Kate (Lane) Pohl, Appellant-Respondent v. Patrick Lane, Appellee-Petitioner (2025)

MEMORANDUM DECISION

[1] Kate (Lane) Pohl (“Mother”) appeals following the trial court's order granting the motion to correct error filed by Patrick Lane (“Father”) and its order modifying Father's child support obligation. Mother raises two issues for our review, which we revise and restate as:

1. Whether the trial court clearly erred when it determined the parties’ increased incomes and continuous disagreements about Father's obligation resulted in a substantial and continuing change of circumstances that warranted modification of a child support order that deviated from the Indiana Child Support Guidelines; and

2. Whether the trial court clearly erred when it found Father's business expenses related to his role as a limited partner in a financial advisory firm should be excluded from the calculation of his gross income for child support purposes.

We affirm.

Facts and Procedural History

[2] Mother and Father married on October 3, 2009. They are the parents of three children, S.L. (born 2009), M.L. (born 2011), and C.L. (born 2015) (collectively “Children”). Children attend private school. C.L. was diagnosed with brain cancer as a young child and underwent chemotherapy to bring the cancer into remission, but he has “lifelong comorbidities” associated with the cancer and treatment. (Tr. Vol. 2 at 28.)

[3] In March 2020, Father filed a petition for dissolution of marriage. Mother and Father then entered into a mediated agreement. The agreement provided Mother and Father were to share joint legal custody of Children and Mother was to have primary physical custody. Article IV of the mediated agreement discussed Father's child support obligation. Father was employed as a financial adviser with Edward Jones and Mother worked as a project manager in executive recruitment at IU Health. The agreement provided:

Husband shall pay “regular” child support to Wife in the amount of Four Hundred Fifteen Dollars ($415) per week, through the Indiana State Central Collection Unit, until further order of the Court. Additionally, Husband shall pay to Wife “additional” child support in the amount of 12% of 93% of income he receives from his employer that is in excess of $304,000 each year by February 15th each year, starting in 2022.

(App. Vol. 2 at 33.) The agreement explained:

For example, if Husband's gross income in 2021 is $400,000, then his “additional” child support payment due to Wife by February 15th would be calculated as follows: $400,000 - $304,000 = $96,000 x 93% = $89,280 x 12% = $10,713.60. Husband would owe to Wife the sum of $10,713.60 for additional child support.

(Id. at 33 n.1.) In addition, the agreement included provisions discussing how the calculation would be modified in subsequent years:

For 2021, Husband's “regular” child support is based on his income of $304,000, which is an average of his income for the prior 3 years. For subsequent years, Husband's “regular” child support shall be recalculated based on a rolling average of his income for the prior 3 years and Wife's income from the prior year (not to be less than $53,000) with the new child support amount going into effect by February 15th each year. The parties shall provide to each other their year-end paystubs by no later than January 15th each year.

Husband's “additional” child support paid by February 15th shall be adjusted each year to account for changes in the current 12% obligation that is calculated from lines 3 and 4 of the [Child Support Obligation Worksheet] and the applicable provision of the Ind. Child Support Guidelines. Additionally, the current 93% obligation shall be adjusted if Husband's tax effective rate exceeds 30% and reduced accordingly.

If, after exchanging year-end paystub[s] by January 15th of any given year, the parties determine that Husband's income decreased, due to no fault of his own, and he overpaid child support, then he shall receive a credit for same on his child support obligation spread out over the remaining weeks of that year.

(Id. at 33-34.)

[4] The agreement also provided that “the parties shall equally share the children's controlled expenses ․ and the first $2,500 of the children's uninsured medical expenses as of January 1, 2021.” (Id. at 34-35.) For any uninsured medical expenses above $2,500, Father was responsible for 85% and Mother was responsible for the remaining 15%. With respect to Children's private education, the agreement provided that Father would pay 85% of the total cost and Mother would pay 15%, “until high school for each child, at which time the parents will determine whether to continue with private education.” (Id. at 36.) The worksheet used to determine Father's regular child support obligation listed Father's gross weekly income as $5,846.15 and Mother's gross weekly income as $1,021.33. On February 17, 2021, the trial court approved the settlement and entered a final decree of dissolution of marriage.

[5] In the years following the divorce, the parties continuously disagreed regarding the proper calculation of Father's additional child support payment in the years following the divorce. Both Mother and Father incurred additional attorney fees in resolving these disputes. Mother also obtained additional employment following the divorce. She worked part-time as a consultant at Springs Connect, a call center, and as a sales representative for a multi-level marketing enterprise. In 2023, S.L. enrolled at Cathedral High School in Indianapolis, and a voucher covered some of the cost of her tuition.

