Whelan v. Whelan

• Decision Date: 06 July 2009
• Docket Number: No. 07-P-1356.,07-P-1356.
• Citation: 74 Mass. App. Ct. 616,908 N.E.2d 858
• Parties: Kenneth R. WHELAN v. Kathleen A. WHELAN.
• Court: Appeals Court of Massachusetts

908 N.E.2d 858

74 Mass. App. Ct. 616

Kenneth R. WHELAN v. Kathleen A. WHELAN.

No. 07-P-1356.

Appeals Court of Massachusetts, Norfolk.

Argued November 5, 2008.

Decided July 6, 2009.

[908 N.E.2d 859]

Whitton E. Norris, III, Boston, for the mother.

Robert Feigin, Wellesley Hills, for the father.

Present: DUFFLY, SMITH, & MILLS, JJ.

DUFFLY, J.

In this appeal from a judgment modifying child support we consider whether a judge of the Probate and Family Court employed the proper method in calculating the plaintiff father's income from self-employment. When the plaintiff father, Kenneth R. Whelan, became unemployed one month after the parties divorced, he filed a complaint for modification of his child support obligations. The defendant mother Kathleen A. Whelan, filed a counterclaim seeking an increase in child support, retroactive adjustment, and modification of provisions governing health insurance for the children. The parties filed additional modification claims, as we shall discuss, all of which were consolidated. The consolidated action was tried before the probate judge, who reduced child support, rejected the mother's claims for back support and a credit for health insurance premiums, and imposed on the mother the obligation to contribute fifty percent of the cost of family health insurance. The mother appealed.

The mother's principal claims are directed to the method employed by the judge in arriving at the amount of the father's income from self-employment. That method, she first complains, calculated the father's annual income by using an income-averaging approach that improperly included a four-month period of unemployment. Second, she asserts, the judge erred in reducing the father's gross business income by expenses not shown to be related to production of that income. We agree and vacate so much of the judgment as depends on these determinations.

Background. The parties' divorce judgment nisi entered February 11, 2004, and incorporated the terms of their separation agreement of even date. Matters pertaining to the four children merged with the judgment.¹ See DeCristofaro v. DeCristofaro, 24 Mass.App.Ct. 231, 235, 508 N.E.2d 104 (1987) (merged separation agreement retains no independent legal significance). As provided by the terms of the agreement, the parties share joint physical and legal custody of the two younger children, who remained dependant at the time of the modification trial and were residing primarily with the mother.²

At the time of the divorce the father, a software engineer, had recently become employed by Maytech Industries after a two-year period of unemployment. The agreement reflects that his then-current annual base salary was $80,000. The mother's annual income at the time was $28,890. The agreement required the father to pay child support to the mother in the amount of $413 per week, which reflected a weekly credit of $18 for the cost of health insurance. He was obligated to maintain health and dental insurance for the benefit of the children as long as such coverage was available through his present employer, and "for the benefit of the Wife so long as the Wife remains eligible for coverage and that coverage can be extended ... through his present employer at no additional cost to the Husband over and above family plan premiums." The parties were to share equally the children's reasonable uninsured medical and dental expenses. In addition, the father agreed to pay to the wife further child support of "thirty (30) percent of any bonus income over and above his current base salary of $80,000" if two children remained unemancipated, subject to downward adjustment if only one child remained unemancipated.³

Less than one month after the judgment nisi entered, the father filed a complaint for modification seeking a reduction in child support, alleging as a change in circumstances that he had lost his job at Maytech Industries on March 5, 2004. The mother filed an answer and counterclaim. She sought to increase child support to $512.57 per week,⁴ as she was now providing health insurance for the children. These actions lay dormant for a period, as the father resumed employment one month or so later.

In December, 2005, the father filed a second complaint for modification seeking sole physical custody and child support from the mother, asserting among other things that he "has a new job that enables him to spend more time at home with the children." The mother's counterclaim sought increased child support, payment of support arrears alleged to be due under the "bonus income" provision of the agreement, reimbursement for one-half of uninsured medical costs incurred by the mother and children, and an order that if due to the father's failure to provide health insurance coverage she must provide such coverage for herself and the children, he will pay her one-half the cost of such coverage.⁵ A trial on all modification claims was conducted on June 8, 2007, and a judgment entered that reduced the father's weekly child support obligation from $413 to $392, ordered the mother to pay fifty percent of the cost of family health insurance, denied the mother's request for retroactive adjustments to child support, and implemented the parties' agreement concerning the daughter's college costs.⁶ The mother's appeal challenges all but the latter aspect of the judgment.

