Opinion
19-P-165
04-15-2020
Peter M. PALLADINO v. Margaret J. PALLADINO.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The defendant and former wife Margaret J. Palladino (wife) appeals from an amended judgment issued by a judge of the Probate and Family Court allowing the modification of a November 20, 2003 judgment of divorce nisi (divorce judgment). On appeal, she challenges (1) the judge's finding that a material change in circumstances had occurred, (2) the reduction of the plaintiff and former husband Peter M. Palladino's (husband) monthly child support obligation, (3) the retroactive application of the reduced child support amount, and (4) the denial of her request for attorney's fees and costs pursuant to G. L. c. 208, § 38 (filed March 6, 2018). We affirm.
Background. The parties' separation agreement dated July 24, 2003 (agreement) was incorporated and merged, in relevant part, in the divorce judgment. In accordance with paragraph one of part two of exhibit A to the agreement, the husband was obligated to pay to the wife monthly child support in the amount of $13,895 "until the emancipation of all of the parties' children"; he also was ordered to pay additional child support equaling 16.39 percent of any annual income that he received between $675,000 and $1 million. Under the provisions contained in exhibit D of the agreement, the husband was obligated to maintain the Northwestern Life Insurance policy (Northwestern policy), which policy provided an additional resource for the payment of the children's anticipated college educational expenses. According to the terms of part five of exhibit F to the agreement, the husband was to maintain a life insurance policy in the amount of $3 million to secure his alimony, child support, and other financial obligations ordered by the divorce judgment.
The parties had two children together. There was no dispute that the parties' oldest child was emancipated at the time of trial. Thus we focus only on the needs of the parties' youngest child unless otherwise noted.
The agreement defined the children's emancipation as the first to occur of any of the following events: death, marriage, full time and permanent employment, high school graduation (except if attending college), college graduation or reaching age twenty-three (whichever occurred first), or permanent "living away" from the husband or wife with the exception that "[l]iving at college shall not be deemed to be permanently being away from the residence of either the [h]usband or the [w]ife."
On May 16, 2013, the husband filed a complaint for modification (modification complaint), citing the following changes in circumstances: (1) the parties' oldest child was emancipated, (2) the parties' youngest child was entering college in August 2016, and "w[ould] no longer be living full time with the [wife]" and, (3) the "529" education accounts and the Northwestern policy were almost exhausted, and the parties could not agree upon allocation of the responsibility for the youngest child's (child) remaining educational expenses. In the modification complaint, the husband sought to terminate or reduce his child support obligation, to "collapse" the Northwestern policy and pay what proceeds remained toward the child's college tuition, a determination of the parties' respective responsibility in sharing the remaining college expenses for the child, and a reduction in the amount of his required life insurance obligation.
As stated in the parties' uncontested facts dated January 10, 2018, the Northwestern policy was closed sometime after the husband filed his modification complaint and therefore was not an issue at trial.
After answering the complaint, the wife, in November 2016, filed a motion to dismiss the husband's complaint, arguing that not all of the children were emancipated and, thus, the husband was not entitled to relief from the terms of the agreement. The motion was denied.
A two-day trial on the husband's complaint was held in January 2018. Both parties testified, as did an accountant on the husband's behalf. On August 16, 2018, judgment entered on the husband's modification complaint (modification judgment) which (1) ordered a reduction in the husband's monthly child support obligation to $8,100, retroactive to the filing of his complaint, (2) ordered the husband to pay all of the child's remaining education expenses, with the wife paying only for the child's transportation expenses to and from college, (3) denied the husband's request for reducing his life insurance obligation, and (4) denied the wife's request for attorney's fees. On October 9, 2018, the modification judgment was subsequently amended (as were certain factual findings) (amended judgment), at the husband's request, relating to, among other things, the timeline of the child's college attendance and graduation which, in turn, affected the retroactive calculation of the husband's child support obligation. , The wife timely appealed; specifically, she appealed paragraphs one through four, seven, and eight of the amended judgment. She also appealed the denial of her motion to alter and amend the judgment (and the allowance of the husband's motion to alter and amend), and the January 12, 2017 denial of her motion to dismiss.
