Ehle v. Ehle
| Decision Date | 17 August 2000 |
| Docket Number | 99-0439P18_397 |
| Parties | NOTICE This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. 808.10 and Rule 809.62. In re the Marriage of: Randall A. Ehle, Petitioner-Appellant-Cross- Respondent, v. Deborah L. Ehle, Respondent-Respondent-Cross-Appellant._397 STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT IV DECISION DATED AND FILED: |
| Court | Wisconsin Court of Appeals |
This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports.
A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. 808.10 and Rule 809.62.
In re the Marriage of: Randall A. Ehle, Petitioner-Appellant-Cross-
Respondent,
v.
Deborah L. Ehle, Respondent-Respondent-Cross-Appellant.
APPEAL and CROSS-APPEAL from an order of the circuit court for Dane County: GERALD C. NICHOL, Judge. Affirmed in part; reversed in part and cause remanded.
Before Dykman, P.J., Vergeront and Deininger, JJ.
1. DEININGER,J.
Randall and Deborah Ehle each appeal an order in which the trial court ordered Randall to pay a child support arrearage, together with interest and a sizeable contribution to Deborah's litigation expenses. Randall claims the court erred by (1)including a portion of corporate income as Randall's income for child support computation purposes; (2)refusing to modify an "ever-increasing" child support provision contained in the divorce judgment; (3)commencing the accrual of interest on the child support arrearage prior to the date of the order; and (4)awarding Deborah over $35,000 in litigation expenses. Deborah, meanwhile, argues that the trial court should have established an even greater support arrearage by attributing more corporate income to Randall than it did.1
2. We find only one claim to be meritorious, and that is Randall's claim that the trial court should have voided the unusual, "ever-increasing" child support provision in the divorce judgment on public policy grounds. We thus reverse those portions of the appealed order which require Randall to pay child support for 1997 and the years thereafter based on his 1995 peak in income. We affirm the order in all other respects.
3. Randall and Deborah were divorced in 1989. The divorce judgment includes the following provision regarding child support for the parties' two minor children, who were primarily placed with Deborah at the time:
Beginning May 1, 1989, and continuing annually on May 1st of each year thereafter, the parties shall exchange their tax returns from the preceding year. If the petitioner's tax returns demonstrate an increase in his income, child support shall be adjusted automatically to an amount equal to 25% of his previous year's gross income, paid weekly, beginning with the first Monday in May.
Randall and his brother, Robert, are each fifty-percent owners of Ehle, Inc., a cement contracting business. In the years following the divorce, 1990 through 1997, Randall's reported earnings from the corporation ranged from $15,275 to $22,750.
4. The current post-judgment litigation began in December 1995, when Deborah filed a motion seeking an increase in child support payments. The family court commissioner ordered Randall to pay additional child support for the years 1990 through 1995 based on the quoted provision in the divorce judgment, and on information from Randall's tax returns showing his adjusted gross income for the years in question. Randall requested a hearing denovo in the circuit court. Before the hearing took place, however, Randall also moved for an order modifying the divorce judgment "because there has been a change in circumstances in that the parties' minor child Jason ... has been residing with [Randall] at [Deborah]'s insistence and request." Deborah subsequently requested the court to establish child support for the years 1990 through 1995, and prospectively, "based on the terms and provisions of the parties' Judgment of Divorce." This motion raised the interrelationship between the corporation's income and Randall's, and it also contained a request for a contribution to Deborah's attorney fees.
5. Following the resolution of some interim discovery disputes and contempt allegations, as well as a change in judge and in counsel for Deborah, the trial court addressed the pending motions. The court heard testimony on four different days, issued memorandum decisions in April and August of 1998, and entered a final order on January 12, 1999. The court made several key findings regarding Ehle, Inc. and Randall's relationship to the corporation. The court found that when the corporation was created in 1990, "Randall's child support obligation was also discussed noting that a `C' corporation could minimize the impact of the 25% of gross income support formula mandated in the court order." The court further found as follows:
7. Ehle, Inc. is controlled by Randall and Robert and they have conveniently used the corporation for their personal purposes as demonstrated by:1)the corporation has kept the salaries of Randall and Robert low; 2)the corporation has retained earnings of nearly $400,000 over seven years; ... 4)the corporation has paid for some of Randall's attorney fees in this divorce action ... 5)in addition the corporation purchased homes which the brothers have lived in and paid reduced rents; ... 7)the corporation paid $42,000 in premiums on life insurance policies for the two Ehle brothers for which the corporation improperly took a tax deduction ... 8)the corporation has paid $100,000 for improvement for properties owned by the brothers as partners.
