Andrusz v. Andrusz

• Decision Date: 13 July 2017
• Docket Number: No. 331339,331339
• Citation: 320 Mich.App. 445,904 N.W.2d 636
• Parties: Thaddeus J. ANDRUSZ, Plaintiff-Appellant, v. Jacqueline R. ANDRUSZ, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

320 Mich.App. 445

904 N.W.2d 636

Thaddeus J. ANDRUSZ, Plaintiff-Appellant,

v.Jacqueline R. ANDRUSZ, Defendant-Appellee.

No. 331339

Court of Appeals of Michigan.

Submitted May 10, 2017, at Detroit

Decided July 13, 2017, at 9:00 a.m.

Hertz Schram PC (by Gerald P. Cavellier and Matthew J. Turchyn ) for plaintiff.

Eisenberg, Middleditch & Spilman, PLLC (by Amy Spilman and Keri Middleditch ), for defendant.

Before: Riordan, P.J., and Ronayne Krause and Swartzle, JJ.

Ronayne Krause, J.

Plaintiff, Thaddeus J. Andrusz, appeals by leave granted the trial court's order clarifying the terms of the parties' consent judgment of divorce. In relevant part, the court ordered plaintiff to pay defendant, Jacqueline R. Andrusz, a sum of money that the court concluded he had underpaid, ordered plaintiff to obtain a life insurance policy in favor of defendant, and declined to reduce the spousal support award. On reconsideration, the trial court clarified that plaintiff may craft the life insurance policy to avoid making potentially posthumous payments to defendant. We affirm in part, reverse in part, vacate in part, and remand for further proceedings.

The parties were married in 1984 and had two children, twins born in 1995. Defendant did not work outside the home after the children were born, and she apparently has worked "very little" since the consent judgment of divorce was entered in 2009. At issue in the instant proceedings is primarily the interpretation of certain of plaintiff's obligations thereunder.

In relevant part, the consent judgment provides as follows:

3. Defendant is awarded modifiable spousal support that shall terminate upon the death or remarriage of the Defendant. Commencing January 1, 2009, Plaintiff shall pay $6,000 per month from Plaintiff's salary directly to Defendant on the first of each month based on Plaintiff's base income of $204,000 annually and Defendant having no income. Additionally, in the event Plaintiff's salary from employment is greater than $204,000 in a given year (January 1 through December 31), he shall pay 25% of said amount from employment-related bonus or commission via electronic fund transfer to Defendant as additional spousal support within 7 (seven) days of receiving same. This shall not include any NBC retention bonus Plaintiff may receive in 2009. Regarding any potential NBC retention bonus Plaintiff may receive, 33.3% of any gross amount of this retention bonus shall be paid to Defendant immediately as it is received by Plaintiff, as a one-time additional spousal support payment by Plaintiff to Defendant. All spousal support paid by plaintiff shall be taxable as income to Defendant and tax deductible from Plaintiff's income for purposes of income taxes in accordance with IRS regulations. Plaintiff shall secure his spousal support obligation with existing life insurance on Plaintiff's life or in a life insurance trust naming Defendant as an irrevocable beneficiary of said life insurance. Plaintiff shall provide proof of said security/insurance in compliance with this provision on a yearly basis to Defendant. A Uniform Spousal Support Order shall enter in accordance with this provision.

As the trial court recognized, the center of the instant controversy is the phrase "salary from employment."

The instant dispute began when defendant reviewed plaintiff's W-2 forms and concluded that plaintiff had "shortchanged" her because he consistently earned more than $204,000 but calculated the additional 25% he owed from the excess on the basis of reported taxable income instead of "Medicare income,"¹ "thereby not accounting for his earned income that he deferred into his 401K [sic]." She also contended that he had not properly verified the existence of the required life insurance policy or the life insurance trust securing his spousal support obligations. Plaintiff contended that defendant was misrepresenting or misunderstanding the terms of the consent judgment because his actual "salary from employment," as specified in the consent judgment, was considerably less than $204,000, and the language regarding excess payment pertained to his base salary rather than total earned income.