In light of the retroactivity of the modification judgment, the judge reduced the husband's twenty-one remaining prospective child support payments for the purpose of satisfying any overpayments he had made during the pendency of the case.
The amended judgment fixed the husband's monthly child support obligation at $925.24 in anticipation of the child's May 2020 college graduation, rather than the amount ordered in the modification judgment of $1,514.77, a calculation based on a June 2020 graduation date.
The judge denied the wife's request to alter or amend the judgment as to the reduction and retroactivity of the husband's child support obligation.
Discussion. In arguing her appeal, the wife claims the judge erred in finding a material change in the parties' circumstances since the entry of the divorce judgment, thereby ignoring the parties' intent as expressed in the agreement to have the husband's child support obligation remain in effect until all of the children were emancipated (as that term was defined by the agreement). She also challenges the reduction of the husband's child support payment, and the retroactive application of that reduction. The wife finally argues that the judge abused his discretion in denying her request for attorney's fees pursuant to G. L. c. 208, § 38. We address her arguments in turn.
1. Substantial change in circumstances/motion to dismiss. The wife first argues that the judge erred by finding a material change in circumstances based on the older child's emancipation and the child's college attendance; she claims that these events were anticipated by the provisions in the parties' separation agreement, and not an appropriate basis to find a change in circumstances. She further contends that because there was no change in circumstances, the denial of her motion to dismiss also was error.
"[T]he merger of an agreement in a judgment is a substitution of the rights and duties under the agreement for those established by the judge or decree." Bercume v. Bercume, 428 Mass. 635, 641 (1999). "When parties to a divorce negotiate an agreement for [child support] that is ‘incorporated and merged into [the divorce] judgment’ upon approval by a judge and in accordance with G. L. c. 208, § 1A or 1B, the judgment ... is subject to modification based on a material change in circumstances" since the entry of the earlier judgment. Chin v. Merriot, 470 Mass. 527, 534-535 (2015). "The change may be in the needs or the resources of the parties ... or in their respective incomes." Emery v. Sturtevant, 91 Mass. App. Ct. 502, 508 (2017), quoting Kernan v. Morse, 69 Mass. App. Ct. 378, 383 (2007).
In this case, the agreement expressly provided that the entire agreement, "with the exception of all provisions regarding the distribution of property contained in [e]xhibit C," was merged into the divorce judgment. Because "the parties agreed that the agreement was to merge with the judgment, we see no reason why the [merger] provision should not be given effect." Bercume, 428 Mass. at 642. Therefore, the provisions of the agreement relating to child support, among others, were subject to modification upon the showing of a material change in circumstances. See Whelan v. Whelan, 74 Mass. App. Ct. 616, 617, 620 (2009). See also G. L. c. 208, § 28.
In reviewing a finding of changed circumstances, we defer to the judge's evaluation of the evidence presented at trial, and will disturb his factual findings as to such change only if clearly erroneous. See Canisius v. Morgenstern, 87 Mass. App. Ct. 759, 770 (2015). The husband presented evidence at trial that, in addition to the emancipation of the oldest child, a change in circumstance had occurred based on the payment of the child's remaining college expenses. The judge appropriately found that the parties' agreement provided that if they could not agree as to the allocation of college educational expenses (after the referenced resources were exhausted, as they were here), either party could seek relief from the court, which is precisely what the husband did. The judge's findings were supported by the record. Although the amount of the child support order was indeed modifiable due to those changed circumstances, the husband's obligation to pay child support remained as the parties intended by the parameters set out in the agreement, a fact that the judge properly recognized. Pierce v. Pierce, 455 Mass. 286, 302 (2009), quoting Bercume, 428 Mass. at 644 (where alimony provisions in agreement merged into judgment, "it is nevertheless appropriate for a judge to take heed of the parties' own attempts to negotiate terms mutually acceptable to them"). We see no error.
