account funds without permission.
[4] On July 28, 2015, the magistrate denied Mother’s petition, finding that Mother
“fail[ed] to present the complete nature and scope of income or potential
income available to her.” Appellant’s App. p. 10. Mother filed a petition
objecting to the magistrate’s ruling and seeking a final appealable order on her
petition for modification. The trial court judge held a hearing on Mother’s
petition for a final order and affirmed the magistrate’s ruling.
Discussion and Decision
1
On Mother’s 2014 tax return, she listed the following as income: $17,680 in wages, $2,299 in taxable
interest, $14,985 in dividends, and $64,976 in capital gains. (Ex. 2) Mother’s adjusted gross income was
$97,147. (id)
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[5] On appeal, Mother argues that the trial court (1) erred by considering her
investment accounts to be weekly gross income, (2) abused its discretion in
denying her petition for modification, and (3) erred by not ordering Father to
pay a portion of the child’s uninsured medical expenses.
Standard of Review
[6] In reviewing the trial court’s decision regarding the modification
of child support, we reverse only for an abuse of discretion. In re
Marriage of Kraft, 868 N.E.2d 1181, 1185 (Ind. Ct. App. 2007).
An abuse of discretion occurs when the decision is clearly against
the logic and effect of the facts and circumstances before the
court, including any reasonable inferences therefrom. In re
Paternity of E.M.P., 722 N.E.2d 349, 351 (Ind. Ct. App. 2000).
Whether the standard of review is phrased as “abuse of
discretion” or “clear error,” the importance of first-person
observation and preventing disruption to the family setting
justifies deference to the trial court. MacLafferty v. MacLafferty,
829 N.E.2d 938, 940-41 (Ind. 2005).
Holtzleiter v. Holtzleiter, 944 N.E.2d 502, 505 (Ind. Ct. App. 2011). Here, the
trial court issued a general judgment, which we will affirm if sustainable on any
legal theory consistent with the evidence. Id. “[W]e neither reweigh the
evidence nor judge the credibility of witnesses and consider only the evidence
most favorable to the judgment and all reasonable inferences drawn therefrom.
Id.
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I. Mother’s Investment Income
[7] Mother argues that the trial court erred by imputing her retirement fund gains
as income. Mother cites to Carmichael v. Siegel, in which we held that courts
may not impute IRA earnings as income for the purpose of a parent’s child
support obligation where there is no indication that previous withdrawals have
been made to fund the parent’s living expenses. 754 N.E.2d 619, 629 (Ind. Ct.
App. 2001); see also Ind. Child Support Guideline 3A, cmty. 2(e) (“The annual
return of an IRA, 401(K) or other retirement plan that is automatically
reinvested does not constitute income” unless “withdrawals…have been made
to fund the parent’s lifestyle choices or living expenses.”). In reaching this
result, we reasoned that “actual weekly gross income,” as contemplated by the
Indiana Child Support Guidelines (“the Guidelines”), only includes earnings
that are presently available to the parent “for his or her immediate use.” Id. at
628.
[8] In its order denying Mother’s petition, the trial court found that Mother
“fail[ed] to present the complete nature and scope of income or potential
income available to her.” Appellant’s App. p. 10. When questioned by the trial
court at the modification hearing, Mother gave the following testimony
regarding her investment account:
Court: Is this money in an account somewhere that you hope to
use someday in retirement and it’s sold by a broker?
Mother: What my father set up for me.
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Court: Okay. It’s separate it’s not in – I know what you’re saying.
It’s not in a savings account but it’s in a brokerage account?
Mother: Yes.
Court: And you – if you absolutely had to have it, um, you could
get to it, is that correct?
Mother: Yes, that’s correct.
Court: Okay. What [Father’s counsel] is asking you is, is it held
in a 401k or an IRA or some other vehicle that would not allow
you to get to it before a certain age?
Mother: Well, no, I don’t believe so your honor.
…
Court: [I]n order to determine what it is, we need to know what
kind of account it is. So to your knowledge it is not in an IRA or
a 401k or any of those tax vehicles?
Mother: I don’t know your honor.
Tr. pp. 25-26.
[9] As evidenced by Mother’s admission, it is unclear what type of investment
account Mother has. Mother made a substantial withdrawal in 2014 but it is
unclear if that was permitted due to a medically-related hardship, or if Mother
is free to withdraw from her account and is either unaware of this fact or simply
chooses not to make withdrawals. In any case, the trial court made a factual
determination that Mother “fail[ed] to present the complete nature and scope of
income or potential income available to her.” Appellant’s App. p. 10. The trial
court was thorough in its attempt to determine the nature of Mother’s
investment account and we are in no better a position to make such a
determination. Accordingly, Mother’s argument that we reverse the trial
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court’s factual finding amounts to an invitation to reweigh the evidence, which
we cannot do. Carmichael, 754 N.E.2d at 634.
