Hudson v. Hudson, No. 3154.

• Court: Court of Appeals of South Carolina
• Writing for the Court: HOWARD.
• Citation: 530 S.E.2d 400,340 S.C. 198
• Docket Number: No. 3154.
• Decision Date: 24 April 2000
• Parties: Punky Brewer HUDSON, Respondent, v. Thomas Lee HUDSON, Appellant.

340 S.C. 198
530 S.E.2d 400

Punky Brewer HUDSON, Respondent,
v.
Thomas Lee HUDSON, Appellant

No. 3154.

Court of Appeals of South Carolina.

Heard February 9, 2000.

Decided April 24, 2000.

340 S.C. 199

William R. Phipps, of Hilton Head Island, for appellant

Deborah R.J. Shupe, of Louthian & Louthian, of Columbia, for respondent.

340 S.C. 200

HOWARD, Judge

This is an appeal from a divorce action involving the award of the dependent tax exemption and the obligation to pay a portion of the child's unreimbursed medical expenses. The family court awarded the dependent tax exemption to the supporting, non-custodial, parent for six years, with an automatic shift of the exemption at the end of that period to the custodial spouse based upon her expected matriculation from school, anticipated income upon graduation, and expected increases in child care expenses. The family court also ordered that all of the minor child's unreimbursed future medical and dental bills be divided pro rata between the parties. Thomas Lee Hudson appeals. We reverse and remand.

FACTS/PROCEDURAL HISTORY

Thomas Lee Hudson (the father) and Punky Brewer Hudson (the mother) married in 1994 and divorced on February 23, 1998, after more than one year's separation. A son, born January 10, 1995, is the only child of the marriage. The family court bifurcated the issue of divorce from issues concerning the child, and held a separate hearing to determine custody, child support, visitation and equitable distribution on May 14, 1998.

On May 26, the court granted custody to the mother. The court allocated the dependent tax exemption to the father for tax years 1998-2003 inclusive, and allocated the exemption to the mother beginning with the 2004 tax year. The basis for this change was twofold. The family court anticipated that the mother would graduate from a college or technical school, and generate a regular income. The family court also anticipated an increase in the son's expenses upon the mother's graduation. The court further ordered the division of the son's unreimbursed future health expenses on a pro rata basis.

On appeal, the father argues the family court erred in transferring the benefit of the dependent tax exemption to the mother at the end of six years absent a present change in circumstances. Second, the father argues the court erred in failing to limit his pro rata obligation for future unreimbursed medical and dental expenses for the son to extraordinary

340 S.C. 201

expenses, defined under the Child Support Guidelines as those unreimbursed expenses over $250 per year

LAW/ANALYSIS

I. Tax Exemption

As an initial matter, the mother contends any issue regarding the allocation of the dependent tax exemption is not preserved for review because the father failed to mention the issue in his pleadings. See Abbott v. Gore, 304 S.C. 116, 119, 403 S.E.2d 154, 156 (Ct.App.1991) (holding issue of dependent tax exemption must be specifically plead, because though of "some relation," it is a "separate issue" from child support). However, the record clearly reflects the tax exemption question was tried before the court without objection. Therefore, the mother may not now complain on this ground. See Rule 15(b), SCRCP ("When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues."); Simmons v. Tuomey Reg'l Med. Ctr., 330 S.C. 115, 125 n. 2, 498 S.E.2d 408, 413 n. 2 (Ct.App.1998) (an issue not expressly mentioned in the complaint but tried without objection and incorporated in the trial court's order is tried by consent according to Rule 15, SCRCP); McCurry v. Keith, 325 S.C. 441, 481 S.E.2d 166 (Ct.App.1997) (issues tried by consent will be treated as if raised in the pleadings).

The mother further argues this issue is not preserved because the father failed to object to the court's ruling or move to reconsider. However, once the tax exemption issue was raised to and ruled upon by the family court, nothing remained for the court to consider and the father correctly proceeded with his appeal. See, e.g., Hubbard v. Rowe, 192 S.C. 12, 19, 5 S.E.2d 187, 189 (1939) ("[A]ll that this Court has ever required is that the questions presented for its decision must first have been fairly and properly raised in the lower Court and passed upon by that Court.").

