Hill v. Kelly

• Decision Date: 30 November 2006
• Docket Number: No. 06-83.,06-83.
• Citation: 243 S.W.3d 886,368 Ark. 200
• Parties: Michele Kelly HILL, Appellant, v. James Edward KELLY, HI, Appellee.
• Court: Arkansas Supreme Court

243 S.W.3d 886

368 Ark. 200

Michele Kelly HILL, Appellant, v.James Edward KELLY, HI, Appellee.

No. 06-83.

Supreme Court of Arkansas.

November 30, 2006.

Gean, Gean & Gean, by: Roy Gean, Fort Smith, AR, for appellant/cross-appellee.

Pryor, Robertson & Barry, PLLC, by: John Beasley and Dusti Miller, Fort Smith, AR, for appellee/cross-appellant.

JIM GUNTER, Justice.

This appeal arises from an order of the, Sebastian County Circuit Court finding a material change in circumstances to justify a modification of child support owed by appellee, James Edward Kelly, III, to appellant, Michele Kelly Hill, for their three children.On appeal, Hill raises three allegations of error, and Kelly brings a cross-appellee.We affirm the circuit court's order as modified.

A recitation of the facts are contained in the first appeal, Kelly v. Kelly,341 Ark. 596, 19 S.W.3d 1(2000).The Kellys have three children.After the birth of their third child, Hill chose to stay home with their children.In 1998, Hill filed for divorce.Hill and Kelly negotiated and executed a property-settlement agreement resolving all marital-property issues.A hearing was held on August 6, 1999, and at the conclusion of the hearing, the chancellor granted Hill an absolute divorce and set child support in the amount of $6,000 per month consistent with the parties' property-settlement agreement.The court also awarded additional child support in the amount of 25% of the net of any bonus that Kelly received.The chancellor entered the divorce decree on August 25, 1999.

In Kelly, supra, Kelly challenged the trial court's ability to order payments based upon the bonus, which he considered as indefinite, conditional income that is contingent upon the profitability of the clinic in the future.Id. at 600, 19 S.W.3d at 4.We agreed, interpreting the language of section III(b) of Administrative Order Number 10 and holding

[t]here is no history of bonus income, and the trial court acknowledged the uncertainty of whether Kelly would even qualify for a bonus in the foreseeable future given the business expense calculation that would be required.We therefore reverse and remand for entry of an order consistent with this opinion.

Id. at 600, 19 S.W.3d at 4.

On February 6, 2003, Hill, who had custody of all three children, filed a motion for increase in child support and motion to enforce child custody, support, separation, and property-settlement agreement.In her motion for increase in child support, Hill alleged a material and substantial change in circumstance that would justify a modification of the child-support payment of $6,000.In her motion to enforce child custody, support, separation, and property-settlement agreement, she averred that Kelly refused to divide their retirement accounts in accordance with their agreement and assessed a hypothetical tax and, penalty on the division of the accounts.

On February 24, 2003, Kelly filed responses to Hill's motion, affirmatively pleading that Hill was barred, among other defenses, by the doctrine of res judicata, estoppel, and laches.He filed a cross-petition for decrease in child support, requesting the consideration of adjusting child support in the event that he was awarded custody of one or more of the minor children.In that cross-petition, he averred that his income for 2002 decreased and that he was entitled to a reduction in child support under the Family Support Chart.He also filed a cross-petition, alleging that he paid Hill one-half of the accounts per their agreement.On July 11, 2003, the circuit court ordered that, based upon an attorney ad litem's recommendation and interviews with the two oldest children, the youngest child remain in Hill's custody, and Kelly was awarded custody of the two oldest children.The circuit court reduced Kelly's support payment to $3,600 per month for obligations to his youngest child.

On August 12, 2003, Hill filed an amended motion for increase in child support and an amended motion to enforce child custody, support, separation, and property-settlement agreement.She also filed a motion for counseling for the three children.In her motion for increased child support, she argued that the entry of the July 11, 2003, order justified a modification in child support.In her motion to enforce child custody, support, separation, and property-settlement agreement, she maintained that Kelly attempted to assess a hypothetical tax and penalty on various accounts and that the accounts had not been equally divided.In her motion for counseling, she requested that Kelly pay for counseling for the three children to assist in the change of their environment.Kelly responded on August 27, 2003.

