Scott v. Corcoran
Decision Date | 28 October 2019 |
Docket Number | Court of Appeals Case No. 19A-DR-444 |
Citation | 135 N.E.3d 931 |
Parties | Kriston M. SCOTT, Appellant-Defendant, v. Gerald J. CORCORAN, III, Appellee-Plaintiff. |
Court | Indiana Appellate Court |
Attorney for Appellant: Tula Kavadias, Crown Point, Indiana
Attorney for Appellee: Andrew P. Martin, Saint John, Indiana
[1] Kriston M. Scott ("Mother") appeals from the trial court's order denying her petition for rule to show cause regarding Gerald J. Corcoran, III's ("Father") failure to pay child support; and denying her request for attorney's fees.1 We affirm in part, reverse in part, and remand.
[2] Mother raises three issues on appeal, which we revise and restate as follows:
[3] Mother and Father married in 2002 and have two children. During the marriage, Mother worked primarily as a homemaker, and Father was employed as an operations manager for Scrap Metal Services ("SMS"). In 2013, Father's annual base salary from SMS was approximately $150,000.00. Father is a minority shareholder in SMS,2 in which he once owned a 20.65 percent interest. Father is also a shareholder in SMS Realty and other SMS entities (collectively, "the subsidiary companies"). In addition to his salary, Father receives distributions from SMS and the subsidiary companies in profitable years.
[4] Father filed to dissolve the marriage and, on November 26, 2013, the trial court approved an agreed decree of dissolution ("Agreed Decree") that incorporated the parties' negotiated settlement agreement and settled outstanding issues of property division, custody, parenting time, and child support. The relevant portion of the Agreed Decree for purposes of this appeal is as follows:
Appellant's App. Vol. II pp. 48-50 (footnotes omitted). In the Agreed Decree, Father also agreed to execute an authorization to allow Mother to obtain his federal tax return "directly from the IRS annually" and to provide "his complete federal and all state income tax returns, his 1099s from all sources, including his INT, DIV and related forms, and his K-1's from all sources" to Mother. Id. In 2012 and 2013, Father paid $37,230 for irregular child support. Father did not pay irregular child support in 2014.
[5] In dividing the marital property in the Agreed Decree, the trial court, inter alia , assigned to Mother Father's interest income from a promissory note ("Note") for approximately $1.155 million between Father and SMS.3 Mother was to receive monthly interest payments of approximately $9,000.00 on the Note and the principal when it was due. In 2015, SMS temporarily ceased making interest payments to Mother because of financial difficulties.4 The Agreed Decree provided that "once [ ] interest income which Mother receives on the Promissory Note ... terminates, [ ] Mother shall be entitled to a modification of support as that event will constitute ... change[d] circumstances." Id. at 50. Father did not pay any irregular child support in 2015.
[6] On August 12, 2015, Mother filed a petition for modification of child support in which she alleged a continuous and substantial change in circumstances warranting modification of the child support order for various reasons, including the suspension of interest payments on the Note. Mother also filed a verified motion for rule to show cause regarding Father's failure to timely produce his 2013 and 2014 tax returns and Father's failure to pay Mother "any sum ... arising from [ ] his excess income." Id. at 63. At the time, Father was paying his agreed-upon base support of $235.00 per week. Mother also sought attorney's fees.
[7] In April 2016, Father paid a lump-sum payment of $108,021.00 for irregular child support to Mother, based on calculations based on his original tax returns. On April 26, 2016, Father filed a petition to modify child support in which he asked the trial court to deviate from the recommended child support pursuant to the Indiana Child Support Guidelines; and Father requested that the trial court, "in determining a proper child support amount for the children[,] tak[e] into consideration that the support payments being made by [F]ather to [M]other [we]re in excess of a reasonable and necessary amount to provide for the care and expenses of the children." Id. at 71. Father also sought an accounting of Mother's use of all child support monies and attorney's fees.
[8] On February 12 and 13, July 30, and November 26, 2018, the trial court conducted a multi-day hearing on Mother's petition to modify child support and motion for rule to show cause, filed on August 12, 2015, and on Father's petitions to deviate from the Child Support Guidelines and for an accounting, filed on April 26, 2016. On the first day of the hearing, Mother testified, under questioning by her counsel, that Father failed to timely supply Mother with his tax returns as required in the Agreed Decree.
[9] Mother's expert, certified public accountant and certified valuation expert, Jill Jones testified that Mother hired her to aid in crafting the formula prescribed in the Agreed Decree for calculating Father's income for purposes of child support. Jones testified that Father's failure to timely produce his tax returns hampered her calculation efforts.5 Jones further testified that Father suffered significant business losses of approximately $4.4 million in 2015, carried the losses back on his already-filed tax returns, and amended his 2013 tax returns to carry back his losses. Jones testified that she needed the amended 2013 tax returns for purposes of calculating Father's income for child support but that, as of the first day of the hearing—February 12, 2018—Father still had not provided his amended tax returns to Mother.
[10] Father's expert, certified public accountant Gary Shutan, testified that his calculations of Father's income for child support purposes were based on Father's original tax returns and not on the amended returns. Shutan testified that the amended 2013 tax returns had no effect on the amount of child support Father was required to pay pursuant to the Agreed Decree.
[11] After the February 13, 2018, portion of the hearing, the trial court continued the hearing and ordered Father to:
provide all amended returns. The signed copies. And all attachments that support those returns within fourteen days. The parties are then to have...
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