Thе petitioner, Frederick Feddersen, appeals the recommendation of the Master (Leonard, S. Green, Esq.) approved by the Superior Court (Brennan, J.) modifying his child support obligation following his receipt of an approximately $3.4 million settlement from a patent infringement lawsuit in 2001. The issue before the trial court was whether and how to include the settlement as “gross inсome” for child support purposes. See RSA 458-C:2, IV (Supp. 2002). On appeal, the petitioner concedes that the settlement was includable as income. He argues, however, that the trial court erred by: (1) using his 2001 tax returns to determine his present income instead of relying solely upon his March 2002 financial affidavit; (2) issuing a child support order based upon the 2001 settlement income for years other than 2001; (3) making the modified award retroactive to January 2001; and (4) requiring him to place money in a trust for the child as security for future child support payments. He also invites the court to overrule its decision in In the Matter of Dolan and Dolan,
I. Factual Background
The petitioner and the respоndent, Shelley Cannon, divorced in 1995. The respondent has custody of the couple’s son, who turned sixteen in January 2003. The 1995 decree required the petitioner to pay $3,000 per month in child support.
The petitioner is the sole shareholder of FMT Corporation, a closely held corporation. Over the yeаrs, FMT Corporation brought three patent infringement suits. The instant appeal concerns the settlement of the third such suit in 2001, for which FMT Corporation received $5 million (less attorney’s fees). After attorney’s fees, the total value of the settlement was approximately $3.4 million. The petitioner has been using the prоceeds of this settlement to fund a newly created start-up business in Tennessee and to pay taxes.
In May 1998, three years after the divorce decree was issued, the respondent petitioned to modify the support order. See RSA 458-C:7 (Supp. 2002). The court did not hear the petition until nearly four years later, in March 2002.
Following the March 2002 hearing, the master ruled that the $3.4 million settlement was includable as gross income for child support purposes. Pursuant to the uniform child support guidelines, the petitioner’s total support obligation would have been $40,000 per month. The master, however, exercised his statutory discretion to reduce the petitioner’s total support obligation, explaining that “[e]ven in California, $40,000 a month for child support might seem a bit over the top.” Accordingly, he ordered the petitioner to pay $7,000 per month in child support until the child turned eighteen. Acknowledging that the $3.4 million settlement was “non-repetitive,” the master ordered the petitioner to place $200,000 in a trust fund to provide the funds to pay $7,000 per month until the couple’s child was eighteen. The master explained that placing the money in a trust was necessary “to protect the child from any future vagaries in the Petitioner’s income.”
II. Discussion
Trial courts have broad discretion to review and modify child support awards. See Nicolazzi v. Nicolazzi,
A. Use of2001 Income
The petitioner first argues that the trial court erroneously relied upon his income for 2001 as his “present income,” rather than his income for March 2002, when the court heard the petition to modify. We disagree.
To calculate child support, the trial court must first determine each parent’s “present income.” In the Matter of Crowe & Crowe,
As in Crowe, the trial court found the petitioner’s financial affidavit misleading. In his March 2002 financial affidavit, the petitioner listed his monthly income as $12,309. This amount did not include any of the proceeds from the patent infringement lawsuits. For instancе, although the petitioner, through FMT Corporation, had received $857,000 in January 2002 as partial payment of a settlement of one lawsuit, he did not report this on the financial affidavit. Nor did he report the $3.4 million settlement FMT Corporation received in 2001, even though his wife was paid $3 million of this settlement as “salary.”
As in Crowe, the court was not required to rely solely upon the petitioner’s estimate of his present income. It was entitled to rely upon his 2001 tax returns as well as the other evidence presented of his present income. We hold that the trial court’s exercise of discretion in this regard was sustainable.
The petitioner arguеs that because his 2001 income was “extraordinary,” the court should not have used it as the basis for modifying his total support obligation. The relevant statutes require otherwise.
The legislature has determined that nonrecurring income is includable as “gross income” for child support purposes. See Dolan,
all income from any source, whether earned or unearned, including, but not limited to, wages, salary, commissions, tips, annuities, social security benefits, trust income, lottery or gambling winnings, interest, dividends, investment income, net rental income, self-employment income, alimony, business profits, pensions, bonuses, and payments from [сertain] government programs____
This definition includes nonrecurring income, such as lottery or gambling winnings, as well as recurring income, such as wages and salary.
Pursuant to the legislative scheme, all items includable as “gross income” must be used to determine the parties’ total support obligation.
