FOR PUBLICATION
ATTORNEYS FOR APPELLANT: ATTORNEY FOR APPELLEE:
DAVID W. STONE, IV MARVIN E. COFFEY
Stone Law Office & Legal Research Robinson & Heck
Anderson, Indiana Indianapolis, Indiana
JANE G. COTTON
Anderson, Indiana
IN THE
COURT OF APPEALS OF INDIANA
DEBRA (Siegel) CARMICHAEL, )
)
Appellant-Respondent, )
)
vs. ) No. 29A02-0011-CV-740
)
MICHAEL J. SIEGEL, )
)
Appellee-Petitioner. )
APPEAL FROM THE HAMILTON SUPERIOR COURT
The Honorable Fredrick R. Spencer, Special Judge
Cause No. 29D01-9111-DR-561
August 31, 2001
OPINION - FOR PUBLICATION
BARNES, Judge
Case Summary
Debra Siegel Carmichael (“Mother” or “Respondent”) appeals the trial court’s calculation of her child support obligation for her children, R.S. and S.S., pursuant to a petition to modify child support brought by Michael Siegel (“Father” or “Petitioner”). Mother also appeals the granting of sole legal custody of R.S. and S.S. to Father, the trial court’s visitation order regarding S.S., and its refusal to find Father in contempt of court. We affirm in part, reverse in part, and remand.
Issues
We restate the issues raised by Mother as follows:
I. whether the trial court erroneously determined her child support obligation because:
A. it improperly found her to be underemployed;
B. it improperly imputed income to her based upon the expected annual returns of her IRAs;
C. it failed to adjust her weekly gross income to account for an after-born child;
D. it should have imputed additional income to Father; and
E. it improperly ordered her to pay part of the cost of R.S.’s private school education;
II. whether there was sufficient evidence to modify the custody arrangement for R.S. and S.S. from joint legal custody to sole legal custody with Father;
III. whether there was sufficient evidence to restrict Mother’s visitation with her children, especially S.S.; and
IV. whether the trial court erred in not finding Father in contempt for violation of an alleged court order.
Facts
The parties were divorced in 1992, at which time the parties were granted joint custody of R.S. and S.S. and Father agreed to pay child support in the amount of $1500 per month because Mother was unemployed. Additionally, Father assigned his interest in approximately $286,000 in various individual retirement accounts (IRAs) to Mother, while retaining his interest in various real estate holdings, except for one marital residence that went to Mother but on which Father would continue to make mortgage payments. In 1994, Mother remarried, and she later expressed her intention to move to Florida with her new husband. The trial court then granted primary physical custody of the children to Father, who remained in Indiana, without altering joint legal custody. Mother was ordered to pay weekly support of $56, based on an annual income of $20,000. We affirmed the trial court’s custody decision, without being asked to address the support issue, by unpublished memorandum decision in Carmichael v. Siegel, No. 29A05-9703-CV-95 (Ind. Ct. App. August 21, 1997). In November 1997, pursuant to an agreed entry, Father waived further payment of support by Mother “because of the hugh [sic] disparity in income.” Record p. 64.
In 1996, R.S. was diagnosed as having Asperger’s Syndrome, which is a high-functioning form of autism. Until the beginning of 1999, R.S. was attending public school in Carmel, where he was doing poorly in terms of grades and discipline. A pediatrician treating R.S. referred him to Brehm Preparatory School in Illinois, a private residential school that specializes in educating children with emotional disabilities, including Attention Deficit Disorder and autism. R.S.’s grades and social problems improved after he began attending Brehm in 1999, and the pediatrician believed it was in R.S.’s best interest to continue attending school there and that the only other comparable schools that could help R.S. were located on the east coast. The total annual cost of attending Brehm in 1999 was over $38,000. On April 14, 1999, our supreme court handed down disciplinary action against Father, who was a practicing bankruptcy attorney. In the Matter of Siegel, 708 N.E.2d 869 (Ind. 1999). It found Father had intentionally deceived a bankruptcy court by knowingly misrepresenting the ownership status of a client’s residence in order to attempt to gain a larger bankruptcy exemption for the property. Id. at 870-71. Father’s license to practice law was suspended for nine months beginning May 21, 1999, without provision for automatic reinstatement. Id. at 872.