[6] On February 21, 2024, Father filed a verified motion to modify his child support obligation. Father asserted modification of the additional child support payment did not take into account changes in Mother's income. He asserted the provision “caused conflict and unnecessary attorney fees, and Father desire[d] to modify the Final Agreement and follow the Indiana Child Support Guidelines.” (Id. at 54.) Father argued modification was warranted because of changes in the incomes of both Father and Mother and because “the parties incur extraordinary educational and uninsured health care expenses and Father pays the bulk of same.” (Id. at 55.)

[7] The trial court held a hearing on Father's motion on June 5, 2024. Father testified that at the time of the settlement agreement, he “was in the building mode of the business, bringing on a lot of new clients.” (Tr. Vol. 2 at 61.) He explained that this meant his income was rising every year at that time but his income since had “leveled off.” (Id.) Father stated his 2024 income was “right on target to be about the same as the prior two years.” (Id. at 61-62.) He explained his total income in 2023 was $578,000, but as a limited partner in his financial advisory firm, he was required to contribute approximately $26,000 to “an IRS certified business expense plan that allows for pre-tax deductions to be able to pay [the firm's] business expenses.” (Id. at 59.) After deducting Father's business expenses, his income was $539,146. Father asked the trial court to eliminate his additional payment. He noted he paid over $70 a week for Children's health insurance and most of Children's uninsured medical and tuition expenses.

[8] Mother testified that her yearly gross income was approximately $75,000 in 2021, $80,000 in 2022, and $90,000 in 2023. Mother explained that as a multilevel sales representative she incurred expenses to purchase inventory from the multi-level marketing enterprise and attempted to sell that inventory to customers for a profit. She also received a commission if she recruited a new sales representative into the enterprise. Mother explained that while this work generated thousands of dollars in revenue, she did not earn a profit in 2023 and was operating at a net loss of approximately $250 in 2024. Father believed Mother's earnings as a sales representative were higher than she claimed based on her bank deposits and money she received through mobile payment services.

[9] On September 13, 2024, the trial court issued an order denying Father's motion for child support modification. Father then filed a motion to correct error. Father argued the trial court “failed to articulate a sufficient basis for deviating from the Indiana Child Support Guidelines.” (App. Vol. 2 at 66.) He noted that the income of both parents had increased substantially since the divorce decree was entered and the calculation of Father's additional child support payment did not take increases in Mother's income into account. Father also asserted the formula in the divorce decree did not take into consideration self-employment income from Mother. Father asked the trial court to modify its prior order and change his child support obligation to be consistent with the Indiana Child Support Guidelines. The trial court then held a hearing on Father's motion. Mother argued the additional child support payment serves “an important role” because “it does not require the parties to go back every year on a modification or within the parameters defined by law simply because income either went up or down.” (Tr. Vol. 2 at 114.)

[10] Following the hearing, the trial court issued an order granting Father's motion to correct error in part. The trial court explained:

The court finds it erred in not applying the presumption for Indiana [C]hild [S]upport [G]uidelines in deciding whether to modify Father's child support obligation and thereby did not state its reason for deviation. Further, the court erred in not including Father's business expenses in determining his gross weekly income, and in not including business income to Mother's gross weekly income.

(App. Vol. 2 at 72.) The trial court also issued an amended order on Father's motion to modify. The trial court subtracted unreimbursed business expenses from each parent's gross annual income and determined that Father's gross weekly income for the purpose of child support was $10,666.32 and Mother's was $2,041.00. The trial court concluded:

21. Further, the court does find there has been a substantial change in circumstances warranting a modification of the manner in which child support is calculated, specifically, parties are no longer in agreement with using the current method to calculate child support and Parties[’] incomes have significantly changed since the last order.

22. The court considers the above and finds there is not a reason to deviate from applying the Indiana [C]hild Support Guidelines to this case.

23. Therefore, Father's weekly child support order is $840.00/week, effective as of the date of the filing of the petition, February 21, 2024. Any arrearage or overpayment of child support paid or owed shall be resolved within thirty days of the date of this order.

24. All other provisions of the final order remain in full force and effect.

(Id. at 79.)

Discussion and Decision

[11] Mother argues the trial court erred by granting Father's motion to correct error and by modifying Father's child support obligation. We review a trial court's ruling on a motion to correct error for an abuse of discretion. Poiry v. City of New Haven, 113 N.E.3d 1236, 1239 (Ind. Ct. App. 2018). “An abuse of discretion occurs when the trial court's decision is against the logic and effect of the facts and circumstances before the court or if the court has misinterpreted the law.” Id. However, deciding whether a trial court abused its discretion in granting a motion to correct error often requires us to evaluate the propriety of the underlying determinations. See Luxury Townhomes, LLC v. McKinley Props., Inc., 992 N.E.2d 810, 815 (Ind. Ct. App. 2013) (“Upon reviewing a motion to correct error, this court also considers the standard of review for the underlying ruling.”), trans. denied.

