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Arndt v. Arndt

Court of Appeals of Missouri, Eastern District, Fourth Division

May 23, 2017

EDWARD ARNDT, Appellant,
v.
PAIGE ARNDT, Respondent.

         Appeal from the Circuit Court of St. Louis County Honorable Kristine A. Kerr.

          KURT S. ODENWALD JUDGE.

         Introduction

         Edward Arndt ("Ed") appeals from the motion court's judgment modifying his maintenance obligation to his ex-wife, Paige Arndt ("Paige").[1] The motion court found a substantial change in circumstances based upon Paige's employment and reduced Ed's monthly maintenance obligation from $4, 444 per month to $2, 489. On appeal, Ed claims that the motion court should have terminated (or further reduced) his maintenance obligation because the motion court improperly computed Paige's income and reasonable expenses. Ed also contends that the motion court abused its discretion by awarding Paige $10, 000 in attorney's fees. Finding certain errors relating to Paige's expenses in the motion court's judgment, we affirm in part, reverse in part, and remand for further proceedings.

         Factual and Procedural History[2]

         In June 2010, Ed and Paige Arndt dissolved their marriage. The divorce decree incorporated the parties' separation agreement and stipulated parenting plan. Under the separation agreement, Ed was required to pay Paige $4, 444 per month in modifiable maintenance.

         During the marriage, Paige was a stay-at-home mother while Ed supported the household financially. After the dissolution, Paige attended the Goldfarb School of Nursing. Upon completion of her nursing studies, Paige passed her board examination and Children's Hospital hired her as a registered nurse in the Neonatal Intensive Care Unit ("NICU").

         Ed sought to modify his maintenance obligation by alleging that substantial and continuing changes had occurred, making maintenance unreasonable. For changed circumstances, Ed asserted that Paige was now fully employed, that she could support herself financially, and that the children were emancipated and no longer required Paige's financial support. Thus, Ed requested that the motion court terminate or significantly reduce his maintenance obligation.

         The parties submitted sworn statements of income and expenses before trial. The motion court heard evidence on three different hearing dates from August through November, 2015.

         By the third day of trial, in November 2015, Paige testified that she had been hired as an operating-room nurse at another BJC hospital, Missouri Baptist. Paige had not yet started at Missouri Baptist. Paige accepted the new position because she did not like working the rotating night shifts at Children's Hospital. The hours at her new position were primarily during the days on Monday through Friday. Paige testified that she would receive the same base hourly rate as her prior position ($21.6275), but she did not know the number of shift differentials[3] she would receive nor the amount of additional pay for those shift-differential hours.

         On February 29, 2016, the motion court issued a written judgment granting Ed's motion in part. The judgment reduced Ed's monthly maintenance payment from $4, 444 to $2, 489 per month. In modifying maintenance, the motion court found that Paige's new job was a change in circumstances so substantial and continuing as to make the terms of the original maintenance award unreasonable. The motion court declined to terminate maintenance altogether because it found that Paige was still unable to meet her reasonable expenses.

         The motion court determined Ed's maintenance obligation by calculating Paige's monthly net income and her reasonable monthly expenses. In determining Paige's monthly net income from her new nursing position at Missouri Baptist, the motion court noted that Paige's base hourly rate was $21.6275. Because Paige testified that she would work mostly weekdays, for 40 hours per week, the motion court calculated Paige's monthly gross income as $3, 749 (the motion court rounded up to $3, 750).[4] The motion court did not include any shift differentials from Paige's new position, recognizing that Paige "testified she would receive differential pay as she had in [her old position] but would not be working nights or weekends on a regular basis."

         The motion court then converted Paige's monthly gross income to net income. The motion court relied on Paige's testimony that, in her prior position, she had netted about 66% of her gross pay after payroll deductions. The motion court applied that percentage to her new employment. Thus, on a gross monthly salary of $3, 749 in her new position, the motion court concluded that Paige's monthly net income would be $2, 474 (66% of her gross salary).

