Kaplan v. Bugalla

Decision Date13 April 2006
Citation188 S.W.3d 632
PartiesBrendi Erin KAPLAN (formerly Bugalla) v. John A. BUGALLA.
CourtTennessee Supreme Court

David W. Garrett, Nashville, Tennessee, for the appellee, John A. Bugalla.

OPINION

CORNELIA A. CLARK, J., delivered the opinion of the court, in which WILLIAM M. BARKER, C.J., E. RILEY ANDERSON, ADOLPHO A. BIRCH, JR., and JANICE M. HOLDER, JJ., joined.

This case involves a post-divorce petition to modify child support to include payment of the children's extraordinary educational expenses. The trial court denied relief, and the Court of Appeals affirmed. We accepted this case to determine whether an obligee-parent is required to prove a "significant variance", as defined in the Child Support Guidelines, in the obligor-parent's income before the trial court can order the obligor-parent to pay a portion of the children's private school tuition and expenses. We hold that the "significant variance" standard is inapplicable to a modification of child support for payment of extraordinary educational expenses. Accordingly, we reverse and remand for further proceedings consistent with this opinion.

FACTUAL & PROCEDURAL BACKGROUND

The parties, Brendi Kaplan (formerly Bugalla) and John A. Bugalla, were divorced by a final decree entered on May 10, 2002. The final decree incorporated the parties' marital dissolution agreement, as well as the parenting plan agreed to by the parties.1 Pursuant to the permanent parenting plan, Ms. Kaplan was named as the primary residential parent for the parties' two minor sons, A.J.B. (birth date: August 18, 1992) and Z.S.B. (birth date: January 25, 1995). Also pursuant to the permanent parenting plan, Mr. Bugalla was ordered to pay $4,000 per month as child support.

Prior to their divorce, the parties lived in Brentwood, Tennessee, and their two sons attended the University School of Nashville ("USN"), a private school. At the time of the divorce, however, both parties intended to move to Chicago. In fact, Mr. Bugalla, an executive with an insurance brokerage company, had moved to Chicago shortly before the final decree was entered. Because he technically was assigned to his employer's Chicago office during the time he worked in Nashville, Mr. Bugalla's move to Chicago did not affect his employment—he simply relocated. At the time of the divorce, Ms. Kaplan, an attorney, was working for a Nashville law firm. She intended to move with the children to Chicago after the divorce in order to be close to family members who resided in the Chicago area. Because both parties intended to move to Chicago, and because they expected that the children would attend public schools in the Chicago area, the permanent parenting plan incorporated into the final decree contained the following provision: "PRIVATE SCHOOL EXPENSES: None."

On September 4, 2002, approximately four months after the divorce, Ms. Kaplan filed a "petition for contempt, to modify parenting plan, and for other relief." In pertinent part, Ms. Kaplan alleged that she had been unable to find comparable employment in the Chicago area and that she had been "unable to find suitable housing in an area of Chicago that would enable her to send the children to a good public school."2 The petition asserted that Ms. Kaplan therefore had decided to remain in Nashville to continue her employment and to allow the children to continue attending USN. The petition stated that, as of the date of filing, the children had both started the 2002-2003 academic year at USN. The petition asked the court to increase Mr. Bugalla's child support obligation to pay a portion of the children's school tuition, fees and expenses.

The trial court conducted an evidentiary hearing on the petition, and both Ms. Kaplan and Mr. Bugalla testified. From their testimony, it is undisputed that their parenting plan was based upon the assumption that both parties were moving to Chicago and that the children would attend public schools there. As alleged in her petition, Ms. Kaplan testified that she had been unable to find comparable employment in Chicago and that she also had failed to find suitable housing. Ms. Kaplan stated that she therefore had decided to remain in Nashville.

Mr. Bugalla testified that his annual income at the time of the hearing was approximately $290,000 (approximately $280,000 in salary, plus an additional $9,000 to $10,000 per year in dividends from a stock investment plan of his former employer). Ms. Kaplan testified that she had been a salaried employee at the law firm, with an annual salary of approximately $87,500. She went on to state, however, that approximately one month before the hearing her employment status had changed. Due to a decrease in business for the law firm section in which she worked, her status changed from being a salaried employee to being a "contract employee" of the firm. As a contract employee, she was being paid $60.00 per hour by the firm, but she received no benefits. The record does not disclose her income for the short time that, as of the hearing date, she had worked on a contract basis.

