Opinion
No. 26049-6-III.
April 17, 2008.
Appeal from a judgment of the Superior Court for Adams County, No. 90-3-00002-5, Richard W. Miller, J., entered March 26, 2007.
Affirmed in part and remanded by unpublished opinion per Brown, J., concurred in by Sweeney and Korsmo, JJ.
Michael Roth, a rental owner and self-employed contractor, mainly contends the trial court erred when ordering post-secondary child support because the court failed to consider "normal business expenses" when setting his net income as required by RCW 26.19.071(5)(h). While the trial court ultimately deviated from the standard support level due to other factors, we agree and vacate the post-secondary support judgment for Debora (Roth) Lyle. We affirm the judgment for unpaid extraordinary health care expenses with prejudgment interest. We remand for the trial court to determine Mr. Roth's net income after normal business expenses, standard child support obligation, percentage obligation, and any deviation. We do not analyze whether the court allowed support beyond the childrens' 23rd birthdays contrary to RCW 26.19.090(5) because Ms. Lyle concedes that ending point in her briefing.
FACTS
In 1990, the superior court entered a final parenting plan for the parties' three minor children; John (09/25/83), Janilee (03/16/85), and Anna (11/21/86). The court set monthly child support, ordered Mr. Roth to pay 77 percent of all extraordinary health care expenses, and reserved the post-majority support issue. On March 13, 2003 and May 19, 2004 by amendment, Ms. Lyle petitioned to modify the 1990 order to include post-secondary educational support for Janilee and Anna. Trial occurred in 2007.
Mr. Roth provided the court with a 2003 financial declaration and his 2004 and 2005 tax returns. Although his combined gross rental and construction income exceeded $100,000 each year, his adjusted gross income for 2004 and 2005 were $723 and $8,780 with listed business expense deductions. Ms. Lyle provided the court with a copy of Mr. Roth's 2001 loan application showing his gross income as $100,000 annually and $8,333.33 monthly. She provided copies of medical bills, receipts, and checks showing Mr. Roth's unpaid portion of past medical expenses under the 1990 order, and a 1997 letter requesting reimbursement for unpaid medical expenses. She did not challenge Mr. Roth's business expense deductions.
The court's February 2007 letter opinion granted a deviation for shared educational expenses at $400 per month, "conditioned upon each daughter continuing to meet the requirements of the statute." Clerk's Papers (CP) at 105. On March 26, 2007, the court entered child support and post-secondary educational support orders.
The court set Mr. Roth's monthly gross income at $8,333.33 and his monthly net income at $5,985.04 (after deducting $1,740.76 for income taxes and $607.53 for social security, Medicare, and self-employment taxes), but deducted nothing for normal business expenses. It found Ms. Lyle's monthly net income to be $1,138.82. The court determined Mr. Roth's proportional expense share at 84 percent, and his basic child support obligation at $1,589.28. The court deviated from the standard child support calculation, ordering Mr. Roth to pay $800 per month due to "[t]he dependent children's portion of the post-secondary education[;]" . . . "[t]he children's scholarships and loans are taken into account when determining the actual transfer payment for the father's portion of the post-secondary educational support." CP at 118.
The court set the effective date for the modified child support order at the March 13, 2003 petition date, and awarded Ms. Lyle "a judgment against [Mr. Roth] in the amount of $30,813.64 for back child [post-secondary] support for the period from 03/13/03 to 02/28/07." CP at 121, 115-16. It further ordered Mr. Roth to pay $10,689.87 in past due medical expenses with $5,084.95 in prejudgment interest. The court awarded no attorney fees. Mr. Roth appealed.
STANDARD FOR REVIEW
We review a trial court's modification of child support and award of prejudgment interest for abuse of discretion. Hadley v. Maxwell, 120 Wn. App. 137, 141, 84 P.3d 286 (2004); In re Marriage of Pollard, 99 Wn. App. 48, 52, 991 P.2d 1201 (2000). Discretion is abused if based on untenable grounds or reasons or if it is manifestly unreasonable. In re Marriage of Fiorito, 112 Wn. App. 657, 663-64, 50 P.3d 298 (2002). Substantial evidence must support the court's findings of fact and its findings of fact must support its conclusions of law. In re Marriage of Myers, 123 Wn. App. 889, 893, 99 P.3d 398 (2004).
ANALYSIS A. Standard Child Support Calculation
The issue is whether, considering the normal expense provisions of RCW 26.19.071(5)(h), the trial court erred in setting Mr. Roth's standard child support amount and percentage obligation for unpaid post-secondary support and unpaid medical expenses incurred after March 13, 2003. Mr. Roth argues the court failed to consider any business expense deductions in calculating his monthly net income.
The court must consider each party's monthly "net income" in establishing child support obligations. RCW 26.19.011(1). Monthly "net income" is calculated by deducting statutorily enumerated expenses, including "normal business expenses," from a party's monthly gross income. RCW 26.19.071(5)(h). "Justification shall be required for any business expense deduction about which there is disagreement." Id. To verify income and deductions, each party must provide the court with two years of tax returns and pay stubs. RCW 26.19.071(2).
