Child support guidelines

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Issues for discussion 12/5/08
1.Child support; Whether the trial court properly granted the defendant-father's motion to modify his child support obligation; De novo standard of review; Peterson v. Peterson; In re Lobaina Estate;
2.Change of circumstances; Chapdelaine v. Sochocki; MCL 552.605(2) governing determination of child support; Ghidotti v. Barber; Burba v. Burba (After Remand);
3.Michigan Child Support Formula Manual (MCSFM); Oviatt v. Oviatt; Aussie v. Aussie; 4.Contract principles; Rory v. Continental Ins. Co.; Bloomfield Estates Improvement Ass'n, Inc. v. Birmingham; Gramer v. Gramer; Lentz v. Lentz; Krueger v. Krueger; Royal Prop. Group, LLC v. Prime Ins. Syndicate, Inc.
[This opinion has been modified for media presentation consult an attorney before you rely on its content.(...) Indicates content has been removed CAP headlines have been added-Terry Bankert 12-5-08]
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Michigan Court of Appeals (Published), Case Name: Holmes v. Holmes e-Journal Number: 41219, Judge(s): Gleicher, Bandstra, and Beckering
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CONTRACT THEORY AND CHILD SUPPORT
The court held since the child support guidelines set forth a parent's minimum support obligation, a voluntarily assumed obligation to pay an amount in excess of the minimum is not inherently objectionable and a contract enhancing a parent's child support obligation should be enforced, absent a compelling reason to forebear.
THE COUPLE WERE BOTH ATTORNEYS
The parties, both attorneys, have two minor children.
THEY DIVORCED 1996
A consent divorce judgment was entered in July 1996. At the time of the divorce, the plaintiff-mother practiced in a small firm.
MOM NOW RUNS A CONSTRUCTION BUSINESS
She is now the president of a family construction business and no longer practices law.
DAD IS A PARTNER IN A LARGE FIRM
Defendant-father is a partner in a large statewide law firm.
THE DIVORCE JUDGEMENT INCORPORATED A SIDE AGREEMENT OR CONTRACT
DAD GETS 164 OVERNIGHTS A YEAR* DAD PAYS 25% OF HIS BONUS AS CHILD SUPPORT
The consent judgment of divorce incorporated a document the parties called the "contract," which provided, inter alia, for joint legal custody of the children, with plaintiff having physical custody, defendant having overnight custody about 164 days a year, and a paragraph as to the computation of child support including a provision requiring defendant to pay as child support 25 percent of any net bonus each year. The contract also contained a provision addressing future child support modification. Over the years, the computation of the amount of child support defendant was to pay was disputed by the parties.
2006 DAD WANTS TO CHANGE THE CHILD SUPPORT
Just before the 10-year anniversary of the divorce judgment, defendant moved for modification of his child support obligation.
THEY WENT TO MEDIATION
The issue was mediated and the trial court issued an order modifying the support obligation (which resulted in a $45 increase in defendant's payments) and held an evidentiary hearing on the bonus percentage, and changed the bonus to 9.3 percent.
THE TRIAL COURT WOULD NOT ENFORCE THE SIDE AGREEMENT OF CONTRACT
The trial court refused to enforce the bonus agreement the parties entered into voluntarily, despite the absence of any evidence its enforcement would create a hardship for the defendant, or otherwise qualify as unjust or inappropriate.
MOM APPEALED TO THE MICHIGAN COURT OF APPEALS
Plaintiff appealed.
CHANGES OF CIRCUMSTANCES CAN CHANGE CHILD SUPPORT
The court held the trial court did not err in concluding a change of circumstances warranted modification of defendant's support obligation.
THE TRIAL COURT MUST USE THE MICHIGAN CHILD SUPPORT FORMULA MANUEL AND EXPLAIN HOW IT DEVIATES
The Supreme Court requires trial courts use the MCSFM and established a procedure they must follow when deviating from the MCSFM including an explanation of how the order deviates from the formula.
THE BONUS AGREEMENT IS CHILD SUPPORT BUT CAN BE MODIFIED IF CIRCUMSTANCES CHANGE
The court noted the history the parties' child support dispute illustrated enforcing the bonus agreement served the purposes of the statutes governing child support, while preserving the court's ability to modify defendant's obligation if his or the children's financial circumstances changed.
THE BONUS AGREEMENT IS A CONTRCAT AND MUST BE ENFORCED
The bonus provision in the divorce judgment was contractual, freely negotiated, and unambiguous. Thus, it must be enforced as written. Reversed and remanded.
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S T A T E O F M I C H I G A N C O U R T O F A P P E A L S
ELIZABETH S. HOLMES, Plaintiff-Appellant, FOR PUBLICATION
December 4, 2008 9:05 a.m. v No. 276470 Kent Circuit Court
RICHARD E. HOLMES, JR., LC No. 96-003184-DM Defendant-Appellee.
Before: Bandstra, P.J., and Beckering and Gleicher, JJ. GLEICHER, J.
e-Journal Number: 41219
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I. Facts and Proceedings
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PROPERTY SETTLEMENT CONTRACT
The parties’ consent judgment of divorce incorporated a document entitled, "Alimony,
Custody, Child Support, Parenting Time, and Property Settlement Contract" (the contract). The
contract provided for joint legal custody of the children, with plaintiff receiving physical
custody. Defendant’s parenting time consisted of 12 monthly overnight visits, or approximately
164 days a year. Paragraph 7 of the contract, entitled "Child Support," is the disputed portion at
the center of this appeal. It provides,
DAD PAYS CHILD SUPPORT IN THE AMOUNT OF $1,263.00
Husband shall pay child support in the amount of One Thousand, Two
Hundred Sixty-three ($1,263.00) Dollars per month (see attached calculations),
which includes his portion of the payment for the children’s nanny.
DAD IS A BIG DOG AND GETS A BIG BONUS
Further,
Husband shall pay twenty-five percent (25%) of any net bonus he receives in any
given year as additional child support. When the oldest child attains the age of
18 or completes high school, whichever event occurs last, this payment shall be
reduced to fifteen percent (15%) of his net bonus, and shall terminate upon the
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youngest child’s attaining the age of 18 or graduating from high school,
whichever last occurs. [Emphasis supplied].
THEY CONTRACTED TO BE OUT OF COMPLIANCE WITH SERF.MOM SAID YOU CAN HAVE EXTRA PARENTING TIME BUT YOU DO NOT GET A BREAK ON YOUR CHILD SUPPORT
The parties agree that they calculated defendant’s $1263 monthly child support obligation
by adding together the amount that would have been due under the standard child support
guidelines in the Michigan Child Support Formula Manual (MCSFM), assuming sole custody
resided with plaintiff ($1697.81), and the amount calculated under the shared economic
responsibility formula (SERF)1 ($828.25), and then dividing by two.2 At the time they
negotiated the contract, the parties recognized that defendant’s substantial parenting time would
potentially entitle him to application of the SERF. They agreed on the compromise embodied in
the contract to avoid a protracted courtroom battle regarding both parenting time and child
support.
Paragraph 8 of the contract, entitled "Additional Child Support Provision," addressed
future child support modification:
All child support shall be paid through Kent County Friend of the Court
and shall be subject to all Friend of the Court regulations and supervisory fees.
DAD SAID HE PROMISED TO NEVER ASK FOR A CHILD SUPPORT REDUCTION UNDER SERF
Husband waives the right to assert shared economic participation and agrees not
to introduce the shared economic concept into the support calculation for the
minor children for a ten-year period. Wife agrees that as long as Husband
exercises the parenting time specified in this Agreement, the same shall be
effected in the support calculation.
DADS INCOME COULD BE REDUCED BUT HE CANNOT SEEK A REDUCTION UNLESS HE IS UNEMPLOYED-CONTRACT PROVISION
Husband and Wife agree that support shall remain fixed for one year after
the entry of the Judgment of Divorce, before it can be reviewed, and that support
will be reviewed only in the event that either Husband or Wife is receiving greater
compensation than at the time of the entry of the Judgment of Divorce.
In no
event shall child support be reduced, unless Husband is completely unemployed
on a non-voluntary basis, or unless Wife’s earnings increase. [Emphasis
supplied].
MPMS INCOME WENT DOWN AND DAD WANTS SERF ....1997
In 1997, the parties filed competing motions to modify defendant’s monthly child support
payments. Plaintiff sought a significant increase, alleging that her income declined when her law
firm closed it doors and she became self-employed. Defendant advocated for application of the
SERF, averring that because he had 14 parenting time days a month the SERF was more
equitable. Plaintiff countered that in the contract defendant had "agreed not to assert shared
economic responsibility for a period of ten years."
