COURT OF APPEALS DECISION DATED AND RELEASED June
22, 1995 |
NOTICE |
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. 94-2345
STATE OF WISCONSIN IN
COURT OF APPEALS
DISTRICT IV
IN RE
THE MARRIAGE OF:
ROBERT
G. FISH,
Petitioner-Appellant,
v.
MARGARET
W. FISH,
Defendant-Respondent.
APPEAL
from orders of the circuit court for Jefferson County: JACQUELINE R. ERWIN, Judge. Affirmed.
Before
Dykman, Sundby, and Vergeront, JJ.
VERGERONT,
J. Robert Fish appeals from orders
directing him to pay certain sums for uninsured medical expenses for his
children, child support arrearages and interest on the arrearages. Robert disputes his obligation to pay for
the medical expenses and the manner in which they were computed. He also claims that the trial court erred in
not retroactively modifying the child support arrearages, in not giving him
retroactive contemporaneous credit for transferring a tax dependency exemption
to his former wife, Margaret Fish, and in ordering interest on the
arrearages. We reject each of these
claims and affirm.
Robert
and Margaret were divorced in 1979. The
divorce judgment granted custody of the parties' two minor children to Margaret
and ordered Robert to pay $60 per week for child support to the Clerk of Courts
in Jefferson County. Robert and
Margaret were each entitled to claim one of the children as a personal
exemption for tax purposes. The
judgment ordered each party to maintain his or her own life and medical
insurance policies and to maintain the children as beneficiaries of those
policies until age eighteen. It then
stated "[t]hat each party shall pay one-half of any extraordinary medical,
dentist and other medical expenses of the children."
Robert's
income decreased in 1982 and he did not make his regular payments for child
support for much of 1982 and 1983, but he then resumed making payments. Robert and Margaret agreed that, beginning
in 1982 and thereafter, Margaret could take both children as personal
exemptions. On December 2, 1993,
Margaret filed a motion seeking an order that Robert make payments toward the
arrearages, pay interest on the arrearages, and reimburse her for one-half of
the children's accumulated uninsured medical expenses. By this time both children were no longer
minors.
After
an evidentiary hearing on the motion, the court issued a written decision and
entered an order. After Robert filed a
motion for reconsideration, the court entered a second order. Details of the trial court's decision and
orders will be discussed below.
MEDICAL EXPENSES
The
trial court determined that under the provision in the divorce judgment, Robert
was required to pay fifty percent of the uninsured medical expenses of the
children incurred while they were minors.
Robert contends he is required to pay fifty percent of only
"extraordinary medical expenses."
The interpretation of a divorce judgment presents a question of law that
we decide de novo, without deference to the trial court. See Levy v. Levy, 130
Wis.2d 523, 528-29, 388 N.W.2d 170, 172-73 (1986).
We
conclude that the phrase "other medical expenses" does not mean
extraordinary medical expenses, but rather includes uninsured medical expenses
that are not extraordinary. Since the
provision expressly requires each party to pay one-half of "extraordinary
medical expenses," adopting Robert's interpretation of the provision would
render the phrase "other medical expenses" meaningless. Robert offers no explanation for why
"other medical expenses" does not include uninsured medical expenses,
except to state that if the parties had meant uninsured medical expenses, they
would have said so. We find this
reasoning unpersuasive. Uninsured
medical expenses are medical expenses and are therefore included in that
category unless there is some indication they are excluded. There is none.
The
interpretation we adopt is the only one that makes sense in the context of the
other provisions on medical expenses.
Each party is required to maintain medical insurance with the children
as beneficiaries. It is obvious there
will be some uninsured medical expenses.
Under Robert's reading of the provision, unless those uninsured expenses
are extraordinary, neither party has an obligation to pay them. This is not a reasonable interpretation of
the divorce judgment.
The
trial court found that Margaret had paid a total of $9,471.09 in uninsured
medical bills. It also found that
Robert had paid $186 toward uninsured medical bills and was entitled to credit
for that amount and any other amounts that he could document. Subject to that credit, the trial court held
that Robert was responsible for one-half of the total of $9,471.09.
Robert
argues that there is no evidentiary basis for the trial court's finding on the
amount of uninsured medical bills.
Robert claims that the trial court excluded the bills for the medical
expenses on the ground that they were hearsay.
He claims a summary prepared by Margaret of the uninsured medical
expenses she paid (Exhibit 5) was inadmissible hearsay.
