-
April 6, 1999
Appellate Division, Third Department
In the Matter of Deborah J. Glucman v. Lyman E. Qua
Supreme Court - Appellate Division
Third Department
Decided and Entered: April 1, 1999 83234
________________________________
In the Matter of DEBORAH J.
GLUCKMAN,
Respondent,
v
OPINION AND ORDER
LYMAN E. QUA,
Appellant.
________________________________
Calendar Date: February 19, 1999
Before: Mikoll, J.P., Mercure, Crew III, Peters and
Carpinello, JJ.
__________
Carusone & Carusone (John J. Carusone Jr. of counsel), Saratoga
Springs, for appellant.
Lawrence R. Hamilton, Saratoga Springs, for respondent.
__________
Carpinello, J.
Appeal from an order of the Family Court of Washington County
(Hemmett Jr., J.), entered July 16, 1998, which granted petitioner's
application, in a proceeding pursuant to Family Court Act article 4,
to modify a prior order of child support.
The parties' two-year marriage ended in divorce in December 1985.
Since that time their two children, born in 1983 and 1985,
respectively, have resided with petitioner and respondent has paid
child support. Although initially set at $100 per week, petitioner
successfully sought an upward modification of support in December
1990 resulting in an increase to $210 per week. At issue on appeal
is petitioner's April 1996 petition for another upward modification
of child support alleging a change of circumstances; namely,
respondent's increased income, a substantial increase in the
children's expenses and her recent loss of a part-time job. With
respect to respondent's income, it is undisputed that it did
increase significantly -- from $43,088 in 1990 to $260,221 in 1995
-- as a result of his success as a local restauranteur.
Petitioner's application was first denied by the Hearing Examiner
"for failure of proof" after a hearing. Specifically, the Hearing
Examiner concluded that petitioner's expenses had decreased between
1990 and 1996, that she had voluntarily reduced her income by
failing to reapply for the part-time job and that she was able to
meet the children's needs. Although noting that respondent's income
had indeed increased since 1990, the Hearing Examiner declined to
find this single factor as an adequate basis upon which to modify
his child support obligation. Petitioner filed objections with
Family Court, which remitted the matter to the Hearing Examiner to
calculate the parties' combined parental income and to reconsider
whether child support should be modified pursuant to Matter of
Cassano v Cassano (85 NY2d 649) and Matter Jones v Reese (227 AD2d
783, lv denied 88 NY2d 810).
Because the record before her was sufficient to make the additional
findings, the Hearing Examiner then determined that the parties'
combined parental income was $288,650.89 (the annual incomes of
petitioner and respondent were calculated at $28,429.89 and
$260,221, respectively). Although the Hearing Examiner again noted
that petitioner's expenses had actually decreased and that the
children's needs were being met, she nevertheless determined that an
upward modification was warranted in view of the dramatic increase
in respondent's income. She then applied "the appropriate child
support percentage [25%] to all income, including income in excess
of $80,000", on the ground that "[t]here was no proof offered as to
why the Court should not or why the Court should vary" from such
formula. This resulted in a $1,251 weekly ($65,052 annual) child
support obligation.
Following objections by respondent, Family Court again remitted the
matter to the Hearing Examiner "to make a further elaboration as to
the reasons that the Child Support Standards Act percentage was
applied to the parental income in excess of $80,000". In the
meantime, respondent successfully moved for a rehearing on the
ground that he mistakenly testified about the extent of his
ownership interest in his restaurant. Following a second hearing,
the Hearing Examiner determined that the parties' combined parental
income was $370,558.86 (the annual incomes of petitioner and
respondent were recalculated to be $37,794.50 and $332,764.36,
respectively). Noting that respondent failed to establish any reason
for her to vary from Family Court Act º 413 (1) (f), the Hearing
Examiner found that it was in the children's best interest to apply
the Child Support Standards Act (hereinafter CSSA) percentage to all
of the combined parental income. This resulted in a $1,600 weekly
($83,200 annual) child support obligation. Respondent again filed
objections with Family Court, contending primarily that the Hearing
Examiner erred in calculating his income and failed to articulate
the reasons for applying the CSSA percentage to the combined
parental income over $80,000. Family Court rejected these
objections, prompting this appeal.
