Elsome v. Elsome

Decision Date15 October 1999
Docket NumberNo. S-98-730.,S-98-730.
PartiesAnn Kennedy ELSOME, appellee, v. Paul T. ELSOME, appellant.
CourtNebraska Supreme Court

Christopher A. Vacanti, of Cohen, Vacanti & Higgins, Omaha, for appellant.

Anne M. Breitkreutz and Thomas J. Nack, of Hotz & Weaver, Omaha, for appellee.

HENDRY, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

MILLER-LERMAN, J.

I. NATURE OF CASE

Paul T. Elsome appeals the order of the district court for Douglas County modifying the amount of his monthly child support obligation. For the reasons stated below, we reverse and remand with directions.

II. STATEMENT OF FACTS

Paul and his former wife, Ann Kennedy Elsome, were divorced by a decree entered March 10, 1997. All terms of the dissolution, including division of the marital estate, alimony, child custody, support, and related expenses were stipulated to by the parties, and the trial court approved the stipulation in the decree of dissolution.

Two daughters were born to Paul and Ann during their marriage. These children were approximately 7 years and 2frac12; years of age, respectively, when the decree was entered. The stipulation which the court approved in its decree included the parties' agreement to "joint legal custody" of both children. The stipulation did not designate either Paul or Ann as the primary physical custodial parent of their daughters, but instead contained a detailed shared custody arrangement based upon 14-day cycles which generally provided that the children spend 4 days every week with Ann and the following 3 days every week with Paul. As a result, Paul had physical custody of the children approximately 42 percent of the time, and Ann had physical custody of the children approximately 58 percent of the time.

When the decree was entered, Paul was unemployed. To meet living expenses, the family was drawing from a $100,000 severance payment Paul had received when his job was eliminated as a result of his employer's acquisition by another business. Ann was self-employed as a consultant, earning a gross income of less than $2,000 per month. Both Paul and Ann were actively seeking full-time employment, and they stipulated that either party could pursue modification after July 1, 1997, approximately 4 months after the entry of the decree, or earlier if either party obtained full-time employment or had an increase in income.

Paul and Ann agreed in the stipulation that Paul would pay Ann $1,100 per month for child support, an amount which the parties explicitly acknowledged in the stipulation was less than Ann would have received under the Nebraska Child Support Guidelines if she had primary physical custody of both children, but more than if the joint physical custody worksheet contained in the guidelines had been used. Paul and Ann agreed that they would divide the cost of child care necessitated by their respective employment on a pro rata basis based upon each party's income. In addition, the parties agreed, inter alia, that Paul and Ann would share all costs for the children's activities and that Paul would pay for tuition and uniforms for each child to attend a Catholic school from kindergarten through the eighth grade, so long as Paul's annual gross income exceeded $100,000. The stipulation and decree contained an expressly nonmodifiable provision for alimony paid by Paul to Ann in the amount of $350 per month for 36 months.

Less than 2 weeks after the decree was entered, Ann commenced employment with First Data Resources at an annual salary of $58,000. Paul accepted a position shortly thereafter with Interactive Medicine as an independent contractor at an annual compensation of $120,000.

Ann filed a petition to modify the decree on July 9, 1997. In her petition, she requested modification of custody designating her as the children's sole legal and physical custodian and increased child support from Paul. In his responsive pleading, Paul affirmatively alleged that he regularly had the children in his physical custody for substantial amounts of time, in accordance with the decree, and denied that a material change in circumstances had occurred to justify either a modification of custody or an increase in his child support obligation. Paul cross-petitioned to reduce his child support obligation and eliminate his alimony payments to Ann. In her answer and reply to Paul's allegations, Ann did not specifically dispute the amount of time the children were in Paul's physical custody. At the modification trial, Ann admitted that Paul correctly represented the fact of his physical custody of the children at approximately 40 percent of the time, as had been specified by the stipulation and decree.

