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Morgan v. Morgan

Court of Appeals of Arkansas, Division III

May 16, 2018

BRIAN KEITH MORGAN APPELLANT
v.
KACIE LYNN MORGAN (NOW MYERS) APPELLEE

          APPEAL FROM THE BENTON COUNTY CIRCUIT COURT [NO. 04DR-14-1437] HONORABLE DOUG SCHRANTZ, JUDGE

          Pinnacle Law Group, by: Matthew A. Kezhaya, for appellant.

          One brief only.

          KENNETH S. HIXSON, Judge.

         Appellant Brian Morgan (Brian) appeals from an August 31, 2017 order modifying child support filed by the Benton County Circuit Court in favor of appellee Kacie Lynn Morgan (Kacie).[1] On appeal, Brian contends that (1) the circuit court erred when it modified child support based on grounds not pleaded in the petition for modification of child support, (2) the circuit court erred in finding that there was a change in circumstances warranting a modification in child support, and (3) the circuit court erred in its calculation of child support. We affirm.

         I. Facts

         The parties were married on September 24, 2004, and have two children. A decree of divorce was filed on October 6, 2014. The decree reflects that the parties agreed and approved the terms of the divorce. Kacie was awarded primary custody of the children with visitation granted to Brian. Brian was ordered to pay child support in the amount of $200 biweekly and to maintain health-insurance benefits for the children. Any medical expenses not covered by health insurance were to be shared equally between the parties. Brian further agreed to pay one-half of the childcare expenses until childcare is no longer necessary, pay 25 percent of his year-end bonus for the year 2014, and pay 15 percent of his year-end bonus after 2014 into a savings account. Pursuant to the order, each party was permitted to claim one child as a dependent for tax purposes.

         Kacie subsequently filed a petition for modification of child support on February 28, 2017. In her petition, she alleged that she was entitled to a modification commensurate with the Arkansas Family Support Chart because Brian's income had increased by 20 percent or by $100 or more per month. Brian filed an answer generally denying the allegations, and a hearing was held on July 31, 2017.

         There was no testimony presented at the hearing. Instead, the parties stipulated to and admitted two exhibits for the circuit court's consideration in ruling on Kacie's petition. The exhibits consisted of information regarding Brian's income, including his 2014 and 2016 tax returns. Kacie's counsel additionally argued at the hearing that the divorce decree did not comply with Administrative Order No. 10(I) (2017) in that the child-support order failed to recite the payor's income, the amount of support that was required under the guidelines, and whether the court deviated from the family-support chart. Kacie's counsel further argued that for the purposes of calculating his child-support obligation, the circuit court should include as income the federal and state tax refunds Brian received.

         Brian's counsel objected to any of the arguments that would justify a modification that were not included in the petition for modification of child support. Although Brian's counsel conceded that the language required under Administrative Order No. 10 was not contained in the decree of divorce, he argued that there was nothing to indicate that the decree was not otherwise enforceable. His counsel further argued that it was Brian's position that the only change of circumstance that had been alleged and was before the circuit court was whether there had been an increase in income. Brian maintained that his income had actually decreased since 2014.

         The circuit court announced from the bench that

in order to avoid coming back here again, I'm going to allow the pleadings to conform to what in essence is the proof that is submitted here, and - - and I am going to take this matter under advisement and will offer a written opinion just as soon as I reasonably can. I anticipate that will be within a couple of weeks. Is there anything else that needs to be addressed at this time?

         Brian's counsel immediately responded that he requested the opportunity to file a posthearing memorandum within five days. The circuit court granted his request and additionally permitted Kacie to file a reply to any memorandum.

         In his memorandum, Brian argued that the parties agreed to a deviation from the child-support guidelines in the decree of divorce; however, he also agreed that the decree itself did not set forth any reasons for the deviation. Although Brian acknowledged that a court may allow an amendment to conform to the evidence, Brian argued that Kacie was barred from arguing that the failure of the decree of divorce to include the language required under our rules constituted the requisite change in circumstances for a modification of child support. He explained that Kacie was barred from that argument because she had failed to obtain relief under the time limitations prescribed under Arkansas Rule of Civil Procedure 60. Regarding the allegation that his income had increased warranting a modification, Brian explained that his income had actually decreased in 2016, after disregarding any tax refunds that he received. Therefore, he argued that the petition should be denied because Kacie had failed to sustain her burden of showing a material change of circumstances justifying a modification. Finally, Brian alternatively argued that his tax refunds should not be included as income when calculating child support because he was permitted to claim one child as a dependent by agreement in the decree of divorce. He admitted that there was "a direct correlation in the increase in refund attributed to the benefit of claiming a child as a dependent for tax purposes." However, he argued that its inclusion "is tantamount to counting it twice . . . [and f]or the Court to then take away the benefit of claiming himself and a child for tax purposes by adding back the refund into the next year's income for child support computation runs counter to logic."

         Kacie filed a reply to Brian's memorandum. In it, she argued that "[a]s the amount of child support that is owed by the plaintiff pursuant to the Arkansas Family Support Chart is more than that ordered by the parties' decree of Divorce, that in itself creates a material change of circumstances pursuant to Arkansas Code Annotated section 9-14-107." Kacie further argued that the tax refunds should be included as income in calculating Brian's child support because our supreme court has consistently ruled that the definition of income is intentionally broad and designed to encompass the widest range of sources consistent with this state's policy to interpret income broadly for the benefit of the child. To that end, she explained that Brian was awarded the ability to claim one child as a tax dependent even though he was not the primary custodial parent. She claimed that this created a windfall to Brian that he received each year, and his refunds should therefore be included as income.

         In its order filed on August 31, 2017, the circuit court specifically made the following pertinent findings:

2. The Decree of Divorce filed in this matter on October 6, 2014, failed to comply with Administrative Order 10 in that it failed to recite [Brian's] income, the amount of support required under the Child Support Guidelines and whether there was a deviation from the Family Support Chart and the reasons therefor.
3. The parties have two (2) minor children and [Kacie] was not represented by counsel during the divorce ...

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