Contrary to respondent's contention, the substantial increase in his
income between 1990 and 1996 provided the necessary change in
circumstances warranting an upward modification of child support
(see, e.g., Matter of Klein v Klein, 251 AD2d 733, , 674 NYS2d 142,
144). We are persuaded, however, that the Hearing Examiner erred in
calculating his income and in failing to adequately articulate the
reasons for applying the CSSA percentage to the parties' combined
parental income in excess of $80,000. Because the record permits,
and in the interest of judicial economy, we shall exercise our
discretion to determine the appropriate child support award (see,
Matter of Ballard v Davis, 248 AD2d 858, 860, lv denied 92 NY2d 803;
Chasin v Chasin, 182 AD2d 862, 864; cf., Kimmel v Mifflin, 240 AD2d
471).
First, the record does not substantiate the Hearing Examiner's
finding that respondent's annual income should include $87,937,
representing the increased value of his stock portfolio from
November 1996 through November 1997.[1] The capital gains allegedly
realized by respondent during this period was "paper only" income
(Orofino v Orofino, 215 AD2d 997, 998-999, lv denied 86 NY2d 706).
Respondent earns a substantial salary in connection with the
operation of his restaurant (compare, McFarland v McFarland, 221
AD2d 983) and an award of child support based on his income
excluding these unrealized gains would hardly be unjust or
inappropriate (compare, Matter of Webb v Rugg, 197 AD2d 777,
778-779), especially since there is no evidence in the record that
respondent was attempting to avoid his child support obligation
through calculated investment strategies -- a concern raised by the
court in McFarland v McFarland (supra, at 984). Accordingly, this
amount should not have been included in computing respondent's
income. Thus, his income for the purpose of calculating child
support is $244,827.36.
Next, we agree with respondent's contention that the Hearing
Examiner failed to sufficiently articulate the reasons for applying
the statutory formula to the combined parental income in excess of
$80,000 (see, e.g., Manno v Manno, 224 AD2d 395, 397). In Matter of
Cassano v Cassano (85 NY2d 649, supra), the Court of Appeals held
that the language of Family Court Act º 413 (1) (f) "should be read
to afford courts the discretion to apply the 'paragraph (f)'
factors, or to apply the statutory percentages, or to apply both in
fixing the basic child support obligation on parental income over
$80,000" (id., at 655). However, the court emphasized that, when a
court chooses to apply the statutory percentage to combined parental
income over $80,000, it is required to provide "some record
articulation" of its reasons in order to facilitate appellate review
(id., at 655). In addition to providing a record articulation for
deviating or not deviating from the statutory formula, a court must
relate that record articulation to the statutory factors (see,
Matter of Ballard v Davis, 229 AD2d 705, 707).
Here, the Hearing Examiner recited the statutory factors in her
decision without relating them to the ultimate facts upon which she
relied. Moreover, upon our consideration of the factors outlined
under the statute to the facts of this case, we conclude that the
Hearing Examiner's application of the statutory 25% to the income
above $80,000 was an abuse of discretion (see, Matter of Cassano v
Cassano, supra, at 655), resulting in an award that was simply
excessive (see, Reiss v Reiss, 170 AD2d 589, 590-591, appeal
dismissed 78 NY2d 908, lv denied 79 NY2d 758). In our view, a
reduced percentage of 15% to the income in excess of $80,000 bears a
more reasoned corollary between the statutory factors and the
parties' circumstances (compare, Orofino v Orofino, 215 AD2d 997,
999, supra).
Mindful of our obligation to outline the factors we have considered
in rejecting a strict application of the statutory formula to the
parties' income over $80,000 (see, Matter of Cassano v Cassano,
supra, at 653), we find the following. First, although respondent
earns substantially more than petitioner (see, Family Ct Act º 413
[1] [f] [7]), petitioner nevertheless has adequate financial
resources at her disposal, including rental property, investments, a
catering business and a working spouse who earns $48,000 per year
(see, Family Ct Act º 413 [1] [f] [1]). As to the physical and
emotional health of the two children and any special needs on their
part (see, Family Ct Act º 413 [1] [f] [2]), petitioner
unequivocally testified that the children are healthy and have no
special needs. Indeed, she described them as happy, well-adjusted
and very good students. Petitioner also testified that she has no
educational needs of her own (see, Family Ct Act º 413 [1] [f] [6]).