1 This methodology appears in § 3.05 of the 2004 MCSFM.
2 The "attached calculations" referenced in ¶ 7 of the contract were not attached to the divorce
judgment or the copy of the contract filed with the circuit court. The parties clashed regarding
the formula for many years. But their current positions remain consistent with the simple
mathematics described here.
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THE LOWER COURT INCREASED CHILD SUPPORT PAYMENTS AND TALKED ABOUT THE CONTRACT BUT DOES NOT ATTACH IT TO THE ORDER
The circuit court increased defendant’s child support payment to $1391 a month,
observing as follows in its written opinion and order:
The issue is complicated by the fact that the judgment incorporates by
reference a document entitled "alimony, custody, child support, parenting time,
and property settlement contract" entered by and between the parties under date of
March 16, 1996. This rather singular document addresses child support in
paragraphs 7 and 8 on pages 3 and 4. Paragraph 7 establishes child support for
the 2 minor children of the parties at $1263.00 per month, including child care,
which figure is ostensibly based upon "attached calculations." Lamentably
however, no such calculations are in fact attached to the document.
1997 LOWER COURT SAID NO MORE REVIEWS FOR 2 YEARS
The circuit court calculated the $1391 monthly figure through a formula of its own creation,
which was more complex than simply adding the standard guideline and SERF numbers, then
dividing the total by two. The circuit court further ordered that no child support reviews would
occur for 24 months, absent an "extraordinary change in circumstances."
2001 DAD WANTS HIS SUPPORT LOWERED,NEW JUDGE
On September 28, 2001, defendant filed a motion "for child support calculation pursuant
to judgment of divorce." He requested that the newly assigned circuit court judge reconsider the
previous judge’s calculation method, and instead calculate the support obligation by combining
the standard guideline amount with the SERF, and dividing by two. Plaintiff responded that the
previously employed method constituted the law of the case. The parties also argued regarding
whether the calculation would be made using defendant’s "base salary" or his "income." The
circuit court ruled that the parties had intended to use the formula advocated by defendant.
2002 CHILD SUPPORT $1,383 PER MONTH PLUS 25 % OF HIS BONUS
In December 2002, the parties stipulated to a monthly child support payment of $1,383.3 Defendant continued to pay 25% of his net bonus as child support.
FOR 10 YEARS DAD PAID 25% OF HIS BONUS
During the 10-year period described in paragraph 8 of the contract, the parties fought
several contentious custody battles, and filed multiple motions seeking child support
modification.4 Notably, neither party challenged the portion of the 1996 contract addressing
defendant’s bonus percentage. Defendant consistently paid 25 percent of his net bonuses as
child support, which in some years represented substantial, six-figure sums.
DAD NOW WANTS A CHANGE AT 10 YR MARK,
Shortly before the 10-year anniversary of the divorce judgment, defendant moved for
modification of his child support obligation. Defendant contended that he could now introduce
the "shared economic concept" because the 10-year period of forbearance specified in the
contract would soon expire. Defendant invoked the following contract provision: "Husband
waives the right to assert shared economic participation and agrees not to introduce the shared
3 Plaintiff filed a delayed application for leave to appeal these rulings, and on May 8, 2003, this
Court denied the application for lack of merit in the grounds presented. Holmes v Holmes,
unpublished order of the Court of Appeals (Docket No. 246548).
4 A 2003 custody battle also resulted in an appeal to this Court. Holmes v Holmes, unpublished
order of the Court of Appeals, issued April 1, 2003 (Docket No. 247574).
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economic concept into the support calculation for the minor children for a ten-year period."
Defendant averred that he had custody of the children for 172 days a year, and that the court thus
had to apply the SERF.
DAD WANTS TO REDUCE HIS CHILD SUPPORT BY $636
He sought a reduction of his support obligation to $636 a month,
constituting four percent of his average monthly income, and a commensurate reduction in the
amount of the support payment deducted from his net bonus, from 25 percent to 4 percent.
MOM SAYS NO CHANGE IN CIRCUMSTANCES
Plaintiff responded that no basis existed for modifying defendant’s support obligation,
because defendant had failed to show a "change in circumstances." Plaintiff further argued that
the bonus percentage had been established in the contract and could not be modified. Plaintiff
calculated that under the SERF, defendant would pay $1134 a month, and under the straight
guidelines formula he would pay $2076.30 each month.
COURT FINDS CHANGE IN CIRCUMSTANCES FOR BOTH
The circuit court referred the matter to the friend of the court, explaining as follows:
The Court does find that there has been a change in circumstances
presented.
I am satisfied that having the ten years lapse is a basis to re-evaluate
appropriate support for the two children.
I’m also satisfied that it’s been two years since the last review of child
support.
And, I’m further satisfied that based on the allegations set forth within
both briefs, that there’s a change in the income of both parties. And, also that the
overnight stays which have been kept track by both parties in copious and
voluminous notations, deserves review.
On March 31, 2006, plaintiff filed a cross-motion for modification of child support,
alleging a change of circumstances that included defendant’s failure to utilize all of his parenting
time, and an increase in defendant’s income. On April 14, 2006, the circuit court referred the
matter "for review and a recommendation to a mediator selected and agreed upon by the parties."
On October 2, 2006, mediator David C. Sarnacki issued his report and recommendations, which
included the following:
39. In this case, the parties’ original agreement included a regular
monthly support amount and a provision for additional child support in the
amount of 25% of any net bonus. The 1996 support calculations showed that the
regular monthly child support obligation was about 25.4% of Richard’s net
income.
40. Richard and his attorney (who calculated the 1996 obligation)
contend that the 25% figure was deliberately set based on the percentage of
obligation to net income. Elizabeth contends that she was never told this in 1996
and that she did not know how Richard selected the 25%. She merely agreed to
his proposal because she knew there was a potential for large bonus income.
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41. As indicated above, the method for providing additional support in
the form of a percentage of net bonus income is not surprising. In fact, the figure
(25%) bears far too much similarity to the actual ratio (25.4%) to be a
coincidence. If there was something shocking about the percentage or including it
within the child support obligation, Elizabeth’s attorney—an experienced and
respected divorce attorney—would have recognized it and it could have been
dealt with in 1996.
42. Despite Elizabeth’s contention that the bonus percentage was
separate and distinct, it was included in the child support provisions, which are
modifiable by law. That percentage served the parties well for 10 years. Now,
with the entire obligation under review, there is no reason to ignore the new ratio
of obligation to net income. The bonus percentage should reflect the child
support obligation as modified.
43. RECOMMENDATIONS: Based upon all the information
provided to this evaluator, I submit the following recommendations to this Court:
44. The effective date for modification is March 19, 2006.
45. Richard’s income is $177,400.00 ($14,783.33/month).
46. Elizabeth’s income is $80,425.00 ($6,702.08/month).
47. Richard’s number of overnights for purposes of the Formula is
157.
48. The formula to be used is SERF.
49. The net bonus percentage is modified in accordance with the ratio
of obligation to net income.
50. The calculation of child support is as follows:
Effective March 19, 2006, Defendant/Father shall pay
Plaintiff/Mother for support for the two minor children, the sum of $1032.89 per
month ($674.55 per month for one) or until further Order of the Court.
In addition to monthly child support, Defendant/Father shall pay
Plaintiff/Mother 9.30% of any net bonus income for the care of the two minor
children (6.17% of any net bonus income for one minor child).
On October 6, 2006, defendant filed a motion requesting that the circuit court adopt the
mediator’s recommendations. Plaintiff accepted the recommendation regarding monthly child
support and agreed that defendant’s parenting time consisted of 157 overnights a year. However,
plaintiff rejected the mediator’s recommendation regarding the modification of defendant’s
bonus percentage. On October 13, 2006, the circuit court entered an order providing as follows:
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1. Defendant’s motion for modification of child support is hereby
GRANTED in part and, by agreement of the parties, the Court adopts the
recommendations of the mediator as follows:
a. Defendant’s monthly child support obligation shall be modified
effective March 19, 2006;
b. The formula to be utilized in calculating monthly child support is
the Shared Economic Responsibility Formula;
c. The monthly income to be utilized in the shared economic
responsibility formula is $14,783.33 per month for Defendant and $6,702.08 for
Plaintiff.
d. The number of overnights for the Defendant to be utilized in the
shared economic responsibility formula is 157.
e. As of the effective date of modification, Defendant’s monthly child
support obligation is $1,032.89 per month.[5]
2. Plaintiff’s cross-motion for modification of child support is hereby
DENIED.
