ISENBERG (ELDON) VS. LAVICTOIRE (LAURA)Annotate this Case
RENDERED: SEPTEMBER 26, 2008; 2:00 P.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
APPEAL FROM WARREN CIRCUIT COURT
HONORABLE MARGARET RYAN HUDDLESTON, JUDGE
ACTION NO. 00-CI-00144
LAURA LAVICTOIRE (NOW ISENBERG)
COMMONWEALTH OF KENTUCKY,
CABINET FOR HEALTH AND FAMILY
CROSS-APPEAL FROM WARREN CIRCUIT COURT
HONORABLE MARGARET RYAN HUDDLESTON, JUDGE
ACTION NO. 00-CI-00144
AFFIRMING CASE NO. 2007-CA-002603-ME AND
REVERSING AND REMANDING 2008-CA-000009-ME
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BEFORE: ACREE AND CLAYTON, JUDGES; GUIDUGLI,1 SENIOR JUDGE.
CLAYTON, JUDGE: This is an appeal from a decision of the Warren Circuit
Court regarding child support due Appellee, Laura LaVictoire aka Laura Isenberg
from the Appellant, Eldon Isenberg.
Eldon Isenberg is the father of a child with Laura LaVictoire Isenberg.
When Eldon was adjudged the father of Laura’s child, he was married to Jani
Isenberg. He and Jani entered into a Legal Separation, a condition of which was
that Eldon would pay Jani $2,000.00 per month in maintenance payments for
twenty (20) years. This Legal Separation was entered by the same Warren Family
Court as the one from which this appeal is taken.
Based upon the finding that Eldon was the father of Laura’s child,
Judge Margaret Huddleston of the Warren Family Court entered an award of child
support to Laura. Eldon contended that the maintenance payments being made to
Jani should be deducted from his income pursuant to KRS 403.212(g)(1). That
section sets forth that the amount of any pre-existing order for maintenance to prior
spouses “to the extent payment is actually made” is not to be included in
calculating a payor’s income in determining the amount of child support due under
Kentucky’s child support guidelines.
Senior Judge Daniel T. Guidugli sitting as Special Judge by assignment of the
Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and
Kentucky Revised Statutes (KRS) 21.580.
On March 14, 2007, an evidentiary hearing was held before the
Warren Family Court. Testimony and evidence was presented regarding the
maintenance payments. Eldon contended that he had made them, however,
opposing counsel set forth evidence in the form of tax returns and the living
arrangements between the parties to prove that he did not. The family court found
that Eldon had not made the payments and had, in fact, perpetrated a fraud upon
the court by hiding income. Eldon has now appealed the issue of whether he
perpetrated such a fraud.
The Cabinet for Health and Family Services (the “Cabinet”) has filed
a Cross-Appeal contending that the family court did not make a finding regarding
Eldon’s underemployment and any imputed income he should have been
Kentucky Rules of Civil Procedure (CR) 52.01 provides that
“[f]indings of fact shall not be set aside unless clearly erroneous, and due regard
shall be given to the opportunity of the trial court to judge the credibility of the
witnesses.” A judgment is not “clearly erroneous” if it is “supported by substantial
evidence.” Owens-Corning Fiberglas Corp. v. Golightly, 976 S.W.2d 409, 414
(Ky. 1998). Substantial evidence is “evidence of substance and relevant
consequence having the fitness to induce conviction in the minds of reasonable
men.” Id., citing Kentucky State Racing Commission v. Fuller, 481 S.W.2d 298,
308 (Ky. 1972).
As set forth above, KRS 403.212(g)(1) provides that “[t]he amount of
pre-existing orders for current maintenance for prior spouses to the extent payment
is actually made” is not to be included in income of the party responsible for
making child support payments. Eldon contends that the $2,000.00 per month he
is obligated to pay Jani pursuant to their Decree of Legal Seperation should be
deducted from his income. The family court did not agree with his position.
The court below found that “the Respondent committed an act of
fraud against the Court by testifying under oath that he continues to make
maintenance payments to Jani Isenberg.” Order at pp. 2-3. She based this decision
on the fact that they continued to live in the same residence even after their Decree
of Legal Separation had been entered. Eldon contends that the family court made
the decision based purely upon his income tax returns filed for the years 2003 and
2004. He argues that pursuant to Justice Lambert’s dissent in Mercer v. Mercer,
836 S.W.2d 897 (Ky. 1992), a court is not bound by the Internal Revenue Service
(IRS) Code definition of income in determining child support awards. This Court
disagrees with Eldon’s position.
To begin, Eldon points to the dissenting opinion, rather than the
majority’s for his proposition. The principal issue in Mercer was “whether the
accumulation of interest from nonmarital funds deposited in a financial institution
is income and to be treated as marital property or is merely an increase in value of
a nonmarital asset which is to be treated as nonmarital property.” Id. at 898.
While Justice Lambert commented in his dissent on KRS 403.190, it was dicta and
we are not bound by it.
Under Internal Revenue Code (I.R.C.) § 71(b)(1)(C), a payment to a
spouse is considered maintenance if the payee and payor are not members of the
same household. The purpose of this regulation is to avoid the hiding of assets.
The family court found that Eldon was attempting to do just that, hide his assets so
that his child support payments to Laura would be smaller. We agree with the
family court. Eldon and Jani continued to reside in the same home and, in fact,
moved to another home together. This is a clear indication that their Legal
Separation was an attempt to hide income from the court when child support
payments were being calculated. The family court based its decision on substantial
evidence and we will not overturn it.
The Cross-Appeal in this action involves Eldon’s potential income.
The Cabinet preserved this issue when Eldon filed his Motion to Alter, Amend of
Vacate with the trial court. The Cabinet argues that Eldon’s potential income is the
same as the income he was earning with a previous employer. Eldon’s testimony
indicated that he left his prior employment with Progressive Insurance in
December of 2006 so that he would not have to travel as often. Eldon earned less
money with his new employer, Team Construction. The Cabinet argues that Eldon
was voluntarily underemployed and we agree with its argument.
KRS 403.212(2)(d) provides that a child support calculation be based
upon the parent’s potential income if he or she is voluntarily unemployed or
underemployed. A court may find a parent underemployed even if he or she was
not intending to avoid or reduce any child support obligation. Eldon’s decision to
leave a higher paying job for a lower one based only on the possibility of less
travel could be sufficient for a court to find he was voluntarily underemployed and
impute income accordingly. Thus, we will remand this action to the trial court for
a decision as to whether Eldon was voluntarily underemployed and whether
income should be imputed.
We affirm the decision of the trial court on the issue of Eldon’s
maintenance payments to Jani and remand this action to the trial court for a
decision on Eldon’s possible underemployment.
ACREE, JUDGE, CONCURS.
GUIDUGLI, SENIOR JUDGE, CONCURS IN RESULT ONLY.
BRIEFS FOR APPELLANT AND
BRIEFS FOR APPELLEE AND
Steven O. Thornton
Bowling Green, Kentucky
Stewart W. Cobb
Assistant Attorney General