Consequently, after the husband successfully established that the allocation between the parties of the child's remaining college expenses constituted a material change of circumstances, the amount of the husband's monthly child support payment was then ripe for modification if the judge determined such a reduction was in the best interests of the child, which he did. See G. L. c. 208, § 28. For that reason, we need not decide whether the judge was correct in determining a change in circumstances based on the older child's emancipation, or the child's attendance at college.
In addition, because the judge was correct in determining that the divorce judgment was modifiable, we discern no abuse of discretion in his denial of the wife's motion to dismiss alleging the failure of the husband to state a viable claim grounded on the emancipation of at least one of the children. See Chin, 470 Mass. at 538 (review of judge's decision is for abuse of discretion). Cf. Lalchandani v. Roddy, 86 Mass. App. Ct. 819, 822 (2015), quoting Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008) (dismissal of modification complaint allowed as facts alleged not "enough to raise a right to relief above the speculative level").
The wife scarcely addresses in her brief the denial of her motion to dismiss. Although her failure to fully address the issue may be cause for waiver, see Barkan v. Zoning Bd. of Appeals of Truro, 95 Mass. App. Ct. 378, 389 (2019), our decision affirming the judge's determination, albeit for a slightly different reason -- that a change in the parties' circumstances occurred -- essentially renders the issue moot, in the sense that the wife claimed that the husband's modification complaint should be dismissed because there was, in her view, no change warranting modification of the earlier order. See Hudson v. Superintendent, Massachusetts Correctional Inst., Concord, 480 Mass. 1038, 1038 (2018).
2. Reduction of child support amount. The wife next argues that the judge erred in substantially reducing the existing child support order, thereby creating a greater disparity in the parties' lifestyles. She also claims error with the termination of the husband's additional child support obligation (based on a range of income), as this aspect of the order, she argues, was not based on need. She further contends that the unreliable methodology of the husband's expert in calculating the child's needs was based on stale data. We are not persuaded by the wife's arguments.
"Because the [child support] order in this case was issued as part of a divorce judgment, [G. L. c. 208,] § 28 governs." Morales v. Morales, 464 Mass. 507, 510-511 (2013). "When assessing a decision regarding a modification of child support, an appellate court ‘review[s] for an abuse of discretion.’ " P.F. v. Department of Revenue, 90 Mass. App. Ct. 707, 708 (2016), quoting Wasson v. Wasson, 81 Mass. App. Ct. 574, 576 (2012). "[A] judge's discretionary decision constitutes an abuse of discretion where we conclude the judge made ‘a clear error of judgment in weighing’ the factors relevant to the decision, such that the decision falls outside the range of reasonable alternatives." L.L. v. Commonwealth, 470 Mass. 169, 185 n.27 (2014), quoting Picciotto v. Continental Cas. Co., 512 F.3d 9, 15 (1st Cir. 2008).
Section 28 provides, in relevant part, that "the court may make a judgment modifying its earlier judgment as to the care and custody of the minor children of the parties provided that the court finds that a material and substantial change in the circumstances of the parties has occurred and the judgment of modification is necessary in the best interests of the children." G. L. c. 208, § 28. The judge also "may make appropriate orders of maintenance, support and education of any child who has attained age eighteen but who has not attained age twenty-one and who is domiciled in the home of a parent, and is principally dependent upon said parent for maintenance." Id.
In this case, the child's needs were more than adequately met prior to the reduction in the existing child support order, which was based on the support of two children. The husband's available income on which his support obligation was calculated far exceeded the levels to which the Massachusetts Child Support Guidelines (guidelines) applied at the time the original order entered in 2003. Such was the case at the time of modification, and the judge found that deviation from the guidelines continued to be in the child's best interests. See Guidelines III.B (2018). As a result, the child's "needs are to be defined, at least in part, by [her] parents' standard of living" which support should "provide the standard of living the child would have enjoyed had the family been intact." Smith v. Edelman, 68 Mass. App. Ct. 549, 554 (2007), quoting Brooks v. Piela, 61 Mass. App. Ct. 731, 737 (2004).
