                      NOTICE: NOT FOR OFFICIAL PUBLICATION.
  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                  AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.




                                     IN THE
              ARIZONA COURT OF APPEALS
                                 DIVISION ONE


                               In re the Matter of:

                    LAURIE E. CURTO, Petitioner/Appellee,

                                         v.

                ANTHONY W. CURTO, Respondent/Appellant.

                            No. 1 CA-CV 14-0615 FC
                              FILED 9-22-2015


            Appeal from the Superior Court in Maricopa County
                           No. FC2002-005685
               The Honorable Gerald Porter, Judge, Retired

                       VACATED AND REMANDED


                                    COUNSEL

Hallier & Lawrence, PLC, Phoenix
By Andrea Christine Lawrence, Christy C. Brown
Counsel for Petitioner/Appellee

McCulloch Law Offices, Tempe
By Diana McCulloch
Counsel for Respondent/Appellant
                             CURTO v. CURTO
                            Decision of the Court



                      MEMORANDUM DECISION

Judge John C. Gemmill delivered the decision of the Court, in which
Presiding Judge Maurice Portley and Chief Judge Michael J. Brown joined.


G E M M I L L, Judge:

¶1           Anthony Curto (“Father”) appeals from the family court’s
order modifying child support. Because the family court erred in
determining the gross income of Laurie Curto (“Mother”), we vacate and
remand for further proceedings.

           FACTUAL AND PROCEDURAL BACKGROUND

¶2           Father and Mother divorced in 2004. Pursuant to the divorce
decree, Mother and Father shared joint legal decision-making of their two
children, and Mother was the primary residential parent. In 2012, the
children chose to reside with Father. Thereafter, Father petitioned to
modify legal decision-making, parenting time, and child support.1

¶3            The parties resolved the issues of legal decision-making and
parenting time prior to trial, leaving the issue of child support for the court
to determine. At the hearing, the parties disagreed on the extent to which
an inheritance received from Mother’s parents should be included in
Mother’s gross income for child support purposes. Taking the inheritance
into consideration, the court ordered Mother to pay $1116.53 per month in
child support from July 1, 2013 to May 31, 2014 and $1302.64 per month
thereafter.2 The court also awarded Father $2500 in attorney fees and costs.
By separate order, the court resolved the division of fees each parent would
pay for the court-appointed advisor. Father then filed this appeal.



1 The children turned eighteen in April 2015. The presumptive termination
date for child support was May 31, 2015. See Ariz. Rev. Stat. § 25-320 app.
§ 4 (2015) (“Guidelines”).

2 The court also added the amount of Mother’s earned income and
attributed to Mother the value of rent-free living. The parties have not
challenged these additions on appeal.



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                            Decision of the Court

                               DISCUSSION

¶4             Father argues the family court abused its discretion in
calculating Mother’s income and awarding attorney fees pursuant to
Arizona Revised Statutes (“A.R.S.”) section 25-324. We review the family
court’s order establishing the amount of child support for an abuse of
discretion. In re Marriage of Robinson & Thiel, 201 Ariz. 328, 331, ¶ 5, 35 P.3d
89, 92 (App. 2001). In determining whether the family court abused its
discretion, we consider whether an error of law was committed in the
process of reaching the discretionary conclusion. Grant v. Ariz. Pub. Serv.
Co., 133 Ariz. 434, 455-56, 652 P.2d 507, 528-29 (1982). We review the court’s
application of the Arizona Child Support Guidelines de novo as a question
of law. Mead v. Holzmann, 198 Ariz. 219, 220, ¶ 4, 8 P.3d 407, 408 (App.
2000).

I. Mother’s Gross Income

¶5             Pursuant to A.R.S. § 25-320(A), a court may order parents to
pay child support in “an amount reasonable and necessary” for the support
of their children. The Guidelines establish a standard for child support
based on “the reasonable needs of children and the ability of parents to
pay.” A.R.S. § 25-320 app. § 1(A) (2015)3 (“Guidelines”). The goal of that
standard is to approximate “the amount that would have been spent on the
children if the parents and children were living together.” Id.

