Petrini v. Petrini

MURPHY, Chief Judge. The principal question presented is whether a trial court can consider non-cash gifts to a parent in determining the amount of that parent’s actual income for the purpose of calculating his child support obligation pursuant to Maryland’s Child Support Guidelines. See Maryland Code (1984, 1991 Repl.Vol.) §§ 12-201 et seq. of the Family Law Article. 1 Also ⁴⁵⁸ to be considered is the extent of a trial judge’s discretion in making a decision concerning an award of child custody. I. Petitioner John Petrini (John) and Respondent Debra Petrini (Debra) were married on October 9, 1984.

The couple had one child: Edgar Jacob Petrini, III (Eddie) who was born on July 23, 1987. The Petrinis separated several times during their almost eight year marriage. On July 9, 1989, Debra left the marital home for good and on July 25, 1990, she filed a Complaint for Divorce in the Circuit Court for Anne Arundel County; she sought custody of Eddie along with child support and attorney’s fees. John filed a Counter-Complaint for Divorce in which he too prayed for custody of Eddie and for child support.

After a four day trial, the court (Wolff, J.) granted Debra a divorce. It awarded sole custody of Eddie to Debra, allowing John liberal visitation with his son. While the parties initially petitioned for joint custody of their son, the court concluded that joint custody would not be in Eddie’s best interest. The court also awarded child support in the amount of $81.31 per week to Debra.

Although the court found John’s take-home income to be only $14,063.00 in 1991, it found that his mother allowed her son to reside in one of her homes rent-free, that she paid the expenses relating to his illeostomy bag, and that she paid Eddie’s health insurance premiums. 2 Respectively, these items had a value of $688.00 per month, $600.00 per year, and $1,392.00 per year. The court determined that these items constituted “actual income” to John, as that term is defined in § 12—201(c)(4)(iii). The court, therefore, increased the amount of actual income received by John by $10,248.00 to reflect these “gifts” and thereby calculated John’s “actual income” to be $24,311.00 for purposes of com ⁴⁵⁹ puting the amount of his child support obligation under the statutory guidelines. 3 The court also ordered John to contribute $3,000.00 toward the cost of Debra’s legal expenses. It explained the basis for its rulings on support, attorney’s fees, and custody in a detailed oral opinion on May 13, 1992.

Thereafter, John noted an appeal to the Court of Special Appeals, seeking a reversal of the court’s judgment as to the award of child support, attorney’s fees, and child custody. The intermediate appellate court, in an unreported opinion, affirmed the judgment of the lower court. We granted certiorari to consider the important issues raised in the case.

II

We first consider whether the trial court properly determined the amount of child support to which Debra was entitled when it increased John’s annual take-home income to account for the “gifts” received from his mother. We next determine whether the trial court abused its discretion by requiring John to contribute $3,000.00 to the cost of his former wife’s legal expenses. And, finally, we decide whether the trial court properly applied the “best interest” of the child standard in awarding sole custody of Eddie to his mother. A. Child Support That both parents have a legal as well as a moral obligation to support and care for their children is well-settled in Maryland.

This legal duty is based on both common law and statutory authority. See § 5—203(b)(1). See also Middle ⁴⁶⁰ ton v. Middleton, 329 Md. 627, 631-33 , 620 A.2d 1363 (1993). In making an award of child support, it is for the trial judge to set an amount reasonably calculated to maintain as nearly as possible the standard of living enjoyed by the child prior to the parents’ divorce.

In February of 1989, the General Assembly put into effect statutory Child Support Guidelines (the guidelines), which were adopted by adding Subtitle 2 to Title 12 of the Family Law Article. 4 The purpose of the guidelines was to limit the role of trial courts in deciding the specific amount of child support to be awarded in different cases by limiting the necessity for factual findings that had been required under pre-guidelines case law. 5 The legislature also intended the guidelines to remedy the unconscionably low levels of many child support awards when compared with the actual cost of raising children, to improve the consistency and equity of child support awards, and to increase the efficiency in the adjudication of child support awards. Voishan, supra, 327 Md. at 322, 609 A.2d 319 . See also Tannehill v. Tannehill, 88 Md.App. 4, 11 , 591 A.2d 888 (1991). To accomplish these goals, the legislature promulgated certain uniform calculations that must be made in making any child support determination. 6 While the Child Support Guidelines were merely advisory when they were first adopted, their use became mandatory when ch. 58 of the Acts of 1990 was enacted.

