IN RE the MARRIAGE OF: Michael A. LUCIANI, Petitioner-Appellant, v. Angelina MONTEMURRO-LUCIANI, Respondent-Respondent-Petitioner.
No. 93-2899
Supreme Court
March 7, 1996
199 Wis. 2d 280 | 544 N.W.2d 561
Oral argument November 1, 1995.
For the petitioner-appellant there was a brief by Thomas W. Anderson, Jr. and Anderson, Sumpter & Anderson, S.C., Kenosha and oral argument by Thomas W. Anderson, Jr.
JON P. WILCOX, J. This is a review of a published decision of the court of appeals which affirmed in part and reversed in part the judgment of divorce granted in the circuit court for Kenosha County, Bruce E. Schroeder, Judge. See Luciani v. Montemurro-Luciani, 191 Wis. 2d 67, 528 N.W.2d 477 (Ct. App. 1995). The court of appeals affirmed the circuit court‘s maintenance provision requiring the respondent-
The issue we consider on review is whether the circuit court erroneously exercised its discretion when it did not deviate from the percentage guideline standards, where the payee earns a substantially greater income than the payer. We hold that in the case of a high-income payee, the percentage standards set by administrative regulation1 presumptively apply, absent a payer‘s showing of unfairness by the greater weight of the credible evidence. We conclude that the circuit court did not err in applying the percentage standards, and therefore reverse that part of the decision of the court of appeals addressing the issue of child support. We affirm the court of appeals’ decision regarding the award of maintenance as well as the tax exemption provision.
The couple, Luciani and Dr. Montemurro, were married in 1986, each at age 32. Dr. Montemurro was in the second year of her medical residency program when the parties were married. In 1988, upon the completion of this program, Dr. Montemurro established her own private medical practice in Kenosha. Luciani was employed as a lab technician at Modine Manufacturing Company in Racine throughout the course of the marriage. The income tax returns for 1987 reported
| Luciani | Dr. Montemurro | |
|---|---|---|
| 1987 | $22,000 | $22,000 |
| 1988 | 26,571 | 14,273 |
| 1989 | 25,789 | 69,060 |
| 1990 | 31,342 | 121,809 |
| 1991 | 29,393 | 131,915 |
| 1992 | 33,177 | 132,8572 |
The divorce action was filed on June 6, 1991. The marriage had produced two children, ages four and three at the time of the trial, who reside with Dr. Montemurro. The circuit court approved the parties’ stipulation to joint legal custody and primary physical placement with Dr. Montemurro. The children‘s physical placement with Luciani is approximately 117 overnights per year, consisting of 32% of the overnight placement, and an additional 49 nonovernight days per year. Dr. Montemurro has the children for the remaining 68% of the overnight placement.
In January 1993, a trial was held in this matter involving a number of issues including property division, debt allocation, attorney‘s fees, beneficiary designations, and placement of the children during certain holiday periods. We are primarily concerned on
Dr. Montemurro argued that the circuit court was required, in accordance with
Following the trial, a judgment of divorce was granted on September 22, 1993. In the initial decision issued by the circuit court, Luciani‘s child support obligation was established by straight application of the percentage standards, although it did not specify a precise dollar amount. The particular subsection of the circuit court‘s decision regarding child support is provided in full:
While there is certainly a huge disparity in the incomes of these two parties, there is nothing in the evidence which would warrant a finding that unfairness will result to Dr. Montemurro, Mr. Luciani or the children by application of the legally-prescribed formula for computing the child support obligation. Indeed, I feel that deviation would have a strong potential for damage to the relationship of the parties: of Dr. Montemurro feeling that Mr. Luciani‘s parental rights are diminished because she is carrying the whole financial load; of the children feeling that their father is less important than their mother or disinterested in them or unwilling to sacrifice for them; of Mr. Luciani feeling that he is not carrying his fair share. All of these can be avoided with Mr. Luciani paying support in accord with the formula, and it is therefore adopted as the Court‘s order.