The court went on to conclude, based on expert testimony in the record, that the retained earnings of the corporation were "excessive." It ordered Randall's income for child support purposes to be calculated by aggregating the following for each year:
[G]ross wages paid by Ehle, Inc.; his share of all partnership and investment income; one half of the retained earnings of Ehle, Inc. with an exclusion of $7,000 as his share of acceptable retained earnings of the business; one half of the $42,000 in insurance premiums and one half of the wages improperly paid to family members.
6. In the subsequent order implementing its decision, the court set forth Randall's income for child support purposes computed in accordance with the quoted formula, and it applied the child support provision of the divorce judgment to the income so computed. Under these calculations, Randall's income for child support purposes increased from $19,741 in 1990 to $92,129 in 1995. In 1996 and 1997, however, the income for child support purposes dropped to $64,283 and $61,497. Nonetheless, in accordance with the language of the child support provision in the divorce judgment, the court based the child support award for years following 1995 on Randall's 1995 income level. The court also ordered interest payable on the arrearages at the rate of 1.5% per month commencing at the time of each support shortfall. Finally, the court ordered Randall to pay $35,521 as a contribution to Deborah's legal costs and expert witness fees, which represented sixty-six percent of the litigation expenses Deborah had incurred in the post-judgment proceedings.2
7. Randall and Deborah both appeal the January 1999 order implementing the trial court's decisions on their post-judgment motions.
8. Randall lists ten separate arguments in his opening brief, although they relate to only four claims of error. Deborah organizes her cross-appeal around three separate issues, but at bottom, each of her claims is simply that the trial court should have gone further in attributing corporate income to Randall for child support purposes. Accordingly, we address first the trial court's handling of the corporate-versus-personal income issue, considering the challenges made by both parties to the court's conclusions in that regard. We then take up the issues Randall has raised regarding the "ever-increasing" child support provision contained in the divorce judgment, the accrual of interest on the child support arrearages, and the contribution he was ordered to make toward Deborah's litigation expenses.
9. The overall determination of a child support award is committed to the sound discretion of the trial court, and we will not disturb it unless we are convinced that the trial court has erroneously exercised its discretion. See Cameron v. Cameron, 209 Wis.2d 88, 98-99, 562 N.W.2d 126 (1997). We will accept the factual findings upon which the trial court has based its child support award, unless one or more of the findings are clearly erroneous. See Wis. Stat. 805.17(2) (1997-98).3 To the extent that a party claims error stemming from the trial court's allegedly erroneous view of the law, we will consider the legal question denovo. Cf. State v. Wyss, 124 Wis.2d 681, 734, 370 N.W.2d 745 (1985), overruled on other grounds by State v. Poellinger, 153 Wis.2d 495, 451 N.W.2d 752 (1990).
10. Neither party expressly challenges any of the trial court's factual findings. After reviewing those findings and the trial court's child support determination based on them, we conclude that the trial court applied the correct law to the findings it made and did not erroneously exercise its discretion in ordering Randall to pay child support based in part on portions of the corporate income of Ehle, Inc. We further conclude that the trial court did not err in declining to go further in imputing corporate income to Randall, or by declining to adopt the "adjusted net worth" approach advocated by Deborah. We also find no error in the court's treatment of interest accrual on the support arrearage, or in its order that Randall contribute to Deborah's litigation expenses. We do conclude, however, that the "ever-increasing" child support provision contained in the divorce judgment must be voided on public policy grounds, and that there is no procedural bar to doing so in the instant proceedings.
11. In directing that Randall's income for child support purposes include a portion of the corporation's retained earnings, as well as one-half of certain insurance premiums and wages...
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