Opinion
No. A-10-1161.
08-23-2011
STATE OF NEBRASKA ON BEHALF OF MARSHALL R. WELLS, A MINOR CHILD, APPELLEE, v. CODY WELLS, DEFENDANT AND THIRD-PARTY PLAINTIFF, APPELLEE, AND MALLORY M. ERPELDING, THIRD-PARTY DEFENDANT, APPELLANT.
Stephanie Payne, of Payne Law, P.C., L.L.O., for appellant. No appearance for appellees.
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).
Appeal from the District Court for Lancaster County: Jodi Nelson, Judge. Affirmed as modified.
Stephanie Payne, of Payne Law, P.C., L.L.O., for appellant.
No appearance for appellees.
INBODY, Chief Judge, and SIEVERS and MOORE, Judges.
MOORE, Judge.
INTRODUCTION
Mallory M. Erpelding appeals from an order of the district court for Lancaster County which provided, in part, that the parties alternate the income tax exemption for their minor child on an annual basis. Pursuant to this court's authority provided in Neb. Ct. R. App. P. § 2-111(B)(1) (rev. 2008), this case was submitted without oral argument. Because we find that the district court abused its discretion in awarding Cody Wells the exemption in alternating years, we modify the judgment of the district court to provide that Mallory shall receive the exemption for the minor child each year.
BACKGROUND
Mallory and Cody are the biological parents of a son born in July 2006. In November 2009, the State of Nebraska filed a complaint to establish child support. Cody filed a third-party complaint against Mallory in which Cody sought a determination of paternity, custody, parenting time, and child support. Mallory filed a cross-complaint. A hearing was held before the district court referee on January 13, 2010, at which time Cody agreed that he is capable of earning $7.25 per hour working 40 hours per week. In a report filed January 13, 2010, the referee recommended that the "child support stipulation" be approved, that Cody's child support obligation be set at $103 per month commencing February 2010, and that a judgment be entered against Cody in the sum of $206 for retroactive support. A basic net income and support calculation was also filed on January 13, which showed zero income for Mallory and imputed monthly income of $1,256 per month for Cody, at $7.25 for 40 hours per week, resulting in support of $103.20 for Cody's share. The support worksheets included a calculation of Cody's support for a subsequent child born to Cody and his wife and a corresponding deduction relative to support for the child at issue. On March 4, the district court entered an order in conformity with the referee's report, setting Cody's child support at $103 per month, and attaching the same child support worksheets filed with the referee's report.
Cody's third-party complaint and Mallory's cross-complaint was heard on September 21, 2010. Evidence was adduced primarily regarding custody, visitation, and the minor child's therapy needs. Because the only issue in this appeal concerns the income tax exemption, we need not detail the aforementioned evidence. Mallory testified that she is employed, working on a full-time basis, and earning approximately $1,100 gross per month. Mallory requested that she be allowed to have the income tax exemption for the minor child. Cody was unemployed, having only worked 3 months in 2010. Cody indicated that he was looking for employment. Cody testified that he understood that he would not get the income tax exemption if he was not current on his child support at the end of the year.
At the conclusion of the hearing, the district judge stated on the record that she was going to "continue" to alternate the exemption, after acknowledging that Cody was not currently employed. On November 2, 2010, the district court entered its written order awarding the physical and legal custody of the minor child to Mallory, subject to Cody's parenting time schedule, and making other provisions regarding therapy for the child. The court also ordered the parties to alternate the federal and state income tax exemption, with Cody being entitled to claim the minor child in odd-numbered years so long as he is current on his child support obligation as of December 31 in the year in which he intends to claim the minor child.
Mallory has timely appealed from this order.
ASSIGNMENT OF ERROR
Mallory asserts that the district court abused its discretion when it awarded Cody the dependency tax exemption in alternate years.
STANDARD OF REVIEW
An award of a dependency exemption is reviewed de novo to determine whether the trial court abused its discretion. State on behalf of Pathammavong v. Pathammavong, 268 Neb. 1, 679 N.W.2d 749 (2004).
ANALYSIS
Mallory argues that the district court abused its discretion in awarding the dependency exemption to Cody in alternate years. Mallory argues that the evidence on the record was not sufficient to overcome the presumption in favor of her being awarded the exemption in its entirety as the custodial parent. Mallory further asserts that the financial impact of awarding Cody the exemption in alternate years makes the award inequitable and unreasonable, given that Cody was not employed and she was.
The Nebraska Supreme Court has recognized the general rule that a custodial parent is presumptively entitled to the federal tax exemption for a dependent child and that a court in a filiation proceeding has the power to allocate tax dependency exemptions to a noncustodial parent if the situation of the parties so requires. State on behalf of Pathammavong v. Pathammavong, supra. In that case, the father was awarded custody and the mother was ordered to pay child support in the amount of $215 per month, which represented a $50 per month deviation from the guidelines as a visitation expense for the mother's benefit. The Supreme Court concluded that the circumstances did not warrant departure from the presumptive rule and affirmed the district court's award of the exemption to the father. In Emery v. Moffett, 269 Neb. 867, 697 N.W.2d 249 (2005), a modification proceeding, the father's child support obligation was increased to $475 per month for the parties' one minor child. The record shows that the father had monthly net income of $2,043, that he had average living expenses of $2,829, and that he was married with three minor children of the marriage. The district court did not address the dependency exemption for the minor child at issue, which exemption had previously been awarded to the mother. The Supreme Court concluded that the district court did not abuse its discretion in not allocating the exemption to the father.
In the case before us, the record shows that at the time of the hearing in September 2010, Mallory was working full time, earning $1,100 gross per month, and Cody was not working, although he was looking for employment. The child support calculation worksheet attached to the order and utilized by the court uses zero income for Mallory and imputed monthly income of $1,256 for Cody. There is no explanation in the record why Mallory's income was not used in the calculation. The district court, in deciding to alternate the tax exemption, acknowledged that Cody was not presently working.
Based upon the record before us, we conclude that the circumstances did not merit an allocation of the dependency exemption to Cody on an alternating basis. The amount of child support that Cody is ordered to pay for this child is relatively low. At the time of the hearing, Cody was unemployed and did not have any solid prospects for employment. A tax dependency exemption is nearly identical in nature to an award of child support. See Hall v. Hall, 238 Neb. 686, 472 N.W.2d 217 (1991). The district court abused its discretion in awarding Cody the exemption in odd-numbered years. Accordingly, we modify the judgment of the district court to provide that Mallory shall receive the income tax exemption for the minor child each year.
CONCLUSION
Based on our de novo review of the record, we conclude that the district court erred in awarding the income tax exemption to Cody on an alternating basis and we modify the judgment of the district court to provide that Mallory shall receive the income tax exemption for the minor child each year.