In response to concerns expressed by the parties in letter briefs following the decision, the circuit court thereafter issued a supplemental decision clarifying that Luciani‘s support obligation was in fact intended to be based on the shared-time provisions of the Admin-
In support of its original decision to adhere to the percentage standards, the circuit court examined several of the statutorily identified factors which would permit deviation if demonstrated by the greater weight of the credible evidence. See
It is important to note that while it may appear to some that it is “unfair” for Mr. Luciani to be required to pay such a large percentage of his income when his ex-wife is earning a much higher income, that this is no more “unfair” than it is for someone who earns the same salary as Mr. Luciani and who also lives apart from two children to pay
far more than Mr. Luciani because his ex-wife earns far less than Dr. Montemurro.
In affirming this decision, the circuit court also reiterated the non-economic considerations encompassed in the initial decision relating to the potential damage to the parties’ relationship and the negative perception of Luciani that may have been harbored by the children if the court were to deviate from application of the percentage standards. Along with the order for child support, the circuit court ordered Dr. Montemurro to pay Luciani $1000 per month in maintenance for 36 months.
Luciani appealed the circuit court‘s order. The court of appeals affirmed the issue of maintenance but reversed the child support portion of the decision. The court of appeals criticized the initial decision, expressing dissatisfaction with the circuit court‘s principal reliance on the non-statutory, non-economic concerns rather than an in-depth economic analysis of the raw financial data available in the record. Luciani, 191 Wis. 2d at 76.
The court of appeals expressed similar concern with the supplemental decision as well. The court concluded that it was couched in non-statutory conclusionary language that lacked the appropriate examination of the disparate incomes and the financial effects of substantial physical placement with Luciani. Id. at 76. Furthermore, the court expressed a troubling concern with its reading of the circuit court‘s decision as stating that the disparity between the parties’ incomes has no bearing on the question of adherence to the percentage standards. Id. at 76-77. The court voiced its disagreement with such a proposition, noting that Hubert v. Hubert, 159 Wis. 2d 803, 465 N.W.2d 252 (Ct. App. 1990) had specifically cautioned against
The appellate court‘s decision concluded that the circuit court “erred in the exercise of its discretion by treating the parties’ disparate incomes as an irrelevant factor and by failing to analyze the economic consequences of the support order in light of the parties’
The circuit court is required to determine the appropriate award of child support by application of the percentage standards mandated under
According to the Department, these percentage standards are an evidentiary shortcut for establishing the need of the child for support. The standards, establish ‘... the cost of maintaining a child as an
equivalent to that percentage of the family income and disposable assets that a parent shares with children in his or her custody.’
Weidner, 131 Wis. 2d at 318 (citing DHSS Memorandum to Members of the Wisconsin Judiciary, December 20, 1983, Attachment I at 3). This court‘s recent decision in Grohmann v. Grohmann, 189 Wis. 2d 532, 525 N.W.2d 261 (1995) clarified the presumptive nature of the percentage standards where we stated: “[a]bsent a showing of unfairness, courts must determine a parent‘s child support obligation by using the percentage standard established by the Department of Health and Social Services....” Id. at 536.
The framework of the statute permits the court to modify the otherwise presumptive calculation if it is demonstrated by the greater weight of the credible evidence that application of the percentage standards would be unfair to the children or either of the parties, see
court lies with the party requesting the modification under the percentage standards.
Dr. Montemurro challenges the court of appeals’ decision to reverse the child support award on two fronts. First, she argues that Luciani failed to prove by the greater weight of the credible evidence that application of the percentage standards resulted in unfairness to him. Secondly, she asserts that the court of appeals’ decision has held that in high-income cases, the circuit court must make a threshold determination that the guidelines are to be utilized, rather than presumptively applying the percentage standards. She asserts that this represents an improper, judicially-legislated shift in the prescribed methodology that the percentage standards presumptively apply unless a showing of unfairness has been established.
