Opinion
2023-CA-1191-MR
10-11-2024
EMILY BERG APPELLANT v. WAYNE BERG APPELLEE
BRIEF FOR APPELLANT: William D. Tingley Louisville, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM JEFFERSON CIRCUIT COURT HONORABLE ANGELA J. JOHNSON, JUDGE ACTION NO. 20-CI-501665
BRIEF FOR APPELLANT: William D. Tingley Louisville, Kentucky
NO BRIEF FOR APPELLEE.
BEFORE: CETRULO, GOODWINE, AND KAREM, JUDGES.
OPINION
KAREM, JUDGE
Emily Berg appeals from the Jefferson Family Court's denial of her motion to modify child support. Upon careful review, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Emily and Wayne Berg were married in 2013 and have one child, M.W.B. ("Child"). They separated in April 2020 and Emily filed a petition to dissolve the marriage on July 24, 2020. Child was six years of age at that time. Emily was earning $629 per month in a new career as a real estate agent and Wayne was earning $3,174 per month at Ecolab.
Emily and Wayne entered into a mediated settlement agreement that was subsequently incorporated into the final decree of dissolution entered on February 26, 2021. Under the terms of the agreement, Emily and Wayne assumed joint legal custody of Child with equal parenting time. Wayne was required to pay $102 per month in child support and he provided health insurance for Child through his employment. The agreement also provided that child support would be reviewed in 2022.
In July 2022, Wayne voluntarily terminated his employment at Ecolab and moved to Beattyville, Kentucky, to live with his girlfriend. Beattyville is approximately a two-hour drive from Emily's residence in Louisville. Shortly after Wayne moved, Emily filed a motion seeking to modify the parenting schedule and child support. At the time Emily filed her motion, Wayne was unemployed. Because Child's health insurance coverage stopped when Wayne quit his job, Emily arranged for temporary health insurance, costing $96 per month, until Medicaid enrollment opened in November 2022. Due to Emily's increased income, Child would be ineligible for re-enrollment in Medicaid for the year of 2024.
Subsequently, Emily sought to modify the parenting schedule and child support. "[D]ue to these changing circumstances, [Emily] requests that the Court modify the parenting schedule to allow the child to primarily reside with [Emily] during the school year and allow [Wayne] every other weekend parenting time with the minor child, and modify child support to include the health insurance cost paid by [Emily] and [Wayne's] voluntary unemployment in its calculation."
Prior to the hearing, Wayne failed to produce any documentary proof of his income, even though Emily filed a motion to compel, and the family court ordered him to do so. His counsel withdrew on February 10, 2023, and Wayne acted pro se through the remainder of the proceedings.
A hearing on the motion was conducted on July 6, 2023. The parties had already agreed to modify their timesharing schedule to account for the long drive between Louisville and Beattyville. Child would spend alternate weekends with Wayne during the school year and alternate weeks with Wayne during the summer. The only point of contention was transportation. Emily wanted Wayne to be solely responsible for transporting Child because he had voluntarily left Jefferson County, whereas Wayne wanted an exchange point halfway between Louisville and Beattyville.
During the hearing, Emily testified about her employment and income stating that in January of 2020, prior to the divorce being final, she had obtained her real estate license. Following the divorce her income increased steadily. She detailed that her monthly earnings in 2021 and 2022 were $3,875 and $7,434, respectively. Although Wayne had maintained health insurance for Child while employed, that ended when he quit his job. Thus, she testified that she was able to obtain insurance costing her $96 per month until she could enroll Child in a Medicaid plan for 2023. However, she would not be able to re-enroll him for 2024 because of the increase in her income.
Emily resided with her boyfriend and paid all household expenses. She testified that the residence was built by her boyfriend, and he had paid it off, thus there was no mortgage payment. Emily estimated the house was worth $300,000 but it had never been appraised.
