Berens v. Berens
| Decision Date | 21 January 2020 |
| Docket Number | No. COA19-306,COA19-306 |
| Citation | 837 S.E.2d 215 (Table) |
| Parties | Michael M. BERENS, Plaintiff-Husband, v. Melissa C. BERENS, Defendant-Wife. |
| Court | North Carolina Court of Appeals |
James, McElroy & Diehl, P.A., by Christopher T. Hood, Gena G. Morris, and Caroline T. Mitchell, for Plaintiff-Appellee/Cross-Appellant.
Fox Rothschild LLP, by Michelle D. Connell, for Defendant-Appellant/Cross-Appellee.
Defendant Melissa C. Berens ("Wife") and Plaintiff Michael M. Berens ("Husband") each appeal from an Order for Child Support, Retroactive Child Support, Postseparation Support, Alimony and Attorney’s Fees (the "Permanent Support Order").
In 1989, Husband and Wife were married. In July 2012, Husband and Wife separated. At the time of Husband and Wife’s separation, five of their six children were minors. The minor children resided with Wife following the parties’ separation.
About a year later, in June 2013, Husband filed the underlying action for child custody and equitable distribution. Wife counterclaimed for child custody, child support, post-separation support, alimony, equitable distribution, and interim distribution.
Four years of discovery, cross-motions, litigation, and temporary orders ensued. During the pendency of the underlying action, Husband and Wife were divorced in December 2014.1
In July 2018, the trial court entered the Permanent Support Order. Wife appealed, and Husband cross-appealed.
On appeal, each party takes issue with various aspects of the Permanent Support Order. Each separately argues that the trial court erred in its award of alimony and its award of child support, and Husband alone contends that the trial court erred in awarding attorney’s fees to Wife. We address each argument in turn.
Husband and Wife each argue that the trial court erred in its award of alimony, but for different reasons. While Wife contends that the trial court erred by imputing income to her, Husband contends that the trial court erroneously calculated the parties’ gross monthly income. We review the trial court’s award of alimony for an abuse of discretion. Quick v. Quick , 305 N.C. 446, 453, 290 S.E.2d 653, 658 (1982).
Kowalick v. Kowalick , 129 N.C. App 781, 787, 501 S.E.2d 671, 675 (1998) (internal citations omitted). A party is acting in bad faith when she "is not living up to [her] income potential in order to avoid or frustrate the support obligation." Works v. Works , 217 N.C. App. 345, 347, 719 S.E.2d 218, 219 (2011) (internal citations omitted).
In the present case, the trial court made multiple findings that Wife "has disregarded her parental obligations by refusing to seek employment and acting in bad faith" and "has made minimal effort to reduce her living expenses while also refusing to seek retraining or employment." Thus, the trial court "found that income [in the amount of $29,120 per year or $2,426.67 per month] should be imputed to [Wife]."
In arguing that the trial court erroneously imputed income to her, Wife cites to our Court’s decisions in Works and Kowalick . However, in these cases the trial court erred by merely failing to make any findings as to whether the parent had "depressed her income in bad faith." Kowalick , 129 N.C. App. at 787, 501 S.E.2d at 675 (); see Works , 217 N.C. App at 348, 719 S.E.2d at 219-20 () (internal citations omitted). No such error was made in the underlying case.
The facts in evidence establish as follows: Wife has not worked outside of the home since 1994, but has been a stay-at-home mother to the couple’s six children, three of whom were still minors. Wife was the sole caretaker of the three minor children. Wife would likely require retraining in order to obtain gainful employment. Wife is well-educated and capable of working, having graduated college with an engineering degree. The three minor children are school age and participate in activities, which would provide Wife with the time and opportunity to work. Wife alleged in her Financial Affidavits that she pays monthly for a maid and other house maintenance.
Thus, the trial court’s finding that "[Wife] has acted in bad faith ... by refusing to seek employment and acting in deliberate disregard of her support obligations" is supported by competent evidence. Moreover, the income imputed to Wife only amounts to a job paying approximately $29,000 per year, or about $14 an hour. This is not an unreasonable or unobtainable amount. Thus, we conclude that the trial court did not abuse its discretion in imputing income to Wife.
Husband also takes issue with the amount of alimony awarded, arguing that the trial court miscalculated the parties’ gross income. In so arguing, Husband contends that the trial court "improperly excluded sources of recurring income reflected on [Wife’s] ... tax returns" and it wrongfully declined to "replicate [and adopt] [Husband’s] calculation of his gross monthly income[.]"
We disagree with Husband that the trial court erred by excluding Wife’s tax refunds when calculating Wife’s income. More specifically, while there was evidence that Wife "received an individual tax [refund] every year from 2013 through 2016," our Court has held that "[t]ax refunds and bonuses are not to be included in the calculation of regular income." Williamson v. Williamson , 217 N.C. App. 388, 391, 719 S.E.2d 625, 627 (2011) ; but see Burger v. Burger , 249 N.C. App. 1, 7, 790 S.E.2d 683, 688 (2016) ().
However, we agree with Husband that the trial court should have included the dividends received and reinvested by Wife when calculating her income. Indeed, our Court has held it proper to "include[ ] ... investment income in its calculation of both parties’ income[.]" Bryant v. Bryant , 139 N.C. App. 615, 618, 534 S.E.2d 230, 232 (2000). Just as "[a] supporting spouse may not insulate himself from payment of alimony by choosing to reinvest income each year rather than actually receive it[,]" a dependent spouse may not elect to reinvest monies to create a need for more alimony to cover living expenses. Friend-Novorska v. Novorska , 131 N.C. App. 867, 870, 509 S.E.2d 460, 462 (1998) (). While Wife alleges that she only has one fund from which she may receive dividends and plans to deplete this account to pay off debt, such debt has not yet been paid off; and it is conceivable that Wife could make different arrangements to pay off the debt in order to continue receiving dividends.
In sum, we hold that the trial court abused its discretion by not including certain sources of income, namely received and reinvested dividends, when calculating Wife’s income. Thus, we remand this portion of the Permanent Support Order to the trial court to recalculate Wife’s gross income, and Husband’s alimony obligation.
Husband and Wife each argue that the trial court erred in its award of child support. Wife contends that the trial court erred by imputing income to her, in basing the child support award on Husband’s net income, and in, effectively, requiring her to deplete her personal estate to support herself and her children. And Husband argues that the trial court committed an error of law by calculating child support based on three minor children, rather than two.
We review child support awards for "a clear abuse of discretion." White v. White , 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985). We only overturn such awards "upon a showing that [the award] was so arbitrary that it could not have been the result of a reasoned decision." Id.
As reasoned and explained above, the trial court did not abuse its discretion in imputing income to Wife.
Likewise, we conclude that the trial court did not err in basing the child support award on Husband’s net income. More specifically, Wife alleges that the trial court’s findings of fact are inconsistent and "totally at odds with one another." This is simply not the case. The findings of fact at issue read as follows:
(Emphasis added).
Indeed, while findings of fact 99 and 121 may be different by twenty dollars ($20.00), the ultimate findings do not differ – Husband cannot afford to pay the full amount of $14,322.58 per month needed by Wife and the children, but he can afford to pay what the court ordered, which is $5,404.63 per month for child support and $4,195.00 per month...
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Berens v. Berens
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