Hardman v. Hardman , 295 Ga. 732 ( 2014 )

In the Supreme Court of Georgia
Decided: September 22, 2014
S14A1187. HARDMAN v. HARDMAN.
NAHMIAS, Justice.
William Jackson Hardman III (Father) appeals from the trial court’s grant
of summary judgment and award of attorney fees to Mary Ann Hardman
(Mother), in an action he filed for declaratory judgment and contempt based on
their divorce decree. We reverse the grant of summary judgment, reverse in part
and vacate in part the award of attorney fees, and remand for further
proceedings.
1. The parties were married in 1992 and divorced in Rabun County on
March 25, 2013. They have three children, including twin boys who are minors.
Under the parties’ settlement agreement, which was incorporated into the final
divorce decree, Father and Mother share joint legal custody of the minor
children, while Mother has primary physical custody. As joint legal custodians,
the parties are to participate jointly in decisions regarding, among other issues,
the children’s education, including the choice of schools. In the event of
disagreement, however, Father is given final decision-making authority as to
education and health care issues, while Mother is the final decision-maker as to
religion and extracurricular activity issues. The settlement agreement says that
Father must pay Mother $7,000 per month, plus 30% of any annual gross
income between $200,000 and $500,000, in “alimony” payments for 78 months
or until she remarries or dies. The agreement also says that “[n]either party shall
pay child support to the other at this time,” but if Mother’s “alimony” is
terminated while the children are minors or in high school, Father’s child
support obligation will be $2,000 per month.1 Although the 24-page settlement
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The record indicates that the parties agreed that Father would pay no child support and
would instead pay a higher alimony amount to give him a tax advantage, as alimony is tax deductible
but child support is not. If taken at face value, such an agreement appears contrary to Georgia law,
because divorcing parents may not agree to waive child support to augment the amount of alimony
to be received by the custodial parent. See Swanson v. Swanson, 276 Ga. 566, 567 (580 SE2d 526)
(2003). We also note that the child support worksheet shows that Father should pay a presumptive
child support amount of $2,127 per month, but this exact amount is then eliminated by a downward
specific deviation for “alimony paid.” See OCGA § 19-6-15 (i) (2) (G) (“Actual payments of
alimony shall not be considered as a deduction from gross income but may be considered as a
deviation from the presumptive amount of child support.”). Even assuming that alimony paid
between the same parties allows such a deviation, compare OCGA § 19-6-15 (f) (1) (A) (xxi)
(alimony is included in the recipient’s gross income only when “received from persons other than
parties to the proceedings before the court”), the amount of the deviation here does not reflect the
amount of alimony set forth in the settlement agreement, and the trial court did not make the written
findings required to support such a deviation. See OCGA § 19-6-15 (i) (2) (G) (“If the
court . . . considers the actual payment of alimony, the court shall make a written finding of such
consideration . . . as a basis for deviation from the presumptive amount of child support.”). See also
OCGA § 19-6-15 (c) (2) (E), (i) (1) (B) (reiterating the requirement of written findings for
deviations). Notwithstanding these concerns, at this point neither party has challenged the validity
of the alimony and child support provisions of the divorce decree, and so we will proceed on the
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agreement is quite detailed, it contains no specific provision regarding payment
for the children’s school expenses, and the child support worksheet attached to
the divorce decree does not include any deviation for extraordinary educational
expenses.
The parties’ oldest child, who is now in college, attended Rabun Gap-
Nacoochee School, a private school for grades 6 to 12. The two minor children
began attending the same school starting in sixth grade in the 2010-2011 school
year, and they have remained there for four school years. The combined tuition
for both children is now about $2,605 per month. Before the divorce
proceedings, the parties paid the private school tuition using joint marital funds,
with Father generally writing the check. After the divorce, Mother refused to
pay the tuition and threatened to move the children to a public school in North
Carolina, where she lives, unless Father paid it.
Father made an advance tuition payment of $9,453.56 so the boys could
enroll for the 2013-2014 school year; he then filed a complaint seeking
reimbursement and a declaratory judgment as to whether Mother is required to
assumption that Mother either waived her entitlement to receive child support payments to help her
pay the children’s expenses or that, putting substance over form, such child support is a component
of the “alimony” payments she receives.
