Walsh v. Walsh

• Decision Date: 01 September 1993
• Docket Number: No. 67,67
• Citation: 333 Md. 492,635 A.2d 1340
• Parties: Elizabeth WALSH v. Earl WALSH. ,
• Court: Maryland Court of Appeals

Page 492

333 Md. 492

635 A.2d 1340

Elizabeth WALSH v. Earl WALSH.

No. 67, Sept. Term, 1993.

Court of Appeals of Maryland.

Jan. 27, 1994.

Jeffrey P. Nesson, Reisterstown, for petitioner.

Christopher M. Lee (Barry T. Canaras, Kodenski & Canaras, on brief) Baltimore, for respondent.

Argued before RODOWSKY, McAULIFFE, ^* CHASANOW, KARWACKI and ROBERT M. BELL, JJ., and MARVIN H. SMITH and CHARLES E. ORTH, Jr., Judges (retired), Specially Assigned.

CHASANOW, Judge.

The parties to this litigation, Elizabeth Walsh (Elizabeth) and Earl Walsh (Earl), were married in 1975. Two children were born of the marriage. In 1988, Elizabeth and Earl voluntarily separated and, approximately two years later on June 13, 1990, they were divorced in the Circuit Court for Baltimore County. A property settlement agreement dated May 24, 1990 was "approved and made part of and incorporated in said Judgment, but not merged therein...." The property settlement agreement provided in pertinent part that the parties would have joint custody of their two minor children, although the children would reside primarily with Elizabeth. Earl was to pay child support in the amount of $40.50 per week, per child. Elizabeth was to have the use and possession of the family home, and Earl was also to pay $334.50 per month, which was one-half of the total monthly mortgage payment of $669.00. The parties also agreed to list their family home for sale as of March 1, 1991, and evenly divide the net proceeds of the sale.

Approximately fifteen months after the divorce, on September 5, 1991, Elizabeth filed a "Complaint for Modification of Custody, Child Support and Other Relief." In that complaint, she asked for an increase in child support alleging that, pursuant to the child support guidelines, she would be entitled to an increase greater than twenty-five percent of the amount of support provided for in the separation agreement, which was incorporated into the judgment of divorce. Earl filed an answer, as well as a "Counter Complaint for Modification of Child Support." In his counter complaint, Earl alleged that, since the divorce, the financial circumstances of the parties had changed, and Earl was earning almost twenty-five percent less than he was earning at the time of the support agreement, while Elizabeth was earning substantially more than she was earning at the time of the separation agreement. Based on these changed circumstances, Earl requested a reduction of child support.

On March 9, 1992, a hearing was held before a Domestic Relations Master on Elizabeth's complaint for modification and Earl's counter complaint. At the hearing, it was established that, since the divorce, Elizabeth had a significant increase in salary due, in part, to working overtime, whereas Earl had a significant decrease in salary due to a job change. There was also testimony that shortly before the hearing the parties had signed an agreement that, in lieu of selling the marital home, Elizabeth was to purchase Earl's interest in the home. According to the agreement, Elizabeth would refinance the home to secure the funds to pay Earl. Settlement on the transfer agreement was scheduled the following week and, as a consequence, Earl's obligation to pay one-half of the mortgage would cease.

Following the hearing, the Domestic Relations Master made several factual findings and rendered an oral opinion. The findings that are relevant to the instant case were that, in spite of the fact that Elizabeth's salary had gone up and that Earl's salary had been reduced, Elizabeth is entitled to $691.66 per month in child support based on the Master's calculation of Earl's support obligation under the child support guidelines. This increase doubled what Earl was paying as child support pursuant to the agreement, although the increase was only slightly more than the mortgage contribution he had been making. Before this Court, Earl does not dispute the Master's factual findings and guidelines calculation, but he does contend that there was no change in circumstances which would permit the court to increase his child support payments.

The basis for the Master's finding of a change in circumstances was his view that Maryland Code (1984, 1991 Repl.Vol.), Family Law Article (hereinafter FL), § 12-202(b) was applicable, and his view of that section that, "if there is more than 25 percent between the guidelines and what the current obligation is, there's a change" in circumstances.

