                                                                           FILED
                                                                      Jul 30 2020, 8:39 am

                                                                           CLERK
                                                                       Indiana Supreme Court
                                                                          Court of Appeals
                                                                            and Tax Court




ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEE
Thomas M. Frohman                                          VIGO COUNTY CHILD SUPPORT
Nicholas J. Minaudo                                        BUREAU
Indiana Legal Services                                     Curtis T. Hill, Jr.
Bloomington, Indiana                                       Attorney General of Indiana

                                                           Frances Barrow
                                                           Deputy Attorney General
                                                           Indianapolis, Indiana



                                             IN THE
    COURT OF APPEALS OF INDIANA

Jason L. Hill,                                             July 30, 2020
Appellant-Defendant,                                       Court of Appeals Case No.
                                                           19A-DR-2701
        v.                                                 Appeal from the Vigo Superior
                                                           Court
Jessica L. Cox,                                            The Honorable Lakshmi Reddy,
Appellee-Petitioner                                        Judge
                                                           Trial Court Cause No.
and                                                        84D02-0201-DR-14

Vigo County Child Support
Office,
Appellee-Intervenor




May, Judge.



Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020                              Page 1 of 11
[1]   Jason L. Hill (“Father”) appeals the trial court’s ruling on his motion to correct

      error. Father argues the court erred by not crediting monies his daughter S.H.

      (“Daughter”) received in connection with his receipt of social security disability

      benefits toward his obligation for Daughter’s uninsured medical expenses. We

      reverse and remand with instructions.



                             Facts and Procedural History
[2]   Father and Jessica L. Cox (“Mother”) divorced in 2002. Daughter was born of

      the marriage in February 2001. The court ordered Father to pay child support

      as part of the dissolution decree, but Father was inconsistent in making such

      payments and began accruing an arrearage. On October 31, 2014, the trial

      court issued an order modifying Father’s child support obligation to forty-five

      dollars a week.


[3]   Father applied for social security disability benefits in December 2015. On

      February 27, 2018, the Social Security Administration (“SSA”) determined that

      Father was disabled. The SSA then paid Father a lump sum amount

      representing the benefits he was entitled to receive while his disability

      application was pending, and the SSA also paid a portion of this lump sum

      payment to Daughter through Mother as Daughter’s representative payee.

      Daughter received a lump sum of $14,306.00 on May 14, 2018. Thereafter, the

      SSA also made monthly payments to Daughter until Daughter turned eighteen

      in February 2019. For the remaining seven months of 2018, the SSA paid



      Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020           Page 2 of 11
      Daughter $502.00 a month. For the first two months of 2019, the SSA paid

      Daughter $512.00 a month.


[4]   As of May 14, 2018, Father had accumulated an arrearage of $9,225.00 in back

      support. At that time, Father also owed $3,174.37 for uninsured medical

      expenses that Daughter incurred in 2015. In 2018, Daughter had two hip

      surgeries that resulted in Father incurring responsibility for an additional

      $1,904.76 of medical debt.


[5]   On July 2, 2019, Father filed a petition to reduce his child support obligation

      and to reduce his arrearage by the dependent benefits Daughter received from

      the SSA. The court held a hearing on Father’s petition on August 27, 2019. At

      the time of the hearing, Daughter was a high school student with an expected

      graduation date in May 2020. The Vigo County Prosecuting Attorney

      represented the State at the hearing. 1 At the hearing, Father argued a medical

      support obligation is part of a child support obligation, such that the money

      Daughter received from SSA should be credited toward the amount he owed for

      back support and for Daughter’s uninsured medical expenses. Consequently,

      Father argued, he had more than satisfied his child support arrearage and both

      existing medical expense obligations.




      1
       Indiana law requires the Child Support Bureau of the Indiana Department of Child Services to “contract
      with: (1) a prosecuting attorney . . . in each judicial circuit to undertake activities required to be performed
      under Title IV-D of the federal Social Security Act (42 U.S.C. 651), including . . . establishment,
      enforcement, and modification of child support orders[.]” Ind. Code § 31-25-4-13.1.

      Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020                                     Page 3 of 11
[6]   On October 3, 2019, the trial court issued an order determining that Daughter’s

      receipt of the $14,306.00 lump sum disability payment on May 14, 2018,

      eliminated Father’s back-support arrearage of $9,225.00 and resulted in Father

      overpaying his back-child-support obligation by $5,081.00. The trial court

      concluded that overpayment covered the $3,174.37 in uninsured medical

      expenses that Daughter incurred in 2015, and the court determined the

      remaining $1,906.63 from the lump-sum payment constituted a gift from Father

      to Daughter.


[7]   Next, the trial court determined the monthly disability payments Daughter

      received for seven months in 2018 and two months in 2019 resulted in a

      $2,660.00 overpayment of child support. The trial court determined that it

      retained discretion regarding whether to credit that overpayment toward the

      $1,904.76 in medical debt resulting from Daughter’s 2018 hip surgeries, and the

      trial court chose not to credit this overpayment toward that medical debt. The

      trial court reasoned that its order was “rather generous to Father whose child

      support obligation had only been $45/week and it costs much more than

      $45/week to financially support a child which means that Mother was covering

      the extra expense plus the child support [amount] that Father failed to pay for

      years.” (Appellant’s App. Vol. II at 34.)


