Davis v Davis, 156 NC App 217 (02-290) 02/04/2003

Appeal by plaintiff from order entered 9 October 2001 by Judge William M. Neely in Montgomery County District Court. Heard in the Court of Appeals 31 October 2002.

Thomas D. Robins for plaintiff appellant.

Etheridge, Moser, Garner, Bruner and Wansker, P.A., by Terry R. Garner, for defendant appellee.

    McCULLOUGH, Judge.

    This case arises out of a divorce proceeding between plaintiff Donald Lewis Davis and defendant Bonnie Gay Davis. The relevant facts are as follows: The Davises were married on 23 May 1978. Their only child, Gregory Lewis Davis, was born on 26 February 1987. The parties separated on 6 July 1998. On 2 September 1999, plaintiff filed a complaint and brought forth issues of absolute divorce, child custody, child support, and equitable distribution. On 26 October 1999, defendant filed an answer and counterclaims for joint custody, child support, post-separation support, permanent alimony, and equitable distribution.     On 22 March 2000, the trial court entered a judgment granting the parties an absolute divorce and joint custody of their son. On 16 October 2000, the trial court determined that defendant was the dependent spouse under N.C. Gen. Stat. § 50-16.1A(2) (2000) and ordered plaintiff to pay defendant alimony in the amount of $1,600.00 per month for a maximum of five years. The order also provided that the case would be reviewed in October 2001 “to determine the financial standing of the parties, including their respective incomes and expenses, and with particular regard to the defendant's income.”
    The issue of child support was tried on 1 August 2001 during a session of Montgomery County District Court. The evidence at the bench hearing showed that both Mr. and Mrs. Davis are dentists. The parties met in dental school and married one year before graduation. After graduating in 1979, Mr. Davis began practicing dentistry in a private setting in Troy, North Carolina, and continued doing so for approximately twenty-one years. Upon her graduation, Mrs. Davis enlisted in the Army and worked as a dentist at Fort Bragg, North Carolina, to provide her and her husband with a steady income. After being discharged from the Army in 1983, Mrs. Davis worked with her husband for a short time, then took a full-time position with the North Carolina Department of Corrections at the Southern Correctional Facility in Troy. Upon agreement of both parties, Mrs. Davis' salary was paid into Mr. Davis' dental practice.     Two years after the birth of their son, Mrs. Davis switched to part-time work at the Department of Corrections so she could devote some of her time to homemaking and caring for the child. She continued working approximately 20 hours per week at the Department of Corrections for eight years. During those years, Mrs. Davis also “picked up an extra duty or extra job in [Mr. Davis'] office doing the books and taking care of those kinds of things. So that sort of took up maybe another half day or another day.” Due to changes in the inmate population at the Southern Correctional Facility, Mrs. Davis' position with the Department of Corrections was eliminated in 1997. When Mr. Davis suffered a neck injury in February 1999, Mrs. Davis worked almost full-time in his practice, even though they had been separated since July 1998. In February 1999, Mrs. Davis began working with a private dental practitioner in Seven Lakes, North Carolina. She worked approximately 25-30 hours per week and earned about $3,300.00 net income per month.
    Throughout the marriage, Mr. Davis consistently earned more income than Mrs. Davis. At the time of the bench hearing, Mr. Davis earned an annual salary of $247,000.00, although the highest income he had earned prior to the date of separation was $127,000.00. Mr. Davis explained that he took on a heavier workload in anticipation of paying a large equitable distribution award, and his extended workdays resulted in the dramatic income increase. In August 2001, Mrs. Davis accepted a full-time job with the North Carolina Department of Corrections and expected to earn a yearly salary of $85,000.00, beginning in September 2001. Theparties also presented testimony regarding an irrevocable trust fund they set up for their son during the marriage. The parties transferred the equipment from Mr. Davis' dental practice into the trust, and Mr. Davis' incorporated dental practice then paid rent for the use of the equipment to the trust. The rent generated approximately $18,000.00 per year in income for the trust. Though the parties initially intended to use the money to pay for their son's college education, they later decided to use the money to pay for his private grade school education as well.
    The trial court made over twenty detailed findings regarding the parties' financial status and employment histories, the custody of their son, and the breakup of their twenty-year marriage. The trial court ordered plaintiff to pay child support of $450.00 per month, beginning 1 June 2001, as well as $1,350.00 in retroactive child support. Mr. Davis was also required to keep their son covered under his medical insurance and pay 70% of any uncovered expenses. From the trial court's order dated 9 October 2001, plaintiff appealed.
    On appeal, plaintiff argues that the trial court committed reversible error by (I) finding and concluding that defendant was entitled to $450.00 per month in child support; and (II) failing to consider that the child's private school expenses were covered by the trust in determining the appropriate amount of child support to award. For the reasons set forth herein, we disagree with plaintiff's arguments and affirm the order of the trial court.     “[The] ultimate objective in setting awards for child supportis to secure support commensurate with the needs of the children and the ability of the [obligor] to meet the needs.” Pittman v. Pittman, 114 N.C. App. 808, 810, 443 S.E.2d 96, 97 (1994). The trial court enjoys broad discretionary power in domestic law cases and has discretion in determining the proper amount of child support to award. Wright v. Wright, 216 N.C. 693, 696, 6 S.E.2d 555, 557 (1940).
            It is well established that where matters are left to the discretion of the trial court, appellate review is limited to a determination of whether there was a clear abuse of discretion. A trial court may be reversed for abuse of discretion only upon a showing that its actions are manifestly unsupported by reason. A ruling committed to a trial court's discretion is to be accorded great deference and will be upset only upon a showing that it was so arbitrary that it could not have been the result of a reasoned decision.

