In re State

• Court: New Hampshire Supreme Court
• Writing for the Court: DUGGAN, J.
• Citation: In re State, 904 A.2d 619, 153 N.H. 700 (N.H. 2006)
• Decision Date: 19 July 2006
• Docket Number: No. 2005–273.,2005–273.
• Parties: In the Matter of STATE of New Hampshire and Mark A. TAYLOR.

153 N.H. 700

904 A.2d 619

In the Matter of STATE of New Hampshire and Mark A. TAYLOR.

No. 2005–273.

Supreme Court of New Hampshire.

Argued: Feb. 8, 2006.

Opinion Issued: July 19, 2006.

Gawryl & MacAllister, of Nashua (Jared O'Connor on the brief and orally), for the intervenor, Myrna Bellot.

McLane, Graf, Raulerson & Middleton, P.A., of Manchester (Scott H. Harris and Margaret R. (Crabb) Kerouac on the brief, and Mr. Harris orally), for the respondent, Mark A. Taylor.

The State of New Hampshire filed no brief.

DUGGAN, J.

The respondent, Mark A. Taylor, appeals the recommendation of the Master (Love, M.) approved by the Superior Court (Hicks, J.) that his child support obligations be modified following his receipt of a lump sum personal injury settlement. We vacate and remand.

The record supports, or the parties agree to, the following facts. Taylor's child was born in 1994 and now lives with her legal guardian, the intervenor, Myrna Bellot. The original child support order, effective January 1, 2001, required Taylor to pay Bellot fifty dollars per month in child support. In August 2003, Taylor was struck by a drunk driver and suffered the loss of his leg. As a result, he received a lump sum personal injury settlement award. Taylor also receives a monthly Social Security Disability Income (SSDI) benefit for his injury. The child receives an SSDI benefit of $119 per month, which is paid to her directly.

Bellot filed a petition to modify child support. The superior court issued a modification order on January 31, 2005, ruling that Taylor's lump sum personal injury settlement was includable in his "gross income." The court then calculated Taylor's monthly obligation by prorating his lump sum settlement award over his remaining life expectancy. It ordered him to pay $502 per month in child support and to create a trust in the amount of $44,905 naming the child as the beneficiary. The court refused to allow Taylor a dollar for dollar credit for the $119 monthly SSDI benefit received by his child.

On appeal, Taylor argues that the trial court erred by: (1) treating the lump sum personal injury settlement as "gross income" within the meaning of RSA chapter 458–C (2004 & Supp.2005); (2) dividing his personal injury settlement over his projected lifetime to impute an income figure for the purpose of calculating child support; and (3) not providing a dollar for dollar child support credit for the SSDI payments received by the child. We address each argument in turn.

Trial courts have broad discretion in reviewing and modifying child support orders. In the Matter of Jerome & Jerome, 150 N.H. 626, 628, 843 A.2d 325 (2004). Because the trial court is in the best position to determine the parties' respective needs and their respective abilities to meet them, we will not overturn modification orders absent an unsustainable exercise of discretion. Id.

I. Lump Sum Personal Injury Settlement

The first issue is whether the trial court erred in ruling that the lump sum personal injury settlement is "gross income" within the meaning of RSA chapter 458–C. We are the final arbiter of the legislature's intent as expressed in the words of the statute considered as a whole. In the Matter of Plaisted & Plaisted, 149 N.H. 522, 523, 824 A.2d 148 (2003). We interpret legislative intent from the statute as written, and, therefore, we will not consider what the legislature might have said or add words that the legislature did not include. Id. at 524, 824 A.2d 148. We interpret statutes in the context of the overall statutory scheme and not in isolation. Id.

For purposes of calculating a parent's child support obligation, RSA 458–C:2, IV (2004) defines gross income as:

All income from any source, whether earned or unearned, including, but not limited to, wages, salary, commissions, tips, annuities, social security benefits, trust income, lottery or gambling winnings, interest, dividends, investment income, net rental income, self-employment income, alimony, business profits, pensions, bonuses, and payments from other government programs ... including, but not limited to, workers' compensation, veterans' benefits, unemployment benefits, and disability benefits.

(Emphasis added.) While trial courts have discretion to adjust a child support award based upon special circumstances, see RSA 458–C:4, II (2004), the legislative scheme requires that all items includable as "gross income" be considered to determine the parties' total support obligation. In the Matter of Feddersen & Cannon, 149 N.H. 194, 197, 816 A.2d 1033 (2003).