       A.     Calculation of Mother’s Gross Income

¶6            The calculation of child support begins with a determination
of each parent’s gross income. Guidelines § 5(A). The term “gross income”
is broadly defined as

       [I]ncome from any source, and may include, but is not limited to,
       income from salaries, wages, commissions, bonuses,
       dividends, severance pay, pensions, interest, trust income,
       annuities, capital gains, social security benefits (subject to
       Section 26), worker’s compensation benefits, unemployment
       insurance benefits, disability insurance benefits, recurring
       gifts, prizes, and spousal maintenance.

Id. (emphasis added).


3Absent material revisions after the relevant dates, we cite the current
versions of statutes unless otherwise indicated.


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                            Decision of the Court

¶7            After her parents passed away, Mother received an
inheritance in the form of individual retirement accounts (“IRAs”). At the
hearing, Mother testified that she regularly transferred money from the
IRAs into a personal bank account to supplement her earned income. After
the hearing, the family court determined that Mother’s withdrawals of
“inherited funds” were “taxable monies” and utilized the amounts
withdrawn from the IRAs in determining mother’s gross income.

¶8           On appeal, neither party argues that the court erred in
considering withdrawals from the IRAs as part of Mother’s gross income.
Rather, Father argues that the court made a “math mistake” when it
determined that Mother’s average monthly withdrawals for the year 2013
amounted to $10,426.41.

¶9             This court has explained that gross income for child support
purposes is “the actual money or cash-like benefits received by the
household which is available for expenditures.” Cummings v. Cummings, 182
Ariz. 383, 385, 897 P.2d 685, 687 (App. 1994) (emphasis added). In
Cummings, we held that consistent gifts from grandparents should be
included in calculation of gross income for child support purposes. See id.
at 386, 897 P.2d at 688. We explained that § 25-320 does not “specify or limit
the items that the court may consider in determining a parent’s ‘financial
resources.’” Id. (quoting A.R.S. § 25-320). More recently, this court held
that principal withdrawn from a short-term retirement account “falls
within the Guidelines’ broad definition of gross income,” reasoning that
“categorizing these monies as income is both consistent with the overall
purposes of the Guidelines and the best interests of the child.” Milinovich
v. Womack, 236 Ariz. 612, 616, ¶ 15, 343 P.3d 924, 928 (App. 2015).

¶10           In Milinovich, we acknowledged two decisions from other
jurisdictions holding that money received from an inheritance may be
included in gross income. Id. at 617, ¶ 15, 343 P.3d at 929 (citing In re A.M.D.,
78 P.3d 741, 746 (Colo. 2003) (holding that inheritance monies saved or
invested are not included as gross income for purposes of calculating child
support, but monies used by the beneficiary “as a source of income either
to meet existing living expenses or to increase the recipient’s standard of
living,” including the drawdown of principal, “should be included in that
year’s gross income”); Gardner v. Yrttima, 743 N.E.2d 353, 356 (Ind. App.
2001) (explaining that many states “consider an inheritance as income
available for purposes of calculating child support”)). These holdings are
consistent with this court’s definition of gross income as “actual money”
received by a household that is “available for expenditures.” Cummings,
182 Ariz. at 385, 897 P.2d at 687.


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                            Decision of the Court

¶11            We agree that the court did not abuse its discretion when it
considered the portion of the inheritance Mother withdraws monthly as
gross income. Our review of the record confirms that those funds were
received by the household and became available for expenditures, and
“[t]here is no evidence to suggest that these monies were spent on any other
investments,” such as Mother’s investment home in Payson.

¶12            In calculating Mother’s income from the IRAs, however, the
court did not utilize the gross withdrawals Mother made from her inherited
funds. Rather, it appears that the court used the figures presented in
Mother’s demonstrative trial exhibits, which adjusted the withdrawals
from Mother’s IRAs by subtracting federal and state tax withholdings. The
court, therefore, used net income, rather than gross income, to calculate the
monthly average.4 See, e.g., Brevick v. Brevick, 129 Ariz. 51, 52, 628 P.2d 599,
600 (App. 1981) (defining “[n]et income from employment” as “gross
earnings less . . . Federal and State withholding”). The Guidelines prescribe
“gross income” as the starting point in calculating child support.
Guidelines § 5. Accordingly, the trial court did not follow the Guidelines.

¶13           The court also made deductions from Mother’s gross income
that are not contemplated by the Guidelines. After determining that
Mother withdrew a monthly average of $10,426 of inherited funds, the court
deducted from that amount: (1) $1500 per month for medical, dental and
vision insurance5; and (2) $2900 per month for Mother’s attorney fees and
costs “for having to maintain the action before the Court.”

