Opinion
No. 2D22-126
02-17-2023
A.G.W., Appellant, v. C.L.C. and Department of Revenue, Appellees.
Ingrid Anderson, Clearwater, for Appellant. Steven Glaros of Steven Glaros & Associates, Tampa, for Appellee C.L.C. Ashley Moody, Attorney General, Tallahassee, and Toni C. Bernstein, Senior Assistant Attorney General, Tallahassee, for Appellee Department of Revenue.
Ingrid Anderson, Clearwater, for Appellant.
Steven Glaros of Steven Glaros & Associates, Tampa, for Appellee C.L.C.
Ashley Moody, Attorney General, Tallahassee, and Toni C. Bernstein, Senior Assistant Attorney General, Tallahassee, for Appellee Department of Revenue.
KHOUZAM, Judge.
A.G.W., the Mother, appeals the Supplemental Final Judgment in her paternity action against C.L.C., the Father. The trial court denied the Mother's petition for upward modification of child support, granted the Father's counterpetition for a downward modification of child support, and denied the Mother's request for attorney's fees. Because the trial court misapplied the governing legal standards and misapprehended the unrebutted evidence, we reverse and remand for further proceedings.
BACKGROUND
The parties never married but produced a child in 2009. A 2012 final judgment of paternity set the Father's monthly child support obligation at $2,000. The Mother has had full custody since birth; the Father has never met the child.
The Father went on to become a professional baseball player, after which the parties entered into a settlement agreement that was incorporated into an amended final judgment in 2016. Therein, the parties agreed that the Father's monthly child support obligation was $8,000, which "shall be non-modifiable through December 31, 2018[,] for any reason, as the Father's contract with the [baseball team] is guaranteed through this date." The Father agreed to "prepay" the support due through the end of 2018 via two lump sum payments made during 2016. The parties agreed to exchange financial information in December 2018 "to assess whether a modification is appropriate."
Following that exchange, in July 2019, the Mother filed a supplemental petition for modification of child support, alleging a substantial change in circumstances. In particular, she alleged that whereas the Father's annual salary at the time of the 2016 amended final judgment was $2,300,000, it had now increased more than four-fold to $9,750,000. The Mother later amended the petition in April 2020 to add additional details, including that the $9.75 million income figure was just base salary and did not include additional income from product endorsements. She also sought attorney's fees.
The Father's May 2020 response to the amended petition included a counterpetition for downward modification of child support. As grounds, he alleged that, during the same period that his $2.3 million income more than quadrupled, the Mother's gross annual salary also rose, from approximately $46,000 to $66,700. Based solely on that increase, the Father alleged that there was no longer any need for the existing support amount "as the minor child's needs can clearly be met at a lower amount," and he sought a variation of more than five percent below the Child Support Guidelines amount. See § 61.30(1)(a), Fla. Stat. (2020). He also asked for an award of attorney's fees.
After a hearing, the trial court entered its Supplemental Final Judgment. The court found a substantial change in circumstances pursuant to section 61.30(1)(b), "wherein the difference between the existing monthly obligation and the amount provided for under the guidelines is at least fifteen percent (15%)." The court accepted that the Guidelines called for a monthly support obligation of $25,522. The court also found that "the total monthly need for the minor child is" $3,891.50. But it found that
it would not be a fair and just result to require the Father to pay child support in the amount provided by the Child Support Guidelines as same substantially exceeds the actual bona fide needs of the child. The Child Support Guidelines reflects almost four times as much money as the Mother would bring in on her own on a monthly basis.
Based on that finding alone, the trial court granted the Father's counterpetition and reduced the amount of his monthly support obligation that the parties had agreed to by more than half, to the amount it found as the child's current need.
Then, the court applied the modification retroactively to the date of the Mother's 2019 petition. It found that "[b]ased upon the calculated child support need of" $3,891.50 per month, the Father had been overpaying since then. The court then applied a credit to the Father's new ongoing obligation, thereby further reducing his monthly payment amount through the date of emancipation.
With respect to attorney's fees, the trial court found:
[I]t is apparent that the Mother was able to create a savings account with a balance of over $100,000.00 from child support payments received from the Father. While the Court commends the Mother in how she has managed her finances, the purpose of child support is not to create a savings account, but to provide directly for the needs of the child.
Based on that finding, the court found the Mother was "fully capable of covering the cost of her litigation" and did "not have a demonstrated need for attorney's fees and costs." It accordingly denied the Mother's request for fees. This appeal followed.
ANALYSIS
On appeal, the Mother challenges the trial court's jurisdiction to hear the Father's petition as well as its substantive rulings on both petitions. We are satisfied with the court's jurisdiction. But because the judgment reflects multiple legal errors, we reverse it on the merits and remand for further proceedings. I. Child Support
The Mother challenges the trial court's substantive rulings reducing the Father's child support obligation by more than half from the amount they had previously agreed as set forth in the 2016 judgment. She contends that the trial court misapplied section 61.30(1)(a) and the authorities construing it by expressly basing the child support obligation only on need and declining to give legal effect to the Father's undisputed good fortune. On this record, we agree.