At the time of the parties' divorce, plaintiff had a total income of "$565,000.00 and change," consisting of a base salary of $203,894 and the remainder from commissions. He was laid off shortly thereafter, and his substitute employment initially provided a base salary of $143,000 plus eligibility for commissions and bonuses. By the time of the instant proceedings, defendant's base salary had increased to $187,455.84, with an additional car allowance, a company credit card for certain business expenses, up to 30% beyond his base salary in possible commission bonuses, and a "speculative" possible additional bonus. Plaintiff put 6% of his total compensation into a 401(k) account, but because of the fluctuation in his total compensation, he did not know the exact amount. There has been no suggestion that plaintiff is not in good faith endeavoring to maximize his earning capacity.

It appears that defendant testified, but for unexplained reasons her testimony was not transcribed. Plaintiff does not dispute the trial court's summary that defendant testified that she would like to work but currently has health problems and is fearful that working would exacerbate other health issues. Nor did plaintiff dispute that defendant has approximately $6,100 in monthly expenses. The consent judgment did not require either parent to contribute to the support of their children after they reached the age of majority, but plaintiff nevertheless continued paying the entirety of the children's substantial college expenses and unspecified other expenses. Plaintiff testified that he had asked defendant to help, but she did not.

Plaintiff testified that he understood the consent judgment required him to pay defendant $6,000 a month if his salary was $204,000 a year and that the phrase "salary from employment" referred to his "base salary." He noted that he had paid the $6,000 even though his base salary was below that amount every year other than in 2009, and that he had also voluntarily overpaid her an additional amount calculated on the basis of 25% of his entire compensation above $204,000 "because [he] wanted to address some of the issues with [defendant] and the kids." The trial court found, accurately insofar as we can determine, that plaintiff's total income had been reduced by more than half since the consent judgment was entered. Plaintiff asked the trial court to reduce his spousal support obligations accordingly and "uphold the original divorce decree which states clearly that it is based on my salary," but he sought no reimbursement.

The trial court concluded that "the plain language of the [judgment of divorce], and the intent and actions of the parties commands that the Plaintiff pay the Defendant 25% of any earned income over $204,000.00 as a result of his employment" and that amount included "taxable and non-taxable income." The trial court did not deem plaintiff's car allowance or expense account to be "income," but it did conclude that between 2012 and 2014, the years for which tax information had been provided, plaintiff had underpaid defendant by a total of $15,591.67. Despite observing that plaintiff's total income had decreased by more than half and that plaintiff was solely paying for the parties' children's expenses, the trial court declined to reduce plaintiff's spousal support obligation, noting in particular that plaintiff was not legally obligated to support the adult children. The trial court finally ordered plaintiff to maintain a life insurance policy in favor of defendant, the value of which plaintiff does not appeal.

As an initial matter, plaintiff inexplicably contends that the trial court's order requiring him to obtain a life insurance policy would effectively grant defendant a potentially posthumous award. This issue was rendered moot by the trial court's order denying reconsideration; the trial court expressly clarified that because the consent judgment unambiguously terminated any of plaintiff's obligations in the event of defendant's death, plaintiff was free to craft the life insurance policy such that it would also terminate upon her death. The only way for defendant to receive a posthumous award would be if plaintiff crafts the life insurance policy to do so, which is now entirely optional, as defendant accurately concedes.

Primarily, plaintiff argues that the trial court inappropriately rewrote the parties' consent judgment, a contract, by replacing the word "salary" with "income." We disagree, but we do conclude that the trial court erred by including the entirety of plaintiff's earned income—not just his taxable income—when calculating his spousal support obligations.

A trial court's award of spousal support is reviewed for an abuse of discretion, but any underlying factual findings are reviewed for clear error, and the award "must be affirmed unless [this Court is] firmly convinced that it was inequitable." Gates v. Gates, 256 Mich.App. 420, 432-433, 664 N.W.2d 231 (2003). "In reviewing de novo equity cases, this Court may modify otherwise final judgments to rectify mistakes, clarify and interpret ambiguities, and alleviate inequities." Hagen v. Hagen, 202 Mich.App. 254, 258, 508 N.W.2d 196 (1993). Consent judgments of divorce are contracts and treated as such. Lobaina Estate, 267 Mich.App. 415, 417-418, 705 N.W.2d 34 (2005). We review de novo as a question of law the proper interpretation of a contract, including a trial court's determination whether contract language is ambiguous. Klapp v. United Ins. Group Agency, Inc., 468 Mich. 459, 463, 663 N.W.2d 447 (2003).

Defendant's position is that trial courts have the authority to modify judgments of divorce to reach equitable results. This is true to a certain extent and in certain contexts, however, this rule does not apply in this case. Specifically, this...