As the judge found, the child (who was twenty years old at the time of trial) lived in New Orleans attending college nine months of the year. When she was on break from school, the child lived primarily with the wife, although she spent some time with the husband, and she regularly traveled. At trial, the judge found the husband's expert credible when he testified as to the analysis of the wife's reported expenses relating to the child for the period January 1 to December 31, 2016. See Kittredge v. Kittredge, 441 Mass. 28, 33-34 (2004) (we will not disturb judge's decision to credit expert testimony). In that report, the expert provided detailed categories of expenses claimed by the wife for the child's benefit, which expenses for the stated time period totaled approximately $97,000 annually (or $8,083.33 per month). The judge found credible the expert's methodology in calculating these expenses.
The expenses included in the expert's report were drawn from the wife's rule 401 financial statement, her self-generated accounting of income and expenses, her bank and credit card statements, and the wife's deposition testimony.
The claimed yearly expenses included shelter related costs attributed to the child (including house cleaning, lawn care, and mortgage payments totaling $37,000), transportation expenses (including Lyft/Uber rides, gas and car expenses, and plane travel to and from New Orleans totaling $4,500), gym and country club memberships (totaling $7,400), and travel expenses for the child's vacations (totaling $9,000).
In addition, the judge determined that embedded in the expert's report were certain assumptions that benefitted the wife's position over the husband's; for instance, no reductions were made for "shelter related expenses" even though the child was away from the wife's home a majority of the year, and the expenses of any nonitemized purchases (appearing on the wife's accounting) was equally divided between the wife, and both children. We discern no error in the judge's calculated modification. Nor do we find that a reduction in the husband's monthly child support obligation to $8,100 (which allows the child a continued predivorce lifestyle) an abuse of discretion. See L.L., 470 Mass. at 185 n.27.
We also conclude, based on the foregoing, that the judge's determination to eliminate the husband's obligation for the additional child support amount for which he was obligated under the earlier judgment was not an abuse of discretion. See Smith, 68 Mass. App. Ct. at 554.
The wife's assertion that the child support order must be based on the husband's enhanced lifestyle is unconvincing. Looking to the expressed intent of the parties based on the provisions included in the agreement, as the wife encourages us to do, the original support order was based on a maximum of income earned by the husband of $1 million. It appears, however, that the judge did consider that the husband had remarried and was supporting additional children in his new household, and that the wife had resumed working since the time of divorce (she worked as an attorney previous to the birth of the children), and was successfully running her own business. Equally important, the judge considered the fact that the husband would now be paying the full cost of the child's college expenses, including tuition, board, books, and other educational expenses, and that the amended judgment provides for the support of one child rather than two. "Of the several factors which the judge may consider in modifying a decree for child support, ... this court has never required that they be accorded equal weight or conjunctive application." Brooks, 61 Mass. App. Ct. at 734, quoting Heistand v. Heistand, 384 Mass. 20, 27 (1981).
We discern no abuse of discretion in the judge's allowance of the husband's motion to alter and amend the judgment to correct the durational limit of his child support obligation based on the child's actual graduation date.
3. Retroactive application of reduction in child support. The wife further argues that the judge erred in considering the retroactivity of the amended child support order as "mandatory." She claims too that the judge abused his discretion in retroactive application, as there was no change in the wife's circumstances since the parties' 2003 divorce, but the husband's income had essentially tripled. These arguments also fail.