The parties' respective motions for modification were tried on January 13, 1998. In support of her request to increase Paul's child support obligation, Ann introduced calculations into evidence based on the sole custody worksheet contained in the guidelines. Ann's worksheet did not contain copies of her tax returns to document her income as required by paragraph D of the guidelines. Ann did, however, provide the court with current pay stubs reflecting employment compensation. Ann offered no documentation regarding Paul's income. According to Ann's sole custody calculations, she and Paul had a combined net monthly income of $9,751.79. Ann argued that Paul's child support payments should be increased to $1,292.85 per month and that this amount should be in addition to preexisting obligations created in the decree for child care, school activities, and educational costs. The child support calculations which Paul offered at trial were based on the joint custody worksheet contained in the guidelines. On his worksheet, Paul claimed that the parties' combined net monthly income was $8,741.53. Paul's child support worksheet contained no pay stubs, tax records, or other independent documentation of his income or Ann's income as required by paragraph D of the guidelines. Paul testified that his gross receipts from Interactive Medicine were $10,000 per month as reflected on his worksheet, a figure which Ann did not dispute. Paul introduced exhibit 17 into evidence, a letter from Interactive Medicine stating that Interactive Medicine considered Paul an independent contractor and that Interactive Medicine neither paid nor contributed to the payment of any employment tax for which Paul was legally liable due to the monies Paul received from the company. Paul testified that he paid a self-employment tax, which was treated as a deduction on his child support worksheet. As an independent contractor, Paul paid an amount essentially equivalent to the entire sum of contributions required by the Federal Insurance Contributions Act (FICA). Paul asserted that his self-employment taxes were therefore substantially greater than the employee's portion of FICA would have been if Interactive Medicine treated him as an employee and contributed the employer's portion of sums due under FICA.

Trial evidence offered by Paul and by Ann regarding the amount of time each parent had the children in his or her physical custody differed only slightly from the stipulated physical custody arrangements which the trial court had approved in the original decree of dissolution in March 1997. Undisputed evidence at the modification trial established that the children were in Paul's physical custody 38 to 40 percent of the time and that they spent approximately 60 to 62 percent of their time in Ann's physical custody. Paul and Ann each testified that he or she believed the other to be a good parent.

At the conclusion of the modification trial, the trial court orally announced from the bench its findings regarding child custody and alimony and subsequently memorialized those findings as well as additional findings regarding child support in a written order filed June 15, 1998. In both its oral pronouncement and written order, the trial court denied Ann's request to modify custody of the children, leaving intact the terms of the original decree granting Paul and Ann joint legal custody of their children, with alternating physical custody. In an oral colloquy at the end of trial, as well as in its written order, the court also denied Paul's request to eliminate his alimony payments to Ann.

As to the parties' respective motions to modify child support, the trial court made no comment in its oral pronouncement. In its written order, the trial court modified the support previously ordered. Notwithstanding its determination that the parties should continue joint legal custody, the trial court relied on Ann's sole custody worksheet support calculation and determined that Paul's monthly child support obligation, according to the guidelines, was $1,292.85 per month. In its written order, the trial court stated as its sole explanation for deviation that it would reduce that amount to $950 per month "to accommodate the substantial amounts of time the children spend with Respondent [Paul]." The court's written order did not include a reason for the court's reliance on the sole custody worksheet rather than the joint custody worksheet or further elaboration on the deviation therefrom. The record does not contain a separate worksheet utilized by the trial court quantifying its means and method justifying an amount of child support or a deviation from what the court had determined was otherwise the proper amount of monthly support under the guidelines.

With respect to the FICA issue, the trial court made no comment from the bench, and the trial court's written order was also silent.

Neither the trial court's oral or written orders effected changes upon Paul's obligations for educational and activity expenses for the children, and the court also left undisturbed the provisions of the decree pertaining to division of child-care costs.

Paul appeals.

III. ASSIGNMENTS OF ERROR

Paul claims, restated, that the trial...

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