Wayne testified that he found full-time employment in Beattyville earning $14 per hour for 40 hours per week. He was also receiving $1,250 per month in rental income for his Louisville home which still had a mortgage. He lived in Beattyville with his girlfriend who contributed $500 monthly for household expenses.
Notably, no objections were made by either side during the hearing. In addition, no opening or closing arguments were made by either side. Following the presentation of evidence, the hearing was concluded, and the court took the motion under submission.
In its July 13, 2023 order, the family court accepted Emily's request to impute to her a monthly income of $4,389. The family court found that it would be fair to adopt the same approach to Wayne and imputed a monthly income to him of $3,242, based on the average of his previous income at Ecolab and his current employment. To these amounts, the family court imputed an additional $1,000 per month to Emily for the mortgage payments made by her boyfriend and an additional $1,750 to Wayne for his rental income and the expenses paid by his girlfriend. These calculations resulted in a total monthly income of $5,389 for Emily and $4,992 for Wayne. Because Emily's parenting time had increased, the family court agreed that a modification in child support would be appropriate, but explained it was unable to modify base support at that time because, under Kentucky Revised Statutes ("KRS") 403.2121(6)(d), no parenting time credit could be given for a child subject to Medicaid. The family court ordered Wayne to continue paying $102 in child support. It also ordered Wayne to pay $184 for his share of Child's past health insurance expenses and ordered him to pay 48 percent (his share of the parties' total monthly income) of any health insurance costs going forward. The parties were ordered to exchange Child in Lexington, which is approximately halfway between their residences.
During her testimony at the hearing, Emily asked the court to attribute earnings of $4,389 monthly to her for the purpose of calculating child support. She stated this number was her average monthly income from the previous years. However, she only testified as to her monthly incomes in the years of 2021 and 2022; $3,875 and $,7434, respectively, the average of which is $5,655. However, at the hearing Emily's counsel did present a chart listing a monthly income for 2020 as $1,858. This chart was allowed as an exhibit for demonstrative purposes only. No testimony was provided to verify the 2020 dollar amount listed on the chart. However, the court accepted Emily's value, the average for all three years; 2020, 2021, and 2022, to calculate child support. Had the court used only the numbers that were actually in evidence, Emily's average monthly income would have calculated to $5,655 per month.
As noted previously, there was no mortgage on the residence in which Emily lived with her boyfriend. However, the court attributed an amount of $1,000 per month as a contribution from her boyfriend to compensate for the fact that Emily paid all household expenses but did not contribute to the cost of the home.
Following the entry of the court's order, Emily filed a motion pursuant to Kentucky Rules of Civil Procedure ("CR") 52 and 59, requesting the court; make findings of fact to support its selection of Lexington as the point of exchange; make specific findings as to the days and hours Wayne works; and make a finding that Wayne had not produced documentation of his income as required under the Family Court Rules of Practice and Procedure ("FCRPP") 9(4)(b). Emily also sought to vacate the child support order, arguing that the family court erred in calculating the amount of support without documentation of Wayne's income. She claimed that the family court had found Wayne to be voluntarily underemployed and that his income for child support purposes should have been based on his potential income, which she contended was the income he had received working at Ecolab. Finally, she argued that the family court misapplied KRS 403.2121(6)(d) when it determined that the receipt of Medicaid prohibited a modification of the base child support obligation.
The family court entered an order denying the motion. It explained that its findings of fact had to be based on the proof presented. It found that although Wayne had failed to provide documentation of his income as required by FCRPP 9(4)(b), he had provided sufficient proof of his income through his testimony. Furthermore, because Emily had allowed the court to take the matter under submission without raising an objection, the family court ruled that she had effectively waived the argument. The family court declined to impute the Ecolab income to Wayne. It also explained how it calculated child support and arrived at an amount of $42.68, payable by Emily to Wayne. It reiterated that Child's receipt of Medicaid benefits meant it could not adjust this amount to reflect Emily's increased parenting time and for that reason, it had kept the original amount of $102 to be paid by Wayne in place. This appeal by Emily followed.
