Kaiser v. Kaiser

259 N.C.App. 499

816 S.E.2d 223

Robert David KAISER, Plaintiff,

v.Jill Ann Gerber KAISER, Defendant.

No. COA17-553

Court of Appeals of North Carolina.

Filed: May 15, 2018

Wyrick Robbins Yates & Ponton LLP, Raleigh, by Tobias S. Hampson, for plaintiff-appellee.

Poyner Spruill LLP, Raleigh, by Steven B. Epstein and Andrew H. Erteschik, for defendant-appellant.

DIETZ, Judge.

Defendant Jill Ann Gerber Kaiser appeals from a child support order. She contends that the order lacks sufficient findings to support various determinations concerning the parties’ gross income and applicable credits.

As explained below, we hold that the court's determination of Ms. Gerber's regular capital gains income, her dividend income, maintenance from Ms. Gerber's fiancé, and several other aspects of the order are unsupported by sufficient factual findings. We therefore vacate the order. On remand, the trial court, in its discretion, may enter a new child support order based on the existing record or may conduct any further proceedings that it deems necessary.

Facts and Procedural History

Defendant Jill Ann Gerber Kaiser and Plaintiff Robert David Kaiser are the parents of three minor children. Ms. Gerber and Mr. Kaiser married in June 2000, separated in June 2014, and divorced on 4 December 2015. Following the parties’ separation, Ms. Gerber took custody of the three children, moved to Illinois, and later was awarded primary custody by consent order.

On 30 June 2014, Mr. Kaiser filed this action seeking a judicial determination of his child support obligation. While this action was pending, Mr. Kaiser paid $1,565 per month to Ms. Gerber, which he believed to be his child support obligation. These payments were a combination of cash payments and a $565 per month payment on Ms. Gerber's car debt. On 2 April 2015, Ms. Gerber filed a counterclaim for child support.

On 19 July 2016, Mr. Kaiser moved for an order to show cause for contempt and to modify child custody, alleging that Ms. Gerber was engaging in a "concerted effort to alienate the minor children" from him. Mr. Kaiser requested primary custody of the children. The trial court later entered an order transferring jurisdiction of any further child custody matters, including Mr. Kaiser's motion to modify, to Illinois where Ms. Gerber resides with the children.

At the hearing on the issue of child support, Ms. Gerber's testimony and the exhibits presented showed that she had significant capital gains each year from 2013 through 2015. In 2014 and 2015, Ms. Gerber sold mutual fund shares in a Wells Fargo account, realizing capital gains of $67,386 in 2014 and $73,143 in 2015. Ms. Gerber then sold the remaining assets in that account in early 2016, realizing $10,345 in capital gains from this final sale.

Ms. Gerber and her accountant both testified that Ms. Gerber received dividend income in 2014 and 2015 from three sources: $580 from the Wells Fargo account, $6,100 from a Vanguard account, and $1,541 from a Charles Schwab account. Ms. Gerber testified that, although the Charles Schwab account was in her name and she included the dividends on her tax returns, the account actually belonged to her father and she did not use the income generated from the account. The parties’ post-nuptial agreement designated the account as "Wife's Father's Separate Property."

Ms. Gerber also testified that she and the children currently reside in a rental house that costs $3,500 per month. She testified that the lease is solely in her name, but that her fiancé lives with her and pays her $1,750 per month to cover his share of the rent and household expenses. Ms. Gerber explained the she and her fiancé "function financially like roommates."

Ms. Gerber also testified that, between the date of separation and trial, she incurred $15,048.88 in expenses for therapy for the children. The children were treated for PTSD and anxiety issues as "a result of the relationship with their father." Ms. Gerber testified that the intent of the therapy was "to try to repair the damage to the relationship between Mr. Kaiser and the children" because the children were afraid of their father, their fear got worse after they moved to Illinois, and the therapists were "trying to help them ... be less afraid of him and—and relate to him better."

Mr. Kaiser testified that Ms. Gerber caused these issues for their children because she "creates this horrible situation for the girls where they feel like they've been abused and abandoned and then, uh, selects these counselors and tells them all these lies about things that have happened and tells the kids and creates all these issues."

