Case Title: Ready v. Ready

Citation: 

Docket Number: 95-66

State: wyoming

Court: Wyoming Supreme Court

Date: 1995-11-22T00:00:00Z

Document:
READY v. READY2003 WY 12176 P.3d 836Case Number: 02-149Decided: 09/26/2003
APRIL TERM, A.D. 2003

 

                                                                                                            

 

K. 
C. JAMES READY,

 

Appellant(Defendant),

 

v.

 

JANELLE 
LOUANNE READY,

 

Appellee(Plaintiff).

 

 

Appeal 
from the District Court of Park County

 

Representing 
Appellant:

Wendy 
Press Sweeny, Worland, Wyoming

 

Representing 
Appellee:

Chris 
Edwards of Simpson, Kepler & Edwards, LLC, Cody, 
Wyoming

 

Before 
HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.

 

 

GOLDEN, 
J., delivers the opinion of the court; VOIGT, J., files a dissenting 
opinion, in which LEHMAN, J., joins.

 

 

GOLDEN, 
Justice.

 

[¶1]           
A 
non-custodial father moved to modify the child support and alimony provisions of 
his 1998 divorce settlement and decree.  
The district court did reduce the father's child support obligation, but 
still ordered an amount higher than the presumptive statutory amount.  The court declined to terminate the 
father's alimony obligation.  The 
father appeals the alimony and child support orders as well as the court's 
refusal to make the child support modification retroactive to the date the 
father filed his motion.  Finding no 
abuse of discretion by the trial court, we affirm.

 

 

ISSUES

 

[¶2]           
K.C. 
James Ready, the father and appellant, presents the following 
issues:

 

I.          
Did the trial court err in its use of the tax returns in ascertaining 
child support?

 

II.          
Did the trial court err in deviating from the child support guidelines 
and increasing the child support due and owing by the 
Appellant?

 

III.         
Did the trial court err in refusing to retroactively apply the reduction 
in child support to the date of the petition being served on the 
Appellee?

 

IV.        Did 
the trial court err in refusing and failing to modify the decree of divorce as 
to the payment of alimony?

 

[¶3]           
Janelle 
Louanne Zinn, mother and appellee, states the issue as whether the trial court 
abused its discretion in any of the four areas presented by the father. 

 

 

FACTS

 

[¶4]           
K.C. 
James Ready (father) married Janelle Louanne Ready, now known as Janelle Louanne 
Zinn (mother) in 1981.  They 
divorced in 1998.  The divorce 
decree incorporated the parties' settlement agreement and awarded custody of 
their three children -- then ages 15, 13 and 11 -- to their mother.  The father was granted visitation and 
ordered to pay child support of $709 per month, plus $200 per month alimony 
until the youngest child graduates from high school in June of 2005. 

 

[¶5]           
Before 
the divorce, the father was employed in Cody, Wyoming, as a branch manager for a 
grocery store chain.  He earned 
$38,000 - $50,000 per year with bonuses.  
The mother, who has a bachelor's degree in elementary education and an 
associate's degree in music, was self-employed as a daycare provider and piano 
teacher.  She earned less than 
$12,000 in the year before the divorce.  
As part of the divorce settlement, the mother was awarded the family home 
in Cody, while the father moved to his family's farm in Thermopolis, Wyoming. 

 

[¶6]           
Both 
parties have changed their employment since the divorce.  The father became a grocery store branch 
manager in Worland, but was terminated at the end of 1998 after he was hurt in a 
fall from a horse.  The store has 
since closed, and the father has not sought work again in that occupation. At 
the time of the modification hearing he was an apprentice electrician in 
training to become a journeyman electrician. He also worked odd jobs and was 
renovating a home for re-sale.  The mother took a job in a doctors' 
office immediately after the divorce decree in September 1998 and was earning 
$10 per hour, with insurance benefits, in 2001.  Just before the modification hearing, 
she went to work for the State of Wyoming at $13.50 per hour with no fringe 
benefits.  She remarried in July 
2001. 

 

[¶7]           
The 
parties' oldest son turned 18 in 2001 and is attending college. His mother 
testified that she would have to provide him with approximately $125 per month 
to assist with his college expenses.  
She also spends one to two hours per day tutoring the second child, who 
is hearing impaired. 

