1999 -NMCA- 2, Styka v. Styka

• Decision Date: 19 November 1998
• Docket Number: No. 18,543,18,543
• Citation: 126 N.M. 515,972 P.2d 16,1999 NMCA 2
• Parties: , 1999 -NMCA- 2 Phillip E. STYKA, Petitioner-Appellant, v. Jane H. STYKA, Respondent-Appellee.
• Court: Court of Appeals of New Mexico

Page 16

972 P.2d 16

126 N.M. 515, 1999 -NMCA- 2

Phillip E. STYKA, Petitioner-Appellant, v. Jane H. STYKA, Respondent-Appellee.

No. 18,543.

Court of Appeals of New Mexico.

Nov. 19, 1998.

Certiorari Denied Jan. 6, 1999.

Kim E. Kaufman, Albuquerque, Barbara V. Johnson, Albuquerque, for Appellant.

David H. Kelsey, Victoria H. Perdue, Atkinson & Kelsey, P.A., Albuquerque, for Appellee.

OPINION

APODACA, J.

¶1 Petitioner Phillip E. Styka (Father) appeals from the trial court's decree dissolving his marriage to Respondent Jane H. Styka (Mother), dividing the community property, and determining child support. Petitioner raises several issues on appeal involving only the child support determination, which he has argued as six separate issues. We have restructured the issues in a different order and format and consolidated them as three issues and several subissues for purposes of discussion.

¶2 The first issue relates to Mother's income. Father argues that the trial court erred in determining Mother's income for purposes of calculating child support, by failing to (1) fully take into account the in-kind benefit that Mother receives from living in a residence for which she pays neither rent nor a mortgage; (2) take into account as other income the annual gift of $10,000 Mother receives from her father and other substantial but irregular gifts or lump sum trust corpus distributions Mother has received during the course of the marriage; (3) impute income to Mother based on a reasonable rate of return on the cash assets Mother received in the divorce proceeding; and (4) impute potential income to Mother based on full-time employment.

¶3 The second issue concerns the costs of child care. Father disputes the trial court's determination that his child care expense was erroneous, as well as the court's imputation of child care expenses to Mother.

¶4 The third issue involves certain private school expenses. Father contends that the trial court erred in including private school tuition in its calculation of child support.

¶5 This appeal presents us with several questions of first impression concerning the meaning of NMSA 1978, § 40-4-11.1 (1995). We affirm the trial court on all issues except the issue of imputation of return on cash assets and income to Mother and the issue of Father's child care costs.

I. FACTUAL AND PROCEDURAL BACKGROUND

¶6 Father and Mother were married in 1987. They separated on April 9, 1996, and Father filed a petition for dissolution of marriage and custody of the children on the following day. There are two children of the marriage, a son and a daughter. At the time the parents separated, their son was six years old and their daughter was four years old.

¶7 Father is an anesthesiologist. Mother holds a degree in pharmacy and is licensed to practice pharmacy in New Mexico. By stipulation, Mother and Father have joint legal custody of their children, with each parent having physical custody of the children 50% of the time. As a practical matter, the children spend alternate weeks with each parent. At the time of trial, both children were enrolled at a private school pursuant to an interim stipulation. The son was in first grade and the daughter attended a pre-kindergarten program. During the school year, the children were in school from 8:00 a.m. to 3:15 p.m. However, the parties agreed that this interim order did not resolve the question of whether the children should attend public or private school. Additional facts are included in our discussion of the issues.

II. DISCUSSION

A. Standard of Review

¶8 The setting of child support is within the trial court's discretion and is reviewed on appeal only for an abuse of that discretion. See Spingola v. Spingola, 91 N.M. 737, 742, 580 P.2d 958, 963 (1978). The trial court's discretion, however, must be exercised in accordance with the child support guidelines. See Tedford v. Gregory, 1998-NMCA-067, pp 32-33, 125 N.M. 206, 959 P.2d 540 (reversing trial court's deviation from the guidelines because the trial court did not exercise its discretion in the manner required by statute); Jurado v. Jurado, 119 N.M. 522, 529-30, 892 P.2d 969, 976-77 (Ct.App.1995) (discussing trial court's exercise of discretion under NMSA 1978, § 40-4-11.2 (1989)). We also review the trial court's findings of fact to determine if there is substantial evidence to support the determinations. See Alverson v. Harris, 1997-NMCA-024, p 27, 123 N.M. 153, 935 P.2d 1165. Finally, we review questions of law de novo. See id. p 6.

