Douglas v. Saathoff

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NOT DESIGNATED FOR PUBLICATION

No. 114,594

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

GARRETT SAATHOFF, a minor,
by and through his mother and next friend, ERICKA L. DOUGLAS,
Appellees,

v.

JUSTIN R. SAATHOFF,
Appellant.


MEMORANDUM OPINION

Appeal from Sedgwick District Court; FAITH A. MAUGHAN, judge. Opinion filed June 10, 2016.
Affirmed.

John C. Nodgaard and Selena Sujoldzic, of Arn, Mullins, Unruh, Kuhn & Wilson, LLP, of
Wichita, for appellant.

Kimberly K. Bonifas, of Morris, Laing, Evans, Brock & Kennedy, Chartered, of Wichita, for
appellee.

Before GARDNER, P.J., LEBEN, J., and HEBERT, S.J.

Per Curiam: Justin R. Saathoff (Father) appeals from the district court's order
modifying child support, contending the district court erred in calculating the amount of
Erika L. Kiefer's (f/k/a Erika Douglas) (Mother) health insurance credit when computing
his child support obligation. Finding no error, we affirm the judgment of the district
court.


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FACTUAL AND PROCEDURAL BACKGROUND

In October 2008, Mother filed a petition for declaration of paternity and orders of
custody and child support against Father. The parties entered into an agreed declaration
of paternity and journal entry of judgment on July 7, 2009. The paternity declaration
ordered Mother to provide health insurance coverage for the parties' minor child and
Father to pay child support.

At some point thereafter, Mother married Joshua Kiefer and obtained health
insurance coverage through Kiefer's employer. The employer's health and dental
insurance provider offered four plans: (1) employee; (2) employee/spouse; (3)
employee/children; and (4) family. The employer paid 75% of the monthly premium but
no more than $500. The parties agreed to add the minor child to the employer health and
dental insurance coverage after considering the other available options for health
insurance. At the time the minor child was added to the employer-sponsored insurance
coverage, Mother and her husband were already insured under the employee/spouse plan.

On October 14, 2014, the deputy court trustee filed a motion to modify child
support. The motion alleged the parties' circumstances had changed since the last child
support order and recalculation of Father's child support obligation was necessary. A
hearing on the deputy trustee's motion was originally scheduled for November 20, 2014,
but consideration of the motion was delayed by several continuances and a request for
discovery. On April 30, 2015, Mother also filed a motion to modify child support. In the
motion, Mother alleged the parties had agreed to continue the minor child's current health
insurance coverage, which was set to renew on May 1, 2015. Mother asserted: "The
additional health insurance cost for the minor child was $308 per month."

Father filed a motion to clarify or reconsider on May 18, 2015. Father alleged that
during a March 10, 2015, hearing, the district court "stated the cost of the [minor child's]
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health insurance to be included in the Child Support Worksheet [was] the additional cost
to add the minor child to the [employer-sponsored] policy." Father argued the district
court intended that the insurance cost be determined by dividing the total cost of family
coverage by three, the number of insured individuals, based on In re Marriage of
Johnson, 24 Kan. App. 2d 631, 950 P.2d 267 (1997), rev. denied 264 Kan. 821 (1998).

On June 4, 2015, a hearing officer for the district court heard oral arguments on
the motions to modify child support and Father's motion to clarify or reconsider. With
regard to Mother's insurance credit, the hearing officer determined the actual cost of the
minor child's insurance coverage was equal to the monthly premium difference between
employee/spouse coverage and family coverage. The hearing officer explained, where
employee, employee/spouse, employee/children, and family coverage is offered, "the
method of calculating the cost . . . is the difference of the actual out of pocket expense of
the party who . . . carries the coverage of the health insurance."