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pay the tuition out of her $7,000 monthly alimony payments and whether she
can remove the children to school in another state. The complaint also sought
an order enjoining Mother from removing the boys from the private school,
asked that Mother be held in contempt, and requested attorney fees under
OCGA § 13-6-11. In response, Mother filed a motion for summary judgment
and a motion for attorney fees under OCGA §§ 9-15-14 and 19-6-2.2
On December 20, 2013, the trial court entered an order granting Mother’s
motion for summary judgment on the ground that Father’s action was barred by
the doctrine of res judicata. The court concluded that, if Father “intended for
[Mother] to pay the private school costs out of the alimony he pays her each
month, he should have written that intent in the Settlement Agreement” rather
than trying to “relitigate the Settlement Agreement in order to supplement its
terms.” The court also rejected Father’s argument that he needed clarification
of the settlement agreement, noting that “[s]imply writing that [Father] has final
authority on educational issues does not create an ambiguity as to payment of
private school tuition.” Finally, after finding that Father’s complaint for
2
We note that Father has not moved for summary judgment.
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declaratory judgment and his action for contempt “lacked substantial
justification,” the court granted Mother’s motion for attorney fees and ordered
Father to pay $5,500 to Mother’s counsel pursuant to OCGA § 9-15-14.
This Court granted Father’s discretionary application to appeal.
2. Father argues correctly that the trial court erred by applying the
doctrine of res judicata strictly in the context of this divorce case. In response
to Mother’s defense of res judicata, the trial court held that this case was
“controlled” by Lay Brothers, Inc. v. Tahamtan, 236 Ga. App. 435 (511 SE2d
262) (1999), a civil case involving the terms of a property lease. The Court of
Appeals held there that res judicata barred the owner’s request for a declaratory
judgment that the lease required the tenant to pay the property taxes, because the
parties had previously litigated about the lease and – under the usual rules of res
judicata – a party is barred from re-litigating not only claims that actually were
adjudicated previously, but also claims concerning the same subject matter that
could have been adjudicated before between the same parties or their privies.
See id. at 435-436. The silence of the lease on the issue of property tax payment
was therefore dispositive, because the owner had the opportunity in the first
proceeding to seek a ruling that the lease required the tenant to pay the taxes but
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did not obtain such a judgment. See id. at 437. Likewise, the trial court here
reasoned, the divorce proceeding resulted in a settlement agreement and final
decree that do not expressly say which party pays for private school tuition, and
thus Father cannot pursue a new action to “supplement” the agreement with a
term requiring Mother to pay.
This Court has held, however, that the doctrine of res judicata – and in
particular, the rule that bars re-litigation of matters that could have been, but
were not actually, raised and decided in a previous action – should not be
applied “mechanical[ly]” in divorce and alimony cases. See Brookins v.
Brookins, 257 Ga. 205, 205-206 (357 SE2d 77) (1987). “‘[T]he true rule of res
judicata in divorce and alimony cases,’” we explained in Brookins, is that “‘a
final decree has the effect of binding the parties and their successors as to all
matters which were actually put in issue and decided, or which by necessary
implication were decided between the parties.’” Id. at 207 (emphasis changed;
citation omitted). Or as the Court of Appeals later put the point, “the doctrine
of res judicata is less strictly applied in divorce and alimony cases, including
cases dealing with child support issues,” and does not bar litigation of matters
that merely could have been put at issue in the earlier proceeding. Dial v.
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Adkins, 265 Ga. App. 650, 651 (595 SE2d 332) (2004).
Looking past the trial court’s misperception of the applicable res judicata
standard, however, the divorce decree in this case is properly read as requiring
Wife to pay the minor children’s private school tuition as long as Father decides
that they should attend private school, as we explain in the next division. The
issues as to which Father sought a declaration of his rights were adjudicated in
his favor in the divorce proceeding, as reflected in the divorce decree, so he was
entitled to the declaratory judgment he sought and Mother’s res judicata defense
should have been rejected under any version of that doctrine.
3. Mother contends that the trial court’s grant of summary judgment
to her should be affirmed because the divorce decree and incorporated
settlement agreement do not say that she must pay private school tuition and
therefore Father must pay it. We disagree.
