Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before
any court except for the purpose of
establishing the defense of res judicata, Jan 10 2014, 9:22 am
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
R. ALLAN KUHLMAN AARON WESTLAKE
Indianapolis, Indiana Thomas Law Firm, P.C.
Auburn, Indiana
IN THE
COURT OF APPEALS OF INDIANA
LUIS ANTONIO PALACIO, )
)
Appellant-Respondent, )
)
vs. ) No. 49A02-1305-DR-397
)
RAQUEL VILLAVICENCIO, )
)
Appellee-Petitioner. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable David J. Dreyer, Judge
The Honorable Patrick Murphy, Commissioner
Cause No. 49D10-1001-DR-3079
January 10, 2014
MEMORANDUM DECISION - NOT FOR PUBLICATION
BRADFORD, Judge
CASE SUMMARY
Appellant-Respondent Luis Antonio Palacio (“Father”) married Appellee-Petitioner
Raquel Villavicencio (“Mother”) on June 29, 2002. One child was born during the course of
the parties’ marriage. The parties subsequently divorced. On April 9, 2010, the parties filed
a “Final Settlement Agreement” (“Settlement Agreement”) in which they agreed to certain
items, including Father’s child support obligation. Approximately two years later, Father
filed a verified petition for modification of his child support obligation, alleging that there
had been a substantial and continuing change in the parties’ circumstances that made the
existing child support order unreasonable. Following a two-day hearing conducted on
August 30, 2012, and February 26, 2013, the trial court denied Father’s request to modify his
child support obligation. Father now appeals the denial of his request to modify his child
support obligation. Upon review, we affirm.
FACTS AND PROCEDURAL HISTORY
Mother and Father were married on June 29, 2002. They are the parents of one child,
Y.V., who was born on December 13, 2005. Mother and Father subsequently divorced. On
April 9, 2010, Mother and Father filed a Settlement Agreement in which they agreed that
Mother would have sole physical custody of Y.V., Father would have parenting time
pursuant to the Indiana Parenting Time Guidelines, and Mother and Father would share joint
legal custody of Y.V. Mother and Father also agreed that $903.00 in weekly income would
be imputed to Father, and that as a result of this income, Father’s weekly child support
obligation would be $97.00.
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Mother and Father acknowledged, however, that at the time they entered into the
Settlement Agreement, Father was working to obtain his doctorate in physics. In light of
Father’s educational pursuits, Mother and Father agreed to defer a portion of Father’s weekly
child support obligation for a period of two years or until Father graduated with his doctorate
in physics, whichever occurred first. During the deferral period, Father would pay $48.50 per
week in child support. At the conclusion of the deferral period, Father’s child support
obligation would become $97.00 per week. Father would also pay an additional $48.50 per
week, for a total of $145.50 per week, until the deferred balance of $5044.00 was paid in full.
The Settlement Agreement was accepted by the trial court. Father subsequently made a lump
sum payment of $2552.00 toward the deferred child support, leaving a balance of $2492.00.
On April 27, 2012, Father filed a Verified Petition for Modification, in which he
claimed that he was entitled to a modification of his child support obligation because there
had been a substantial and continuing change of his and Mother’s circumstances that made
the existing child support order unreasonable. The trial court conducted a two-day
evidentiary hearing on August 30, 2012, and February 26, 2013, at which time it heard
argument and accepted evidence relating to Father’s request for a modification of his child
support obligation. On April 3, 2013, the trial court denied Father’s request to modify his
child support obligation.
DISCUSSION AND DECISION
On appeal, Father contends that the trial court abused its discretion by denying his
request to modify his child support obligation.
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In reviewing the trial court’s decision regarding the modification of child
support, we reverse only for an abuse of discretion. In re Marriage of Kraft,
868 N.E.2d 1181, 1185 (Ind. Ct. App. 2007). An abuse of discretion occurs
when the decision is clearly against the logic and effect of the facts and
circumstances before the court, including any reasonable inferences therefrom.
