Adrian Teschendorf v. Craig Teschendorf (2012)

MEMORANDUM OF DECISION ON POSTJUDGMENT MOTION TO MODIFY # 116

The parties divorced by way of agreement on June 15, 2010.   In their separation agreement, which was incorporated by reference into the judgment, the defendant husband was ordered to pay the plaintiff wife child support on behalf of the three minor children (presently ages nine, seven and four years) in the amount of $267.00/week, he was ordered to maintain health insurance on behalf of the minor children and both parties were ordered to share equally any out of pocket and/or un-reimbursed health care expenses incurred on behalf of the minor children.   Because the defendant husband, at the time of the divorce, was an employed electrician and the plaintiff wife was a stay-at-home mother, the parties agreed that the defendant husband would claim all three minor children as dependency exemptions.   The child support clause is contained in Article III, p. 4 of the separation agreement, the health insurance clause is contained in Article IV, p. 5, the “uninsured medical expenses” is contained in Article V, p. 5 and the dependency exemptions clause is contained in Article XII (12.2), p. 8 of the separation agreement.

In February of 2011 the defendant husband became unemployed.   He continued to timely pay $267.00/week in child support until the order was modified downward by the magistrate court in August of 2011 to $150.00/week.¹ On the same day the present motion was scheduled for an evidentiary hearing the parties appeared once again in magistrate court and the child support order was further modified downward to $130.00/week with an order that the defendant pay $20.00/week toward an arrearage regarding un-reimbursed and/or out of pocket health care expenses.²

In addition to the downward modifications of child support, in approximately August of 2011, the defendant husband, due to his continued unemployment, was no longer able to maintain the children on his health insurance through the International Brotherhood of Electricians.   Consequently, the plaintiff wife, at no additional cost, added the three minor children to her present husband's health insurance.

Two of the three minor children have ongoing medical and/or health issues.   One child is autistic and has attention deficit and hyperactivity disorder (ADHD) and although integrated into a conventional classroom he requires extra services to be maintained.   A second child has speech delays, breathing issues and hypotonia (loose muscle tone) and requires speech and occupational therapy.   Both children require services, medications and/or therapy that is not fully covered by health insurance.³  The plaintiff wife estimates between three hundred to five hundred dollars per month is incurred in out-of-pocket or un-reimbursed health care expenses for the minor children.⁴

The defendant husband who was residing in Florida at the time of the divorce and continues to do so presently, has gone back to school for heating, ventilation and air conditioning (HVAC) training.   He will complete his schooling in 2013 but hopes to begin introductory employment-training later this year.   The plaintiff wife remarried her first husband, in January of 2012.   She resides with her husband and her five children, the two oldest teenagers are issue of her first marriage with her present husband.

The plaintiff wife now seeks a modification of the judgment regarding the dependency exemptions.   She argues that the dependency exemptions are in the nature of support and are therefore modifiable if a substantial change in circumstance has occurred.   The substantial change, she argues, is the defendant's protracted unemployment which has resulted in a downward modification of child support, her remarriage and the need for her to add the three minor children to her present husband's health insurance policy.   She argues that at the very least she should at least share in one or more of the dependency exemptions to offset her out-of-pocket health care expenses regarding the minor children.   The defendant counters that the dependency exemptions are property assets and therefore this court lacks the authority, postjudgment, to entertain any modification.   Alternatively the defendant argues that contractually, the language of section 12.2 of the separation agreement is clear and unambiguous and clearly contemplated no possibility of modification.   Furthermore if the court were to reject his first two arguments, the defendant contends alternatively there has been no substantial change in circumstance as he plans to be re-employed in the near future and because he has continued to pay child support and the plaintiff has continued to remain a stay-at-home mom;  equity therefore dictates that he retain all three dependency exemptions.

