COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 68739 LYNN M. SLOWBE, : : Plaintiff-Appellee : : JOURNAL ENTRY vs. : and : OPINION BURT T. SLOWBE, : : Defendant-Appellant : DATE OF ANNOUNCEMENT OF DECISION : DECEMBER 7, 1995 CHARACTER OF PROCEEDING : Civil appeal from : Common Pleas Court -- : Domestic Relations Division : Case No. D-194907 JUDGMENT : AFFIRMED IN PART AND : REVERSED AND REMANDED IN : PART. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiff-appellee: James Konchan 700 Marion Building 1276 West Third Street Cleveland, Ohio 44113 For defendant-appellant: Brian K. Schaner Thomas L. Meros 1630 Standard Building 1370 Ontario Street Cleveland, Ohio 44113 -2- NAHRA, J.: Appellant, Burt T. Slowbe, is appealing the trial court's order dated February 27, 1995, which modified child support, found appellant in contempt for failure to pay certain support, and ordered appellant to pay attorney fees of appellee, Lynn Slowbe. For the following reasons we affirm in part and reverse in part. The parties entered into an agreed judgment entry of divorce, filed February 13, 1990. Appellee was awarded custody of the parties' child, Karen (d.o.b. 4/6/82). Appellant was to pay child support and receive the dependency tax exemption. As of January 3, 1992, appellant was ordered to pay child support of $162.50 per month. His income at that time consisted of two disability pensions from the Sheet Metal Worker's Union, totalling $1,092.38 per month. Appellee's income from baby-sitting in her home was $10,000 per year. In March, 1993, appellant started receiving Social Security disability benefits of $1,086.00 per month, based on his conditions of multiple sclerosis and manic depression. He received a lump sum of $21,003.00 for payments retroactive to the date of application, July, 1991. The minor child, Karen, received benefits of $543.00 per month, plus a lump sum payment of $11,036.00. The increased income from Social Security caused both parents to file motions to modify child support. A hearing was held before the referee. The referee imputed interest income of $750.00 per year to appellant, which appellant could have made from the lump sum Social Security payment of -3- $21,003.00. Appellant testified that he used the money to re-pay loans to his parents. Appellant's annual income was found to be $26,890.56. Appellant resided in a home owned free and clear by his current wife, Marge Weekly. Weekly and appellant shared living expenses. Weekly earned a "substantial income" as an administrative assistant. Appellant testified that he had monthly expenses of $1,698.00. The referee reduced appellant's clothing expenses of $300.00 per month to $50.00 per month, noting that appellee's clothing expense for appellee and the child was $20.00 per month. Appellant testified he had special clothing expenses for his wedding and he had inadequate income to buy clothes for several years. The referee also deducted $200.00 property tax which appellant paid on the home owned by Weekly, because appellant was not obligated to make these payments. The referee found appellant had discretionary income of $930.38 per month. (The referee did not include the $750.00 per year interest income in this calculation.) Appellant testified that he must pay federal tax on the disability pensions, but not on the Social Security income. Appellee testified that her receipts from baby-sitting in her home were $17,652.00 per year. She deducted supplies and other expenses, including part of the utilities paid on her home and part of her mortgage interest, to obtain her gross income of $11,782.00 per year ($981.83 per month). Appellee's expenses for Karen had increased since the last child support order. Appellee had monthly -4- expenses of $1,736.00, resulting in a shortfall of $211.00 per month, even including the $543.00 per month Social Security payment to Karen. Appellee also testified that she had saved $2,000.00, which she recently spent on new windows for her home. The referee calculated the total child support obligation per the guidelines as $438.00 per month and appellant's child support obligation as $328.50 per month. Appellant was ordered to pay child support of $250.00 per month plus poundage. Partial credit was given for the $543.00 per month Social Security payments to Karen. In effect, an upward deviation from the guidelines occurred because the child received $793/month ($250/month child support plus $543/month Social Security). The referee's report and the court's journal entry stated that deviation from the guidelines was warranted because of the significant disparity in the incomes of the parties, the tax free nature of part of appellant's income and the benefits appellant received by sharing living expenses with his current spouse. Appellant was ordered to continue to pay $57.50 per month towards