|
COURT OF APPEALS DECISION DATED AND FILED November 6, 2012 Diane M. Fremgen Clerk of Court of Appeals |
|
NOTICE |
|
|
|
This opinion is subject to further editing.� If published, the official version will appear in the bound volume of the Official Reports.� A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals.� See Wis. Stat. � 808.10 and Rule 809.62.� |
|
����������� APPEAL from an order of the circuit court for Polk County:� STEVEN P. ANDERSON, Judge.� Affirmed in part; reversed in part and cause remanded.�
����������� Before Hoover, P.J., Mangerson, J., and Thomas Cane, Reserve Judge.
�1������� PER CURIAM. Linda Krings appeals a postdivorce order requiring her to split the cost of her four minor children�s health insurance premium with her former husband, Erik Paulson.� Krings contends that, because the parties� divorce judgment stated Paulson would provide health insurance for the children, the court had no authority to order Krings to pay half of the premium.� We conclude the court had discretion to make Krings responsible for half of the premium, as part of its authority to modify child support.� However, the court erroneously exercised its discretion by failing to provide adequate reasons for its decision.� We therefore affirm in part, reverse in part and remand for the court to properly exercise its discretion.
BACKGROUND
����������� �2������� Krings and Paulson were married in 1989 and divorced in April 2005.� They have four minor children.� Their divorce judgment incorporated the terms of a marital settlement agreement (MSA).� The MSA provided the parties would have joint legal custody and equal physical placement of the children.� In lieu of child support or maintenance, they agreed that, for one year, �[e]ach party [would] provide the other party with one-half of their net income � on a bi‑weekly basis[]� so that �each parent [would] have exactly the same amount of disposable income[.]�� The MSA also stated, �[Paulson] shall continue to provide medical insurance covering the minor children as long as it is available to him through his place of employment at the St. Croix Falls School District.�� All other variable expenses for the children, including medical expenses not covered by insurance, were to be split equally between the parties.�
����������� �3������� The income-sharing arrangement outlined in the MSA was extended until January 1, 2007.� On November 20, 2006, the circuit court approved a �Stipulation for Modification of Divorce Decree.�� The stipulation provided that, from January 1, 2007 until April 19, 2009, Paulson would pay Krings $500 per month in maintenance and $500 per month in child support.� During the following year, Paulson would pay Krings $1000 per month in maintenance, and he would then pay her $900 per month in maintenance until April 19, 2011.� Neither party would be entitled to maintenance after April 19, 2011.� The stipulation also provided, �Child support shall be reviewed as of April 20, 2011.�� In all other respects, the terms of the MSA remained in effect.�
����������� �4������� On December 16, 2010, Paulson moved for a revision of child support.[1]� In addition to asking that child support be set based on the shared placement formula, he requested that the parties each be made responsible for half of the children�s health insurance premium.� At a hearing on Paulson�s motion, Krings argued the court had no authority to modify responsibility for the children�s health insurance because the MSA specifically stated Paulson was responsible for that expense.� She testified Paulson�s payment of the insurance premium was �a huge part� of the original settlement, stating:
[T]he last two years of child support were no longer called child support, they were just called maintenance.� So he got a huge tax benefit for that, and that was some of the give-and-take in the agreement we made.� There was a lot of give-and-take and one of them was he would carry the kids on his insurance.�
����������� �5������� The court ultimately concluded Krings should be responsible for half of the children�s health insurance premium.� The court first determined it had authority to modify responsibility for the children�s health insurance costs due to a �change of circumstances� consisting of the �termination of maintenance and the need to determine child support and the need to address the financial obligations of the parties to their children[.]�� The court then explained:
[M]y position generally is that the parties as long as they are splitting everything, or I guess just generally my position is, that the party that�s obligated to provide the insurance provides the insurance; but the parties split the premium attributable to the children.� And in this case that would be on its face the way to go since the parties are splitting placement, they are splitting variable costs, we have a child support order based upon those splits.� It seems like they are sharing across the board.
