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COURT OF APPEALS DECISION DATED AND RELEASED January 15, 1997 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-3389
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT II
In re the Marriage of:
DONNA SHIRLEY,
f/k/a DONNA MALLORY,
Joint-Petitioner-Respondent,
v.
WILLIAM J. MALLORY,
Joint-Petitioner-Appellant.
APPEAL from an order of
the circuit court for Washington County:
RICHARD T. BECKER, Judge. Affirmed.
Before Snyder, P.J.,
Brown and Anderson, JJ.
PER
CURIAM. William J. Mallory appeals from a trial court order
requiring him to pay interest and penalties for taxes due on family support he
paid his former wife, Donna Shirley, for 1991 through 1994 and declining to
award him a credit on allegedly overpaid family support. We conclude that the trial court did not err
and affirm.
Resolution of this
appeal requires discussion of the parties' conduct regarding family
support. Mallory and Shirley divorced
in 1985. Under the divorce judgment,
Mallory was required to pay family support which would increase annually based
upon a cost of living index established by the Federal Bureau of Labor
Statistics. In 1986, the parties
stipulated that Mallory would pay all of Shirley's state and federal income
taxes attributable to family support.
These tax payments were deemed additional family support which would be
deducted by Mallory and included in Shirley's income. In 1988, family support increased and the court required Mallory
to pay family support by wage assignment to the clerk of circuit court.
In 1990, family support
increased and was enforced by wage assignment.
That year the parties were before the court to resolve tax-related
matters. Mallory was held responsible
for interest and penalties attributable to his failure to make timely quarterly
estimated family support tax payments on Shirley's behalf. Shirley was held responsible for late filing
fees because she had not filed her tax returns on time.
In May 1993, the parties
stipulated, without benefit of counsel or involvement of the court, that family
support would no longer be paid by wage assignment through the clerk of
courts.
The parties returned to
court in June 1995 to address whether Mallory was responsible under the 1986
stipulation for the taxes attributable to family support for the years 1991
through 1994 and whether an order should be entered to increase Mallory's
monthly family support payment to include an amount for Shirley's taxes.
In its June 1995 ruling,
the trial court observed that the parties repeatedly neglected to follow its
orders and that matters became more muddled each time the parties ignored the
outcome of earlier proceedings. The
trial court then made the following findings of fact. The taxes on Shirley's income, the bulk of which was family
support, were not paid for 1991 through 1994.
The court found that Shirley did not present sufficient evidence of the
amounts she received from Mallory.[1] Therefore, it relied upon financial
information provided by Mallory.
Mallory's accountant calculated the amount of family support Shirley
received in the years at issue and the tax attributable to family support. The court found that Mallory unilaterally
calculated his family support payment without employing a specific
formula. The court recalculated
Mallory's support payments based upon the amount required in the 1990 court
order ($3930 per month) and increased each subsequent year's support by the
cost of living adjustment contemplated in the 1985 judgment of divorce.
Mallory claimed that he
overpaid family support and that the overpayments satisfied the taxes for 1991
through 1994 as required by the 1986 stipulation. The trial court found that there was no written documentation of
this claimed overpayment. The court
noted that although Mallory paid estimated federal tax in 1992 on Shirley's
family support (which amounts were in excess of the actual tax owed), he did
not pay any Wisconsin estimates for that year and paid no estimates or tax for
the years 1991, 1993 and 1994. At the
same time, Shirley did not undertake to have tax returns prepared, believing
that it was Mallory's obligation to do so.
The court found that
Mallory owed the taxes for the years in question and assigned him
responsibility for the interest and penalties on those taxes. The court noted that Mallory did nothing
until 1995 to address his tax liability and, at a minimum, he could have paid
estimated taxes as he did in 1992 which would have reduced the penalties and
interest on unpaid tax. The court
enforced the family support and tax-related provisions of the judgment of
divorce and the 1986 stipulation and found that whatever confusion arose
regarding the parties' obligations was of their own making.
