Wasson v. Wasson

Decision Date11 April 2012
Docket NumberNo. 11–P–21.,11–P–21.
Citation965 N.E.2d 882,81 Mass.App.Ct. 574
Parties Alfred W. WASSON v. Silvia M. WASSON.
CourtAppeals Court of Massachusetts

William Sanford Durland, III, Boston, for Silvia M. Wasson.

Sheara F. Friend, Wellesley, for Alfred W. Wasson.

Present: KATZMANN, SMITH, & GRAINGER, JJ.

KATZMANN, J.

This case arises from a Probate and Family Court judgment on a complaint for modification, as amended by an order allowing a motion to amend judgment (which also is on appeal). The principal issue centers on the judge's apparent exclusion of capital gains income in determining child support under the governing statute and the Massachusetts Child Support Guidelines (guidelines), and whether the child support order, which deviated from the guidelines, was an abuse of discretion.

Background. Defendant Silvia M. Wasson and plaintiff Alfred W. Wasson were divorced in 2004. The divorce judgment provided, among other things, that the plaintiff would maintain health insurance for the defendant and the minor child. In 2005, the parties filed cross claims for modification. In 2008, both claims were dismissed or otherwise resolved, with the only genuine issue being whether the parties would be paid their attorney's fees. The divorce judge decided not, generally concluding that the claims by each, while ultimately not meritorious, were not frivolous. A panel of this court affirmed. Monteleone–Wasson v. Wasson, 74 Mass.App.Ct. 1117, 2009 WL 1650075 (2009).

Soon after the 2008 modification judgment issued, and while it was on appeal, the parties again filed cross claims for modification. The plaintiff, contending that adding the defendant to his insurance was becoming prohibitively expensive, and noting that she could obtain health insurance through her employer, Tufts University (Tufts), at greatly reduced cost, wanted the defendant to get insurance through Tufts. (He still would reimburse her for that insurance.) Although the Tufts coverage apparently was better than that provided by the plaintiff, the defendant resisted. For her part, the defendant wanted the plaintiff's child support obligation modified to be in better accord with the guidelines as she interpreted them.

On the morning of the first day of trial on the cross complaints for modification, the defendant conceded that the plan through Tufts was a "good" plan, withdrew her objection, and indicated her willingness to voluntarily sign up for insurance through Tufts. As such, the 2009 modification judgment ordered the defendant to seek health insurance through Tufts, for which the plaintiff would continue to pay; increased the plaintiff's weekly child support payments; and denied requests for attorney's fees by both parties. The decision noted, however, that the award of some, but not all, attorney's fees to the plaintiff might have some merit due to "stalling" by the defendant, but that the plaintiff's attorneys' affidavits had redacted too much information to make this possible.

The plaintiff then filed a motion to amend judgment, seeking to have his attributable income reduced to match the defendant's, requesting a change to exclude his capital gains from his over-all investment income, and seeking attorney's fees from the defendant. In an order dated April 18, 2010, the 2009 modification judge granted all of the plaintiff's requests for relief and awarded him $21,855 in attorney's fees instead of the $39,097.50 that he requested. The defendant filed the current appeal.

Discussion. 1. Recalculation of plaintiff's child support obligation. The defendant claims that the 2009 modification judge erred as a matter of law by excluding the plaintiff's regular use of assets from the calculation of his income. Specifically, the defendant argues that the judge should have counted as income capital gains from the liquidation of certain investments. The plaintiff contends that the evidence presented showed that these gains were actually principal withdrawals, not income.

When assessing a decision regarding a modification of child support, an appellate court "review[s] for an abuse of discretion." Richards v. Mason, 54 Mass.App.Ct. 568, 572, 767 N.E.2d 84 (2002), quoting from Crowe v. Fong, 45 Mass.App.Ct. 673, 677, 701 N.E.2d 359 (1998). "In assessing whether a judge has abused his discretion, [an appellate court does] not simply substitute [its] judgment for that of the judge, rather, [it asks] whether the decision in question rest[s] on whimsy, caprice, or arbitrary or idiosyncratic notions." Chan v. Chen, 70 Mass.App.Ct. 79, 84, 872 N.E.2d 1153 (2007), quoting from Massachusetts Assn. of Minority Law Enforcement Officers v. Abban, 434 Mass. 256, 266, 748 N.E.2d 455 (2001).

