Scoleri v. Scoleri

• Decision Date: 26 April 2002
• Docket Number: No. 45A05-0108-CV-381.,45A05-0108-CV-381.
• Citation: 766 N.E.2d 1211
• Parties: In re the Marriage of Patrick R. SCOLERI, Appellant-Petitioner, v. Rebecca SCOLERI, Appellee Respondent.
• Court: Indiana Appellate Court

766 N.E.2d 1211

In re the Marriage of Patrick R. SCOLERI, Appellant-Petitioner, v. Rebecca SCOLERI, Appellee Respondent.

No. 45A05-0108-CV-381.

Court of Appeals of Indiana.

April 26, 2002.

Joseph Banasiak, Bosch & Banasiak, Hammond, IN, Attorney for Appellant.

John M. Hughes, Conyers, Hollandsworth & Hughes, Highland, IN, Attorney for Appellee.

OPINION

ROBB, Judge.

Patrick Scoleri ("Father") appeals the trial court's denial of his petition to modify his child support obligation and the award of $4,777.50 in attorney's fees to Rebecca Scoleri ("Mother").¹ We affirm.

Issues²

Father raises the following consolidated and restated issues for our review:

1. Whether the trial court properly denied Father's petition to modify his child support obligation; and

2. Whether the trial court properly awarded $4,777.50 in attorney's fees to Mother.

Facts and Procedural History

The facts reveal that Father and Mother were married on November 11, 1978. The marriage produced four children, C.S. born April 2, 1982, T.S. born February 20, 1984, K.S. born July 8, 1989, and K.S. born May 23, 1992. On June 16, 1994, the trial court entered a summary dissolution decree awarding the parties joint legal custody of the children with Mother having sole physical custody.³ As part of the decree, Father was ordered to pay $325.00 per week in child support.

On July 11, 1998, Father unilaterally reduced his child support obligation to $250.00 per week, informing Mother by written note that "[Mother], do what you have to do, I'm sorry I'm trying. [Father]." Appellant's Appendix at 9. On August 24, 1998, Father filed with the trial court a petition for modification of child support. Father argued that he was entitled to a modification of support because his job as a pressman supervisor had terminated and he was currently working at a lower paying job.

On August 24, 1998, Mother filed with the trial court a petition for modification of child support and a petition for citation of contempt requesting that the court cite Father for contempt because he was $450.00 in arrears with respect to child support as of August 14, 1998. On February 23, 1999, Mother filed with the trial court another petition for citation of contempt.⁴ Following a hearing, the trial court on May 15, 2001, sua sponte entered findings of fact and conclusions of law.⁵ The trial court denied Father's petition for modification of child support and concluded that Father was in civil contempt. In addition, the trial court awarded Mother $4,777.50 in attorney's fees and ordered Father to pay Mother $2,925.00 in back child support.

On June 13, 2001, Father filed with the trial court a motion to correct errors. On July 12, 2001, Father filed with the trial court an amended motion to correct errors. This appeal ensued.

Discussion and Decision

I. Modification of Child Support

Father first contends that the trial court erred in denying his petition to modify his child support obligation. We disagree.

A. Standard of Review

In the present case, the trial court sua sponte entered findings of fact and conclusions of law.⁶ "When the trial court enters such findings sua sponte, the specific findings control only as to the issues they cover, while a general judgment standard applies to any issue upon which the court has not found." Nelson v. Marchand, 691 N.E.2d 1264, 1267 (Ind.Ct. App.1998). In reviewing the judgment, this Court must determine whether the evidence supports the findings and whether the findings support the judgment. Id. We will reverse a judgment only when it is shown to be clearly erroneous, "i.e., when the judgment is unsupported by the findings of fact and conclusions entered on the findings." Id. For findings of fact to be clearly erroneous, the record must lack probative evidence or reasonable inferences from the evidence to support them. Id. In determining the validity of the findings or judgment, we consider only the evidence favorable to the judgment and all reasonable inferences to be drawn therefrom, and we will not reweigh the evidence or assess the credibility of witnesses. Id. Finally, a general judgment may be affirmed on any theory supported by the evidence presented at trial. Id.

