Opinion
No. 1 CA-CV 14-0848 FC
10-29-2015
In re the Marriage of: KATHRYN MARIE WEIR, Petitioner/Appellant, v. BENJAMIN ROBERT WEIR, Respondent/Appellee.
COUNSEL Scott L. Patterson, PLLC, Tempe By Scott L. Patterson Counsel for Petitioner/Appellant Leary & Wence, PC, Scottsdale By Erin Leary Counsel for Respondent/Appellee
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Maricopa County
No. FC2004-095125
The Honorable Benjamin R. Norris, Judge Retired
REVERSED AND REMANDED
COUNSEL Scott L. Patterson, PLLC, Tempe
By Scott L. Patterson
Counsel for Petitioner/Appellant
Leary & Wence, PC, Scottsdale
By Erin Leary
Counsel for Respondent/Appellee
MEMORANDUM DECISION
Judge Kent E. Cattani delivered the decision of the Court, in which Presiding Judge Diane M. Johnsen and Judge John C. Gemmill joined. CATTANI, Judge:
¶1 Kathryn Weir ("Mother") appeals from the superior court's ruling modifying Benjamin Weir ("Father")'s child support obligation. Mother's core argument is that the court erred by failing to take into account income beyond that earned through Father's business as a golf pro. For reasons that follow, we reverse the modification of child support and remand for further proceedings.
FACTS AND PROCEDURAL BACKGROUND
¶2 Mother and Father are the parents of two minor children. At the time of their divorce in 2005, the parties were unable to agree on Father's income for purposes of calculating child support. Father asserted that the court should take into account only receipts from his golfing business, whereas Mother maintained that the court should also consider recurring monetary gifts from Father's parents.
¶3 After an evidentiary hearing in 2005, the superior court concluded that monies from Father's parents constituted continuing and recurring gifts that should be included as income for purposes of calculating child support (despite Father's intention to repay his parents if or when possible). Because Father had failed to provide financial records to establish the amount of the gifts, the court estimated the amounts of the gifts and determined Father's gross monthly income as $4,918 by multiplying his admitted monthly expenses of $3,279 times 1.5. This resulted in a monthly child support obligation of $1,023.
¶4 In 2014, Father filed a petition to modify child support. Father alleged that his monthly income had decreased to $3,216 and requested recalculation of child support based on that income level. Mother opposed modification, asserting that Father's reported income improperly failed to include continuing monetary gifts and free housing from his parents.
Father's petition also sought a modification of parenting time. The superior court denied Father's request for equal parenting time, and Father has not challenged that ruling.
¶5 At an evidentiary hearing on modification, Father testified that his monthly income was $3,216, which he characterized in his financial affidavit as dividends (and some expenses) paid by his company. He explained that he was a golf instructor at a country club in Mesa. All proceeds from his work as a golf pro were deposited into a bank account for his business, and then his personal income was transferred from the business account into his personal account.
¶6 Father acknowledged that he lived rent-free in a house owned by his parents. He further acknowledged receiving monetary gifts from his parents, which he quantified at a total of approximately $10,000 over the preceding four or five years. He characterized these payments as loans that he intended to pay back incrementally.
¶7 After the hearing, the superior court recalculated child support based on Father's asserted income of $3,216 per month, yielding a reduced monthly support obligation of $402.25. In reducing Father's child support obligation, the court did not include in his calculated income money or cost-free housing Father's parents provided. The court denied both parties' requests for attorney's fees, finding that both sides had acted unreasonably in the course of the modification litigation.
The initial calculation transposed numbers in Mother's monthly income. The court later corrected Mother's income amount, which yielded Father's $402.25 support obligation.
¶8 Mother then moved for a new trial, asserting in part that the court's assessment of Father's income was not justified by the evidence and was based on Father's demonstrably inaccurate testimony. See Ariz. R. Fam. Law P. 83(A)(2), (6). Among other arguments, Mother pointed out that, contrary to Father's assertion that all of his earnings flowed through the business account and were distributed from there into his personal account, he made substantial deposits to his personal account—over $40,000 over a period of 17 months—from unspecified other sources. The court denied Mother's motion in all material respects.
¶9 Mother timely appealed, and we have jurisdiction under Arizona Revised Statutes ("A.R.S.") § 12-2101(A)(1), (5)(a).
Absent material revisions after the relevant date, we cite a statute's current version. --------
DISCUSSION
¶10 Mother argues the superior court erred by modifying Father's child support obligation (and by denying her motion for new trial) because the court erred in calculating Father's gross income. We review the superior court's modification of a child support order for an abuse of discretion, deferring to the court's factual findings. See Strait v. Strait, 223 Ariz. 500, 502, ¶ 6, 224 P.3d 997, 999 (App. 2010). We similarly review for an abuse of discretion the court's denial of a motion for new trial. Pullen v. Pullen, 223 Ariz. 293, 296, ¶ 10, 222 P.3d 909, 912 (App. 2009). We consider de novo the interpretation of the Arizona Child Support Guidelines, A.R.S. § 25-320 app. ("Guidelines"), as a question of law. Patterson v. Patterson, 226 Ariz. 356, 358, ¶ 4, 248 P.3d 204, 206 (App. 2011).
