Johnson v. Johnson

• Decision Date: 15 May 2015
• Docket Number: No. S–13–775,S–13–775
• Parties: Elizabeth Grant Johnson, now known as Elizabeth D'Allura, appellant and cross–appellee, v. Kari Johnson, appellee and cross–appellant.
• Court: Nebraska Supreme Court

862 N.W.2d 740

Elizabeth Grant Johnson, now known as Elizabeth D'Allura, appellant and cross–appellee

v.Kari Johnson, appellee and cross–appellant.

No. S–13–775

Supreme Court of Nebraska.

Filed May 15, 2015

Rodney C. Dahlquist, Jr., and Christine A. Lustgarten, of Dornan, Lustgarten & Troia, P.C., L.L.O., Omaha, for appellant.

Virginia A. Albers, Omaha, of Slowiaczek, Albers & Astley, P.C., L.L.O., for appellee.

Heavican, C.J., Wright, Connolly, Stephan, McCormack, Miller–Lerman, and Cassel, JJ.

Syllabus by the Court

1. Modification of Decree: Child Support: Appeal and Error.Modification of a dissolution decree is a matter entrusted to the discretion of the trial court, whose order is reviewed de novo on the record, and which will be affirmed absent an abuse of discretion by the trial court. The same standard applies to the modification of child support.

2. Judgments: Appeal and Error.When reviewing questions of law, an appellate court has an obligation to resolve the questions independently of the conclusion reached by the court below.

3. Rules of the Supreme Court: Child Support.In general, child support payments should be set according to the Nebraska Child Support Guidelines.

4. Child Support.Use of earning capacity to calculate child support is useful when it appears that the parent is capable of earning more income than is presently being earned.

5. Child Support: Evidence.Generally, earning capacity should be used to determine a child support obligation only when there is evidence that the parent can realize that capacity through reasonable efforts.

6. Social Security.Social Security benefits are not a mere gratuity from the federal government but have been earned through an employee's payment of Social Security taxes.

7. Child Support: Appeal and Error.Whether a child support order should be retroactive is entrusted to the discretion of the trial court, and an appellate court will affirm its decision absent an abuse of discretion.

8. Modification of Decree: Child Support.In determining whether to order a retroactive modification of child support, a court must consider the parties' status, character, situation, and attendant circumstances.

9. Modification of Decree: Child Support: Time.Absent equities to the contrary, modification of a child support order should be applied retroactively to the first day of the month following the filing date of the application for modification.

10. Modification of Decree: Child Support.In modification of child support proceedings, the children and the custodial parent should not be penalized by delay in the legal process, nor should the noncustodial parent gratuitously benefit from such delay.

11. Child Support.The general rule is that no credit is given for voluntary overpayments of child support, even if they are made under a mistaken belief that they are legally required.

Miller–Lerman, J.

I. NATURE OF CASE

Kari Johnson filed a petition for further review of the Nebraska Court of Appeals' decision which affirmed in part

and reversed in part the order of the district court for Douglas County which modified his child support obligation. We conclude that (1) the Court of Appeals correctly determined that the district court erred when it imputed to Elizabeth Grant Johnson, now known as Elizabeth D'Allura, a wage-earning capacity of $52,000 per year and reversed the order and remanded the cause for a hearing on Elizabeth's wage-earning capacity, (2) the Court of Appeals did not err when it affirmed the district court's conclusion that the Social Security benefits paid to the children were a gratuity and that Kari should not be given a credit for them upon remand, and (3) although the Court of Appeals correctly affirmed the district court's decisions that a downward modification in Kari's child support could be retroactive to the month after the filing of the application to modify, that the judgment against Elizabeth for $25,472.11 should be reversed, and that a judgment against Elizabeth for $2,357.90 should be entered, it erred when it reasoned that upon remand, Kari could not receive credit for overpayments, if any, made during the pendency of the modification proceedings for the reason that Kari had continued to pay the $3,000–per–month child support ordered in the original decree. To the contrary, the fact that Kari continued to pay what had been ordered does not preclude consideration of a potential credit after receipt of additional evidence upon remand. Accordingly, we affirm in part, and in part reverse and remand with directions.

