Wednesday, January 14, 2009

College Expenses and Child Support Payments: Indiana

One thing that I often get asked about is Child Support Payment Orders and college education. Our Indiana Supreme Court has determined that dissolution of marriage provides parents with the resources to fully fund a child's college education. I was under the impression that split families incurred greater expenses and actually had less money available to pay for their children's college education but what do I know. I don't get paid obscene amounts of money to sit in the Statehouse and handout opinions instead of participating in the real world where you have to work for what you have.

Today I am examining the case of PATRICIA SUE BECK v MARK ALLEN BECK Cause No. 76A03-0807-CV-341. This is an appeal from the Steuben Superior Court where the Honorable William C. Fee, Judge, presided at the trial court level under Cause No. 76D01-0511-DR-377. This is an unpublished opinion issued on 29 December 2008. Judge Fee is a member of the Supreme Court Child Support Committee and should know child support law better than your typical family court judge.

Appellant-Petitioner, Patricia Sue Beck (Patricia), appeals the trial court’s judgment ordering Appellee-Respondent, Mark Allen Beck (Mark), to pay only $2,471.32 of their daughter, K.B.’s, college expenses. We affirm.

Patricia presents one issue for our review, which we restate as: Whether the trial court erred in applying the college expenses provision of the parties’ property settlement agreement.

It is important to first note that under Indiana Code § 31-16-6-6(a)(1), a court may order payment for post-secondary educational costs continuing past the time the child reaches age twenty-one. Martin v. Martin, 495 N.E.2d 523 (Ind. 1986). So for everyone who asks about support ending at age 21 there is an answer for you. In additional to the educational cost, health care cost may also be assessed against parents although case law conflicts on this. In Schueneman v. Schueneman, 591 N.E.2d 603 (Ind. Ct. App. 1992), the court held that it was within a trial court’s discretion to include payments for health insurance in a post-secondary educational order, even if such payments continue beyond the child’s twenty-first birthday. However, later in Sebastian v. Sebastian, 798 N.E.2d 224 (Ind. Ct. App. 2003), the court found that “[a]ny medical and dental expenses are part of support and terminate at age twenty-one.”

In January 2006 the parties had agreed to a property settlement in their dissolution action wherein K.B. would pay 1/3 of her college expenses. Of the remainder Mark would pay 59% and Patricia would pay 41%. K.B. Had already completed a significant amount of credits when the settlement was tendered.

The relevant portion of the agreement reads, “The parties agree that their minor daughter, [K.B.], is currently enrolled in college.” That “college expenses” includes “tuition, room and board, books, lab fees, supplies, and student activity fees associated with her college education.”

K.B. incurred $6,283.00 in college expenses for the spring semester of 2006. After the trial court entered its dissolution decree, K.B. did not incur any further expenses. She signed up for classes for the fall of 2006, but she eventually withdrew and was not charged. From 2003 to 2006, K.B. incurred approximately $72,000.00 in student loan debt.

Later in the year Patricia filed a Motion for Contempt against Mark alleging he had failed to pay his portion of K.B. College expenses. The trial court found that K.B. had “prepaid” $6,283.00 in expenses “at the time of (or just days prior to) the execution of the Property Settlement Agreement and entry of the Final Decree” and had not incurred any additional expenses since that time, the trial court ordered Mark to pay $2,471.32 which is 59% of two-thirds of $6,283. Furthermore, because Patricia “has signed a student loan used by [K.B] pay the college billing and is paying the monthly payment on that loan,” the trial court ordered Mark to pay the money directly to Patricia. Patricia filed a motion to correct error, which the trial court denied.

In her appeal Patricia contends that the trial court erred in not applying the settlement agreement retroactively for the purpose of getting Mark to pay her 59% of 2/3's of $72,000. However, since the agreement applied to K.B.'s current college expenses it would require the court to rewrite the agreement which it may not do. This is addressed in Shorter v. Shorter, 851 N.E.2d 378, 382-83 (Ind. Ct. App. 2006).

The Court of Appeals found that it would be illogical to apply the agreement to the previously incurred college expenses. This is the portion that I found most interesting and wanted to pass along to you. Construing the college expenses provision to require Patricia and Mark to pay K.B.’s previously-incurred expenses would make no sense: those expenses have already been paid through K.B.’s scholarships and student loans. To the extent that Patricia argues that the parties were agreeing to pay a portion of K.B.’s existing student loans in addition to a portion of her future college expenses the court found two problems. First, student loans are not “college expenses.” Student loans are used to pay college expenses. The college expenses provision says nothing about the payment of student loans. Second, and more importantly, if Patricia and Mark had considered K.B.’s existing student loans to be their own personal debt, the dollar amount was easily ascertainable and could have been listed in the “Debts” section of Exhibit A to the property settlement agreement, just like the parties’ other debts. It was not.

So, in writing agreements that include college educational expenses litigators and attorneys must be aware of the language used and make particular stipulation as to exactly what is included.

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©2008, 2009 Stuart Showalter, LLC. Permission is granted to all non-commercial entities to reproduce this article in it's entirety with credit given.

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