 

[¶8]           
Upon 
the father's motion for modification, the district court terminated the father's 
child support obligation for the oldest son.  The court then calculated the 
presumptive level of support for the two remaining minor children using the 
parties' 2000 income as the most representative of their current earning 
ability.  The court determined the 
father's 2000 earnings were approximately $19,500, and that his $2,036 refund of 
1999 taxes received in 2000 should also be counted as income because it 
represented over-withholding.  His 
monthly average income was therefore $1,800.  The court found the mother's income to 
be $1,508 per month and determined that her tax refund should not be counted 
because it was due to her charitable contributions.  

 

[¶9]           
Using 
those income figures, the district court determined the presumptive level of 
support under the governing statute to be $470 but also determined that 
deviation upward to $635 was appropriate based upon six other factors, 
including:

  the father's choice to reside in an 
economically depressed area where work in his profession is 
unavailable;

  the special healthcare and educational 
needs of the parties' second child; 

  the mother's contribution of tutoring 
services for their hearing-impaired son;

  the father's failure to exercise his 
right to overnight visitation with his daughter;

  the mother's cash assistance to the 
oldest son in college;

  the father's expectation of eventual 
profit from the house he is renovating.

[¶10]       
The 
court also declined to terminate the father's $200 per month alimony obligation 
because it was part of a comprehensive property and child custody agreement, 
because the alimony is to terminate on a specific date, and because the 
agreement "was also apparently geared to a consideration of the needs of the 
children of the parties."  

 

 

STANDARD 
OF REVIEW

 

[¶11]       
Our 
role in reviewing petitions to modify child support is well 
established:

 

There 
are few rules more firmly established in our jurisprudence than the proposition 
that disposition of marital property, calculation of income for child support 
purposes, and the granting of alimony are committed to the sound discretion of 
the district court.  Johnson v. 
Johnson, 11 P.3d 948, 950 (Wyo. 2000).  Judicial discretion is a 
composite of many things, among which are conclusions drawn from objective 
criteria; it means exercising sound judgment with regard to what is right under 
the circumstances and without doing so arbitrarily or capriciously.  Id.; Vaughn v. State, 962 P.2d 149, 151 (Wyo. 
1998).  We must ask ourselves whether the trial court could reasonably 
conclude as it did and whether any facet of its ruling was arbitrary or 
capricious.  Johnson, 11 P.3d  at 
950.  In accomplishing our review, 
we consider only the evidence in favor of the successful party, ignore the 
evidence of the unsuccessful party, and grant to the successful party every 
reasonable inference that can be drawn from the record.  Id.

 

Belless 
v. Belless, 
2001 WY 41, ¶6, 21 P.3d 749,¶6 (Wyo. 2001).

 

The party 
seeking modification must establish there has been a material and substantial 
change in circumstances which outweighs the interest of society in applying the 
doctrine of res judicata.  Pauling v. Pauling, 837 P.2d 1073 (Wyo. 
1992); Crawford v. Crawford, 828 P.2d 1192 (Wyo. 1992); Dorr v. 
Newman, 785 P.2d 1172 (Wyo. 1990); Mentock v. Mentock, 638 P.2d 156 (Wyo. 
1981). The trial court is vested with discretion to modify the provisions 
of the divorce decree and, absent a grave abuse of that discretion, we will not 
disturb its decision. Parry v. 
Parry, 766 P.2d 1168 (Wyo. 1989); Manners v. Manners, 706 P.2d 671 (Wyo. 
1985). The standard we apply in review of cases asserting abuse of 
discretion as an issue is whether the trial court reasonably could have 
concluded as it did. Rude v. State, 
851 P.2d 20 (Wyo. 1993), and Parry 
(both citing Martinez v. State, 611 P.2d 831 (Wyo. 1980)).

 

Pasenelli v. 
Pasenelli,  2002 WY 159, ¶9, 57 P.3d 324, ¶9 
(Wyo. 2002) (quoting Jones v. Jones, 
858 P.2d 289, 291 (Wyo. 1993)).

 

This policy 
manifests a balance between the doctrine of finality of judgments which is 
supported by the doctrine of res judicata 
and the statutes providing for modification of the provisions of a decree 
relating to child custody, support, and alimony. The trial court is charged 
with resolving that tension, and it must do so in the exercise of 
discretion. The discretion afforded the trial judge is encompassed in Wyo. 
Stat. § 20-6-302(b). The discretion is guided by a list of thirteen 
factors, but the final one, "[o]ther factors deemed relevant by the court * * 
*," is a classic acknowledgment of judicial discretion.