In a later written journal entry, the hearing officer further explained his decision
with regard to the cost of the minor child's health insurance coverage:

"Regarding the determination on the health insurance calculation . . . , it has
always been the policy of this Court and this jurisdiction that when formal breakdowns
are available with set costs for employee only, employee plus spouse, employee plus
children, and/or employee plus family, the proper method for calculating the costs of
child support purposes is the difference of the actual out-of-pocket costs for the child to
the party with coverage. The determination for the cost in this case is the difference
between the employee plus spouse plan, and the employee plus family plan that adds the
minor child. The court finds that this is the actual cost for the child.
. . . .
"The Court finds that the application of the Johnson case in this matter as cited
by [Father], is inappropriate as it contains a different application and presentation of
issues. The Court finds in the present case that it is fair to both parties to use the actual
costs for adding the minor child. . . . [T]o calculate health care costs in this case other
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than using the actual costs, requires the child to be sharing the cost of the insurance for
his mother and her spouse, which isn't fair."

Father filed an application for review of the hearing officer's decision on July 14,
2015. Father argued that to determine the actual cost of the minor child's health insurance
coverage, the hearing officer should have divided the cost of family coverage by three,
the number of total individuals insured under the coverage. Alternatively, Father argued
the hearing officer should have divided the difference between single and family
coverage by two, the number of individuals covered under Kiefer's single/employee
coverage.

The district court heard oral arguments on August 25, 2015. Considering the
exhibits, hearing transcript, and arguments of counsel, the district court affirmed the
hearing officer's determination and credited Mother the monthly premium difference
between employee/spouse and family coverage. The district court found the calculation
method produced the "exact cost for the insurance for the [minor] child" and was
appropriate under the circumstances.

Father timely appealed.

ANALYSIS

As his sole claim on appeal, Father contends that the district court erred in
calculating the amount of Mother's health insurance credit when computing his support
obligation.




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Standard of Review

We would first note that Father does not begin his arguments and authorities by
setting forth an appropriate standard of review, nor does he identify and separate the
issues to be addressed in his argument. See Supreme Court Rule 6.02(a)(5) (2015 Kan.
Ct. R. Annot. 41).

An appellate court reviews a district court's order determining the amount of child
support for an abuse of discretion. In re Marriage of Wiese, 41 Kan. App. 2d 553, 559,
203 P.3d 59 (2009). A judicial action constitutes an abuse of discretion if the action: (1)
is arbitrary, fanciful, or unreasonable; (2) is based on an error of law; or (3) is based on
an error of fact. The party claiming an abuse of discretion bears the burden of proof. In re
Marriage of Thomas, 49 Kan. App. 2d 952, 955, 318 P.3d 672 (2014).

Interpretation and application of the Kansas Child Support Guidelines
(Guidelines) are subject to unlimited review. In re Marriage of Matthews, 40 Kan. App.
2d 422, 425, 193 P.3d 466 (2008), rev. denied 288 Kan. 831 (2009). Use of the
Guidelines is mandatory, and failure to follow them is reversible error. Any deviation
from the amount of child support determined by use of the Guidelines must be justified
by written findings in the journal entry, and failure to make such written findings is
reversible error. In re Marriage of Thurmond, 265 Kan. 715, 716, 962 P.2d 1064 (1998);
In re Marriage of Atchison, 38 Kan. App. 2d 1081, 1089, 176 P.3d 965 (2008).

The Relevant Guidelines Provisions

Section IV.D.4.a of the Guidelines provides:

"The cost to the parent or parent's household to provide for health, dental,
orthodontic, or optometric insurance coverage for the child is to be added to the Gross
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Child Support Obligation. If coverage is provided without cost to the parent or parent's
household, then zero should be entered as the amount. If there is a cost, the amount to be
used on Line D.4 is the actual cost for the child or children.
"The court has the discretion to determine whether the proposed insurance cost is
reasonable, taking into consideration the income and circumstances of each of the parties
and the quality of the insurance proposed, and to make an adjustment as appropriate. The
cost of insurance coverage should be entered in the column of the parent or parent's
household which is providing it, and the total is entered on Line D.4 (see Appendix VIII,
Example 1, Subsection D.3)." (2015 Kan. Ct. R. Annot. 124).