PRELIMINARY ISSUE
We first note that Wayne did not file an appellee brief. When a party fails to file a responsive brief, the Court may: (i) accept the appellant's statement of the facts and issues as correct; (ii) reverse the judgment if the appellant's brief reasonably appears to sustain such action; or (iii) regard the appellee's failure as a confession of error and reverse the judgment without considering the merits of the case. Kentucky Rule of Appellate Procedure ("RAP") 31(H)(3). "The decision as to how to proceed in imposing such penalties is a matter committed to our discretion." Cabinet for Health and Family Services v. Loving Care, Inc., 590 S.W.3d 824, 826 (Ky. App. 2019) (quoting Roberts v. Bucci, 218 S.W.3d 395, 396 (Ky. App. 2007)). In this case, we choose to exercise our discretion and refrain from imposing any penalties herein; however, we caution that such courtesy may not be extended in the future.
ANALYSIS
I. Voluntary Underemployment
Notably, in Emily's CR 59 motion, she mistakenly claimed that the lower court found Wayne to be voluntarily underemployed. In her appeal, Emily corrected that error arguing that the family court should have found that Wayne is voluntarily underemployed and imputed to him the income he was earning at Ecolab prior to June 2022. However, at no point in the proceedings in family court did Emily argue Wayne was voluntarily underemployed; nor did she ask for a finding to that effect from the court. No legal memo supporting such an argument was ever submitted to the family court. No opening or closing statements were made at the hearing where Emily could have made legal arguments for such a finding. And, while Emily states this argument was preserved in her CR 59 motion, this is simply not the case. As noted, Emily's CR 59 motion mistakenly claims the court found Wayne was voluntarily underemployed, but no such finding was made by the court. And, more importantly, this precise argument was never made. The mere mention that Wayne was voluntarily underemployed is not sufficient.
The appellate court reviews for errors, and a nonruling is not reviewable when the issue has not been presented to the trial court for decision." Turner v. Commonwealth, 460 S.W.2d 345, 346 (Ky. 1970); see also Hatton v. Commonwealth, 409 S.W.2d 818, 819-20 (Ky. 1966). "[I]t is the accepted rule that a question of law which is not presented to or passed upon by the trial court cannot be raised here for the first time." Hutchings v. Louisville Trust Co., 276 S.W.2d 461, 466 (Ky. 1955); Benefit Ass'n of Ry. Employees v. Secrest, 239 Ky. 400, 39 S.W.2d 682, 687 (1931). "The underlying principle of the rule is to afford an opportunity to the trial court, before or during the trial or hearing, to rule upon the question raised." Hartsock v. Commonwealth, 382 S.W.2d 861, 864 (Ky. 1964).Jones v. Livesay, 551 S.W.3d 47, 52 (Ky. App. 2018). In the case sub judice, the family court was never asked to make the finding of voluntary underemployment. As the lower court was never presented with this issue, it was never properly presented or preserved and will not be considered on appeal.
II. Calculation of Child Support
The family court did not make an express finding that Wayne was voluntarily underemployed, although it did find that Emily had proven a material change in circumstances warranting a modification of child support, based on Wayne's relocation, job change, and the removal of Child from his health insurance plan. It provided the following explanation for its decision to impute income to Wayne based on the average between his past and current employment:
[I]t was uncontroverted that the Respondent does not work at Ecolab[] anymore. The Court could have imputed this amount to the Respondent but the evidence did not show that the Ecolab income reflected his employment potential and probable earnings level. While Ecolab was evidence of his recent work history, no evidence was shown that the job had special occupational qualifications that he is not using; there was no evidence to show that there were opportunities for the same job where he lived; and there was no evidence to show he could earn the same amount, doing what he had been doing at Ecolab, in Beattyville or within a reasonable distance from Beattyville. The evidence that was presented were income statements from Ecolab, which was a job he no longer had, and testimony from Respondent that he earns $14.00 an hour. While the Court felt it was inequitable to impute Ecolab to the Respondent, the Court felt it was also inequitable to the Petitioner for the Court [to] impute $14.00. The Court chose a compromise between the two positions because it gave account for the Respondent's ability to earn more while reflecting the fact that the Respondent was not currently making that much and the lack of evidence to show that he could re-earn that amount. While it is understandable that Petitioner believes the Ecolab income information is the best information, it does not accurately portray the Respondent's current or potential income situation.