 

           The 
child support guidelines identify a base from which the judge must invoke the 
exercise of discretion. In the absence of an agreement with respect to 
child support, the guidelines will have a more significant controlling 
impact. When an agreement as to child support is involved, however, more 
weight may be given to the agreement. Child support agreements entered into 
by the parties are favored by the courts. Beard v. Beard, 368 P.2d 953 (Wyo. 
1962).

 

Smith v. 
Smith, 895 P.2d 37, 41 (Wyo. 1995).

 

 

DISCUSSION

            

[¶12]       
Child 
support is calculated pursuant to statute.  
The first step is to calculate the parents' current monthly net income 
for application to the presumptive child support tables. Wyo. Stat. Ann. § 
20-2-304 (LexisNexis 2003).  
"Income" and "net income" are defined in Wyo. Stat. Ann. § 20-2-303(a) 
(LexisNexis 2003) as follows:

 

(ii)  "Income" 
means any form of payment or return in money or in kind to an individual, 
regardless of source. Income includes, but is not limited to wages, earnings, 
salary, commission, compensation as an independent contractor, temporary total 
disability, permanent partial disability and permanent total disability worker's 
compensation payments, unemployment compensation, disability, annuity and 
retirement benefits, and any other payments made by any payor, but shall not 
include any earnings derived from overtime work unless the court, after 
considering all overtime earnings derived in the preceding twenty-four (24) 
month period, determines the overtime earnings can reasonably be expected to 
continue on a consistent basis. In determining income, all reasonable 
unreimbursed legitimate business expenses shall be deducted. Means tested 
sources of income such as Pell grants, aid under the personal opportunities with 
employment responsibilities (POWER) program, food stamps and supplemental 
security income (SSI) shall not be considered as income. Gross income also means 
potential income of parents who are voluntarily unemployed or 
underemployed;

 

(iii)  "Net 
income" means income as defined in paragraph (ii) of this subsection less 
personal income taxes, social security deductions, cost of dependent health care 
coverage for all dependent children, actual payments being made under 
preexisting support orders for current support of other children, other 
court-ordered support obligations currently being paid and mandatory pension 
deductions. Payments towards child support arrearage shall not be deducted to 
arrive at net income[.]

 

[¶13]       
The father 
first argues on appeal that the district court erred in its use of the parties' 
most recent tax returns to ascertain their income for determining child support 
under the statutory guidelines.  He 
claims this violates our ruling in Houston v. Smith, 882 P.2d 240 (Wyo. 
1994), in which we held that "federal income tax computations differ in 
significant respects from the computations required by [the child support 
statute], and the district court erred in substituting the federal income tax 
concepts to arrive at those critical amounts."  Id. at 240-41.  

 

[¶14]       
In Houston, the district court had followed 
the federal income tax computation by deducting from the obligor's income, as an 
"unreimbursed legitimate business expense," the amortized depreciation for 
business property to which obligor was entitled on his federal taxes.   
Since amortized depreciation does not directly affect cash flow in later years, 
we ruled that it was not appropriate, for child support purposes, to recognize 
the same deduction from income as federal tax law allows.  "Since the purpose of depreciation is to 
assist a person in regaining their expenditures, it does not 
follow that depreciation is a business expense for the calculation of disposable 
income under the Guidelines." Id. at 244 (quoting Stewart v. Stewart, 793 P.2d 813, 815 
(Mont. 1990)) (emphasis in original). 

 

[¶15]       
In Watson v. Watson, 2002 WY 180, 60 P.3d 124 (Wyo. 2002), we dealt with the other side of that coin and the federal tax 
provision under 26 U.S.C.A. § 179 which allows a taxpayer to elect a same-year 
deduction for certain business property rather than an amortized deduction over 
a number of years.  In calculating 
income for child support purposes, the district court, based on our ruling in Houston, had not allowed a deduction 
from income for the Section 179 business expenses.  In reversing again, we clarified that 
the test is whether the business expense affects the obligor's actual cash flow 
during the year in question, rather than a mere book entry for federal tax 
purposes.  Since the Section 179 
property is actually paid for in the same year in which the deduction is 
allowed, it does affect cash flow in that year and we allowed the deduction for 
child support purposes.  Watson, ¶¶ 14-16.

