Opinion
No. 51053-3-I.
Filed: February 2, 2004. UNPUBLISHED OPINION
Appeal from Superior Court of King County. Docket No: 01-3-05693-3. Judgment or order under review. Date filed: 08/26/2002.
Counsel for Appellant(s), Steven Jeffrey Fields, Attorney at Law, 18222 104th Ave NE Ste 101, Bothell, WA 98011-3491.
Counsel for Respondent(s), Alayne L. Spaulding, Law Offices of Alayne L. Spaulding, 1604 Hewitt Ave Ste 401, Everett, WA 98201-3536.
Michael Millspaugh appeals the order of child support and argues the trial court abused its discretion because (1) it included his nonrecurring bonus income, (2) there was no evidence of the parties' financial resources, the mother's expenses and the child's needs that allowed the court to extrapolate from the child support schedule, (3) an unauthenticated formula was used to extrapolate, and (4) the child support worksheets did not include the standard support amount from the child support schedule. He also argues the $10,000 attorney fee award to his former spouse, Kimberly Millspaugh, was an abuse of discretion because it was based on an erroneous calculation and there was no evidence of need or ability to pay. We conclude the trial court did not abuse its discretion and affirm the child support order and award of attorney fees.
FACTS
Michael and Kimberly Millspaugh were married for approximately three years. They married on July 26, 1998, and separated in May 2001, approximately six months after the birth of their only child, E.
The parties are referred to as 'mother' and 'father.'
Prior to and during the marriage, the father was vice president of a company that buys commercial jet airplanes from Airbus and Boeing and leases them to airlines around the world. The mother has a high school education and held an administrative position in an office equipment company until E was born. Afterwards, she stayed home to care for E.
Prior to trial, the mother and father participated in mediation and entered into an agreement dividing their assets and liabilities. The agreement also identified the issues that remained for trial: the adoption of a parenting plan; the value and characterization of the parties' two cars; responsibility for approximately $40,000 from a line of credit obtained by the father prior to the marriage and the parties' joint credit card debt; the division of bonuses paid to the father after the parties separated; child support; and attorney fees. The trial was limited to the issues identified by the parties and lasted three days, from July 15 to July 18, 2002. At the conclusion of the trial, the court gave its oral decision. The court ruled that the mother's Jeep was a community asset with a value of approximately $22,000 and the father's Acura had a net value of approximately $11,500, $8,500 of which was a community asset. The trial court determined that the majority of the funds obtained through the line of credit ($30,000) was the husband's separate debt and that each party was responsible for half of the community debt ($10,000) and $1,800 in credit card debt. The court concluded that a $40,000 'stay-put' bonus received by the father for 2001 was the father's separate property because it could not have been realized until after the parties' separation, but 45 percent of his $50,000 performance bonus, earned before the separation, was community property.
During the trial, the mother and father presented an agreed parenting plan that provided E would reside primarily with the mother.
The court calculated the father's monthly net income as $12,039.28 and the mother's net income as $2,242.74. The resulting combined monthly net income is $14,282.02. The father's income represents approximately 85 percent of that figure. The maximum combined monthly net income listed on the economic table of the child support schedule is $7,000. The trial court ruled that because the combined income figure exceeded $7,000, the amount of child support should be extrapolated from the schedule. The court set the basic child support obligation at $1,843.54 per month; $1,554.11 of this amount was allocated to the father and $289.43 to the mother.
The trial court also ordered the father to pay $10,000 of the attorney fees incurred by the mother.
On August 2, 2002, the trial court entered an order of child support with child support worksheets and a worksheet synopsis, the decree of dissolution, findings of fact and conclusions of law, and the parties' mediation agreement.
The parties designated the agreement as a 'CR 2A Agreement' and presented it to the court at trial. Under CR 2A, an agreement is not enforceable unless entered by the court.
The father filed a motion for reconsideration, challenging the child support order and the attorney fee award. The trial court denied his motion. The father appeals the child support order and the $10,000 award of attorney fees to the mother.