3. That portion of Defendant’s motion for modification of child
support relating specifically to modification, if any, of a percentage of
Defendant’s net bonus shall be scheduled for an evidentiary hearing before this
Court.
On January 19, 2007, the circuit court conducted the evidentiary hearing regarding
defendant’s bonus percentage. Both parties testified regarding their interpretations of the
contract’s bonus clause. Plaintiff testified that she and defendant agreed that she would receive
25 percent of defendant’s bonus until the older child’s eighteenth birthday. The bonus
percentage "would then drop to 15 percent," and would remain at that level until the younger
child’s eighteenth birthday. Plaintiff conceded that this amount was considered child support
rather than a property settlement, and that child support is modifiable under Michigan law.
Plaintiff nevertheless asserted, "My position is that Rich and I agreed that it would not be
modifiable until [the older child] turned 18, which we can do."
Defendant contended that when they negotiated the bonus provision, he and plaintiff
applied the same percentage (25%) to his bonus as they had to his income, when calculating his
monthly child support payment. He asserted that he agreed to pay more than the SERF required
so that plaintiff would agree to allow him more overnights with his children, declaring, "I paid
extra money to purchase time with my children and to guarantee they could stay in the home."
5 This constituted a $45 increase in defendant’s payments.
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BONUS AGREEMENT COULD CHANGE AFTER 10 YEARS
Defendant testified that he and plaintiff intended the bonus percentage to remain at 25% for 10
years, and that ¶ 8 of the contract "guaranteed" that after 10 years the bonus percentage would
change. He explained, "I also understood at the time that all child support agreements had to
read that they continued until a child was 18 or had graduated from high school. That was
standard language."
Attorney Roger Boer represented plaintiff at the time of the divorce, and drafted the
contract. According to Boer, the parties modeled the bonus percentages on those used by
divorcing Steelcase employees, because Steelcase "had a wonderful bonus plan," and the 25%
formula for two children was "state of the art at the time that most judgments contained that."
Boer asserted that when he drafted the contract, he intended that the bonus percentages "would
run" until the specific events identified in the contract, the children’s eighteenth birthdays. Boer,
too, conceded his awareness that child support is always modifiable under Michigan law.
THE LOWER TRIAL COURT SAID THE SIDE AGREMENT/CONTRACT WAS INCLUDED AS CHILD SUPPORT AND IS MODIFIABLE
The circuit court ruled from the bench as follows:
I am asked by Ms. Holmes to find that this is a contractual negotiated
provision and to not modify its terms.
The Court declines to be persuaded by this argument.
Certainly there are many times when additional support is a negotiated,
contractual, additional enforceable term, such as agreements within judgments
that a parent agrees to pay for college, or in some cases where bonus amounts are
also referred to in the property section and there is specific language that although
child support is reviewable, this specific term is not to be modified and was a part
of the negotiated agreement.
I don’t find that those clarifying terms exist in the parties’ judgment of
divorce. I do not find that this is a negotiated portion of a property settlement.
I do find that the bonus, as with the child support, is modifiable and that
the terms contained in the judgment allow for the Court to review what
modifications are appropriate.
LOWERE COURT TO FOLLOW SERF
In reviewing the extensive income information, the Court concurs with the
agreement of the parties, that the application of the SERF formula is appropriate
in this case.
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As SERF has been applied to the child support component, I also believe
that the SERF application is appropriate to utilize when evaluating the bonus
funds.
I concur with the observations, findings and recommendations of the
skilled mediator, David Sarnacki.
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The Court will utilize the same computations and order that as SERF is
applied to the bonus, that 9.3 percent of Mr. Holmes’ bonus be paid over annually
to Ms. Holmes to assist in supplementing the child support she receives to care for
the children.
MOM APPEALS, A CONTRACT IS A CONTRACT
Plaintiff filed a delayed application for leave to appeal, which this Court granted.
HOW DOES THE COURT OF APPEALS REVIEW THE LOWER COURT.
II. Standard of Review
DE NOVO REVIEW
We review child support orders and the modification of such orders for an abuse of
discretion. Peterson v Peterson, 272 Mich App 511, 515; 727 NW2d 393 (2006). However,
"[w]hether a trial court properly operated within the statutory framework relative to child support
calculations and any deviation from the child support formula are reviewed de novo as questions
of law." Id. at 516. An appellate court also reviews de novo a trial court’s finding "derived from
an erroneous application of law to facts." Beason v Beason, 435 Mich 791, 804-805; 460 NW2d
207 (1990). To the extent that the circuit court’s ruling involves statutory construction, this
Court also applies de novo review. Fisher v Fisher, 276 Mich App 424, 427; 741 NW2d 68
(2007).
EXISTENCE OF A CONTRACT
The existence of a contract involves a question of law that we review de novo. Kloian v
Domino’s Pizza, LLC, 273 Mich App 449, 452; 733 NW2d 766 (2006). Contract interpretation
presents a question of law also subject to de novo review. Reed v Reed, 265 Mich App 131, 141;
693 NW2d 825 (2005).
CONTRACTS AND DIVORCE JUDGEMENT
A judgment of divorce "entered upon the settlement of the parties . . .
represents a contract, which, if unambiguous, is to be interpreted as a question of law." In re
Lobaina Estate, 267 Mich App 415, 417-418; 705 NW2d 34 (2005).
CHANGE IN CIRCUMSTANCES
III. Change of Circumstances
... "A party may not take a position in the trial court and subsequently seek redress in an appellate court that isbased on a position contrary to that taken in the trial court." Czymbor’s Timber, Inc v City ofSaginaw, 269 Mich App 551, 556; 711 NW2d 442 (2006) (internal quotation omitted), aff’d 478 Mich 348; 733 NW2d 1 (2007).
"A party cannot stipulate a matter and then argue on appeal that
the resultant action was error." Chapdelaine v Sochocki, 247 Mich App 167, 177; 635 NW2d
339 (2001).
CHILD SUPPORT
IV. Governing Legal Principles Regarding Child Support
A circuit court’s power to determine an award of child support is governed by MCL
552.605(2), which provides as follows:
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Except as otherwise provided in this section, the court shall order child
support in an amount determined by application of the child support formula
developed by the state friend of the court bureau as required in section 19 of the
friend of the court act, MCL 552.519.
DEVIATION FROM THE FORMULA
The court may enter an order that deviates
from the formula if the court determines from the facts of the case that application
of the child support formula would be unjust or inappropriate and sets forth in
writing or on the record all of the following:
(a) The child support amount determined by application of the child
support formula.
(b) How the child support order deviates from the child support
formula.
(c) The value of property or other support awarded instead of the
payment of child support, if applicable.
(d) The reasons why application of the child support formula would be
unjust or inappropriate in the case.
A COURT MAY DEVIATE FROM THE FORMULA
This statute specifically acknowledges that under certain circumstances, a court may properly
deviate from the guidelines:
A COURT MAY AGREE TO A PARTIES STIPULATION
Subsection (2) does not prohibit the court from entering a child support
order that is agreed to by the parties and that deviates from the child support
formula, if the requirements of subsection (2) are met. [MCL 552.605(3).]
2004 MCSFM -DAD AT 177,000+, MOM 80,000+, AND THE BONUS
The 2004 MCSFM states, "Based on the estimated costs of raising children and factors
like parental income, family size, and ages of children, the formula provides for appropriate
support amounts in orders involving the support of children." 2004 MCSFM § 1.02. The 2004
MCSFM sets forth a lengthy list of potential "Deviation Criteria," including,
(i) One or both parents earn incomes of a magnitude not fully taken
into consideration by the formula.
(j) One or both parents have varying amounts of irregular bonus
income. [Id., § 1.04(D)(5).]
NEEDS OF THE CHJILD PLUS ACTUAL RESOURCES
The child support formula utilized by a circuit court "shall be based upon the needs of the
child and the actual resources of each parent." Ghidotti v Barber, 459 Mich 189, 198; 586
NW2d 883 (1998), quoting MCL 552.519(3)(a)(vi).
THE LOWER COURT MUST USE THE GUIDELINES OR A PROCEDURE FOR DEVIATION
Our Supreme Court has repeatedly
emphasized the obligation of circuit courts to utilize the MCSFM guidelines in fashioning child
support orders. In Burba v Burba (After Remand), 461 Mich 637; 610 NW2d 873 (2000), the
Supreme Court established a procedure that circuit courts must follow when deviating from the
MCSFM.