Mr. Kaiser testified regarding the income he receives from his 50% interest in a business called SAJ Media. He provided documentation of the business's revenues from the first eight months of 2016 but did not provide a projection for likely profits for the remainder of the year. Ms. Gerber asserted that the business typically earned its largest profit in the final three months of the year. Mr. Kaiser testified that the net profit for the year "depends on what happens the rest of the year" and there is no way "with certainty to know what's going to happen in the next three months." He testified that "there's so much uncertainty you really don't know" because "our year is made or broken in the fourth quarter."

Mr. Kaiser also testified that, in addition to his income from SAJ, he had received a total of $50,000 in financial support from his parents after he separated from Ms. Gerber. Mr. Kaiser testified that the $50,000 he received was a loan rather than a gift. He explained that there is a written promissory note for repayment of $30,000 and an informal verbal agreement to repay the remaining $20,000.

On 14 November 2016, the trial court entered its child support order. The trial court found that it was necessary "to deviate from the presumptive child support guidelines" due to the length of time that the matter had been pending and the significant changes in income for both parties. The trial court stated that its determination of the parties’ incomes was based on "the parties[’] 2014–2015 Tax Returns, their current paystubs, 2015 and 2016 YTD Profit and Loss Statements of SAJ Media, and the testimony of [Ms. Gerber's] CPA." The trial court found that Ms. Gerber's income is $15,239 per month, including $685 per month in regular dividends, $6,095 per month in regular capital gains, and $1,750 per month from her fiancé for maintenance. The court found that Mr. Kaiser's income is $9,615 per month, including his salary of $5,833 per month from SAJ Media and his profits of $3,620 per month from his 50% ownership share of SAJ Media. The trial court relied on the 2016 year-to-date profits from SAJ Media to determine Mr. Kaiser's expected yearly income from the company, without assuming an increase from expected fourth quarter profits. Ultimately, the trial court found that Mr. Kaiser's income represents 38.7% of the parties’ combined incomes and Ms. Gerber's income represents 61.3%.

Based on its findings regarding the parties’ incomes and expenses, the trial court ordered Mr. Kaiser to pay $1,922 per month in child support to Ms. Gerber. The trial court determined that Mr. Kaiser had paid a total of $39,043 in child support from the date of separation through October 2016, resulting in a $1,304 overpayment. In making this determination, the court credited Mr. Kaiser for car payments of $565 per month on Ms. Gerber's car. The trial court denied Ms. Gerber's request for payment for the children's past and future therapy expenses, finding that the expenses for therapy were "unreasonable and unnecessary" and Mr. Kaiser was not obligated to pay Ms. Gerber for them because "the primary cause for any therapy was [Ms. Gerber's] active alienation of the minor children against their dad." Ms. Gerber timely appealed.

Analysis

Ms. Gerber challenges virtually every portion of the trial court's child support order in this case, but her arguments largely are tied together by a single thread: the lack of sufficient factual findings to support various legal determinations concerning the parties’ respective child support obligations. As explained below, we agree that many of the decisions in the trial court's order lack sufficient factual findings. We therefore vacate the trial court's order and remand for further proceedings.

In North Carolina, the determination of parents’ child support obligations is guided by the North Carolina Child Support Guidelines, which are designed to calculate the amount of financial support necessary to meet "the reasonable needs of the child for health, education, and maintenance, having due regard to the estates, earnings, conditions, accustomed standard of living of the child and the parties, the child care and homemaker contributions of each party, and other facts of the particular case." N.C. Gen. Stat. § 50–13.4(c) ; see also 2015 N.C. Child Support Guidelines, AOC–A–162, Rev. 8/15, at 2.

Ordinarily, "[c]hild support orders entered by a trial court are accorded substantial deference by appellate courts and our review is limited to a determination of whether there was a clear abuse of discretion." Leary v. Leary , 152 N.C. App. 438, 441, 567 S.E.2d 834, 837 (2002). "The trial court must, however, make sufficient findings of fact and conclusions of law to allow the reviewing court to determine whether a judgment, and the legal conclusions that underlie it, represent a correct application of the law." Spicer v. Spicer , 168 N.C. App. 283, 287, 607 S.E.2d 678, 682 (2005).

Over time, this Court has decided hundreds of cases involving the calculation of gross income and the deductions and credits applicable to parties’ child support obligations under the Guidelines. In many of these cases, this Court has identified specific fact findings that are necessary for this Court to review the judgment. The unfortunate result of this patchwork of precedent is that trial...