In re the Marriage of Jeffrey S. Davis

• Decision Date: 17 February 2011
• Docket Number: No. 09CA1002.,09CA1002.
• Parties: In re the Marriage of Jeffrey S. DAVIS, Appellee,andGail Davis, n/k/a Gail Nguyen, Appellant.
• Court: Colorado Court of Appeals

252 P.3d 530

In re the Marriage of Jeffrey S. DAVIS, Appellee,andGail Davis, n/k/a Gail Nguyen, Appellant.

No. 09CA1002.

Colorado Court of Appeals, Div. IV.

Feb. 17, 2011.

Law Offices of Marcy L. Rothenberg–Romer, Marcy L. Rothenberg–Romer, Denver, Colorado, for Appellee.Law Office of Cheryl A. Miller, P.C., Cheryl A. Miller, Centennial, Colorado, for Appellant.Opinion by Judge DAILEY.

In this post-dissolution of marriage matter between Gail Davis, now known as Gail Nguyen (wife), and Jeffrey S. Davis (husband), wife appeals from the trial court's order modifying child support and denying her requests to hold husband in contempt and for attorney fees. As to the child support provisions of the order, we affirm in part, reverse in part, and remand for further proceedings. We affirm the provisions of the order concerning contempt and attorney fees.

I. Child Support

We review child support orders for abuse of discretion because the issue of the parents' financial resources is factual in nature. In re Marriage of Atencio, 47 P.3d 718, 720 (Colo.App.2002). We review de novo, however, whether the trial court applied the correct legal standard to its findings of fact. Id.

A. Retroactive Application of Section 14–10–115(6)(b)(I)

Wife contends that the trial court erred when modifying child support by applying the January 2008 revisions to section 14–10–115(6)(b)(I), C.R.S.2010, retroactively to her 2006 motion to modify child support. We agree, but only in part.

Initially, we reject husband's argument that wife is barred from raising this issue because she failed to provide the notice required by C.A.R. 44(a) that she was raising a question involving the constitutionality of a statute. Wife does not contend that the statute is facially unconstitutional, but rather only that applying it retroactively is unconstitutional. Accordingly, she is not barred from raising this issue. See In re Estate of Becker, 32 P.3d 557, 560–61 (Colo.App.2000) (holding that lack of C.A.R. 44(a) notice does not bar party's argument that statute is unconstitutional as applied retroactively), aff'd sub nom. In re Estate of DeWitt, 54 P.3d 849, 861 (Colo.2002).

“A statute is applied prospectively if it operates on transactions that occur after its effective date; it is applied retroactively if it operates on transactions that have already occurred or on rights and obligations that existed before its effective date.” Specialty Rests. Corp. v. Nelson, 231 P.3d 393, 399 (Colo.2010). A statute is presumed to operate prospectively and may be interpreted to operate retroactively only if the legislature clearly indicates that intent. Id.

Here, during the course of the child support modification hearing, which began in December 2007 and concluded in February 2009, section 14–10–115(6)(b)(I) was amended to allow for a deduction when calculating child support for all children not of the parties' marriage, including children born after the children of the marriage, who were not included under the previous version of the statute. See ch. 379, sec. 7, § 14–10–115(6)(b)(I), 2007 Colo. Sess. Laws 1651. The legislature specified that the new version of the statute “shall take effect January 1, 2008.” Ch. 379, sec. 29, 2007 Colo. Sess. Laws 1668. Providing an effective date is not sufficient alone to indicate an intent to apply a statute retroactively. See Kohut v. Hartford Life & Accident Ins. Co., 710 F.Supp.2d 1139, 1150 (D.Colo.2008) (recital that act takes effect on a particular date does not support conclusion that legislature intended retroactive application). Our review has not found any indication in the legislative history to overcome the presumption of prospective application of section 14–10–115(6)(b)(I).

Accordingly, we agree with wife that the trial court erred by applying the new provisions of the statute to the parties' child support obligations that accrued before the January 1, 2008, effective date of the amended statute. Because child support is a continuing obligation that is always modifiable under the provisions of section 14–10–122(1)(a), C.R.S.2010, however, we perceive no error by the court in applying the revised statute to the parties' child support obligations that accrued after the effective date of the statute. See McDonough v. McDonough, 458 N.W.2d 344, 345–46 (N.D.Ct.App.1990) (allowing modification of child support payments accruing after effective date of statutory amendments because, “[a]lthough the amendment may not be retroactively applied to child support accruing before the effective date, an obligor's child support obligation is a continuing obligation which may be modified prospectively” (citation omitted)); Mazzuckelli v. Mazzuckelli, 106 Ohio App.3d 554, 666 N.E.2d 620, 622–23 (1995) (allowing application of statutory amendments to child support payments accruing after amendment's effective date because the child support obligation was ongoing and had not yet been fully carried out under existing law at the time statute was amended, and thus the application was not truly retrospective).

