Opinion
No. C6-00-1285.
Filed March 6, 2001.
Appeal from the District Court, Dakota County, File No. F29415232.
Wayne A. Jagow, (for respondent)
Nancy J. Ella, (for appellant)
Considered and decided by Halbrooks, Presiding Judge, Schumacher, Judge, and Amundson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant Kimberly Ward challenges a child-support order alleging that the trial court erred in (1) its calculations of the parties' net incomes, (2) failing to use a Hortis/Valento formula to calculate child support, (3) awarding retroactive child support to respondent, and (4) denying appellant the opportunity to provide after-school care for their child. Because we find that the trial court abused its discretion by including appellant's commission income in establishing the basic level of monthly child support, we reverse on that issue and remand to the trial court to recalculate appellant's obligation for child support and daycare expenses. We affirm on all other issues.
FACTS
In a March 1995 dissolution order, the trial court granted appellant Kimberly Ward and respondent Brian Lee Selchow joint legal and physical custody of their minor child. Neither party was obligated to pay child support. In September 1998, appellant brought a motion requesting sole physical custody. Respondent filed a counter-motion, seeking sole physical custody and child support. The trial court held a three-day evidentiary hearing that resulted in its conclusion that the shared custodial arrangement was endangering the child's emotional health and impairing his emotional development. In November 1999, the trial court granted respondent sole legal and physical custody of the child without addressing child support.
Respondent brought a motion in March 2000, requesting that appellant pay child support in accordance with the Minnesota Guidelines, reimburse respondent for daycare expenses, and permit respondent to annually claim the child as a tax exemption. Appellant brought a responsive motion seeking a child-support payment based on a Hortis/Valento formula, the opportunity to provide the child with after-school care, to claim the IRS exemption in alternate years, and to prohibit a change in the child's school.
On June 2, 2000, the trial court issued its findings of fact, conclusions of law, and order requiring appellant to pay monthly child support of $1,128 and 46% of daycare expenses, retroactive to December 1, 1999. In addition, the trial court denied appellant's request to require respondent to keep their child in the same school but granted appellant's request to claim their child as a dependent for tax purposes in alternate years. This appeal follows.
DECISION
Appellant argues that the trial court abused its discretion by determining her child-support obligation based on her past earnings rather than her anticipated future income and by building bonus and commission income into the base income. We agree.
Public policy favors setting child support at a specific amount. Keil v. Keil, 390 N.W.2d 36, 38 (Minn.App. 1986). For the purpose of determining child support, income is defined as "any form of periodic payment to an individual." Minn. Stat. § 518.54, subd. 6 (2000). By definition, "bonuses are forms of periodic payment and therefore income." Novak v. Novak, 406 N.W.2d 64, 68 (Minn.App. 1987), review denied (Minn. July 22, 1987); s ee also Minn. Stat. § 518.551, subd. 5(a) (2000) (in addition to an order for a specific dollar amount, the court may order the obligor to pay child support in the form of a percentage of obligor's net bonuses or other forms of periodic compensation). The issue in this case is how to determine child support based on a total income that fluctuates due to receipt of commissions.
In Novak, this court affirmed a child-support award requiring the non-custodial parent to pay 35% of his bonuses as additional support if and when he received them. 406 N.W.2d at 68. This court has also upheld a trial court's decision to exclude the obligor's bonuses in setting the amount of child support because the bonuses were variable — varying from no bonus to $9,000 annually — and were not a guaranteed source of income. Haasken v. Haasken, 396 N.W.2d 253, 261 (Minn.App. 1986). In affirming the trial court, this court stated:
To properly be included in a calculation of net monthly income the payments need to be "the type of income which could or should provide a dependable source of child support."
Id. (quoting Stangel v. Stangel, 366 N.W.2d 747, 749 (Minn.App. 1985)). Appellant presented evidence that her salary structure as an account associate was changing in 2000 to a higher base pay but a lower commission rate. Her new base salary is $38,000, with a variable commission percentage of .0185. Her supervisor estimated that appellant's commissions in 2000 would be between $17,500 and $27,380. In the first two months of 2000, however, appellant's earnings were $29,222.98, the highest she had earned in 26 months. The trial court found that appellant's income was $74,803 in 1999. By adding appellant's income for 1999 and the first two months of 2000, and dividing the total by 14 months, the trial court determined that appellant's monthly net income is $4,470.
But there was no evidence presented that this income level will continue. To the contrary, appellant provided evidence in the form of a letter from her supervisor that, under the new salary structure, appellant's gross annual income is likely to be in the range of $55,150 to $65,380. Given the variability of appellant's new salary and commission structure, we conclude that the trial court erred by including commissions in appellant's basic level of child support. We, therefore, remand to the trial court to recalculate child support consistent with appellant's base salary, separately requiring a percentage of her commissions to be paid as child support as they are earned and received or as the trial court deems appropriate.