Here, the circuit court exercised a rational mental process in examining the list of factors provided under
In addition, the court reiterated the previously mentioned non-economic relationship concerns expressed in the initial decision of April 8, 1993. The court found these facts pertinent to the mental and emotional development of the children, and considered them as other factors relevant to the determination of what was in their best interest. See
In Hubert, the ex-wife of a cardiac surgeon with an annual income of over $1,000,000 asked the circuit court to determine child support by straight application of the percentage standards. The circuit court determined that such application would be unfair to the husband, and modified the award accordingly.12 Hubert, 159 Wis. 2d at 814. The court of appeals reversed, holding that the circuit court had failed to consider several factors weighing against deviation, including the economic level the children would have enjoyed had the marriage continued. Id.
Relying on Parrett v. Parrett, 146 Wis. 2d 830, 841-42, 432 N.W.2d 664 (Ct. App. 1988) for the proposition that courts may deviate from the percentage standards if an award will exceed the children‘s needs, the court of appeals noted that “[w]e agree that in cases where the parties have a substantial marital estate and income far beyond the average income of most people, the robotistic utilization of the percentage standards may give absurd results.” Hubert, 159 Wis. 2d at 814.
In this case, the circuit court‘s application of the percentage standards was by no means “robotistic,” as suggested by the court of appeals, as it considered the relevant statutory factors in determining Luciani‘s support obligation.
Luciani, however, maintains that the circuit court failed to consider the disparity of the parties’ incomes, as well as the statutory factors, constituting an erroneous exercise of discretion. The essence of Luciani‘s challenge is that application of the percentage standards in this case will produce an absurd result. He suggests to this court that the record is “replete with evidence” which supports this claim, and therefore seeks a modification of the child support obligation as determined under
In his financial disclosure statement, Luciani represented to the court that his annual childcare expenses (i.e., daycare) would slightly exceed $10,000. However, when questioned about the validity of this figure by opposing counsel, Luciani modified the child care claim to an average of $30 per week or $1560 per year. He admitted that he has custody of the children on alternating weekends from January through May, and September through December, and therefore incurs no child care expenses during this time. Such expenses would be confined to the months of June and August, during which time Luciani would take vacation, and perhaps his parents visiting from Florida would care for the children, as they had done for an entire summer in the past. These salient factors would significantly reduce the already deflated child care expense estimate offered to the court by Luciani. It is clear that the claimed figures in the financial disclo
On further cross-examination, a number of additional figures were also reduced. Luciani‘s claimed housing expense was $1,124.30, but he testified that his actual monthly rent was $650, a fixed cost unaffected by the presence of the children. The claimed utility expense of $195 was reduced to $150. In addition, Luciani testified that he incurred clothing expenses for the children in the amount of $20 per week and approximately $10 per week in medical supplies. This was the extent of the evidence provided by Luciani in support of his request to modify the child support obligation.
In fact, a comprehensive review of the record in this case further evidences testimony by Luciani which seemingly undermines his challenge that the child support order is patently unfair. Luciani initially testified that his annual budget would require a figure of $36,500, based upon income and liabilities in his financial disclosure statement. This computation, however, included the erroneous claim of child care expenses in the amount of $200 per week. As indicated above, Luciani‘s testimony dramatically reduced this figure to only $30 per week. Subsequent to being alerted to this discrepancy by opposing counsel, Luciani amended the budget claim to an annual figure of $27,600.
Upon a cursory inspection, this figure would appear to exceed Luciani‘s after-tax income of $22,000, resulting in the alleged “forced impoverishment” suggested by the dissent. Dissent, at 311. However, the $22,000 figure significantly underrepresents the income available to Luciani. The dissent has failed to appreciate the fact that he will also receive an addi
The circuit court was next presented with testimony regarding Dr. Montemurro‘s expenditures for the children as well as a multitude of other expenses. Dr. Montemurro was making regular payments on her medical school loans ($36,000 balance), the home mortgage ($84,000 balance; $1100/month), and payments on a business loan for her medical practice ($51,000 balance). In addition to the initial loan to open her practice, Dr. Montemurro was similarly making payments on corporate debts of nearly $44,000. To this figure we further attach the court ordered $1000 monthly maintenance award payable to Luciani for 36 months.
