Spicer v. Spicer

• Decision Date: 01 February 2005
• Docket Number: No. COA03-1197.,COA03-1197.
• Citation: 607 S.E.2d 678,168 NC App. 283
• Court: North Carolina Court of Appeals
• Parties: Sean Christian SPICER, Plaintiff, v. Kristen Leippe SPICER, Defendant.

607 S.E.2d 678

168 NC App. 283

Sean Christian SPICER, Plaintiff, v. Kristen Leippe SPICER, Defendant.

No. COA03-1197.

Court of Appeals of North Carolina.

February 1, 2005.

Andrew D. Taylor, Jr. & Assoc., by Andrew D. Taylor, Jr., Charlotte, Michelle D. Reingold, Clemmons, for plaintiff-appellant.

Ellis M. Bragg, Jr., Charlotte, for defendant-appellee. GEER, Judge.

In his appeal from a child support order, plaintiff Sean Christian Spicer contends primarily that the trial court erred in concluding that a trust fund established for his support following a disabling automobile accident was non-recurring income within the meaning of the North Carolina Child Support Guidelines, 2005 Ann. R. N.C. 47 (Rev. Oct. 2002) ("the Guidelines") and ordering him to pay $74,722.80 to establish a trust fund for the support of his son. We conclude that the trial court did not err in determining that the settlement was non-recurring income and that it could be used to establish a child support trust. Because, however, the trial court failed to make sufficient findings of fact regarding the reasonable needs of the child, we must remand for further proceedings.

Factual Background

The Spicers were married on 20 June 1998 and their son was born 1 January 1999. At that time, Mr. Spicer, who was the sole financial provider for the family, worked for Time Warner Cable Company, earning approximately $25,000.00 annually. On 1 April 1999, Mr. Spicer was severely injured when a truck swerved into his lane and collided head-on with his vehicle. As a result of his injuries, Mr. Spicer was in a coma for several weeks, was hospitalized for approximately four months, and underwent rehabilitation for approximately one year. Mr. Spicer's cognitive abilities, including his short-term memory, have been severely impaired as a result of his traumatic head injury.

Mr. Spicer ultimately entered into a lump-sum settlement with the company that owned the truck. Mr. Spicer's father, a financial planner, placed the settlement proceeds in an inter vivos family trust, naming Sean Spicer as grantor and himself as trustee. The trust instrument provides that Sean Spicer, as grantor, has the right to "alter, amend, or revoke" the trust agreement "in whole or in part at such time as [he] may see fit by written notice delivered to the Trustee." Although the instrument provides that the trustee may "pay to or for the benefit of [Sean Spicer] ... such amounts of the income and principal of this trust as [Sean Spicer] may in writing request," it also includes a spendthrift clause. After payments to resolve a medical insurance subrogation claim and for litigation expenses, a balance of $622,690.22 remained in the trust.

The Spicers separated on 27 March 2000, approximately a year after the accident. A final divorce decree was entered 1 June 2001. On 10 July 2001, Mr. Spicer filed a complaint seeking joint custody of his son. On 31 August 2001, Ms. Spicer filed an answer and counterclaim seeking temporary and permanent custody of the child.

A consent order for permanent custody and visitation was entered on 28 March 2003, granting Ms. Spicer permanent custody of the child and granting Mr. Spicer permanent supervised visitation. On 10 June 2003, the trial court entered an order for permanent child support, in which the court (1) applied the Guidelines to Mr. Spicer's recurring income resulting in a child support obligation of $460.02 per month, (2) treated Mr. Spicer's entire trust principal as non-recurring income under the Guidelines, (3) determined that it would be unjust to Mr. Spicer and inappropriate to use the methods specified in the Guidelines to calculate the amount of non-recurring income to be applied toward child support, (4) ordered, based on application of a formula, a lump sum payment of $74,722.80 from the trust principal to be placed in a second trust for the child, and (5) awarded Ms. Spicer $5,583.75 in attorneys' fees and costs. Mr. Spicer has appealed from this order.

Discussion

Under N.C. Gen.Stat. § 50-13.4(c) (2003), a court "shall determine the amount of child support payments by applying the presumptive guidelines established pursuant to subsection (c1) of this section." Child support set in accordance with the Guidelines "is conclusively presumed to be in such amount as to meet the reasonable needs of the child and commensurate with the relative abilities of each parent to pay support." Buncombe County ex rel. Blair v. Jackson, 138 N.C.App. 284, 287, 531 S.E.2d 240, 243 (2000). The trial court may, however, deviate from the Guidelines if:

after considering the evidence, the Court finds by the greater weight of the evidence that the application of the guidelines would not meet or would exceed the reasonable needs of the child considering the relative ability of each parent to provide support or would be otherwise unjust or inappropriate....