The Master made no express finding whether the termination of Earl's obligation to pay one-half of the mortgage constituted a "material change of circumstance" under FL 12-104(a), although in his oral opinion, the Master noted that the change in Earl's obligation to pay one-half of the mortgage was "generated and already into the works...." The Master further noted that Earl's contribution toward the mortgage was "part of a normal child support [award] that would normally be paid for living arrangements or something of that nature," and that obligation was terminating the following week.

Earl filed exceptions to the Master's report and recommendations, and a hearing was held in the Circuit Court for Baltimore County. The circuit court sustained all of Earl's exceptions. The circuit court's findings that are relevant to the issue before this Court are as follows:

"1) That the Master erred as a matter of law in increasing child support based upon the Twenty-five Percent Rule contained in Family Law Article, Sec. 12-202(b)(2) as the child support previously established was pursuant to a Judgment of Divorce dated June 13, 1990, which Judgment was entered subsequent to the effective date of the child support guidelines; and

2) That, excepting the error of law in applying the Twenty-five Percent Rule, there was insufficient evidence of a substantial change in circumstances to warrant any change in child support to be paid by the Defendant to the Plaintiff...."

Elizabeth appealed to the Court of Special Appeals. The intermediate appellate court affirmed the judgment of the circuit court. Walsh v. Walsh, 95 Md.App. 710, 622 A.2d 825 (1993). This Court granted Elizabeth's petition for certiorari to consider three questions:

"Was the Court of Special Appeals correct in interpreting that FL 12-202(b) did not apply to orders entered after April 10, 1990?

Was the Court of Special Appeals correct in determining that there was insufficient evidence of a material change in circumstances to award child support according to the guidelines?

Should the matter be remanded to the Circuit Court for the taking of additional evidence on the issue of substantial change in circumstances?"

I. FL 12-202(b)

The Domestic Relations Master found that there was a change in circumstances since the June 13, 1990 order by relying on FL 12-202(b) and determining that application of the child support guidelines would increase Earl's child support payments more than twenty-five percent above the June, 1990, court-ordered support. The circuit court judge and the Court of Special Appeals held that the Master erred and that FL 12-202(b) is not applicable to a child support order entered after April 10, 1990, which was the date when the legislature made the child support guidelines presumptively applicable. We agree. FL 12-202(b) is a transitional statute enacted as a bridge between pre-guidelines child support orders and post-guidelines child support determinations. The circuit court judge and the Court of Special Appeals also found that there was insufficient evidence upon which the Master could have found a material change of circumstances under FL 12-104. We disagree.

In order to seek a modification of a prior child support order, a party must show a change in circumstances under either FL 12-104 or FL 12-202. This is a threshold requirement for any modification of any final order for child support. FL 12-104 requires "a material change of circumstance." It provides the following "(a) Prerequisites.--The court may modify a child support award subsequent to the filing of a motion for modification and upon a showing of a material change of circumstance."

Where use of the guidelines would increase a pre-guidelines award by twenty-five percent or more, FL 12-202 permits a finding of a change in circumstances. FL 12-202(b) provides:

"Modification of orders.--(1) Subject to the provisions of paragraph (2) of this subsection, the adoption of the guidelines set forth in this subtitle may be grounds for requesting a modification of a child support award based on a material change in circumstances.

(2) The adoption of the guidelines set forth in this subtitle may not be grounds for requesting a modification of a child support award based on a material change in circumstances unless the use of the guidelines would result in a change in the award of 25% or more."

In 1989, the legislature adopted advisory child support guidelines by adding Subtitle 2 to Title 12 of the Family Law Article. See Chapter 2 of the Acts of 1989. Part of that legislation was FL 12-202(b). During the 1990 session, by emergency legislation effective April 10, 1990, FL 12-202(a) was amended to require, rather than merely permit, courts to use the child support guidelines. See Ch. 58 of the Acts of 1990. The statute created a rebuttable presumption that the guidelines are correct and applicable unless such application would be unjust or inappropriate in a particular case. Id.; FL 12-202(a). No change was made to FL 12-202(b).

Elizabeth contends that there was a change in circumstances under FL 12-202(b) because she alleged, and the Master found, more than a twenty-five percent difference between the support order and the guidelines amount. Earl disagrees and contends that FL 12-202(b) does not apply because the section is only applicable to modifications of pre-guidelines support orders. He finds support in the legislature's use of the word "adoption." FL 12-202(b)(2) provides...