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Elnicki v. Carraci

Court of Appeals of Missouri, Eastern District, Fourth Division

May 27, 2014

JEFFREY K. ELNICKI, Plaintiff/Appellant,
v.
MICHELLE D. CARRACI, Defendant/Respondent

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[Copyrighted Material Omitted]

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Appeal from the Circuit Court of St. Louis County. Honorable Dale W. Hood.

FOR APPELLANT: James Leightner, Clayton, Missouri.

FOR RESPONDENT: Stefan J. Glynias, Matthew S. McBride - co-counsel, St. Louis, Missouri.

Lisa S. Van Amburg, Presiding Judge. Patricia L. Cohen.J., and Philip M. Hess, J., concur.

OPINION

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Lisa S. Van Amburg, Presiding Judge

I. INTRODUCTION

Jeffrey K. Elnicki (" Father" ) appeals the judgment of the Circuit Court of St. Louis County modifying the terms of child support paid to Michelle Caracci (" Mother" ) for care of their sole child (" Child" ), a daughter, born during the marriage. Father raises nine points of error on appeal. Specifically, Father claims the trial court erred bye: (1) imputing additional salary income to him, because the evidence does not support the trial court's finding that he was underemployed; (2) imputing additional capital gains to him, because the evidence does not support the trial court's finding that he underreported his capital gains income; (3) imputing additional yearly income to him based on a one-time inheritance; (4) determining the amount of child support and expenses that are reasonable and necessary for Child's care; (5) ordering him to pay child support until Child is twenty-two years old; (6) requiring him to pay 100% of Child's out-of-state college tuition, as well as room, board, meals, travel, and study abroad; (7) allowing evidence on the issues of Child's college expenses and the date Father's support obligation terminates, because those issues were not properly pled or tried by consent; (8) ordering him to pay Mother's attorneys fees of over $165,000; and (9) denying his motion to disqualify the trial judge for prejudice.

We affirm the trial court's decision to receive evidence on the issues of Child's college expenses and the date Father's support obligation terminates. We also affirm the denial of Father's motion to disqualify the trial judge. We reverse the remainder of the trial court's judgment and remand for further proceedings consistent with this opinion.

II. BACKGROUND

Father and Mother divorced in 1990. Several amendments and modifications regarding custody, visitation, and support of Child would follow. The first of these proceedings occurred in 1992, when the parties filed a motion to re-open the dissolution in order to amend their separation agreement. They agreed that Mother would have primary custody of Child and that Father would pay $600 per month in child support, which represented 74% of the cost of Child's care. Father agreed to maintain health insurance for Child through his work and pay 74% of any uncovered medical expenses. The parties also agreed to set up a college fund for Child, anticipating that they would share equally in the cost of Child's college education, and that Father would pay child support until Child reached twenty-two years of age. The trial court entered judgment to this effect. Though Father received visitation rights in the agreement, he has since had almost no contact with Child.

In 1996, Mother filed a motion to modify the separation agreement. After a hearing and by consent of the parties, the trial court entered judgment increasing Father's support obligation to $736 per month. The parties' agreement also stipulated that Father would pay for 100% of Child's uncovered medical expenses.

In 2000, Mother filed a motion for contempt. After a hearing, the parties consented to another amended agreement. The agreement provided that parties would alternate the years in which they would claim a dependency exemption for support of Child on their federal and state tax returns. The trial court entered judgment to this effect.

In 2005, Mother filed the instant motion to modify, requesting a retroactive increase

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in Father's monthly child support payments, various extraordinary child-rearing expenses, the dependency exemption for all years, and attorney's fees for prosecuting the action. In the summer of 2006, shortly before the motion to modify was heard, Father filed a motion to disqualify trial judge Dale W. Hood for cause. Father alleged that Judge Hood had shown bias throughout the pre-trial proceedings. Judge Hood denied Father's motion without an evidentiary hearing and proceeded to hear Mother's motion to modify.

In its 2007 judgment, following an evidentiary hearing, the trial court found that Father, an attorney, was not earning a salary commensurate with other similarly situated attorneys in the St. Louis area. Though Father's full-time salary at the time of the judgment was $58,875 per year, the trial court imputed $100,000 per year in salary income to him. The trial court also found that Father deliberately underreported his income from premature IRA withdrawals and then imputed $11,618 in investment income. Lastly, the trial court imputed $17,446 in annual capital gains income based on Father's average reported capital gains between 2003 and 2005. In all, the trial court imputed to Father an income of $129,064 per year.

Based on this imputed income figure and its own Form 14 calculation, the trial court ordered Father to pay retroactive child support $1,154 per month from the time of the 2007 judgment to the time the modification was filed in 2005. The trial court ordered Father to pay $1,263 per month prospectively. The trial court also specified that Child's college expenses would be split evenly between the parties, and ordered Father to pay Mother's attorney's fees of $25,958.

Father appealed the trial court's 2007 judgment, and in Elnicki v. Caracci, 255 S.W.3d 44, 50 (Mo. App. E.D. 2008), this Court held that the trial court erred by failing to permit Father an evidentiary hearing on his motion to disqualify Judge Hood. This Court remanded for an evidentiary hearing on Father's motion and for a new trial on Mother's motion to modify.

On remand, Judge Michael D. Burton conducted an evidentiary hearing on Father's motion to disqualify Judge Hood. Father argued that Judge Hood was hostile to him throughout the proceedings, for example, by stating that Father " dodged a bullet" by settling a contempt motion before the court could rule on it. However, Judge Burton did not find credible Father's testimony that Judge Hood made the complained-of statement. Judge Burton also noted that even if Judge Hood had made such a statement, it would have been warranted due to the repeated failures of both parties to follow pre-trial instructions. Judge Burton denied Father's motion and Judge Hood proceeded to re-try Mother's motion to modify.