[12] We also review a trial court's order modifying a parent's child support obligation for an abuse of discretion. In re Marriage of Kraft, 868 N.E.2d 1181, 1185 (Ind. Ct. App. 2007). The trial court's entry of findings of fact and conclusions of law also impacts our standard of review. Ashworth v. Ehrgott, 982 N.E.2d 366, 372 (Ind. Ct. App. 2013). We “shall not set aside the findings or judgment unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.” Ind. T.R. 52(A). “A finding is clearly erroneous if there are no facts in the record to support it, either directly or by inference.” Eisenhut v. Eisenhut, 994 N.E.2d 274, 276 (Ind. Ct. App. 2013). “A judgment is clearly erroneous when there is no evidence supporting the findings, when the findings fail to support the judgment, or when the trial court ‘applies the wrong legal standard to properly found facts.’ ” In re Paternity of M.R.A., 41 N.E.3d 287, 293 (Ind. Ct. App. 2015) (quoting K.I. ex rel. J.I. v. J.H., 903 N.E.2d 453, 457 (Ind. 2009)). We review the trial court's conclusions of law de novo. In re Moeder, 27 N.E.3d 1089, 1098 (Ind. Ct. App. 2015), trans. denied.

[13] When, as here, the trial court enters findings of fact and conclusions of law without a written request made prior to the admission of evidence, the findings and conclusions are considered sua sponte. Erie Ins. Exch. v. Sams, 20 N.E.3d 182, 187 (Ind. Ct. App. 2014), trans. denied. In such instances, “the specific findings control our review and the judgment only as to the issues those specific findings cover. Where there are no specific findings, a general judgment standard applies, and we may affirm on any legal theory supported by the evidence.” Id. (internal citation omitted).

1. Change of Circumstances

[14] Mother contends the trial court erroneously found that a substantial change in circumstances required modification of the child support order. Indiana Code section 31-16-8-1(b)(1) provides a trial court may modify or revoke a child support order “upon a showing of changed circumstances so substantial and continuing as to make the terms unreasonable[.]” It is the burden of the party seeking a modification of the child support order to demonstrate a substantial and continuing change in circumstances. MacLafferty v. MacLafferty, 829 N.E.2d 938, 940 (Ind. 2005). “Typically, changes in parents’ income, emancipation, increase in educational expenses, and changes in custody of a child qualify as substantial and continuing circumstances that justify modifying a support order.” Krampen v. Krampen, 997 N.E.2d 73, 82 (Ind. Ct. App. 2013), trans. denied. Even a child support obligation reached by agreement of the parties is subject to later modification upon a change of circumstances. See Adams v. Adams, 873 N.E.2d 1094, 1098 (Ind. Ct. App. 2007) (Despite initial agreement between parents setting father's child support obligation, father “was entitled to a modification of child support by showing either changed circumstances so substantial and continuing as to make the terms unreasonable or a twenty percent deviation.”). Here, the trial court found that there had been a substantial and continuing change in circumstances because Mother and Father no longer agreed on how child support should be calculated and the incomes of both Mother and Father had increased substantially since the last child support order had been issued.

[15] Father's child support obligation under the settlement agreement differed from the recommended obligation under the Indiana Child Support Guidelines because, at the time of the divorce, Father's income often increased substantially from year to year. However, Father testified at the hearing on his petition to modify that his income had essentially stabilized. Father's income in 2021 was approximately $507,000 and his income increased to $571,000 in 2022. In 2023, Father's income was approximately $579,000, and he anticipated his 2024 income to be in line with his income in 2022 and 2023. At the time of the divorce, Mother's annual income was approximately $53,000, but when Father filed his petition to modify, Mother's annual income had increased to approximately $90,000. The calculation of Father's additional child support payment under the agreement did not consider changes in Mother's income, and Father remained responsible for the bulk of Children's medical and tuition expenses. Father testified regarding the parties’ continuing disagreements about calculating his additional payment. Father explained that he and Mother have “gone back and forth with tons of emails back and forth and incurred a lot of attorneys’ fees.” (Tr. Vol. 2 at 62.) Given these changes, Father no longer felt his child support obligation outlined in the parties’ settlement agreement was fair. The changes in the parties’ incomes and the multiple disagreements over the calculation of Father's additional payment support the trial court's conclusion that there was a continuing and substantial change in circumstances that made the terms of the settlement agreement unreasonable.¹ See, e.g., Walters v. Walters, 901 N.E.2d 508, 511 (Ind. Ct. App. 2009) (holding mother's employment and increased income constituted a substantial change in circumstances justifying modification of child support order).