White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985) (citations omitted). The North Carolina Child Support Guidelines ordinarily determine the amount of a child support obligation. However, “when the parties' annual combined income exceeds the upper limit covered by the Guidelines (presently $150,000),” child support is calculated on a case-by-case basis. Shaw v. Cameron, 125 N.C. App. 522, 528, 481 S.E.2d 365, 369 (1997). The amount of child support awarded cannot be lower than the maximum basic child support obligation in the Guidelines.
        [A]n order for child support must be based upon the interplay of the trial court's conclusions of law as to (1) the amount of support necessary to “meet the reasonable needs of the child” and (2) the relative ability of the parties to provide that amount. These conclusions must themselves be based upon factual findings specific enough to indicate to the appellate court that the judge below took “due regard” of the particular “estates, earnings, conditions, (and) accustomed standard of living” of both the child and the parents. It is a question of justice and fairness to all concerned.

Coble v. Coble, 300 N.C. 708, 712, 268 S.E.2d 185, 189 (1980) (quoting Beall v. Beall, 290 N.C. 669, 674, 228 S.E.2d 407, 410 (1976)). See also Little v. Little, 74 N.C. App. 12, 20, 327 S.E.2d 283, 290 (1985); and N.C. Gen. Stat. § 50-13.4(c) (2001). With these concepts in mind, we turn to the case before us.

    Plaintiff argues the trial court's Finding of Fact No. 12 attributed to him a yearly income of $180,000.00, based on the fact that plaintiff had increased his work hours “anticipating a significant distributive award to be paid to the defendant as a part of the equitable distribution of their marital property, and the plaintiff should not be penalized for working extra hours.” Plaintiff argues the trial court arbitrarily chose the sum of $180,000.00, despite its statement that it did not wish to penalize him for working extra hours. He further argues that the trial court's order failed to include findings of fact necessary to support its conclusion of law that $450.00 was an appropriate child support award. We do not agree.
            With regard to what the findings of fact concerning the needs of the minor child[] must contain, there are no set guidelines. The appellate courts of this state require only that the findings be based on competent evidence as to what the needs of the child[]are, and that such findings sustain the conclusion that the support payments ordered are in such amount as to meet the reasonable needs of the child. The evidence must support the facts found by the trial court which in turn support the trial court's conclusions of law which in their turn provide a basis for the trial court's judgment. Each link in this chain of reasoning must appear in the trial court's order.

Byrd v. Byrd, 62 N.C. App. 438, 440, 303 S.E.2d 205, 207 (1983).
    Plaintiff's W-2 tax form for the year 2000 listed his income as $252,500.00, and the form was stipulated into evidence. Based on the record before us, it appears the trial court took plaintiff's long hours into account and found that, even if he worked less and reduced his income by about 25%, he could still earn approximately $180,000.00 per year. We hold the trial court's estimation was proper, as it used plaintiff's disposable income to judge his ability to pay child support.
        Although the relative ability of the parties to contribute should not depend solely and exclusively on the parties' income, we consider the court's use of the parties' disposable income (net income after deducting personal expenses) to fairly reflect the relative abilities of the parties to contribute proportionately to support of the child.