The
trial court sustained Robert's objection to testimony by Margaret as to what
medical expenses were extraordinary and also sustained his objection to
admission of the bills for the medical expenses on hearsay grounds. However, Robert made no objection to the
admission of Exhibit 5. Indeed,
Robert's counsel marked this document as an exhibit and questioned Margaret on
it. Margaret testified in response to
those questions that Exhibit 5 was a tabulation of uninsured medical expenses
for the children that she had paid and for which Robert had not reimbursed
her. This testimony was not challenged
or disputed by Robert. Robert's
attorney offered Exhibit 5 into evidence and it was admitted. Exhibit 5 shows the total amount of
uninsured expenses paid by Margaret for each year beginning in 1980. The total is $9,471.09.
We
will not set aside the trial court's findings of fact unless clearly
erroneous. Section 805.17(2), Stats.
The trial court's finding that the uninsured medical expenses Margaret
had paid was $9,471.09 is not clearly erroneous in view of Exhibit 5 and
Margaret's testimony concerning that exhibit.
There is no testimony controverting that those were the amounts of
uninsured medical expenses she paid. If
Robert intended to have Exhibit 5 admitted for certain purposes but objected to
its admissibility for other purposes, it was incumbent on him to make this
objection so that Margaret could respond and the trial court could rule on
it. Since Robert did not do this, he
has waived the objection. See State
v. Damon, 140 Wis.2d 297, 300, 409 N.W.2d 444, 446 (Ct. App. 1987)
(failure to timely object to the admissibility of evidence waives that
objection); § 901.03(1)(a), Stats.
SUPPORT
ARREARAGES
A
trial court has the discretion to reduce child support arrearages under an
order or judgment entered prior to August 1, 1987. Schulz v. Ystad, 155 Wis.2d 574, 598, 456 N.W.2d
312, 321 (1990). The trial court's
discretionary determination will be upheld if the court arrived at reasonable
conclusions based on consideration of appropriate law and the facts of record. Hartung v. Hartung, 102 Wis.2d
58, 66, 306 N.W.2d 16, 20-21 (1981). We
will find a misuse of discretion only if the court has not exercised its
discretion or has exercised its discretion on the basis of an error of law or
irrelevant or impermissible factors. Barstad
v. Frazier, 118 Wis.2d 549, 554, 348 N.W.2d 479, 482 (1984).
Robert
testified that his income in 1981 was approximately $11,000 or $12,000 for the
year and that in 1982 his hourly wage was reduced by $1.30 and his piecework
rate by approximately ten percent. As a
result, he was bringing home $80 to $90 per week. On one occasion in 1982, Margaret lent him money for food. Robert testified that he contacted Margaret
about his situation, but the parties' testimony as to what was said is in
conflict. Robert testified that
Margaret agreed that he need not pay support unless he was earning more than
$100 per week. Margaret denied
this. She testified that when he told
her that his income was reduced, she helped him create a hypothetical budget
and asked him to produce a real budget along with proof of his income and
expenses but that this was never provided to her.
The
trial court set forth its reasoning for not reducing the child support
arrearages based on this record:
Robert
asks the court to find that he did not have the ability to pay any child
support during that time and to expunge the arrearage. Robert does not provide a 1982-83 budget and
we are left to speculate regarding his expenses for that period of time. We do not know what, if any, living expenses
and non-essential expenses were deducted from Petitioner's gross. We do not know if he, like Margaret, reduced
living expenses by residing with parents or others. We do not know the date in 1983 upon which Robert's income
increased.
Therefore, Robert
asks the court to engage in guesswork and to find that he was unable to pay any
support to his children from January 1, 1992 through October 12, 1993 [sic], or
to reduce it to an amount which has no particular basis. While it is highly likely, relying on the
sketchy facts given, that the family court would have reduced Robert's child
support for 1982 and 1983 if presented with full facts at that time, this court
may not speculate from the record before it in 1994.
Robert
argues that this was a misuse of discretion because the court should have
inferred that, with take home pay of less than $100 per week, he was unable to
pay $60 per week in child support. We
do not agree. It was Robert's
obligation to present evidence to the court from which it could find what his
income and expenses were during the time Robert's income was reduced and
exactly what that time period was. The
fact that it is undisputed that his income was reduced does not entitle him to
a reduction of support arrearages in the absence of evidence that would permit
the court to make findings on what his income was, what his expenses were, and
what period of time was involved.