the child's health insurance. The referee awarded the dependency exemption to appellee. The referee found that appellant had an arrearage in child support as of March, 1992 of $3,475.67, but the lump sum Social Security payment to Karen could be used to satisfy this amount. The arrearage on child support and medical insurance premiums from March, 1992 to September, 1993 was $94.34. Appellant overpaid spousal support by $200.66. Appellant failed to pay appellee's -5- attorney fees of $5,500.00, as previously ordered by the court. The $200.66 overpayment could be applied against the attorney fees, but the lump sum social security payment to the child could not. Prior court order obligated appellant to pay 61% of Karen's uninsured medical bills. Appellant owed $319.05 on medical bills incurred in May and August, 1992 and January through August, 1993. The referee did not apply the child's lump sum Social Security payment to these medical bills. The referee found appellant in contempt for failing to pay appellee's attorney fees and the child's medical bills. The referee recommended appellant pay appellee $1,500.00, a portion of the attorney fees incurred by appellee in this action. The trial court overruled appellant's objections to the referee's report and approved the recommendation of the referee, with the following modifications: Appellant would pay only $500.00 of appellee's attorney fees from this action. Appellant's child support arrearages from July 1, 1991 to March 23, 1992 of $1,810.65 may be credited with the child's lump sum social security payment. There were no child support arrearages from March, 1992 to September, 1993. In fact, there was an overpayment of child and spousal support of $940.66 for this period. Appellant overpaid spousal support by $1,235.66 (includes the $940.66 overpayment), which may be credited against the attorney fees owed by appellant of $5,500.00. -6- I. Appellant's first and third assignments of error are interrelated and will be discussed together. They state: I. THE TRIAL COURT ABUSED ITS DISCRETION IN SETTING A LEVEL OF CONTINUING CHILD SUPPORT TO BE PAID BY APPELLANT WHICH IS GROSSLY IN EXCESS OF THE STATUTORY CHILD SUPPORT GUIDELINE AMOUNTS. III. THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT FAILED TO FULLY CREDIT APPELLANT WITH SOCIAL SECURITY PAYMENTS MADE TO APPELLANT'S MINOR DAUGHTER IN RESPECT OF APPELLANT'S DISABILITY AGAINST ALL CURRENT CHILD SUPPORT OBLIGATIONS. The trial court has broad discretion to deviate from the level of support computed under the guidelines, if the deviation is in the best interest of the child and the court substantiates its decision with findings of fact. Hurdlebrink v. Hurdlebrink (1989), 45 Ohio App.3d 5, Gatliff v. Gatliff (1993), 89 Ohio App.3d 391, R.C. 3113.215(B)(3). The trial court may consider the following factors in determining whether the guideline figure is unjust, inappropriate or not in the best interest of the child: the disparity in income of the parties, R.C. 3113.25(B)(3)(g); the benefits either party receives from remarriage or sharing living expenses with another person, R.C. 3113.25(B)(3)(h); and the amount of federal, state and local taxes actually paid or estimated to be paid by a party, R.C. 3113.25(B)(3)(i). The trial court here expressly relied on these three factors in deviating from the guidelines. The trial court's reasons for deviation were supported by its findings of fact. -7- Appellant argues that the court should have given him full credit for the Social Security payments made to the child. The trial court must consider the income of the child from Social Security benefits in determining child support. R.C. 3109.05. The court is not required to give full credit for the child's Social Security benefits against the parents' support obligation Jackson v. Jackson (Oct. 23, 1992), Lake App. No. 91-L-112, unreported, see McNeal v. Cofield (1992), 78 Ohio App.3d 35, Previte v. Previte (1994), 99 Ohio App.3d 347. The proper method is to deduct all or part of the Social Security benefits received on behalf of the child from the guideline-determined necessary child support predicated upon the best interests of the child and equity to both parents. (Emphasis added.) McNeal, supra, at 39, see Previte, supra, at 351. The trial court here gave only partial credit for the Social Security benefits paid to Karen because of the disparity in income of the parties, appellant's benefits of remarriage and appellant's partially tax free income. Furthermore, appellee was short $200.00 per month, even including the Social Security payments to Karen. The trial court determined that the best interest of the child and equity to the parents mandated only a partial deduction of the child's Social Security income. Appellant argues that the amount of support needed by Karen was established by the