The parties had a final opportunity to offer additional support for their position when required to submit letter briefs to the court following the initial decision. Luciani‘s letter brief reiterated his position at trial, and though replete with allegations of unfairness, neglected to provide the appropriate figures to support these claims.
After reviewing the record, we are satisfied that the circuit court properly concluded that Luciani had failed to prove by the greater weight of the credible evidence that the presumptive application of the percentage standards would be unfair to the children or either party. The court of appeals’ decision stated that it believed that the circuit court had found the disparity of the parties’ incomes to be an irrelevant consideration on the question of adherence to the percentage standards. Luciani, 191 Wis. 2d at 77. This interpretation is mistaken. The circuit court‘s supplemental decision clarified that the disparity in income does not automatically trigger deviation from the percentage standards. Rather, it is but one of many factors
The recent decision by the court of appeals in Kjelstrup v. Kjelstrup, 181 Wis. 2d 973, 512 N.W.2d 264 (Ct. App. 1994) demonstrates that where the parent with primary custody earns a higher income, it does not necessarily follow that “unfairness” results when the circuit court does not deviate from the percentage standards. In Kjelstrup, the court commissioner increased Susan Kjelstrup‘s child support award, at a post-judgment modification hearing, to equal the percentage standard. Id. at 974. Rod Kjelstrup petitioned, and the court reduced the commissioner‘s award, stating that the application of the percentage standards would be unfair given the recent disparity in the parties’ incomes.
The court of appeals reversed the decision of the circuit court because it deviated from the percentage standards by relying solely upon the income discrep
The [percentage of income] standard is based on the principle that a child‘s standard of living should, to the degree possible, not be adversely affected because his or her parents are not living together. It [the standard] determines the percentage of a parent‘s income and potential income from assets that parents should contribute toward the support of children if the family does not remain together. The standard determines the minimum amount each parent is expected to contribute to the support of their children. It expects that the custodial parent shares his or her income directly with their children.
Id. (citing § HSS 80 Preface). In the present case, Luciani similarly seeks to have the support obligation modified because Dr. Montemurro earns a greater income. This argument fails to recognize the assumption that underlies application of the percentage standards, as stated above. Dr. Montemurro is presumed to contribute at least 25%18 of her income to the children‘s support, thereby reducing the income disparity that Luciani relies upon. And further, as made clear by the decision in Kjelstrup, disparity in the parties’ incomes, by itself, is not sufficient to require the court to deviate from strict adherence to the percentage standards. Absent a showing that such disparity will adversely affect the children or the parties in some demonstrative manner, it is simply one among a number of factors to be considered by the court when a
We conclude that the circuit court reviewed the disparity of the parties’ incomes, the amount of physical placement with Luciani, as well as other relevant factors, and exhibited a reasoned process in concluding that deviation from the percentage standards was not warranted in this case. The circuit court did not err in exercising its discretion, and we therefore reverse the court of appeals on this issue.
Finally, we address Dr. Montemurro‘s contention that the court of appeals ignored the statutory presumption of the percentage standards and implicitly rewrote the statute to require the circuit court to make a threshold determination that the guidelines are to be utilized, thereby improperly shifting the burden of proof away from Luciani.
The court of appeals’ error is exhibited in a series of footnotes, which set forth the issue presented by this review:
On a somewhat similar theme, Angelina contends that the amount of support to be paid by the payer under the guidelines is not influenced by the income of the payee. We agree. The standards expect that the custodial parent share his or her income directly with the children. . . . Here, however, the issue is whether the family court properly chose to adhere to the standards in the first instance. It is not whether the court correctly computed Michael‘s support obligation under the standards. This is a subtle but important distinction. (Emphasis added.)