N.C. Gen.Stat. § 50-13.4(c). In this case, the trial court applied the Guidelines to Mr. Spicer's recurring income, but decided to deviate from the Guidelines with respect to Mr. Spicer's non-recurring income.

In reviewing child support orders, our review is limited to a determination whether the trial court abused its discretion. Leary v. Leary, 152 N.C.App. 438, 441, 567 S.E.2d 834, 837 (2002). Under this standard of review, the trial court's ruling will be overturned only upon a showing that it was so arbitrary that it could not have been the result of a reasoned decision. Id. The trial court must, however, make sufficient findings of fact and conclusions of law to allow the reviewing court to determine whether a judgment, and the legal conclusions that underlie it, represent a correct application of the law. Id. at 441-42, 567 S.E.2d at 837.

I. APPLICATION OF THE GUIDELINES TO PLAINTIFF'S RECURRING INCOME

In applying the Guidelines to Mr. Spicer's recurring income, the trial court found that Mr. Spicer receives an average monthly gross income of $98.90 from a part-time job, $851.00 from social security disability, $442.00 in social security benefits for his child (as a result of Mr. Spicer's disability), and $221.00 from Time Warner disability. In addition, the trial court found that Mr. Spicer lives with his parents rent-free and that "the benefit of a rent-free residence reduces the Plaintiff's personal living expenses and that the sum of Three Hundred and 00/100 Dollars ($300.00) monthly should be attributed to the Plaintiff as income for this benefit."

Mr. Spicer argues on appeal that this finding represents an improper imputation of income under the Guidelines. In discussing "income" to be used in calculating support, the Guidelines provide:

(3) Potential or Imputed Income. If either parent is voluntarily unemployed or underemployed to the extent that the parent cannot provide a minimum level of support for himself or herself and his or her children when he or she is physically and mentally capable of doing so, and the court finds that the parent's voluntary unemployment or underemployment is the result of a parent's bad faith or deliberate suppression of income to avoid or minimize his or her child support obligation, child support may be calculated based on the parent's potential, rather than actual, income. Potential income may not be imputed to a parent who is physically or mentally incapacited or is caring for a child who is under the age of three years and for whom child support is being determined.

Guidelines, 2005 Ann. R. N.C. 49 (emphasis added). Mr. Spicer contends that imputation of income is improper because he is mentally incapacitated.

Based on our review of the record, we disagree with Mr. Spicer's characterization of the trial court's finding. Instead of imputing potential income to Mr. Spicer, the court was considering his cost-free housing as a form of gross income valued at $300.00 per month. See Burnett v. Wheeler, 128 N.C.App. 174, 177, 493 S.E.2d 804, 806 (1997) ("Judge Foster did not `impute' an income of $77,000 to defendant. A careful review of the record reveals that the trial court found that defendant's total income, from all available sources, equaled at least $77,000.")

The Guidelines include as "income" any "maintenance received from persons other than the parties to the instant action." Guidelines, 2005 Ann. R. N.C. 48. "Maintenance" is defined as "[f]inancial support given by one person to another...." Black's Law Dictionary 973 (8th ed.2004). As our appellate courts have previously recognized, cost-free housing is a form of financial support that may be considered in determining the proper amount of child support to be paid. See Guilford County ex rel. Easter v. Easter, 344 N.C. 166, 171, 473 S.E.2d 6, 9 (1996) (voluntary support by maternal grandparents, including cost-free housing, properly considered in determining child support); Gibson v. Gibson, 24 N.C.App. 520, 522-23, 211 S.E.2d 522, 524 (1975) (evidence that employer supplied father with automobile and rent-free apartment that reduced his living expenses was evidence of "additional income" from his job beyond his salary). See also 2 Suzanne Reynolds, Lee's North Carolina Family Law § 10.8 at 533 (5th ed.1999) (included in income are "in-kind payments, such as a company car, free housing or reimbursed meals, if they are significant and reduce personal living expenses"). We therefore hold that the trial court did not err in including the $300.00 per month value of Mr. Spicer's housing as income.

II. THE TRIAL COURT'S TREATMENT OF MR. SPICER'S TRUST

Mr. Spicer next contends the trial court erred when it ordered him to invade the principal of the settlement trust and make a lump-sum payment that would in turn be used to establish a trust for the child's support. He argues further that even if the trial court properly considered his trust as income, it failed to make sufficient findings of fact to support its deviation from the Guidelines with respect to the trust.

A. Treatment of...