B. Mother's Income for Purposes of Child Support

¶9 Section 40-4-11.1(C)(2) defines gross income in part as follows:

"gross income" includes income from any source and includes but is not limited to income from salaries, wages, tips, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, workers' compensation benefits, unemployment insurance benefits, disability insurance benefits, significant in-kind benefits that reduce personal living expenses, prizes and alimony or maintenance received[.]

¶10 On appeal, Mother essentially contends, as she did at the hearing before the trial court, that gifts are not income. We hold that, at a minimum, the trial court must include in its income determinations the actual cash value of the income sources listed in Section 40-4-11.1(C)(2).

¶11 We believe the language of Section 40-4-11.1(C)(2) requires consideration of the actual amount of income from the statutorily listed sources in determination of each parent's gross income. Although we have not directly addressed this issue before, our decisions on these issues have consistently taken this approach. See Tedford, 1998-NMCA-067, p 31, 125 N.M. 206, 959 P.2d 540 (findings concerning income should be made before applying any deviation from the guidelines); Major v. Major, 1998-NMCA-001, pp 4-11, 124 N.M. 436, 952 P.2d 37; Jurado, 119 N.M. at 529-30, 892 P.2d at 976-77; Roberts v. Wright, 117 N.M. 294, 297, 871 P.2d 390, 393 (Ct.App.1994); Perkins v. Rowson, 110 N.M. 671, 674, 798 P.2d 1057, 1060 (Ct.App.1990) (dicta).

¶12 We turn now to the specific errors or subissues argued by Father under this first issue.

¶1 The Residence

¶13 Father argues that the trial court erred in calculating the significant in-kind benefit of Mother's residence under Section 40-4-11.1(C)(2). This section partly defines "gross income" as "significant in-kind benefits that reduce personal living expenses...." We disagree with Father's definition of in-kind benefits and uphold the trial court's ruling on this issue.

¶14 At the time of the hearing in the trial court, Mother was living without cost to her in a residence that had been purchased in the name of her father while the divorce was pending. The purchase price of the residence was $325,000. Mother received $100,000 of the purchase price as a gift from her father. The other $225,000 was paid by the Louis Stefurak Trust. In exchange, Mother gave the Louis Stefurak Trust a promissory note for $225,000 at 6.75% interest. Under the terms of the note, payments would not begin until May 31, 2012. Nothing in Mother's testimony suggests that interest would accumulate on the debt during the years that payments were not being made. Consequently, it was undisputed that Mother would not be required to make any payments on the house until after the parties' children reached the age of majority.

¶15 At the hearing, Father asked the trial court to treat the use of the house as an in-kind benefit. He urged the court to calculate its value based on the cost of a 30-year mortgage at 8%. He calculated the monthly payment of this mortgage as $2376. In contrast, Mother asked the trial court to ignore the value of the house entirely. The trial court, without explanation, valued the house at $1000 per month. Father contends that the trial court's determination was not supported by substantial evidence.

¶16 We do not believe that the residence is a significant in-kind benefit within the meaning of Section 40-4-11.1(C)(2). Rather, we believe that the term in the statute refers to employment benefits. Because the statute does not define the term and the term does not have a commonly accepted plain meaning, we consider legal commentary and statutory authority in our interpretation. See State v. Fellhauer, 1997-NMCA-064, pp 4-5, 123 N.M. 476, 943 P.2d 123 (stating that court may use interpretative aids in construing statute).

¶17 Section 3.12(4)(a) of the American Law Institute's Principles of the Law of Family Dissolution: Analysis and Recommendations (Tentative Draft No. 3, Part II, 1998) captures "in-kind employee " or self-employment benefits in calculating a parent's income for purpose of establishing a child support award. (Emphasis added.) A cited example is housing provided by an employer. See id. illus. 2. Additionally, Section 3.12(4)(b) generally does not impute income arising from ordinary home ownership where the owner occupies the home. See id. cmt. d. (impute income only if home is incommensurate with economic resources of owner due to excessive investment). A statute similar to Section 40-4-11.1(C)(2) refers to "economic in-kind benefits received by an employed obligor " in determining gross income for child support obligations. See Ga.Code Ann. § 19-6-15(b)(4) (1996) (emphasis added). These references support our construction of in-kind benefits under Section 40-4-11.1(C)(2) as employment benefits.

¶18 Mother did not cross appeal the trial court's imputation of income from the house at the rate of $1000 per month. For that reason, that part of the trial court's calculation of the imputed amount shall remain in effect.

¶2 Gifts and Distributions From Trusts

¶19 Father testified at trial that, during the nine years of the parties' marriage, Mother received $10,000 each year from her father. Mother did not dispute this, nor did she indicate that these gifts...