[10] Mother argues that Father waived the imputed-income argument by failing to
submit a child support worksheet. We must disagree. We are aware of no
authority supporting Mother’s argument that the only manner in which to
challenge another party’s income calculation is by filing a child support
worksheet. The issue surrounding Mother’s investment income was repeatedly
addressed during the modification hearing. We see no reason why
subsequently declining to file a child support worksheet would waive an
already-raised argument.
II. Modification of Child Support
[11] Child support orders may only be modified
(1) upon a showing of changed circumstances so substantial and
continuing as to make the terms unreasonable; or
(2) upon a showing that:
(A) a party has been ordered to pay an amount in child
support that differs by more than twenty percent (20%)
from the amount that would be ordered by applying the
child support guidelines; and
(B) the order requested to be modified or revoked was
issued at least twelve (12) months before the petition
requesting modification was filed.
Ind. Code § 31-16-8-1. Mother argues that even including her investment
income in the child support calculation, the increase in Father’s income still
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justifies a modification in his child support obligation because it would yield a
change of greater than twenty percent.
[12] Once the trial court decided not to exclude Mother’s investment income from
the worksheet calculation, it suggested that it would craft a new worksheet
using her total income. Mother submitted her 2014 tax return as evidence
which showed that her adjusted gross income was $97,147. According to
Mother’s calculation, using $97,147 for her income along with Father’s new
income yields a weekly child support obligation of $157 for Father, which is
approximately a 45% increase from his current obligation of $108. In making
this calculation, Mother makes three significant assumptions: (1) Father is not
entitled to a parenting time credit, i.e. the child would stay with him less than
fifty-two days a year, (2) Father had no weekly work-related childcare expenses,
and (3) Father’s bonus should be included in his weekly income. Child Supp.
G. 6; Child Supp. Worksheet. However, each of these facts was disputed at the
modification hearing.
[13] Regarding work-related childcare expenses, Father testified that he incurred
expenses in the amount of $270 a week for daycare. With regard to Father’s
income, Mother calculated that Father’s weekly gross income is $1864. In
reaching this figure, Mother included a bonus Father received from his
employer that amounted to $158 a week. However, Father testified that this
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was a one-time bonus, as opposed to a recurring annual bonus, and so should
not be considered in calculating his gross weekly income. 2
[14] As for parenting time, there was evidence that Father would exercise time
pursuant to the Indiana Parenting Time Guidelines.
Court: [Mother’s counsel] is correct almost in her numbers
because I come up with 7 times 7 is 49 days in the summer and 7
[days] of winter is 56 and then 9 days at spring break which
would be 65 days is what I come up with under the
guidelines….It’s just commentary but that’s all I really have
unless there’s been a real pattern.
Counsel for Mother: I mean, I want to leave it open – I agree
with you using that as a basis but I do want to leave it open to
rebuttal on what is actually been exercised.
Tr. p. 35. When Mother was later asked how much parenting time she
anticipated Father to exercise in the future, Mother was inconsistent, initially
saying, “I believe we would go by the Indiana State Guidelines,” tr. p. 39, but
later predicting that Father would not “have more than 51 overnights,” in a
year. Tr. p. 54. As the trial court noted, the Indiana Parenting Time
Guidelines recommend that Father, as the non-custodial parent, is entitled to
take the child for a total of approximately sixty-five days throughout the year,
which would entitle Father to a parenting time credit that would reduce his
support obligation. Ind. Parenting Time Guidelines Section III, cmty. (C).
2
Aside from his bonus, Father did not dispute Mother’s calculation of his weekly gross income.
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[15] The trial court did not complete a worksheet or make findings on the
aforementioned contested factual issues. Additionally, Father did not file a
worksheet which would provide us with guidance on what numbers the trial
court could have used for these variables. We note that this court “[does] not
condone [a] trial court’s decision to proceed without verified child support
worksheets,” and “‘we strongly discourage such a practice and urge trial courts
in the exercise of their discretion to require verified child support worksheets in
every case. Failure to do so frustrates not only appellate review but also the
goals of the child support guidelines.’” Hedrick v. Gilbert, 17 N.E.3d 321, 327
(Ind. Ct. App. 2014) (quoting Butterfield v. Constantine, 864 N.E.2d 414, 417
(Ind. Ct. App. 2007)).