340 S.C. 202

The father first argues the family court erred in transferring the benefit of the dependent tax exemption from him to the mother after six years, absent a present showing of a change of circumstances. We agree.

Section 20-3-130 provides, in pertinent part:

(F) The court may elect and determine the intended tax effect of the alimony and separate maintenance and support as provided by the Internal Revenue Code and any corresponding state tax provisions. The Family Court may allocate the right to claim dependency exemptions pursuant to the Internal Revenue Code and under corresponding state tax provisions and to require the execution and delivery of all necessary documents and tax filings in connection with the exemption.

S.C.Code Ann. § 20-3-130(F) (Supp.1999) (emphasis added).

The mother counters that this statute is contained within the provisions pertaining to alimony and spousal support, and therefore only allows the family court to allocate a dependency exemption pursuant to an award of alimony or separate maintenance and support. Therefore, the father cannot complain, because, as the custodial parent, she was entitled to the dependency exemption in each year. We disagree with this interpretation of the statute.

The mother's argument assumes this statutory provision applies only to cases where the court awards the exemption as an incident of spousal support because the first sentence of the subsection makes reference to alimony and separate support and maintenance. As our supreme court has often stated, however, where "a statute's language is plain and unambiguous, and conveys a clear and definite meaning, there is no occasion for employing rules of statutory interpretation and the court has no right to look for or impose another meaning." Ray Bell Constr. Co., Inc. v. School Dist. of Greenville County, 331 S.C. 19, 25-26, 501 S.E.2d 725, 729 (1998) (quoting Paschal v. State Election Comm'n, 317 S.C. 434, 436-37, 454 S.E.2d 890, 892 (1995)). Hence, this Court cannot review a statute without regard to its plain and ordinary meaning, and "may not resort to subtle or forced construction in an attempt to limit or expand a statute's scope." Id. at 26, 501 S.E.2d 725, 501 S.E.2d at 729 (emphasis added).

340 S.C. 203

Since the language of § 20-3-130(F) is clear, unambiguous, and internally consistent, we refuse to adopt the mother's constrained view of the family court's authority to allocate dependent tax exemptions. We believe the legislature, through the language employed, did not intend to make the family court's authority to allocate the right to claim dependency exemptions exclusively incident to proceedings for spousal support.

Citing Dodge v. Dodge, 332 S.C. 401, 505 S.E.2d 344 (Ct. App.1998) and Josey v. Josey, 291 S.C. 26, 351 S.E.2d 891 (Ct.App.1986), the mother next argues the lower court's order should be affirmed because "[u]nder the applicable tax laws, a custodial parent is entitled to claim the child as an [sic] dependent unless that right is relinquished in writing." These cases, however, are easily distinguished from the case at bar. While Dodge and Josey both correctly state that the custodial parent is entitled to claim the dependent tax deduction under the governing provisions of the Internal Revenue Code, neither case addresses the issue of the family court's authority to allocate the exemption.¹

340 S.C. 204

Moreover, the Internal Revenue Code does not mandate that the custodial parent take the deduction. Instead, it merely outlines a "support test" that divorced parents attempting to claim the exemption must meet in order to comply with the eligibility requirements of the applicable tax laws and IRS rules. See I.R.C. § 152. The fact that section 152 provides a mechanism for the custodial parent to "waive" his or her entitlement to the exemption anticipates that the custodial parent may not have the option of taking it. See I.R.C. § 152(e)(2)(A) & (B) (providing that a noncustodial parent who obtains a written declaration from a custodial parent stating that the custodial parent will not claim the parties' child as a dependent for that tax year may then take the exemption). The majority of jurisdictions interpreting section 152 have likewise come to the same conclusion.² Accordingly,

340 S.C. 205

we find the allocation of a dependent tax exemption to be within the family court's discretion.³ See Dodge, 332 S.C. at 418, 505 S.E.2d at 353.

Here, the family court reasoned that giving each party equal opportunity to claim the dependent tax exemption for their son was "the most equitable way to distribute this benefit." The exemption, however, while certainly a benefit,

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