Generally, "a trial court's decision regarding whether to modify child support [is reviewed] for abuse of discretion." Dep't of Rev. ex rel. Shirer v. Shirer , 197 So. 3d 1260, 1262 (Fla. 2d DCA 2016) (citing Seward v. Fla. Dep't of Rev. ex rel. McClellan , 794 So. 2d 614, 615 (Fla. 2d DCA 2001) ). "However, where the issue relates to a trial court's application of the law, our review is de novo." Id. (citing Finney v. Finney , 995 So. 2d 579, 581 (Fla. 1st DCA 2008) ).
"The burden of establishing that a reduction is necessary is on the party seeking modification." Overbey v. Overbey , 698 So. 2d 811, 813 (Fla. 1997) (citing Deatherage v. Deatherage , 395 So. 2d 1169 (Fla. 5th DCA 1981) ). Further, where "the child support was based on an agreement by the parties that was subsequently incorporated into an order, a heavier burden rests on the party seeking a reduction than would otherwise be required." Id . at 814 (citing Tietig v. Boggs , 602 So. 2d 1250 (Fla. 1992) ).
Section 61.30(1)(a) provides in pertinent part:
The child support guideline amount as determined by this section presumptively establishes the amount the trier of fact shall order as child support in an initial proceeding for such support or in a proceeding for modification of an existing order for such support, whether the proceeding arises under this or another chapter. The trier of fact may order payment of child support which varies, plus or minus 5 percent, from the guideline amount, after considering all relevant factors, including the needs of the child or children, age, station in life, standard of living, and the financial status and ability of each parent. The trier of fact may order payment of child support in an amount which varies more than 5 percent from such guideline amount only upon a written finding explaining why ordering payment of such guideline amount would be unjust or inappropriate.
(Emphasis added.)
In two key decisions, the Florida Supreme Court discussed at length how to resolve a petition for modification of child support where the paying parent is considerably wealthier than the custodial parent. First, in Miller v. Schou , 616 So. 2d 436, 437 (Fla. 1993), the court stated that "a substantial change in the paying parent's income is itself sufficient to constitute a change in circumstances warranting an increase in child support without a demonstration of increased need." Accordingly, the court held "that an increase in ability to pay is itself sufficient to warrant an increase in child support." Id. at 438.
The court continued, "It follows, then, that the need of the child is only one of several factors to be considered in determining an appropriate amount of support." Id. Consistent with that approach, the court "reject[ed]" the "argument that merely knowing the child's needs as gleaned from [Mother]'s financial affidavit and knowing that [Father] has a substantial income sufficient to satisfy those needs is enough to allow the court to make a support determination." Id.
The court explained:
As a practical matter, it is impossible to believe that any court would award the same amount of child support where the paying parent is a multimillionaire as it would where the paying parent makes a modest living. While technically the child's basic survival needs would be the same in each case, the determination of "need" in awarding child support takes into account more than just the basic necessities of survival. The child of a multimillionaire would be entitled to share in that standard of living—for example to attend private school or to participate in expensive extracurricular activities—and would accordingly be entitled to a greater award of child support to provide for these items, even though provision for such items would not be ordered in a different case.
Id. (citation omitted). The court emphasized that the principle addressed here "is recognized in the statutory child support guidelines, which award greater support as the parents' income increases." Id. at 438 n.3 (citing § 61.30, Fla. Stat. (1991) ). It observed that under this analysis, depending on whether the paying parent is "making two hundred thousand dollars a year or ten million dollars a year ... the amount of support awarded would be drastically different in each case." Id. at 438.
The supreme court revisited the "good fortune" issue in Finley v. Scott , 707 So. 2d 1112 (Fla. 1998). There, it considered an en banc decision of the Fifth DCA that had reversed a child support obligation including a "good fortune" component, thereby stripping the obligation down to only the amount of the child's need. Id. at 1115 (citing Finley v. Scott , 687 So. 2d 338, 342 (Fla. 5th DCA 1997) ). In quashing the Fifth District's decision and reinstating the trial court's award including a "good fortune" component, the supreme court confirmed: "Consideration of both the bona fide needs of the child and the financial circumstances of each parent complies with section 61.30, Florida Statutes (1993), and with our decision in Schou ." Id. at 1116 (emphasis added).
