Court Opinion

ID: 893735
Source: CourtListenerOpinion
Date Created: 2013-06-05 19:00:25.611023+00
Date Added: 2024-06-11T15:09:31.750693
License: Public Domain

1   This memorandum opinion was not selected for publication in the New Mexico Reports. Please
 2   see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions.
 3   Please also note that this electronic memorandum opinion may contain computer-generated
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 6   IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

 7 SARAH A. PARR,

 8          Petitioner-Appellee,

 9 v.                                                                                    NO. 29,348

10 JOSEPH M. ERIDON,

11          Respondent-Appellant.

12 APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
13 Elizabeth Whitefield, District Judge

14 Lorenz Law
15 Alice T. Lorenz
16 Albuquerque, NM

17 for Appellee

18 Atkinson & Kelsey, P.A.
19 Patrick L. McDaniel
20 Albuquerque, NM

21 for Appellant

22                                 MEMORANDUM OPINION

23 GARCIA, Judge.

24          Respondent-Appellant Joseph Eridon (Father) appeals the district court’s order
 1 denying his motion to modify child support based upon a substantial change in

 2 circumstances, pursuant to NMSA 1978, Section 40-4-11.4(A) (1991). We affirm the

 3 district court.

 4 BACKGROUND

 5        On January 28, 2008, Father and Petitioner-Appellee Sarah Parr (Mother)

 6 entered into a marital settlement agreement (MSA), which included the parties’

 7 agreements regarding legal and physical custody of their two minor children, child

 8 support, alimony, division of property, and assumption of debt.           The MSA

 9 incorporated the New Mexico Child Support Guidelines. The parties agreed to base

10 child support “on a compromised figure for [Father’s] average gross monthly income

11 of $4,550 and on [Mother’s] average gross monthly income of $10,992.” Pursuant to

12 the child support guidelines for those income levels, the parties agreed that Mother

13 would pay $800 per month in child support to Father beginning on June 1, 2008. The

14 parties further agreed that child support would automatically reduce to $500 per

15 month on June 1, 2009, when the elder child reached the age of majority. Finally, the

16 MSA awarded the marital residence and other property to Father “[a]s a compromise

17 distribution of the community property.” The district court incorporated the MSA into

18 the judgment and final decree of dissolution of marriage on February 1, 2008.

                                             2
 1        On June 30, 2008, Father filed a motion to modify child support and alleged

 2 that a substantial change in circumstances had occurred based upon an increase in

 3 Mother’s income. Mother filed a response to the motion to modify child support on

 4 July 18, 2008, denying that a substantial change in circumstances had occurred. Both

 5 parties submitted requested findings of fact and conclusions of law to the district

 6 court. On December 8, 2008, the district court conducted an evidentiary hearing on

 7 Father’s motion to modify child support.

 8        The district court entered an order denying Father’s motion to modify child

 9 support on January 26, 2009. The court found that the MSA provided that the first

10 exchange of financial income was scheduled to occur by February 15, 2009, and that

11 Father filed a motion to modify child support on June 30, 2008, four months after the

12 final decree was entered. The court determined that “[t]he gravamen of [Father’s]

13 complaint was [that] he was not provided with true income information by [Mother]”

14 at the time of settlement. Additionally, the parties disagreed regarding how to

15 calculate Mother’s income for purposes of determining whether a substantial change

16 in circumstances had occurred. The district court concluded that the MSA clearly

17 indicated that “child support was based upon compromised income figures for both

18 [Father] and [Mother],”and further determined that child support guidelines were

                                              3
 1 followed “[b]ased upon the income figures agreed to by the parties.” The court found

 2 that other claims were compromised to reach a global settlement agreement, including

 3 Mother’s giving up $300,000 in separate funds as part of the property distribution.

 4 Additionally, the district court concluded that Father “either knew or should have

 5 known of [Mother’s] interest, dividend[,] and capital gains information when he

 6 entered into the MSA,” and that Father agreed to the compromised income figures

 7 with the advice of counsel. The court found that Father’s testimony that the settlement

 8 agreement did not cover “undisclosed income” was not credible.