         Ed aggressively challenged Paige's reasonable monthly expenses at trial. Using discovery of Paige's bank accounts and credit cards, Ed compiled a pedantic litany of Paige's actual expenses from 2010 to 2014. At trial, Ed submitted a series of exhibits purporting to show that many of Paige's claimed expenses were either unreasonable, unjustified by her actual expenses, or commingled with expenditures for the children. Conversely, Paige testified and was cross-examined extensively on her claimed expenses, which she submitted to the motion court in a sworn statement of income and expenses. Paige insisted that her claimed expenses were reasonable. After hearing the evidence, the motion court made a factual finding on each of the expenses disputed by Ed, finding that Paige had $4, 398.83 in reasonable monthly expenses, almost $2, 000 less than Paige had claimed in her First Amended Statement of Income and Expenses.[5]

         The motion court also determined that the "interests of justice" suggested that Ed pay Paige's estimated income taxes on the maintenance. The motion court concluded that Paige's total annual tax on the maintenance payments was $6, 768, or $564 per month. The motion court relied on Paige's testimony that she paid $564.83 per month in federal and state taxes on maintenance in 2014, and this amount was also included on Paige's statement of income and expenses.

         In awarding maintenance, the motion court found a shortfall between Paige's net income and her reasonable expenses. The motion court then added the taxes on Paige's maintenance award as an allowable expense as follows:

Net Income

$2, 474

Reasonable Expenses-

$4, 399

Actual Monthly Shortfall -

$ 1, 925

Taxes on Maintenance-

$564

Maintenance Need -

$2, 489

         The motion court awarded Paige $2, 489 per month in modified maintenance, which reduced Ed's original maintenance obligation by $1, 955 per month. The motion court made the modification retroactive three months to December 1, 2015. The motion court further ordered Ed to pay $10, 000 toward the attorney's fees incurred by Paige in defending the motion to modify. This appeal follows.

         Points on Appeal

         Ed raises five points on appeal. Points One and Two argue that the motion court's judgment was against the weight of the evidence. Specifically, Point One contends that the modified maintenance award was improperly inflated because Paige's reasonable monthly expenses were substantially less than the motion court found. Point Two avers that the motion court underestimated Paige's monthly income by not including the shift differentials that Paige would receive in her new job. Points Three and Four claim that the motion court erred in calculating Paige's tax expenses. Ed asserts that the motion court improperly imputed a 34% tax rate on Paige's gross income when calculating her net income, and used an improper tax rate to determine Paige's tax liability on the maintenance payments. Ed posits that these calculations incorrectly applied federal and state tax law (Point Three) and were unsupported by substantial evidence (Point Four). Finally, Point Five argues that the motion court abused its discretion in awarding Paige $10, 000 toward the attorney's fees she incurred during the modification proceedings.

         Discussion

         Ed's first four points all complain that the motion court erred in modifying his maintenance obligation. Thus, we will address those points together in the first section. In the second section, we will address Ed's Point Five, which assigns error to the award of attorney's fees.

         I. Maintenance Modification

         This section addresses Ed's first four points on appeal. First, we outline our standard of review in assessing the motion court's judgment, and then we provide the general rules on awarding and modifying maintenance. We then consider Ed's first two points in turn, both of which argue that aspects of the motion court's findings were against the weight of the evidence. Next, because Points Three and Four advance nearly the same arguments relating to the motion court's alleged miscalculation of Paige's tax obligations, we address those points together. Finally, we consider Paige's overarching argument that we should overlook any motion-court errors and, instead, affirm the judgment as reaching the correct result, even if for the wrong reason.

         A. Standard of Review

         In reviewing a court-tried case, such as a modification proceeding, our standard of review is set forth by Murphy v. Carron. 536 S.W.2d 30, 32 (Mo. banc 1976). We will affirm unless the motion court's judgment erroneously declares or applies the law, is unsupported by competent and substantial evidence, or is against the weight of the evidence. Id.; Almuttar v. Almuttar. 479 S.W.3d 135, 138 (Mo. App. W.D. 2016).

         Ed argues that the motion court's judgment was against the weight of the evidence (Points One and Two), was an incorrect application of the law (Point Three), and was unsupported by substantial evidence (Point Four). We review the motion court's application of law to facts de novo. Rhea v. Sapp, 463 S.W.3d 370, 375 (Mo. App. W.D. 2015).

