Gress v. Gress

743 N.W.2d 67

274 Neb. 686

Pamela Joann GRESS, Appellee and Cross-Appellant v. Patrick Raymond GRESS, Appellant and Cross-Appellee.

No. S-06-607.

Supreme Court of Nebraska.

December 21, 2007.

Louie M. Ligouri, of Ligouri Law Office, Auburn, for appellant.

Stefanie S. Flodman and Steven J. Flodman, of Johnson, Flodman, Guenzel & Widger, Lincoln, for appellee.

HEAVICAN, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

HEAVICAN, C.J.

I. INTRODUCTION

This action originated as a petition for dissolution of marriage between Pamela Joann Gress and Patrick Raymond Gress. The district court dissolved the marriage between the parties, divided their assets, and ordered Patrick to make monthly child and spousal support payments. Patrick appealed, citing an error in the district court's calculation of child support and alimony. On appeal, we concluded the district court improperly calculated child support. We therefore remanded the cause for further proceedings, instructing the court to recalculate Patrick's share of child support and to make any necessary changes to the alimony award.¹

On remand, the district court made a slight reduction in Patrick's child support obligation and reinstated its order that Patrick pay alimony of $1,000 per month for 60 months. Patrick now appeals, once again arguing that the district court erred in setting the amount of his child and spousal support obligations. Pamela cross-appeals, contending the district court erred by limiting alimony to a period of 60 months. For reasons developed in detail below, we affirm the district court's child support order and the duration of the alimony award, but reverse the court's order with regard to the amount of alimony.

II. BACKGROUND

Because a more thorough statement of facts can be found in our prior opinion,² we recount only facts relevant to this appeal. During the marriage, Pamela was a stay-at-home mother while Patrick, a lifelong farmer, worked the family's farm. In September 2003, Pamela petitioned for a divorce. Patrick and Pamela have four children ranging in age from 5 to 17. The youngest of the Gress children was born with Down syndrome.

On December 15, 2004, the district court entered an order which dissolved the marriage, divided the couple's assets and liabilities, and ordered Patrick to pay child support and alimony. Specifically, Patrick was ordered to pay, among other things, child support of $1,285 per month and alimony of $1,000 per month for 60 months. As noted above, Patrick appealed to this court, and after identifying an error in the district court's calculation of depreciation in Patrick's income, we remanded the cause for further proceedings, instructing the court to adjust the amount of Patrick's child support responsibilities. On remand, the court reduced Patrick's child support obligation to $1,224 per month and reinstated its order that Patrick pay Pamela alimony of $1,000 per month for 60 months. Patrick was also ordered to pay an "80.5%" share of any daycare costs. Both parties now appeal.

III. ASSIGNMENTS OF ERROR

Patrick assigns, restated and renumbered, that the district court erred in calculating Patrick's child support obligation by (1) basing the calculation on an average of his incomes from 2001 through 2003, (2) disregarding paragraph Q of the Nebraska Child Support Guidelines, (3) violating paragraph R of the Nebraska Child Support Guidelines, and (4) failing to take the youngest child's Social Security benefits into consideration. Additionally, Patrick assigns that the district court erred in (5) awarding an unreasonable amount of alimony to Pamela.

In her cross-appeal, Pamela assigns that the district court erred by limiting Patrick's alimony obligation to 60 months.

IV. STANDARD OF REVIEW

Domestic matters such as child custody, division of property, child support, and alimony are entrusted to the discretion of trial courts.³ A trial court's determinations on such issues are reviewed "de novo on the record to determine whether there has been an abuse of discretion by the trial judge."⁴ Under this standard, an appellate court conducts its "own appraisal of the record" to determine whether the trial court's judgments "are untenable such as to have denied justice."⁵

Finally, we note that interpretation of the Nebraska Child Support Guidelines presents a question of law, regarding which an appellate court is obligated to reach a conclusion independent of the determination reached by the court below.⁶

V. ANALYSIS

Taken together, the parties' assignments of error concern either the amount of Patrick's child support obligation or the amount and duration of Patrick's spousal support obligation. The Nebraska Child Support Guidelines (hereinafter NCSG) instruct that a party's alimony obligation is to be set according to the income he or she has available after his or her child support obligations, if any, have been accounted for.⁷ Accordingly, we begin with an analysis of the district court's child support determination, then the alimony award.