Recognizing "that decisions as to whether and how much to vary child support awards from amounts dictated by the statutory guideline formula are fact-intensive decisions that depend upon the record in each case," id. at 1117, the supreme court expressly approved the following language in "Judge Sharp's well-reasoned dissent" from the Fifth District's en banc decision:
I appreciate the paradox of requiring a parent to overpay "needs and expenses" for a child .... The difficulty is in part semantical, and in part practical. The crux of the difficulty is settling on whose standard of living determines the "needs" of this child.
In this case, the mother is raising the child on a much lower standard of living than would be established by the father, if the child were living at his current lifestyle [as a professional athlete] of $266,926.00 gross income per month. He could well afford, for example, a full time nanny, housekeepers, international travel, residence in a mansion with high attendant expenses, and transportation in expensive automobiles—a portion of which could be allocated to this child. These expenses could easily equate to the $5,000.00 per month found appropriate by the trial court.
However, the mother is not able, in this case, to live at that standard of living.... At her standard of living, the trial court found that only $2,000.00 was actually being spent on this child. However, if the father's child support obligations are limited to this level, the child
will not share in her father's much higher standard of living and lifestyle. Clearly the "needs" of this child should not be solely based on what the mother can afford to spend on her, consistent with the mother's much lower standard of living. That also would be inequitable.
Id. at 1117 (alteration in original) (quoting Finley , 687 So. 2d at 345 (W. Sharp, J., dissenting)).
Ultimately, the court laid out the following test "[t]o assist trial courts in making this fact-intensive decision in future cases":
[A] trial court is to begin its determination of child support by accepting the statutorily mandated guideline as the correct amount. The court is then to evaluate from the record the statutory criteria of the needs of the child, including age, station in life, and standard of living, the financial status and ability of each parent, and any other relevant factors. If the trial court then concludes that the guideline amount would be unjust or inappropriate and also determines that the child support amount should vary plus or minus five percent from the guideline amount, the trial court must explain in writing or announce a specific finding on the record as to the statutory factors supporting the varied amount. Absent an abuse of discretion as to the amount of the variance, the trial court's determination will not be disturbed on appeal if the calculation begins with the guideline amount and the variation is based upon the statutory factors.
Id. at 1117.
Here, as a threshold matter, we note that a few key points are not in dispute. First, the Father acknowledges that the only change in circumstances he alleged was an increase in the Mother's monthly gross income of about $20,700 annually, which he calls "arguably a substantial increase." He also agrees that his own base salary increased by nearly $7.5 million annually during the same period and, with it, his resulting ability to pay. Finally, he agrees that in reducing his monthly obligation in the face of this evidence, the court omitted any good fortune component in the award, instead ordering support in only the amount of the "monthly need of the child." Nonetheless, the Father contends "that the trial court did not err in failing to order good fortune child support."
But we conclude the court misapplied the statutory standard as clarified in Schou and Finley and thereby abused its discretion. In particular, the court declined to address whether the Father's undisputed annual base income increase of approximately $7.5 million in just a few years constituted a change of circumstances under Schou . Further, it reduced the obligation from the agreed amount set forth in the 2016 judgment by more than half to only the amount it found as the child's monthly need, without including any good fortune component.
In denying the Mother's petition without explanation, the trial court appears to have ignored the supreme court's unequivocal holding that "an increase in ability to pay is itself sufficient to warrant an increase in child support." Schou , 616 So. 2d at 438. The Father admitted that his base salary had increased from $2.3 million to $9.75 million. Yet the only "change in circumstances" the trial court found was a resulting greater-than-fifteen-percent difference between the existing monthly obligation and the Guidelines amount under section 61.30(1)(b).
Then, in reducing the Father's obligation, the court failed to reconcile the Mother's modest gross income increase with the Father's multimillion-dollar base salary increase during the same period. Simply put, if her $20,700 gross income increase was "arguably ... substantial," then his simultaneous $7,500,000 base income increase was too.
The court also failed to properly apply the good fortune factor. Despite acknowledging that the award in cases like this one should be based not only on the child's needs but also on good fortune, the court expressly set the monthly obligation at the exact amount it found for the child's monthly need. But on this record, where the Father's good fortune is clear and undisputed, the court should have taken it into account in determining the appropriate amount of support under section 61.30(1)(a). See Schou , 616 So. 2d at 438 ("[T]he need of the child is only one of several factors to be considered in determining an appropriate amount of support."); Finley , 707 So. 2d at 1118 (quashing DCA decision that stripped good fortune component from child support obligation and reinstating trial court order awarding good fortune component on top of base need).
To support the downward deviation from the $25,522 Guidelines amount to the $3,891.50 need amount, the court made two findings. It found that awarding the Guidelines amount would be unjust or inappropriate because that amount (i) "substantially exceeds the actual bona fide needs of the child" and (ii) "reflects almost four times as much money as the Mother would bring in on her own on a monthly basis."