DISCUSSION
The amount of child support rests in the sound discretion of the trial court. In re Marriage of Crosetto, 82 Wn. App. 545, 560, 918 P.2d 954 (1996); In re Marriage of Stern, 57 Wn. App. 707, 717, 789 P.2d 807 (1990). A trial court abuses its discretion only when its decision is manifestly unreasonable or based on untenable grounds. State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971). A court's decision is based on untenable grounds if the factual findings are unsupported by the record; it is based on untenable reasons if it is based on an incorrect standard of law or the facts do not meet the requirements of the correct standard of law. In re Marriage of Littlefield, 133 Wn.2d 39, 47, 940 P.2d 1362 (1997).
1. Nonrecurring Income
The father contends the trial court erred by including his $40,000 'stay-put' bonus in the calculation of his income. After his company was purchased by another company, the father received 'stay-put' bonuses to reward his continued employment. He testified he received 'stay-put' bonuses for the past three years and he had received a performance bonus every year. However, according to the father, he would not receive a 'stay-put' bonus after 2002 and he did not expect substantial performance bonuses in the future because of the economic downturn in the aviation industry. He contends the court erred when it included the 'stay put' bonus because his testimony was unrefuted.
On appeal, the father specifically challenges only the inclusion of the 'stay-put' bonus.
RCW 26.19.071(3)(r) provides that bonus income shall be included in the calculation of gross monthly income. If the bonus income is nonrecurring, there is a basis to deviate from the standard calculation. RCW 26.19.075(1)(b). 'Deviations for nonrecurring income shall be based on a review of the nonrecurring income received in the previous two calendar years.' RCW 26.19.075(1)(b).
Because the father received a 'stay-put' bonus for the preceding three years, there was no basis to deviate and the bonus was properly included in the calculation of the father's income. Based on the father's testimony, the court acknowledged and accounted for any change in his income. The court's order explicitly provides: '[I]t is anticipated that the father's income may drop in 2002/3 and an adjustment may be necessary in approximately 5/03.' The court's order allows the parties to, 'adjust the child support obligation effective 5/1/03 and annually every year thereafter.'
CP 223.
CP 226.
The court did not err when it included the father's 2002 bonus in the income calculation because he had received it the two previous years. And the court in the order of child support provides for annual adjustments of the child support obligation based on the parties' income.
2. Extrapolation
In Washington, child support obligations are calculated according to the statutory support schedule. See RCW 26.19.020. The schedule was enacted in order 'to insure that child support orders are adequate to meet a child's basic needs and to provide additional child support commensurate with the parents' income, resources, and standard of living.' RCW 26.19.001. In re Marriage of Leslie, 90 Wn. App. 796, 803, 954 P.2d 330 (1998). The schedule sets forth support obligations for each child based on the combined monthly net income of both parents, the number of children in the family, and the age of the child. See RCW 26.19.001.
Here, the combined monthly net income was approximately double the maximum amount ($7,000) listed on the economic table. When the combined net income exceeds $7,000, the amounts listed on the schedule are advisory. The statute provides:
The economic table is presumptive for combined monthly net incomes up to and including five thousand dollars. When combined monthly net income exceeds five thousand dollars, support shall not be set at an amount lower than the presumptive amount of support set for combined monthly net incomes of five thousand dollars unless the court finds a reason to deviate below that amount. The economic table is advisory but not presumptive for combined monthly net incomes that exceed five thousand dollars. When combined monthly net income exceeds seven thousand dollars, the court may set support at an advisory amount of support set for combined monthly net incomes between five thousand and seven thousand dollars or the court may exceed the advisory amount of support set for combined monthly net incomes of seven thousand dollars upon written findings of fact.
RCW 26.19.020 (emphasis added).
When the combined monthly net income exceeds $7,000, the court has two options under the child support schedule: (1) it may set support at the advisory amount for incomes between $5,000 and $7,000 (here that amount is between $738 and $986); or (2) it may exceed the advisory amount for combined incomes of $7,000 upon written findings.
If a court exceeds the amount of support provided by the child support schedule it should be ''commensurate with the parents' income, resources, and standard of living,' in light of the totality of the financial circumstances.' Leslie, 90 Wn. App. at 804. When the court exceeds the advisory amount of the schedule for monthly net incomes over $7,000, it must provide written findings of fact. RCW 26.19.020. However, the lack of written findings is not fatal; an appellate court may look to the oral opinion. Crosetto, 82 Wn. App. at 560.