CREDIT FOR DEPENDENCY
EXEMPTION
The trial court ordered
that Robert was to receive a credit of $1,556.94, which was the amount of the
tax benefit to Margaret for the dependency exemption which had initially been
awarded to Robert but which he permitted her to take in 1982 and
thereafter. Robert claims that the
trial court misused its discretion in not awarding him a credit each year, with
interest, to offset the support arrearages accumulated for that year. The effect of this would be to reduce the
interest he was ordered to pay on the arrearages.
At
trial, Robert attempted, through expert testimony, to introduce exhibits
showing the benefit to Margaret of the additional tax dependency exemption for
each year, with the addition of interest at eighteen percent each year for
those savings. The trial court refused
to admit those exhibits into evidence because they lacked foundation. This was a discretionary determination. Prill v. Hampton, 154 Wis.2d
667, 678, 453 N.W.2d 909, 913 (Ct. App. 1990).
Robert does not explain how the trial court misused its discretion in
refusing to allow the admission of this testimony. He appears to concede that whether to grant a credit and, if so,
to what extent is within the trial court's discretion. His argument is that the trial court misused
its discretion because it did not express its reasoning for the approach it
adopted and for its rejection of the approach he suggested. We do not agree.
The
trial court stated:
During the years of Andrew's minority, the parties agree
that the tax benefit to Margaret was $1,556.94. It is unknown what, if any, detriment was suffered by Robert as a
result of the transfer of personal exemption.
The family court is a court of equity and the court will offset from the
arrearage, medical expenses and interest thereon the financial benefit to
Margaret realized on transfer of the exemption. When the transfer was made, it was a practical solution in an
attempt to increase income available for the children. The court believes likewise that a practical
resolution is appropriate at this juncture.
Robert will receive a credit of $1,556.94 against the total owed by him
as of the date of this decision. There
was no agreement regarding interest on this benefit nor does the statute
require interest and no interest is awarded.
The
trial court's decision not to grant interest on the credit for the dependency
exemption is consistent with its decision not to grant interest on the amount
Robert owed as his share of the uninsured medical expenses. No statute requires interest on such sums
and the trial court did not misuse its discretion in not awarding interest.
INTEREST ON
CHILD SUPPORT ARREARAGES
The
trial court concluded that § 767.25(6), Stats.,
mandates simple interest at 1.5% per month on unpaid child support due after
July 2, 1983, the effective date of that subsection, and that the court does
not have discretion to forgive interest which accrued after that date. This is a correct statement of the law. In Greenwood v. Greenwood, 129
Wis.2d 388, 385 N.W.2d 213 (Ct. App. 1986), we held that § 767.25(6)
applies to support arrearages accrued as of July 2, 1983. Id. at 392-93, 385 N.W.2d at
215. In Greenwood, we
reversed a trial court's determination that the statute did not apply to such
arrearages and remanded the matter with directions to the trial court to
determine the amount of the interest on all of the arrearages, including that
portion that had accrued prior to July 2, 1983. Id.
Robert
relies on Schulz and argues that just as a court may, under Schulz,
exercise its discretion in retroactively reducing support arrearages under
orders entered prior to the effective date of § 767.32(1m), Stats.,[1]
so the trial court has the discretion not to impose interest on unpaid support
due under a pre-July 2, 1983 decree. We
are not persuaded by this argument.
In
Schulz, the court determined that § 767.32(1m), Stats., eliminated the well-established
right of a child support obligor to petition for retroactive modification of
support. Schulz, 155
Wis.2d at 598, 456 N.W.2d at 321. This
was a substantive change in the obligor's legal rights and obligations, the
court held. Therefore, there was a
presumption in favor of prospective application unless that presumption was
expressly or impliedly overcome by the language or history of the new
section. Id. The court found nothing in either the
language or the legislative history to indicate that the legislature intended
that the prohibition on retroactive reductions would affect orders or judgments
entered prior to the effective date of the statute. For this reason, it concluded that the new statute applied only
to judgments and orders entered after that date. Id. at 598-99, 456 N.W.2d at 321.
Although
in Greenwood we did not expressly state whether § 767.25(6),
Stats., was a substantive or a
procedural statute, we did look to the intent of the legislature with respect
to the retroactive/prospective issue.
We used the analysis the Schulz court used to determine
whether § 767.25(6) should apply to arrearages existing on the effective
date of the statute. We noted that the
preamble to the act creating that section stated that interest is to be assessed
on "any child ... support payment paid on or after the effective date of
this act, regardless of the date of entry of the order for payments." Greenwood, 129 Wis.2d at 392,
385 N.W.2d at 215. We concluded this
indicated that the legislature intended the new statute to apply to arrearages
accumulated on the effective date of the new statute. Id. at 393, 385 N.W.2d at 215.