 9        After considering both testimony and evidence regarding the parties’ income

10 for 2006 to 2008, the district court concluded that there had been no material change

11 in circumstances since the final decree was entered in February 2008. The court

12 reasoned that Mother’s income, including dividends, interest, and capital gains, had

13 not changed significantly. The court further concluded that the MSA was enforceable

14 and that future child support calculations would include Mother’s interest and divided

15 income, but not capital gains. As a result, the district court denied Father’s motion to

16 modify child support, and Father now appeals that determination.

17 DISCUSSION

18        Father appeals the district court’s denial of his motion to modify child support

                                              4
 1 based upon the following alleged errors: (1) the district court abused its discretion in

 2 determining that no substantial change in circumstances occurred; (2) the district court

 3 abused its discretion in excluding Mother’s capital gains from her income for child

 4 support purposes; and (3) the district court erred by determining that Mother’s capital

 5 gains income would be excluded from future child support calculations.              We

 6 consolidate our analysis of the first two issues because they are based upon the same

 7 general allegation: The district court improperly excluded capital gains from its

 8 calculation of Mother’s income, and consequently, abused its discretion by

 9 determining that no substantial change in circumstances occurred. The third issue is

10 addressed separately.

11 A.     Calculation of Income Pursuant to the MSA

12        As a preliminary matter, we interpret the MSA to determine how the parties

13 agreed to calculate income for child support purposes. “Marital settlement agreements

14 are contracts executed by divorcing spouses setting forth the present and future

15 obligations of the parties.” Cortez v. Cortez, 2009-NMSC-008, ¶ 1, 145 N.M. 642,

16 203 P.3d 857. Interpretation of an unambiguous contract is a question of law that we

17 review de novo. Smith & Marrs, Inc. v. Osborn, 2008-NMCA-043, ¶ 10, 143 N.M.

18 684, 180 P.3d 1183. Similarly, we review de novo a district court’s determination that

                                              5
 1 the language of a contract is ambiguous. Weddington v. Weddington, 2004-NMCA-

 2 034, ¶ 19, 135 N.M. 198, 86 P.3d 623. If ambiguity exists and the district court’s

 3 interpretation is both consistent with the language of the agreement as a whole and

 4 supported by the record, “we review [a district] court’s resolution of the ambiguity for

 5 abuse of discretion.” Id.

 6        The disputed portion of the MSA states that “[s]upport [was] based on a

 7 compromised figure for [Father’s] average gross monthly income of $4,550 and on

 8 [Mother’s] average gross monthly income of $10,992.” Father argues that the district

 9 court abused its discretion in determining that both Father’s and Mother’s incomes

10 were based upon compromised figures and that the parties agreed that Mother’s

11 income would not include capital gains. In contrast, Mother argues that the district

12 court correctly determined that both parties’ incomes were based upon compromised

13 figures and that Mother’s compromised income did not include capital gains.

14        We determine that the MSA is ambiguous regarding whether the word

15 “compromised” applies to both Father’s and Mother’s income and whether Mother’s

16 income included capital gains. Consequently, we review the district court’s resolution

17 of that ambiguity for abuse of discretion and determine whether the court’s

18 interpretation is both consistent with the language of the agreement as a whole and

                                              6
 1 supported by the record. Weddington, 2004-NMCA-034, ¶ 19.

 2        Additional provisions of the MSA indicate that the parties made compromises

 3 regarding property distribution such that Father received as his separate property the

 4 entire equity in the marital residence. Moreover, Mother testified that at the

 5 settlement conference, the parties agreed to calculate child support based upon her

 6 income from interest and dividends and that capital gains would not be included.

 7 Mother further testified that her compromised income figure was part of a global

 8 settlement in which Father received marital property that included her separate assets

 9 of approximately $300,000, and Mother agreed to take on more tax responsibility.