As a second issue, appellant argues that the trial court erred in its determination of respondent's income. A trial court's findings on net income for child support will be affirmed on appeal, if those findings have a reasonable basis in fact and are not clearly erroneous. State ex rel. Rimolde v. Tinker, 601 N.W.2d 468, 470 (Minn.App. 1999). Respondent, a self-employed carpet layer, submitted his 1998 taxes and a child-support worksheet completed in July 1999 by Hennepin County Child Support Services. The trial court left the record open to allow appellant to submit further evidence of respondent's salary. Appellant later submitted testimony from an October 1999 evidentiary hearing in which respondent testified that he earned $35,000. The court took that evidence into consideration but relied on the child-support worksheet and the tax return to set respondent's net monthly income at $900. Here, the trial court determined respondent's monthly net income based upon a July 1999 calculation in a Hennepin County Child Support and Collection order. Because the finding is supported by the record, we do not find that the trial court erred in setting respondent's monthly income.
Third, appellant argues that because of the miscalculated income levels, the court also erred in setting daycare expenses. Because a determination of the appropriate daycare payment is dependent upon income determination, we remand this issue for recalculation.
Fourth, appellant argues that the trial court abused its discretion by not applying a Hortis/Valento formula to determine her child-support payment. A Hortis/Valento formula requires that a parent who shares a significant amount of custody, regardless of the label attached to the custody arrangement, pay guideline child support for the period of time that the other parent has custody of the child. Valento v. Valento, 385 N.W.2d 860, 862 (Minn.App. 1986), review denied (Minn. June 30, 1986); Hortis v. Hortis, 367 N.W.2d 633, 636 (Minn.App. 1985). This court has utilized this formula in cases where a parent provides a "significant amount of physical care." Tweeton v. Tweeton, 560 N.W.2d 746, 748 (Minn.App. 1997), review denied (Minn. May 28, 1997). Some cases have used the number of overnights as a measure of physical care. See, e.g., Rogers v. Rogers, 606 N.W.2d 724, 727-28 (Minn.App. 2000) (calculating the amount of time respondent has the children based on the number of overnights in the visitation order). But the courts thus far have not strictly quantified what is a "significant amount of physical care," so as to require application of a Hortis/Valento formula.
The trial court found that appellant's visitation rights result in her being with their child 29% of the time (based on 106 overnights) and concluded that this was not significant enough to require the application of a Hortis/Valento formula. This record, including the visitation schedule established in the November 1999 custody order, supports the court's finding. Therefore, the trial court did not abuse its discretion is ruling that a Hortis/Valento formula did not apply.
Fifth, appellant argues that the trial court erred as a matter of law in ordering child support to apply retroactively to December 1, 1999. Appellant contends that under Minn. Stat. § 518.64, subd. 2(d) (2000), the modification may only be made retroactive to "the date of service of notice of the motion on the responding party." Appellant argues that, although respondent brought a motion for child support in October 1998, his failure to complete discovery or to pursue the issue of support was, in effect, an abandonment of the motion and thereby a waiver of any right to retroactive modification. See Hicks v. Hicks, 533 N.W.2d 885, 886 (Minn.App. 1995) (finding that, by failing to pursue a motion, the obligor was deemed to have abandoned the motion and lost the claim to retroactive modification). In Hicks, respondent served appellant with a motion to modify support in May 1992 but conducted no discovery, requested no hearings, and presented no evidence to support his motion. Id. at 886. As a result, he was "deemed to have abandoned this motion, waiving any claim to retroactive modification to [the time] when the motion was served." Id. (citation omitted). In addition, the court dismissed the proceeding the following year. Id.
Here, unlike Hicks, respondent did not abandon the motion. Instead, he was pursuing the child custody issue between the parties. It was not until after the court's November 19, 1999 custody order that respondent could have known that the court would not address child support. Approximately two months later, on February 2, 2000, he moved to modify child support based upon the court's custody decision. This limited delay is reasonable. In addition, appellant was given notice of respondent's intent to modify child support in the October 1998 motion. On this record, the trial court's order of child support effective December 1, 1999, is not error.
Finally, appellant argues that the trial court abused its discretion in failing to grant her request to provide after-school daycare to the child under Minn. Stat. § 518.175, subd. 8 (2000). But respondent, as sole legal and physical custodian, has the legal right to make all decisions regarding "the child's upbringing, including education, health care, and religious training" as well as the "routine daily care and control * * * of the child." Minn. Stat. § 518.03, subd. 3(a), (c) (2000). In her affidavit supporting her motion, appellant requests that she be afforded the opportunity to care for the parties' minor child after school in lieu of sending him to daycare, but she does not request additional visitation. In fact, she admits that she will not always be at home in the afternoons but rather, "[o]ftentimes, either I or one of his [step]brothers will be home." Therefore, because this is a decision involving routine daily care, respondent as sole legal custodian has the right to make this childcare decision. The trial court was within its discretion to deny appellant's request.