On June 4, 1999, Father filed a petition to modify Mother’s support obligation, alleging a substantial and continuing change in circumstances had occurred that required Mother to pay support. Father also petitioned for sole legal custody of the children on April 14, 2000. Mother filed a contempt petition on June 19, 2000, alleging Father failed to buy clothing for S.S. in accordance with a court order. After a hearing conducted on June 12 and 13, 2000, and argument on September 18, 2000, the trial court entered findings of fact and conclusions of law stating there was a substantial and continuing change of circumstances that required Mother to pay both ordinary support for S.S. and R.S. and to pay a portion of R.S.’s Brehm expenses, retroactive to the filing of the modification petition. It also granted sole legal custody to Father, severely restricted Mother’s visitation with S.S., and refused to find Father in contempt of any of its orders. Some of the findings and conclusions most relevant to our review follow:
* * * * *
2) The Court finds that the Respondent is employed at 30 hours per week and receives $9.00 per hour and grosses approximately $270.00 per week.
3) The Court finds that the Respondent is underemployed and imputes $360.00 per week in income, based on Respondent’s education and training.
4) The Court further finds that a substantial portion of Respondents [sic] expenses are paid by her present spouse, such as mortgage and utilities.
* * * * *
6) The Court finds that Respondent has $584,000.00 in tax deferred IRA’s.
7) The Court imputes $20,440.00 per year on Respondent’s IRA’s. Based on the testimony of Respondent’s CPA, Respondent could easily earn 7% interest. The CPA testified 10-12% was more probable. The Court however finds that if Respondent took out these funds she would be taxed at 40% federal and a 10% penalty. (There is no state tax where Respondent lives.) Taking 50% of $584,000 equals $292,000 X .07 equals $20,440 per year on her IRA’s after taxes and imputes that income to her.
8) Respondent’s total income consists of:
$20,440.00 IRA
$ 4,000.00 Real estate [rental]
$18,720.00 Wages
9) Respondent’s total income is $43,160.00 per year or $830.00 per week.
10) Petitioner earns from all sources $2,065.00 per week and the health insurance premium for minor children is $217.00 per month or $50.00 per week.
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20) The Court finds that Petitioner and Respondent should share the education expense of Brehm, being $38,160.00, based on their respective incomes.
21) The Court finds that Respondent earns 28.7% of the total income . . . .
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23) The Court finds that Respondent lives in Florida permanently, sees the children irregularly, and the parties do not communicate.
24) Based on those findings and the fact that the children have been residing with Petitioner since Respondent moved to Florida and it is in the best interest of the minor children, the Court finds Petitioner should be granted sole legal custody of the minor children.
25) The Court accepts Dr. Tarr’s report and adopts all recommendations set out in Dr. Tarr’s report.
26) The Court finds that per Dr. Tarr’s report, Respondent shall not have visitation with [S.S.] until Respondent and [S.S.] attend, in Indiana, psychological therapy until such time that the psychologist is satisfied that their damaged relationship is rehabilitated.
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31) The Court finds that neither Petitioner nor Respondent are in contempt of any Court Orders.
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Based on the significant expense of [R.S.]’s education, based on his needs, based on what is in best interest [sic] of [R.S.], and based on the financial resources of the parties, the Court finds that Respondent should pay $10,000.00 for past tuition and $10,000.00 for current tuition and $10,000.00 per year, for each year that [R.S.] attends Brehm Preparatory School.
* * * * *
The Court finds that Respondent’s expenses for mortgage and utilities are paid by her current husband and deviates from the Guidelines for that reason.
The Court finds that Respondent’s income is $43,160.00 per year and that Respondent should pay child support in the amount of $109.00 (one hundred nine) per week, by income withholding, through the Clerk, Hamilton County Court, per attached worksheet.
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Record pp. 108-12. Mother now appeals.
