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Szwedo v. Cyrus

Court of Appeals of Arkansas, Division II

January 23, 2019



          Kamps & Stotts, PLLC, by: Jocelyn A. Stotts, for appellant.

          Short Law Firm, by: Lee D. Short, for appellee.

          BART F. VIRDEN, Judge

         This appeal arises out of a paternity and child-support case. The Pulaski County Circuit Court entered orders finding appellee Arthur Cyrus to be the father of two children born to appellant Dominika Szwedo, awarded custody of the children to Szwedo, and ordered Cyrus to pay $8, 333 a month in child support. The court declined Szwedo's request for approximately $450, 000 in retroactive child support. The court ordered Cyrus to establish college savings accounts for each child of at least $100, 000. On appeal, Szwedo argues six points. We affirm in part and reverse in part. We remand for further proceedings consistent with this opinion.

         The parties met in 2003 while attending medical school in Poland and soon began dating. Cyrus returned to the United States in 2004, and Szwedo followed in 2006 when she began her residency in New York City. The exact nature and extent of the parties' relationship was contentious and disputed. Two daughters were born to Szwedo, A.R.C. in 2010 and A.G.C. in 2013. The parties separated for good in the summer of 2015.

         In December 2015, Cyrus sued to establish paternity of the children and requested joint custody. Szwedo answered and counterclaimed for custody, to set visitation, and for child support, both current and retroactive to each child's birth. Cyrus answered the counterclaim, admitting the paternity of the children but denying the remaining allegations. Cyrus amended his answer to Szwedo's counterclaim on May 9, 2017, to plead the affirmative defenses of estoppel, laches, payment, set off, waiver, and satisfaction.

         On May 15, 2017, at the beginning of the two-day trial, the circuit court entered a paternity decree that found Cyrus to be the father of A.R.C. and A.G.C. and incorporated and approved the parties' agreement as to custody and visitation. The agreement provided that the parties would have joint legal custody of the children with Szwedo having primary physical custody and Cyrus having visitation. The agreement covered visitation in great detail and provided that the issues of the children traveling outside Arkansas and outside the United States were reserved for the final hearing. Also reserved for trial were the issues of current and retroactive child support and payment of the attorney ad litem's fees.

         At trial, the court heard testimony about both parties' incomes. Szwedo calculated Cyrus's income for child-support purposes and his child-support obligation based on the tax returns he produced and sought a net judgment for a retroactive child-support arrearage of approximately $450, 000. There was also extensive testimony about the nature of the parties' relationship. Szwedo testified that Cyrus was abusive, had raped her, and had threatened to kill her. She further testified that she was afraid Cyrus would disappear with the children if he were allowed to travel outside Arkansas or internationally with the children. Cyrus testified that he opened joint bank accounts with Szwedo and that he had supported the children through housing and financial support. The court also heard recommendations from the attorney ad litem.

         On June 28, 2017, the court issued an order from the final hearing. After adopting the paternity decree, the court recounted a brief history of the parties' relationship before addressing the reserved issues. The court found that it was in the best interest of the children to have the opportunity to visit with their extended family on both sides and that there was no reason that the children should not be allowed to travel internationally with either parent. The court did order certain safeguards to allay some of Szwedo's concerns.

         The court noted that Szwedo was claiming that she was entitled to upwards of $450, 000 in retroactive child support and that the parties disagreed over the extent of Cyrus's financial involvement and support before filing this action. After noting that it could consider the circumstances in awarding retroactive child support, the court found that it would be fundamentally unfair to award the full amount of retroactive support sought. The court did not specifically order any amount of retroactive support but ordered that Cyrus establish a 529 account or similar savings plan for each daughter valued at $100, 000 each to prepare for their secondary-education expenses.