"With respect to any period during which a complaint for modification is pending, a party is entitled to retroactive modification of a child support order where a judge finds that the parties' circumstances have materially changed and that such modification is in the best interests of the children." Whelan, 74 Mass. App. Ct. at 627, citing G. L. c. 119A, § 13 (a) ; G. L. c. 208, § 28. A judge is not required to make an order for modification retroactive, but " ‘absent a specific finding that retroactivity would be contrary to the child's best interests, unjust, or inappropriate,’ these factors should be considered." Whelan, supra, quoting Boulter-Hedley v. Boulter, 429 Mass. 808, 812 (1999). The judge made no such finding. It is left to the judge's discretion to make retroactive a child support order "for any period during which there is pending a complaint for modification." Rosen v. Rosen, 90 Mass. App. Ct. 677, 683 (2016), quoting T.M. v. L.H., 50 Mass. App. Ct. 856, 859 (2001). See G. L. c. 119A, § 13 (a ).
As the judge found, the husband made service of his modification complaint on the wife on June 7, 2016. After service of the modification complaint, the husband continued to pay his existing monthly child support obligation of $13,895 in the manner required by the divorce judgment, and until the time the amended judgment issued in August 2018. As part of the amended judgment, the husband's monthly child support obligation was reduced to $925.24, and due to terminate in May 2020 as a result of the child's emancipation under the terms of the agreement. Because there had been a material change in the parties' circumstances warranting a modification in the child's best interests, the judge did not abuse his discretion in retroactively applying the modified child support order to June 2016 (the date of service), and crediting the husband for his overpayment of such support during the pendency of the case. , See Hoegen v. Hoegen, 89 Mass. App. Ct. 6, 11 (2016). See also G. L. c. 119A, § 13 (a ).
The husband was not credited with the payment of $53,267.50 in additional child support paid to the wife based on his 2016 income.
Based on the foregoing, the judge did not abuse his discretion in denying the wife's motion to alter and amend the judgment to eliminate the retroactivity of the child support order.
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4. Denial of attorney's fees. The wife's final argument challenging the denial of her requested attorney's fees pursuant to G. L. c. 208, § 38, fares no better. She claims that the judge failed to provide the required explanation of the denial, and that the record strongly supports an award to the wife. We disagree.
"A judge has broad discretion in awarding attorney's fees under G. L. c. 208, § 38, and, it follows, broad discretion to deny an award." Feinstein v. Feinstein, 95 Mass. App. Ct. 230, 239 (2019), quoting Freidus v. Hartwell, 80 Mass. App. Ct. 496, 504 (2011). A judge's denial of a requested award of attorney's fees will not be disturbed unless there is a showing of an abuse of that discretion. See Freidus, supra.
Here, the husband sought for the first time after ten years, to modify his child support obligation based on a material change in circumstances. He also requested, among other things, that the judge allocate between the parties responsibility for the payment of the remaining college expenses for the child; the judge determined that there was indeed a material change in circumstances warranting a modification. The husband also successfully challenged his 2017 obligated payment of additional child support. The parties were able to stipulate as to the closing of the Northwestern policy without further litigation. "[T]he judge made no finding of misrepresentation or fraudulent conduct on the part of the husband" in bringing this action, Freidus, 80 Mass. App. Ct. at 504, or that the husband "needlessly complicated" the wife's efforts to defend against it. Schechter v. Schechter, 88 Mass. App. Ct. 239, 260 (2015).
The wife, in turn, filed a motion to dismiss (which was unsuccessful), and she vigorously litigated against the husband's successful reduction of his child support obligation. Provided with these opportunities, there was no pressing reason for the judge to award the wife her requested attorney's fees and costs pursuant to G. L. c. 208, § 38. Compare Brooks v. Brooks, 65 Mass. App. Ct. 129, 131-132 (2005) (wife awarded requested attorney's fees under G. L. c. 208, § 38, where modification complaint lacked requisite material change in circumstances). "[T]he judge acted well within h[is] discretion in deciding the attorney's fees question based on the litigation as a whole." Feinstein, 95 Mass. App. Ct. at 239-240. Accordingly, "[w]e cannot say that the judge abused h[is] broad discretion in declining to award the wife statutory attorney's fees." Freidus, 80 Mass. App. Ct. 504.
Amended judgment affirmed.