Fisher v. Fisher

Citations: 2007 OK CIV APP 103; 171 P.3d 917; 2007 Okla. Civ. App. LEXIS 74; 2007 WL 3275514Docket: 102,872

Court: Court of Civil Appeals of Oklahoma; July 27, 2007; Oklahoma; State Appellate Court

SummaryOriginalCytator Case TreatmentAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Colene Fisher appeals several orders from the Decree of Dissolution of Marriage issued on November 17, 2005, by the Court of Civil Appeals of Oklahoma. The court determined Keifer Fisher's average yearly gross income to be $120,000 and Colene's at $17,000, establishing a monthly child support obligation for Keifer of $1,112.07. Additionally, Colene was awarded $27,000 in support alimony, payable at $1,500 per month. Colene argues that the trial court abused its discretion in setting the amounts for child support and alimony, as well as in the division of marital property. After Colene's motion for reconsideration was denied, she appeals the decision.

The couple, married in 1989 and parents to two children, operated a dental practice together, with Keifer as the owner and Colene as a dental technician. Colene filed for divorce in 2003. 

In assessing child support, the court follows the principle of equitable cognizance, meaning the support amount can only be overturned if clearly unjust or inequitable. Child support is calculated based on the combined gross income of both parents, which includes both earned and passive income. For self-employment income, gross income is defined as gross receipts minus necessary business expenses. The court must carefully review income and expenses to determine an appropriate gross income level for child support obligations and may choose the most equitable computation method, such as averaging past income.

Wife argues that the court improperly set Husband's income at $120,000, asserting that his actual average yearly gross income was $158,572.07. This figure includes his salary, 401K contributions, vehicle reimbursements, and rental income, adjusted for expenses. Evidence indicated that Husband controlled his salary from the dental corporation, which averaged $101,000 from 2002 to 2004, along with an average vehicle reimbursement of $4,300. The dental corporation rented property and equipment from both spouses, yielding an average rental income of $21,500 after expenses and depreciation, although Wife contends that depreciation should not have been deducted, suggesting an average rental income of $37,400 instead. Additionally, Husband contributed approximately $8,500 annually to his 401K, and the couple experienced a farm loss averaging $6,500 annually prior to the divorce. The trial court's determination of Husband's income lacked clarity on the deductions and income considered. Calculations show that the court's finding was lower than what the evidence supported, indicating an abuse of discretion. Consequently, the case is remanded for the court to reassess all income for child support purposes, taking into account Wife's claims. Furthermore, Wife argues against including Husband's 2004 income due to his indication of reduced work hours to lower support obligations, preferring an average from 2001 to 2003. However, the court appropriately exercised its discretion to average the most recent three years, and the review found no error in this decision.

Wife argues that the trial court improperly deducted depreciation from Husband’s gross income for child support calculations, asserting that depreciation does not decrease the actual income available for support. Husband asserts that depreciation is a legitimate business expense eligible for deduction under Oklahoma law, specifically citing 43 O.S. Supp.2002. 118(E)(3)(a). The statute does not explicitly reference depreciation, but it mandates that courts assess income and expenses to determine gross income, allowing deductions only for "ordinary and necessary expenses" related to self-employment or business operations. The Oklahoma Supreme Court has not ruled specifically on the deductibility of depreciation, though previous cases, such as Minnich v. Minnich, suggest trial courts may have discretion in determining the reasonableness of such deductions.

Various jurisdictions have differing views on this issue. The Connecticut Supreme Court identified three approaches: 1) depreciation is a non-cash figure that should not be deducted; 2) depreciation impacts income-generating capacity and merits deduction; and 3) the relevance of depreciation should be evaluated based on individual case circumstances. Courts denying depreciation deductions often argue that it is a non-cash expense that does not affect the obligor's ability to pay support, emphasizing that it represents a "paper loss" rather than a real decrease in income. This perspective was supported by rulings in cases such as Stewart v. Stewart and McAuliffe v. McAuliffe, which highlighted the need for income calculations to reflect actual financial resources rather than artificially inflated financial pictures created by depreciation deductions.

Courts permitting depreciation deductions typically cite tax law provisions, justifying such deductions by asserting that depreciation is a legitimate business expense impacting net income. In Spotts v. Spotts and Turner v. Turner, courts recognized depreciation as an expense that reduces taxable income, which could also apply to child support calculations. However, in Oklahoma, depreciation is not considered in determining income for child support, as the statutes are based on gross income rather than net income. Depreciation is characterized as a non-cash expense that could lead to inflated deductions detrimental to accurately assessing gross income available for child support. The trial court's allowance of a depreciation deduction from the husband’s rental income was deemed an abuse of discretion.

On remand, the court must evaluate all income sources of the husband, excluding depreciation deductions. The wife contested the trial court's determination of her income at $17,000, claiming insufficient evidentiary support. Her only submitted income evidence was a 2004 tax return showing $12,435, and she failed to substantiate her earnings from other ventures. The court found no clear evidence to overturn the income assessment.

Regarding alimony, the wife argued that the awarded $27,000 was inadequate compared to her request for $200,000. She claimed her after-tax income was below $900 per month, while her monthly needs exceeded $2,800. The trial court has broad discretion in alimony awards, and such decisions are upheld unless there is clear abuse of discretion or a determination contrary to the evidence. The burden of proof lies with the appealing party to demonstrate error in the court's ruling.

Alimony is defined as a court-ordered allowance for a party's maintenance post-marriage, primarily aimed at cushioning the economic impact of transitioning to self-sufficiency. The determination of alimony is need-based and considers various factors, including demonstrated need, the parties' social status, marriage duration, ages, earning capacities, physical conditions, financial means, lifestyle during marriage, and the time required for a spouse to transition to self-support. The burden of proof lies with the party seeking alimony to demonstrate a legitimate need for additional funds during this transition.

In the case presented, the Wife claimed that her fibromyalgia limited her ability to work and necessitated expensive prescriptions, but she did not provide supporting medical evidence or testimony at trial. Although she listed her expenses and described her financial situation, she failed to indicate how long she would need support or how much she earned in her current job. Additionally, the Wife received significant assets from the divorce, including farmland and nearly $100,000 from the Husband's retirement account, which she did not demonstrate would be insufficient for her needs.

Married for sixteen years, the Wife had relevant employable skills, including a dental technician certificate and insurance license, and had worked in both fields. She also had the option to breed and sell registered dogs. The court concluded that the Wife did not sufficiently prove a lasting need for additional alimony beyond the $27,000 awarded, and thus, the court did not abuse its discretion in determining the amount of alimony. The court’s decision was supported by precedent indicating that lack of demonstrated income from property and an inability to transition to self-support did not warrant higher alimony.

Wife claims the trial court abused its discretion by not equally dividing property and by valuing certain built-in features of the marital home separately from the overall assessed value. These features included a surround sound system, custom speakers, and a sprinkler system, which were integral to the home and could not be removed without causing damage. Husband argued these items should be included in the assessed value since they were not listed in the appraisal. The court assigned a combined value of $11,000 to these features and added it to the stipulated value of the house awarded to Wife. Consequently, Wife received $444,338.83 in property, while Husband received $460,622.75. The court found that property division does not have to be equal, only equitable, citing Gamble v. Gamble, and noted the trial court's broad discretion in such matters. After reviewing the record, the court concluded that Wife did not demonstrate the division was inequitable or unjust. The ruling was affirmed in part and reversed in part, with the case remanded. Additional notes include Wife's calculations of Husband's income, his investments post-divorce, claims of depreciation on a vehicle awarded to him, and temporary support payments made by Husband.