Section IV.D.8 of the Guidelines instructs: "If costs of health, dental, orthodontic,
and optometric premiums and/or work-related child care costs are included in the total
child support obligation, the parent or the parent's household actually making the
payment is credited." (2015 Kan. Ct. R. Annot. 126.) "The touchstone of the [G]uidelines
on this point is that the increased cost is entered on line D.4. and that the parent making
the payment is given credit for this amount." In re Marriage of Johnson, 24 Kan. App. 2d
at 637.

The Actual Cost of the Minor Child's Insurance Coverage

Father never directly claims that the district court abused its discretion but rather
argues that the court failed to calculate child support in "the appropriate and accurate
way" suggested in In re Marriage of Johnson. He argues first that the appropriate and
accurate way to calculate the cost for the minor child would be to take the cost of the
family plan and divide it by three to reflect the number of people covered by the plan.
Father alternatively contends, because the cost of single coverage was discernible, the
appropriate way to calculate the actual cost was to divide the difference in premium
amount between single and family coverage by two, the number of individuals covered
by the family coverage.

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We find Father's reliance on In re Marriage of Johnson to be misplaced. In that
case, the undisputed evidence showed that it cost the father $152 above his single health
insurance coverage for family coverage. The $152 per month paid for coverage on the
parties' child, the father's current wife, and the father's other two children. On appeal, the
mother argued the father did not incur any additional cost associated with providing
health insurance for the parties' minor child because he already carried and paid for
family coverage. The father contended he was entitled to credit for the entire amount of
the cost for family coverage because it was the increase over single coverage. This court
found both rationales complied with the Guidelines but "[u]sing either rationale would
result in an inequitable result for one of the parties." 24 Kan. App. 2d at 637-38. This
court held:

"[W]here a parent is paying for family health insurance that covers individuals from more
than one family, the cost of the family coverage should be divided among the number of
individuals who are covered by the insurance and that the number should be multiplied
by the number of children subject to the child support order." 24 Kan. App. 2d at 638.

Applying the formula, this court determined the $152 difference between single
and family health insurance coverage "should be divided by four, the number of
individuals covered by the policy other than [the father], which would equate to $38 per
covered person." 24 Kan. App. 2d at 638. This court concluded the applicable cost for
health insurance coverage was $38 because the parties had one child. 24 Kan. App. 2d at
638.

This case is distinguishable from In re Marriage of Johnson. Here, the undisputed
evidence demonstrated the additional cost associated with insuring the minor child under
the employer-sponsored family insurance coverage. For the purposes of determining the
actual cost of the minor child's insurance coverage, the employee/spouse plan was
equivalent to single coverage. Thus, Mother was entitled to credit for the increased cost
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above her employee/spouse coverage. Moreover, unlike In re Marriage of Johnson,
where multiple individuals were insured under family coverage without demarcation,
here the minor child was the only individual covered by the additional family coverage
above Mother's employee/spouse coverage. Therefore, it was unnecessary for the district
court to divide the additional cost of the family coverage among multiple individuals. The
difference in cost between the employee/spouse coverage and family coverage was solely
attributable to the minor child's insurance coverage.

Furthermore, given the circumstances, Father's proposed calculation methods
would yield the proportional cost rather than the actual or increased cost of insuring the
minor child under the employer-sponsored insurance coverage. If the parties had opted to
insure the minor child under private insurance coverage, Mother and her husband would
still pay the cost of the employee/spouse coverage and the additional cost of the minor
child's private insurance coverage.

Applying the appropriate standards of appellate review, we find that the district
court properly applied the Guidelines and did not abuse its discretion in calculating the
actual cost of the minor child's health and dental insurance coverage.

Reasonableness of the Insurance Credit

Father further contends that the district court erred in failing to make an
adjustment to Mother's insurance credit. Again, without specifically alleging an abuse of
discretion, he contends that requiring him to pay anything over 5% of his gross income
for the minor child's insurance coverage was unreasonable.

