Summary
In Thayer we held that it was not error for the trial court to include fringe benefits because they "are a form of enrichment which indirectly bear upon plaintiff's ability to pay alimony and child support" and "represent compensation for personal expenditures which plaintiff would otherwise be required to pay from his salary."
Summary of this case from In the Matter of ClarkOpinion
No. 79-139
Decided December 12, 1979
1. Divorce — Custody and Support of Children — Ability To Pay The income of the parties to a divorce action is a relevant factor in determining an award of alimony and child support and although contributions by professional corporation to pension and profit-sharing plan were not disposable income out of which husband could pay alimony, court did not, as a matter of law, abuse its discretion in considering the contributions as part of his income because husband controlled the professional corporation, had the option of electing to receive the contributions in the form of salary and exercised control over the method of receipt and disbursement of these monies.
2. Divorce — Custody and Support of Children — Discretion of Court Matters of support and alimony are within the sound discretion of the trial court, unrestricted by fixed formulas and guidelines, and the court's determination will not be set aside absent showing of clear abuse of discretion.
3. Divorce — Custody and Support of Children — Ability To Pay Expenses paid by husband's professional corporation, in the form of fringe benefits, represented compensation for personal expenditures which plaintiff would otherwise be required to pay from his salary and were a form of enrichment bearing indirectly upon his ability to pay alimony and child support; accordingly, trial court did not abuse its discretion in considering such payment of expenses as part of husband's income for the purpose of awarding alimony and child support.
4. Divorce — Custody and Support of Children — Ability To Pay Reimbursements for business and travel expenses by one's professional association or employer should not be considered by the court in determining one's ability to pay alimony and child support; unlike personal living expenditures, business and travel expenses are costs incurred by the taxpayer in earning gross income and reimbursements therefor are not properly considered as part of his net accession to wealth.
5. Divorce — Custody and Support of Children — Ability To Pay Although reimbursements for business and travel expenses by an employer should not be considered in determining one's ability to pay alimony and child support, court's award of alimony and support was not an abuse of discretion or incorrect as a matter of law where the figures were not in dispute and the record did not indicate that the court considered those sums in arriving at husband's net income or ability to pay and where the findings were supported by sufficient evidence and could not be said to be erroneous.
6. Divorce — Appeals — Harmless Error Considering husband's substantial annual income, even if court had improperly considered reimbursements of business expenses in arriving at his ability to pay alimony, the relatively small size of the expenditures at issue would be de minimis and would not constitute reversible error.
Cooper, Hall Walker, of Rochester (Peter A. Handy orally), for the plaintiff.
Boynton, Waldron, Dill Aeschliman, of Portsmouth (Nicholas R. Aeschliman orally), for the defendant.
The issue in this divorce case is whether the trial court may consider contributions to pension and profit-sharing plans, fringe benefits, and reimbursements of business expenses by a professional corporation in determining one's ability to pay alimony and child support. We hold that contributions to pension and profit-sharing plans and fringe benefits may be considered, but that reimbursable business expenses may not.
This action arises from cross petitions by plaintiff and defendant for divorce on grounds of irreconcilable differences. A hearing was held before a Master (Nicholas G. Copadis, Esq.) whose recommendations were approved by the Trial Court (Bean, J.). Plaintiff excepted to parts of the court's decree and moved for rehearing. Defendant moved to clarify the decree. Another hearing was held, and the master made further recommendations, most of which were approved by the Trial Court (Mullavey, J.). Plaintiff seasonably excepted to various findings and rulings by the court. We overrule plaintiff's exceptions.
Plaintiff and defendant were married in 1958 and have four children. Plaintiff is a surgeon and has been the sole source of financial support for the family. He has been practicing in Portsmouth since 1958, and operates his practice as a professional association in which he is the only doctor. Plaintiff receives various benefits as an employee of the professional association, including contributions to a pension and profit-sharing plan, payment of medical expenses, dental expenses, Blue Cross-Blue Shield, health insurance, life insurance, and business expenses.
The first issue is whether the $13,175 in professional association contributions to pension and profit-sharing plans was properly considered in determining plaintiff's ability to pay alimony and child support.
[1, 2] A relevant factor in determining the award of alimony and child support is the income of the parties. See Ames v. Ames, 117 N.H. 554, 555, 374 A.2d 1181 (1977); Calderwood v. Calderwood, 114 N.H. 651, 653, 327 A.2d 704, 706 (1974). Although the contributions at issue were not disposable income out of which plaintiff could pay alimony once they became part of the pension and profit-sharing plan, plaintiff controlled the professional association and had the option of electing to receive the contributions in the form of salary. Because he exercised control over the method of receipt and disbursement of these monies we cannot say as a matter of law that the court abused its discretion in considering the contributions as part of plaintiff's net income. Matters of support and alimony are within the sound discretion of the trial court unrestricted by fixed formulas and guidelines, and the court's determinations will not be set aside absent a showing of a clear abuse of discretion. Symmes v. Symmes, 118 N.H. 488, 490, 387 A.2d 1181, 1182 (1978); Grandmaison v. Grandmaison, 119 N.H. 268, 270, 401 A.2d 1057, 1058-59 (1979). Because neither party disputes the distribution of property by the master, we do not reach the issue of whether a retirement plan is a property interest subject to division upon divorce. See generally Foster and Freed, Spousal Rights in Retirement and Pension Benefits, 16 JOUR. FAM. LAW 187 (1977-78).
The next issue is whether certain expenses paid by the professional association in the form of fringe benefits were properly attributed to plaintiff's net income. The expenses include $898 for life insurance, $1,273.13 for health insurance, $511.98 for Blue Cross-Blue Shield, $450 for medical expenses, and $124 for dental expenses. These benefits are a form of enrichment which indirectly bear upon plaintiff's ability to pay alimony and child support. They represent compensation for personal expenditures which plaintiff would otherwise be required to pay from his salary. Accordingly, we find no abuse of discretion. See Symmes v. Symmes, 118 N.H. 488, 387 A.2d 1181 (1978).
The final issue is whether the court erred in finding that in 1977, plaintiff's professional association paid for 80% of his auto expenses, the total auto expenses being $2,864, and for travel expense of $465.
[4-6] Reimbursements for business and travel expenses by one's professional association or employer should not be considered by the court in determining one's ability to pay alimony and child support. Unlike personal living expenditures, business and travel expenses are costs incurred by the taxpayer in earning gross income, and reimbursements therefor are not properly considered as part of his net accession to wealth. However, we cannot say that the court erred as a matter of law in its finding. The figures themselves are not in dispute, and the record does not indicate that the court considered those sums in arriving at plaintiff's net income or ability to pay alimony. Because the record discloses sufficient evidence to support its findings, and they cannot be said to be erroneous, we find no abuse of discretion. Beaudoin v. Beaudoin, 118 N.H. 325, 327, 386 A.2d 1261, 1263 (1978); Erin Food Services, Inc. v. 688 Properties, 119 N.H. 232, 401 A.2d 201, 204 (1979). Furthermore, even if it was clear that the court erred in this matter, the relatively small size of the expenditures at issue would be de minimis and would not constitute reversible error considering plaintiff's substantial annual income. See 5 AM. JUR. 2d Appeal and Error 790 (1962). See also Legislative Util. Consumers' Council v. Pub. Serv. Co., 119 N.H. 332, 354, 402 A.2d 626. 640-41 (1979).
Exception overruled.
GRIMES, C.J. and KING, J., did not sit; the others concurred.