Our appellate attorney, Niles Illich, recently achieved a win in a family law appeal. At issue was whether the annual profit-sharing distribution the father received from his employer counted as a bonus as referred to in the “additional child support” provision in the Mediated Settlement Agreement (MSA) and final divorce decree. Niles argued that both the father and mother, our client, understood during mediation that the profit-sharing distribution was considered a bonus. Thus, the father owed our client child support arrearages for the years he failed to make the additional payment. The appellate court agreed.
The father and mother resolved their divorce through an MSA. The MSA contained an “additional child support” provision, stating that the father would pay the mother a percentage of his net annual bonus. The additional payment was to begin in 2013 and continue as long as he owed support for his children.
Between 2013 and 2018, the father received a profit-sharing distribution from his employer. The amount he received was in addition to his annual salary. However, he never paid additional child support based on a percentage of that bonus.
In 2019, the mother filed a motion to the trial court, contending that the father failed to make child support payments and did not provide his paystubs as agreed in the MSA and divorce decree. She requested that the court confirm that the father owed her arrearages plus interest.
The father argued that he did not owe any additional child support because he never received a bonus. He asserted that his profit-sharing distribution was not what the MSA and decree were referring to in the additional child support provision.
The court clarified that his profit-sharing distributions were considered net annual bonuses. It decided that the father owed the mother additional child support arrearages for 2013 to 2019.
Issue on Appeal
The father took the case to the Fifth Court of Appeals. Maintaining that his profit-sharing distribution was not a bonus, he asked the appellate court to reverse the trial court’s judgment. He stated that the decision “substantively changed” the divorce decree.
In his appellate brief, Niles asserted that when the father and mother were going through mediation, they understood what was meant by additional annual income (or bonus). They agreed that the father would contribute a percentage of his profit-sharing to child support. At trial, the father disputed this, arguing that there was no agreement the terms were used interchangeably, but the court later determined that his claim was false.
The appellate court provided that Texas law allows courts to clarify an order when the provisions are ambiguous and cannot be enforced by contempt. It stated that when the MSA and decree were established, the only additional income the father received was the profit-sharing distribution. Thus, a provision was included to account for this bonus.
Further, if profit-sharing were not considered a bonus, it would render the additional child support provision meaningless. No MSA or decree should contain pointless terms.
The Fifth Court of Appeals decided that the trial court did not err in clarifying what was included as a bonus. It affirmed the lower court’s judgment that the father owed our client child support arrearages.
For your appeals matter, contact Niles Illich at Scott H. Palmer, P.C. by calling (214) 891-3382.