Plott v. Plott, 313 N.C. 63, 75, 326 S.E.2d 863, 870-71 (1985). See also Savani v. Savani, 102 N.C. App. 496, 503, 403 S.E.2d 900, 904 (1991).
    With regard to expenses, we note that plaintiff claimed monthly expenses of $4,841.00 at the alimony hearing in October 2000, and the trial court found that amount to be reasonable. Atthe child support hearing in August 2001, plaintiff claimed monthly expenses of $6,916.00; this figure did not include plaintiff's monthly alimony payment of $1,600.00. This $2,075.00 increase (in less than one year) supports the trial court's finding that plaintiff's expenses were inflated and exaggerated. Plaintiff's financial affidavit indicated his monthly net income was $11,700.00 and his monthly expenses were $8,516.00 (including alimony). Even if the trial court accepted plaintiff's monthly expenses of $8,516.00, plaintiff still had a surplus of $3,184.00 net income per month, from which a $450.00 child support payment could easily be paid.
    Based on the foregoing, we conclude the trial court considered the relevant factors concerning the parties and made sufficient findings of fact to support Conclusion of Law No. 2, which ordered plaintiff to pay $450.00 per month in child support. Plaintiff's first assignment of error is therefore overruled.

    By his second assignment of error, plaintiff contends the trial court committed reversible error by failing to consider the income and expenses of the trust when calculating the child support award. Defendant, on the other hand, argues that the trial court properly declined to consider the trust when calculating the child support award. Upon consideration of these arguments, we agree with defendant.
    When making its determination of child support, the trial court found:            21. That inasmuch as the parties have, in all respects, treated the trust created for their minor child as a separate legal entity, the court finds that it is a separate legal entity. Therefore, since the private school expenses of the minor child of the parties is paid for by the trust for the child, the court will not consider or treat the private school expenses as an extraordinary expense incurred by either party, or by the parties jointly, for purposes of establishing child support in this action.

    Generally, a minor child's separate estate does not decrease or relieve a parent from his or her obligation to support his or her child as long as that parent is able to provide support. “The supporting parent who can do so remains obligated to support his or her minor children, even though they may have property of their own.” Browne v. Browne, 101 N.C. App. 617, 625, 400 S.E.2d 736, 741 (1991). In spite of this, plaintiff argues that Guilford County ex rel. Easter v. Easter, 344 N.C. 166, 473 S.E.2d 6 (1996) is instructive in this case. In determining whether a trial court may consider the contributions of third parties when assessing whether to deviate from the child support guidelines, the Supreme Court stated:
            We find nothing in North Carolina case law or in N.C.G.S. § 50-13.4(c) which suggests that the contributions of third parties may not be considered when determining whether to deviate from the guidelines. The role of the trial court is to determine whether the reasonable needs of the children are being met and whether imposing the presumptive amount would not meet or exceed the reasonable needs of the children or would be otherwise inappropriate or unjust. N.C.G.S. § 50- 13.4(c). In making this determination, the trial court should have at its disposal any information that sheds light on this inquiry.
Guilford County, 344 N.C. at 169-70, 473 S.E.2d at 8.
    While Guilford County holds that contributions from a third party may be considered by a trial court when it contemplates a deviation from the Guidelines, a deviation is not always necessary, even when a third party provides some support to the minor child.
In the present case, if plaintiff was not paying $18,000.00 to the trust in equipment rental per year, he would have a total income of $270,500.00. In that situation, a $450.00 child support payment would be even less burdensome. We therefore conclude the trial court properly declined to consider the trust fund when calculating plaintiff's monthly child support obligation. Accordingly, plaintiff's final assignment of error is overruled.
    Upon careful review of the record and consideration of the parties' arguments, we conclude the trial court's order was proper in all respects. The order of the trial court is hereby
    Affirmed.
    Judges WALKER and CAMPBELL concurred in this opinion prior to 31 December 2002.
    Report per Rule 30(e).

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