I. CHILD SUPPORT

Patrick argues that the trial court erred in ordering him to pay $1,224 per month in child support. He offers four distinct reasons why this figure is erroneous. First, Patrick argues that the court erred in averaging his incomes from 2001 through 2003. Patrick contends the court should have used an 8-year average instead or, at the very least, should have included Patrick's income from 2004 in its average. Second, Patrick argues that the district court erred by disregarding paragraph Q of the NCSG in setting child support. Third, Patrick argues that the district court erred by ordering an amount of child support which allegedly violates paragraph R of the NCSG. Finally, Patrick argues that the district court incorrectly ignored the Social Security allowance in setting Patrick's child support obligation. We address each argument in turn in the sections that follow.

(a) Income Averaging

In his primary argument, Patrick asserts that the district court erred in averaging his annual income for the purpose of calculating his monthly child support obligation. Before determining an individual's child support obligation, the trial court must identify the monthly incomes for both the custodial and noncustodial parents.⁸ As a self-employed farmer, Patrick's income is prone to fluctuations from year to year. The NCSG anticipates this contingency and provides that "[i]n the event of substantial fluctuations of annual earnings of either party during the immediate past 3 years, the income may be averaged to determine the percent of contribution of each parent. . . ."⁹

In 2001, Patrick's annual income was $51,654. In 2002, this figure increased to $61,059, only to plummet to $28,400 in 2003. These figures translate to an approximate 18-percent increase from 2001 to 2002, then a 54-percent drop from 2002 to 2003. This is the sort of substantial fluctuation that the NCSG contemplates. Therefore, it was entirely proper for the district court to use income averaging to calculate Patrick's income for child support purposes. Patrick contends, however, that the district court erred by (1) using a 3-year average instead of an 8-year average or, alternatively, (2) not including Patrick's income from 2004 in its average.

(i) 8-Year Average

Per Pamela's suggestion, the district court averaged Patrick's annual income from 2001 through 2003 to identify Patrick's income for child support purposes. Averaging these figures gave Patrick an estimated gross income of $47,037 per year, or $3,920 per month. Patrick argues that the court should have used an 8-year average rather than a 3-year average to estimate his income. Using the figures Patrick supplies in his brief for the additional 5 years, an 8-year average would result in an income of $34,065 per year, or $2,839 per month.

In support of his claim that the court should have used an 8-year average, Patrick cites testimony by his tax preparer, Gerald Siefken, a farm tax expert. Siefken testified that farmers' incomes are inherently unpredictable and that it was his practice to use an 8- or 10-year average to calculate farmers' taxes. Patrick emphasizes that his incomes from 2001 and 2002 are some of the highest incomes he has had in recent history. Patrick argues that using those 2 years as two-thirds of the average misrepresents his actual level of income. Relying on Siefken's testimony, Patrick suggests that only an 8-year average will accurately reflect his present level of income. The question, then, is whether the district court abused its discretion by using a 3-year average instead of an 8-year average.

We have not yet had occasion to consider the number of years a court should—or must—use when averaging an income pursuant to the NCSG. As stated above, the NCSG provides that in the event of a fluctuation within "the immediate past 3 years, the income may be averaged."¹⁰ This language could be read as indicating that a fluctuation within the prior 3 years should trigger an average of the incomes only from those prior 3 years. On the other hand, it is entirely possible to read this language as standing for the proposition that a fluctuation in the prior 3 years triggers some form of averaging, be it 3 years, 8 years, or some other number.

This was apparently the reading the Nebraska Court of Appeals adopted in Wagoner v. Tracy.¹¹ In Wagoner, the court acknowledged that the NCSG "refer[s] to a 3-year average," but nonetheless permitted a 5-year average.¹² The court reasoned that such an average "result[ed] in a more fair representation of [the husband's] income" than a 3-year average.¹³ Similarly, the Court of Appeals had allowed a 4-year average in Hughes v. Hughes.¹⁴

Although we previously discussed income averaging in Peter v. Peter,¹⁵ that case dealt solely with the threshold question of when averaging is appropriate and did not describe how to actually conduct the average. It...