prior child support order. See Cheek v. Cheek (1982), 2 Ohio App.3d 86. Although appellee testified her expenses for Karen increased, appellee did not show an increase in -8- need sufficient to justify the amount of increase in child support. Appellant's arguments fail because the amount necessary for child support is the amount necessary to maintain the child's standard of living the child would have enjoyed had the marriage continued. Cheek, supra. An increase in the parent's income may justify an upward modification of child support. Id. We cannot say that the trial court's deviation from these guidelines was an abuse of discretion. The court stated reasons for its deviation, which were supported by its findings of fact. The court was not required to give full credit for the Social Security payments made to the child. Accordingly, appellant's first and third assignments of error are overruled. II. Appellant's second assignment of error states: THE TRIAL COURT ABUSED ITS DISCRETION AND ACTED CONTRARY TO THE WEIGHT OF THE EVIDENCE WHEN IT DETERMINED THAT THE APPELLANT SHOULD PAY CURRENT CHILD SUPPORT IN EXCESS OF THE STATUTORY CHILD SUPPORT GUIDELINES AMOUNT. Appellant argues that the trial court's finding that appellee had a $200.00 shortfall each month was against the weight of the evidence. Appellee testified that she saved $2,000.00 for windows, so she could not have had a shortfall. Additionally, the court should not have allowed appellee to deduct part of her utilities and mortgage interest from her baby-sitting receipts because they are "paper deductions." -9- There was no evidence of when appellee was able to save $2,000.00. Appellee may have saved the money in past years, which would not affect her current income and expenses. (Except for interest income.) The trial court could still find appellee had a shortfall of $200.00 per month. Appellee could deduct actual cash items expended by her for her business, but could not deduct certain depreciation and other non-cash items. R.C. 3113.215(A)(3), (4), see Baus v. Baus (1991), 72 Ohio App.3d 781. Appellee made actual cash expenditures for utilities and mortgage interest. A portion of these expenses can be attributed to the business, which was located in appellee's basement. We find that the trial court's findings as to appellee's income and expenses were supported by competent, credible evidence. The decision of the trial court was not against the weight of evidence. See Seasons Coal Co. v. Cleveland (1984), 10 Ohio St.3d 77, 79-80. Accordingly, this assignment of error is overruled. III. Appellant's fourth and fifth assignments of error are interrelated and will be discussed together. They state: IV. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN IT HELD THAT THE APPELLANT IS IN CONTEMPT OF COURT WHEN APPELLANT IS IN FULL COMPLIANCE WITH THE TRIAL COURT'S PRIOR ORDERS RESPECTING BOTH CURRENT SUPPORT AND PAYMENT OF PAST ARREARAGES AND WHEN APPELLANT'S OVERPAYMENTS OF SUPPORT FULLY OFFSET SUPPOSED MEDICAL PAYMENT ARREARAGES. -10- V. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN IT ORDERED APPELLANT TO PAY ATTORNEY FEES AND COURT COSTS BY REASON OF ITS FINDING THAT THE APPELLANT WAS IN CONTEMPT OF THE COURT'S ORDER. Appellant contends he was in compliance with the court's prior order of support and paid the monthly amount of support and arrears as required by the past orders. The prior orders also required appellant to pay $5,500.00 of appellee's attorney fees as additional alimony. The court credited $1,235.66 overpayments of spousal support, leaving $4,264.34 unpaid. The lump sum Social Security payment to the child cannot be applied against this additional alimony. The Social Security benefits to the child may only be used for the child's current maintenance. See McNeal v. Cofield (1992), 78 Ohio App.3d 35, 40, Catlett v. Catlett (1988), 55 Ohio App.3d 1. The medical payment arrearages totalling $319.05 were for medical bills dated May - August, 1992 and January - August, 1993. The lump sum Social Security payment to the child of $11,036.00 was made in March, 1993 and was retroactive to July, 1991. The Social Security payments could have been applied to medical bills prior to March, 1993. The trial court also could have applied the $940.66 overpayment in child and spousal support to the medical bills, but instead applied it to attorney fees. Even if the medical bills were offset by credits, appellant still failed to pay attorney fees. -11- The trial court did not err in finding appellant in contempt of court for failure to pay support. The trial court could order appellant to pay the reasonable attorney fees incurred in the contempt action. R.C. 3111.13(F), 31019.05(C). The court could also require appellant to pay attorney fees incurred in the modification of the child support order. R.C. 3113.219(B). Accordingly, appellant's