Emily argues that she had no legal duty to show that the Ecolab job had special occupational qualifications that Wayne was not using nor was she required to prove that there were opportunities for the same job where he lived in Beattyville or that he could earn the same amount, doing what he had been doing at Ecolab, in Beattyville or within a reasonable distance of Beattyville. She contends that these comments by the family court constituted an impermissible shifting of burdens in direct contravention of the standard set forth in Keplinger v. Keplinger, 839 S.W.2d 566 (Ky. App. 1992). But Keplinger states that "[w]e believe that KRS 403.212(2)(a) must be read as creating a presumption that future income will be on a par with the worker's most recent experience." Id. at 569 (emphasis added). As the family court correctly stated in its order denying Emily's postjudgment motion, it would have been well within its discretion to calculate child support based solely on Wayne's current income of $14 per hour at 40 hours per week. "The party who wants the trial court to use a different income level in applying the child support guidelines bears the burden of presenting evidence which would support the requested finding." Id. No evidence was placed in the record regarding the type of work Wayne performed at Ecolab or at his current employment. Admittedly, Wayne disregarded the court's orders and did not produce documentary evidence of his income. Nonetheless, Emily was afforded an opportunity at the hearing to question Wayne about the nature of his employment but did not do so.
The family court's decision to impute income to Wayne based on an average of his current and past earnings was based on the evidence available to it and it was the same approach Emily had requested for the calculation of her own income. Although Emily argues that her situation is distinguishable because she is still in the same career she had when the parties divorced, and there are no allegations she is not using her best efforts to maximize her income, the family court did state elsewhere in its opinion that it did not choose to penalize Wayne for a life decision, i.e., moving to Beattyville to live with his girlfriend. This determination was well within the family court's discretion and will not be disturbed on appeal.
Nor does the case upon which Emily relies, Duffy v. Duffy, 540 S.W.3d 821 (Ky. App. 2018) compel a different conclusion. At the time the mother in Duffy filed a petition for dissolution, the father was living in another state, earning approximately $144,757 at Amazon, receiving full tuition, a monthly housing allowance of $2,506, and restricted stock units ("RSUs"). The family court entered a temporary child support order based on this income. Three weeks after the entry of that order, the father stopped taking classes, which terminated his housing allowance. About four months later, he quit his job and accepted employment at about one-third of his previous salary. He also relinquished $82,665 in RSUs. The issue on appeal was whether the trial court erred in ruling that the RSUs were marital property and that the father's forfeiture of the RSUs constituted the dissipation of a marital asset. The appellate court agreed with the trial court that father's "decision to resign two months before the vesting date was illogical at best and certainly supports the trial court's conclusion that it was for the sole purpose of depriving [his ex-wife] of her proportionate share of the marital assets." Id. at 829. Although the timing of Wayne's move to Beattyville occurred in the same year that the settlement agreement provided for a review of child support, there is no indication that the decision was illogical or that the timing was so suspect as to compel a conclusion that he moved in order to avoid paying child support. "[T]his Court is [not] authorized to substitute its own judgment for that of the trial court on the weight of the evidence[.]" Leveridge v. Leveridge, 997 S.W.2d 1, 2 (Ky. 1999), as corrected on denial of reh'g (Aug. 26, 1999).