(a) To begin with, one of the issues on which Father sought a
declaratory judgment was whether the divorce decree allows Mother to move the
boys from their private school to a public school in North Carolina, as she had
threatened to do. The settlement agreement clearly and explicitly gives Father
the final and binding authority to decide what school the minor children will
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attend. It defines “matters affecting the children’s . . . education” to include
“choice of schools,” and then specifies that if Father and Mother cannot agree
on such matters, “[Father] shall have final decision-making authority as to
education . . . issues” and his decisions on those issues “shall be binding.”
Father has decided that the boys should continue to attend the Rabun Gap-
Nacoochee School. In light of Mother’s threat to move the children to a
different school – that is, her assertion that she has the right to choose which
school they attend and intends to exercise that right – Father was entitled to seek
a declaratory judgment to ascertain his rights under the divorce decree and the
parties’ contract that it incorporates. See Weaver v. Jones, 260 Ga. 493, 493
(396 SE2d 890) (1990) (“‘A declaratory judgment is an appropriate means of
ascertaining one’s rights and duties under a contract and decree of divorce.’”
(citation omitted)). And given the plain language of the settlement agreement,
the trial court plainly erred in granting Mother summary judgment on Father’s
request for a declaration that the divorce decree precludes Mother from
unilaterally changing the children’s school.
(b) As for which parent is responsible for paying the private
school tuition, Mother and the trial court have overlooked a venerable principle
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for interpreting contracts like the settlement agreement at issue here: “‘The laws
which exist at the time and place of the making of a contract, enter into and form
a part of it’; and the parties must be presumed to have contracted with reference
to such laws and their effect on the subject matter.” McKie v. McKie, 213 Ga.
582, 583 (100 SE2d 580) (1957) (citations omitted) (applying this rule in
interpreting an agreement for alimony). Accord, e.g., Magnetic Resonance Plus,
Inc. v. Imaging Sys. Intl., 273 Ga. 525, 527 (543 SE2d 32) (2001); West End &
Atlanta Street R. Co. v. Atlanta Street R. Co., 49 Ga. 151, 158 (1873).
Georgia’s child support laws establish a presumption that the custodial
parent will bear the expenses related to the children, assisted by child support
paid by the non-custodial parent, with the amount of the child support obligation
calculated principally in proportion to the adjusted gross income of each parent.
See OCGA § 19-6-15 (b) (outlining the calculation of the child support
obligation). This statutory scheme reflects “the state policy of affording to
children of unmarried parents, to the extent possible, the same economic
standard of living enjoyed by children living in intact families consisting of
parents with similar financial means.” OCGA § 19-6-15 (c) (1). Thus, before
a divorce, the parents normally pay the costs of child-rearing from their
9
collective household income; when that household is divided, the parent in
whose home the child primarily lives normally pays the child-rearing expenses,
with the help of child support from the non-custodial parent that is calculated
largely as a pro rata share of the parent’s collective income.
The presumptive amount of child support calculated pursuant to the
statutory child support guidelines is not conclusive. The parents may agree to
vary from the presumptive support amount, as long as their agreement complies
with the provisions of the guidelines, contains factual findings to support any
deviations from the presumptive amount, and is determined by the court to
provide adequate support to the children. See OCGA § 19-6-15 (c) (6). The
trial court also has considerable discretion to deviate from the presumptive child
support amount based on the many specific deviations listed in the guidelines
or on other grounds, but only after supporting any deviation with written
findings of fact. See OCGA § 19-6-15 (c) (2) (E), (i). Indeed, the guidelines
enumerate a set of specific deviations for “extraordinary expenses,” which allow
the child support obligation to vary from the “average child rearing expenditures
for families given the parents’ combined adjusted income and number of
children.” OCGA § 19-6-15 (i) (2) (J). The guidelines also provide a specific
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deviation to reflect “parenting time,” if the child spends extended time with the
noncustodial parent so that parent would bear more of the child’s regular
expenses. See OCGA § 19-6-15 (b) (8) (K), (g), (i) (2) (K). Any such
deviations, however, must be identified and supported on Schedule E of the
child support worksheet, which in turn must be attached to the trial court’s final
child support order or judgment. See OCGA § 19-6-15 (m) (1).