The first issue that must be addressed is whether this court has the authority to entertain this postjudgment modification motion.   In McCarthy v. McCarthy, 60 Conn.App. 636 (2000), the parties divorced in September of 1995.   In a postjudgment proceeding in April of 1997, the trial court, for the first time, addressed the allocation of tax dependency exemptions.   The defendant raised the issue in a second postjudgment motion in 1999, from which the defendant appealed.   Although the appellate court was not presented with the precise issue of whether the allocation of tax exemptions was properly before the trial court four years postjudgment, implicitly, in addressing and ultimately upholding the trial court's ruling the appellate court determined the trial court had postjudgment jurisdiction over dependency exemptions.   Similarly, the Connecticut Supreme Court, in Battersby v. Battersby, 218 Conn. 467 (1991), in affirming the trial court's postjudgment ruling on a motion to modify child support opined:  “It is clear that the trial court has the authority to allocate the income tax exemption and that doing so is a reasonable exercise of the court's wide discretion and broad equitable power.   See Serrano v. Serrano, 213 Conn. 1, 12 566 A.2d 413 (1989).”  Battersby at 472 fn. 9.

The issue of whether the allocation of dependency deductions is in the nature of support has been raised but not definitively addressed by Connecticut courts.   The trial court in Ciolino v. Ciolino, 2005 Ct.Sup. 788, 38 Conn. L. Rptr. 525 (2005), engaged in a comprehensive overview of other states' cases which have ruled affirmatively.   The Ciolino court and the Kaiser court (Kaiser v. Kaiser, Superior Court, judicial district of New Haven, Docket NO. 339639 (October 10, 1996, Alander, J.) [17 Conn. L. Rptr. 662], decided the postjudgment motions in terms of a contractual interpretation of the separation agreements thereby making it unnecessary to reach the issue of whether dependency exemptions are in the nature of support.

After a review of relevant Connecticut and other states' cases this court concludes the allocation of dependency exemptions is in the nature of support and therefore a proper subject for a postjudgment motion for modification.   The Serrano court eloquently opined:  “As we have consistently reaffirmed, actions for dissolution of marriage are inherently equitable proceedings ․ the [Serrano ] trial court therefore did not commit error by exercising its equity jurisdiction in an attempt to fashion a just remedy under the circumstances of this case.”  Id. at 12.   That said however, any contemplated modification cannot contravene the intent of a separation agreement.

The defendant husband in the present case correctly points out that the dependency exemptions clause is located articles and pages away from the child support clause.⁵  The contractual language in Ciolino contemplated one specific contingency that would permit a change to the dependency exemption allocation.   Similarly, in Kaiser the “permanent waiver” of any entitlement to the dependency exemption was explicit enough language for the trial court to conclude “[t]he unmistakable purpose of including the paragraph in the separation agreement providing the plaintiff with the dependency tax exemption was to make her right to the exemption permanent and unchangeable.”

The language in section 12.2 of the present case contemplates no contingencies and is silent as to its modifiability.   Noteworthy is, section 4.2 regarding the maintenance of health insurance:  “In the event the Husband loses his [health] insurance coverage, the parties agree to renegotiate the issue of support and maintenance and payment of medical insurance for the children;  and if they cannot agree, the issue shall be determined by the Superior Court at New Haven or any other court of competent jurisdiction.”  (Emphasis added.)   Given that the plaintiff assumed responsibility for insuring the minor children, section 4.2 triggers a review by this court of the support and maintenance issues and given this court's ruling that dependency exemptions are in the nature of support the contractual language of the separation agreement permits this court to contemplate the plaintiff's motion for modification.