¶14           Although section six of the Guidelines authorizes
“adjustments” to gross income for spousal maintenance and child support
for other children, it does not permit adjustments for a parent’s health
insurance or attorney fees. Guidelines § 6. Accordingly, the family court

4 According to her 1099s for that year, Mother withdrew a total of $160,797
from the IRAs in 2013. The 1099s also reflect state and federal tax
withholdings of $35,683 on those withdrawals, resulting in after-tax income
of $125,117. When divided by twelve, the after-tax income yields the figure
of monthly average of $10,426 utilized by the court.

5 The vast majority of this $1500 reflected the cost of Mother’s own health
insurance. Section Nine of the Guidelines provides that the cost of the
children’s, but not a parent’s, medical dental and/or vision insurance
coverage should be added to the basic child support obligation. Guidelines
§ 9(A).



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                           Decision of the Court

did not follow the Guidelines when it applied these deductions to Mother’s
income.

      B.     No Explanation for Deviation from Guidelines

¶15             Deviation from the Guidelines can be appropriate in some
cases, however. Section 20 of the Guidelines provides the court with
“flexibility to deviate from the Guidelines when unique circumstances of a
particular case so demand.” Mead, 198 Ariz. at 223, ¶ 14, 8 P.3d at 411. The
court shall deviate from the Guidelines when the following criteria are met:

      1. Application of the guidelines is inappropriate or unjust in
         the particular case,

      2. The court has considered the best interests of the child in
         determining the amount of a deviation. A deviation that
         reduces the amount of child support paid is not, by itself,
         contrary to the best interests of the child,

      3. The court makes written findings regarding 1. and 2. above in
         the Child Support Order, Minute Entry or Child Support
         Worksheet,

      4. The court shows what the order would have been without the
         deviation, and

      5. The court shows what the order is after deviating.

Guidelines § 20(A) (emphasis added).

¶16            Here, the family court did not satisfy the Section 20(A)
criteria. The order modifying child support did not contain any findings to
support why the court did not include as Mother’s monthly income the pre-
tax or “gross” amount that she withdrew from her inherited funds, rather
than the after-tax amount. Likewise, the order did not reflect that the court
had “considered the best interests of the child[ren]” in making deductions
from gross income for Mother’s health insurance and attorney fees. Finally,
the order did not show what the monthly child support would have been
without the deductions in Mother’s favor. See Milinovich, 236 Ariz. at 618,
¶ 20, 343 P.3d at 930 (“[A] deviation from any provision of the Guidelines
requires a trial court to make written findings, including a showing of what
the child support order would have been without the deviation.”).




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                             CURTO v. CURTO
                            Decision of the Court

¶17           Because the court did not follow the Guidelines or explain
why it did not, we vacate the child support order and remand for
reconsideration of Mother’s income. In remanding, we acknowledge the
family court’s authority to deviate from the Guidelines if appropriate, but
emphasize the court must make findings and explain any deviation as
required by Section 20. See, e.g., Gallegos v. Gallegos, 174 Ariz. 18, 21-22, 846
P.2d 831, 834-35 (App. 1992) (directing deviation from the Guidelines in a
case involving income received from a personal injury settlement by a
father, who was a quadriplegic, and needed significant income to meet his
medical expenses).

II. Attorney Fees

¶18           A trial court has discretion in awarding attorney fees and
costs. Davis v. Davis, 9 Ariz. App. 49, 54, 449 P.2d 66, 71 (1969). The family
court exercised its discretion by awarding Father $2500 in attorney fees and
costs. We find no abuse of discretion, and affirm the family court’s award
of fees.

¶19           Mother and Father both request an award of attorney fees and
costs on appeal in accordance with A.R.S. § 25-324. Having reviewed the
record, the position of the parties on appeal and efforts to resolve their
dispute short of the appeal, we exercise our discretion and deny both
requests for fees on appeal. However, as the prevailing party, Father is
entitled to recover his taxable costs on appeal upon compliance with
ARCAP 21.

                               CONCLUSION

¶20           For the foregoing reasons, we vacate the family court’s order
modifying child support and remand for reconsideration upon
recalculation of Mother’s gross income. Upon remand, the court may also
consider anew any additional fee request by either parent in accordance
with A.R.S. § 25-324.




                                    :ama



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