Under this legal framework, if the child support worksheet shows no
deviation as to a particular child-rearing expense or type of expense, there is
normally no ambiguity as to which parent must pay the expense. The
presumption remains intact that the custodial parent will do so, with the aid of
the child support he or she receives. We made this point in Georgia Department
of Human Resources v. Sweat, 276 Ga. 627 (580 SE2d 206) (2003):
[C]ustodial and non-custodial parents are not, by definition,
similarly situated. The custodial parent often contributes to the
costs of caring for children, and also takes primary responsibility
for the day-to-day care of a child, maintains a separate household
suitable for the children, and depends upon the Guidelines to ensure
he or she receives adequate financial resources from the
non-custodial parent to assist in raising the child. Non-custodial
parents generally have measurably less involvement in the
day-to-day care of children, and depend on the Guidelines to ensure
that their financial support obligations are not out of proportion to
their income level. Of course, the financial contributions of
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non-custodial parents are significant and are often the result of hard
work and sacrifice; nonetheless, it is generally true that “after
divorce, the custodial parent’s responsibility for the child’s support
as well as care is general and plenary, while the non-custodial
parent’s responsibility is usually limited to the requirements of the
support order.”
Id. at 630 (citation omitted).
This point is particularly clear as to the type of educational expenses at
issue in this case. The statutory guidelines provide a specific deviation for
“extraordinary educational expenses,” which can be used to shift some or all of
these expenses from the custodial parent to the non-custodial parent:
Extraordinary educational expenses may be a basis for deviation
from the presumptive amount of child support. Extraordinary
educational expenses include, but are not limited to, tuition, room
and board, lab fees, books, fees, and other reasonable and necessary
expenses associated with special needs education or private
elementary and secondary schooling that are appropriate to the
parent’s financial abilities and to the lifestyle of the child if the
parents and the child were living together. . . . If a deviation is
allowed for extraordinary educational expenses, a monthly average
of the extraordinary educational expenses shall be based on
evidence of prior or anticipated expenses and entered on the Child
Support Schedule E--Deviations.
OCGA § 19-6-15 (i) (2) (J) (i) (emphasis added).
In this case, the parties’ divorce decree, attached child support worksheet,
and incorporated settlement agreement do not include such a deviation or
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provide the findings that would be necessary to support it and thereby shift the
responsibility for paying the children’s educational expenses to Father. In light
of the background law of child support, the minor children’s educational
expenses, like the other expenses of raising them, remained the responsibility
of Mother as the custodial parent, who has either waived her right to receive
child support from Father or receives child support as a component of her
$7,000 monthly “alimony” payment. See footnote 1 above. The fact that the
educational expenses are much higher than they would be if the children
attended public school reflects Father’s decision that they should remain at the
Rabun Gap-Nacoochee School – but Mother expressly agreed that Father would
have the authority to make that decision, and his decision could come as no
surprise, since the parties’ oldest child did his entire secondary schooling there
and the twins began school there as soon as they could enroll, three years before
the divorce. If there is a substantial change in the income or financial status of
either party or in the children’s educational needs, Mother’s remedy would be
to seek a modification of the child support order. See OCGA § 19-6-15 (k).
Until then, however, she must abide by the divorce decree and the settlement
agreement she entered.
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Accordingly, the trial court also erred in granting summary judgment to
Mother on the issue of whether the divorce decree requires her to pay the
children’s private school tuition. The court’s conclusion that Father “should
have specifically addressed [Mother]’s obligation to pay for private school if
that is what he intended” has it backwards. It was Mother who needed to have
the settlement agreement (as well as the child support worksheet) specify that
Father would pay for private school, if she wanted to alter the legal presumption
that the custodial parent would pay that child-rearing expense.
4. The trial court awarded $5,500 in attorney fees to Mother pursuant
to OCGA § 9-15-14, based on a finding that Father’s complaint for declaratory
judgment and action for contempt lacked substantial justification.3 Our
discussion in Division 3 above shows that Father’s declaratory judgment action
did not lack substantial justification; the attorney fees award as to that part of
Father’s case is therefore reversed. See White v. Howard, __ Ga. __, __ (758
3
OCGA § 9-15-14 (b) says:
The court may assess reasonable and necessary attorney’s fees and expenses of
litigation in any civil action . . . if, upon the motion of any party or the court itself,
it finds that an attorney or party brought or defended an action, or any part thereof,
that lacked substantial justification . . . . As used in this Code section, “lacked
substantial justification” means substantially frivolous, substantially groundless, or
substantially vexatious.