Child support is meant to provide for the care and well-being of minor children.  Battersby at 473;  C.G.S. § 46b–86.   Again, because the dependency exemptions are in the nature of support, said exemptions can also therefore be viewed as a source of support.   In the present case, both parties concede that at least two of their three minor children's health issues burden them with significant out of pocket health care expenses that can be partially offset with the tax dependency exemption.⁶

This court concludes that the defendant husband's protracted unemployment and decreased child support payments constitutes a substantial change in circumstances to warrant a change in the allocation of the dependency exemptions.   Although the plaintiff wife has incurred no additional expenses by adding the three minor children to her husband's health insurance she has experienced an approximately 50% decrease in child support since the date of the dissolution.   Her remarriage affords her the opportunity to recoup some of her expenditures for health care for the minor children that as a single stay at home mom she had not been entitled to.   Accordingly, this court grants the motion to modify and orders that the plaintiff wife be granted the minor child Noah as a dependency deduction and the defendant husband retain Zachary and Ana as dependency deductions.

At trial the defendant husband testified he had already filed his 2011 taxes.   It is the court's intent that the plaintiff be afforded the dependency exemption for Noah for 2011 and forward every year thereafter.   The defendant shall amend his 2011 tax filings to accommodate the court's holding.

The plaintiff's motion to modify is granted in accordance with this opinion.   The defendant's objection is overruled.

Bernadette Conway, Judge

FOOTNOTES

FN1. The plaintiff testified the magistrate court decreased child support to $150/week in November of 2011.   A review of the court file reflects it was an August 2, 2011 order..  FN1. The plaintiff testified the magistrate court decreased child support to $150/week in November of 2011.   A review of the court file reflects it was an August 2, 2011 order.

FN2. At the April 10, 2012 magistrate court hearing the parties' stipulated the arrearage owed by the defendant to the plaintiff for health care expenses presently equals $956.43.   However the court notes the matter is further complicated by the following:  A prior health care expense arrearage of $2,019.20 existed and the defendant in an attempt to address said arrearage arranged, prior to April 10th to have his 2011 tax refund check of $1,909 forwarded to the plaintiff.   Although the plaintiff received said monies, inexplicably, she subsequently received a letter from the IRS ordering her to return the refund money to the IRS. The parties intend to follow up with the IRS and it is the intent of the parties that the plaintiff receive the $1,909.   For purposes of this decision the existence of the health expense arrearage, regardless of the amount, plays no part in the court's analysis..  FN2. At the April 10, 2012 magistrate court hearing the parties' stipulated the arrearage owed by the defendant to the plaintiff for health care expenses presently equals $956.43.   However the court notes the matter is further complicated by the following:  A prior health care expense arrearage of $2,019.20 existed and the defendant in an attempt to address said arrearage arranged, prior to April 10th to have his 2011 tax refund check of $1,909 forwarded to the plaintiff.   Although the plaintiff received said monies, inexplicably, she subsequently received a letter from the IRS ordering her to return the refund money to the IRS. The parties intend to follow up with the IRS and it is the intent of the parties that the plaintiff receive the $1,909.   For purposes of this decision the existence of the health expense arrearage, regardless of the amount, plays no part in the court's analysis.

FN3. The children's health issues existed at the time of the dissolution..  FN3. The children's health issues existed at the time of the dissolution.

FN4. Each parent has been and will continue to be equally responsible for said expenses..  FN4. Each parent has been and will continue to be equally responsible for said expenses.

FN5. However, it is noteworthy to look at section 12.1(b) of the separation agreement:  “All payments pursuant to Article III (child support) hereof are designated as payments that are not includable in the gross income of the payee (Wife) and are not deductible to the payor (Husband) under Section 215 of the Internal Revenue Code.”.  FN5. However, it is noteworthy to look at section 12.1(b) of the separation agreement:  “All payments pursuant to Article III (child support) hereof are designated as payments that are not includable in the gross income of the payee (Wife) and are not deductible to the payor (Husband) under Section 215 of the Internal Revenue Code.”

FN6. Neither party could specifically articulate the monetary benefit derived from the dependency exemptions allocation.   The defendant husband guessed he claimed $3,000 to $4,000 in health care related expenses for 2011..  FN6. Neither party could specifically articulate the monetary benefit derived from the dependency exemptions allocation.   The defendant husband guessed he claimed $3,000 to $4,000 in health care related expenses for 2011.

Conway, Bernadette, J.