Taylor argues that because the statutory definition of gross income does not explicitly include lump sum personal injury settlements, we must look to other definitions of "income." He urges us to rely upon definitions of "income" from two dictionaries and three United States Supreme Court cases where the Court considered whether various items were "income" under federal income taxation statutes. See O'Gilvie v. United States, 519 U.S. 79, 84–86, 117 S.Ct. 452, 136 L.Ed.2d 454 (1996) ; Eisner v. Macomber, 252 U.S. 189, 219, 40 S.Ct. 189, 64 L.Ed. 521 (1920) ; Commissioner of Internal Rev. v. Glenshaw Glass Co., 348 U.S. 426, 431, 75 S.Ct. 473, 99 L.Ed. 483 (1955).

Bellot argues that we need not look beyond the statute to define gross income. She argues that the words "including, but not limited to" in the definition of "gross income," "act as a starting point and the enumerated items that follow are an illustration of a few applicable terms." She argues that "gross income" must be interpreted broadly to include lump sum personal injury settlements in light of the policy goals of the child support guidelines.

We have previously addressed whether the definition of "gross income" under the child support guidelines includes items not specifically listed in RSA 458–C:2, IV. See, e.g., In the Matter of Dolan and Dolan, 147 N.H. 218, 221–22, 786 A.2d 820 (2001) ; Feddersen, 149 N.H. at 196, 816 A.2d 1033; Jerome, 150 N.H. at 629, 843 A.2d 325. We did not consider the dictionary definitions of "income" in any of these cases and focused instead on whether the legislature intended to include the item in question within the statutory definition of "gross income." Similarly, we have no reason to turn to dictionary definitions in this case.

The objectives of the child support guidelines are to reduce the economic consequences of divorce on children and ensure that children enjoy a standard of living equal to that of the noncustodial parent's subsequent family. RSA 458–C:1, II (Supp.2005); Dolan, 147 N.H. at 222, 786 A.2d 820. These same objectives are present in a non-divorce situation where the parties never married, but child support obligations exist nonetheless. These objectives differ from the objectives of the federal income taxation statutes. See Thor Power Tool Co. v. C.I.R., 439 U.S. 522, 542, 99 S.Ct. 773, 58 L.Ed.2d 785 (1979). Therefore, how federal income taxation statutes define "income" is of little relevance to our interpretation of gross income under the child support guidelines. Cf. Rattee v. Rattee, 146 N.H. 44, 48, 767 A.2d 415 (2001).

Our prior rulings support treating lump sum personal injury settlements as gross income. In Jerome, we considered whether a personal injury settlement received as an annuity was income under the child support guidelines. Jerome, 150 N.H. at 628–32, 843 A.2d 325. We held that the payments were gross income because the term "annuities" is explicitly listed as one of the potential sources of income in RSA 458–C:2, IV. Id. at 629, 632, 843 A.2d 325. We stated that, "[ RSA 458–C:2, IV] by its plain terms, excludes payments from public assistance programs from the definition of ‘gross income’; it does not exclude proceeds from personal injury settlements." Id. at 629, 843 A.2d 325.

Taylor relies upon our statement in Jerome that "[a] lump sum settlement is akin to an asset while annuity payments provide a regular income flow." Id. at 632, 843 A.2d 325. Taylor does not read this statement in the proper context. We made this statement while summarizing a distinction made by the court in Kelly v. Kelly, 775 So.2d 1237, 1243 (La.Ct.App.2000), cert. denied, 787 So.2d 1001 (La.2001), overruled on other grounds by Salles v. Salles, 928 So.2d 1, 7–8 (La.Ct.App.2005), between that portion of a personal injury settlement intended to compensate for lost wages and the portion intended to compensate for medical care and pain and suffering. This statement was clearly not the holding in Jerome.

More fundamentally, a conclusion that a personal injury settlement paid as a lump sum is not gross income would be inconsistent with our holding in Jerome that personal injury settlements paid as annuities are gross income. Such a conclusion might encourage litigants to structure personal injury settlements as lump sum settlements rather than annuities to avoid child support obligations. We do not believe that the legislature intended that two similarly situated obligors would have different child support obligations based upon nothing more than the means by which they receive settlement payments.

Our reasoning in Feddersen is consistent with Jerome. In Feddersen, we treated a one-time, nonrecurring post-divorce payment of a patent infringement settlement of more than three million dollars as "gross income" for child support purposes. Feddersen, 149 N.H. at 196, 816 A.2d 1033. Taylor argues that Feddersen is distinguishable because the patent infringement settlement represented an accession to wealth, while Taylor's personal injury settlement was intended instead to make him whole by compensating him for physical and economic losses. We previously rejected the argument that personal injury settlements should not be treated as " gross income" for child support purposes because they are intended to make the recipient whole: "The plain language of the statute ... refutes [this] argument." Jerome, 150 N.H. at 629, 843 A.2d...