Analysis
I. Standard of Review
The trial court in this case entered Findings of Fact and Conclusions of Law, and so we apply a two-tiered standard to review the court’s entry. First, we determine whether the evidence supports the findings and second, whether the findings support the judgment. Oil Supply Co., Inc. v. Hires Parts Service, Inc., 726 N.E.2d 246, 248 (Ind. 2000). In deference to the trial court’s proximity to the issues, we disturb the judgment only where there is no evidence supporting the findings or the findings fail to support the judgment. Id. We do not reweigh the evidence, but consider only the evidence favorable to the trial court’s judgment. Id. Challengers must establish that the trial court’s findings are clearly erroneous. Id. Findings are clearly erroneous when a review of the record leaves us firmly convinced a mistake has been made. Carnahan v. Moriah Property Owners Ass’n, Inc., 716 N.E.2d 437, 443 (Ind. 1999). However, while we defer substantially to findings of fact, we do not do so to conclusions of law. Menard, Inc. v. Dage-MTI, Inc., 726 N.E.2d 1206, 1210 (Ind. 2000). Additionally, a judgment is clearly erroneous under Indiana Trial Rule 52 if it relies on an incorrect legal standard. Shell Oil Co. v. Meyer, 705 N.E.2d 962, 972 (Ind. 1998). We evaluate questions of law de novo and owe no deference to a trial court’s determination of such questions. Anthem Ins. Companies, Inc. v. Tenet Healthcare Corp., 730 N.E.2d 1227, 1237 (Ind. 2000).
II. Child Support
A. Mother’s Alleged Underemployment
Mother first claims the trial court improperly concluded that she was underemployed and thus improperly imputed an additional $90 per week income to her. We hold that the trial court’s finding of underemployment is clearly erroneous because it relied on an incorrect legal standard. When determining whether and in what amount potential income should be attributed to a parent because of his or her voluntary underemployment, courts should consider the obligor’s work history, occupational qualifications, prevailing job opportunities, and earnings levels in the community. Ind. Child Support Guideline 3(A)(3); In Re Paternity of E.M.P., 722 N.E.2d 349, 351 (Ind. Ct. App. 2000). One purpose of potential income is to discourage a parent taking a lower-paying job in order to avoid the payment of significant child support; also, potential income fairly allocates the support obligation “when one parent remarries and, because of the income of the new spouse,” chooses to be un- or underemployed. Child Supp.G. 3(A), cmt. 2(c) (emphasis added); E.M.P., 722 N.E.2d at 351. “However, child support orders cannot be used to force parents to work to their full economic potential or make their career decisions based strictly upon the size of potential paychecks.” E.M.P., 722 N.E.2d at 351-52. Also, there is no basis for determining that a parent is underemployed when the level of his or her earnings has remained relatively constant over a number of years. See In Re Paternity of Buehler, 576 N.E.2d 1354, 1356 (Ind. Ct. App. 1991).
At the time of the modification hearing, Mother worked an average of thirty hours per week as a manager of a bookstore at a Florida garden, earning approximately $270.00 per week. She has a high school diploma, some college classes, and an Indiana real estate license that is not recognized in Florida. The trial court found Mother was underemployed based on her “education and training” and imputed $360.00 as her potential weekly income. This finding was insufficient to support the conclusion that Mother was underemployed for purposes of calculating her support obligation. Most importantly, there is no indication the trial court considered Mother’s work history in making this determination, as is required by the Child Support Guidelines and case law. At a hearing the trial court did state that it did not “really know that much about Mrs. Siegel’s employment history,” and Father provided no such information to enlighten the trial court. Record p. 768. Because Father pressed the claim that Mother was underemployed, we believe it was his burden to present evidence on this point and specifically that her earned income has declined significantly over time, for whatever reason. See Hamiter v. Torrence, 717 N.E.2d 1249, 1252 (Ind. Ct. App. 1999) (holding that each party bears the burden of justifying the incomes used in court-submitted child support worksheets). The record before us does not reveal the existence of such a decline. In fact, the 1992 divorce decree reveals that Mother was not employed outside the home at that time; thus, in 2000 she was making considerably more than when she was divorced from Father.
Additionally, Father does not claim that Mother is underemployed for the purpose of avoiding her child support obligations. He does point to the trial court’s finding that Mother’s current spouse contributes to her living expenses, but there is no dollar amount placed on this figure and no indication that these contributions were being imputed to Mother as income. Rather, the trial court ultimately concluded that these contributions led it to deviate from the amount of support recommended by the Guidelines, which is a separate issue from determining the amount of Mother’s income. See Child Supp.G. 3(F) (deviation from guideline amount, if any, is determined after multiplying each parent’s percentage share of total weekly adjusted income times the Total Child Support Obligation). There is no suggestion that Mother has chosen her current job and/or lowered her earnings because of her new spouse’s income. Thus, because child support orders cannot be used to force persons to work to their full economic potential, there is no basis in the record for a finding that Mother is underemployed, even if she could theoretically earn more than she currently is earning. The proper legal standard for determining voluntary “underemployment,” including consideration of a parent’s work history and the reasons behind his or her current employment choice, was not applied here.