Adams v. Adams

• Decision Date: 12 October 2012
• Docket Number: 2100787.
• Parties: William Clyde ADAMS, Sr. v. Phoebe Nicole ADAMS.
• Court: Alabama Court of Civil Appeals

107 So.3d 194

William Clyde ADAMS, Sr.

v.Phoebe Nicole ADAMS.

2100787.

Court of Civil Appeals of Alabama.

April 20, 2012.

Rehearing Denied June 15, 2012.

Certiorari Denied Oct. 12, 2012.

Alabama Supreme Court 1111246.

Bernard Harwood of Rosen Harwood, P.A., Tuscaloosa, for appellant.

Jaime Webb Conger of The Fisher Law Firm, P.C., Tuscaloosa, for appellee.

PITTMAN, Judge.

This appeal, which arises from a postdivorce proceeding between William Clyde Adams, Sr. (“the father”), and Phoebe Nicole Adams (“the mother”), presents a question of first impression: whether a noncustodial father who is required by the terms of a divorce judgment to pay child support, and who later reaches retirement age and receives Social Security retirement benefits, is entitled to credit against his child-support obligation the child's Social Security dependent benefits. The circuit court disallowed the credit; we reverse and remand.

Facts and Procedural History

The parties were divorced in March 2007, when the child was less than two years old. At the time of the divorce, the mother's gross monthly income was $4,166.67, and the father's gross monthly income was $100,000; their combined incomes exceeded the uppermost income level of the child-support schedule in effect. See Rule 32, Ala. R. Jud. Admin. (Appendix). The divorce judgment incorporated the parties' agreement, which, among other things, provided that the father would pay $2,000 per month in child support, an amount that, the parties stipulated, had not been calculated according to the child-support schedule but, they agreed, was “fair and reasonable” and “sufficient to provide appropriately for the minor child's care and support.” The parties also agreed that the father would (a) pay for private-school tuition, books, fees, and other school-related expenses beginning when the child enrolled in kindergarten, (b) provide health-insurance coverage for the child, (c) establish a trust fund for the child, and (d) establish a “529” college-savings plan for the child.¹ It is undisputed that, since the time of the divorce, the father has been paying $2,000 per month in child support, $892 per month for a family health-insurance plan that covers the child, and annual school-related expenses totaling $6,294.50 for the child. In addition, he has been regularly contributing to the child's trust fund and 529 plan.

In December 2009, the father filed a petition seeking to modify the divorce judgment, asserting various grievances that are not at issue on appeal and seeking a finding of contempt against the mother. The mother answered and counterclaimed, seeking, among other relief, an increase in child support. In 2010, the father, who was still working and earning income, reached 66 years of age and began receiving Social Security retirement benefits in the amount of $2,326 per month. Pursuant to 42 U.S.C. § 402(d)(2), the child became eligible for Social Security dependent benefits equal to one-half of the father's benefits.² In November 2010, the mother, as the child's representative payee, began receiving Social Security dependent benefits in the amount of $1,163 per month for the child.

In December 2010, the father filed a petition to modify the child-support provision of the divorce judgment, asserting that he was entitled to a dollar-for-dollar reduction in his child-support obligation corresponding to the amount of the child's dependent-benefits payment. The mother answered and denied that the father was entitled to a child-support credit.

On February 1, 2011, the parties reached a settlement of all disputed matters except child support; they agreed to submit that issue to the circuit court for resolution upon stipulations and documentary evidence. The parties stipulated to the following matters: the father's current gross monthly income, including employment income, nonemployment income, and Social Security retirement benefits, was $101,485—an increase of $1,485 since the date of the divorce; the mother's current gross monthly employment income was $2,666—a decrease of $1,500.67 since the date of the divorce; the mother's monthly expenses were $5,205.50—an amount that had not increased since the time of the divorce and that included monthly payments totaling $899 on 7 credit cards; the father's annual expenditures for the child, over and above his monthly child-support obligation and excluding his trust-fund and 529–plan contributions, amounted to $8,294.50—$2,400 of which he attributed to clothing, shoes, and toys for the child, with the remainder being school-related expenses.

The circuit court received no testimonial evidence. It decided the case on the briefs and arguments of counsel. On March 11, 2011, the circuit court entered a judgment denying the mother's request for an increase in child support and denying the father's request to credit the child's dependent benefits against his child-support obligation, following which the father timely appealed.

Standard of Review

“The trial court in this case applied the law to undisputed, stipulated facts. Our review therefore is de novo.