fourth and fifth assignments of error are overruled. IV. Appellant's sixth assignment of error states: THE TRIAL COURT ABUSED ITS DISCRETION AND ACTED CONTRARY TO THE WEIGHT OF THE EVIDENCE WHEN IT MODIFIED THE PRIOR ORDER OF THE COURT AWARDING THE INCOME TAX CHILD DEDUCTION TO APPELLANT BY GRANTING THE DEDUCTION TO APPELLEE DESPITE EVIDENCE THAT THE DEDUCTION WAS OF MORE BENEFIT TO APPELLANT THAN APPELLEE AND DESPITE NEITHER PARTY REQUESTING SUCH A CHANGE. The trial court may reconsider which parent receives the dependency exemption when it modifies or reviews a child support order. R.C. 3113.21(C)(1)(f), Singer v. Dickinson (1992), 63 Ohio St.3d 408. The exemption should be awarded to the noncustodial parent only if such an award results in a net tax savings for the parents. Id. A net tax savings furthers the best interest of the child because the parents have more money to pay support. Id. Appellant testified that his pension income of $13,000/year was subject to federal income tax, but his Social Security income was not. None of appellant's income is subject to state tax. R.C. 5747.01(A)(4). Appellee's income of $11,000.00 is subject to -12- federal and state tax. (Local tax returns do not provide exemptions.) Appellant and appellee would receive the same tax savings on their federal return from the dependency exemption because they are in the same tax bracket. See Singer, supra. Appellee receives state tax savings from the dependency exemption while appellant does not. Therefore, an award of the exemption to appellee results in the greatest net tax savings to the parents. Appellant contends the court should have considered that he files jointly with his current wife, who earns income subject to federal and state tax. It is in the discretion of the trial court whether to consider the new spouse's income in awarding the dependency exemption. Hutchinson v. Hutchinson (1993), 85 Ohio App.3d 173, 177-178. We conclude that the court properly awarded the dependency exemption to appellee. Accordingly, this assignment of error is overruled. V. Appellant's seventh assignment of error states: THE TRIAL COURT ERRED WHEN IT FAILED TO PROPERLY APPLY SOCIAL SECURITY PAYMENTS MADE TO APPELLANT'S MINOR CHILD IN RESPECT OF APPELLANT'S DISABILITY TO PAST CHILD SUPPORT AND CHILD SUPPORT ARREARAGES. As discussed above, the trial court does not have to fully credit the Social Security payments to the child when computing the amount of child support. A different issue is presented by this assignment of error, which questions whether retroactive Social Security payments should be credited to the corresponding past -13- child support obligations. See Jackson v. Jackson (Oct. 23, 1992), Lake App. No. 91-L-112, unreported. It is proper to credit Social Security benefits received on behalf of a child whose father is receiving Social Security disability toward the father's support obligation to the extent that the Social Security benefits do not exceed the amount of support ordered. Pride v. Nolan (1987), 31 Ohio App.3d 261, Taylor v. Taylor (May 27, 1993), Cuyahoga App. No. 62249, unreported. Social Security payments should be credited against child support. Gilford v. Wurster (1983), 24 Ohio App.3d 77, Fugate v Fugate (July 3, 1990), Montgomery App. No. 12028, unreported. The trial court should have credited the lump sum Social Security payment received by Karen of $11,036.00 to appellant's child support obligation for the period of July, 1991 through March, 1993. The trial court here applied the lump sum to a child support arrearage of $1,810.65 for support from July, 1991 to March, 1992. The court should also have credited arrearages on the child's medical bills from July, 1991 to March, 1993. Additionally, appellant was entitled to credits against the amounts he paid, as well as arrearages. See Fugate, supra. The proper amount of credit is the child support obligation from January, 1991 through March, 1993, not to exceed $11,036.00. Accordingly, this assignment of error is sustained. -14- VI. Appellant's eighth assignment of error states: THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN IT IMPUTED INCOME TO APPELLANT AND WHEN IT FAILED TO FULLY RECOGNIZE INCOME OF THE APPELLEE. The referee imputed interest income to appellant of $750.00 per year on the $21,003.00 lump sum Social Security payment made to appellant. Appellant testified he used the lump sum payment to repay a loan to his parents. He further testified he had cancelled checks and bank statements as proof of the loan, but these documents were not introduced into evidence. Appellant attached copies of these documents to his objections to the referee's report. The record is ambiguous as to whether or not the referee found credible the appellant's testimony that he used the money to repay a loan to his parents. The