The father argues the trial court impermissibly exceeded the child support schedule without evidence of the parties' financial resources, standard of living, the mother's expenses and the child's needs. He claims that because of the lack of evidence of the parties' financial resources, the mother's expenses, and the child's needs, the court failed to consider the 'totality of the economic circumstances' and abused its discretion in setting the extrapolated amount of child support.
In Finding No. 3.5 of the child support order, the trial court determined that:
The combined net income of the parties is $14,281.44, more than double the $5,000-$7,000 income for the statutory advisory amount. The father/obligor's net monthly income is $12,038.70. He [possesses] substantial earning capacity, has significant income, and a high standard of living. The father's significant income and standard of living are consistent [with] the circumstances into which the child was born.
CP 221.
The court also found that the extrapolated amount was 'consistent with legislative intent as set forth in Marriage of Leslie' and 'commensurate' with the parents' standard of living and 'the totality of the financial circumstances'.
CP 221.
In its oral ruling the court stated:
Child support at this level would provide the child with a household income in the mother's home of approximately $55,000, well below that of the father but still comfortable in a closer approximation of what the child would have enjoyed had the parties not divorced.
RP (7/18/02) at 6.
The father relies on Leslie to argue that the child support order must be reversed because it was not made 'in light of the totality of financial circumstances.' But the father takes the language of Leslie out of context. In Leslie, the trial court refused to award child support in excess of the amount set for a combined income level of $7,000, where the father had a monthly net income of approximately $29,000, compared to the mother's income of approximately $2,000. The trial court's decision in Leslie was based on the assumption that exceeding the child support schedule in these circumstances was a deviation. In reversing, this court held that by 'couching' the issue as a deviation the trial court 'inappropriately narrowed the scope of its inquiry and contravened legislative intent'. Leslie, 90 Wn. App. at 804. Because the trial court's misunderstood its authority to exceed the schedule, this court remanded for consideration of whether to do so given the parties' economic circumstances.
Here, two of the issues in dispute were the characterization and distribution of substantial bonuses paid to the father and the expenditure of the line of credit secured by the home. There was a substantial amount of evidence before the trial court about the parties' economic circumstances including income, assets, liabilities, standard of living, expenses and expenditures. The parties submitted bank and credit card statements, which showed both their income and expenditures, including expenditures for the child. The court heard testimony from both the mother and father about their finances, and had documentary evidence from both parties, including several years of federal tax returns that included income from stocks and investments. According to the parties' 2000 and 1999 tax returns, the mother made less than $30,000 a year, while the father made approximately $180,000 each year, not including $10,000 distributed to his 401(k).
An exhibit introduced by the father contained the mother's answers to interrogatories in which she calculated her monthly expenses at $3,507, including expenses for the child (exceeding her monthly income by approximately $1,250). The father complains that this information should not have been considered because the mother's interrogatory answers were not signed by her or her attorney. However, his financial declaration was also unsigned and each party testified about the information in these exhibits.
Because the father's child support obligation is less than 45 percent of his income, there was no requirement to prove the child had extraordinary day-care expenses or special medical, educational or psychological needs. RCW 26.19.065(1).
The parties' mediation agreement listed the assets and liabilities and described the division of the property between the mother and father. The father retained the family residence, which he had purchased prior to the marriage, along with stocks and other investments. The mother did not own any real property and was renting at the time of trial. The mother testified that she came into the marriage without financial assets other than a mutual fund worth approximately $4,000, and that this was the only investment account in her name. She also testified that she had no independent source of income other than her salary.
The parties were prepared to present witnesses at trial to establish the value of their assets and property, but did not because they entered into the mediation agreement and stipulated that the division was equitable. And so, as the father acknowledged, the parties eliminated the necessity of proving the monetary value of their assets. Although the parties did not present evidence of specific monetary values for the parties' assets and property, it is clear from the evidence that there is a great disparity in the financial circumstances and wealth of the mother and father.
While specific values for resources, assets and liabilities is a necessary part of the information on the child support worksheets and facilitates appellate review, it was not included because of the mediation agreement.
The father also argues the child support order contravenes one of the purposes of the statute, to provide for 'comparable orders in cases with similar circumstances.' RCW 26.19.001(2). The father claims that in Leslie, the child support obligation of $1,400 per month is less than the amount here ($1,843.54) even though the father's income in Leslie was significantly higher and there was evidence in Leslie of other substantial financial resources. But the father's argument fails to recognize that this court in Leslie vacated the child support order, reinstated an earlier, higher, child support amount of $2,250, and remanded for reconsideration.