In Kansas, the Guidelines grant the district court discretion to determine whether a
proposed insurance credit is reasonable, taking into consideration the income and
circumstances of each of the parties and the quality of the insurance proposed, and to
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adjust a parent's insurance credit when appropriate. Guidelines § IV.D.4.a (2015 Kan. Ct.
R. Annot. 124).

In support of his contentions, Father cites and relies on child support statutes from
other states where the "reasonable cost" of health insurance is statutorily capped at 5%.
He also suggests that the Patient Protection and Affordable Care Act would cap his
insurance cost at 6.3% based on family size. While it is unclear where in the district
court proceedings Father raised this specific argument, it suffices here to note that Kansas
does not have similar percentage restrictions with regard to the reasonable cost of health
insurance. Thus Father's reliance on such comparisons is misplaced.

Here, Father does not demonstrate, and the record does not otherwise indicate, the
quality of the health and dental insurance coverage was disproportionate to the proposed
insurance cost. In fact, Father concedes in his reply brief that "the parties, after
considering the options for health insurance, [agreed] the best health insurance coverage
for the minor child would be through the employer of [Mother]'s husband." (Emphasis
added.)

The record also demonstrated that the proposed insurance credit was reasonable in
light of each party's income and circumstances. Father contends that the proposed
insurance credit was unreasonable because it required him to allocate 8.35% of his gross
income toward payment of the minor child's insurance. But he conveniently ignores the
fact that Mother contributes the same percentage of her income toward the insurance
coverage. Mother was a stay-at-home parent, and the district court imputed a gross
income of $1,257 per month. The Father was employed, earning $2,428 per month.
Father fails to show how he bore a disproportionate or unreasonable amount of the costs.

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Therefore, Father's contention that he bore an unreasonable amount of the minor
child's insurance cost is unfounded, as he and Mother contributed the same percentage of
their gross income toward the minor child's insurance coverage.

Father additionally contends the employer contribution is disproportionately
allocated among Mother, Mother's husband, and the minor child. Father highlights that
the minor child is receiving a lower percentage of the employer contribution in
comparison to Mother and her husband. Again, there is no specific citation to the trial
record showing where this argument was raised and ruled on below. In any event,
Father's reliance on the employer's contribution is misplaced. "[T]he Parental Total Child
Support Obligation is increased by health [and dental] insurance only if it is provided at
cost to the parent, and then it is deducted for the parent making the payment." In re
Marriage of Woolsey, No. 96,134, 2007 WL 806022, at *3 (Kan. App. 2007)
(unpublished opinion) (a persuasive opinion finding the cost of insurance coverage for
the minor child was not considered income where the father's union provided coverage at
no cost to the father). Only the actual cost incurred by a parent or the parent's household
is credited. Guidelines § IV.D.4.a (2015 Kan. Ct. R. Annot. 124). Whether an employer
paid a portion of the monthly premium is irrelevant to determining the actual cost paid
monthly by the parent or the parent's household.

In conclusion, Father has not demonstrated the district court abused its discretion
in calculating Mother's insurance credit. Therefore, the district court did not err in
determining Father's child support obligation.

Mother's Motion for Attorney Fees

Mother has filed a motion for appellate attorney fees pursuant to Kansas Supreme
Court Rule 7.07(c) (2015 Kan. Ct. R. Annot. 72). She claims that the Father has pursued
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the appeal frivolously or for purposes of harassment or delay. Father filed a response to
the motion.

Mother would suggest that the action is frivolous because the amount in
controversy is only $73 per month. But the child in question was only 6 years old at the
time of the district court hearing, and monthly payments throughout his minority could
exceed $10,500 over the long run.

Father has presented, both to the trial court and to this court, a genuine issue of
law and fact under the Guidelines in reliance on the In re Marriage of Johnson case. It is
not frivolous to seek appellate review of the district court's interpretation and ruling, nor
does vigorous advocacy equate to harassment or delay.

The record does not support Mother's allegations of frivolousness, harassment, or
intent to delay, and the motion for appellate attorney fees based on Kansas Supreme
Court Rule 7.07(c) is overruled and denied.

Affirmed.