         For review of factual issues, more deference is accorded to the motion court's judgment. See Hughes v. Hughes, 505 S.W.3d 458, 467 (Mo. App. E.D. 2016). In deciding whether the motion court's judgment was against the weight of the evidence, we defer to the motion court's findings of fact on contested factual issues, and we defer to the motion court's credibility determinations, hi A judgment is considered against the weight of the evidence only if the motion court "could not have reasonably found, from the evidence at trial, the existence of a fact that is necessary to sustain the judgment." hi Further, in reviewing for substantial evidence, we view the evidence in the light most favorable to the judgment, disregarding all contrary evidence and deferring to the motion court's credibility determinations. IcL Substantial evidence is evidence that, if believed, has some probative force on each fact that is necessary to sustain the judgment. Id. We overturn the motion court's judgment on these two fact-based standards only if we firmly believe the judgment is wrong. Id.

         Regarding modification of maintenance specifically, we afford the motion court considerable discretion, and the appellant must prove an abuse of that discretion. Id. "The [motion] court abuses its discretion when its order is against the logic of the circumstances and is so arbitrary and unreasonable as to shock the sense of justice and indicate a lack of careful consideration; if reasonable persons can differ about the propriety of the action taken by the trial court, then it cannot be said that the trial court abused its discretion." IcL

         B. General Rules Governing Maintenance Modification

         Section 452.370.1 (Supp. 2014)[6] authorizes a motion court to modify maintenance "only upon a showing of changed circumstances so substantial and continuing as to make the terms [of the original dissolution decree] unreasonable." This statutory standard is designed to be strict so it discourages recurrent and insubstantial motions to modify. Barden v. Barden. 463 S.W.3d 799, 804 (Mo. App. E.D. 2015). In deciding this threshold question of whether a substantial change has occurred, the motion court considers all financial resources of both parties. Section 452.370.1. The party seeking modification bears the burden of establishing with "detailed evidence" that this substantial and continuing change occurred and that the terms of the original decree have become unreasonable. Greenberg v. Greenberg. 454 S.W.3d 390, 394 (Mo. App. E.D. 2015).

         Here, the motion court found that a substantial change in circumstances occurred because, since the parties' divorce, Paige obtained both her nursing diploma and full-time employment as a nurse. Neither party questions the motion court's finding on this threshold issue. On appeal, Husband asserts that the motion court should have further reduced or terminated maintenance given Paige's income and reasonable needs. In modifying the amount of maintenance, the motion court may (but is not required to) consider the factors in Section 452.335[7] that a trial court must consider in fashioning maintenance at dissolution. Brooks v. Brooks. 957 S.W.2d 783, 786 (Mo. App. W.D. 1997).

         Maintenance is for the reasonable needs of the spouse receiving it. McKown v. McKown, 280 S.W.3d 169, 175 (Mo. App. W.D. 2009). Maintenance, however, is not awarded to the receiving spouse for the purpose of building an estate or accumulating capital. Stauffer v. Stauffer, 267 S.W.3d 805, 808 (Mo. App. W.D. 2008). In other words, a maintenance award bridges the gap between the reasonable needs of a spouse and that spouse's income. Powell v. Powell, 203 S.W.3d 271, 285 (Mo. App. W.P. 2006). The trial court-or, in a modification proceeding, the motion court-must award an amount that it deems just after considering all relevant factors. Id.; see Section 452.335.2 (standards for determining an initial maintenance decree). Once the motion court finds a substantial change resulting in an original maintenance amount that is unreasonable, the motion court should fashion a maintenance award (or terminate maintenance) in a way that is reasonable. See Section 452.370.1 (the plain language of the maintenance-modification statute). Trial and motion courts have broad discretion to award maintenance in a reasonable and just way. See Almuttar. 479 S.W.3d at 138.

         In accord with the broad rules of awarding and modifying maintenance, we address Ed's first four points on appeal.

         C. Point One-Paige's Reasonable Expenses

         In Point One, Ed asserts that the motion court's maintenance award was against the weight of the evidence because the motion court substantially overstated Paige's reasonable expenses. The record shows that the motion court relied largely on Paige's sworn statement of income and expenses, as well as her trial testimony about those expenses, to determine her reasonable expenses.