WHAT IS THE SUPPORT UNDER THE FORMULA
The Supreme Court directed that a deviating court "must first state the level of child
support it would have ordered had it followed the formula (§ 17)." Id. at 645.
EXPLAIN HOW IT DEVIATES
Because courts
"presumptively must follow the formula," they are required "to meticulously set forth" the
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statutory deviation criteria and "provide an explanation of how the order deviate[s] from the
formula." Id. at 645-646.6
THE COURT DISFAVORS SIDE AGREEMENTS
This Court strongly disfavors deviations from the child support formula premised on
private agreements that limit a parent’s obligation to pay child support.
YOPU CANNOT BARGAIN AWAY THE CHILD WELFARE
For example, in Johns v
Johns, 178 Mich App 101, 106; 443 NW2d 446 (1989), this Court observed, "Parents may not
bargain away a child’s welfare and rights, including the right to receive adequate child support
payments.
SIDE AGREEMENTS DO NOT SUSPEND THE AUTHORITY OF THE COURT
An agreement by the parties regarding support will not suspend the authority of the
court to enter a support order." In Ballard v Ballard, 40 Mich App 37, 39-40; 198 NW2d 451
(1972), this Court refused to enforce a provision in a divorce judgment requiring that the
custodial parent never seek modification of a child support order awarding her $2.84 a week for
each child. This Court employed sweeping language in rejecting the parties’ agreement:
"[I]rrepsective of the agreement, the trial judge retained inherent jurisdiction to modify the
judgment as to support payments upon a proper showing at any time." Id. at 40.
BUT THE COURT DOES ENFORCE VOLUNTARY AGREEMENTS
In contrast, this Court has enforced voluntary agreements to pay additional child support
incorporated into a divorce judgment. In Oviatt v Oviatt, 43 Mich App 628, 629; 204 NW2d 753
(1972), this Court considered the power of the circuit court to enforce "provisions in a judgment
of divorce which require the husband to provide support (including college expenses) for his
children after said children reach age 21, where the challenged provision was incorporated
verbatim into the judgment from a written stipulation and property settlement agreement
voluntarily executed by the parties prior to their divorce." This Court held that a circuit court
could validly exercise its discretion to enforce such as provision, explaining,
[W]here the parties entered into an agreement that was incorporated by the
court in its judgment, and the parties concede they knew at the time that the terms
were not subject to performance fully within the minority of the children, it would
be an invitation to chaos to hold that such provision was not enforceable.
WE WANTS CONTRCATS ENFORCED OR THERE WILL BE CHAOS
It would permit parties to divorce actions to play fast and loose with the court and
with the other parties to the action by entering into agreements which they had no
intention of performing. [Id. at 638.]
In Aussie v Aussie, 182 Mich App 454, 460; 452 NW2d 859 (1990), the defendant father
entered into a post-divorce agreement requiring him to pay $6000 a year toward one child’s
college expenses, "in return for which plaintiff waived her right to petition the circuit court ‘for
an increase in child support, above the current level of $75 per child, per week.’" The defendant
breached the agreement, and the plaintiff filed a petition seeking an increase in child support, as
6 The divorce judgment in this case was entered several years before the Supreme Court’s Burba
decision. However, the circuit court and the parties freely deviated from the MCSFM guidelines
throughout the first 10 years after the divorce, and failed to strictly comply with the procedural
rules discussed in Burba. Presumably, because the guideline deviations benefited the children,
the circuit court and the parties never considered that they should explain on the record the
reasons for rejecting the MCSFM formula.
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well as reimbursement of the child’s college expenses. Id. The circuit court entered an order
increasing the defendant’s child support, but refused to enforce the post-divorce college payment
agreement. Id. This Court affirmed the circuit court’s order for increased child support,
observing that a circuit court "has the statutory power to modify orders for child support upon a
showing by the petitioning party of a change in circumstances sufficient to justify a
modification." Id. at 463. But citing Oviatt, this Court reversed the circuit court’s decision not
to enforce the college payment agreement, explaining that the "defendant did agree to pay the
college expenses in consideration of plaintiff’s agreement not to seek additional support at the
time. Plaintiff kept her part of the bargain. As the Oviatt panel concluded, failure to enforce
such contracts would be ‘an invitation to chaos . . . .’" Id. at 464.7
CHILD SUPPORT PRINCIPALS
V. Application of Child Support Principles
WE WILL LET YOU AGREE TO PAY MORE
.... We hold that because the child support guidelines set forth
a parent’s minimum support obligation, a voluntarily assumed obligation to pay an amount in
excess of the minimum is not inherently objectionable.
CONTRCAT INCREASING CHILD SUPPORT SHOULD BE ENFORCED
Therefore, a contract enhancing a
parent’s child support obligation should be enforced, absent a compelling reason to forbear.
Here, the circuit court refused to enforce the bonus agreement that the parties, two attorneys,
entered into voluntarily, despite the absence of any evidence that its enforcement would create a
hardship for defendant, or otherwise qualify as unjust or inappropriate. The history of the
parties’ child support dispute illustrates that enforcement of the bonus agreement served the
purposes of the statutes governing child support, while preserving the court’s ability to modify
defendant’s obligations if his financial circumstances, or that of his children, were to change.
Defendant consistently contended throughout these lengthy proceedings that when he
entered into the contract, the SERF guidelines applied. According to defendant, because he
spent more than the requisite number of overnights with the children, plaintiff was not entitled to
utilize the "straight guidelines" formula. Defendant alleged that the parties’ compromise
regarding application of the SERF led to the development of the contract, specifically that he
gave up on application of the SERF solely to avoid a protracted custody battle that could have
resulted in a reduction of his parenting time and a consequent application of the "straight
guidelines" formula.
That compromise involved payment of a significant, certain, and presumptively
nonmodifiable percentage of his yearly bonus. Defendant agreed to pay a larger percentage of
7 In Aussie, this Court acknowledged that in Smith v Smith, 433 Mich 606; 447 NW2d 715
(1989), the Michigan Supreme Court held that a circuit court lacked jurisdiction to order child
support beyond the age of majority. Aussie distinguished Smith as follows: "[W]e do not read
Smith to preclude plaintiff from enforcing a clear contract of the parties which may be of record
or in the judgment in the case." Aussie, supra at 464. The Michigan Legislature subsequently
enacted MCL 552.16a "in response to" Smith’s conclusion that "Michigan law did not provide
for postmajority support." Rowley v Garvin, 221 Mich App 699, 706; 562 NW2d 262 (1997).
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his bonus than he would have had to pay if the SERF applied.
APPELLATE COURT SAID HE AGREED TO PAY MORE
Thus, the agreement negotiated by
the parties required defendant to pay an amount exceeding the guidelines, which served to
benefit the Holmes children, and caused no demonstrable hardship for defendant during the 10
years that he paid it. Continued enforcement of the 25% bonus provision benefits the Holmes
children without violating the court’s inherent ability to modify the child support award in the
event that circumstances substantially changed, or that the child support amount qualified as
"unjust or inappropriate" under MCL 552.605(2).
THE LOWER COURT SHOULD HAVE ENFORCED THE CONTRACT
Accordingly, we conclude that the circuit
court erred by finding that it lacked the power to enforce the contractual bonus provision.
VI. Governing Contract Principles
CONTRCATS ARE GIVEN PLAIN MEANING,ENFORCE THEM AS WRITTEN
A contract must be interpreted according to its plain and ordinary meaning. St Paul Fire
& Marine Ins Co v Ingall, 228 Mich App 101, 107; 577 NW2d 188 (1998). Our interpretation of
contractual language is further guided by the following precepts:
Under ordinary contract principles, if contractual language is clear,
construction of the contract is a question of law for the court. If the contract is
subject to two reasonable interpretations, factual development is necessary to
determine the intent of the parties and summary disposition is therefore
inappropriate. If the contract, although inartfully worded or clumsily arranged,
fairly admits of but one interpretation, it is not ambiguous. The language of a
contract should be given its ordinary and plain meaning. [Meagher v Wayne State
Univ, 222 Mich App 700, 721-722; 565 NW2d 401 (1997).]
