Court: Court of Appeals of South Carolina; August 15, 2012; South Carolina; State Appellate Court
Brian DiMarco (Father) contends that the family court improperly included rental income and capital gains in the child support calculation and awarded excessive attorney's fees to Cheryl DiMarco (Mother). The court affirms some decisions, reverses others, and remands for further action.
The case stems from the couple's 1998 divorce, where Mother was granted custody of their four children, with Father ordered to pay child support. In 2003, Father sought to modify the child support agreement. In 2004, an agreement was reached, establishing Father’s gross income at $8,333 per month and Mother’s at $2,500, resulting in a child support payment of $1,439 for three minor children.
By 2006, following a motion by Mother for increased support and attorney's fees, the family court determined Father’s income was contested and set temporary support at $835 per month based on his declared income of $4,733. A final trial occurred in March 2008, leading to an April order that adjusted Father's income to $10,255 per month and Mother’s to $3,416, incorporating $11,263 in rental income and $7,133 in capital gains into the calculation. Father’s support obligation was set at $1,226 per month, and Mother received $25,000 in attorney's fees.
After Father's motion to amend the judgment, the court revised Mother's income to $4,293 and adjusted Father's support obligation to $1,216, while denying his request to exclude rental income and capital gains. The appeal follows, with the appellate court reviewing factual and legal issues de novo, affirming the trial court's decisions unless errors of law or contrary evidence are demonstrated.
Father contested the family court's calculation of his rental income for child support, arguing it was erroneous. The Child Support Guidelines define income as either the actual gross income or potential income for those unemployed or underemployed, encompassing various sources including rental income after allowable business expenses. Typically, income is determined from verified financial declarations, but courts may use suitable documentation when there are discrepancies.
At the hearing, Father’s accountant indicated the rental properties were operating at a loss due to factors like high interest rates, evictions, and difficulties in finding tenants. Father provided details of his expenses for maintaining the rental property and noted that all expenses were included in his 2006 tax return, which supported his claims of losses. Although the family court calculated Father’s rental income as $11,263 per year, it did not deduct ordinary expenses such as cleaning, maintenance, legal fees, and supplies, which are critical in determining net income. The court's reliance on the 2006 tax return was implied but not explicitly stated.
The finding that Father earned net rental income failed to account for these necessary deductions. Consequently, the court's calculation was reversed, and the matter was remanded for a recalculation allowing Father to present evidence of his expenses.
Regarding Wife’s rental income, Father argued it should be excluded from his income calculation. However, this argument was deemed abandoned on appeal due to a lack of supporting case law or authority in his brief, following established precedents that require cited authority to substantiate claims.
Father contends that the family court incorrectly included capital gains in its income calculation for child support purposes. The court determined an average capital gain of $7,133 per year from Father and Wife’s joint tax returns for 2004, 2005, and 2006. Father’s argument regarding the inclusion of Wife’s capital gains and his investment losses was raised in a rule 59(e) motion but not preserved for appellate review, as he did not present this argument to the family court initially. He claims that capital gains are a 'one-time event' and should be excluded from income calculations. The appellate court cites King v. King to affirm that issues must be raised in the family court to be preserved for appeal.
Additionally, Father argues that the family court awarded excessive attorney's fees to Mother. As a result of the decision on capital gains, the appellate court remands the attorney's fees issue for reconsideration, referencing Sexton v. Sexton regarding the reversal of substantive results affecting fee awards. The family court's ruling is thus partially affirmed, reversed, and remanded. Mother documented attorney's fees totaling $33,910.37, while Father’s 2006 tax returns indicated $66,315 in gross rental income, resulting in a net rental income very close to the family court's calculation of $11,263. Father also disputes the reliance on his 2005 loan application for determining rental income; however, the family court explicitly stated it did not use those amounts. Father’s capital gains were reported as $11,821 in 2004, $11,344 in 2005, and $8,144 in 2006.