Robert
does not discuss Greenwood and therefore does not explain why Greenwood
is not controlling. We are bound by the
published decisions of the court of appeals.
In re Court of Appeals of Wisconsin, 82 Wis.2d 369, 371,
263 N.W.2d 149, 149-50 (1978).
Robert
also argues that under the doctrine of equitable estoppel, the trial court
should not have awarded interest on the arrearages. Equitable estoppel may bar a custodial parent from claiming or
collecting child support arrearages. Harms
v. Harms, 174 Wis.2d 780, 785, 498 N.W.2d 229, 231 (1993). Assuming, without deciding, that the
doctrine of equitable estoppel may apply also to a custodial parent's claim for
interest on support arrearages, we nevertheless affirm the trial court's
ruling.
Before
the trial court, Robert raised the issue of equitable estoppel both as a basis
for reducing his support arrearages and as a basis for not charging interest. As noted above, Margaret and Robert gave
conflicting testimony on the issue of whether she agreed that he did not have
to pay support for a period of time.
The trial court implicitly accepted Margaret's version of the events
when it ruled that "[o]n equitable estoppel, Robert has not met his burden
of proof." Focusing solely on
equitable estoppel as it applies to interest, the question is what action or
inaction of Margaret's with respect to Robert's obligation to pay interest on
arrearages induced reliance by Robert to his detriment.[2]
In
its decision, the trial court stated:
The strongest testimony from [Robert] in this regard is
that [Margaret] "did not tell [him] that she would want back support or
interest" during their discussions of 1982. Such an absence of communication does not create a promise or
contract which justifies reliance.
We
agree with the trial court that Margaret's failure to tell Robert she intended
to collect interest is not sufficient, as a matter of law, to support the
application of equitable estoppel in this case. Cf. Harms, 174 Wis.2d at 785, 498 N.W.2d at
231 (custodial parent barred by equitable estoppel from collecting support
where she sent a certified letter to obligor telling him she no longer expected
him to pay child support).[3]
By
the Court.—Orders affirmed.
Not
recommended for publication in the official reports.
No. 94-2345(CD)
SUNDBY,
J. (concurring in part; dissenting in part). The
majority has struggled to make sense out of paragraph 7(n) contained in the
divorce judgment entered August 30, 1979.
That section provides:
"That each party shall pay one-half of any extraordinary medical,
dentist and other medical expenses of the children." The majority concludes that that provision
requires the parties to pay one-half of all uninsured medical expenses. I cannot join in that construction.
The
provision is plainly ambiguous and we must search for its meaning from the
entire judgment. I rule out the
majority's construction because its effect is to require each party to pay
one-half of all medical and dental expenses.
Had that been the intent of the parties, paragraph 7(n) could have
read: "That each party shall pay
one-half of any medical or dental expenses of the children."
I
believe the provision was intended to apportion the costs of
"extraordinary" medical and dental costs.
Paragraph
7(o) provides: "That respondent
[the wife] shall maintain health insurance for the minor children of the
parties." Health insurance
policies typically cover medical and dental expenses but contain exclusions for
costly, extraordinary expenses. For
example, if I go to the hospital for my annual check-up, the exercise EKG is a
regular, usual or routine part of my examination. If, however, my exercise EKG suggests that the lower left
ventricle of my heart is leaking blood and I have open-heart surgery to correct
the condition, I have incurred an "extraordinary" expense which is
rarely covered by medical insurance.[4]
I
conclude that the intent of the parties was that the wife would maintain health
insurance for the minor children which would cover the usual, routine medical
and dental expenses. However, the
parties had to deal with "extraordinary" medical and dental expenses
and did so by requiring each party to pay one-half of such costs. I therefore dissent from the majority's
construction of this part of the divorce judgment. I concur in all other respects.
[1] Section 767.32(1m), Stats., effective August 1, 1987, provides that the circuit
court may not revise the amount of child support due under an order or a
judgment for support prior to the date that notice of a petition to revise
support is given to the custodial parent.
[2] Equitable estoppel requires a showing of
three elements: (1) action or inaction
which induces, (2) reliance by another, (3) to his or her detriment. The reliance must be reasonable. See Harms v. Harms, 174
Wis.2d 780, 785, 498 N.W.2d 229, 231 (1993).