In Rory v Continental Ins Co, 473 Mich 457, 461; 703 NW2d 23 (2005), the Supreme
Court emphasized that courts must construe unambiguous contract provisions as written. "We
reiterate that the judiciary is without authority to modify unambiguous contracts or rebalance the
contractual equities struck by contracting parties because fundamental principles of contract law
preclude such subjective post hoc judicial determinations of ‘reasonableness’ as a basis upon
which courts may refuse to enforce unambiguous contractual provisions." Id. In Bloomfield
Estates Improvement Ass’n, Inc v Birmingham, 479 Mich 206, 213; 737 NW2d 670 (2007), the
Supreme Court again stressed that contracts must be enforced as written: "[W]hen parties have
freely established their mutual rights and obligations through the formation of unambiguous
contracts, the law requires this Court to enforce the terms and conditions contained in such
contracts, if the contract is not ‘contrary to public policy.’" Parties may elect to include a written
modification clause in a contract, but with or without such a clause, "the principle of freedom to
contract does not permit a party unilaterally to alter the original contract." Quality Products &
Concepts Co v Nagel Precision, Inc, 469 Mich 362, 364; 666 NW2d 251 (2003) (emphasis in
original).
STGIPULATED AGREEMENTS IN A JUJDGEMENT ARE LIKE A CONTRACT
"Judgments entered pursuant to the agreement of parties are of the nature of a contract."
Gramer v Gramer, 207 Mich App 123, 125; 523 NW2d 861 (1994).
ENFORCEABLE CONTRACTS ARE CREATED IN DIVORC E
A long line of case law
reflects that divorcing parties may create enforceable contracts. In Gramer, this Court enforced
a property settlement agreement, finding that "there is no claim or any factor such as fraud or
duress," and that its language qualified as "unambiguous and unequivocal." Id. More recently,
in Lentz v Lentz, 271 Mich App 465, 467; 721 NW2d 861 (2006), we enforced the parties’
separation agreement, created in contemplation of their divorce, observing "Generally, contracts
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between consenting adults are enforced according to the terms to which the parties themselves
agreed." Id. at 471.
In In re Lobaina Estate, supra, this Court applied the principles of Gramer and Lentz to a
divorce judgment provision entitled, "SUPPORT OF MINOR CHILDREN—LIFE
INSURANCE." Id. at 417. The provision required both parties to "irrevocably designate the
minor children as beneficiaries of any life insurance policies they may have by virtue of their
employment," until the end of the parties’ support obligations. Id. This Court enforced the
provision, reasoning, "Because the judgment of divorce was entered upon the settlement of the
parties, it represents a contract, which, if unambiguous, is to be interpreted as a question of law."
Id. at 417-418. In Krueger v Krueger, 88 Mich App 722; 278 NW2d 514 (1979), this Court
acknowledged that although the circuit court lacked the power "to compel a party to convey
property or a property interest to a third person, even a child of the parties," it could confirm a
settlement regarding property interests. Id. at 724-725. In Krueger, we explained,
MOM GAVE UP SPOUSAL SUPPORT AND TOOK LESS CHILD SUPPORT THAN THE GUIDELINES IN EXCHANGE FOR THE BONOUS
The wife took no alimony and the child support was in an amount less
than that recommended by the Friend of the Court. She gave up something she
was entitled to in exchange for a benefit to her child. Under these circumstances
many courts have held that the agreement embodied in the judgment will be
enforced even if the court would have had no power to order the same disposition
in a contested case. [Id.]
The Court also enforced a contested insurance agreement not linked to a child support provision,
characterizing it as an "obligation, voluntarily undertaken," and subject to court enforcement. Id.
at 726.
The contractual language here qualifies as clear and unambiguous:
Further, Husband shall pay twenty-five percent (25%) of any net bonus he
receives in any given year as additional child support. When the oldest child
attains the age of 18 or completes high school, whichever event occurs last, this
payment shall be reduced to fifteen percent (15%) of his net bonus, and shall
terminate upon the youngest child’s attaining the age of 18 or graduating from
high school, whichever lasts occurs.
It contains definite terms regarding is duration, and lacks any reference to future adjustments or
modifications. By its terms, the agreement plainly contemplated that the 25 percent bonus
payments would continue until the older child’s eighteenth birthday. We reject defendant’s
argument that the bonus provision was modifiable because paragraph 8 permitted the circuit
court to review "support" after one year. This Court reads contracts as a whole, giving
harmonious effect to each word and phrase. Royal Prop Group, LLC v Prime Ins Syndicate, Inc,
267 Mich App 708, 719; 706 NW2d 426 (2005). Specific contractual provisions normally
override general ones. Id.
We further reject defendant’s argument that the parties intended that the original base
child support percentage (25.4) would also apply to the bonus. The 25.4 base support percentage
applied only during the first year of the agreement. During the next 10 years, defendant’s
income and bonuses fluctuated, as did his support obligation. The parallel bonus ratio did not
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necessarily continue during the time that the parties voluntarily abided by the support provision.
Moreover, regardless of the basis for the initial calculation, the plain language of the agreement
contemplates that the agreed percentages would apply until the children’s eighteenth birthdays.
The circuit court recognized its authority to enforce a parent’s contractual agreement to
pay a child’s college expenses, or a similarly worded bonus provision contained in the property
settlement section of a divorce judgment. The circuit court expressly admitted, "Certainly there
are many times when additional support is a negotiated, contractual, additional enforceable term .
. . ." Nevertheless, the circuit court refused to enforce this "negotiated, contractual, additional …
term" because (1) the contract lacked "specific language that although child support is
reviewable, this specific term is not to be modified," (2) child support is always modifiable, and
(3) "[a]s SERF has been applied to the child support component, I also believe that the SERF
application is appropriate to utilize when evaluating the bonus funds." The circuit court further
referenced Sarnacki’s conclusion regarding the modifiability of the bonus provision:
42. Despite Elizabeth’s contention that the bonus percentage was
separate and distinct, it was included in the child support provisions, which are
modifiable by law. That percentage served the parties well for 10 years. Now,
with the entire obligation under review, there is no reason to ignore the new ratio
of obligation to net income. The bonus percentage should reflect the child
support obligation as modified.
CONTRACTS ARE ENFORCED AS WRITTEN
The absence of specific contractual language prohibiting modification of the bonus
provision does not render the bonus provision unenforceable. Contracts are enforced as written,
and no exception to this basic rule exists for contracts lacking a modification clause.
Furthermore, the parties included a "review" provision in ¶ 8, contemplating that the monthly
child support payments would be "fixed for one year after the entry of the Judgment of Divorce,
before it can be reviewed, and that support will be reviewed only in the event that either Husband
or Wife is receiving greater compensation than at the time of the entry of the Judgment of
Divorce." The absence of a similar provision regarding the bonus percentage supports that the
parties did not intend that percentage to be modifiable. Furthermore, merely because a circuit
court possesses the power to modify a child support award, it may not simply ignore an
unambiguous contractual provision regarding child support.
Finally, the circuit court opined that "additional support" might constitute a "negotiated,
contractual, additional enforceable term" when it is included in the "property section" of a
divorce judgment. Apparently the circuit court would have enforced the bonus provision as
written, if it had been labeled as part of the parties’ property settlement rather than appearing in a
child support paragraph. We conclude that this is a distinction lacking a meaningful difference.
Regardless of the bonus provision’s location in the judgment, the provision is contractual, freely
negotiated, and unambiguous. Therefore, it must be enforced as written.
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Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction.
/s/ Elizabeth L. Gleicher
/s/ Richard A. Bandstra
/s/ Jane M. Beckering

Spousal Support

S T A T E O F M I C H I G A N
C O U R T O F A P P E A L S
EUGENE S. OLSOWKA,
Plaintiff-Appellee/Cross-Appellant,
UNPUBLISHED
November 20, 2008
v No. 279694
Saginaw Circuit Court
SUGENDRINI PONNAMPALAM f/k/a
SUGENDRINI OLSOWKA,
LC No. 05-058191-DO
Defendant-Appellant/Cross-
Appellee.
Before: Beckering, P.J., and Borrello and Davis, JJ.
PER CURIAM.
Defendant appeals as of right, and plaintiff cross-appeals, the judgment of divorce
entered July 23, 2007. Defendant argues that the trial court abused its discretion in awarding her
temporary spousal support of $3,500 a month and denying her motion to reopen proofs. On
cross-appeal, plaintiff argues that the trial court abused its discretion in awarding defendant
spousal support and $20,000 in attorney fees. We affirm in part and remand for an evaluation of
the award of attorney fees.
I. Facts and Procedural History
The parties were married on February 14, 1998. Each of the parties had been previously
married and had a child from their prior marriage. Plaintiff filed for divorce on October 17,
2005, and moved out of the marital home the following week. The trial court issued its judgment
of divorce almost two years later, in July of 2007.