referee would not have erred in finding the testimony incredible. The credibility of this testimony was primarily for the trier of fact. Seasons Coal Co. v. Cleveland (1984), 10 Ohio St. 3d 77. At the hearing, appellant did not present documentary evidence of the loan. The trial court had discretion whether to hear additional evidence. Civ. R. 53(E)(2), Evicks v. Evicks (1992), 79 Ohio App.3d 657. The trial court did not abuse its discretion here, when there was no reason why the documents could not have been introduced at the referee's hearing. If the referee found this testimony incredible, it was proper to impute interest income. Interest income may be imputed to a parent under R.C. 3113.215(A)(2), which defines gross income to -15- include "potential cash flow from any source." See Sizemore v. Sizemore (Oct. 14, 1994), Montgomery App. No. 13673, unreported. If the referee found appellant's testimony credible, it would not be proper to impute income. Appellant can not have potential interest income from money he no longer possesses. Cf. Sizemore, supra. The error would be harmless, however, because reducing appellant's income by $750/year decreases his child support obligation by less than $10.00 per month. This amount is negligible, considering that the trial court deviated from the guideline figure for the reasons discussed above. Appellant also asserts the trial court erred in determining appellee's income. We have already addressed this argument under appellant's second assignment of error, above. Accordingly, this assignment of error is overruled. VII. Appellant's ninth assignment of error states: THE TRIAL COURT VIOLATED THE APPELLANT'S RIGHTS TO DUE PROCESS OF LAW AS GUARANTEED BY THE CONSTITUTION OF THE UNITED STATES WHEN IT GRANTED A JUDGMENT IN DIVORCE WHILE LACKING SUBJECT MATTER JURISDICTION TO DO SO. The parties entered into an agreed judgment entry of divorce, filed February 13, 1990. The grounds for divorce was stated as "irreconcilable differences." A second judgment entry filed March 6, 1990 listed the grounds for divorce as "incompatibility." In 1993, the trial court vacated the judgment entry of March 6th and found the February 13th judgment entry was the only valid enforceable divorce decree. Pursuant to Civ.R. 60(A), the court on -16- its own motion, amended the February 13th decree to list "incompatibility" as the grounds for the divorce. "Incompatibility" was listed as a grounds for divorce in R.C. 3105.01, while "irreconcilable differences" was not. The trial court had subject matter jurisdiction over this divorce action when it entered judgment on February 9, 1990. The court of common pleas, division of domestic relations has full equitable powers and jurisdiction appropriate to the determination of all domestic relations matters. R.C. 3105.011. The subject-matter jurisdiction of a trial court to award permanent alimony and to formulate an equitable division of the marital assets commences when either party files a complaint for divorce and a division of the marital property. Bolinger v. Bolinger (1990), 49 Ohio St.3d 120. Whether or not grounds for divorce under R.C. 3105.01 exist is not a jurisdictional requirement. See Cline v. Cline (March 21, 1991), Greene App. No. 90-CA-38, unreported. If the court grants a divorce on a ground not provided by statute, the divorce decree is voidable, but is not void for lack of subject matter jurisdiction. See, generally, Kurtz v. Kurtz (1991), 71 Ohio App.3d 176, 183. In re Forfeiture of Property No Longer Needed as Evidence (1993), 86 Ohio App.3d 68, 72, Eisenburg v. Peyton (1978), 56 Ohio App.2d 144. A voidable judgment must be vacated via Civ.R. 60(B) or on appeal from that judgment. Id. Appellant never requested relief from the February 9, 1990 judgment entry because of the grounds for divorce, and never filed an appeal from that judgment entry. -17- Appellant also contends the trial court erred in correcting the February 20, 1990 judgment entry via Civ.R. 60(A). Appellant never appealed the order of June 25, 1993 which corrected the prior judgment entry. An appeal of this order now is not timely, so this court lacks jurisdiction over the issue. App.R. 4(A). Accordingly, this assignment of error is overruled. The decision of the trial court is reversed as to the credit given to appellant against past child support for the Social Security lump sum payment to the child. Otherwise, the decision of the trial court is affirmed. This case is remanded for further proceedings in accordance with this opinion. -18- This cause is affirmed in part and reversed and remanded in part. Costs to be divided equally between plaintiff-appellee and defendant-appellant. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. SPELLACY, P.J., and PORTER, J., CONCUR. JOSEPH J. NAHRA JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time .