Court: Court of Appeals of Wisconsin; December 27, 2018; Wisconsin; State Appellate Court
Craig Fieschko appeals the circuit court's denial of his motion to modify child support obligations for his two minor children with ex-spouse Geraldine Veneman. Fieschko contends that the court incorrectly determined that significant increases in his income, which led to higher support payments, did not constitute a substantial change in circumstances as required by WIS. STAT. 767.59(1f) (2015-16). He argues that the court erred in presuming that both parties anticipated his income would rise to this extent at the time of their divorce and that it confused the standards for modifying child support with those for deviating from guideline levels. The court concluded that Fieschko did not demonstrate that the income increases were unforeseeable and did not identify any errors undermining this conclusion.
Additionally, Fieschko sought to place a portion of what he deemed excessive child support payments into trusts for the children, citing WIS. STAT. 767.511(2). The court denied this request, finding that Fieschko did not sufficiently show that Veneman was incapable or unwilling to manage the funds wisely, as required by precedent. As a result, the court affirmed its decision.
The background reveals that a judgment of divorce was finalized in January 2014, incorporating a settlement agreement that included shared physical placement of the children and specified child support obligations based on fluctuating income. Notably, the agreement acknowledged the uncertainty surrounding future child support due to Fieschko's variable income. Following an initial reduction of child support in October 2014, Fieschko's income rose substantially from 2014 to 2016, leading to increased support obligations. The appeal centers on a motion filed in November 2016, where Fieschko alleged that Veneman misallocated substantial child support funds for her personal benefit.
The court commissioner denied Fieschko's motion to modify child support, leading him to seek de novo review in the circuit court. Fieschko's modified motion requested either a downward adjustment of his support obligation or the allocation of part of the payments into trusts for their two minor children. During discovery, Fieschko obtained details about Veneman's financial situation. At an evidentiary hearing, accountant Dennis Kleinheinz testified that Fieschko's child support payments in 2016 exceeded Veneman's total living expenses by approximately $8,600 and that her savings increased by over $38,000 that year. Both parties testified about their income and Veneman's expenses.
Fieschko claimed that his increased income led to excessive child support payments that Veneman was misusing for personal benefit rather than solely for the children. He argued that Veneman's financial growth could not solely be attributed to her personal income and savings, citing her spending on luxuries. Veneman countered that the support agreement anticipated fluctuations in Fieschko's income and maintained that her financial management was prudent, not excessive.
The court ultimately denied Fieschko's motion, finding that changes in the parties' financial situations were not substantial or unforeseen at the time of their divorce and prior modification. The court emphasized the importance of maintaining the children's standard of living, which had been established prior to the divorce. It credited Veneman's testimony regarding her use of child support for the children's benefit and determined that Kleinheinz's testimony did not effectively contradict her claims about her personal expenditures.
Fieschko's request to modify child support payments or establish trusts for his children was denied by the circuit court. The court found that he did not provide substantial evidence demonstrating that placing child support payments into trusts would serve the children's best interests, particularly since Veneman was deemed capable of managing the payments responsibly. Fieschko appealed, arguing that the court erred in concluding there was no substantial change in circumstances since the last order. He contended that his income increases were not foreseeable at the time of divorce and claimed the court misapplied the legal standards for determining substantial changes in circumstances under WIS. STAT. 767.59(1f) versus WIS. STAT. 767.511(1m).
The court upheld its decision, stating that Fieschko failed to demonstrate a substantial change in circumstances, particularly given that significant income increases were foreseeable. Furthermore, his argument regarding the misapplication of legal standards did not change the outcome. The court reiterated that to modify child support, one must show a substantial change in circumstances as specified in WIS. STAT. 767.59(1f), which includes unanticipated events post-divorce. While the statute does not define "substantial change," it lists factors that could qualify, such as changes in earning capacity or any relevant considerations. Case law suggests that a substantial change typically involves unforeseen events after an agreement, including factors like children's aging and parents' financial situations.
The circuit court's findings of fact will not be overturned unless clearly erroneous. The court independently assesses whether a substantial change in circumstances has been demonstrated, while giving deference to the trial court’s analysis, particularly regarding underlying facts. In this case, the circuit court found no substantial change in circumstances regarding Fieschko's income increases, noting that these increases were foreseeable, particularly given his percentage-based child support obligation. Fieschko was aware that higher earnings would lead to higher child support payments. The court also highlighted that fluctuations in Fieschko's income prior to the settlement suggested that the increases were not unexpected.