Hill filed a motion to require Kelly to comply with Act 337 of 2003 on September 26, 2003, requesting the circuit court to order Kelly to provide income information for the previous calendar year, as provided by Act 337.On October 15, 2003, Kelly responded, arguing that Hill breached their confidentiality agreement by disclosing tax returns to third parties and by making remarks that he was guilty of tax fraud in the presence of their children.He requested that the court enter a protective order, impose sanctions against Hill, and order attorneys' fees to be paid by Hill.In the motion, he cross-petitioned the circuit court to hold Hill in contempt of court for her alleged refusal to comply with visitation orders.On January 20, 2004, the circuit court ordered Hill to produce 2002 tax returns, to refrain from disclosing the contents of those tax returns, and to discontinue discussing their financial affairs in the presence of the children.The circuit court denied Kelly's petition for contempt of court and set a summer visitation schedule for 2004.

The circuit court held a hearing on May 27, 2005.On October 17, 2005, the circuit court entered an order, ruling that the motion for counseling was dismissed, and found that there had been a material change in circumstances that justified a modification in child-support payments required of Kelly in accordance with Ark. Code Ann. § 9-14-107(a)(1)(Supp.2005).The circuit court found from Administrative Order Number 10 the applicable rates to be used to calculate child support to be 25% for three children, 21% for two children, and 15% for one child because Kelly's income exceeded the chart.The court further found the effective date of the motion for changing custody to be the effective date for calculating support Ultimately, the court allowed Hill 25% of Kelly's income from the date of the motion until custody was changed with the two older children going to Kelly and the youngest child remaining with Hill.From the date of the change of custody, the court allowed a 21% credit against income to Kelly before calculating the support due to Hill for the youngest child, and then applied 15% to Kelly's income as reduced by the credit.Finally, the court required Hill to contribute to the support of the two children in Kelly's custody by calculating the support based upon Hill's imputed minimum-wage income.The net result included a lump-sum, accrued-support balance of $39,198 due to Hill, as well as the current support amount of $4,653 per month to be used prospectively.The circuit court also found that Kelly was entitled to a credit of $4,540 against a child-support balance of $39,198 for paying orthodontic expenses.Kelly's claims for contribution to the children's college fund and for reimbursement of travel expenses were denied.The court also ruled that Kelly would continue to claim the three children as dependants for income-tax purposes.The circuit court further denied Kelly's cross-petition to receive a refund of a portion of Hill's alimony.After the circuit court's order was entered, Hill timely filed her notice of appeal on October 28, 2005.Kelly filed a cross-appeal on November 1, 2005.From the October 17, 2005, order, both parties bring their appeals.

For her first point on appeal, Hill argues that the circuit court erred in adjusting Kelly's income for the financial support of the two oldest children in determining the amount of support owed by Kelly to Hill for the youngest child.Specifically, Hill contends that the circuit court's reducing Kelly's net income by 21% was a deviation from the support guidelines set forth in Administrative Order Number 10.She asserts that, in addition to the 21% reduction for his financial support for the two oldest children, Kelly is credited with the amount of Hill's support for the children in Kelly's custody.Further, she makes the argument that she did not receive the same credit for the financial support of her youngest child; that there was no evidence presented that would support any need for an adjustment; that the circuit court's adjustment is based upon "the erroneous finding that `the father has contributed all of the funds to support the two children in his custody;'" and that the allocated reduction of 21% of Kelly's net income has no bearing on what is spent on the two children.In response, Kelly argues that the circuit court's adjustment of his child-support obligation for their youngest child was not in error.Specifically, he contends that the circuit court's rulings comply with Administrative Order Number 10.

Our standard of review for an appeal, from a child-support order is de novo on the record, and we will not reverse a finding of fact by the circuit court unless it is clearly erroneous.Ward v. Doss,361 Ark. 153, 205 S.W.3d 767(2005).A finding is clearly erroneous when the reviewing court, on the entire evidence, is left with the definite and firm conviction that a mistake has been committed.Mathews v. Mathews,368 Ark. 252, ___ S.W.3d ___(Dec. 7, 2006).We give due deference to the trial court's superior position to determine the credibility of the witnesses and the weight to be given their testimony.Id.In a child-support determination, the...