[8]   Father filed a motion to correct error, arguing in part that the trial court erred in

      refusing to allocate his monthly overpayments toward the $1,904.76 medical

      debt. The trial court issued an order on October 22, 2019, denying that portion

      of Father’s motion.

      Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020          Page 4 of 11
                                       Discussion and Decision
[9]    We generally 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, we apply a de novo

       standard of review when the issue presented for review is a pure question of

       law. Id.


[10]   At issue in this appeal is the trial court’s treatment of both the lump sum

       payment Daughter received in May 2018 and the nine monthly payments

       Daughter received between the lump sum payment and her 18th birthday in

       February of 2019. As a different part of Indiana Child Support Guideline

       3(G)(5)(b), which addresses the payment of “Arrearages” from Social Security

       Disability payments, applies to each of those forms of payment, we analyze the

       forms of payment separately.


[11]   First, as to the lump sum payment, both Father and the State 2 argue that

       remand is necessary in light of Indiana Child Support Guideline 3(G)(5)(b)(1),

       which states:


                  1. Credit for retroactive lump sum payment. A lump sum
                  payment of retroactive Social Security Disability benefits shall be



       2
           Mother proceeded pro se in front of the trial court, and she has not filed an appellate brief.


       Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020                                    Page 5 of 11
               applied as a credit against an existing child support arrearage if
               the custodial parent, as representative payee, received a lump
               sum retroactive payment, without the requirement of a filing of a
               Petition to Modify Child Support. However, no credit should be
               allowed under the following circumstances:


                        i. A custodial parent should never be required to pay
                        restitution to a disabled noncustodial parent for lump sum
                        retroactive Social Security Disability benefits which exceed
                        the amount of “court-ordered” child support. Any portion
                        of lump sum payments of retroactive Social Security
                        Disability benefits paid to children not credited against the
                        existing child support arrearage is properly treated as a
                        gratuity to the children. No credit toward future support
                        should be granted.


                        ii. No credit shall be given for a lump sum disability
                        payment paid directly to a child who is over the age of
                        eighteen (18). The dependency benefits paid directly to a
                        child who has reached the age of majority under the Social
                        Security law, rather than to the custodial parent, as
                        representative payee, do not fulfill the obligations of court-
                        ordered child support.


[12]   Father and the State agree that Father’s unpaid medical debt as of the date of

       the lump sum payment, May 14, 2018, should be considered part of Father’s

       then-existing child support arrearage. See Ind. Code § 31-9-2-125 (defining

       “support order” as “any judgment, decree, or order of child support, including

       medical support[.]”); and see Ind. Code § 31-16-6-4(a) (“A child support order

       must require either parent or both parents to provide medical support for the

       child through health insurance coverage if the health insurance coverage is


       Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020             Page 6 of 11
       available to the parent at a reasonable cost.”) 3 We agree that Father’s $3,174.37

       arrearage on Daughter’s medical expenses from 2015 is a child support

       arrearage. Because this arrearage existed at the time Daughter received the

       lump sum payment in May 2018, the trial court correctly applied the excess

       from the lump sum payment as a credit against Father’s $3,174.37 arrearage on

       Daughter’s medical expenses from 2015. See Ind. Child Support Guideline

       3(G)(5)(b)(1) (“A lump sum payment of retroactive Social Security Disability

       benefits shall be applied as a credit against an existing child support arrearage . .

       .”) (emphasis added).


[13]   However, the trial court refused to consider whether to apply the remaining

       surplus of $1,906.63 from the lump sum payment as a credit against the medical

       expenses for Daughter’s two hip surgeries in 2018. The trial court did not

       determine whether any of those surgical expenses were incurred before May 14,

       2018, such that they would have been “an existing child support arrearage” to

       which the lump sum payment “shall be applied.” See id. If any of those

       expenses accrued before of the lump sum payment, then the $1,906.63

       overpayment must be credited toward payment of that “existing child support

       arrearage.” See id. Accordingly, we reverse the trial court’s declaration that the

       $1,906.63 surplus from the lump sum payment was a gift from Father to

       Daughter, and we remand for the trial court to determine when in 2018



       3
         Additionally, the law governing each state’s eligibility to receive federal child welfare grants requires states
       to have in effect laws that provide for the children of divorce to receive medical support. 42 U.S.C. §
       666(a)(19).

       Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020                                     Page 7 of 11
       Daughter incurred medical expenses and to apply the surplus as a credit toward

       any medical expenses that existed as of May 14, 2018. See Ashworth v. Ehrgott,

       934 N.E.2d 152, 162 (Ind. Ct. App. 2010) (remanding with instructions to

       credit father for children’s health insurance premium). If none of Daughter’s

       uninsured medical expenses in 2018 accrued before May 14, then the $1,906.63

       surplus may again be denominated a gift from Father to Daughter. If only

       some of those expenses in 2018 accrued before May 14, then after those

       expenses are paid from the lump sum, any remaining money is a gift from

       Father to Daughter.