In re Paternity of E.M.P., 722 N.E.2d 349, 351 (Ind. Ct. App. 2000). Whether
the standard of review is phrased as “abuse of discretion” or “clear error,” the
importance of first-person observation and preventing disruption to the family
setting justifies deference to the trial court. MacLafferty v. MacLafferty, 829
N.E.2d 938, 940-41 (Ind. 2005).
Holtzleiter v. Holtzleiter, 944 N.E.2d 502, 505 (Ind. Ct. App. 2011).
Generally, child support obligations are modifiable whether they are court ordered or
the result of parties’ agreements. See Hay v. Hay, 730 N.E.2d 787, 791 (Ind. Ct. App. 2000).
Modification of child support is governed by Indiana Code section 31-16-8-1, which states,
(a) Provisions of an order with respect to child support ... may be modified or
revoked.
(b) Except as provided in section 2 of this chapter, modification may be made
only:
(1) upon a showing of changed circumstances so substantial and
continuing as to make the terms unreasonable; or
(2) upon a showing that:
(A) a party has been ordered to pay an amount in child support
that differs by more than twenty percent (20%) from the amount that would be
ordered by applying the child support guidelines; and
(B) the order requested to be modified or revoked was issued at
least twelve (12) months before the petition requesting modification was filed.
However, as this court concluded in Hay, and subsequently reaffirmed in Reinhart v.
Reinhart, 938 N.E.2d 788,792 (Ind. Ct. App. 2010), “when a parent has agreed to pay support
in excess of the guidelines and which could not be ordered by a trial court, that parent must
show a substantial change in circumstances independent of the twenty percent deviation to
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justify modification.”1 Hay, 730 N.E.2d at 795. The party seeking to modify a child support
order bears the burden of establishing that the requirements of section 31-16-8-1 have been
met. Holtzleiter, 944 N.E.2d at 505 (citing Saalfrank v. Saalfrank, 899 N.E.2d 671, 675 (Ind.
Ct. App. 2008)).
A. Imputation of Income
In arguing that the trial court abused its discretion by denying his request to modify his
child support obligation, Father claims that the trial court erroneously imputed income to
him. Specifically, Father claims that he did not agree in the Settlement Agreement that
certain income should be imputed to him for the purpose of determining his child support
obligation. However, the trial court found, and the record clearly demonstrates, otherwise.
The trial court made a factual finding that, pursuant to the terms of the Settlement
Agreement, $903.00 in weekly income should be imputed to Father. The trial court based
1
In reaching this conclusion, this court recognized that while the plain language of Indiana Code
section 31-16-8-1(b)(2) would seemingly permit modification under any circumstance where a twenty percent
differential exists, the court found it “difficult to believe that the legislature intended to permit a child support
agreement to be so easily circumvented by virtue of the differential in the support obligation amounts where
there was not a change of circumstances independent from that provided by [Indiana Code section 31-16-8-
1(2)].” Hay, 730 N.E.2d at 794.
To reduce support on [the basis of a twenty percent deviation] alone vitiates the agreement of
the parties and runs contrary to the public policy of encouraging parties to agree on matters of
child custody and support. See Ind. Code § 31-15-2-17(a)(3) (“To promote the amicable
settlements of disputes that have arisen or may arise between the parties to a marriage
attendant upon the dissolution of their marriage, the parties may agree in writing to provisions
for: ... (3) the custody and support of the children of the parties.”); Clark v. Madden, 725
N.E.2d 100, 106 (Ind. Ct. App. 2000) (“[W]e encourage parents to come to agreements for
educational expenses as soon as possible.”); Mundon v. Mundon, 703 N.E.2d 1130, 1134
(Ind. Ct. App. 1999) (“Indiana law ‘expressly encourages’ divorcing spouses to reach such
agreements.”).
Id. at 794-95; see also MacLafferty, 829 N.E.2d at 941 n.5 (citing Hay with apparent approval).
