Cronin v. Cronin
977 N.W.2d 273
| Neb. Ct. App. | 2022Background
- Parties divorced by decree in December 2011; two minor sons (born 2002, 2006). The decree adopted a joint custody parenting plan and imposed an upward deviation from the child support guidelines, resulting in Keith paying $1,350/month until June 2013, then $1,000/month (later $800 upon future events).
- Keith filed to modify the dissolution in June 2020, alleging material changes in incomes and expense allocation. Jamie counterclaimed seeking recalculation and changes to custody-related issues but later abandoned the custody modification request.
- At the March 2021 hearing, evidence showed Keith’s compensation included salary, bonuses, and annual retention stock awards (vested and unvested); retention awards had materially decreased in quantity though share price rose. Jamie had been terminated from Union Pacific in Nov. 2020 and received a severance and prorated equity vesting.
- The district court modified child support to $451/month (two children), found both parents had material changes in income, used a 5-year averaging approach for Keith (monthly $16,985), imputed Jamie’s monthly income at $9,139, set Keith’s filing status to single, and made support retroactive to July 1, 2020.
- On appeal the court reviewed income calculations de novo, adjusted Keith’s gross monthly income to $19,097 (using 2021 actual income rather than speculative averaging of unvested shares), imputed Jamie’s monthly income at $9,367, treated Keith’s tax-filing status as Head of Household for calculation purposes, attributed the child tax credit and three exemptions to Keith, found a material change of circumstances, and recalculated child support to $638/month (two children) and $426/month (one child) with cost-sharing 66% Keith / 34% Jamie.
Issues
| Issue | Plaintiff's Argument (Jamie) | Defendant's Argument (Keith) | Held |
|---|---|---|---|
| Proper method to calculate Keith’s income for child support (retention shares) | Court should not average speculative unvested share values; use historical 5-year average or exclude speculative portions | Include some value for retention shares; district court’s 5-year averaging was appropriate | Court abused discretion to average unvested-share values; used Keith’s known 2021 income ($19,097/mo) for calculation (least speculative) |
| Imputation of Jamie’s income | Jamie challenged any higher imputation; district court erred if it used lower prior-year salary | Keith argued higher imputed income (approx $10,417/mo) reflecting 2020 salary and bonus | Court abused discretion imputing $9,139; on de novo review imputed $9,367/mo (reflecting most recent monthly earnings) |
| Tax filing status and allocation of exemptions/child tax credit | Keith filed jointly in prior years; court erred using Single status, and misallocated exemptions/child tax credit | Keith argued Married Filing Jointly understates his tax liability by absorbing spouse’s deductions; proposed Head of Household on calculation | Court abused discretion setting Keith to Single; for calculator purposes treated Keith as Head of Household (best proxy for his tax liability) and attributed three exemptions and Brock’s child tax credit to Keith |
| Material change and retroactivity of modification / cost-sharing | No material change sufficient to reduce Keith’s prior upward-deviated obligation; if retroactive support ordered, court should also retroactively adjust cost-sharing and Jamie’s unilateral expenses | Keith argued changes in compensation and reduction of deviation-related expenses justify modification and retroactive application to filing-month +1 | Court found a material change (satisfied §4-217 presumption), allowed retroactive modification to July 1, 2020, but did not require retroactive adjustment of the parties’ cost-sharing; appellate court modified support amounts per recalculation |
Key Cases Cited
- Tilson v. Tilson, 307 Neb. 275, 948 N.W.2d 768 (trial-court modification reviewed de novo; abuse-of-discretion standard)
- Vanderveer v. Vanderveer, 310 Neb. 196, 964 N.W.2d 694 (proceeds from vested/cashed restricted stock units includable where regularly received)
- Hotz v. Hotz, 301 Neb. 102, 917 N.W.2d 467 (child-support guidelines: include all income except specified exclusions)
- Noonan v. Noonan, 261 Neb. 552, 624 N.W.2d 314 (income inclusion under guidelines)
- Armknecht v. Armknecht, 300 Neb. 870, 916 N.W.2d 581 (use current earnings generally for child support)
- Fetherkile v. Fetherkile, 299 Neb. 76, 907 N.W.2d 275 (factors for material change in child-support modification)
- Brodrick v. Baumgarten, 19 Neb. App. 228, 809 N.W.2d 799 (prior deviation cannot be undone merely because guidelines would produce a different amount where no change in circumstances)
- Johnson v. Johnson, 290 Neb. 838, 862 N.W.2d 740 (retroactivity: absent equities, modification applies to first day of month following filing)
- Bowmaker v. Rollman, 29 Neb. App. 742, 959 N.W.2d 819 (trial court has discretion on retroactive application of modification)