Before we address
Mallory's appellate issues, we note that the trial court's decision on these
issues is influenced by the facts and the law and by its familiarity with the
parties' repeated failure to comply with its orders and their decision to alter
their financial relationship without the benefit of counsel or a court
order. A trial court has certain advantages
over an appellate court in assessing the conduct of the parties. See State v. Hagen, 181
Wis.2d 934, 949, 512 N.W.2d 180, 185 (Ct. App. 1994); see also State
v. Bunch, 191 Wis.2d 501, 509-10, 529 N.W.2d 923, 926 (Ct. App.
1995). Therefore, we take the trial
court's observations into account in addressing the appellate issues.
Postdivorce support
issues are within the discretion of the trial court. See Poindexter v. Poindexter, 142 Wis.2d
517, 531, 419 N.W.2d 223, 229 (1988).
We will uphold a trial court's discretionary decision if the trial court
examined the relevant facts, applied the proper legal standard and reached a
conclusion that a reasonable judge could reach using a demonstrated rational
process. Phone Partners, Ltd. v.
C.F. Communications, 196 Wis.2d 702, 710, 542 N.W.2d 159, 162 (Ct. App.
1995). However, because the issue on
appeal is whether the trial court erroneously determined that the parties did
not meet their respective burdens that excess family support payments were
either gifts (Shirley's contention) or taxes (Mallory's contention), we are
presented with a question of law which we review de novo. See Brandt v. Brandt, 145
Wis.2d 394, 409, 427 N.W.2d 126, 131 (Ct. App. 1988) (whether a party has met
his or her burden of proof is a question of law). Although we review de novo, we are nevertheless assisted by the
trial court's ruling. See State
v. Timmerman, 198 Wis.2d 309, 316, 542 N.W.2d 221, 224 (Ct. App.
1995).
On appeal, Mallory
argues that he should not be held liable for the penalties and interest on
Shirley's family support taxes for the years 1991 through 1994 because Shirley
never prepared a tax return. The trial
court rejected this claim, as do we.
Pursuant to the judgment of divorce and the 1986 stipulation, Mallory
was responsible for paying the taxes on the family support he paid to
Shirley. It was within Mallory's
knowledge how much he paid her from 1991 through 1994 and nothing prevented
Mallory from paying the taxes on that income by forwarding the correct amounts
to either the taxing authorities or to Shirley. Accordingly, we conclude that the trial court did not misuse its
discretion in assigning to Mallory the penalties and interest upon taxes for
the years 1991 through 1994.
We also affirm the trial
court's rejection of Mallory's claim that because he overpaid family support,
he effectively paid the taxes required by the 1986 stipulation. The court stated, "I am not even going
to try to determine what these parties said to each other in phone conversations,
etc. The written documentation is
controlling. What problems this causes
for the parties is of their own making."
It is plain that the trial court rejected the parties' testimony
regarding side agreements dealing with responsibility for preparing Shirley's
tax returns and which of Mallory's payments were gifts and which were family
support.
We agree with the trial
court that neither party met his or her burden. The court's rulings that Mallory did not prove he overpaid family
support or that the overpayments were intended for taxes were not clearly
erroneous.[2] Therefore, Mallory did not meet his burden
of producing evidence in support of his contention.
Although the trial court
never made any express credibility finding on Shirley's claim that the excess
payments to her were gifts rather than family support, it clearly rejected the
claim as inadequately documented. As
with Mallory's asserted overpayment, the court was faced with a self-serving
assertion by Shirley. In light of all
the circumstances of this case, we conclude that the parties did not meet their
respective burdens.
Mallory argues that the
court's previous orders did not establish a method for paying income taxes
associated with family support. While
this is true, the 1986 stipulation required Mallory to pay those taxes and the
burden was upon him, as the party writing the support checks, to take steps to
timely meet his tax obligations.
Under all the
circumstances of this case and in light of the trial court's extensive
knowledge of the orders it entered and the parties' conduct in light of them,
the court's rejection of Mallory's claimed overpayment and allocation of
penalties and interest on the family support taxes to Mallory was not a misuse
of the court's discretion.
By the Court.—Order
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.