Paternity of Tukker M.O., In re

• Decision Date: 15 February 1996
• Docket Number: No. 93-1929,93-1929
• Citation: 544 N.W.2d 417,199 Wis.2d 186
• Parties: , 64 USLW 2535 In re the Paternity of TUKKER M.O., MARY L.O., Petitioner-Respondent-Petitioner, v. TOMMY R.B., Jr., Respondent-Appellant.
• Court: Wisconsin Supreme Court

Page 417

544 N.W.2d 417

199 Wis.2d 186, 64 USLW 2535

In re the Paternity of TUKKER M.O.,

MARY L.O., Petitioner-Respondent-Petitioner, v. TOMMY R.B., Jr., Respondent-Appellant.

No. 93-1929.

Supreme Court of Wisconsin.

Argued Oct. 31, 1995.

Decided Feb. 15, 1996.

Appeal from Circuit Court; Sheboygan County; John B. Murphy, Judge.

For the petitioner-respondent-petitioner there was a brief by Carl K. Buesing, Robert H. Halvorsen and Halvorsen, Buesing & Seymour, S.C., Sheboygan and oral argument by Carl K. Buesing.

For the respondent-appellant there was a brief by James J. Podell, Carlton D. Stansbury and Law Offices of Podell & Podell, Milwaukee and oral argument by Carlton D. Stansbury.

Amicus curiae brief was filed by Sherwood K. Zink, counsel, Madison for the Wisconsin Department of Health and Social Services.

REVIEW of a decision of the Court of Appeals. Affirmed in part and reversed in part and cause remanded.

DAY, Chief Justice.

This is a review of a published decision of the court of appeals, Mary L.O. v. Tommy R.B., Jr., 189 Wis.2d 440, 525 N.W.2d 793 (Ct.App.1994), reversing in part and affirming in part a judgment of the circuit court for Sheboygan County, John B. Murphy, Judge, that ordered Tommy R.B., Jr. (Tommy) to pay seventeen percent of his income as child support and creating a trust for a portion of the child support payments. This case presents two issues. First, whether a family court in a paternity action may award child support according to the percentage standards in order to assure payment throughout the child's minority when the payor currently has a high income, but may soon undergo a substantial loss of income; second, whether a family court may establish a trust for a child's post-minority educational expenses from funds paid for child support. We answer both questions in the affirmative and reverse in part the decision of the court of appeals.

Mary L.O. (Mary) was a twenty-two-year-old college student in August 1990 when she met and spent an evening with Tommy. Mary gave birth to a child, Tukker M.O. (Tukker) in May of 1991, and named Tommy as the child's father. Tommy admitted paternity. Mary and Tommy have never lived together as a family, and Tommy had never seen Tukker as of the time of the trial court proceedings in this case.

Tommy has been a punter in the National Football League (NFL) since 1987, and as of the February 1993 court proceedings had played on the same team since 1989. His income has ranged from approximately $70,000 in 1989 to approximately $430,000 at the time of the family court proceedings to determine child support for Tukker in February, 1993. At the time of the proceedings, Tommy was not under contract to a football team, although he testified that his performance during the previous year made him confident that he would be playing during the following season. Tommy's financial advisor testified that the average career of an NFL punter is 4.03 years. The advisor also testified that he was not aware of any other skills or abilities on Tommy's part that would allow him to find employment other than as a football player. Tommy has a four-year college degree in business. Before becoming a punter, he worked as a shoe salesman.

Under Wis.Stat. § 767.51(4m) (1993-94), ¹ a family court shall determine the amount of child support payments according to percentage standards established by the Department of Health and Human Services (DHSS). In this case, the applicable percentage was seventeen. See Wis.Admin.Code § HSS 80.03(1)(a) (June 1994). Tommy asked the family court to deviate from this amount, as allowed under Wis.Stat. § 767.51(5) (1993-94). ² Tommy argued that applying the seventeen percent standard in this case would result in an award much greater than required to support Tukker. Mary expressed concern that Tommy's career as a special-teams player might suddenly end, and he would thus be unable to meet his child support obligations due to a substantially lower income.

The family court stated:

[I]f we have, as the evidence clearly did demonstrate, ... an earner, a payor, whose income stream, as it stands, is short-lived.... [I]t's an important idea. Because it shows us that we really do have to take some steps to capitalize on what he's got for right now and in the future hope that he works, but if he doesn't, insure that his child is well cared for.