A rebuttable presumption was thereby created that an award reached by ⁴⁶¹ applying the guidelines is the proper amount of child support to be awarded. Voishan, supra, 327 Md. at 323-24 , 609 A.2d 319 . This presumption can be rebutted by showing evidence that applying the guidelines would be unjust or inappropriate in a particular case. The legislature set forth certain criteria that should be considered in determining whether the application of the guidelines would be unjust or inappropriate. 7 See § 12-202(a)(2).

If the court does conclude that the application of the guidelines would be unjust or inappropriate, it must make a written or oral finding on the record explaining its departure from the established guidelines. Walsh v. Walsh, 333 Md. 492, 501-502 , 635 A.2d 1340 (1994). A basic child support obligation is determined using the schedule for that purpose set forth in § 12-204(e); it is divided proportionately between the parents in relation to their “adjusted actual incomes.” 8 According to § 12-201(c), “actual income” is defined as “income from any source.” 9 In addition to the categories of actual income mentioned in § 12- ⁴⁶² 201(c)(3), § 12-201(c)(4) provides that “[b]ased on the circumstances of the case, the court may [also] consider the following items as' actual income: (i) severance pay; (ii) capital gains; (iii) gifts; or (iv) prizes” for the purpose of determining a party’s child support obligation. (Emphasis supplied) The types of “gifts” that may be includable as part of a parent’s actual income in a particular case is within the court’s discretion, and should only be reversed if it acted arbitrarily in exercising its discretion or if the judgment on the matter was clearly wrong.

Gates v. Gates, 83 Md.App. 661, 663 , 577 A.2d 382 (1990). See also Kramer v. Kramer, 26 Md.App. 620, 636 , 339 A.2d 328 (1975). The General Assembly intentionally designed the guidelines to place decisions concerning whether “gifts” to a parent should be considered part of that person’s “actual income,” and the items properly to be considered “gifts,” within the sound discretion of the trial court. This intent is clear upon review of the legislative history of the guidelines.

Initially, the legislature included “gifts” as part of § 12-201(c)(2), which enumerates an extensive list of categories of things that must be considered in calculating a parent’s “actual income.” Before the guidelines reached their final form, however, § 12-201 was revised and the category of “gifts” was taken out of § 12-201(c)(2) and put into § 12-201(c)(4), which specifically leaves the decision concerning whether certain contributions to a person’s well being should be considered part of that party’s “actual income” within the sound discretion of the trial court, taking into account the totality of the circumstances. John argues that the court abused its discretion when it increased his take-home income to reflect the “gifts” that he received from his mother. These “gifts,” as we earlier discussed, included rent-free housing valued at $688.00 per month, the expenses surrounding John’s illeostomy valued at $600.00 per year, and the cost of Eddie’s health insurance premiums valued at $1,392.00 per year. John maintains that these items do not amount to “gifts” within the meaning of § 12-201(c)(4).

His primary argument is that he receives no ⁴⁶³ tangible funds from these non-liquid and non-marketable assets from which he can pay an increased level of child support. John further argues that even if the contributions made to him do constitute “gifts” under the guidelines, they should not have been considered part of his actual income under the circumstances of his case. He attempts to illustrate the inequity of attributing what he calls “phantom income” to him by asserting that doing so leaves him with a negative after-tax income. Neither the legislature in the statute, nor the courts in existing case law, have specifically defined what the word “gifts” means in the context of the guidelines.

Thus, we must undertake to extrapolate its meaning from its general usage. Webster’s Third New International Dictionary 956 (1981) defines a “gift” as “something that is voluntarily transferred by one to another without compensation.” Black’s Law Dictionary 688 (6th ed. 1990) defines a “gift” as “a voluntary transfer of property to another made gratuitously or without consideration.” The benefits conferred upon John by his mother fit within both of these definitions. 10 As we see it, the General Assembly purposely did not define with pin-point precision what it intended the term “gifts” to encompass under the guidelines; rather it afforded trial courts the latitude to consider all the relevant circumstances in a particular case before making any determination about what should be considered in calculating a parent’s support obligation. Some of the considerations that might be ⁴⁶⁴ made by a trial judge include: a parent’s actual ability to pay the specified child support award, any lack of liquidity or marketability of a party’s assets, the fact that a parent’s take-home income is not an accurate reflection of his or her actual standard of living, and whether either party is voluntarily impoverished. All of these factors came into play in this case and were considered by the trial court in making its award.

