Tag Archive | "Divorce"

Trial Court Erred in Imputing Both Parties Incomes

Family Law Case Review

Case: Karen B. Salser v. Gregg A. Salser
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Trial court erred when it imputed Mother to full-time employment as a nurse practitioner, even though her history for the previous five years had been to work about half-time and Mother’s testimony was that no additional hours were available through her current employer.

HELD: Trial court erred when it failed to include Father’s irregular bonus income, which has the potential to equal 28% of his annual base income, in any part of the child support calculation.

HELD: Trial court erred when it ordered the parents to contribute equally to post-secondary educational expenses. Because the equal division was premised upon the erroneous imputation of Mother to full-time employment, then the post-secondary educational expense division was also error.

FACTS AND PROCEDURAL HISTORY:
The parties married in 1993 and filed for dissolution in 2014. At the time of the dissolution proceedings, the parties had one child in college and one in middle school.

Mother was a nurse practitioner who worked part-time and hourly for a physician. For 2012 through 2015, her income varied from $39,946 to $49,786 per year.

Father was a pharmaceutical rep. He earned a base salary of $95,000 per year, but with bonus opportunities of up to another $27,000 per year.

Following the final hearing, the trial court issued its Decree, which included the following pertinent provisions:

1.     The child support order was based upon imputing Mother to full-time employment at her current hourly rate.

2.     The child support order disregarded Father’s potential bonus income altogether.

3.     Because Mother’s imputed income level was comparable to Father’s income level, the trial court’s post-secondary educational expense order provided that the son should pay 34% of his college expenses, with the remainder divided equally between Mother and Father.

Mother appealed.

The Court of Appeals agreed with Mother that imputation was error. The Court relied primarily upon part-time employment by Mother having become established practice during the marriage, coupled with the evidence that no additional hours were available through Mother’s current employer. There was also no evidence that Mother was attempting to reduce her income to avoid a child support obligation.

The Court also agreed with Mother that it was improper for the trial court to completely disregarding Father’s potential bonus income. The Court specifically noted the percentage calculation set forth in the Guidelines that can be developed to provide that a specific fraction of each bonus payment is paid as child support.

Finally, because Mother was improperly imputed to full-time earning potential, the post-secondary educational expense order — which was derived in part from Mother’s imputed income level — was also erroneous.

The case was remanded for a recalculation of child support and the post-secondary educational expense order, consistent with the Court’s opinion.

Judge Bradford dissented, noting the great deference that the Guidelines and case law afford to trial courts, not just in family law matters generally, but in deciding whether to impute income and how to handle bonus income in particular. “Mother, a licensed nurse practitioner, has the ability to work full-time but simply chooses not to, numerous opportunities are available in Mother’s line of work within the community, and Mother would make the same hourly rate ($50 per hour) or higher if she were to accept a full time position.” 

To view the text of this opinion in its entirety, click here: Karen B. Salser v. Gregg A. Salser

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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Trial Court Did Not Err in Finding that Father was Voluntarily Underemployed, but Erred when Determining How Father’s Income Should be Imputed

Family Law Case Review

Case: Mark H. Miller, II v. Leigh Anne Miller
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Trial court did not err in finding that Father was voluntarily underemployed, but the trial court erred when it determined the amount to which Father’s income should be imputed without evidence of prevailing job opportunities and earning levels in the community.

DICTA: When determining an income amount to which a parent should be imputed, this opinion suggests that the trial court is required to consider evidence of all four of the following factors: (1) the party’s work history; (2) the party’s abilities; (3) prevailing job opportunities, and (4) earnings levels in the community. Failing to consider all four of these factors appears to be reversible error.

FACTS AND PROCEDURAL HISTORY:
Mother and Father married in 1999 and had four children together. Mother had been the primary caregiver for the children, but she obtained full-time employment in late 2009, at the about the same time Father lost his job as an insurance agent. Thereafter, Father became the primary caregiver to the children. Mother and Father agreed that Father should return to school, so in 2010, he enrolled part-time at IUPUI.

In 2014, Mother filed a petition for dissolution. At the time of the parties’ 2016 final hearing, Father was still attending IUPUI part-time, but he was also working 15 hours per week which earned him $250/wk. The trial court found Father to be voluntarily underemployed, and imputed him to income of $600/wk for child support purposes. The trial court’s findings suggested the $600/wk amount was based upon Father’s income history as an insurance agent. Father appealed.

