Sherye Reichert & the Dep't of Healthcare & Family Servs. v. Mohlenbrink
| Decision Date | 22 January 2016 |
| Docket Number | NO. 4-14-1021,4-14-1021 |
| Citation | 2016 IL App (4th) 141021 -U |
| Parties | SHERYE REICHERT and THE DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES, Petitioners-Appellees, v. TRAVIS MOHLENBRINK, Respondent-Appellant. |
| Court | United States Appellate Court of Illinois |
NOTICE
This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from Circuit Court of McLean County
Honorable Elizabeth A. Robb, Judge Presiding.
¶ 1 Held: The appellate court affirmed, concluding (1) the trial court did not err by including respondent father's payments related to the purchase of business assets when calculating his net income; and (2) respondent failed to supply a sufficient record with which to provide this court a sufficient basis to review the trial court's decision.
¶ 2 Following a hearing on the Department of Healthcare and Family Service's (Department) petition to modify child support, brought on behalf of Sherye Reichert, the trial court, pursuant to section 5/505(a) of the Illinois Marriage and Dissolution of Marriage Act (Act) (750 ILCS 5/101 to 802 (West 2014), ordered respondent father, Travis Mohlenbrink, to pay $2,972 per month for child support of his son, Bryce Reichert. Respondent appeals, arguing (1) the trial court impermissibly included payments related to expenditures for the repayment of debt in calculating his net income; and (2) abused its discretion when it incorrectly relied on the expert opinion of a certified public accountant (CPA) in determining the amount of his child support obligation. We disagree and affirm.
¶ 4 Respondent and Reichert are the parents of one child, Bryce Reichert, born May 13, 2004. On March 20, 2008, the trial court approved a stipulated agreement between the parties outlining the details of child support and determined respondent would pay $220.40 on a biweekly basis according to section 505(a) of the Act (750 ILCS 5/505(a) (West 2008)). Respondent worked as the manager of a Radisson Hotel, making $50,000 per year. The agreement also delineated instructions to respondent to provide his yearly W-2 and "[i]f there is a need to adjust the child support due to an increase in his salary, the parents will adjust in accordance with the Illinois guidelines."
¶ 5 In 2008, Reichert learned of respondent's catering business, Cracked Pepper, and asked respondent for his tax returns in 2009. Beginning May 29, 2013, respondent increased his child support payments to $276.48. Respondent owns two additional restaurants, Sugar and Salt, along with the catering business. These S-Corporations were incorporated in 2013, 2010, and 2008, respectively. In December 2012, respondent purchased a Porsche Boxster for $79,590, trading in a vehicle worth $38,000 and paying $40,000 in cash. The Porsche is owned and used by Cracked Pepper. In November 2013, respondent purchased a 2014 Land Rover Range Rover Sport for $82,469 for Cracked Pepper, using an older Land Rover Evoque as a trade-in ($44,000 value), paying $18,778 in cash, and financing $20,000. Respondent presented an affidavit of Wendi Olson Ramsay, a CPA, who stated respondent often paid for equipment in one-time payments. Respondent testified that he paid cash for the entire inventory for Sugar. The companies have no debt other than the 2014 Land Rover.
¶ 6 On June 13, 2012, the Department filed a petition to modify child support under section 510 of the Act (750 ILCS 5/510 (West 2012)) on behalf of Reichert. At the hearing, Reichert presented expert testimony by Dennis Knobloch, a CPA. Knobloch testified he reviewed respondent's 2012 and 2013 tax returns for the three Chapter S-Corporations respondent owned as well as his personal income tax returns to calculate child support in accordance with section 505(a) of the Act (750 ILCS 5/505(a) (West 2012)). According to the trial court's letter opinion, Knobloch testified to his calculations of respondent's statutory net income under section 505(a) and statutory guidelines for child support obligations. Knobloch testified he added depreciation back into respondent's income in accordance with the law in the Fourth District. Based upon these calculations, Knobloch determined respondent's net income, multiplied by 20% and divided by 12, resulted in a child support obligation of $2,972 per month. Respondent opposed this calculation.