         Turning to prospective support, the court considered Cyrus's 2014, 2015, and 2016 income, as well as his income to date in 2017. The court found that Cyrus's net income may vary from $30, 000 to $50, 000 a month depending on the amount of work he completes. Some of the variation resulted from Cyrus forgoing some shifts in order to exercise his visitation. The court found Cyrus's net income to be $40, 000 a month. Pursuant to the guidelines, the court calculated the total current child-support obligation to be $8, 333 a month. The court found that $8, 333 was a fair amount of child support considering the needs of the children, the income of both parties, and the fact that Cyrus's income may deviate from month to month.

         The court ordered the parties to equally divide the remaining balance of $11, 530 due and owing on the attorney ad litem's fee.

         Szwedo filed a motion seeking $111, 706 in attorney's fees and $7, 060 in costs, for a total $118, 766. Cyrus responded to Szwedo's motion for fees and sought his own award of fees. He sought $84, 897 in attorney's fees and $36, 931 in costs, for a total of $121, 828. He asserted that Szwedo necessitated the fees by making unfounded allegations of abuse and unnecessary discovery requests.

         Cyrus filed a motion to amend the court's findings and to modify the order, noting that there may be a prohibition to an order directing funds to an interest-bearing account. Cyrus argued that the court may grant less child support than the chart amount if warranted by the specific circumstances of each case. Cyrus sought to have the court amend its order to find that his retroactive child-support obligation since the birth of the parties' oldest child through the entry of the first child-support order was $450, 000. Cyrus suggested that the court could then apply a deviation analysis to find that the proper amount of retroactive child support was $200, 000. He continued, arguing that the court could then find that he had satisfied that obligation by funding the two educational accounts. Szwedo responded to the motion, arguing that there was no legal or factual basis for the relief Cyrus sought.

         On August 11, 2017, the circuit court entered an order addressing the various posttrial motions. The court noted that the matter was hotly contested and that the parties cared very little about one another. The court first addressed Szwedo's request for retroactive child support and whether Cyrus provided in-kind support while the parties resided together. Although the court had difficulty determining which party was telling the truth about their relationship, it had no doubt that the children had been supported by both parties to some extent. The court found that Szwedo failed in her burden of proof to show that Cyrus had not supported the children from 2010 to 2015, based in part on Szwedo's lack of credibility due to her behavior. The court found Cyrus to be more credible. The court noted that it could have been clearer in stating that no retroactive support was owed and that the provision regarding the educational accounts was simply a means to provide for the children's education.

         The court also took up the issue of attorney's fees. The court noted that the attorneys spent an "inordinate amount of time representing their client even though the issues presented were not particularly novel or unique." The court also noted that the custody and visitation issues were ultimately settled. After considering the factors provided in case law, the court ordered Cyrus to pay Szwedo $20, 000 in attorney's fees. Each party was to bear the balance of their attorney's fees and costs. This appeal followed.

         Our standard of review for an appeal from a child-support order is de novo on the record, and we will not reverse a finding of fact by the circuit court unless it is clearly erroneous. Ward v. Doss, 361 Ark. 153, 158, 205 S.W.3d 767, 770 (2005) (citing McWhorter v. McWhorter, 346 Ark. 475, 58 S.W.3d 840 (2001)). In reviewing a circuit court's findings, we give due deference to that court's superior position to determine the credibility of the witnesses and the weight to be accorded to their testimony. Id. at 158, 205 S.W.3d at 770. As a rule, when the amount of child support is at issue, we will not reverse the circuit court absent an abuse of discretion. Id., 205 S.W.3d at 770. However, a circuit court's conclusion of law is given no deference on appeal. Id., 205 S.W.3d at 770.

         Szwedo first argues that the circuit court erred in allowing Cyrus to amend his answer to her counterclaim five days before trial to assert the affirmative defenses of estoppel, laches, payment, setoff, waiver, and satisfaction. Cyrus argues that the point is not preserved for our review because Szwedo's argument on appeal-that Cyrus did not timely raise the affirmative defenses-is not an objection ...

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