Opinion
18-P-1313
12-03-2019
Peter Kurt HIGGINS v. Kimberly HIGGINS.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Peter Kurt Higgins (husband) appeals from a judgment of divorce, entered in the Probate and Family Court on March 19, 2018, requiring him to pay alimony to Kimberly Higgins (wife) of $1,051 per week. We vacate the alimony award and remand the matter to the Probate and Family Court for proceedings consistent with this memorandum and order.
The husband's notice of appeal states that he appeals from an order dated March 15, 2018, denying his request for attorney's fees. He does not, however, address the issue in his brief, and thus, that aspect of his appeal is waived. See Mass. R. A. P. 16 (a) (4), as amended, 367 Mass. 921 (1975). (We cite to the Massachusetts Rules of Appellate Procedure in effect at the time the husband's brief was filed.)
Background. After over twenty years of marriage, the husband filed a complaint for divorce in February of 2016. At the time of the divorce, neither party was earning income. The wife was unemployed and the husband was working for CVR Portfolio Funds LLC (CVR), a small investment firm he cofounded in 2013, which paid for one hundred percent of the family's health insurance coverage but had yet to generate any income for the husband. Prior to the trial, the parties executed a series of stipulations agreeing to an "approximately" equal division of the marital estate and to shared custody of their three children. The parties also agreed that, for purposes of calculating support, income would be attributed to each of them. The parties settled on an annual attributed income of $40,000 for the wife, but they were unable to agree on an attributed income figure for the husband (despite the husband's offer to stipulate to an annual salary of $175,000). Accordingly, the central issues reserved for trial were the amount of income to attribute to the husband, and the type and amount of support to be paid by the husband. At trial, the wife's vocational expert testified to the husband's potential earning capacity if he were to leave CVR and obtain employment elsewhere, opining that the husband could earn a salary somewhere between $177,000 and $398,000.
The wife sought to attribute an annual income to the husband of $400,000.
In the divorce findings and rationale dated March 15, 2018, the judge attributed an annual income to the husband of $177,000, reflecting his potential earning capacity if he were to obtain employment outside CVR. The judge also imputed additional income to the husband of $23,192 per year, representing CVR's annual contribution toward the family health insurance plan. The judge calculated child support under the Child Support Guidelines (guidelines) using the husband's total annual income of $200,192 (including both attributed and imputed income), and the wife's attributed annual income of $40,000, resulting in a presumptive child support order of $536 per week. See Child Support Guidelines, preamble (2017). Finding that amount insufficient to meet the wife's needs, the judge instead ordered the husband to pay alimony to the wife of $1,051 per week.
In the present appeal, the husband contends that the judge (1) failed to consider the tax consequences when awarding alimony instead of child support, in contravention of the guidelines; and (2) improperly imputed income to the husband on the basis of CVR's contribution toward the family health insurance plan. We address the husband's arguments in turn.
Tax consequences. Although there exists "a rebuttable presumption" that "the amount of the child support order calculated under the[ ] guidelines is the appropriate amount of child support to be ordered," Child Support Guidelines, preamble (2017), a judge may designate "any support order" as alimony "without it being deemed a deviation, provided that the tax consequences are considered in determining the support order and the after-tax support received by the recipient is not diminished." Child Support Guidelines, § II (A) (2) (2017). The husband contends that the judge improperly ordered him to pay alimony to the wife instead of child support without considering the tax consequences as required by the guidelines. See id. However, the parties here did not present any such evidence to the judge. See Child Support Guidelines, § II (A) (2) (2017) (the "parties have the responsibility to present to the Court [evidence of] the tax consequences"). Accordingly, we cannot fault the judge for failing to consider evidence that was never presented. See Putnam v. Putnam, 7 Mass. App. Ct. 672, 674 (1979) ("when parties decline to offer evidence on [required statutory] factors ... consideration of the factors thereby omitted can properly be deemed waived"). The judge's findings reflect careful consideration of all relevant circumstances, including the disparity in the parties' respective earning capacities and the wife's need for alimony, in "determin[ing] the most equitable result for the children and the parties." Child Support Guidelines, § II (A) (3) (2017). The husband does not challenge the judge's determination of the wife's need for alimony, nor does he claim to have an inability to pay the amount ordered. See Van Arsdale v. Van Arsdale, 477 Mass. 218, 219 (2017) (alimony continues to be grounded in determination of need and ability to pay). See also G. L. c. 208, § 53 (b ). In light of the foregoing, we discern no error in the judge's decision to order alimony instead of the presumptive child support amount under the guidelines.