The family court then determined that applying the seventeen percent standard was not unfair, discussing each of the factors listed in Wis.Stat. § 767.51(5). Mary had acknowledged that her current child support needs were $1500 per month. The court awarded child support in the amount of $1500 per month to be paid to Mary. The remaining portion of the seventeen percent was to be placed in a trust fund. The family court stated its purpose in creating the trust fund as follows: "[T]o provide the cash flow for the support of [Tukker], a minor, over the period of time to meet the statutory criteria of child support and to meet the post-minority responsibilities of going off to college."

The trust fund, as established by the family court, has two components. The first component is a liquid "discretionary fund" with a continuously maintained balance of $20,000. Mary can obtain money from this fund without prior approval from Tommy "for child support when the $1500 per month is not immediately forthcoming from the payor and for reasonable costs of [Tukker's] minority education." Each year, Tommy has a right to review distributions from the fund.

The second component of the trust, funded from the remaining monies, is to be invested in "highly-secured, high-yield, and long-term types of securities." Upon their mutual agreement, Mary and Tommy may make withdrawals from this component of the trust for "big expenses, for college tuition, etc." If Mary and Tommy do not agree, then withdrawal can occur by court order.

Both Tommy and Mary are cotrustees. Mary is to provide an annual accounting of the trust to Tommy. The family court "will review and examine the trust corpus on or about the Nineteenth (19th) birthday of [Tukker] to determine what, if anything, needs to be paid to bring the child support up to date and review what is necessary for the future educational needs of the child at that time." The family court judgment further provides: "The trust shall terminate in its entirety on and no later than the twenty-fifth (25th) birthday of [Tukker] by order of the Court, or upon the earlier death of [Tukker]." Upon termination of the trust, the remaining monies in the trust, including both principal and interest, will revert back to Tommy.

Tommy appealed the circuit court's order. A two-to-one majority of the court of appeals affirmed in part and reversed in part. The majority of the court of appeals held that the circuit court had not erroneously exercised its discretion in creating a trust; however, the circuit court had erred in calculating child support based on the percentage standards and in providing for the educational needs of Tukker after he had reached the age of majority. Mary L.O., 189 Wis.2d at 443, 525 N.W.2d 793. Mary sought review.

The determination of appropriate child support is committed to the discretion of the family court. Weidner v. W.G.N., 131 Wis.2d 301, 315, 388 N.W.2d 615 (1986). An appellate court will sustain a discretionary act if it finds that the family court examined relevant facts, applied a proper standard of law, and, using a demonstrated rational process, reached a conclusion a reasonable judge could reach. Id. (citing Loy v. Bunderson, 107 Wis.2d 400, 414-15, 320 N.W.2d 175 (1982)).

The first question is did the family court err in using the percentage standards to determine Tommy's child support obligation. The family court is required to determine child support according to the percentage standards, see Wis.Stat. § 767.51(4m), although the court may modify the award if it finds by the greater weight of the credible evidence that the use of the standards would be unfair to the child or the party requesting a modification, see Wis.Stat. § 767.51(5).

The court of appeals has considered the difficulties created by high-income payors in child support cases. The application of the percentage standards in such cases may produce incongruous results. In Parrett v. Parrett, 146 Wis.2d 830, 432 N.W.2d 664 (Ct.App.), review denied, 147 Wis.2d 888, 436 N.W.2d 29 (1988), a business owner with a gross income of approximately $16,500 per month and his spouse were divorced. The family court concluded that the use of the percentage standards would "result in a figure so far beyond the child's needs as to be irrational" and instead set child support payments at $1000 per month. Id. at 837, 432 N.W.2d 664. The court of appeals upheld the trial court's judgment, holding "[i]t is reasonable to refuse to apply guidelines based on statistical generalities when the facts before the court bear little relationship to a statistical norm." Id. at 842, 432 N.W.2d 664.

In Hubert v. Hubert, 159 Wis.2d 803, 465 N.W.2d 252 (Ct.App.1990), a cardiac surgeon with an annual income of over $1,000,000 and his wife were divorced. The wife asked that child support payments for the couple's two children be determined according to the percentage standards, i.e., twenty-five percent of the husband's income, or approximately $20,000 per month. Id. at 813, 465 N.W.2d 252. The trial court found that applying the percentage standard would be unfair to the husband, and instead set child support payments at $4000 per month. Id.

The court of appeals reversed. The court of appeals first noted that Parrett did allow a court to deviate from the percentage standards when the payor's high income would result in unnecessarily high payments: "We agree that in cases where the parties have a substantial marital estate and income far beyond the average income of most people, the robotistic utilization of the...