II. STATEMENT OF FACTS

Kari and Elizabeth were married in 1996. Two children were born to the marriage: one born in May 1995 and one born in July 1998. Kari and Elizabeth were divorced in January 2010, when the district court entered a stipulated decree and parenting plan. The dissolution decree, inter alia, provided for joint legal custody of the children and awarded physical custody to Elizabeth. Per the stipulation, the decree required Kari to pay child support of $3,000 per month while both children were minors and $1,500 per month when only the younger child was a minor.

Approximately 6 months after entry of the decree of dissolution, Kari moved for an order nunc pro tunc, in which motion he asserted that the dissolution court was not aware of the Social Security payments the children were receiving and that had the dissolution court been aware of the Social Security benefits, Kari “would be responsible for far less than the $3,000” monthly amount of child support. Kari later withdrew the motion, and thus the dissolution court never entertained it.

At the January 2013 modification trial which gives rise to this appeal, Kari acknowledged that when he stipulated to the terms of the original decree, filed on January 10, 2010, he understood that the children were receiving Social Security benefits by virtue of his status as a retired taxpayer. He acknowledged that the receipt of the Social Security benefits was in addition to his obligations for child support and alimony. The record shows that the children received Social Security benefits in 2010, 2011, and part of 2012.

Nine months after the decree of dissolution was entered, Kari moved to vacate the decree, asserting that the decree was void because the district court lacked personal jurisdiction over him. We affirmed the district court's order denying the motion to vacate the decree of dissolution. Johnson v. Johnson, 282 Neb. 42, 803 N.W.2d 420 (2011). At the modification trial, Kari testified that he pursued the personal jurisdiction issue rather than first applying for a modification, because he wanted a “do-over” and to have the entire decree overturned.

In September 2011, Kari filed an application to modify the decree, in which he sought to be awarded physical custody based on the children's preference and to have child support recalculated accordingly. Elizabeth filed a cross-application in which she sought sole legal custody based on Kari's uncooperative behavior and his failure to pay his share of medical bills and to maintain his life insurance. Kari thereafter amended his application to allege that in the event physical custody remained with Elizabeth, his child support obligation should be modified downward because he had experienced a decrease in income which constituted a material change in

circumstances. The parties ultimately stipulated to a modification of physical custody to a joint physical (as well as legal) custody arrangement.

In January 2013, trial was eventually held on the issue of appropriate modification of child support. A review of the supplemental transcript shows that during the pendency of Kari's motion to modify which had been filed in September 2011, a trial was set for April 10, 2012; the parties “settled” the matter, but after the trial date had passed, Elizabeth repudiated the settlement. On September 6, Kari sought temporary abatement of child support. And on October 19, 2012, Kari filed an additional motion for temporary adjustment of child support and a motion for credit. Elizabeth successfully sought continuance of Kari's temporary motions to adjust or credit child support. Specifically, the district court ordered that Kari's motions for abatement or credit of child support were to be addressed at trial. The trial was set for January 2013. The judge who heard the modification matter was not the judge who entered the decree.

At the time of trial, Kari was 69 years old and Elizabeth was 47 years old. Both parties testified that Elizabeth had remained in the family home because they wanted to maintain stability for the children. The record reflects that at the time of trial, Elizabeth's only income was payments she received from a blind trust. She testified that she generally received about $27,000 to $28,000 per year from the trust, or approximately $2,300 per month. Her monthly expenses at the time of the modification trial for the mortgage, utilities, and food totaled more than $4,000, but she admitted that her food expenses would be reduced by the joint custody arrangement. Elizabeth testified that she did not have any money. In its ruling on the modification, the district court found that the evidence showed that Elizabeth received a $95,000 inheritance during the marriage, the equity in the $500,000 marital home in the divorce, and an unexplained deviation upward in child support, and that her new husband contributed to the family's home expenses.

Elizabeth had previously been employed by an aircraft charter company as a pilot; in 2004, she was employed full

time and earned $23,000. There was evidence that Elizabeth would be eligible for a copilot position with her former employer at a salary of $1,500 per month, or $18,000 per year. However, to accept the position, she would have to move from Omaha, Nebraska, to California and undergo a minimum of 4 weeks' requalification training, which training Elizabeth testified would cost $10,000 and would be deducted from...