“ ‘ “When reviewing a case in which the trial court sat without a jury and heard evidence in the form of stipulations, briefs, and the writings of the parties, this Court sits in judgment of the evidence; there is no presumption of correctness. Old Southern Life Ins. Co. v. Williams, 544 So.2d 941, 942 (Ala.1989); Craig Constr. Co. v. Hendrix, 568 So.2d 752, 756 (Ala.1990). When [an appellate court] must determine if the trial court misapplied the law to the undisputed facts, the standard of review is de novo, and no presumption of correctness is given the decision of the trial court. State Dep't of Revenue v. Garner, 812 So.2d 380, 382 (Ala.Civ.App.2001); see also Ex parte Graham, 702 So.2d 1215 (Ala.1997). In this case the trial court based its decision upon the stipulations, briefs, writings, and arguments of the parties' attorneys. No testimony was presented. Therefore, we must sit in judgment of the evidence, and the trial court's ruling carries no presumption of correctness.” ’ ”

Town of Westover v. Bynum, 68 So.3d 840, 842 (Ala.Civ.App.2011) (quoting American Res. Ins. Co. v. H & H Stephens Constr., Inc., 939 So.2d 868, 872–73 (Ala.2006), quoting in turn Bean Dredging, L.L.C. v. Alabama Dep't of Revenue, 855 So.2d 513, 516–17 (Ala.2003)).

Discussion

This court has held that a child-support obligor is entitled to credit, against his or her child-support obligation, the Social Security dependent benefits that a child receives on account of the obligor's disability. See Harbison v. Harbison, 688 So.2d 876 (Ala.Civ.App.1997); Self v. Self, 685 So.2d 732 (Ala.Civ.App.1996); and Binns v. Maddox, 57 Ala.App. 230, 327 So.2d 726 (Civ.App.1976). We have also held that the estate of a child-support obligor is entitled to a credit for Social Security benefits that a child receives on account of the obligor's death. See Bowden v. Bowden, 426 So.2d 448 (Ala.Civ.App.1983). We have not, however, addressed the issue presented in this case—whether a child-support obligor is entitled to a credit for Social Security dependent benefits that a child receives on account of the obligor's receiving Social Security retirement benefits.

There is a split of authority on that issue, with a majority of states holding that an obligor is entitled, as a matter of law, to a credit for dependent benefits, irrespective of whether those benefits are paid on account of the obligor's death, disability, or retirement. See generally Michael A. DiSabatino, Annot., Right to Credit on Child Support Payments for Social Security or Other Government Dependency Payments Made for Benefit of Child, 34 A.L.R.5th 447, §§ 9–11 (1995). “The rationale for [the majority] view is that such benefits have been generated by the obligor parent's own earnings. If Social Security benefits are viewed as a parent's own earnings, the payments should be properly applied as a substitute for support payments from the obligor's wage earnings.” Rebecca Spencer, Comment, Using Social Security Benefits as a Credit Towards a Child Support Obligation, 16 J. Am. Acad. Matrimonial Law. 223, 223 (1999). See also Tori R.A. Kricken, Child Support and Social Security Dependent Benefits: A Comprehensive Analysis and Proposal for Wyoming, 2 Wyo. L.Rev. 39, 62–63 (2002) (stating that the “majority view regards social security benefits as ‘earnings' of the contributing parent that have been ‘invested’ in an insurance-type system. For this reason, benefits paid to a child on the parent's behalf should be credited toward child support obligations as would be an insurance payout.”). That rationale applies equally to dependent benefits paid on account of the obligor's death, disability, or retirement. See, e.g., In re Marriage of Belger, 654 N.W.2d 902, 907 (Iowa 2002) (noting that “ ‘[a]lthough most of the relevant cases from other states have addressed the issue in the context of social security disability benefits rather than retirement benefits—the type of benefits at issue here—there appears to be no theoretical basis for distinguishing between the two types of payment’ ”) (quoting Miller v. Miller, 890 P.2d 574, 577 (Alaska 1995)).

Alabama cases have adopted the “earnings” and “insurance” rationale for allowing a credit against child support for Social Security dependent disability or death benefits. In Binns, supra, we stated:

“ ‘Social Security disability payments represent money which an employee has earned during his employment and also that which his employer has paid for his benefit into a common trust fund under the Social Security Act. 42 U.S.C. § 301 et seq. These payments are for the purpose of replacing income lost because of the employee's inability to work upon becoming disabled. Thus, these payments substitute for income.’...”

57 Ala.App. at 233, 327 So.2d at 728 (quoting Horton v. Horton, 219 Ga. 177, 178, 132 S.E.2d 200, 201 (1963)). In Bowden...