The guidelines "were developed with the understanding that child support is nondeductible by the payor and non-taxable to the recipient." Child Support Guidelines, § II (A) (2) (2017).
Here, the husband's alimony obligation is consistent with the wife's needs as found by the judge, and does not exceed the thirty-five percent guideline set forth in the Alimony Reform Act. See G. L. c. 208, § 53 (b ) ("the amount of alimony should generally not exceed the recipient's need or [thirty] to [thirty-five] per cent of the difference between the parties' gross incomes established at the time of the order being issued").
Imputation of income. The husband next contends that it was an abuse of discretion to impute income to him based on CVR's health insurance contributions, where the judge had already attributed income based on his potential earning capacity. We agree.
The husband also argues that an employer's health insurance contribution is not the type of benefit warranting imputation of income, as contemplated by the guidelines. Although we are inclined to agree, we need not reach that question here.
The concepts of imputed income and attributed income are distinguished in the guidelines. "Income may be imputed when there are actual resources available to the parent that are not reported for tax purposes." Commentary, Child Support Guidelines, § I (D) (2017). A judge may "reasonably impute income to [a] parent" who receives "[e]xpense reimbursements, in-kind payments or benefits received by a parent, personal use of business property, and payment of personal expenses by a business in the course of employment, self-employment, or operation of a business ... if such payments are significant and reduce personal living expenses." Child Support Guidelines, § I (D) (1-2) (2017). In contrast, "[i]ncome is attributed to a parent when the Court determines a parent is capable of earning more than is currently being earned and assigns a hypothetical amount of income to the parent." Commentary, Child Support Guidelines, § I (E) (2017).
Here, the judge attributed income to the husband of $177,000 per year based on his potential salary with an outside employer, and also imputed income of $23,192 per year based on CVR's present health insurance contributions. While the attribution of income reflected the judge's consideration of "potential earning capacity rather than actual earnings," Child Support Guidelines, § I (E) (2), the imputation of income reflected the judge's consideration of an actual, rather than potential, benefit currently being "received by" the husband. Child Support Guidelines, § I (D) (2). We therefore agree with the husband that it was improper to simultaneously attribute income based on his hypothetical earnings with a new employer and impute income based on a benefit provided by his current employer (a benefit that would presumably cease if he were to leave CVR and obtain outside employment). Given that the husband does not challenge the attribution of income, the imputation of $23,192 based on CVR's health insurance contributions cannot stand. As that imputed income was used to determine the husband's present support obligations, the matter must be vacated and remanded for a recalculation of the husband's alimony and child support obligations based solely on his annual attributed income of $177,000. On remand, child support should be calculated using the corrected 2018 guidelines worksheet, and the judge may adjust the husband's support obligations if necessary.
Due to an error on the previous version of the 2017 guidelines worksheet, the husband's original child support obligation was artificially low.
Conclusion. We vacate so much of the divorce judgment that requires the husband to pay alimony to the wife of $1,051 per week and remand the matter for a recalculation of the husband's support obligations consistent with this memorandum and order.
To the extent that we do not address the husband's other contentions, they "have not been overlooked. We find nothing in them that requires discussion." Commonwealth v. Domanski, 332 Mass. 66, 78 (1954).
Both parties' requests for attorney's fees are denied.
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So ordered.
Vacated and remanded.