Moreover, while there is no doubt that respondent's recent success
as a restauranteur would have permitted the children to enjoy a
higher standard of living had the parties remained married (see,
Family Ct Act º 413 [1] [f] [3]), we believe that the increase in
child support as herein determined permits them to enjoy an
appropriately enhanced standard of living. To this end, we note that
although children must generally be permitted to share in a
noncustodial parent's enhanced standard of living and a court is not
permitted to make an award based solely on their actual needs (see,
Matter of Cassano v Cassano, supra, at 653),[2] the children's needs
are nonetheless an appropriate factor to be considered when
determining an award of child support on income in excess of $80,000
(see, Granade-Bastuck v Bastuck, 249 AD2d 444, 446; Matter of
Niagara County Dept. of Social Servs. v C.B., 234 AD2d 897, 900;
Matter of Schmitt v Berwitz, 228 AD2d 604, 606; Chasin v Chasin, 182
AD2d 862, supra). The mere fact that the children would have enjoyed
an enhanced standard of living had the parties remained married does
not necessarily mean that the statutory formula should be blindly
applied on all income over $80,000 (see, Matter of Niagara County
Dept. of Social Servs. v C.B., supra, at 899; Chasin v Chasin,
supra, at 863). To do so would constitute an abdication of judicial
responsibility rendering meaningless the statutory provision setting
a cap on a strict application of the formula (see, Chasin v Chasin,
supra, at 863), particularly in cases where the combined parental
income substantially exceeds $80,000.
In this case, although petitioner outlined purported needs of her
teenage children -- ranging from new clothes and "expensive juice"
to a new horse and an updated computer -- it is clear that these
needs do not require annual child support in excess of $83,000.
Indeed, the child support petitioner was receiving as of the second
hearing ($1,251 per week/$65,052 per year) was more than either
petitioner or her current spouse earned and was sufficient to cover
all of petitioner's household expenses as outlined by her on a 1997
financial statement. Tellingly, petitioner testified that she had no
idea how she would spend $65,000 per year on her children and her
current spouse testified that the child support would be used to
paint and restore the couple's house. Finally, in finding it
appropriate to apply a reduced percentage to the combined parental
income over $80,000, we also deem it relevant that respondent is
responsible for providing health insurance for the children (see
generally, Family Ct Act º 413 [1] [f] [10]; Matter of Bryant v
Bryant, 235 AD2d 116, 121-122) and that his increased income over
the years was not based on a windfall but rather the direct result
of his personal efforts to succeed in a highly competitive business
(see, Family Ct Act º 413 [1] [f] [10]).
Given our findings, respondent's child support obligation must be
computed as follows: (1) respondent's income ($244,827.36) +
petitioner's income ($37,794.50) = combined parental income
($282,621.86); (2) appropriate child support percentage (25%) x
$80,000 = child support obligation ($20,000); (3) appropriate child
support percentage (15%) x combined parental income in excess of
$80,000 ($202,621.86) = additional child support obligation
($30,393.28); (4) respondent's income ($244,827.36) = 87% of
combined parental income; (5) 87% x total child support obligation
($50,393.28) = respondent's annual child support obligation
($43,842.15); and (6) $43,842.15 divided by 52 = $843.12 (see,
Family Ct Act º 413 [1] [c]). Therefore, respondent is ordered to
pay child support in the amount of $843.12 per week.
Finally, having failed to object to the Hearing Examiner's award of
counsel fees in its written objections to Family Court, respondent
has waived appellate review of this issue (see, Matter of Stoltz v
Stoltz, AD2d , , 682 NYS2d 488, 489 n 1; Matter of Ballard v Davis,
248 AD2d 858, 859, supra).
Mikoll, J.P., Mercure, Crew III and Peters, JJ., concur.
ORDERED that the order is modified, on the law and the facts,
without costs, by directing respondent to pay weekly child support
in the amount of $843.12 per week, and, as so modified, affirmed.
ENTER:
Michael J. Novack
Clerk of the Court
**FOOTNOTES**
[1]: As neither party filed objections to the Hearing Examiner's
computation of petitioner's income, we will not disturb the finding
that petitioner's income is $37,794.50.
[2]: To the extent that the Hearing Examiner held that "child
support is not limited by need and represents the ability of a child
to share its [sic] parents' lifestyle and resources", we clarify
what we believe to be a misreading of Matter of Cassano v Cassano
(supra). In discussing the purpose of the CSSA generally, the Court
of Appeals noted that there was a shift from a needs-based
determination to a determination based on parental income (see, id.,
at 652; see, Matter of Jones v Reese, 227 AD2d 783, 784, supra). The
court's observation of the statute's general objectives should not
be misread to eliminate completely an analysis of children's needs
as one of many factors to be considered by a court should it choose
to deviate from the statutory percentage on income in excess of
$80,000.