10 Additionally, at the time of settlement, Father had filed joint tax returns with Mother

11 for 2004 to 2006, and Father had also received investment statements from Mother

12 from 2007. These documents clearly indicated that Mother’s income, including

13 capital gains, exceeded the $10,992 monthly average income agreed upon by the

14 parties to calculate child support. Finally, an accountant testified that Mother’s

15 monthly average income excluding capital gains was approximately $10,300 at the

16 time of settlement. Consequently, based upon the language of the MSA as a whole

17 and the evidence in the record, we conclude that the district court did not abuse its

18 discretion in determining that the parties agreed to a calculation of Mother’s income

                                              7
 1 upon a compromised income figure that did not include capital gains.

 2        Father also argues that the district court erred by admitting parol evidence

 3 concerning the parties’ interpretation of the terms of the MSA where there was no

 4 ambiguity and where the integration clause contained in the MSA provided that it,

 5 together with the incorporated documents, constituted the entire understanding of the

 6 parties. First, we recognize that Father failed to preserve or raise this argument below

 7 and did not object to testimony regarding the meaning of the settlement agreement.

 8 Absent proper preservation, we will not consider the issue. See Crutchfield v. N.M.

 9 Dep’t of Taxation & Revenue, 2005-NMCA-022, ¶ 14, 137 N.M. 26, 106 P.3d 1273

10 (determinating that absent citation to the record regarding where the party invoked the

11 district court’s ruling or “any obvious preservation, we will not consider the issue”).

12 Secondly, we note that “[w]hile extrinsic evidence is inadmissible to contradict, and

13 perhaps even to supplement, the terms of an integrated agreement, it is admissible to

14 explain the terms of the agreement.” Ruggles v. Ruggles, 116 N.M. 52, 69, 860 P.2d

15 182, 199 (1993). Finally, we conclude that the MSA was ambiguous regarding

16 whether Mother’s monthly gross income of $10,992 was a compromise figure and that

17 the district court did not abuse its discretion in resolving that ambiguity. As a result,

18 we affirm the district court on this issue.

                                                 8
 1 B.     Motion to Modify Child Support Based Upon a Substantial Change in
 2        Circumstances

 3        Father argues that the district court improperly excluded capital gains from its

 4 calculation of Mother’s income, and consequently, abused its discretion by

 5 determining that no substantial change in circumstances occurred. Father argues that

 6 a substantial change in circumstances occurred based upon the difference between

 7 Mother’s compromised income as stated in the January 2008 MSA, which excluded

 8 capital gains, and Mother’s average monthly income, including capital gains, as

 9 reported on tax returns for years 2005 through 2008. In effect, Father argues that

10 Mother’s income was improperly calculated in the January 2008 MSA and that a

11 recalculation of Mother’s income would result in a substantial change in Mother’s

12 child support obligation.

13        “Modification of child support is within the discretion of the district court.”

14 Thomasson v. Johnson, 120 N.M. 512, 514, 903 P.2d 254, 256 (Ct. App. 1995).

15 However, the district court’s “discretion must be exercised in accordance with the

16 child support guidelines.” Mintz v. Zoernig, 2008-NMCA-162, ¶ 17, 145 N.M. 362,

17 198 P.3d 861 (internal quotation marks omitted). “On appeal, our review of the denial

18 of a motion for modification is limited to whether there was substantial evidence to

19 support the findings and whether the district court abused its discretion.” Thomasson,

                                              9
 1 120 N.M. at 514, 903 P.2d at 256. “Substantial evidence is such relevant evidence

 2 that a reasonable mind would find adequate to support a conclusion.” Landavazo v.

 3 Sanchez, 111 N.M. 137, 138, 802 P.2d 1283, 1284 (1990). When applying the

 4 substantial evidence standard, “[w]e indulge every presumption in favor of the

 5 correctness of the findings, conclusions, and judgment of the district court.” Sanchez

 6 v. Saylor, 2000-NMCA-099, ¶ 12, 129 N.M. 742, 13 P.3d 960. “[T]he question is not

 7 whether substantial evidence exists to support the opposite result, but rather whether

 8 such evidence supports the result reached.” Romero v. Parker, 2009-NMCA-047, ¶

 9 26, 146 N.M. 116, 207 P.3d 350 (internal quotation marks and citation omitted).