Here, the court set Mr. Roth's monthly gross income at $8,333.33 and his monthly net income at $5,985.04, deducting nothing for normal business expenses despite the unchallenged expenses shown in his 2004 and 2005 tax returns. The court found Mr. Roth's proportional income share was 84 percent and ordered him to pay that percentage of past due post-secondary support. While we are generally deferential to the superior court's findings of fact, it appears the superior court failed to follow the legislatively mandated procedures of RCW 26.19.071 in establishing Mr. Roth's net income. Therefore, we remand for fact finding of Mr. Roth's "net income" and correct, if necessary, the resulting percentages and post-secondary judgment amount.
B. Post-Secondary Support Effective Date
The issue is whether the trial court erred in awarding post-secondary educational support during an ineligible period. Mr. Roth argues the effective date preceded both children's high school graduations and the amended petition seeking support for Anna. Child support may be modified to include post-secondary educational support "[o]nly as to installments accruing subsequent to the petition for modification or motion for adjustment." RCW 26.09.170(1)(a). An award for post-secondary educational support requires the child receiving support to "enroll in an accredited academic or vocational school, . . . be actively pursuing a course of study commensurate with the child's vocational goals, and . . . be in good academic standing as defined by the institution." RCW 26.19.090(3). An award for post-secondary educational support "shall be automatically suspended during the period or periods the child fails to comply with these conditions." RCW 26.19.090(3).
Here, Ms. Lyle filed a petition for modification seeking post-secondary educational support for Janilee on March 13, 2003, and an amended petition seeking post-secondary educational support for Anna on May 19, 2004. In a letter ruling, the court acknowledged post-secondary support was conditioned upon each child meeting statutory requirements. The court ordered Mr. Roth to pay $800 per month for post-secondary educational support based as a deviation amount for both children and judgment for that back support "for the period from 03/13/03 to 02/28/07." CP at 121.
Mr. Roth fails to show the court abused its discretion in awarding support during ineligible periods. Mr. Roth argues, without citation to the record, that the court's judgment included post-secondary support for four months before Janilee graduated high school and 16 months before Anna graduated high school. But in calculating post-secondary support at $800 per month for the duration of the period ordered, Mr. Roth's support obligation would have been approximately $38,053.29 (48 months at $800, minus 13 days at $26.67 ($800 / 30 days)). Support during the ineligible period, as argued by Mr. Roth, would have totaled approximately $8,000 ($400 x 20 months). The difference between these approximated amounts totals $30,053.29. Considering the approximated time period, the court did not abuse its discretion in ordering Mr. Roth to pay $30,813.64 for past due post-secondary support. In any event, the judgment amount will be recalculated on remand.
C. Prejudgment Interest
The issue is whether the court erred in awarding prejudgment interest on the amounts owed for uncontested past due medical expenses. Mr. Roth contends the expenses covered a 14-year period, were unliquidated, and disputed.
Prejudgment interest is awarded for a liquidated claim "to compensate [the] party who has lost the use of money to which he or she was entitled." Lakes v. Von Der Mehden, 117 Wn. App. 212, 217, 70 P.3d 154 (2003). "A claim is liquidated if data in the evidence makes it possible to compute the amount with exactness, without reliance on opinion or discretion." Id. A defendant's challenge to the amount owed, even if "partially successful in reducing his or her share of liability," does not convert a liquidated claim to an unliquidated claim. Hadley, 120 Wn. App. at 144.
Here, the record shows Ms. Lyle paid numerous extraordinary medical expenses without reimbursement from Mr. Roth. In a 1997 letter, Ms. Lyle sought reimbursement from Mr. Roth. At the 2007 hearing, Mr. Roth testified he made no attempt to reimburse Ms. Lyle for unpaid medical expenses even after receiving notice of unpaid amounts in the 2003 petition. The court calculated Mr. Roth's unpaid medical expense obligation at $10,689.87. Mr. Roth's portion of unpaid expenses was computed with exactness; under the 1990 order, he owed 77 percent of all extraordinary medical expenses. Accordingly, the court did not abuse its discretion in awarding prejudgment interest.
D. Attorney Fees
Ms. Lyle seeks attorney fees and costs on appeal under RAP 18.1, RCW 26.18.160, and RCW 26.09.140. Under RCW 26.18.160, a prevailing party is entitled to costs and reasonable attorney fees "[i]n any action to enforce a support or maintenance order under this chapter." But this appeal was not under chapter 26.18 RCW. Under RCW 26.09.140, a court has discretion, after considering each parties' financial resources, in awarding attorney fees for "maintaining or defending any proceeding under this chapter." RAP 18.1(c). In view of our remand decision, we decline to consider attorney fees and costs with leave to the trial court to consider them upon remand. RAP 14.4.
A majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will be filed for public record pursuant to RCW 2.06.040.
SWEENEY, J. and KORSMO, J., concur.