[14]   Next, we must determine whether the nine monthly overpayments of support

       that occurred from June 2018 to February 2019 can be applied to any of

       Daughter’s uninsured medical expenses that accrued in 2018 after May 14. The

       trial court declined to apply any of these monthly overpayments against the

       medical expenses that accrued for the two hip surgeries in 2018.


[15]   The State argues the trial court had discretion to not apply the excess monthly

       child support paid against the unpaid medical expenses arrearage because,

       unlike Child Support Guideline 3(G)(5)(b)(1), which says the court “shall”

       apply excess lump sum benefits against an arrearage, Child Support Guideline

       3(G)(5)(b)(2) provides the court “may” do so: “Application of current Social

       Security Disability benefits. The amount of the benefit which exceeds the child

       support order may be treated as an ongoing credit toward an existing

       arrearage.” Child Supp. G. 3(G)(5)(b)(2) (emphasis added).



       Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020       Page 8 of 11
[16]   However, the Commentary to Guideline 3G states: “The language in Guideline

       3.G.5.b.2 directs that the excess SSD benefit may be applied as payment toward

       an existing arrearage. Once the arrearage is satisfied, any portion of the SSD

       benefit that exceeds the current support obligation is considered a gratuity.”

       Accordingly, while the Guideline uses the term “may,” the Commentary by the

       drafters of the Guideline indicate that any current benefit in excess of the

       current support obligation is a gratuity only after “the arrearage is satisfied[.]”

       Commentary to Guideline 3(G).


[17]   Moreover, in Anderson v. Anderson, a father became disabled and began

       receiving social security disability benefits. 955 N.E.2d 236, 237 (Ind. Ct. App.

       2011). The couple’s daughter received benefits from her father’s account, both

       in the form of a lump sum and monthly payments. Id. The father filed a

       motion to modify his child support obligation, seeking to have the disability

       benefits paid to his daughter credited toward his child support arrearage. Id.

       We held that both the benefits the daughter received in the form of a lump sum

       payment and in the form of monthly payments should be credited toward the

       father’s arrearage. Id. at 241. We explained, “just as with lump-sum payments,

       applying periodic payments to an accumulated arrearage ‘is merely a method of

       payment applied to a past support obligation not paid.’” Id. (quoting Brown v.

       Brown, 849 N.E.2d 610, 614 (Ind. 2006)). In addition, we concluded “there is

       no principled reason to treat periodic SSD benefit payments to a child

       differently than lump-sum SSD benefit payments, i.e., it ‘shall be applied as a




       Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020          Page 9 of 11
       credit to an existing child support arrearage’ without the need to file a petition

       for modification.” Id. (quoting Brown, 849 N.E.2d at 614).


[18]   Therefore, to the extent Father overpaid his monthly child support obligation

       after Daughter incurred medical debt in 2018, that overpayment must be

       credited toward any medical debt that existed on the date of the overpayment.

       See id. An overpayment can be considered a gift to Daughter only if the

       overpayment: (1) preceded Daughter incurring medical debt; or (2) came after

       all medical debt arrearage had been paid. However, as we noted earlier, the

       trial court did not determine, and the parties have not directed us to evidence

       of, when in 2018 Daughter accrued these uninsured medical expenses for hip

       surgeries.


[19]   To the extent Father made the overpayments after any portion of the medical

       debt accrued, the overpayments should be credited towards the medical debt.

       See Anderson, 955 N.E.2d at 241. Therefore, we remand with instructions for

       the trial court to determine the amount of Father’s overpayment, whether in the

       form of a lump sum payment or monthly payments, made after Daughter

       accrued the medical debts in 2018 and to apportion that overpayment toward

       Father’s responsibility for the debt. At a minimum, any overpayment from the

       two payments Daughter received in 2019, before she turned eighteen, should be

       credited toward the unpaid medical debt. See Fritts v. Fritts, 28 N.E.3d 258, 267

       (Ind. Ct. App. 2015) (remanding for trial court to correct arrearage calculation),

       reh’g denied.



       Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020        Page 10 of 11
                                                 Conclusion
[20]   The trial court erred by not first determining when in 2018 Daughter incurred

       medical debts related to her two hip surgeries. Father’s responsibility for that

       medical debt made up a part of Father’s child support arrearage as of the dates

       when Daughter accrued the debts. Consequently, any overpayment of Father’s

       child support obligation that occurred after Daughter incurred the 2018 medical

       debt should be credited toward Father’s obligation for the medical debt.

       Therefore, we remand this matter to the trial court for further factfinding and a

       new final order that is consistent with the law discussed herein.


[21]   Reversed and remanded with instructions.


       Robb, J., and Vaidik, J., concur.




       Court of Appeals of Indiana | Opinion 19A-DR-2701 | July 30, 2020       Page 11 of 11