 

[¶16]       
In neither 
Houston nor Watson, however, did we state a per se 
prohibition, as the father in this case implies, on the use of federal tax 
information as evidence in determining "income" and "net income" under the 
Wyoming child support statutes.  In 
fact, in all child support proceedings, the parties are required to submit to the court financial 
affidavits with supporting documentation that includes copies of their most 
recent tax returns.  Wyo. Stat. Ann. 
§ 20-2-308(a), (b) (LexisNexis 2003).  
The 2000 tax year was the most recent one available at the time of the 
hearing.  A review of the record in 
this case shows that the court considered the father's receipt of  a significant tax refund in 2000 for 
overpaid 1999 taxes as a matter affecting his cash flow during the year 
2000.  The father would have us base 
his child support obligation not on his actual after-tax income, but rather on 
an income that is artificially reduced by temporary overpayment of taxes.  That would not comport with the 
statutory and case law definitions of income.

 

[¶17]       
The father 
also complains for the first time on appeal that the court did not take into 
consideration his unreimbursed business expenses.  However, he offered no evidence of any 
such expenses beyond a general statement that he had costs associated with the 
remodeling of a home.  As we also 
stated in Watson at ¶16, "[t]he 
burden of proving that an expense was a reasonable unreimbursed legitimate 
business expense lies with the party seeking the deduction. Erhart v. Evans, 2001 WY 79, ¶15, 30 P.3d 542, 546 (Wyo. 2001); Fountain v. 
Mitros, 968 P.2d 934, 938 (Wyo. 1998)."  The court need not speculate about such 
expenses where none were claimed.  
In light of the above, the father has not demonstrated and we cannot say 
that the trial court exceeded the bounds of reason by using the parties' 
reported 2000 federal income tax wages as the basis for calculating presumptive 
child support.

 

[¶18]       
The father 
next argues that the trial court erred in deviating from the presumptive child 
support guidelines.  The parties' 
income as determined by the court resulted in a presumptive child support figure 
of $470 per month.  The court, 
however, exercised its discretion under § 20-2-307 to deviate from that figure, 
increasing it by $165 to $635 per month.  
As required by the statute, the court set forth its reasons for the 
deviation.  The father has chosen to 
reside in an economically depressed area where work in his former profession, at 
which he earned up to $50,000 per year, is not available.  The parties' second son has a hearing 
disability, requiring additional expense for hearing aids and battery 
replacement. The mother, who has an education degree, contributes tutoring 
services for the hearing-impaired son, which otherwise would have to be 
purchased for him.  The father at 
the time of the hearing was not exercising his right to overnight visitation 
with his daughter and, although not articulated by the trial court, would 
therefore not be incurring the additional meal and other incidental expenses he 
would incur if she were spending time in his home.  The mother anticipated providing 
approximately $125 per month in cash assistance to the oldest son, who is now in 
college.  Finally, the father is 
renovating a house for re-sale and in that sense anticipates additional 
self-employment income from the profit on the house.  These considerations clearly fall within 
those factors listed in § 20-2-307 which justify deviation from the 
presumptive child support level.

 

[¶19]       
In Pasenelli, 2002 WY 159, ¶11, 57 P.3d 324, ¶11 
(Wyo. 2002), we reiterated that a district court has broad discretion in 
determining the proper amount of a child support award, and that we will not 
disturb the trial court's ruling unless there is a clear showing of an abuse of 
discretion.  Judicial discretion is 
a composite of many things, among which are conclusions drawn from objective 
criteria; it means a sound judgment exercised with regard to what is right under 
the circumstances and without doing so arbitrarily or capriciously.  Id. (citing Vaughn v. State, 962 P.2d 149, 151 
(Wyo. 1998)).  While another judge 
or even this Court may have weighed those factors differently and reached a 
different figure for child support in this case, we cannot conclude from the 
record that the trial court could not reasonably have concluded as it 
did.

 

[¶20]       
Father next 
claims error in the trial court's issuing its order prospectively only, even 
though the father had requested that any reduction in child support be made 
retroactive to the filing of his motion, as allowed by Wyo. Stat. Ann. § 
20-2-311(d)(ii).  Again, this is a 
decision within the sound discretion of the trial court, one which will be 
disturbed on appeal only upon a clear showing of abuse.  Houston, 882 P.2d  at 245.  The father alleges unreasonable delay 
from the filing of his original motion to the date of the court's order.  The original petition was filed pro se 
on November 21, 2000; it was amended in April 2001, after the father obtained an 
attorney.  Hearings were held in 
June and July 2001, and the court announced its decision from the bench on July 
26, 2001.  That decision date 
coincided with the oldest child's 18th birthday, when father was no 
longer obligated to pay support for him.  
We cannot conclude that a decision on a petition to modify a divorce 
decree, entered four months after the amended petition was filed, constituted 
unreasonable delay, nor that it was an abuse of discretion to make the change 
effective when one of the children became emancipated.