The father also claims that under this court's decision in Scanlon v. Witrak, 109 Wn. App. 167, 34 P.3d 877 (2001), rev. denied, 147 Wn.2d 1026 (2002), the child support order must be reversed because the trial court did not make findings regarding the mother's expenses or the child's needs. In Scanlon, the father sought a downward modification of his child support obligation and the mother, the primary residential parent, filed a cross-motion for an upward modification. The trial court granted the mother's motion and denied the father's, but failed to enter any findings regarding changed circumstances supporting a modification. This court reversed. In Scanlon, the father's monthly net income was considerably lower than the mother's, approximately $3,000 compared to $12,500. Due to the mother's remarriage, her household monthly net income was approximately $43,000. In reversing the upward modification of support, this court found that the court's reasons for exceeding the child support schedule and increasing the father's level of support were not supported by the evidence. For instance, although the trial court found the father could earn more, there was no evidence that the father's lower income was voluntary. This court also concluded that the modification was effectively an 'impermissible retroactive award of support.' Scanlon, 109 Wn. App. at 179.
The trial court in Scanlon also improperly based the father's increased support on the number of overnights spent with him.
In contrast, the trial court here did not base its order of child support on reasons unsupported by any evidence. The parties' combined income exceeded the statutory child support schedule maximum, and the court took into consideration the significant discrepancy in wealth between the father and the mother. This is consistent with the intent of the statute and with Scanlon:
Generally, when an obligor parent is ordered to pay an amount of support that exceeds the economic table, that parent enjoys substantial wealth in contrast to the obligee parent who lives in comparatively modest circumstances. In those cases, it is appropriate for a court, in considering the standards of living of both parents, to attempt to lessen the disparity between the standard of living of the child and the wealthy parent. But it contravenes legislative intent to increase the child support obligation of an obligor parent of moderate means simply because the oblige parent is affluent.
Scanlon, 109 Wn. App. at 179-80.
Neither Leslie nor Scanlon support the father's argument that the child support order must be reversed. The evidence before the trial court of the parties' financial resources, their expenses and standard of living, and the child's needs, was sufficient to consider the totality of the parents' financial circumstances. The court should and did compare the financial circumstances of the parties, and its finding of a significant disparity in wealth and standard of living is supported by the evidence including their income, earning capacity, standard of living and assets. The child support order is supported by the evidence and the trial court did not abuse its discretion.
3. Extrapolation Formula
The father argues the trial court abused its discretion by extrapolating from the economic table using an undocumented and 'unauthenticated' formula.
App. Br. at 13.
It is permissible to exceed the economic table by extrapolation when the combined monthly income exceeds $7,000. Clarke v. Clarke, 112 Wn. App. 370, 48 P.3d 1032 (2002). In these circumstances, the 'statute expressly invites the court to extrapolate from the existing schedule when the parents' income exceeds the amounts calculated in the schedule.' Clarke, 112 Wn. App. at 379. The court defined extrapolation as a 'process of estimating an unknown number outside the range of known numbers' but did not mandate use of a particular formula. Clarke, 112 Wn. App. at 379 (quoting Black's Law Dictionary (6th Ed. 1990) at 587).
The father claims that Clarke is not controlling because it is unclear whether the issue of extrapolation was properly raised at trial in Clarke. But this court's decision in Clarke indicates that the issue of extrapolation was raised and addressed before the trial court. In Clarke, the court commissioner had two proposals before it, the husband's proposal to use the presumptive child support amount for combined income of $5,000, and the wife's proposal to exceed the economic table by extrapolation based on the parties' actual combined income of approximately $8,500. Because the father failed to offer evidence or argument demonstrating the extrapolated amount should not be used, the commissioner adopted the mother's extrapolation approach.
Here, the father did not object to extrapolation in general or the particular formula used at trial until his motion for reconsideration.