[16] Where the failure to complete a worksheet prevents this court from determining
whether the trial court complied with the Guidelines, we will remand for
clarification.
While Child Supp. G. 3(B)(1) does state that the parties “shall”
file a worksheet, it does not state the consequence of failing to file
one. The dissent assumes such a failure prevents a trial court
from entering a support award. A more logical assumption is that
it prevents the non-complying party from challenging the income
figures arrived at by the trial court.
However, because the trial court did not award the amount
calculated by Young, and made neither findings concerning the
income it attributed to each party nor completed its own child
support worksheet, we are unable to determine whether the court
in fact complied with the child support guidelines. Thus, we must
remand to the trial court for clarification of its award. If the trial
court complied with the guidelines, it should enter findings or
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complete a child support worksheet, detailing how it arrived at
the $110.00 amount. The findings or worksheet should contain
the figures assigned for income, child care, health insurance
premiums and credit for Dye’s support obligations to his other
children as well as the percentage of support assigned to each
parent. If the court deviated from the guidelines, it should enter
findings or provide a worksheet demonstrating its calculations, as
well as a written finding setting forth the factual basis for the
deviation. Child Supp. G. 3(F)(2).
Dye v. Young, 655 N.E.2d 549, 550-51 (Ind. Ct. App. 1995). Here, as in Dye, the
trial court neither completed its own child support worksheet nor made findings
concerning Father’s income, parenting time credit, child care costs, or the
percentage of support assigned to each parent. As such, we are unable to
determine whether the trial court complied with the Guidelines.
[17] We note that while there may be evidence in the record which supports the
denial of modification, we will not pick and choose to credit only that evidence
when Father did not complete a worksheet and there is little or no indication of
what evidence the trial court found credible or relied upon in reaching its
decision. To do so would discourage the use of child support worksheets,
incentivize trial courts to issue conclusory judgments, and ultimately vitiate this
court’s ability to independently and accurately review those judgments. While
trial courts are not always required to explain their reasoning, doing so is
particularly important where, as here, there is a statutory formula which we can
easily review. Therefore, we remand with instructions that the trial court make
additional findings or complete a child support worksheet and, if applicable,
explain why any deviations from the Guidelines are justified. See Beardsley v.
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Heazlitt, 654 N.E.2d 1178, 1182 (Ind. Ct. App. 1995) (“[A] trial court is required
to articulate its reasons when its child support order deviates from the result
which would have been reached under the guidelines.”).
III. Medical Expenses
[18] Mother argues that she is entitled to reimbursement by Father for the child’s
uninsured medical expenses in 2014 and that the trial court erred in failing to
order such reimbursement. The trial court made no mention of medical
expense obligation in its order. The Guidelines provide as follows with regard
to uninsured medical expenses:
Ordinary uninsured health care expenses are paid by the parent
who is assigned to pay the controlled expenses (the parent for
whom the parenting time credit is not calculated) up to six
percent (6%) of the basic child support obligation (Line 4 of the
Child Support Obligation Worksheet). Extraordinary health care
expenses are those uninsured expenses which are in excess of six
percent (6%) of the basic obligation, and would include
uninsured expenses for chronic or long term conditions of a
child. Calculation of the apportionment of the health care
expense obligation is a matter separate from the determination of
the weekly child support obligation. These calculations shall be
inserted in the space provided on the Worksheet.
Child Supp. G. 7.
[19] Initially, we note that Father made no arguments at the modification hearing as
to why he would not be responsible for some portion of the child’s uninsured
medical expenses, nor did he contest the validity or amount of any of the
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expenses submitted by Mother. On appeal, Father argues only that Mother’s
calculation of his medical expense obligation is based on information outside
the record on appeal. We disagree. At the modification hearing, Mother
submitted records and receipts detailing the child’s 2014 uninsured medical
expenses which amounted to $1,445.11. It appears that these expenses are far
in excess of six percent of Father’s current yearly obligation and would entitle
Mother to reimbursement of some portion thereof.3 Accordingly, we remand
with instructions that the trial court determine what amount of uninsured
medical expenses Father is obligated to reimburse Mother.
[20] The judgment of the trial court is affirmed in part and remanded with
instructions.
Bailey, J., and Altice, J., concur.
3
While we cannot make exact determinations with the evidence available to us on appeal, we estimate that
Father’s current yearly basic obligation is approximately $6,000, six percent of which is $360.
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