...
Luciani, 191 Wis. 2d at 77 n.5. The appellate court‘s reversal of the percentage standards statutory pre
Angelina argues that Michael‘s attack is on the mechanics of the shared-time formula. . . . We disagree. Michael makes no argument that the family court‘s computation of his support obligation under the shared-time payer formula was flawed. Rather, he argues against the application of the shared-time payer formula on a threshold basis. (Emphasis added.)
The appellate court‘s decision implies that the previously existing presumptions regarding application of the percentage standards are inapplicable in high-income disparity cases. The decision has attempted to shift the established burden of proof in cases where unfairness is alleged, from the requesting party to the circuit court. The circuit court would now be required to conduct its own threshold investigation to determine the appropriateness of the percentage standards in a high-income case, regardless of the amount of evidence presented by the requesting party. This approach ignores the administrative regulation and stated presumptions underlying the statute, see Kjelstrup, 181 Wis. 2d at 977, as well as case law interpreting the percentage standards as an evidentiary shortcut to be utilized in determining the relative needs of the child for support. Weidner, 131 Wis. 2d at 318.
The court of appeals’ dissatisfaction with the shared-time payer formula on the basis that neither the Wisconsin Statutes nor the Administrative Code consider the income of the custodial parent, is not the relevant inquiry in light of the nature of the support guidelines as adopted in Wisconsin. The rules promul
The obligation to support one‘s children is a basic one. Luciani‘s contention that he should be relieved of this burden simply because his ex-wife earns a substantially higher income runs contrary to the paramount goal of child support, namely, securing the best interest of the children. Kuchenbecker v. Schultz, 151 Wis. 2d 868, 875, 447 N.W.2d 80 (Ct. App. 1989). We recognize the role that income disparity may play in a particular case, but under the facts before us, it is only relevant where Luciani can demonstrate that he is unable to pay the court ordered child support or that such disparity in income will adversely affect the children or himself. The circuit court properly concluded that he has failed to do so in this case. Luciani‘s claim of unfairness is unsupported by the facts, as he enjoys an annual budget which exceeds that figure which he testified at trial would be required to maintain himself and the children.
The language in
WILLIAM A. BABLITCH, J. (dissenting). I agree completely with the sound legal analysis written by the majority. Where I disagree is with the application of the law to the facts of this case. Accordingly, I respectfully dissent.
The economic facts are somewhat difficult to glean from this record, particularly because the circuit court made no specific economic analysis or findings other than some conclusory references. What we do glean from the record is the following.
Husband Michael Luciani has aftertax monthly income of approximately $1900 ($22,000 annually). Wife Dr. Angelina Luciani has aftertax monthly income of approximately $8300 ($100,000 annually). Mr. Luciani has the children for approximately 117 overnight days and 49 nonovernight days per year, a placement characterized by the court of appeals as a “nearly equal child placement provision.” Luciani v. Montemurro-Luciani, 191 Wis. 2d 67, 77, 528 N.W.2d 477 (1995).1 He pays $650 a month rent for a home for himself and his children when they are with him. From the statement of facts presented by Dr. Luciani‘s attorney to the court of appeals, we further learn that Mr.
The majority affirms the circuit court decision that says Mr. Luciani must pay approximately $680 a month in child support. Taking into account his rent, utilities, and child care, this leaves him with approximately $290 a month for himself (and his children when they are with him) for expenses such as food, car, gasoline, clothing, car insurance, health insurance, life insurance, and incidentals. It leaves him with little or no discretionary income to spend on gifts, entertainment, vacations and the like for either himself or the children. We compare this to his wife who will have more than ample discretionary income to bestow upon the children, a fact that will certainly resonate with them as they get older.
On the face of it, this result is tantamount to forced impoverishment of one spouse while the other spouse has ample income to live exceedingly well.2 Without further economic analysis by the circuit court with respect to the circumstances of each party, this result could hardly be more inequitable.