Fieschko's argument that the court improperly assumed no substantial change could occur simply because some income increase was foreseeable was rejected. The court considered the totality of circumstances, determining that Fieschko's two-year income increase aligned with what was foreseeable at the time of divorce. Fieschko's objection to using his historical income data from 2005 to 2013 was dismissed as overly narrow; the court reasonably considered this data to anticipate potential income increases. Historical financial information is relevant in assessing modifications to child support obligations, allowing the court to look beyond the immediate periods surrounding the last court order and the modification request.
Fieschko argues that his increased income led to child support payments exceeding Veneman's total child-related expenses, thereby constituting 'disguised' or 'hidden maintenance.' He claims these payments became unreasonable and that Veneman benefited from this excess, likening it to maintenance payments. However, the court finds that Fieschko's focus on 'disguised maintenance' is irrelevant to the primary issue of whether the income increases were foreseeable to both parties. The court rejects Fieschko's proposal for a bright line rule that automatically categorizes significant increases in child support payments as substantial changes in circumstances. Instead, it emphasizes that the applicable statute allows for an increase in income to 'may constitute' a change, not 'must constitute.' Consequently, the court affirms its finding that Fieschko's income increases were foreseeable, thus not warranting a modification of child support. Fieschko also contends the court improperly applied factors from WIS. STAT. 767.511(1m) when determining substantial change under WIS. STAT. 767.59(1f), but the court finds no merit in this argument, suggesting the distinction he draws may be overly rigid. The court concludes that relevant factors from both statutes can overlap in evaluating substantial changes and did not rely solely on 767.511(1m) in its determination.
The court assumes, without deciding, that it may have erroneously considered factors under WIS. STAT. 767.511(1m) regarding a substantial change justifying the modification of child support. Fieschko does not demonstrate how these considerations, such as children's standard of living pre-divorce or their financial resources, affected the court's decision that changes in financial circumstances were not substantial due to their foreseeability.
Fieschko challenges the circuit court's denial of his request to divert what he terms the 'excess' portion of his child support payments into trusts, alleging these payments amount to 'disguised maintenance' under WIS. STAT. 767.511(2). The court exercised its discretion in this matter, stating that a trust is only necessary if the primary custodian is unwilling or incapable of managing the funds wisely, and that it must also be in the child's best interests. The court found credible testimony from the primary custodian, Veneman, indicating her capability and willingness to manage the child support effectively.
Fieschko's evidence, although potentially supportive of his position, did not meet the burden of proving the court's findings were clearly erroneous. Consequently, the court affirms the denial of Fieschko's motion to modify his child support obligation and to establish trusts for a portion of the payments. The order is affirmed and not recommended for publication in official reports. All statutory references pertain to the 2015-16 version unless specified otherwise.
Wis. Stat. 767.59(1f)(c) outlines criteria for revising child support judgments based on substantial changes in circumstances, including changes in the payer's income, the child's needs, the payer's earning capacity, or other relevant factors. Fieschko argues that Veneman's increased income post-divorce constitutes a substantial change; however, he does not provide sufficient record evidence to evaluate this change. While Veneman acknowledges a degree of income increase, the circuit court did not make specific findings regarding her income changes, and Fieschko failed to present her 2014 income for comparison. Fieschko also posits a public policy concern that high-income parties may be deterred from equitable divorce settlements if rising child support is perceived as disguised maintenance. The court questions this argument but refrains from addressing it, noting that it would require legislative or judicial changes beyond their scope. Ultimately, the circuit court's reasonable determination regarding the credibility of Veneman's testimony and her management of child support funds remains unchallenged by Fieschko.
Fieschko fails to demonstrate that Veneman's saving of a portion of child support payments indicates she received disguised maintenance, or excessive child support. Notably, Fieschko did not file a contempt motion alleging that Veneman misused the payments, which would have initiated a separate legal proceeding from his request to modify child support based on a claimed substantial change in circumstances. The court indicates it could dismiss Fieschko's argument regarding trusts on two additional grounds beyond the one it chose. First, the circuit court did not err in concluding that Fieschko did not pay disguised maintenance. Second, Fieschko's proposal to place any alleged disguised maintenance into trusts contradicts his assertion that such maintenance exceeds the necessary funding for the children's welfare. The court also notes a possible requirement for Fieschko to demonstrate a substantial change in circumstances regarding his request for trusts, a matter not addressed by the parties. However, this potential issue is set aside as the trusts matter is resolved on different grounds.