"By statute, Massachusetts fixes child support guidelines." Adams v. Adams, 459 Mass. 361, 393, 945 N.E.2d 844 (2011). " [C]hild support is controlled by G.L. c. 208, § 28, and the Massachusetts Child Support Guidelines.’ ... Except as otherwise stated therein, the guidelines have presumptive application to actions to modify existing orders." Croak v. Bergeron, 67 Mass.App.Ct. 750, 754, 856 N.E.2d 900 (2006). General Laws c. 208, § 28, as appearing in St.1998, c. 64, § 194, provides: "[i]n determining the amount of the child support obligation or in approving the agreement of the parties, the court shall apply the child support guidelines promulgated by the chief justice for administration and management, and there shall be a rebuttable presumption that the amount of the order which would result from the application of the guidelines is the appropriate amount of child support to be ordered" (emphasis supplied). General Laws c. 208, § 28, also states that if a party should rebut this presumption and show that deviation from the guidelines is warranted, "the court shall make specific written findings indicating the amount of the order that would result from application of the guidelines; that the guidelines amount would be unjust or inappropriate under the circumstances; the specific facts of the case which justify departure from the guidelines; and that such departure is consistent with the best interests of the child" (emphasis supplied).

The preamble of the guidelines states, "There shall be a rebuttable presumption that these guidelines apply in all cases establishing or modifying a child support order." Furthermore, tracking the statute, § IV of the guidelines requires that the judge make specific written findings when deviating from the guidelines, including findings "that such departure is consistent with the best interests of the child." Section IV of the guidelines then sets forth examples of "[c]ircumstances which may support deviation [,] includ[ing] ... [that] absent deviation, application of the guidelines would lead to an order that is unjust, inappropriate or not in the best interests of the child, considering the Principles of these guidelines."

Of relevance here, § I of the guidelines addresses the definition of income, and how it should be calculated when determining a child support obligation: "For purposes of these guidelines, income is defined as gross income from whatever source regardless of whether that income is recognized by the Internal Revenue Code or reported to the Internal Revenue Service or state Department of Revenue or other taxing authority. Those sources include, but are not limited to, the following: ... capital gains in real and personal property transactions to the extent that they represent a regular source of income." Therefore, to the extent that capital gains represent a regular source of income, there is a rebuttable presumption that they should be included when calculating income for a child support obligation. Cf. Noonan v. Noonan, 261 Neb. 552, 563, 624 N.W.2d 314 (2001) (interpreting its own, similar guidelines, Supreme Court of Nebraska ruled that "the father has not rebutted the presumption of including the capital gains income in the child support calculation").

In the present case, there is evidence on the record that the plaintiff's use of capital gains constituted a regular source of income. More specifically, in 2006, the plaintiff had capital gains of $41,863; in 2007 he had capital gains of $25,204; and in 2008 he had capital gains of $141,575.

The divorce judge appears to have followed the guidelines and counted the plaintiff's capital gains as income for purposes of calculating his child support obligation, setting the amount that he could generate from investments at $60,000 per year. Three years later, the 2009 modification judge initially followed this formula, leaving the plaintiff's obligation undisturbed. In her decision, the judge noted that the plaintiff's unearned income should include attributed interest, dividend income, and income derived from capital gains due to a lack of evidence by which to distinguish these amounts.

In the plaintiff's motion to amend, he contended that capital gains should be excluded from the calculation of his income, and that the amount of his child support should thereby be reduced from $361 per week to $261 per week. He stated:

"Plaintiff's testimony, as well as the tax returns, also demonstrate that his reported income from capital gains resulted from his sale of stocks, which, as Plaintiff testified, was necessary solely in order to generate sufficient income to pay his support obligation. In fact, in 2007 Plaintiff's entire income, excluding capital gains, was $47,366, or about half the amount on which the child support obligation was based; and in 2008 this income was reduced further to $43,075. Plaintiff had no choice but to generate more income in order to pay his support. Such capital gains thus do not represent a true gain from which his support obligation should be calculated. This would create a self-perpetuating process by which Plaintiff would be continuously required to create more capital gain income solely to pay the increased support obligation that resulted solely
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