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this finding on the express language of the Settlement Agreement that was submitted and
signed by the parties and accepted by the trial court. In family law matters, such as questions
regarding child support, we defer to the factual findings of the trial court. See MacLafferty,
829 N.E.2d at 940 (providing that appellate courts give considerable deference to the factual
findings of the trial court as the trial court “is in the best position to judge the facts, to get a
feel for the family dynamics, to get a sense of the parents and their relationship with their
children—the kind of qualities that appellate courts would be in a difficult position to
assess”). In addition, the record demonstrates that in the Child Support Obligation
Worksheet that was filed with the Settlement Agreement, the parties agreed that Father
should have $903.00 in weekly income assessed to him, and that in light of this agreed
income, his child support obligation should be set at $97.00 per week.
A decision to impute income to a party is within the sound discretion of the trial court.
See J.M. v. D.A., 935 N.E.2d 1235, 1240-41 (Ind. Ct. App. 2010). Here, in light of the
factual determination of the trial court as well as the evidence presented during the
evidentiary hearing establishing the parties’ intent to impute $903.00 in weekly income to
Father, we conclude that the trial court did not abuse its discretion in continuing to impute
$903.00 in weekly income to Father.2
B. Substantial and Continuing Change in Circumstances
Father also claims that the trial court abused its discretion in denying his request for
2
Having concluded that the trial court did not abuse its discretion in imputing $903.00 in weekly
income to Father, we need not consider Father’s claim that he was entitled to a modification of his child
support obligation because without said imputed income, the child support order represented a twenty percent
deviation from the amount of child support that could otherwise be ordered by the trial court.
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modification of his child support obligation because there had been a substantial and
continuing change of circumstances, i.e., he had yet to graduate from the doctorate program
in which he was enrolled. The parties acknowledged that at the time they entered into the
Settlement Agreement, Father was continuing work on a doctorate degree in physics.
Accordingly, the parties agreed to defer a portion of Father’s child support obligation for a
period of two years or until he graduated from the doctorate program, whichever came first.
During the deferment period, Father’s child support obligation was set at $48.50 per week.
After the conclusion of the two year period or Father’s graduation, again, whichever came
first, Father’s full $97.00 per week child support obligation would go into effect. In addition,
Father would pay an additional $48.50 per week, for a total of $145.20 per week, until the
balance of $5044.00 in deferred child support was paid in full.
The substantial and continuing change of circumstance claimed by Father is his failure
to graduate from the doctorate program before the expiration of the two-year child support
deferral period. Father presented evidence that he is on schedule with his doctoral work but
is not expected to graduate from the doctoral program until 2014 or 2015. The mere fact that
Father failed to complete the doctorate program within the two-year deferral period,
however, does not constitute a substantial and continuing change of circumstances from the
parties’ circumstances at the time they entered into the Settlement Agreement as the
Settlement Agreement contemplated the possibility that Father may not complete the program
within two years but explicitly stated that the deferral period would end “[a]t the end of two
years, or upon graduation from the Doctorate Program in Physics (whichever comes first).”
7
Appellant’s App. p. 7.
Again, at the time of the evidentiary hearing on Father’s request to modify his child
support obligation, Father was continuing his doctoral work and was on schedule to graduate
in either 2014 or 2015. Father was also working as a teaching fellow at Indiana University-
Purdue University Indianapolis (“IUPUI”). As a part of his fellowship, Father teaches
science at a local high school in addition to his research responsibilities. Father is paid for
his work as a teaching fellow at IUPUI, and this payment, which is more than Father was
earning at the time he and Mother entered into the Settlement Agreement, covers most of the
income that the parties agreed should be imputed to Father. As such, we conclude that the
trial court did not abuse its discretion in determining that there had not been a substantial and
continuing change of the parties’ circumstances that would warrant a modification of
Father’s child support obligation.
The judgment of the trial court is affirmed.
MATHIAS, J, and PYLE, J., concur.
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