Arndt v. Arndt

• Decision Date: 23 May 2017
• Docket Number: No. ED 104531,ED 104531
• Citation: 519 S.W.3d 890
• Parties: Edward ARNDT, Appellant, v. Paige ARNDT, Respondent.
• Court: Missouri Court of Appeals

519 S.W.3d 890

Edward ARNDT, Appellant,
v.
Paige ARNDT, Respondent.

No. ED 104531

Missouri Court of Appeals, Eastern District, DIVISION FOUR.

FILED: May 23, 2017

Alan E. Freed, 165 N. Meramec Ave., Suite 110, St. Louis, MO 63105, for appellant.

Michael L. Schechter, Kristen J. Dunnett, 8000 Maryland Ave., Suite 950, Clayton, MO 63105, for respondent.

KURT S. ODENWALD, Judge

Introduction

Edward Arndt ("Ed") appeals from the motion court's judgment modifying his maintenance obligation to his ex-wife, Paige Arndt ("Paige").¹ The motion court found a substantial change in circumstances based upon Paige's employment and reduced Ed's monthly maintenance obligation from $4,444 per month to $2,489. On appeal, Ed claims that the motion court should have terminated (or further reduced) his maintenance obligation because the motion court improperly computed Paige's income and reasonable expenses. Ed also contends that the motion court abused its discretion by awarding Paige $10,000 in attorney's fees. Finding certain errors relating to Paige's expenses in the motion court's judgment, we affirm in part, reverse in part, and remand for further proceedings.

519 S.W.3d 896

Factual and Procedural History ²

In June 2010, Ed and Paige Arndt dissolved their marriage. The divorce decree incorporated the parties' separation agreement and stipulated parenting plan. Under the separation agreement, Ed was required to pay Paige $4,444 per month in modifiable maintenance.

During the marriage, Paige was a stay-at-home mother while Ed supported the household financially. After the dissolution, Paige attended the Goldfarb School of Nursing. Upon completion of her nursing studies, Paige passed her board examination and Children's Hospital hired her as a registered nurse in the Neonatal Intensive Care Unit ("NICU").

Ed sought to modify his maintenance obligation by alleging that substantial and continuing changes had occurred, making maintenance unreasonable. For changed circumstances, Ed asserted that Paige was now fully employed, that she could support herself financially, and that the children were emancipated and no longer required Paige's financial support. Thus, Ed requested that the motion court terminate or significantly reduce his maintenance obligation.

The parties submitted sworn statements of income and expenses before trial. The motion court heard evidence on three different hearing dates from August through November, 2015.

By the third day of trial, in November 2015, Paige testified that she had been hired as an operating-room nurse at another BJC hospital, Missouri Baptist. Paige had not yet started at Missouri Baptist. Paige accepted the new position because she did not like working the rotating night shifts at Children's Hospital. The hours at her new position were primarily during the days on Monday through Friday. Paige testified that she would receive the same base hourly rate as her prior position ($21.6275), but she did not know the number of shift differentials³ she would receive nor the amount of additional pay for those shift-differential hours.

On February 29, 2016, the motion court issued a written judgment granting Ed's motion in part. The judgment reduced Ed's monthly maintenance payment from $4,444 to $2,489 per month. In modifying maintenance, the motion court found that Paige's new job was a change in circumstances so substantial and continuing as to make the terms of the original maintenance award unreasonable. The motion court declined to terminate maintenance altogether because it found that Paige was still unable to meet her reasonable expenses.

The motion court determined Ed's maintenance obligation by calculating Paige's monthly net income and her reasonable monthly expenses. In determining Paige's monthly net income from her new nursing position at Missouri Baptist, the motion court noted that Paige's base hourly rate was $21.6275. Because Paige testified that she would work mostly weekdays, for 40 hours per week, the motion court calculated Paige's monthly gross income as $3,749 (the motion court rounded up to $3,750).⁴ The motion court did not include any shift

519 S.W.3d 897

differentials from Paige's new position, recognizing that Paige "testified she would receive differential pay as she had in [her old position] but would not be working nights or weekends on a regular basis."