¶11 Arizona law allows modification of an existing child support order on a showing of "changed circumstances that are substantial and continuing." A.R.S. § 25-327(A). A showing that application of the Guidelines would result in at least a 15% variation from the amount of the existing order "will be considered evidence of substantial and continuing change of circumstances." Guidelines § 24(B).
¶12 The amount of child support is calculated based on the parents' gross income, which is intended to encompass "the actual money or cash-like benefits received by the household which is available for expenditures." Cummings v. Cummings, 182 Ariz. 383, 385, 897 P.2d 685, 687 (App. 1994). The Guidelines define gross income as "income from any source" and contemplate that such income "may include, but is not limited to," earnings from wages, dividends, other employment benefits, and recurring gifts, whether monetary or non-cash. Guidelines § 5(A). Non-recurring payments need not be included, and the court generally should not attribute to a parent more income than would be earned from a full-time job. Id.
¶13 Mother argues that the court erred by failing to include the value of Father's housing—provided to him rent-free by his parents—as a component of his gross income. We agree. Here, the original child support order expressly included the value of parental gifts to Father as an element of his gross income. In addressing Father's request to reduce his child support obligation, the superior court was therefore obligated to consider the value of any continuing parental gifts, whether monetary or in-kind, in determining whether this circumstance had undergone a substantial and continuing change justifying modification under A.R.S. § 25-327(A).
¶14 Father asserts that the superior court reasonably excluded the value of his housing because it is income from a second job, characterizing his role as essentially a property manager for his parents' investment property. But the record does not support this characterization. Father testified that he was the "lucky recipient" of rent-free housing from his parents. Notably absent from his testimony was a description of any property management agreement with his parents or any arguable property management services he provided beyond generalized "upkeep," which, like his payments for utilities and landscaping, would be characteristic of a rental relationship.
¶15 The record reflects that Father's free housing is a recurring and predictable gift from his parents, albeit in a different form than their monetary contributions at the time of dissolution. See Cummings, 182 Ariz. at 386, 897 P.2d at 688 (affirming the superior court's treatment of grandparents' payment of a parent's mortgage, as well as other recurring monetary and non-monetary gifts, as "predictable gift income" included in the parent's gross income). Regardless whether the Guidelines would otherwise mandate inclusion of this benefit—which defrays Father's living expenses and thus frees other funds for expenditure, see Cummings, 182 Ariz. at 385, 897 P.2d at 687—the existence of a change of circumstances cannot turn on whether a new judge decides to treat the same income source differently. Accordingly, the superior court erred by failing to include the aggregate value of all recurring gifts given to Father by his parents (housing as well as any continuing monetary gifts) to assess whether Father has shown a substantial and continuing diminution of income since the original support order.
¶16 Mother also asserts, as she did in her motion for new trial, that Father's bank records show substantially more income than he admitted, and suggests that this excess should be construed to be monetary gifts from Father's parents. Contrary to Father's testimony and his financial affidavit setting forth a monthly income of $3,216, bank statements admitted at trial showed that Father deposited on average almost $4,500 per month into his personal checking account from January 2013 through mid-May 2014. Similarly, the bank statements show average monthly spending of over $4,400 over the same period, well in excess of Father's asserted income.
¶17 A portion of the deposits (less than half) can be traced, as Father testified, to payments from his business account. But the bank records show deposits of thousands of dollars almost every month, apparently from sources other than Father's business, that are not accounted for in Father's explanation of his income. Because the bank statements are inconsistent with the evidence on which the superior court relied in calculating Father's gross income, the court erred by denying Mother's motion for new trial on this basis. See Ariz. R. Fam. Law P. 83(A)(6) (authorizing new trial if "the ruling is not justified by the evidence"). Although Mother asserts that the excess funds should be assumed to be gifts from Father's parents, the record does not establish the source of the deposits. On remand, the superior court should consider the full scope of Father's income and determine whether the excess deposits reflect payments that should be considered income under the Guidelines.
¶18 Our reversal of the court's decision on modification necessarily undermines its related decision denying attorney's fees. Accordingly, we vacate the superior court's denial of an attorney's fees award.
¶19 Both Mother and Father request an award of their attorney's fees on appeal under A.R.S. § 25-324. Having considered the statutory factors, and in an exercise of our discretion, we award Mother her reasonable attorney's fees expended on appeal upon compliance with ARCAP 21.
CONCLUSION
¶20 For the foregoing reasons, we reverse the superior court's child support calculation, vacate the modified child support order, vacate the denial of attorney's fees, and remand for further proceedings consistent with this decision.