Thaddeus J Andrusz v. Jacqueline R Andrusz
331339
| Mich. Ct. App. | Jul 13, 2017Background
- Parties divorced by consent judgment in 2009; decree awarded defendant modifiable spousal support: $6,000/month based on $204,000 "base income," plus 25% of "salary from employment" exceeding $204,000 per year from bonuses/commissions. Judgment required plaintiff to secure support with life insurance or trust.
- After divorce plaintiff’s total compensation fell (base salary dropped substantially; later rose but remained variable with commissions/bonuses); he deferred some pay to retirement accounts. Plaintiff continued paying children’s college expenses voluntarily.
- Defendant reviewed W-2s and claimed plaintiff underpaid the 25% by excluding deferred (non-taxable) earnings; also disputed adequacy/existence of the life insurance security.
- Trial court found the consent judgment required 25% of all earned income over $204,000 (including non-taxable deferred earnings), found underpayments of ~$15,591.67 for 2012–2014, ordered life insurance, and denied reducing spousal support despite plaintiff’s decreased total income and child support payments.
- On reconsideration the trial court clarified the life insurance may be drafted to avoid posthumous payments to defendant; plaintiff appealed the interpretation and the denial to reduce support.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of "salary from employment" (base salary v. income) | "Salary" means base salary; 25% applies to employment-related bonus/commission only | Phrase intended to mean total income from employment (includes bonuses/commissions) | Ambiguous in contract; course of performance showed parties treated it as total income, so 25% of income over $204,000 applies |
| Inclusion of non-taxable/deferred earnings in "income" | Calculation should be based on taxable income (exclude deferred/non-taxable items) | Should include all earned income (taxable and non-taxable) | Court erred including non-taxable/deferred earned income; obligation limited to taxable income (reverse trial court on this point) |
| Trial court’s refusal to reduce spousal support after plaintiff’s income dropped | Reduced total income and voluntary support of adult children warrant reduction or reconsideration | Spousal support was modifiable but trial court properly declined to reduce based on record | Trial court abused discretion by refusing to consider plaintiff’s support of children; remand for reconsideration of support reduction (vacated that portion) |
| Life insurance requirement and posthumous award issue | Life insurance could create posthumous award to defendant (problematic) | Insurance secures spousal support obligation; defendant entitled to security | Moot as trial court clarified plaintiff may draft policy to terminate on defendant’s death; no posthumous award compelled by court |
Key Cases Cited
- Gates v. Gates, 256 Mich. App. 420 (trial court abuse-of-discretion standard for spousal support)
- Hagen v. Hagen, 202 Mich. App. 254 (limits on altering consent judgments vs. court-ordered judgments)
- In re Estate of Lobaina, 267 Mich. App. 415 (consent judgments treated as contracts)
- Klapp v. United Ins. Group Agency, Inc., 468 Mich. 459 (de novo review of contract interpretation and ambiguity)
- Coates v. Bastian Bros., Inc., 276 Mich. App. 498 (ambiguity in contract allows extrinsic evidence)
- Shay v. Aldrich, 487 Mich. 648 (intent of parties governs contract interpretation)
- Schroeder v. Terra Energy, Ltd., 223 Mich. App. 176 (course of performance as persuasive evidence of contract meaning)