III. Gift Income
Emily testified that she lived with her boyfriend in a home that she believed had a value of $300,000. Her boyfriend had built the home and paid it off thus there was no mortgage or house payment. Emily, in return for her boyfriend providing the roof over her head, paid all the household bills. Given this information, the family court imputed a monthly gift income of $1000 to Emily from her boyfriend which was then included as part of her gross income. Emily argues that the family court erred in imputing gift income to her because the evidence did not rise to the clear and convincing standard required to establish an inter vivos gift. She argues that the imputation of $500 in income to Wayne for his girlfriend's contribution to their household expenses was similarly erroneous.
For purposes of calculating child support payments, KRS 403.212 defines "gross income" very broadly as:
income from any source, except as excluded in this subsection, and includes but is not limited to income from salaries, wages, retirement and pension funds, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, Social Security benefits, workers' compensation benefits, unemployment insurance benefits, disability insurance benefits, Supplemental Security Income (SSI), gifts, prizes, and alimony or maintenance received.KRS 403.212(3)(b) (emphasis added).
Emily relies on the six-element definition of an inter vivos gift provided in Howell v. Herald, 197 S.W.3d 505, 507-08 (Ky. 2006), as modified on denial of reh'g (Aug. 24, 2006), a case involving a purported gift of valuable real estate two days before the owner's death. But the standard for establishing a gift for purposes of inclusion as gross income under the child support statute is not so well-established. In fact, "[t]here are no cases in Kentucky construing what is meant by gifts in this context." Stewart v. Burton, 108 S.W.3d 647, 648 (Ky. App. 2003). In KRS 403.212(3)(b), the legislature provided an expansive definition of income "to include many sources of wealth which may be used for the child's benefit." 108 S.W.3d at 648. In Stewart v. Burton, the Court addressed whether payments made by the father's parents towards his rent and maintaining his vehicle were gifts that should be included in the father's gross income for child support purposes. The Court cited with approval a case from the Maryland Court of Appeals which held that "if a parent is relieved of some basic living expenses through outside contributions, it may be appropriate under certain circumstances to increase the parent's actual income to account for such contributions." Id. (citing Petrini v. Petrini, 336 Md. 453, 460, 648 A.2d 1016, 1019 (1994)). The Court agreed with the Maryland court that by having these expenses paid for him, it freed up father's other sources of income and made them available for payment to his child. Id. In light of this analysis, the family court's inclusion of the mortgage payments made by Emily's boyfriend in her gross income was not an abuse of discretion. Emily argues that there was no evidence of the amount of the monthly payment, but she testified that her boyfriend made the payments, and she was free to submit evidence of the amount but failed to do so or to raise the issue in her post-judgment motion. Consequently, it is waived on appeal. "An appellate court is without authority to review issues not raised in or decided by the trial court." Ten Broeck Dupont, Inc. v. Brooks, 283 S.W.3d 705, 734 (Ky. 2009) (internal quotation marks and citations omitted).
IV. Split Custody Calculation
Finally, Emily contends that the family court improperly used the split custody calculation set forth in KRS 403.212(8), whereas she and Wayne have a joint custody arrangement. Although the family court's order references the split custody section of the statute, its actual calculations were in complete conformity with the appropriate section of the statute, KRS 403.212(5)(a), which states that "the child support obligation set forth in the child support guidelines table shall be divided between the parents in proportion to their combined monthly adjusted parental gross income." The family court added together Emily and Wayne's gross incomes, found the appropriate child support obligation in the statutory guidelines, and then apportioned it according to Emily and Wayne's percentage of the total income. Because Wayne earns 48 percent of their total income, Emily would be required to pay him $42.68 in child support. As we have already stated, the family court found this result unfair to Emily because she has assumed a greater share of parenting time. Accordingly, the family court left the original amount of child support in place. Emily's argument is therefore essentially moot.
CONCLUSION
For the foregoing reasons, the orders of the Jefferson Family Court are affirmed.
ALL CONCUR.