But, as already discussed, the statutory standard explained in Schou and Finley affirmatively contemplates that the obligation in cases like this one will exceed the child's baseline needs. And the undisputed great income disparity is what resulted in the high Guidelines amount in the first place—it cannot also be the sole basis for reducing that amount. Indeed, the increased disparity itself is a change warranting additional support under Schou and Finley , not a reason to reduce support well below the amount the parties previously agreed. We acknowledge that the court was permitted under section 61.30(1)(a) to deviate from the Guidelines amount by more than five percent upon sufficient findings, but we conclude that stripping the obligation down by nearly eighty-five percent based only on the existence of an income disparity cannot be justified.
Moreover, the court failed to address the Father's "heavier burden" to establish a reduction from the parties' prior agreement to a higher monthly support amount. See Overbey , 698 So. 2d at 814. The Father agreed to that amount when he was earning considerably less money per year, in a written agreement that was incorporated into the 2016 judgment and expressly contemplated modification based on financial developments. Yet the court did not appear to consider the legal effect of that agreement in deciding the petitions. This too was error.
Accordingly, where there is no dispute that, after the court reduced the parties' support agreement to judgment, the great disparity in the parties' incomes only increased dramatically, the trial court abused its discretion in denying the Mother's petition without explanation and instead reducing the Father's support obligation by more than half. Because the trial court misapplied section 61.30(1)(a) and the authorities construing it, we must reverse the modification of the child support award and remand for further proceedings.
II. Attorney's Fees
The trial court also declined to award the Mother attorney's fees based on an apparent misapprehension of the evidence and a mistaken belief that the Mother should pay for her attorney's fees with child support monies. Accordingly, we also remand the court's ruling on the Mother's fees request for reconsideration.
The trial court appears to have confused the Mother's personal savings account with the Certificate of Deposit (CD) into which she placed the Father's prior lump-sum child support prepayment. During questioning by counsel and the court itself, the Mother was unequivocal that the $100,000 asset was a CD, although the record does not reflect its duration. The Mother specified that the entire contents of the CD came from the Father's 2016 lump-sum child support prepayment, which she deposited "[s]oon after, to keep it completely locked away for the future" to be spent on the child. She testified that her "savings account" was separate and had a much lower balance. This evidence regarding the Mother's assets was unrebutted, and the court made no finding that the Mother's testimony was not credible. Yet the court focused on the contents of the Mother's $100,000 "savings account" as the express basis for finding she had no need for attorney's fees.
Further, the existence of this child support account was the only stated basis for the trial court's finding that the Mother "is fully capable of covering the cost of her litigation" and "does not have a demonstrated need for attorney's fees and costs." To the extent the court intended to suggest that the Mother should pay her attorney's fees with child support monies, that would also be error. As this court recently observed, child support payments "are not income. After all, ‘[c]hild support is a right that belongs to the child.’ " Gonzalez v. Reyes , 302 So. 3d 1045, 1047 (Fla. 2d DCA 2020) (alteration in original) (quoting Cronebaugh v. Van Dyke , 415 So. 2d 738, 741 (Fla. 5th DCA 1982) ); see also Robert S. Thurlow, P.A. v. LaFata , 915 So. 2d 737, 739 (Fla. 5th DCA 2005) (concluding that a mother's estate could not assign interest in child support arrearages because the right thereto belonged to the children).
For guidance on remand, we reiterate our recent holding that "[t]he primary factor to be considered in determining entitlement [to attorney's fees] under section 61.16(1) is the parties' financial resources," which "requires consideration of both the parties' incomes and assets." C.F. v. S.B. , 313 So. 3d 873, 875 (Fla. 2d DCA 2021) (emphasis added) (explaining that "[s]ection 742.045, Florida Statutes (2016), of the paternity statute provides for attorney's fees on the same basis as the provision for attorney's fees in dissolution of marriage cases, section 61.16(1), Fla. Stat. (2016)"). This means that "[w]here one [parent] has a superior financial ability to secure counsel, it is not necessary for the other [parent] to be completely unable to pay attorney's fees in order to be entitled to an award of such fees." Melchione v. Temple , 326 So. 3d 182, 185 (Fla. 5th DCA 2021) (first alteration in original) (quoting Ariko v. Ariko , 475 So. 2d 1352, 1353 (Fla. 5th DCA 1985) ).
CONCLUSION
In light of the errors discussed herein, we reverse the judgment and remand for reconsideration of the petitions under the correct legal tests consistent with this opinion. If the trial court again decides to deviate from the Guidelines amount by more than five percent, then it shall support such deviation with sufficient findings pursuant to section 61.30(1)(a) and the authorities construing it. Likewise, if the trial court once again denies the Mother's request for attorney's fees, then that ruling must be supported by appropriate findings based on the evidence and after consideration of both parties' financial resources.
Reversed and remanded.
VILLANTI and ROTHSTEIN-YOUAKIM, JJ., Concur.