Discussion. Following entry of judgment the judge issued findings of fact. The standard we apply in reviewing the judge's findings is set forth in Millennium Equity Holdings, LLC v. Mahlowitz, 73 Mass.App.Ct. 29, 36-37, 895 N.E.2d 495 (2008):

"In reviewing a matter wherein the trial judge was the finder of fact, `we accept the judge's findings of fact as true unless they are clearly erroneous.' Green v. Blue Cross & Blue Shield of Mass., Inc., 47 Mass.App.Ct. 443, 446, 713 N.E.2d 992 (1999), quoting from Kendall v. Selvaggio, 413 Mass. 619, 620, 602 N.E.2d 206 (1992). `A finding is "clearly erroneous" when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.' Springgate v. School Comm. of Mattapoisett, 11 Mass.App.Ct. 304, 309, 415 N.E.2d 888 (1981), quoting from United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948)."

See Martin v. Martin, 70 Mass.App.Ct. 547, 548-549, 874 N.E.2d 1137 (2007). "Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous." Edinburg v. Edinburg, 22 Mass.App.Ct. 199, 203, 492 N.E.2d 1164 (1986), quoting from Anderson v. Bessemer City, 470 U.S. 564, 573-574, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). Although we will not substitute our judgment for that of the probate judge, we will "scrutinize without deference the propriety of the legal criteria employed by the trial judge and the manner in which those criteria were applied to the facts." Kelley v. Kelley, 64 Mass.App. Ct. 733, 739, 835 N.E.2d 315 (2005), quoting from Iamele v. Asselin, 444 Mass. 734, 741, 831 N.E.2d 324 (2005).⁷

The broad issue presented is whether the father has "demonstrate[d] a material and substantial change in circumstances sufficient to justify a reduction in his child support obligations." Croak v. Bergeron, 67 Mass.App.Ct. 750, 750, 856 N.E.2d 900 (2006). If he has not, a related question is whether the mother has met this burden and the judge erred in denying the mother's request to increase support. We discuss separately the mother's contentions, detailing relevant facts as found by the judge, supplementing those findings with undisputed facts in the record. See Bassette v. Bartolucci, 38 Mass.App.Ct. 732, 733, 652 N.E.2d 623 (1995).

1. Father's income. a. Income-averaging calculation. The probate judge reduced child support based on her findings that the father suffered "loss of employment, and subsequent self-employment, which has lowered his income," the "new expense to both parties of the cost of COBRA health insurance," and because the mother's income "has increased modestly since the date of divorce, from $28,890 in 2004, to $37,500 in 2007." Citing LaValley v. LaValley, 25 Mass.App.Ct. 918, 516 N.E.2d 182 (1987), the judge concluded that it was appropriate to average the father's fluctuating self-employment income, and to include therein periods of unemployment, and that "certain legitimate business expenses (such as auto, gas, insurance, phone, home office expense, etc.) ... should be taken into consideration when computing his `income.'"

The findings do not specifically set forth what the judge found to be the father's annual income, nor do the findings detail which of the father's claimed business expenses were found by the judge to be "legitimate business expenses." It is, however, readily apparent that the $21 reduction in weekly child support is based upon a Child Support Guidelines (Guidelines) worksheet in evidence that was prepared by the father, dated May 11, 2007, that listed his annual income as $79,872, or $1,536 per week, and the mother's annual income as $37,501.⁸, ⁹

The father asserts that he arrived at the figure of $79,872 "by deducting business expenses from the gross receipts and by averaging the resulting net figure over the entire period of his self-employment ... comprising of April 1, 2006 through the end of December, 2006." The trial judge generally accepted this approach. We do not think it is supported by the evidence or decisional law.

The uncontroverted evidence reflects that, since the divorce in February, 2004, the father was unemployed for about one month during 2004, then employed by Philips Advanced Metrology Systems (Philips), earning "about" $95,000. He left Philips in February or March, 2005, was unemployed for one month, and received unemployment compensation before becoming employed by The Math Works, Inc. (Math Works). The father's 2005 income, as...