What we have here is a situation in which the non-primary parent with a substantially lower income than the primary parent has a time share with the children that approaches equal time. Such a situation was
In addressing the shared-time formula, the authors state that the formula results in inequitable award calculations in two situations: one, where the non-primary parent‘s time share approaches equal; two, where the non-primary parent has a lower income. Where both situations are present, as they are here with husband Luciani, the authors state unequivocally: “the resulting support award, as calculated by the formula currently in effect, produces markedly inequitable results.” Id. at 15 (emphasis added).
The authors use an example, outlined more fully below,3 in which the mother is the non-primary parent with $3000 less income than the father, but, after paying support consistent with the current formula, ends up with nearly $10000 less yearly income than the
Here, the facts are different from their example only with respect to who the non-primary parent is (and of course gender should make no difference) and the amount of the income disparity (which is far greater here than in the example where the authors found the disparity to be “tremendously inequitable” to the mother).
There is a way for this court to resolve the inequity: put teeth into the statutory provision which permits the court to deviate from the standards if the court finds by the greater weight of the credible evidence that the use of the standards is unfair to the children or the party requesting such deviation. See
I conclude that Judge Nettesheim, writing for a unanimous court of appeals, got it exactly right. That court concluded that the circuit court “erred in the exercise of its discretion . . . by failing to analyze the economic consequences of the support order in light of the parties’ budgets, incomes and nearly equal child placement provisions.” Id. Even a cursory look at both circuit court decisions compel this conclusion. Not one figure is cited. There is no analysis whatsoever. All statements are conclusory.
The majority says Mr. Luciani failed to prove by the greater weight of the credible evidence that the presumptive application of the percentage standards would be unfair to either the parties or the children. What more does he need to produce other than the above described facts to establish basic inequity? These facts, on their face, are more than enough evidence to overcome the presumption. I agree with the court of
Notes
Except as provided in sub. (1m), the court shall determine child support payments by using the percentage standard established by the department of health and social services under s. 46.25(9).
The authors state:
In this case, a mother who has her children living in her home for 15 fewer days over the course of a year than the father, and who has a yearly income of $16,000 versus a yearly income of $19,000 for the father, would be ordered to pay the father $3,282 per year using the formula currently in effect. The family incomes which would result after the child support transfer are, for the father, $22,292; for the mother, $12,718. The disparity in family finances which results from the application of the current shared custody child support formula would be tremendously inequitable in this case for the mother and the children.
Melli, Child Support in Shared Physical Custody, at 17 (emphasis added).
Determining child support using the percentage standard.... The percentage of the payer‘s base or adjusted base that constitutes the child support obligation shall be:
...
(b) 25% for 2 children;
Upon request by a party, the court may modify the amount of child support payments determined under sub. (1j) if, after considering the following factors, the court finds by the greater weight of the credible evidence that use of the percentage standard is unfair to the child or to any of the parties:
....
If the court finds under sub. (1m) that use of the percentage standard is unfair to the child or the requesting party, the court shall state in writing or on the record the amount of support that would be required by using the percentage standard, the amount by which the court‘s order deviates from that amount, its reasons for finding that use of the percentage standard is unfair to the child or the party, its reasons for the amount of the modification and the basis for the modification.
Furthermore, if Luciani had been concerned about the proper calculation of the additional 49 nonovernight days in which he had the children for four hours, he could have sought relief under
We note that the circuit court maintenance award is payable for 36 months. Upon the expiration of this period, if Luciani feels that he can no longer meet his child support obligations under the current order, he may seek revision under
Notice of change of employer; change of address; change in ability to pay.
Each order for child support, family support or maintenance payments shall also include an order that the payer notify the clerk of court, within 10 days, of any change of employer and of any substantial change in the amount of his or her income such that his or her ability to pay child support, family support or maintenance is affected.
In order to secure such a revision in his child support obligation, Luciani would be required to prove a substantial change in circumstances. See