Shipley v. Shipley, 930145

• Decision Date: 02 December 1993
• Docket Number: No. 930145,930145
• Citation: Shipley v. Shipley, 509 N.W.2d 49 (N.D. 1993)
• Parties: Frank E. SHIPLEY, Plaintiff and Appellee, v. Conchita P. SHIPLEY, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 49

509 N.W.2d 49

Frank E. SHIPLEY, Plaintiff and Appellee, v.Conchita P. SHIPLEY, Defendant and Appellant.

Civ. No. 930145.

Supreme Court of North Dakota.

Dec. 2, 1993.

Donald L. Peterson(argued), McGee, Hankla, Backes & Wheeler, Ltd., Minot, for plaintiff and appellee.

Richard B. Baer(argued), Richard B. Baer, P.C., Bismarck, for defendant and appellant.

LEVINE, Justice.

Conchita Shipley appeals from an amended judgment modifying child and spousal support obligations of Frank Shipley, failing to require immediate income withholding by Frank's employer, and refusing to hold Frank in contempt of court.We affirm in part, reverse in part, and remand for further proceedings.

Conchita and Frank were divorced on August 5, 1985.Pursuant to their stipulation, the divorce decree awarded Conchita custody of their four daughters, subject to reasonable visitation by Frank; ordered Frank to pay $1,000 per month in child support for one year and $2,000 per month thereafter; and ordered Frank to pay "spousal support health insurance for a period of six months commencing on August 15, 1985 and the sum of One Thousand Dollars ($1,000.00) per month commencing on August 15, 1985 both earlier terminating upon the following contingencies, whichever shall occur first, the death of either party or the remarriage of" Conchita.

In December 1992, Conchita moved to amend the judgment to increase Frank's child support obligation.She filed a form affidavit in which she disclosed her financial status.Although she had not remarried, one of the preprinted captions of the affidavit stated: "debts of my self and my spouse."(Emphasis added).In response, Frank stopped paying spousal support, and Conchita thereafter moved to have Frank held in contempt of court.

After a hearing, the trial court increased Frank's child support obligation to $3,511 per month, effective from January 1, 1993, until the oldest child graduated from high school in June 1993, and thereafter to $3,165 per month.The court not only refused to hold Frank in contempt but also terminated his spousal support obligation, effective June 1, 1993.After the court denied Conchita's request for reconsideration, she appealed.

I.CHILD SUPPORT

Conchita asserts that the trial court erred in calculating Frank's income under the child support guidelines in N.D.A.C. ch. 75-02- 04.1.She argues that the court erred in not including some employer benefits in Frank's gross income, deducting employer-paid health insurance premiums from Frank's net income without including those amounts in his gross income, and using incorrect income tax deductions to calculate Frank's net income.She also contends the court erred in not allowing her to supplement the record with additional documentation of Frank's income.

Section 14-09-09.7(3), N.D.C.C., establishes "a rebuttable presumption that the amount of child support which would result from the application of the child support guidelines is the correct amount of child support."The presumptive amount of child support is a scheduled amount, which is based upon the "obligor's monthly net income and the number of children for whom support is being sought."N.D.A.C. § 75-02-04.1-10.Under the guidelines, the obligor's net income is computed by first determining gross income and then subtracting the items listed in N.D.A.C. § 75-02-04.1-01(4).¹Gross income is broadly defined under N.D.A.C. § 75-02-04.1-01(2) to mean

"income from any source, including salaries, wages, overtime wages, commissions, bonuses, deferred income, dividends, severance pay, pensions, interest, trust income, annuities income, capital gains, social security benefits, workers' compensation benefits, unemployment insurance benefits, retirement benefits, veterans' benefits (including gratuitous benefits), gifts and prizes to the extent each exceeds one thousand dollars in value, spousal support payments received, cash value of in-kind income received on a regular basis, income imputed from assets, and net income from self-employment, but excluding benefits received from means tested public assistance programs such as aid to families with dependent children, supplemental security income, and food stamps."