¶ 7 Respondent believed his net income is only proper if business expenses, as allowed under section 505 (a)(3)(h) of the Act, are deducted. The letter opinion explained respondent did not present an expert witness but testified the expenditures for the restaurant equipment should be deducted from his income as allowable business expenses. The only equipment referenced in the letter opinion was the Porsche Boxster and the Land Rover. In his reply brief, respondent stated on several occasions these expenses included "ovens, stoves, dishwashers, etc[.]"; "ovens, hood systems, dishwashers, etc."; and "ovens, stoves, tables, chairs, dishwashers, etc." Ramsay, a CPA, the respondent's affiant, swore respondent presented unique circumstances by paying for assets in one-time payments. Respondent cited In re Marriage of Davis, 287 Ill. App. 3d 846, 679 N.E.2d 110 (1997), in support of his belief he should be allowed to deduct reasonable and necessary business expenditures used for repayment of debt for theproduction of income in determining his net income according to section 505 (a)(3)(h) of the Act. He testified he made one-time payments for business assets, and the Land Rover was the only debt the three entities had. He presented no other schedule or evidence of the repayment of any debts. He nevertheless deducted these assets "as if they were 100% expensed." According to this calculation, respondent would only pay child support of $1,507 per month.
¶ 8 The trial court found Reichert's expert, Knobloch, correctly calculated respondent's net income according to Fourth District case law. The court also rejected respondent's contention the inventory and equipment purchased by him should be treated as a deduction from his net income as if the assets were 100% expensed. The trial court ordered respondent to pay $2,972 per month for child support, retroactive to the date of filing the petition to modify. The court noted although this order resulted in nearly a $30,000 per year increase in child support, the court "received little to no information concerning the income and needs of Ms. Reichart" and Bryce has "some unusual health needs and learning disabilities" for which he requires tutoring. The trial court found it did not have enough information to allow it to deviate from the statutory minimum child support calculations and ordered respondent to pay $2,972 per month.
¶ 9 This appeal followed.
¶ 12 Respondent does not challenge the trial court's decision to modify the previous child support order. The issue on appeal, according to respondent, is whether the court erred in its calculation of his net income. Respondent argues the court did not properly deduct his one-time payments as expenses incurred for the repayment of debts. Respondent argues, in particular, his one-time expenditures for the "repayment of debts" should be considered 100% expensed and deducted from his net income; as compared to debts initially financed to make the initial purchase.
¶ 13 Reichert and the Department argue despite respondent's hypothetical financing, the reality is he purchased this equipment with one-time payments, and no debt exists. Thus, he would not be allowed to deduct these expenditures for repayment of debts under 505(a)(3)(h) of the Act. We agree.
¶ 14 The determinations of a party's net income and to award child support lie within the sound discretion of the trial court. Einstein v. Nijim, 358 Ill. App. 3d 263, 268, 831 N.E.2d 50, 54 (2005). Respondent does not challenge the award or the need for a modification of child support, but the trial court's interpretation of section 505(a)(3)(h) of the Act. 750 ILCS 5/505(a)(3)(h) (West 2012). " " Einstein, 358 Ill. App. 3d at 267, 831 N.E.2d at 54 (citing In re Marriage of Rogers, 213 Ill. 2d 129, 135-36, 820 N.E.2d 386, 389-90 (2004)). Accordingly, our review is de novo. Id.
¶ 15 While the decision to award child support is within the discretion of the trial court, the minimum amount is dictated by statute (750 ILCS 5/505(a) (West 2012)). The trial court is charged with calculating a party's net income and dividing the result by a particular number, dependent on the number of children, to determine the minimum statutory child support amount (750 ILCS 5/505(a)(1) (West 2012)). Section 505(a)(3) defines a party's net income as the total of all income from all sources (750 ILCS 5/505(a)(3) (West 2012)). "The determination of 'net income' *** is a straightforward, mechanical process, explicitly delineated by thelegislature in section 505(a)(3) of the Act." In re Marriage of Boland, 308 Ill. App. 3d 1063, 1067, 721 N.E.2d 815, 818 (1999). The legislature provides deductions to be subtracted from net income, including the following:
750 ILCS 5/505(a)(3)(h) (West 2012).
¶ 16 When engaged in statutory interpretation, the...
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