10 Finally, “[t]o the extent that Father’s appeal requires us to determine questions of law,

11 we review these questions de novo.” Klinksiek v. Klinksiek, 2005-NMCA-008, ¶ 4,

12 136 N.M. 693, 104 P.3d 559.

13        The district court “may modify a child support obligation upon a showing of

14 material and substantial changes in circumstances subsequent to the adjudication of

15 the pre-existing order.” Section 40-4-11.4(A). A presumption of a material and

16 substantial change in circumstances occurs if application of the child support

17 guidelines “would result in a deviation upward or downward of more than twenty

18 percent of the existing child support obligation and the petition for modification is

                                              10
 1 filed more than one year after the filing of the pre-existing order.” Id.

 2        Initially, we note that Father’s argument regarding the inclusion of Mother’s

 3 capital gains in calculating her income appears to attack the January 2008 MSA,

 4 which could be properly raised in a motion to set aside the child support provisions

 5 of the MSA, pursuant to Rule 1-060(B) NMRA.                   See Edens v. Edens,

 6 2005-NMCA-033, ¶¶ 13-22, 137 N.M. 207, 109 P.3d 295 (reviewing the district

 7 court’s denial of the husband’s motion to set aside the MSA based on an alleged

 8 misrepresentation of the wife’s financial situation and capability during mediation).

 9 However, Father only argues that he seeks a modification of child support based on

10 a substantial change of circumstances and does not seek to set aside the MSA. We

11 analyze the case as it has been presented by the parties and based upon the relief

12 Father seeks.

13        Father argues that a substantial change in circumstances occurred based upon

14 the difference between Mother’s income as stated in the January 2008 MSA and

15 Mother’s average monthly income, including capital gains, for tax years 2005 through

16 2008. A presumption of a substantial change in circumstances does not apply because

17 Father’s June 2008 motion to modify child support was not “filed more than one year

18 after the filing of the pre-existing order” in February 2008. Section 40-4-11.4(A).

                                             11
 1 Father does not dispute the lack of a presumption of a substantial change in

 2 circumstances, but instead argues that he has overcome the presumption based upon

 3 an actual showing of a substantial change in circumstances.

 4        We conclude that substantial evidence supports the district court’s

 5 determination that no substantial change in circumstances had occurred since the entry

 6 of the pre-existing child support order in February 2008. At a hearing on December

 7 8, 2008, the district court considered testimony and evidence regarding Mother’s

 8 income from 2006 through October 2008 to determine whether a substantial change

 9 in circumstances had occurred since the final decree was entered on February 1, 2008.

10 We assume without deciding that the district court also considered any changes that

11 occurred after the June 2008 motion to modify was filed and before the hearing on the

12 motion in December 2008. For purposes of this appeal, our consideration of either

13 time period does not change the result. After the final decree was entered on February

14 1, 2008, the parties filed their 2007 joint income taxes, Mother began receiving

15 approximately $139 per week in wages, and Mother’s investments resulted in

16 approximately $127,000 in capital gains. However, an accountant testified that

17 Mother’s income from interest and dividends in 2007 was actually about $2,500 less

18 than in 2006. The accountant further testified that for both 2006 and 2007, Mother’s

                                             12
 1 average monthly income from interest and dividends was between approximately

 2 $10,000 and $10,300 per month. Similarly, the accountant testified that Mother’s

 3 average monthly income from wages, interest, and dividends in 2008 was

 4 approximately $10,300 per month. Consequently, the district court determined that

 5 Mother’s current average monthly income, as calculated pursuant to the MSA, would

 6 not result in a substantially higher child support obligation than her pre-existing child

 7 support obligation, as stated in the MSA.

 8        Furthermore, even if capital gains were considered in Mother’s income, we

 9 conclude that substantial evidence supports the district court’s determination that no

10 substantial change in circumstances occurred. Based upon the exhibits presented and

11 testimony at the hearing, Father argues that Mother’s income including capital gains

12 was $280,128 in 2006, $287,406 in 2007, and $230,559 for January through October

13 2008. However, even if we assume without deciding that Father’s calculations are

14 correct, we still conclude that the district court did not abuse its discretion in

15 determining that Mother’s income, including dividends, interest, and capital gains, had

16 not changed substantially since the pre-existing order was entered in February 2008.