         To prove expenses, statements of income and expenses are routinely admitted and relied upon without any further testimony or documentary support for each individual item. Brooks v. Brooks, 957 S.W.2d 783, 788 (Mo. App. W.D. 1997) (citing M.A.Z. v. F.J.Z.. 943 S.W.2d 781, 790 (Mo. App. E.D. 1997)). The weight accorded to these statements of income and expenses is sufficient to sustain a judgment unless the expense amounts are disputed, the party seeking maintenance concedes a lack of knowledge about the actual amounts of the claimed expenses, and the party testifies inconsistently about the amounts claimed. Brooks, 957 S.W.2d at 788 (crafting this test from the holding in M.A.Z., 943 S.W.2d at 790). This exception, first articulated in M.A.Z.. was a case-specific holding that should not be applied to a case that does not share the "unique" facts of M.A.Z. Herschend v. Herschend. 486 S.W.3d 346, 353 (Mo. App. S.D. 2015).

         The motion court was ultimately required to decide what expenses, in light of all relevant factors, were reasonable and appropriate. Hammer v. Hammer. 139 S.W.3d 239, 245 (Mo. App. W.D. 2004). Reasonable needs are seldom a matter of mathematical precision, and expense submissions need not be based on strict necessity. Id. The purpose of maintenance is to achieve a just result in light of all relevant considerations. IcL We now address each of the expenses challenged by Ed.

         1. Life Insurance

         Paige carries life insurance for the benefit of their children.[8] Paige testified that the proceeds of the policy would be enough for her "children to take care of whatever needed to be taken care of when I die and not have worries about funeral costs or estate costs or whatever costs are involved with death, " Ed argues that a life-insurance policy on Paige's life cannot be counted among Paige's present, reasonable needs.[9] We are aware of no Missouri authority directly addressing whether a spouse receiving maintenance may include, as a reasonable need, the monthly premiums for a life-insurance policy on his or her life for the benefit of the parties' children.

         In support of his contention, Ed relies on In re Marriage of Boston, 104 S.W.3d 825, 832 (Mo. App. S.D. 2003). Boston held that a dissolution court was without authority to require the ex-husband (the paying spouse) to carry a life-insurance policy on his life that named the ex-wife or the minor child as beneficiaries. Id. Because the benefits of the life-insurance policy were not payable prior to the ex-husband's death, a decree requiring the ex-husband to maintain a life-insurance policy on his life constituted posthumous child support. Id. A motion court lacks authority to require posthumous child support.[10] Id. Notably, the Boston court did not consider whether the requirement to name the ex-wife as a beneficiary might have been proper as express posthumous maintenance. Cf. McAvinew v. McAvinew, 733 S.W.2d 816, 819 (Mo. App. W.D. 1987) (distinguishing the same line of cases regarding child support on which Boston relied, and holding that an order requiring maintenance in the form of life insurance expressly provides posthumous maintenance, which is allowed under Section 452.370); Section 452.370.3 ("Unless otherwise agreed in writing or expressly provided in the judgment, the obligation to pay future statutory maintenance is terminated upon the death of either party or the remarriage of the party receiving maintenance.").

         In any event, Boston does not control this case. The dissolution court in Boston required the ex-husband to maintain a life-insurance policy on his life; here, on the other hand, the motion court required Ed to pay the premiums of a life-insurance policy on Paige's life. The core rationale of Boston was that the life-insurance policy could not, by definition, pay out until after the ex-husband died-thus the trial court's order forced the ex-husband to provide posthumous support. Here, Paige's life-insurance policy would pay out at Paige's death, which could happen while Ed is still alive. Further, if Ed died before Paige, he would be relieved of his duty to pay premiums. So Paige would need to continue paying the premiums, which would mean that Paige would be supporting the children. Accordingly, we do not see Ed's obligation as requiring posthumous child support.

         However, the life-insurance expense presents another problem: the proceeds from the life-insurance policy do not benefit Paige. Our caselaw is clear that the requirement to pay premiums on a life-insurance policy is seen as a support obligation to the beneficiaries of the policy. See Boston, 104 S.W.3d at 832 (ex-wife and child were beneficiaries of the policy, and ex-husband's requirement to pay premiums was seen as a support obligation to them); McAvinew, 733 S.W.2d at 819 (ex-wife was the beneficiary of the policy, and ex-husband's obligation to pay the premium was seen as maintenance); Niederkorn v. Niederkorn, 616 S.W.2d 529, 538 (Mo. App. E.D. 1981) (benefits of the life-insurance policy, not payable until after the husband's death, amount to posthumous child support). Paige testified that the purpose and benefit of the policy was to allow the children to take care of her post-death expenses and not to worry about "funeral costs or estate costs or whatever costs are involved with death." While we understand that Paige considers life insurance to be a reasonable expense, it is undisputed that her life-insurance policy, according to her testimony, benefits the parties' children.