Father’s primary argument on appeal was that the finding of voluntary underemployment was erroneous because Father’s decision to return to college was made by agreement with Mother, and that Father should not be penalized for making the decision to return to school. The Court of Appeals rejected these arguments, focusing on the fact that, at the time Father returned to school part-time in 2010, he was also the children’s primary caregiver; since then, Father no longer had the caregiving responsibilities — yet Father continued to take classes on only a part-time basis. “A reasonable inference can be drawn that the time Father spent in his caretaking function is now available for other purposes, yet he is working only fifteen hours a week.”

However, the Court of Appeals agreed with Father that there was insufficient evidence to support the $600/wk amount to which the trial court imputed Father. Interestingly, the opinion suggests that evidence of a party’s abilities and income-earning history, without more, is inadequate on which to determine an imputation amount. Instead, the imputation amount should be determined from four factors: (1) the party’s work history; (2) the party’s abilities; (3) prevailing job opportunities, and (4) earnings levels in the community. The matter was remanded for a hearing on all four factors.

To view the text of this opinion in its entirety, click here: Mark H. Miller, II v. Leigh Anne Miller

 

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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COA: Supreme Court was Clear, Post-Secondary Educational Expenses are Constitutional

Family Law Case Review

Case: Lisa Gill, et al. v. Jeffrey B. Gill, et al.
by Mike Kohlhaas, Bingham Greenebaum Doll

This is a consolidated appeal of three separate challenges to Indiana’s post-secondary educational expense statute. The constitutional arguments are: (1) the statute violates Equal Protection, by placing divorced parents in a different position than married parents; and (2) the statute violates a parent’s constitutional right to determine his or her child’s upbringing and education.

The Court of Appeals quickly disposed of the matter, concluding that “the Indiana Supreme Court has clearly held that statutory authority allowing a trial court to order a divorced parent to contribute to his child’s post-secondary educational expenses is constitutional.” The Court was unpersuaded by the appellants’ argument that the passage of time warranted a closer review of precedent.

We will provide updates on transfer, if sought.

To view the text of this opinion in its entirety, click here: Lisa Gill, et al. v. Jeffrey B. Gill, et al.

 

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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Support Modifications Typically Inappropriate without Differing at Least 20% from the Prior Order

Family Law Case Review

Case: Danielle Maple v. Travis Maple
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Court of Appeals underscores the Indiana Supreme Court’s MacLafferty holding that, when entertaining a child support modification, it will very seldom be appropriate to modify support if the new support amount is not more than 20% different than the previously-ordered support amount.

HELD: When a trial court is establishing a child support order that includes a credit for “prior born” children, the trial court is required to use a prevailing child support worksheet from that prior born child’s case, and the amount of the credit for prior born children may not be re-litigated.

FACTS AND PROCEDURAL HISTORY:
Mother and Father married, had two children, and divorced in 2009. Mother also had one child from a prior relationship, for whom a child support order had been issued in 2005 and never modified. That 2005 worksheet established Mother’s legal duty of support for her prior-born child at $121/wk.

In the instant case, Father endeavored to modify child support for a variety of reasons, including changes of income and parenting time. However, in the course of seeking this modification, Father sought to reduce Mother’s credit for her legal duty to support a prior born child down to $66/wk. The trial court agreed and, recalculating child support, issued a new child support order which differed by only 16% from the prior order. Mother appealed.

The Court of Appeals reviewed the MacLafferty holding, which provides that the circumstances are rare in which child support should be modified without differing at least 20% from the prior order. The Court of Appeals concluded that no such extraordinary circumstances existed in this case, and the trial court’s modification of support was inappropriate.

Further, the Court of Appeals assigned error to the trial court’s recalculation of the amount of Mother’s credit for her legal duty to support her prior-born child. In effect, the Court concluded that a trial court calculating child support is bound to the child support worksheet of the other court that established support for the prior-born child, and the amount of that credit may not be re-litigated in the current court.

To view the text of this opinion in its entirety, click here: Danielle Maple v. Travis Maple

 

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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