Saturday, February 25, 2017

Calculation Connundrum

Merchant v. Merchant, 2015 VT 72

By Elizabeth Kruska

Sometimes we here at SCOV Law lose track of things and realize we’ve got an old case or two kicking around that needs addressing. Sort of like in Home Alone when they realize they got to Paris and left Macaulay Culkin in Chicago. Hilarity ensues. This case is about child support, though, so there probably won’t be any Wet Bandits and probably not much will be hilarious. Hey, I’m trying here.

The Merchants were married in 2000 (so, ten whole years after Home Alone came out, if we’re keeping with a theme, which apparently I am) and divorced in 2008. In the 8 years of their marriage they had two kids. Initially they agreed they’d have joint custody of the kids, and that they’d each pay for child care as needed during their respective times. A child support calculation was done and came out to show that Dad would have to pay Mom $112 per month in support. However, they agreed to deviate from that, and that Dad would pay $200 per month plus $43 in arrears. Once the arrearage was paid off (over 42 months), Dad agreed he would just keep paying $243. This is in addition to each parent footing the bill for their own respective child care costs. They also agreed that Mom would get to claim the kids at tax time to get the benefit of a deduction.

A few years later, Dad filed a motion to modify the child support. Reading between the lines a little bit, I think Dad had some changes to his work after his divorce that may have brought his income down and so he tried to get his out-of-pocket child support reduced.

The Magistrate used Dad’s income information and discovered his new support obligation under the guidelines would actually be $256 per month. Since Dad couldn’t show he had a real, substantial, and unanticipated change in circumstances and because he couldn’t show that there would be a 10% decrease in his support obligation based on his income, the Magistrate denied his motion.

Dad appealed to the Family Court (this is permissible in child support cases). Dad argued to the Family Court that the Magistrate miscalculated his income, that the tax deduction for the kids was actually accounted for incorrectly, and that the Magistrate should not have included child care costs in the original calculation. These are the only arguments Dad made. The Family Court affirmed, and Dad appeals to SCOV.

SCOV affirms the Family Court. A lot of this has to do with factual findings, which SCOV is not going to disturb unless they’re clearly erroneous.

First, Dad tries to make several new arguments to SCOV. SCOV, unsurprisingly, and predictably says, “No. We aren’t considering these arguments since you didn’t raise them below. Let’s move on.”

SCOV examines Dad’s issue regarding the tax argument. Dad argued that even though each parent could have taken the kids as a deduction, and that the statute accounts for that, that actually Mom took both kids as a deduction. His argument is that by doing that, it actually makes it look like Dad has more available income due to a deduction (or two) and that mom actually has more cash in hand due to a refund that Dad doesn’t get. SCOV points out that the child support guidelines are meant to take into account taxes and withholding. If the legislature meant for courts to account for which parent actually took deductions based on child dependents, the legislature would have written the statute that way. But they didn’t. And furthermore, the parties in this case agreed in their final divorce order that Mom would take the deductions every year. SCOV takes the position that the parents, in doing this, should have known it could cause a child support distortion.

In any case, if a calculation comes out to be too high or too low, there is the ability for the presiding magistrate to deviate from the guidelines if the magistrate finds that it is in the best interest of the children and the parties to do so. The particular magistrate in this case didn’t find it necessary to do that, so we move on.

Dad also argues that the Magistrate erred in calculating child support by including child care costs. The language of the divorce order, which was incorporated, said that each parent would pay child care costs for the portion of time when the children were with that particular parent. SCOV says it was fine that these costs were included in the calculation. By statute, qualifying child care costs are supposed to be considered in the overall child support calculation, and the Family Court concluded that as a matter of law, the Magistrate’s calculation was correct. SCOV says it wasn’t clear from the original divorce order that the parties meant to exclude child care costs from the child support calculation, so they leave this alone.

Last, Dad argued that the Magistrate made errors in calculating his income. There are a few paragraphs in the opinion about whether Dad was working as an employee or a subcontractor for various businesses doing towing or truck driving. The long and short of it is that it was Dad’s burden to produce evidence and show a change, and that in the lower court he wasn’t able to do that. SCOV isn’t going to reverse the lower court because it could have done a calculation in a slightly different way. If it turns out that Dad’s income is actually a lot lower, Dad can always file a motion to modify showing a change in circumstances.

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