����������� �6������� The court then noted that, although the MSA required Paulson to pay for the children�s insurance, Krings had voluntarily maintained additional health insurance for them through her employer. �As long as Krings continued to provide that additional insurance, the court stated it would be appropriate for Paulson to pay the full premium for the insurance provided through his employer.� However, Krings conceded she had recently stopped carrying the children on her health insurance.� The court therefore concluded, �Since [Krings] has had to drop her insurance and no longer carries the children, what I�m going to order the parties to do is split the health insurance premium which is attributable to the children.�� The court then ordered Paulson to pay $352 per month in child support, less fifty percent of the children�s health insurance premium.� Thus, Paulson�s ultimate child support obligation was set at $294.72 per month.� Krings now appeals, contending the court erred by making her responsible for half of the children�s health insurance premium.
DISCUSSION
����������� �7������� Krings argues the court had no authority to modify the parties� responsibility for the children�s health insurance because the MSA specifically provided that Paulson was responsible for that expense.� She contends that, by making her responsible for half of the premium, the court improperly granted Paulson relief from the divorce judgment under Wis. Stat. � 806.07.[2]
����������� �8������� We disagree.� In November 2006, the parties stipulated that the court would �review� the issue of �child support� in April 2011.� Payment of children�s health care expenses constitutes child support.� See Kuchenbecker v. Schultz, 151 Wis. 2d 868, 876, 447 N.W.2d 80 (Ct. App. 1989) (�[B]oth monetary payments to the custodial parent and the assignment of responsibility for health care are child support provisions[.]�).� Thus, by giving the court authority to review child support in April 2011, the November 2006 stipulation gave the court authority to review the parties� responsibility for the children�s health insurance.� Accordingly, the court did not relieve Paulson from the divorce judgment by making Krings responsible for half of the children�s premium.� Instead, the court acted according to the authority granted by the parties� November 2006 stipulation.
����������� �9������� Nonetheless, a court must exercise discretion in setting child support.� See Randall v. Randall, 2000 WI App 98, �7, 235 Wis. 2d 1, 612 N.W.2d 737 (setting child support is committed to circuit court�s discretion). �A court properly exercises its discretion when it examines the relevant facts, applies the correct standard of law, and, using a demonstrated rational process, reaches a conclusion a reasonable judge could reach.� Id.
����������� �10����� We conclude the court did not adequately explain its reasons for splitting the children�s health insurance premium between Krings and Paulson.� The court indicated its position �generally� is that when the parties are splitting all other expenses, they should also split the children�s health insurance premium.� The court stated it seemed appropriate to follow that practice in this case because Krings and Paulson were sharing placement, splitting variable costs, and seemed to be �sharing across the board.�� However, merely stating that the court�s general practice is to split health insurance costs is an inadequate reason for ordering the parties to split the costs in this particular case.
����������� �11����� The court also stated Krings should be responsible for half of the children�s premium because, although not required by the MSA, she had until recently provided additional health insurance for the children.� However, the fact that Krings used to provide supplemental health insurance for the children does not explain why she should have to pay half of the premium previously paid by Paulson.� The court did not, for instance, compare the cost Krings previously paid to insure the children with the cost of half their premium under the insurance provided by Paulson�s employer.� Nor did the court consider Krings� and Paulson�s respective financial situations or determine which party was better able to shoulder the health insurance costs.� Additionally, the court did not consider whether the parties� financial situations had changed since the time of the MSA, such that a change in their responsibility for the health insurance costs would be justified.� The court simply did not provide an adequate explanation for its decision that Krings and Paulson should split the cost of the children�s health insurance premium.
����������� �12����� Accordingly, we affirm the order to the extent the court determined it had authority to modify the parties� responsibility for the children�s premium.� However, we reverse that portion of the order making Krings responsible for half of the premium by giving Paulson a credit against his monthly child support obligation.� Because we conclude the court failed to adequately explain its reasoning, we remand for the court to properly exercise its discretion in allocating responsibility for the premium.
����������������������� By the Court.�Order affirmed in part; reversed in part and cause remanded.
����������� This opinion will not be published.� See Wis. Stat. Rule 809.23(1)(b)5.