The statutory scheme provides courts with the means to address income fluctuations. See Dolan,
Moreover, an obligor is not “without' recourse when [his] income changes. Either party may seek an adjustment in child support by petitioning for a modification of support payments” based upon substantially chаnged circumstances. Rattee,
B. Dolan
The petitioner urges us to overrule our recent decision in Dolan on the ground that it prohibits courts from addressing nonrecurring income separately from an obligor’s regulаr salary when calculating the parties’ total support obligation. This prohibition stems from the statutory scheme, not from Dolan, and, thus, we decline to overrule Dolan.
In Dolan,
We held that the trial court erred': “Having aptly concluded that exercised stock options are includable as income, the trial court should have added them to the petitioner’s gross income when calculating the parties’ total support obligation pursuant to RSA 458-C:2 & :3.” Id. at 223. Wе reaffirm this ruling as the relevant statutes mandate it.
In this case, he asserts, the trial court should have used his $8.4 million settlement to calculate his child support obligation for 2001 only and, presumably, used his March 2002 financial affidavit to calculate his child support obligation for other years. He asserts that his child support obligation for 2001, however, should be capped at $7,000.
We refuse the petitioner’s request. This request presumes, incorrectly, that the trial court erred when it found the petitioner’s March 2002 financial affidavit misleading. The evidence supported the trial court’s finding in this regard. As previously discussed, we affirm the trial court’s use of the petitioner’s 2001 tax returns to determine his present income for child support purposes.
This is not the first case in which we have addressed how to accommodate an obligor’s fluctuating income when calculating child support payments. In Hillebrcmd, .
We affirmed this ruling in Rattee,
In this case, having properly determined that the petitioner’s present income included the $3.4 million settlement, the trial court committed no error by calculating the petitioner’s child support obligation based upon his presеnt income. See id. Further, after applying the uniform child support guidelines percentage, the court exercised its statutory discretion to deviate from the guidelines to account for the petitioner’s “[significantly high ... income.” RSA 458-C:5,1(b) (Supp. 2002).
C. Duration of Child Support Order
The petitioner asserts that the trial court erroneously required him tо pay the modified support amount “for the balance of the child’s minority or until he graduates from high school.” We disagree. In this State, a child support order remains in effect until it is judicially modified, unless the court has provided for earlier cessation of payments, or unless the child support obligation terminatеs by operation of law. See Griffin v. Avery,
The petitioner next contends that the trial court impermissibly used his 2001 income to revise its temporary order retroactively. We find no such error. As the petitioner concedes, by statute, the trial court had the discretion to make its modified support order retroactive to May 1998, the date on which the petition to modify was filed. See RSA 458:17, VIII (Supp. 2002); Maciejczyk v. Maciejczyk,
The petitioner asserts that he relied upon the temporary order to make financial plans in 2001 and 2002. He contends that, based upon the temporary order, “[h]e thought he knew what his combined obligations to his former wife and son wеre, and he arranged to draw sufficient funds out of his business to pay those.” He then used other available funds to invest in new lines of business, and now finds the retroactivity of the modified child support order “highly disruptive and inappropriate.” The petitioner’s reliance upon the temporary order was misplaced as it expressly stated that it was “temporary in nature and subject to further review at the final hearing.”
D. Trust Fund
Finally, the petitioner takes issue with the court’s order requiring him to place $200,000 in a trust fund as security to ensure payment of child support. He concedes that “[i]n appropriate cases” the trial court has the stаtutory authority to require security, such as a trust fund, for payment of future child support. See RSA 458:21 (1992). He contends, however, that security measures were not justified in this case. We disagree.
RSA 458:21 permits the trial court, in its discretion, to require security for payment of child support. To accomplish this, the court may require the obligor tо place money in a trust and empower the trustee to make
The petitioner mistakenly relies upon our holding in Dubois. In Dubois,
In this case, the trial court required the trust after finding the petitioner’s financial affidavit “misleading” because it did not include the $3.4 million settlement, as well as other amounts from the patent infringement lawsuits, and that the petitioner did not pay child support on the income hе actually received in 2001. Additionally, the trial court heard the petitioner testify that he believed the money from the patent infringement suits belonged to him alone and that he had used some of it to invest in new business ventures. In light of these findings, which the record supports, and this testimony, we cannot say that the trial court erred when it required the petitioner to place $200,000 in a trust fund to secure future child support payments.
Affirmed.