Both parties are licensed pathologists. When they first met in July of 1994, they were
both practicing pathology full time. Sometime in 1996, defendant began suffering from severe
migraine headaches. By December of that year, each migraine lasted up to three days, with
almost no time between migraines. Defendant was forced to stop working and began receiving
$7,000 a month, or $84,000 a year, in private disability insurance payments. She also started
treatment at the Michigan Headache and Neurological Institute (MHNI). Defendant testified that
after several months, she began suffering fewer migraines. She had an average of three
migraines per week, and two or three days each week without a migraine. Defendant admitted
that MHNI found no physical abnormalities accounting for her migraines. After the parties
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married in 1998, defendant continued treatment, did not return to work, and continued to receive
disability insurance payments.
In 2000 and 2001, defendant had several appointments with neurologist Barbara Jahnke.
Dr. Jahnke’s notes reflect that at her first appointment, defendant reported suffering a migraine
every 12 to 14 days, and at a later visit, reported that her migraines were a little better. During
the same time period, defendant’s disability insurance carrier arranged for her to have an
independent medical exam. The doctor who conducted the exam and reviewed defendant’s
treatment history determined that she was capable of working. As a result, defendant’s insurance
payments were terminated. Defendant filed suit against her insurance carrier, but agreed to settle
the case in June of 2001 for a gross sum of $240,000. Later in 2001, defendant began receiving
Social Security disability benefits.
Defendant continued treatment at MHNI in 2001 and 2002. Her last appointment was in
October of 2002. From September of 2003 through the time of trial in February of 2007,
defendant received treatment from Dr. Louis Constan. The doctor’s notes reflect that in July of
2004, defendant reported having migraines fairly regularly; in August of 2004, she reported
having three migraines over the previous month; in September of 2004, she reported having one
or two migraines a week, but that her medications “helped a lot;” in January of 2005, she
reported that her migraines had improved; in January and February of 2006, she reported that her
migraines had increased to three times a week due to the stress of divorcing plaintiff; and, in
April of 2006, she again reported that her migraines had improved.
Defendant testified that she continues to have migraines and that each migraine lasts
approximately three hours. In an attempt to avoid migraines, defendant takes medication, does
several therapies, and does not participate in a number of activities. But, defendant is able to do
some cooking, cleaning, laundry, shopping, and traveling. Defendant also managed five rental
properties during the parties’ marriage. Before the parties married, defendant purchased a
Florida condominium and in the beginning of their marriage, they purchased a Florida timeshare.
Defendant rented out both properties. In 2002, defendant purchased two rental properties in
Saginaw, Michigan. In 2003, she purchased a third Saginaw property, and put it in her
daughter’s trust. She financed the purchase by taking out a loan on the Florida condominium. In
2005, after plaintiff filed for divorce, defendant paid off the loan by taking out a loan on the
marital home. Both parties testified that although plaintiff co-signed for the loan, they agreed
that he would not be held responsible for the payments. Defendant testified that she has
managed all three Saginaw properties and that she plans to manage properties in the future.
Defendant further testified that although she is able to manage rental properties, she does
not believe that she is able to work as a pathologist. According to defendant, concentrating for a
lengthy period of time, the smell of chemicals, and looking through a microscope would
probably give her a migraine. In 2004, defendant attempted to work with pathologist Frederick
Wreford on a temporary basis. Dr. Wreford testified that defendant attempted to do the work,
but was unable to finish the temporary assignment because of a migraine. He testified that in his
opinion, it would be difficult for defendant to work as a pathologist. He admitted, however, that
he based his opinion on defendant’s representations about the severity of her migraines.
Plaintiff testified that he believes defendant suffers from migraines. As a pathologist,
plaintiff is able to prescribe medications and he admitted to calling in refills of defendant’s
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prescriptions, or allowing her to call in refills under his name. Plaintiff repeatedly testified,
however, that he does not believe defendant’s migraines are as severe as she represents. Over
the course of the marriage, defendant almost always attended pre-planned events with friends,
went on vacations, and managed rental properties. Plaintiff believes that defendant is able to
work as a pathologist.
After plaintiff filed for divorce in October of 2005, the parties participated in a referee
hearing to determine defendant’s reasonable expenses and her ability to pay those expenses
during the divorce proceedings. Defendant submitted a list of expenses totaling $8,497 a month.
The referee determined that a number of defendant’s expenses were unreasonable and
recommended that plaintiff pay $6,000 a month in temporary spousal support. The trial court
issued an order implementing the referee’s recommendations. In August and September of 2006,
the parties participated in mediation and ultimately reached a property settlement pursuant to the
terms of their prenuptial agreement.
At trial, the parties testified at length about their property settlement, income, and
expenses. Defendant requested $6,000 a month in permanent spousal support, as well as
attorney fees. The trial court issued an oral opinion on March 20, 2007. The court
acknowledged that defendant suffers from migraines, but concluded that she is capable of
working and can find work as a pathologist. Ultimately, the court awarded defendant spousal
support of $3,500 a month for a period of three years, and $20,000 in attorney fees.
On June 18, 2007, defendant filed a motion to reopen proofs or, alternatively, for a new
trial to present additional evidence of her disability. Defendant’s trial counsel indicated that he
did not present the additional evidence at trial based on the trial court’s statement in chambers
that plaintiff could not deny that defendant was disabled. Defense counsel interpreted the court’s
statement to mean that the court had found defendant disabled, that no further proofs were
required on that issue, and that defendant was entitled to spousal support.
At the hearing on defendant’s motion, the trial court judge indicated that he did not recall
all of the statements made in chambers, but that he never instructed counsel not to present
additional proofs at trial. The judge stated that he based his conclusions about defendant’s
ability to work on all of the evidence presented at trial, and that presentation of additional proofs,
even the testimony of defendant’s treating physicians, would not change his mind in that regard.
At a subsequent hearing, the judge stated: “I recall the testimony . . . and as I indicate again with
all due respect to her, I was firmly convinced, and still am, that [defendant] could work, and in
particular in her profession, . . . and I guess I don’t know what anymore testimony . . . would
have added.” The trial court issued an order denying defendant’s motion to reopen proofs on
June 3, 2007, and issued the judgment of divorce on July 23, 2007. Defendant now appeals as of
right. Plaintiff cross-appeals.
II. Spousal Support
Defendant argues that the trial court abused its discretion in awarding her spousal support
in the amount of only $3,500 a month for a period of only three years. Defendant asserts that she
is entitled to permanent spousal support of $6,000 a month. We disagree.
-4-
We review a trial court’s award of spousal support for an abuse of discretion. Olson v
Olson, 256 Mich App 619, 631; 671 NW2d 64 (2003). An abuse of discretion occurs when the
trial court’s decision falls outside of the range of reasonable and principled outcomes.
Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809 (2006). We review a trial
court’s findings of fact related to spousal support for clear error. Moore v Moore, 242 Mich App
652, 654; 619 NW2d 723 (2000). “A finding is clearly erroneous if the appellate court is left
with a definite and firm conviction that a mistake has been made.” Id. at 654-655.
The main objective of spousal support is to balance the incomes and needs of the parties
in a way that will not impoverish either party. Id. at 654. Support is to be based on what is just
and reasonable under all of the circumstances. Id. In awarding spousal support, the trial court
should consider: (1) the relations and conduct of the parties during the marriage; (2) the length of
the marriage; (3) the parties’ ability to work; (4) the distribution of property awarded to the
parties; (5) the parties’ ages; (6) the parties’ abilities to pay support; (7) the present situation of
the parties; (8) the parties’ needs; (9) the parties’ health; (10) the parties’ prior standard of living
and whether either is responsible for the support of others; (11) contributions of the parties to the
joint estate; (12) a party’s fault in causing the divorce; (13) the effect of cohabitation on a party’s
financial status; and (14) general principles of equity. Olson, supra at 631.
In this case, the trial court specifically addressed all of the factors relevant to an award of
spousal support. See Id. The court found that the parties had a relatively short marriage, lasting
only 7.5 years before plaintiff filed for divorce, and that they had no children together. The court
found the parties to be equally at fault for the breakdown of the marriage, and the parties do not
directly dispute that finding on appeal. Further, as the trial court indicated, both parties have
substantial assets. Defendant entered the marriage with $364,000 in assets, and left the marriage
with between $982,012 and $994,407 in assets, including the marital home, personal property,
rental properties, and several investment accounts. Plaintiff entered the marriage with $153,000
in assets, and left the marriage with approximately $395,000 in assets, not including his share of
his pathology practice.