17        Father argues that pursuant to the statutory guidelines for modification of child

18 support, the district court erred by excluding the 2007 and 2008 capital gains from

                                              13
 1 Mother’s income for the purposes of calculating her child support obligation. As

 2 defined in the child support guidelines, “income” means actual gross income “from

 3 any source and includes but is not limited to income from . . . interest, trust income,

 4 annuities, [and] capital gains.” NMSA 1978, § 40-4-11.1(C)(1) & (2) (2008).

 5 However, “[t]he adoption of the guidelines did not nullify the requirement that a

 6 parent show a substantial change in circumstances before a district court can modify

 7 the parent’s support obligation.” Bustos v. Bustos, 2000-NMCA-040, ¶ 15, 128 N.M.

 8 842, 999 P.2d 1074. A claim that the pre-existing child support order was too low

 9 pursuant to the statutory guidelines does not provide a substantial change in

10 circumstances to support modifying child support. See Mintz, 2008-NMCA-162, ¶ 19

11 (determining that no substantial change in circumstances had occurred when the

12 mother’s current income was approximately the same as her income when the pre-

13 existing order was entered); see also Perkins v. Rowson, 110 N.M. 671, 672-75, 798

14 P.2d 1057, 1058-62 (Ct. App. 1990) (reversing the district court’s granting of the

15 father’s motion to modify child support to impute income to the mother pursuant to

16 the child support guidelines because based on the record, the factual circumstances of

17 the parties had not changed substantially since the pre-existing order was entered); see

18 also Clayton v. Trotter, 110 N.M. 369, 371, 796 P.2d 262, 264 (Ct. App. 1990)

                                              14
 1 (determining that a motion to modify child support based upon a claim that the

 2 original child support obligation was too low did not support modification because a

 3 substantial change in circumstances had to have occurred since the pre-existing order

 4 was entered). Similarly, we determine that the district court appropriately denied

 5 Father’s motion to modify child support because Mother’s income had not changed

 6 substantially since the pre-existing order was entered in February 2008, regardless of

 7 whether or not capital gains were included as part of her income.

 8        Consequently, we conclude that substantial evidence supports the district

 9 court’s denial of Father’s motion to modify child support based upon its determination

10 that no substantial change in circumstances occurred.

11 C.     Exclusion of Capital Gains Income From Future Child Support
12        Calculations

13        Father also argues that the district court erred by determining that Mother’s

14 capital gains income shall be excluded from future child support calculations. A

15 calculation of future child support is only speculative at this time and is not before this

16 Court. This Court will not presume that the district court will fail to follow the law

17 regarding the calculation of future child support. Therefore, we will not attempt to

18 speculate regarding the future circumstances of the parties or issue an advisory

19 opinion regarding the circumstances for a proper calculation of child support. See

                                               15
 1 Insure N.M., LLC v. McGonigle, 2000-NMCA-018, ¶ 27, 128 N.M. 611, 995 P.2d

 2 1053 (concluding that this Court “will not issue an advisory opinion in the absence of

 3 a justiciable issue”). We do, however, note that “[i]t is well established that child

 4 support orders may be modified.” Mintz, 2008-NMCA-162, ¶ 18. Consequently, as

 5 the district court determined, the parties are required to exchange income information

 6 annually, and nothing in the district court’s order prevents Father from filing a future

 7 motion to modify child support based upon a substantial change in circumstances that

 8 might occur.

 9 CONCLUSION

10        For the foregoing reasons, we affirm the district court’s order denying Father’s

11 motion to modify child support.

12        IT IS SO ORDERED.

13                                                 ______________________________
14                                                 TIMOTHY L. GARCIA, Judge

15 WE CONCUR:

                                              16
1 _________________________________
2 JAMES J. WECHSLER, Judge

3 _________________________________
4 ROBERT E. ROBLES, Judge

                                  17