The father relies on an out-of-state case, Battersby v. Battersby, 590 A.2d 427, 218 Conn. 467 (1991), to argue that, as a matter of policy, extrapolation based on a percentage of the obligor parent's income should not be permitted because the proportion of household income spent on children decreases as the income increases. Under the economic table, as the combined income figure increases, so does the dollar amount of the presumptive level of support. The father does not present any argument about why the extrapolated figure does not comport with the economic table. And, the support level gradually decreases as a percentage of the combined income. Thus, the lowest amount of combined income listed on the economic table is $600 and the presumptive basic child support for that income level represents 22% of the income. The advisory amount of child support for the combined income of $7,000 is $986, representing approximately 14% of the combined income. The extrapolated figure used by the court represents approximately 13% of the combined monthly income amount. This extrapolated amount of thirteen percent of the actual combined monthly net income, follows the pattern of the economic table of gradually decreasing percentages of combined income.
Neither the statute nor caselaw identifies a particular mathematical formula for exceeding the economic table. And the statute and caselaw do not require that the mathematical formula used be set forth in the child support order.
Clarke held that the trial court is permitted to exceed the economic table by extrapolation. The trial court did not abuse its discretion by doing so here.
4. Inclusion of Standard Calculation
The father contends the court's order of child support is an abuse of discretion because RCW 26.19.035(4) requires the order shall 'state the amount of child support calculated using the standard calculation and the amount of child support actually ordered.' The standard calculation is the 'presumptive amount of child support owed as determined from the child support schedule before the court considers any reasons for deviation.' RCW 26.19.011(8). The father claims that, in addition to the amount of support actually ordered, the child support order should state the standard calculation amount of $986.00.
But the attachment to the child support worksheets entitled 'Worksheet Synopsis' lists $986 as the advisory amount of support, as well as $738 as the presumptive amount, and $1843.54 as the extrapolated amount of support ordered by the court. This attachment was adopted and entered by the trial court. We reject the father's claim that the child support worksheets do not comply with RCW 26.19.035(4).
Moreover, although the father claims that the standard calculation amount is $986, that figure is not the presumptive amount of support, but is only an advisory amount under RCW 26.19.020. And exceeding the highest advisory amount listed on the schedule when the combined income exceeds the schedule is not a 'deviation' as contemplated by RCW 26.19.035(4). Leslie, 90 Wn. App. at 804.
5. Attorney Fee Award
The father claims that the trial court abused its discretion when it ordered him to pay $10,000 of the mother's attorney fees because the fee award was based on an erroneous calculation and the evidence was insufficient to establish the mother's need and his ability to pay. The father also argues that he was entitled to an award of attorney fees based on the mother's intransigence.
An award of attorney fees is within the trial court's discretion. In re Marriage of Knight, 75 Wn. App. 721, 729, 880 P.2d 71 (1994). The party challenging the award must show that the court used its discretion in an untenable or manifestly unreasonable manner. Knight, 75 Wn. App. at 729. The trial court ordered the father to pay a portion of the mother's attorney fees under RCW 26.09.140. Under RCW 26.09.140, the trial court must balance the needs of the party requesting fees against the ability of the opposing party to pay the fees. In re Marriage of Crosetto, 82 Wn. App. 545, 563, 918 P.2d 954 (1996) (citing Knight, 75 Wn. App. at 729).
'The court from time to time after considering the financial resources of both parties may order a party to pay a reasonable amount for the cost to the other party of maintaining or defending any proceeding under this chapter and for reasonable attorney's fees or other professional fees in connection therewith, . . .' RCW 26.09.140.
The father suggests that the court's award of fees was based on the erroneous assumption that the mother's first attorney was paid with community funds. But the testimony established that when the parties separated, they divided the community funds in their checking account and the mother used her share of these funds to pay her first attorney. Subsequently, she paid her second attorney by charging approximately $6,000 to her credit card and was only able to retain her third attorney by borrowing funds from her parents. We are not persuaded that the court's award of fees was based on an erroneous assumption or calculation.
The evidence supports the trial court's conclusion that the father had the ability to pay a portion of the mother's attorney fees. As previously explained, there was ample evidence before the court of the parties' income, earning capacities, resources and expenses and the mother's needs. It does not appear that the father requested fees below on the basis of the mother's intransigence. Nor does the father identify evidence of intransigence. We, therefore, decline to consider his argument. See RAP 2.5.
Both parties request attorney fees on appeal. The appellate court may, in its discretion, award attorney's fees. We award the mother reasonable attorney's fees on appeal in accordance with RAP 18.1.
We affirm the trial court's order of child support and its award of attorney fees.
APPELWICK and BECKER, JJ., concur.