At the time of trial, plaintiff was 52 years old and in good health. Defendant was 49
years old and suffered from migraines. Both parties are licensed pathologists. When the parties
married in 1998, plaintiff was practicing pathology and his annual income was $140,000.
During the marriage, plaintiff became a partner in his pathology practice and his salary increased
accordingly. When the parties separated in 2005, his annual income was $373,788. Plaintiff
admits that he is able to pay spousal support. Defendant, on the other hand, has not worked full
time since 1996. Defendant testified that she stopped working because of her migraines. When
the parties married in 1998, she was collecting $84,000 a year in private disability insurance
payments. In 2001, however, defendant settled her insurance claim for $240,000, and began
collecting Social Security disability benefits. At the time of trial, defendant received $16,968 a
year, or $1,414 a month, from Social Security, and approximately $100 a month in rental
income. She received additional monthly payments for her daughter’s care.
Although defendant has not worked full-time since 1996 and receives Social Security
benefits, the trial court determined that she is able to work as a pathologist. Defendant asserts
that she is unable to work because of her migraines, and that the trial court erred in finding
otherwise. But, the evidence presented at trial supports the court’s finding. Defendant testified
at length about her medical history and symptoms. The trial court acknowledged her testimony
-5-
that she continues to suffer from migraines, is undergoing treatment for migraines, has adjusted
her lifestyle in an attempt to avoid migraines, and was unable to complete a temporary
assignment as a pathologist because of a migraine. Defendant further testified, however, that her
migraines have improved over the years. She testified that in 1996, each migraine lasted up to
three days, whereas, at the time of trial, each migraine lasted only three hours. Medical records
indicated that at times, defendant suffered only two migraines a month. The trial court also
noted that during the marriage, defendant traveled abroad, managed five rental properties, and
expressed interest in managing more properties. Additionally, plaintiff testified that defendant
almost always attended pre-planned events with friends, and that he could not recall a single
occasion when she was unable to do something that she wanted to do because of a migraine.
Plaintiff testified that in his opinion, defendant is able to work as a pathologist, especially
considering that pathologists work regular business hours, or even shortened hours, and current
technology allows them to avoid excessive microscope use. Considering this evidence, and that
the trial court is in the best position to judge the credibility of the witnesses, see MCR 2.613(C);
Fletcher v Fletcher, 447 Mich 871, 890; 526 NW2d 889 (1994), we cannot conclude that the trial
court clearly erred in finding that defendant is able to work as a pathologist.
Defendant further argues that plaintiff “should be estopped from disputing [her]
disability.” According to defendant, plaintiff essentially conceded her inability to work by
accepting her Social Security benefits as marital income, listing her occupation as “disabled” on
income tax returns for 2005, and allowing her to call-in refills of her prescriptions using his
name. Initially, we note that defendant has failed to present any authority to support her
equitable estoppel argument. A party may not leave it to this Court to search for authority to
sustain or reject a position. Thompson v Thompson, 261 Mich App 353, 356; 683 NW2d 250
(2004). Moreover, even were we to consider defendant’s argument, she has not established that
plaintiff conceded her alleged inability to work. First, there is no evidence that plaintiff had any
control over defendant’s Social Security payments. To the contrary, defendant testified that she
spent most, if not all, of her payments on purchases for herself, her daughter, and her daughter’s
trust. Nor is there evidence that plaintiff received any benefit by labeling defendant’s occupation
as “disabled” on their income tax returns. Finally, by allowing defendant to call in refills of her
prescriptions using his name, plaintiff simply acknowledged that defendant suffered from
migraines requiring medication, not that she was unable to work. We additionally note that
defendant has failed to present any evidence of detrimental reliance, an essential element of
equitable estoppel. Frank v Equitable Life Assurance Society, 136 Mich App 616, 621; 358
NW2d 21 (1984).
In awarding defendant temporary spousal support, the trial court also considered the
parties’ standard of living during the marriage, defendant’s needs, and general principles of
equity. See Olson, supra at 631. Before trial, the parties participated in a referee hearing. The
referee determined that a number of defendant’s expenses were unreasonable and recommended
temporary support of $6,000 a month. The trial court took note of the referee’s findings and the
court’s corresponding order for temporary support, but specifically stated that it was not bound
by the referee’s recommendations. See Duperon v Duperon, 175 Mich App 77, 79; 437 NW2d
318 (1989) (stating that a trial court may, but is not required to, consider the report and
recommendations made by a referee).
-6-
At trial, defendant requested $6,000 a month in spousal support. She submitted an
updated list of monthly expenses, including $835 for the loan she took out on the marital home,
$345.93 for private medical insurance, $100 for gifts, $417 for her IRA, as well as funds for both
a landline and cell phone, eating out, dry cleaning, maintaining the marital home and grounds,
long-term care insurance, life insurance for which her daughter was the beneficiary, and club
membership fees. During her testimony, defendant claimed additional monthly expenses of $500
for her daughter’s college fund, $210 for maintaining her medical license, and $415 for
vacations, which increased her monthly expenses to more than $6,000. The trial court found that
plaintiff was not liable for the loan on the marital home pursuant to the prior agreement between
the parties, and noted that as a Social Security recipient, defendant was entitled to Medicare
benefits. The court further found that many of the items on defendant’s expense list were
excessive, including funds for both cell phones and landlines, eating out, and over $18,000 a year
for maintaining the marital home and grounds. With regard to the marital home and the parties’
prior standard of living, the court stated:
The Court would believe that it’s going to be inappropriate to try and
maintain [the marital] home, and it’s a little disingenuous to expect the former
spouse to maintain that home and that the . . . defendant may very well have to
move into a smaller residence which would significantly reduce expenses for the
home . . . .
* * *
The Court has commented on the income earning potential of – of the
parties as well as income potential based on the assets. It understands that the
[parties] may not be – be forced to sell assets to survive, but it’s – certainly
principles of equity and common sense would dictate that someone who lived in a
$385,000 home . . . cannot be expected to continue in that area and expect the
spouse to pay the other spouse to maintain that lifestyle.
After considering all of the factors relevant to an award of spousal support, and paying
particular attention to defendant’s needs and ability to work, the trial court awarded defendant
temporary spousal support of $3,500 a month. Defendant asserts that the trial court’s award will
force her to drastically reduce her standard of living. But, as the trial court indicated, the parties’
standard of living during the marriage is only one of the factors to be considered in awarding
spousal support. See Olson, supra at 631. Defendant cannot legitimately argue that the trial
court’s award will leave her impoverished. See Moore, supra at 654.
On cross-appeal, plaintiff argues that the trial court abused its discretion in awarding
defendant any spousal support. In so arguing, plaintiff emphasizes that defendant voluntarily
settled her disability insurance claim, that she received nearly $1,000,000 in assets in the parties’
property settlement, that some of those assets have high income-earning potential, and that she is
capable of supporting herself as a pathologist. We are unpersuaded by plaintiff’s argument.
Plaintiff cannot establish that defendant would have continued receiving her disability insurance
benefits had she refused to settle her claim, especially considering that the doctor who examined
her at the time determined that she was able to work. Further, while some of defendant’s assets
may have high income-earning “potential,” her assets produced only $100 a month in income at
the time of trial. Although the trial court determined that defendant is able to work as a
-7-
pathologist, the court awarded her temporary spousal support so that she could “get back on her
feet.” Considering that defendant last worked as a pathologist in 1996, granting her three years
to obtain employment and begin supporting herself was both fair and equitable. See Id.
Accordingly, we find that the trial court did not abuse its discretion in awarding
defendant spousal support of $3,500 a month for a period of three years.
III. Defendant’s Motion to Reopen Proofs
Next, defendant argues that the trial court abused its discretion in denying her motion to
reopen proofs to present additional evidence of her alleged disability. Again, we disagree.
We review a trial court’s decision on a motion to reopen proofs for an abuse of
discretion. People v Herndon, 246 Mich App 371, 419; 633 NW2d 376 (2001). In determining
whether proofs should be reopened, the trial court must consider “whether any undue advantage
would be taken by the moving party and whether there is any showing of surprise or prejudice to
the nonmoving party.” Id. at 420. Other relevant factors include “whether newly discovered and
material evidence is sought to be admitted, . . . and the timing of the motion.” People v Oscar
Moore, 164 Mich App 378, 383; 417 NW2d 508 (1987), mod in part and remanded on other
grounds 433 Mich 851 (1989). Additionally, the trial court retains “the discretion to determine
the admissibility of the proposed [evidence] as a threshold issue.” Herndon, supra at 420 and n
109.