 

[¶21]       
Finally, the 
father claims an abuse of discretion in not terminating his alimony 
obligation.  The trial court has 
authority to revise and alter the alimony provision of a divorce decree.  Wyo. Stat. Ann. § 20-2-116 (LexisNexis 
2001).  Such a revision requires the 
moving party to demonstrate a substantial change in circumstances from the time 
of the divorce to the time of the petition to modify.  Dorr v. Newman, 785 P.2d 1172, 1178 
(Wyo. 1990).  In this case, only two 
years had elapsed between the date of the decree and the date of the original 
petition to modify.  At the time of 
the divorce, Mr. Ready had already left the family home in Cody and relocated to 
Thermopolis.  Although he had made 
more money in some previous years, at the time of the decree his income was 
found to be $2,270.59 per month.  At 
the time of the modification hearing in 2001, he was making approximately 80% of 
that amount, with the prospect of improvement upon completion of his electrical 
apprenticeship. 

 

[¶22]       
As with the 
modification of child support, the decision to modify an alimony provision of a 
divorce decree lies with the sound discretion of the trial court and will not be 
disturbed on appeal absent clear abuse.  
Belless, ¶6.   We have noted also that "the 
purpose of alimony is to provide a post-divorce substitute for the support 
provided to a spouse during the marriage,' and that an award of alimony requires 
evaluation of the financial needs of each party and is affected by a 
determination of child custody." Carlton 
v. Carlton, 997 P.3d 1028, 1035 (Wyo. 2002) (quoting in part Reavis v. Reavis, 955 P.2d 428, 435 
(Wyo. 1998)).  The trial court was 
cognizant of this standard, and that the alimony in this case was part of a 
comprehensive stipulation that encompassed support, property division, 
assignment of debts and alimony until the youngest child turns 
eighteen.

 

[¶23]       
The husband 
offers evidence that his income has decreased and his ex-wife's increased 
between the date of the decree and the date of the modification petition.  However, we have recognized that it is 
entirely within the discretion of the trial court to award alimony during a 
transition period wherein the party requesting alimony may gain special skills, 
education, or experience to enable the party to raise his or her earning 
capacity.  Belless, ¶11 (citing Hendrickson v. Hendrickson, 583 P.2d 1265, 1268 (Wyo. 1978)).  The trial 
court may reasonably conclude that that transition was not complete in the first 
three years after the divorce, especially since it was entirely anticipatable at 
the time of the agreement that the wife would be improving her earnings during 
the seven-year alimony period. As in Belless, the husband does not persuade 
us that the trial court failed to exercise sound judgment or otherwise abused 
its discretion by providing continuing support to the wife through an award of 
alimony.

 

 

CONCLUSION

 

[¶24]       
The district 
court demonstrated sound judgment in drawing conclusions from objective criteria 
when it calculated child support, when it refused to change child support 
retroactively, and when it refused to terminate alimony.  Our review of the record indicates that 
the court could have reasonably reached those conclusions.  The ruling is therefore not arbitrary or 
capricious and is affirmed.   

 
  

            
VOIGT, Justice, dissenting, with whom LEHMAN, Justice, 
joins.

 

[¶25]   I agree, for the most part, with 
the majority's analysis and conclusions.  
I dissent, however, because there are two aspects of the district court's 
decision that should not receive this Court's approval.  First, I do not believe that the 
custodial parent's income for child support computation purposes should be 
reduced by charitable contributions.  
Charitable contributions, which are voluntary, are not of the same nature 
as the items that statutorily may reduce "income" to "net income."  See Wyo. Stat. Ann. § 
20-2-303(a)(ii) and (iii) (LexisNexis 2003).  Second, there should not be an upward 
deviation in the non-custodial parent's child support obligation based on the 
custodial parent's decision to contribute to an adult child's college 
expenses.  Both with charitable 
contributions and with college expenses, the effect of the court's order is to 
force the non-custodial parent partially to fund the custodial parent's 
unilateral financial decisions.

 

[¶26]   I would reverse and remand with 
instructions to the district court to omit these "expenses" when calculating 
child support.