14
SE2d 824, 828) (2014); Farris v. Farris, 285 Ga. 331, 333-334 (676 SE2d 212)
(2009).
Father’s contempt claim is a different matter. His motion asked the trial
court to hold Mother in contempt based on her refusal to pay the children’s
private school tuition and her threat to move them to a public school, but the
attorney fees portion of the court’s order only addresses the threat to change
schools. To that extent, the court properly held that Father’s claim was made in
“anticipation” of Mother’s contempt, since she had not actually changed the
children’s school and thus had not even arguably violated the divorce decree in
that respect. Father cited no law in the trial court, and has cited none here,
allowing an “anticipatory contempt” claim. Concern that a counter-party may
improperly be asserting rights under an agreement should be addressed, if at all,
in an action for declaratory judgment rather than contempt.4
Thus, an award of attorney fees to Mother under OCGA § 9-15-14 might
be appropriate if limited to fees she incurred solely in litigating the threatened-
4
For the reasons discussed in Division 3 (b), Father’s contempt claim based on Mother’s
actual (not merely threatened) refusal to pay tuition that was due did not lack substantial justification,
so an award of attorney fees under OCGA § 9-15-14 based on this claim would be inappropriate.
We express no opinion, however, about whether any violation of the divorce decree by Mother was
willful.
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school-change aspect of Father’s contempt motion. However, the trial court did
not allocate any specific portion of the $5,500 fee award to that aspect of the
contempt claim, and the record shows that Mother did not provide evidence of
attorney fees incurred solely in relation to that aspect of the contempt claim.
Accordingly, to the extent the attorney fee award was based on the contempt
action, it is vacated, and the case is remanded for the trial court to determine the
amount of attorney fees, if any, that should be awarded to Mother based solely
on the threatened-school-change aspect of that claim. We note that Mother also
requested attorney fees based on the financial circumstances of the parties, see
OCGA § 19-6-2, but the trial court did not address that request; it may do so on
remand.
Judgment reversed in part and vacated in part, and case remanded with
direction. Hines, P.J., Benham, Hunstein, Melton, Blackwell, JJ., and Judge
Roger B. Lane, Sr. concur. Thompson, C.J., not participating.
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S14A1187. HARDMAN v. HARDMAN.
MELTON, Justice, concurring.
While I concur fully in the majority opinion, I write separately to highlight
the fundamental errors committed by the trial court in applying the doctrine of
res judicata to bar Father’s proper declaratory action. As the majority points out,
although the plain language of the divorce decree does not explicitly state that
Mother was responsible for paying the minor children’s private school tuition,
the decree “is properly read as requiring Wife to pay the minor children’s
private school tuition as long as Father decides that they should attend private
school.” Maj. Op. at 6. Thus, contrary to the trial court’s conclusions that the
parties’ agreement “does not address the particular issue” of private school
payment and that Father cannot “relitigate the Settlement Agreement in order to
supplement its terms,” the divorce decree does in fact address the issue of
private school payment and further resolves the issue in Father’s favor.
Accordingly, the fundamental errors committed by the trial court here began
with respect to its interpretation of the divorce decree.
By failing to properly analyze the language of the decree, the trial court
in turn failed to fulfill its duty to provide the parties with clarity when faced
with a proper declaratory action by Father. Indeed, because the parties could not
agree who had to make such payments pursuant to the decree, Father was
entitled to pursue a declaratory action to determine whether he or Mother was
responsible for making the private school payments. See, e.g., Weaver v. Jones,
260 Ga. 493, 493 (396 SE2d 890) (1990) (“‘A declaratory judgment is an
appropriate means of ascertaining one’s rights and duties under a contract and
decree of divorce’”). However, instead of properly resolving the ambiguity with
respect to the parties’ rights under the divorce decree, the trial court invoked res
judicata to conclude, erroneously, that the “unresolved” issue of private school
tuition payments could not be resolved in Father’s favor because the parties had
failed to address it in the original decree. However, here, Father did not seek to
“relitigate” the terms of the agreement or even litigate an issue that “should have
been” resolved previously. He merely sought guidance with respect to the
previous court order and the law regarding an issue in contention that arose after
the divorce decree had been entered. Father was entitled to seek this guidance,
and the trial court erred by failing to provide the proper guidance to Father
through an appropriate interpretation of the language of the divorce decree.
2