The trial court's computations ² indicate that it determined Frank's net monthly income from a "statement of earnings and deductions" issued by his employer, the Medical Arts Clinic in Minot.According to that statement, Frank's gross "earnings" as a physician at the clinic for a two-week pay cycle were $7,019.16, and, after deductions for Federal Insurance Contributions Act (FICA) and for federal and state income taxes, his "net pay" for a two-week period was $4,215.46.Using that figure, the court calculated Frank's yearly and monthly "net pay," deducted $460 per month for health insurance provided by the clinic and added $585 per month for imputed income to arrive at his net monthly income of $9,300.The court then determined the scheduled amount of child support for that net monthly income and four children.

However, Conchita also presented evidence that the clinic contributed about $25,000 a year to a pension plan for Frank.That contribution, plus the family health insurance premiums provided by the clinic constitute "income from any source" under the broad definition of "gross income" in N.D.A.C. § 75-02-04.1-01(2).The trial court erred in not including those amounts in Frank's "gross income."In computing "net income,"N.D.A.C. § 75-02-04.1-01(4)(d) and (g) allow deductions from gross income for "[t]hat portion of premium payments for health insurance policies or health service contracts intended to afford coverage for the child or children for whom support is being sought" and "[e]mployee retirement contributions, other than FICA, where required as a condition of employment."Hallock v. Mickels, 507 N.W.2d 541(N.D.1993).

During closing argument to the trial court, Conchita asked to supplement the record with further documentation about the exact amount of the clinic's contribution to Frank's pension plan.According to the clinic's administrator, that information was readily available.Although we do not condone the parties' initial failure to fully present that information at the hearing, we decline to visit that failure on their children.Cf., Spilovoy v. Spilovoy, 488 N.W.2d 873, 877(N.D.1992)["Although a custodial parent may have a representational right to collect support on behalf of a child, the right to the support actually belongs to the child."]Accurate information about Frank's pension was necessary to correctly determine his gross income and net income.Under these circumstances, the trial court should have required the parties to supply that information to determine the exact amount of the clinic's contribution to Frank's pension and whether it qualified for deduction from his gross income under N.D.A.C. § 75-02-04.1-01(4)(g).Cf., Delorey v. Delorey, 357 N.W.2d 488(N.D.1984)[remand for retrial of property division where parties did not introduce evidence of present value of military retirement account].

Conchita also testified that their four children were not receiving coverage under Frank's family health insurance.Frank had remarried and, at a minimum, his family health insurance covered his second wife and her two children from a previous marriage.However, the evidence is not clear about the pro rata share of health insurance premiums, or the extent of coverage for the children for whom support was being sought.Under the definition of net income in N.D.A.C. § 75-02-04.1-01(4)(d), Frank may deduct from his gross income only that portion of health insurance premiums intended to afford coverage for the children for whom support is being sought.Hallock.

For purposes of federal and state income tax withholding, Frank claimed single marital status and no dependents on his "statement of earnings and deductions" from the clinic.N.D.A.C. § 75-02-04.1-01(4)(a) and (b) require application of "standard deductions and tax tables" for determining "net income" under the child support guidelines, and Frank was not automatically entitled to deduct the actual amount of federal and state taxes that he designated to be withheld.Hallock.He is only entitled to subtract that amount to be withheld under standard deductions and tax tables.

We conclude the trial court failed to properly calculate Frank's gross income and net income under the child support guidelines.Accordingly, we reverse the court's computation of Frank's child support obligation, and we remand to supplement the record and recompute his obligation under the definitions of gross income and net income in the child support guidelines.

Conchita asserts that Frank's child support obligation should have been modified effective December 1, 1992.The effective date for a modification of child support depends upon the facts of each case.Olson v. Garbe, 483 N.W.2d 775(N.D.1992).Conchita's motion to modify child support was served on Frank on December 17, 1992, and was filed with the court on December 29, 1992.Under these circumstances, we cannot say the trial court erred in modifying Frank's child support obligation effective January 1, 1993.

Conchita asserts the trial court erred in failing to require immediate income withholding under N.D.C.C. § 14-09-09.24.³The plain language of that statute subjects "each [child support] judgment or order" issued or modified after January 1, 1990, to immediate withholding of the obligor's income, "regardless of whether the obligor's support payments are delinquent," unless the obligor demonstrates and the court finds "good cause not to require immediate withholding."See Hallock."Good cause" is narrowly defined and requires, at a minimum, the court to make a written determination explaining why immediate income withholding is not in the best interests of the child, proof of timely payment of previously ordered support, and the...