         The law is clear that maintenance is limited to the needs of the recipient-here, Paige. Courtney v. Courtney, 458 S.W.3d 462, 477 (Mo. App. E.D. 2015). Missouri law holds that "awards of spousal maintenance and child support are two distinctly separate concepts, and that maintenance does not include child support." Id. (quoting Schubert v. Schubert. 366 S.W.3d 55, 64 (Mo. App. E.D. 2012)). The needs of the parties' children are not to be included in any maintenance award. Id.

         Here, the motion court misapplied the law and erred in allowing Paige's life-insurance premiums as her reasonable need. While the policy insured Paige's life, the death benefit would not inure to her benefit. As Paige testified, the children will receive the benefit of the policy. Moral obligations aside, the children may do as they please as beneficiaries of the policy. The record is void of any limitation placed on the children upon receipt of any death benefits following Paige's death. The record does not suggest that Paige discussed her thoughts with the children or that the children accepted any limitation on their use of any death benefits. Given the lack of evidence supporting an obligation to use the insurance proceeds to address expenses related to Paige or her death, we are compelled by law to disallow this expense. In effect, by allowing this expense, the motion court has required Ed to pay child support through the guise of maintenance. Despite the reasonableness of the Paige's intention, the life-insurance expense for this policy is not related to Paige's reasonable needs. See Courtney, 458 S.W.3d at 477. The motion court misapplied the law by finding the life-insurance premium as a reasonable need.[11]

         2. Charitable Contributions

         Ed argues that the motion court erred in allowing Paige $125 per month as a reasonable expense for charitable giving. The evidence at trial indicated that the parties gave $1, 600 per month to charity during the marriage; that amount was split between "weekly tithing" to their church and an annual gift to their children's high school. Paige also testified, "And sometimes if somebody was in need or somebody was going on a missionary trip we would donate as well." Ed accurately notes that Paige's current charitable contributions (at the time of the modification proceedings) were not to the parties' church and the high school. Paige testified that she now donates money to an orphan in Africa and to missionary groups based in the Philippines, Orlando, and St. Louis. These targets of Paige's generosity, Ed contends, represented a different set of choices from those the family selected during the marriage, choices to which he should not be bound. We find Ed's argument unavailing.

         The general rule is well established: modest charitable contributions may be included when figuring reasonable expenses of the party seeking maintenance, but only if substantial evidence exists that those contributions were made throughout the course of the marriage. Batka v. Batka, 171 S.W.3d 757, 762 (Mo. App. E.D. 2005). We have approved charitable expenses "where they fit within the parties' overall pattern of spending prior to the dissolution." Hosack v. Hosack, 973 S.W.2d 863, 871 n.5 (Mo. App. W.D. 1998).

         Notably, Ed has cited no authority limiting the spouse's charitable contributions after the marriage to the exact charitable entity that the parties supported during the marriage. We have found no authority to support the limitation asserted by Ed.

         Paige initially sought $550 per month in charitable contributions to be included in her allowable expenses. Upon careful and thorough review, the motion court substantially reduced Paige's monthly charitable expense to $125. While it is unclear why the motion court chose $125, our record indicates that the motion court considered Paige's claimed expense and Ed's argument, and exercised its discretion to substantially reduce her claimed amount.

         We hold that substantial evidence exists of similar charitable contributions made throughout the marriage, which justifies the motion court's award of a modest charitable expense in its maintenance calculation. Paige testified that the couple sometimes donated to people "going on a missionary trip" during the marriage. Paige stated that she now donates to several missionary groups, and the word "missionary" naturally contemplates "one sent to propagate the faith, doctrine, and principles of a religion or a religious group among nonbelievers." See Webster's Third New International Dictionary 1445 (1981). The parties gave substantial amounts to their church and donated, at least occasionally, to persons going on missionary trips. Paige now gives to missionary groups. We disagree with Ed's contention that Paige's new charitable spending represents a "completely different set of choices from those the family selected during the marriage." Further, the $125 charitable expense awarded to Paige was modest in comparison to the ...


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