[16] Indiana Child Support Rule 2 states that “there shall be a rebuttable presumption that the amount of the award which would result from the application of the Indiana Child Support Guidelines is the correct amount of child support to be awarded.” “However, a trial court may, in its discretion, deviate from the presumptive amount specified by the guidelines if application would result in an unjust award. In such a situation, the trial court must set forth a written finding stating the factual basis for the deviation.” In re Paternity of Jo. J., 992 N.E.2d 760, 771 (Ind. Ct. App. 2013) (internal citation and quotation marks omitted). Here, the trial court explicitly found there was no reason to deviate from the guidelines. The parties’ initial child support order deviated from the guidelines because of the agreement of the parties. There was not a judicial finding that the amount recommended by the guidelines was inequitable. At the hearing on Father's petition to modify his child support obligation, Mother asked the trial court to leave the initial child support order in place, but she did not argue or present evidence that the guideline amount was unjust. Therefore, we cannot say the trial court's finding that there was no reason to deviate from the child support amount recommended by the guidelines was clearly erroneous, and thus, the trial court did not abuse its discretion when it granted Father's motion to correct error and modified Father's child support obligation to conform with the amount recommended by the Indiana Child Support Guidelines. Cf. Hamiter v. Torrence, 717 N.E.2d 1249, 1253-54 (Ind. Ct. App. 1999) (holding trial court abused its discretion in ordering father to pay child support in an amount below that recommended by the guidelines because father did not present any evidence that the presumptive amount under the guidelines was unjust).

2. Business Expenses

[17] Mother contends the trial court erred by deducting Father's business expenses from his gross income because the amended order “failed to include any findings that these claimed expenses were reasonably necessary to produce income and that Father did not personally benefit from these expenditures.” (Appellant's Br. at 20.) A party's “ ‘weekly gross income’ is defined as actual weekly gross income of the parent if employed to full capacity, potential income if unemployed or underemployed, and the value of in-kind benefits received by the parent.” Ind. Child Support Guideline 3(A)(1). “Weekly Gross Income from self-employment, operation of a business, rent, and royalties is defined as gross receipts minus ordinary and necessary expenses․ Weekly Gross Income from self-employment may differ from a determination of business income for tax purposes.” Id. at 3(A)(2). Both Mother and Father incurred business expenses and submitted evidence related to their business expenditures. Mother incurred such expenses as a sales representative, and Father incurred business expenses because of his status as a limited partner in his investment firm. The trial court deducted $5,265.45 in business expenses when calculating Mother's income. Father submitted a detailed Business Expense Summary letter from Edward Jones outlining his 2023 business expenditures. These expenditures included the purchase of office supplies, advertising, meals and gifts for clients, and similar items. The trial court then deducted $23,921.25 in business expenses when calculating Father's income. It was within the trial court's discretion to evaluate Father's submitted business expenses and determine which expenses were deductible. See Young v. Young, 891 N.E.2d 1045, 1049 (Ind. 2008) (“Trial courts have discretion in determining which business expenses are deductible for calculating the child support obligation of self-employed persons, but the court must engage in a careful review of the facts and circumstances in making its determination.”). Given the trial court's consistent treatment of business expenses between the two parties, we cannot say the trial court clearly erred when it deducted Father's business expenses.

Conclusion

[18] The trial court did not abuse its discretion in granting Father's motion to correct error and amending its previous order on Father's petition to modify his child support obligation. The trial court's finding that there was a substantial and continuing change in circumstances justifying a modification was not clearly erroneous because the parties’ incomes had increased substantially since the prior order and the parties disagreed regarding the calculation of Father's additional child support payment. In addition, the trial court's deduction of business expenses from each party's total gross income when calculating the party's annual gross income for child support purposes was not clearly erroneous. Accordingly, we affirm the trial court.

[19] Affirmed.

FOOTNOTES

1.   Mother contends the trial court's initial order denying Father's petition to modify his child support obligation was supported by the evidence presented at the June 5, 2024, hearing. However, “[t]he purpose of a motion to correct error is to call the trial court's attention to errors committed at trial to give the court a chance to correct them.” Dickerson v. Toney, 253 N.E.3d 1159, 1167 (Ind. Ct. App. 2025), reh'g denied, trans. denied. Trial Rule 59(J)(4) provides that if the trial court “determines that prejudicial or harmful error has been committed,” it “shall take such action as will cure the error, including ․ amend[ing] or correct[ing] the findings or judgment as provided in Rule 52(B)[.]” In granting Father's motion to correct error, the trial court determined that it had erred in concluding no substantial and continuing change of circumstances had occurred and the trial court chose to alter its findings and judgment to cure that error. Thus, our review is focused on the propriety of the amended order.

May, Judge.

Judges Mathias and Bradford concur. Mathias, J., and Bradford, J., concur.