The trial court issued its opinion in this case on March 20, 2007. On June 18, 2007,
almost three months after the court issued its opinion and after the parties had filed several
motions and proposed judgments, defendant filed a motion to reopen proofs. Defendant sought
to present additional evidence that she is disabled and unable to work. At the hearing on the
motion, defense counsel asserted that he did not present the additional evidence at trial based on
unrecorded statements made by the trial court in chambers. According to defense counsel, on the
fourth day of trial, the court stated that plaintiff could not deny that defendant was disabled.
Defense counsel interpreted the court’s statement to mean that the court had found defendant
disabled, that no further proofs were required on that issue, and that defendant was entitled to
spousal support. Defense counsel indicated that he was shocked when the court found that
defendant was able to work and awarded her only temporary spousal support.
We find, however, that there is little support in the record for defense counsel’s
assertions. Plaintiff’s counsel recalled having a general discussion in chambers, without any
findings of fact or of law, and emphasized that no such findings were placed on the record. In
response to the parties’ arguments, the trial court stated that it did not recall making any findings
regarding defendant’s alleged disability in chambers, and would never have instructed defense
counsel not to present additional proofs. Even defense counsel asked during closing arguments
at trial that the court consider all of the evidence and find defendant unable to work.
Additionally, defendant has made no attempt to explain why, if she and her attorney were so
surprised by the trial court’s opinion in this case, she waited nearly three months to file a motion
to reopen proofs. Because defendant has presented no reasonable excuse for failing to present
the additional evidence at trial, or even moving to reopen proofs immediately after trial, we find
that the trial court properly denied her motion.
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Moreover, even if defense counsel reasonably relied on the trial court’s statements in
chambers in failing to present the additional evidence at trial, the additional evidence is
cumulative to that presented at trial and would not affect the outcome of the case. In deciding a
motion to reopen proofs, the trial court must consider whether the evidence sought to be
presented is material and otherwise admissible. Oscar Moore, supra at 383; Herndon, supra at
420 and n 109. Even relevant evidence may be excluded “on the basis of needless presentation
of cumulative evidence.” Id. at 420 n 110, quoting MRE 403. In support of her motion,
defendant filed the affidavit of her friend Deborah Huntley, the affidavit of her daughter
Christine Ponnampalam, an offer of proof regarding Dr. Constan’s proposed testimony about his
treatment of defendant, and records showing that she is entitled to Social Security disability
benefits. Both Huntley and Christine would have testified that defendant suffers severe migraine
headaches that limit her. At trial, both parties testified about the severity of defendant’s
migraines, how she has adjusted her lifestyle to avoid migraines, and the activities she
participates in. Defendant also testified at length about her treatment history, including
references to Dr. Jahnke and Dr. Constan’s notes, and indicated that she receives Social Security
disability payments. The trial court judge repeatedly stated that he was convinced defendant is
able to work based on the evidence presented at trial, and that the proposed proofs would not
change his mind. Because the trial court did not clearly err in finding that defendant is able to
work and the additional evidence defendant seeks to present is merely cumulative of evidence at
trial, we find that the trial court properly exercised its discretion in denying her motion to reopen
proofs.
IV. Attorney Fees
Plaintiff argues on cross-appeal that the trial court abused its discretion in ordering
plaintiff to pay $20,000 of defendant’s attorney fees. “Because this issue was addressed and
decided by the trial court, no further action was necessary to preserve it for appellate review.”
Reed v Reed, 265 Mich App 131, 163; 693 NW2d 825 (2005), citing MCR 2.517(A)(7). We
review a trial court’s decision on a request for attorney fees for an abuse of discretion, and any
findings of fact on which the trial court relied for clear error. Id. at 164. In this case, the
conclusory nature of the trial court’s decision does not allow for meaningful appellate review.
Therefore, we must remand this issue to the trial court for further proceedings.
“In domestic relations cases, attorney fees are authorized by both statute, MCL 552.13,
and court rule, MCR 3.206(C).” Id. Attorney fees may be awarded “when a party needs
financial assistance to prosecute or defend the suit.” Id. That is, “a party should not be required
to invade assets to satisfy attorney fees when the party is relying on the same assets for support.”
Gates v Gates, 256 Mich App 420, 438; 664 NW2d 231 (2003). Pursuant to MCR
3.206(C)(2)(a), the party requesting the fees must allege facts sufficient to show that he or she is
“unable to bear the expense of the action, and that the other party is able to pay.”
A determination that a party is entitled to attorney fees does not decide the amount of the
award. Wood v DAIIE, 413 Mich 573, 588; 321 NW2d 653 (1982). In determining the
reasonableness of attorney fees, a trial court should consider the professional standing and
experience of the attorney, the skill and labor involved, the amount in question and the results
achieved, the difficulty of the case, the expenses incurred, and the nature and length of the
professional relationship with the client. Smith v Khouri, 481 Mich 519, 529-530; 751 NW2d
472 (2008), citing Wood, supra at 588. Generally, if the reasonableness of a fee is challenged,
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the court should conduct an evidentiary hearing. Miller v Meijer, Inc, 219 Mich App 476, 479;
556 NW2d 890 (1996). No hearing is necessary when there is an otherwise-sufficient record to
support a finding of reasonableness. Head v Phillips Camper Sales & Rental, Inc, 234 Mich App
94, 113; 593 NW2d 595 (1999). Even if no hearing is held, the trial court should briefly discuss
its view of the factors on the record. Smith, supra at 529 n 14, 531.
When the parties separated in October of 2005, plaintiff provided defendant with $3,500
to retain an attorney. Defendant first hired attorney Craig Dill, but he was discharged shortly
thereafter. Defendant then hired attorney John Picard who filed a motion for temporary spousal
support and attorney fees of $20,000. Pursuant to that motion, the parties agreed to refer the
issues of spousal support and attorney fees to a referee for a hearing. Picard moved to withdraw
as counsel in March of 2006. Thereafter, defendant hired attorney Christopher Swartz who
represented her throughout the trial court proceedings. After the referee hearing in May of 2006,
the referee recommended that plaintiff pay $3,000 of defendant’s attorney fees. The trial court
then issued an order implementing the recommendation. At trial, defendant testified that she had
already paid $3,500 to Dill and $10,000 to Picard. She presented a document indicating that as
of February 14, 2007, she had paid Swartz $500 and owed him a balance of $22,078.35.
Plaintiff’s counsel stipulated that the document listed Swartz’s billing and the balance owed him.
He specifically stated, however, that he was not stipulating that defendant was entitled to the
amount of attorney fees listed on the document. During closing arguments, plaintiff objected to
paying any of defendant’s attorney fees in light of the assets awarded her in the parties’ property
settlement. Defendant requested $27,000 in attorney fees and expert witness fees, arguing that
she should not be required to invade her assets in order to pay the fees.
In issuing its oral opinion, the trial court awarded defendant $20,000 in attorney fees
without providing any reasoning for its decision. In requesting attorney fees, defendant made no
showing that she was “unable to bear the expense of the action,” as required by MCR
3.206(C)(2)(a), and the trial court made no such finding. We cannot simply assume from the
trial court’s award of spousal support to defendant that she is unable to pay her attorney fees.
Pursuant to the parties’ property settlement, defendant left the marriage with between $982,012
and $994,407 in assets and, while “a party should not be required to invade assets to satisfy
attorney fees when the party is relying on the same assets for support,” Gates, supra at 438, there
is no evidence that defendant is relying on any of her assets for support. Additionally, the trial
court made no determination as to the reasonableness of the fees. Smith, supra at 529 n 14, 531.
Given the conclusory nature of the trial court’s decision, it is impossible to determine
whether the court abused its discretion in awarding defendant attorney fees. Therefore, this issue
must be remanded to the trial court for further proceedings. On remand, the trial court should
determine whether defendant is “unable to bear the expense of the action, and that the other party
is able to pay,” pursuant to MCR 3.206(C)(2)(a). If the court determines that an award of
attorney fees was appropriate in this case, it should either award a reasonable amount of fees
based on the evidence defendant presented and articulate the reasons for its award on the record
or, if the evidence is insufficient to support a finding of reasonableness, hold an evidentiary
hearing on the matter. See Smith, supra at 529 n 14, 531; Head, supra at 113; Miller, supra at
479.
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Affirmed in part and remanded for proceedings consistent with this opinion. We do not
retain jurisdiction.
/s/ Jane M. Beckering
/s/ Stephen L. Borrello
/s/ Alton T. Davis