Ms. Kaplan testified that the parties' two sons continued to attend school at USN. According to an exhibit submitted by Ms. Kaplan, the annual tuition for each child was, at the time of the hearing, approximately $10,000 for lower school tuition and $11,000 for middle school tuition, respectively. The exhibit indicated that the tuition for the 2003-2004 academic year would increase to approximately $10,700 and $11,700, respectively.

At the conclusion of the hearing, the trial court denied Ms. Kaplan's request to modify the child support award. The trial court's order ruling on the petition states, in pertinent part: "Ms. Kaplan's request for an order requiring Mr. Bugalla to contribute to the cost of the children's private education shall be, and is hereby, denied, unless one of the children develops a special problem where, for some extraordinary reason, he needs a private school."

The Court of Appeals affirmed the trial court's ruling. The intermediate court concluded that Ms. Kaplan, in order to obtain a modification of child support, was required by statute to show a "significant variance" between the amount of child support ordered on May 10, 2002, the date of the divorce, and the amount of child support sought on February 3, 2003, the date of the trial court's hearing on the petition. The Court of Appeals concluded that the evidence did not establish a significant variance and that Ms. Kaplan therefore was not entitled to a modification of child support.

STANDARD OF REVIEW

Our review of the trial court's findings of fact is de novo upon the record, accompanied by a presumption of correctness, unless the preponderance of the evidence is otherwise. Tenn. R.App. P. 13(d); Kendrick v. Shoemake, 90 S.W.3d 566, 569-70 (Tenn.2002). The trial court's conclusions of law are reviewed de novo, with no presumption of correctness accorded to the decisions of the courts below. State v. Wilson, 132 S.W.3d 340, 341 (Tenn.2004).

ANALYSIS
I. EXTRAORDINARY EDUCATIONAL EXPENSES

In Barnett v. Barnett, 27 S.W.3d 904 (Tenn.2000), we considered whether private school tuition is an "extraordinary educational expense" which the non-custodial parent should be required to pay in addition to the base child support calculated under the Child Support Guidelines. We first concluded that private school tuition is an "extraordinary educational expense," as that term is used in the Guidelines.3 Id. at 907. We then went on to consider whether that expense must be added to the obligor's base child support calculated under the Guidelines. As stated in Barnett, the Child Support Guidelines in effect at that time provided, "[e]xtraordinary educational expenses . . . shall be added to the percentage calculated in the above rule [setting out the percentage of net income to be paid as child support]." Id. (quoting Tenn. Comp. R. & Regs. 1240-2-4-.04(1)(c)) (emphasis added). Based upon that mandatory language, "shall be added", we held that extraordinary educational expenses must be added to the obligor's base child support calculated under the Guidelines. Id. See also, Umstot v. Umstot, 968 S.W.2d 819, 824-25 (Tenn.Ct.App.1997); Dwight v. Dwight, 936 S.W.2d 945, 950 (Tenn.Ct.App.1996).

We recognized in Barnett that "[t]he wholesale imposition of private school tuition on the obligor in these cases could result in a tremendous disparity in the obligor's relative percentage of income attributed as child support—even to the extent of absorbing every penny of the obligor's income." Barnett, 27 S.W.3d at 908. To avoid "an interpretation of the guidelines that would lead to an absurd result[,]" id., we went on to state that "it is appropriate to consider the income of the custodial parent in considering whether a downward deviation from the total child support award (percentage plus extraordinary educational expense) would achieve equity." Id. at 909. We therefore held that imposing the entire amount of extraordinary educational expenses on the non-custodial parent could "constitute an `unjust or inappropriate' application of the guidelines that would warrant a downward deviation. Downward deviation in this context would spread the cost of tuition equitably among [sic] the parties." Id.

From our analysis in Barnett, it is clear that payment of extraordinary educational expenses is a separate component of an obligor's total child support obligation, that is, separate from the base child support calculated under the Guidelines. Barnett also makes it clear that the court can order the obligor to pay less than the full amount of a child's (or children's) extraordinary educational expenses, depending upon the proof in a particular case. While those two issues were resolved in Barn...

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