Our limited task is to determine whether, the trial court abused its discretion in deciding that the gifts conferred upon John constitute actual income under § 12—201(c)(4). The trial court, in its opinion, stated that “the guidelines tell us, that if you get [gifts], they’re to be considered as income, cause it’s something you don’t have to spend for.” We agree that when the Child Support Guidelines were formulated the drafters took into consideration the fact that everyone has certain basic living expenses, such as room and board, which must be paid out of their take-home income. Thus, if a parent is relieved of some of these expenses through outside contributions, it may be appropriate under certain circumstances to increase the parent’s actual income to account for such contributions. Manifestly, these benefits may have the effect of freeing up other income that may not have otherwise been available to pay a child support award.

In considering the circumstances surrounding John’s financial situation, the court decided that the most equitable resolution required inclusion of the subject benefits conferred upon John as part of his actual income. The evidence presented at trial supported this conclusion by the court. It established that John has never needed to engage in full-time employment because his mother in addition to providing him with rent-free lodging, paying health insurance premiums, and covering the cost of his illeostomy bag, also paid some of his daily living expenses—such as food, gas, and clothing—as well as giving him large cash payments to do with as he wished. Essentially, John’s mother paid for things that he would otherwise have been responsible for paying for himself out of his take-home salary. ⁴⁶⁵ The trial court also found that because John always seemed to have resources available to buy whatever he needed or wanted, he could afford to work only when he felt like it. 11 John admitted that he has received regular subsidies of approximately $500.00 per week from his mother over a long period of time to supplement his income as a part-time boatyard mechanic. 12 He accounted for these subsidies as “additional income” on his financial affidavit submitted to the court in this case.

Therefore, the trial court found that John’s take-home income was not an accurate measure of his ability to pay child support for Eddie. The Court of Special Appeals dealt with a somewhat similar situation in Goldberger v. Goldberger, 96 Md.App. 313 , 624 A.2d 1328 (1993), cert. denied, 332 Md. 453 , 632 A.2d 150 (1993). In that case, Aron Goldberger, an Orthodox Jew, purportedly had devoted his entire life to the study of the Torah/Talmud. As a consequence, he had never been employed at an income-producing vocation, even before he got married and had children.

He had been supported by others—his parents, his father-in-law, and friends in the Orthodox community—throughout his entire life, and thus had consistently relied upon the charity of others to provide his family with the necessities of life. Based on these circumstances, the trial court found that Goldberger was “voluntarily impoverished.” Because he had no “actual income” as defined by the guidelines, the court imputed what it found to be his “potential income” based on ⁴⁶⁶ various delineated factors. 13 See § 12—201(b). In finding Goldberger to be voluntarily impoverished, the Court stated: [a] parent who chooses a life of poverty before having children and makes a deliberate choice not to alter that status after having children is also “voluntarily impoverished.” Whether the voluntary impoverishment is for the purpose of avoiding child support or because the parent simply has chosen a frugal lifestyle for another reason, . doesn’t affect that parent’s obligation to the child. Although the parent can choose to live in poverty, that parent cannot obligate the child to go without the necessities of life.

A parent who .brings a child into this world must support that child, if he has or reasonably could obtain, the means to do so. The law requires that parent to alter his or her previously chosen lifestyle if necessary to enable the parent to meet his or her support obligation. Goldberger, supra, 96 Md.App. at 326-27 , 624 A.2d 1328 . According to this analysis, John might have been considered “voluntarily impoverished,” but the court did not so find.

Instead it determined that because John did not work full-time on a regular basis, and because he did not stop working up to his potential just to avoid paying child support to his son, he was not voluntarily impoverished as defined by the case law. Rather, as we have said, the court, exercising its discretion, considered the “gifts” from his mother as part of John’s actual income in calculating his support obligation. Supportive of this determination is the case of Walsh, supra, 333 Md. at 502 , 635 A.2d 1340 , holding that a husband’s obligation to pay part of the mortgage payment on a family home in which his former wife and children lived under a use and possession order was to be considered income to the wife, resulting in a ⁴⁶⁷ reduction of the husband’s income for the purpose of calculating his support obligation under the guidelines. Here, as in Walsh , money is made available to the party benefitting from the contribution that would not have otherwise been available to pay this ordinary living