Kelly-Whitney v. Kelly-Whitney, 2011 VT 12 (mem.)
This appeal turns on whether a tuition benefit is gross income for purposes of determining child support. The Court says it is not because the tuition benefit does not decrease living expenses. That’s really all you need to know, but we’ll give you the rundown anyway—‘cause that’s what we do here at SCOV Law.
Christina and Marie Kelly-Whitney are the unmarried parents of two kids who are litigating a separation agreement in family court. Christina is a licensed teacher who voluntarily works as a paraprofessional and custodian at the kids’ private school. By virtue of this position, she gets a tuition benefit worth a little over $20K a year. When child support was established, a magistrate counted that benefit as gross income, and Marie’s child-support contribution was set at $4.85 a month. Christina appealed that decision to the Superior Court (family division), which found that the tuition benefit did not count as gross income, and reversed and remanded the magistrate’s decision. Marie’s child support obligation without the tuition benefit rose to $315.06 a month plus arrearages. Naturally, Marie appealed that decision to the SCOV.
On appeal, Marie presents three arguments. The first is a straightforward challenge to the interpretation of gross income to not include the in-kind tuition benefit. Gross income under the statute is broadly defined, but the key is that the benefit, whether it is income, a free house, or tuition reimbursement, has to reduce personal living expenses in order to “count” for child support. The SCOV reasoned that although a tuition benefit is an in-kind payment, which is included in the first part of the definition, the tuition benefit does not actually reduce personal living expenses. It’s a take-it-or-leave-it kind of thing—not like, say, employer-provided housing that actually compensates for a household expense. Therefore, it does not count as gross income because it is a perquisite that improves the family’s quality of life but it does not take the place of or reduce a personal living expense. Accordingly, the SCOV rejects Marie’s gross-income argument.
The next argument that Marie makes is to argue that the trial court improperly ignored the parties separation agreement and the effect that the agreement had on the meaning of “personal living expense.” This is a bit of a stretch, but the SCOV does no heavy lifting to answer it. Marie’s argument is that the separation agreement requires the parties to keep the kids in private school and obligates Christina to continue paying the tuition. Therefore, argues Marie, the effect is to make private school tuition a “personal living expense.” The SCOV offers a stilted response to this by noting that the trial court looked at the term “personal living expense” as a matter of law rather than fact. The implied reasoning here is that the term is a statutory one that the law decides and is not modified by the parties. The SCOV then goes on to note that the agreement does not require Christine to keep the kids enrolled in private school. Thus, it rejects Marie’s arguments based on the circumstances of the case. Clear? As mud. The SCOV seems to be rejecting this argument on two bases. First, it is going to look to the statute for the meaning of such terms and will not look to the parties’ agreements. Second, a party is going to have to be fairly specific and clear before the SCOV will take an obligation from an agreement to modify the meaning of “personal living expense.” Like most family court questions, the message about the answer here is: it depends.
Marie’s third argument hits the jackpot, and gets to the heart of the matter. It concerns whether Christine, who is a licensed teacher, is purposefully underemployed as a janitor/ paraprofessional. The SCOV notes that Christina’s situation may indicate that she is voluntarily underemployed and whether income should be attributed to her as a result. The rule here is that you cannot hide from your talents to deprive the children the fruits of your higher income. But this determination is primarily factual, and accordingly, the SCOV kicks the ball back to the family division to determine whether Christina is voluntarily underemployed.
The docket to this case indicates that it was originally filed in 2008, unless these children were in elementary school at the time, the parties' dispute has a good chance of outlasting the actual tuition payments—kind of like the way the television show M*A*S*H ran eight years longer than the Korean War.