The motion court then converted Paige's monthly gross income to net income. The motion court relied on Paige's testimony that, in her prior position, she had netted about 66% of her gross pay after payroll deductions. The motion court applied that percentage to her new employment. Thus, on a gross monthly salary of $3,749 in her new position, the motion court concluded that Paige's monthly net income would be $2,474 (66% of her gross salary).

Ed aggressively challenged Paige's reasonable monthly expenses at trial. Using discovery of Paige's bank accounts and credit cards, Ed compiled a pedantic litany of Paige's actual expenses from 2010 to 2014. At trial, Ed submitted a series of exhibits purporting to show that many of Paige's claimed expenses were either unreasonable, unjustified by her actual expenses, or commingled with expenditures for the children. Conversely, Paige testified and was cross-examined extensively on her claimed expenses, which she submitted to the motion court in a sworn statement of income and expenses. Paige insisted that her claimed expenses were reasonable. After hearing the evidence, the motion court made a factual finding on each of the expenses disputed by Ed, finding that Paige had $4,398,83 in reasonable monthly expenses, almost $2,000 less than Paige had claimed in her First Amended Statement of Income and Expenses.⁵

The motion court also determined that the "interests of justice" suggested that Ed pay Paige's estimated income taxes on the maintenance. The motion court concluded that Paige's total annual tax on the maintenance payments was $6,768, or $564 per month. The motion court relied on Paige's testimony that she paid $564.83 per month in federal and state taxes on maintenance in 2014, and this amount was also included on Paige's statement of income and expenses.

In awarding maintenance, the motion court found a shortfall between Paige's net income and her reasonable expenses. The motion court then added the taxes on Paige's maintenance award as an allowable expense as follows:

Net Income $2,474
                Reasonable Expenses -$4,399
                __________________________________
                Actual Monthly Shortfall -$1,925
                Taxes on Maintenance -$564
                __________________________________
                Maintenance Need -$2,489
                

The motion court awarded Paige $2,489 per month in modified maintenance, which reduced Ed's original maintenance obligation by $1,955 per month. The motion court made the modification retroactive three months to December 1, 2015. The motion court further ordered Ed to pay $10,000 toward the attorney's fees incurred by Paige in defending the motion to modify. This appeal follows.

Points on Appeal

Ed raises five points on appeal. Points One and Two argue that the motion court's

519 S.W.3d 898

judgment was against the weight of the evidence. Specifically, Point One contends that the modified maintenance award was improperly inflated because Paige's reasonable monthly expenses were substantially less than the motion court found. Point Two avers that the motion court underestimated Paige's monthly income by not including the shift differentials that Paige would receive in her new job. Points Three and Four claim that the motion court erred in calculating Paige's tax expenses. Ed asserts that the motion court improperly imputed a 34% tax rate on Paige's gross income when calculating her net income, and used an improper tax rate to determine Paige's tax liability on the maintenance payments. Ed posits that these calculations incorrectly applied federal and state tax law (Point Three) and were unsupported by substantial evidence (Point Four). Finally, Point Five argues that the motion court abused its discretion in awarding Paige $10,000 toward the attorney's fees she incurred during the modification proceedings.

Discussion

Ed's first four points all complain that the motion court erred in modifying his maintenance obligation. Thus, we will address those points together in the first section. In the second section, we will address Ed's Point Five, which assigns error to the award of attorney's fees.

I. Maintenance Modification

This section addresses Ed's first four points on appeal. First, we outline our standard of review in assessing the motion court's judgment, and then we provide the general rules on awarding and modifying maintenance. We then consider Ed's first two points in turn, both of which argue that aspects of the motion court's findings were against the weight of the evidence. Next, because Points Three and Four advance nearly the same arguments relating to the motion court's alleged miscalculation of Paige's tax obligations, we address those points together. Finally, we consider Paige's overarching argument that we should overlook any...