On remand, the trial court shall recalculate the child support obligations that accrued before January 1, 2008, without applying the amended version of section 14–10–115(6)(b)(I).

We reject wife's further contention that the amended statute does not apply to husband's after-born children in any case because it would apply only to her, the parent moving to modify. Section 14–10–115(6)(b)(I) now provides in relevant part:

At the time of the initial establishment of a child support order, or in any proceeding to modify a support order, if a parent is also legally responsible for the support of other children for whom the parents do not share joint legal responsibility, an adjustment shall be made revising the parent's income prior to calculating the basic child support obligation for the children who are the subject of the support order if the children are living in the home of the parent seeking the adjustment or if the children are living out of the home, and the parent seeking the adjustment provides documented proof of money payments of support of those children.

We do not interpret this language as applying only to the parent who filed a motion to modify child support. Rather, the statute provides that the adjustment shall be made to the income of the parent who is also legally responsible for other children. The subsequent language referring to “the parent seeking the adjustment” refers to the parent seeking the adjustment to his or her income, and not solely to a parent, like wife here, who files a motion to modify child support.

B. Husband's Income

Wife further contends that the trial court erred when calculating husband's income for child support purposes without including his employer's contributions to his 401(k) savings plan, stock option plan, and insurance plans, and the stipend husband receives to defray his own insurance costs. We disagree.

Child support obligations are determined by applying the statutory guidelines in section 14–10–115(7), C.R.S.2010, to the parents' combined gross incomes. See § 14–10–115(1)(b)(I), (7)(a)(I), C.R.S.2010; In re Marriage of Nimmo, 891 P.2d 1002, 1005 (Colo.1995). Gross income means the actual gross income of a parent from any source. § 14–10–115(3)(c), (5)(a)(I), C.R.S.2010; In re Marriage of Mugge, 66 P.3d 207, 210 (Colo.App.2003).

1. 401(k) Contributions

Prior to actual distribution, employer contributions to a spouse's retirement account or pension plan do not constitute gross income for child support purposes. Mugge, 66 P.3d at 211. This was the holding in Mugge even though the spouse in that case had already retired at the time of dissolution and had an opportunity to cash out the contributions, but instead elected to roll them over into another pension plan. See id. at 212. The division reasoned that the pension and retirement benefits, which are expressly included as income in section 14–10–115(5)(a)(I)(H), C.R.S.2010, include only such benefits that have actually been paid out and not those that are undistributed at the time of the hearing. See Mugge, 66 P.3d at 211.

Here, husband testified that his employer made contributions to his 401(k) account but that he could not receive those funds prior to retirement without paying a penalty. We are persuaded by the reasoning of the division in Mugge that such unrealized employer contributions are not income for child support purposes. Accordingly, the trial court did not abuse its discretion by excluding them from husband's income.

We are not persuaded otherwise by In re Marriage of Tessmer, 903 P.2d 1194 (Colo.App.1995), on which wife relies. Tessmer held that interest and dividends credited to a retired spouse's account, which the spouse had not yet withdrawn, were income for child support purposes. See id. at 1196. Interest and dividends are expressly included in gross income under section 14–10–115(5)(a)(I)(F) and (K), C.R.S.2010, however, and these assets differ from pension contributions in how they are accumulated and paid. See Mugge, 66 P.3d at 212–13 (similarly distinguishing Tessmer and holding that undistributed employer-funded retirement benefits that spouse elected not to receive were not income for child support purposes).

2. Stock Options

Similarly, a spouse's stock options from an employer are included in gross income for child support purposes only to the extent that the options have already been exercised at the time child support is determined. See In re Marriage of Campbell, 905 P.2d 19, 20–21 (Colo.App.1995) (holding that amount received from stock options that were exercised is income for child support purposes, but that the potential income from the future exercise of other stock options is not). Accordingly, we also discern no abuse of discretion by the trial court in excluding from husband's income his employer's contributions to his stock option plan.

3. Employer Contributions to Husband's...