On appeal from the denial of a petition to modify, we review the trial court's decision under the clearly erroneous standard. Beardsley v. Heazlitt, 654 N.E.2d 1178, 1180 (Ind.Ct.App.1995). We will reverse a decision regarding modification of child support only where it is clearly against the logic and effect of the facts and circumstances that were before the trial court. Id. Child support awards may be modified only:

(1) upon a showing of changed circumstances so substantial and continuing as to make the terms unreasonable; or

(2) upon a showing that:

(A) a party has been ordered to pay an amount in child support that differs by more than twenty percent (20%) from the amount that would be ordered by applying the child support guidelines; and

(B) the order requested to be modified or revoked was issued at least twelve (12) months before the petition requesting modification was filed.

Ind.Code § 31-16-8-1. On appeal, we do not weigh the evidence or judge the credibility of the witnesses but, rather, consider only that evidence most favorable to the judgment, together with the reasonable inferences that can be drawn therefrom. Bower v. Bower, 697 N.E.2d 110, 113 (Ind. Ct.App.1998). The petitioner bears the burden of proving a substantial change in circumstances justifying modification. Weiss v. Frick, 693 N.E.2d 588, 590 (Ind. Ct.App.1998), trans. denied.

B. 401(k) Account

Father first argues that the trial court erred in denying his petition for modification of suport because the return derived from the early withdrawal of his 401(k) is not income within the meaning of the Indiana Child Support Guidelines. Mother argues that the return from the cashed 401(k) should be included in the calculation of Father's weekly gross income.

In the present case, Father possessed a 401(k) account with Holden Graphics Company in the amount of $35,000.00 when he left the printing company. On August 3, 1998, Father made an early withdrawal from his 401(k), incurring a penalty of $7,000.00, receiving a return in the amount of $28,000.00. Father essentially "cashed in" the full amount of his 401(k). Father applied $8,000.00 of the return to pay bills and used the remaining amount as a down payment for a home in his then-fiancée's name. In denying Father's petition, the trial court determined that Father's child support obligation should not be reduced in part because he clearly demonstrated the financial ability to pay $325.00 per week in support when he gave his then-fiancée $20,000.00 as a down payment for the home. See Appellant's Appendix at 17, 29.

We will first discuss the nature of 401(k) accounts. A 401(k) plan, sometimes called a "salary reduction" plan, is the product of amendments to the Internal Revenue Code, made pursuant to the Revenue Act of 1978 that became effective 1980.⁷ Typically, an employer sets up a 401(k) plan with an investment company, an insurance company, or a bank trust department. The 401(k) plan is unique in that the employee may elect between: (a) having an employer contribute a portion of his or her salary to a 401(k) plan; or (b) having the employer pay the amount directly to him or her. In the first situation, the employee is not taxed currently; however, in the second situation the employee is taxed in the year the income is received. If an employee is faced with genuine financial hardship,⁸ and the plan so provides, any money of the plan may be withdrawn without penalty. In addition, the employee can take the money in a lump sum after the age of fifty-nine and one-half (59½) years. If the money is withdrawn early, the individual will incur a ten percent (10%) penalty and be required to pay federal, state, and local taxes on the return. We are presented with the question of whether the return from Father's early withdrawal from his 401(k) constitutes income within the meaning of the Indiana Child Support Guidelines.

The Guidelines define weekly gross income as follows:

For purposes of these Guidelines, "weekly gross income" is defined as actual weekly gross income of the parent if employed to full capacity, potential income if unemployed or underemployed, and imputed income based upon "in-kind" benefits. Weekly gross income of each parent includes income from any source, except as excluded below, and includes, but is not limited to, income from salaries, wages, commissions, bonuses, overtime, partnership distributions, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, workmen's compensation benefits, unemployment insurance benefits, disability insurance benefits, gifts, prizes, and alimony or maintenance received from other marriages. Specifically excluded are benefits from means-tested public assistance programs, including, but not limited to Temporary Aid To Needy Families (TANF), Supplemental Security Income, and Food Stamps.

Child Supp. G. 3(A)(1). The phrase "actual income" has been interpreted by this court as existing income currently received by a parent and available for his or her immediate use. Carmichael v. Siegel, 754 N.E.2d 619, 628 (Ind.Ct.App.2001).

This court was previously faced with the issue of whether the annual return of an IRA⁹ that is automatically reinvested constitutes income within the meaning of our Guidelines. We concluded that when "the annual returns of a parent's IRA or IRAs are automatically reinvested and there is no indication that previous withdrawals from the IRA have been made to fund the parent's lifestyle choices or living expenses, those returns generally should not be considered `actual income' when calculating the parent's child support obligation. Such returns are not currently received by the parent nor immediately available for...