In the summer of 2012, after a hearing at which all parties were present and evidence was received, the trial court entered its second judgment on the motion to modify, which imposed even greater financial obligations on Father. Again, the trial court found that Father's salary was not commensurate with other similarly situated attorneys in the St. Louis area. Though Father's salary had dropped to $46,411 by 2010, the trial court imputed a salary of $115,000 to him. Father's reported capital gains had also dropped by the time of the 2012 judgment to an average of approximately $93 per year between 2006 and 2011.[1] However, the trial court

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concluded that Father was deliberately hiding capital gains income and imputed annual capital gains of $16,860. The trial court also imputed annual income of $16,600 based on Father's receipt in 2008 of a one-time inheritance of $83,000 from his parents' estate. In all, the trial court imputed to Father annual income of $148,460.

The trial court also found that the reasonable and necessary expenses for Child's care were significantly greater than the amount set in the 2007 judgment. The trial court rejected Form 14's presumptive child support guidelines and independently calculated Father's support obligations. First, the trial court ordered Father to pay support of $1611 per month from July 1, 2005, to June 30, 2007; $1719 per month from July 1, 2007, to July 31, 2010; and $1905 per month from August 1, 2010, until the termination of Father's support obligation. Second, the trial court ordered Father to pay $11,791 for the cost of Child's car; $3244 for softball; $886 for camps, conventions, and driving school expenses; $8577 for computer expenses; $608 in senior high school expenses; and $972 for college preparation and visits. Third, the trial court ordered Father to pay for 76% of Child's college expenses, including 100% of Child's out-of-state college tuition at the University of Kansas-Lawrence, as well as room, board, meals, travel, and study abroad. Fourth, the trial court ordered Father to pay Mother's attorney's fees, which had ballooned from $25,958 at the conclusion of the first trial to $165,982 by the time of the 2012 judgment. In total, the trial court ordered Father to pay $366,088 to Mother.[2] The court further ordered Father to continue to pay support consistent with the judgment until Child reached twenty-two years of age in the summer of 2013. This appeal follows.

III. STANDARD OF REVIEW

" We will not disturb an order modifying a child support obligation unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law." Forde v. Forde, 190 S.W.3d 521, 527 (Mo. App. E.D. 2006). " We will interfere with the award [of child support and expenses] only if the trial court abused its discretion by ordering an amount that is 'against the logic of the circumstances' or is 'arbitrary and unreasonable.'" Id. (quoting Ponce v. Ponce, 102 S.W.3d 56, 60 (Mo. App. W.D. 2003)). We also review for abuse of discretion the trial court's imputation of income, In re Marriage of Crow and Gilmore, 103 S.W.3d 778, 783 (Mo. banc 2003), decision to amend the pleadings to conform to the evidence, Wheeler ex rel. Wheeler v. Phenix, 335 S.W.3d 504, 510 (Mo. App. S.D. 2011), award of attorney's fees, Nichelson ex rel. Lohrasbi v. Roberts, 164 S.W.3d 179, 183 (Mo. App. E.D. 2005), and denial of a motion to disqualify a judge, Elnicki, 255 S.W.3d at 48. " We view facts and reasonable inferences in the light most favorable to the trial court's decision and defer to the trial court's superior ability to determine the credibility of witnesses." Forde, 190 S.W.3d at 527.

IV. DISCUSSION

1. Imputing Earned Income

In his first point, Father argues the trial court erred by imputing salary income of $115,000 per year to him, when his full-time

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salary as an attorney between 2002 and 2010 averaged approximately $55,000.[3] Father contends that imputing salary income was erroneous, because there was no substantial evidence that he voluntarily or deliberately reduced his salary by refusing to work. Mother responds that the trial court properly imputed income, because Father was not earning at a level commensurate with his experience as an attorney and " utter[ly] fail[ed] to be candid as to issues of his income."

" The theory behind imputing income to a spouse/parent is directed toward preventing a [parent] from escaping responsibilities to the family by deliberately or voluntarily reducing his or her income." Buchholz v. Buchholz, 166 S.W.3d 146, 152 (Mo. App. W.D. 2005). " In order to avoid such a situation, a court may, in proper circumstances, impute an income to a [parent] according to what that [parent] could earn by use of his or her best efforts to gain employment suitable to that [parent]'s capabilities." Id. at 153 (quoting Jensen v. Jensen, 877 S.W.2d 131, 136 (Mo. App. E.D. 1994)). " What constitutes 'proper circumstances' depends on the facts and must be determined on a case-by-case basis, but includes a situation where a parent has voluntarily reduced his income without justification." Id. " Also included are situations where a parent involuntarily lost a job but, (1) failed to use his or her best efforts to obtain a new job, (2) refused to accept employment offers, or (3) failed to show that the unemployment was other than temporary." Id. " Courts do not, however . . . compel [parents] to obtain employment which will generate the maximum possible income to support their children, or to mandate the employment which a [parent] is required to take." Id. (citing Smith v. Smith, 969 S.W.2d 856, 859 (Mo. App. E.D. 1998)); see also Payne v. Payne, 206 S.W.3d 379, 385 (Mo. App. E.D. 2006); Wuelling v. Brown, 341 S.W.3d 157, 159 (Mo. App. E.D. 2011).

Here, the trial court found that Father was " underemployed in that his income is not commensurate with that of other [tax] attorneys in the St. Louis metropolitan area with his same skills, education, experience, and work history." The trial court concluded that the " lack" of credible evidence that Father " diligently searched for a job [as a tax attorney] to ...


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