RENDERED: AUGUST 20, 2015 TO BE PUBLISHED
oi5nprrtur Court of 1firttfurkv 2014-SC-000329-DGE 2014-SC-000495-DGE
C. D. G. APPELLANT/CROSS-APPELLEE
ON REVIEW FROM COURT OF APPEALS V. CASE NO. 2013-CA-001110-ME JEFFERSON CIRCUIT FAMILY COURT NO. 07-J-500757
N. J. S. APPELLEE / CROSS-APPELLANT
OPINION OF THE COURT BY JUSTICE NOBLE
REVERSING AND REINSTATING
The main issue in this case is whether a parent may be given a dollar-
for-dollar credit for Social Security retirement dependent benefits against a
child-support obligation in light of KRS 403.211(15), which expressly allows
such a credit for disability payments but says nothing about retirement
benefits. The secondary issue, if such credits are proper, is whether the trial
court can apply the credit retrospectively when a lump-sum payment for past
benefits is paid for the child. The Court of Appeals concluded that such credits
are improper. This Court concludes otherwise and reverses and reinstates the
order of the circuit court. I. Background
This case has a rather complicated back-story. Much of it is not germane
to the issues in the case, however, and we recount only those facts necessary
to resolve the issues.
The child in question was born in 2002 when NJS ("the mother"), 1 was
married to JS ("John"). (The mother had four other children, all presumably
fathered by her husband, and later had yet a sixth child; the support of those
other children is not at issue in this case.) As would later be proved, however,
the child was actually fathered by CDG ("Chris"), with whom the mother had
been having an affair and for whom she worked. Nevertheless, John was listed
as the child's father on the birth certificate, and he believed himself to be the
child's father.
In 2006, the mother filed for divorce from John. The question of paternity
of the child was raised for the first time in the divorce action. John resisted
attempts to have paternity established as belonging to anyone other than
himself.
Nonetheless, the mother initiated a paternity action against Chris in
March 2007. Less than a month later, the mother and John entered into a
marital settlement resolving child support and custody issues with respect to
all the children. Under that agreement, John was to have the child no less than
1 Initials are used in the caption of this opinion to identify the people in this action because that is how they are identified in the filings before this Court (they were named in the documents in the circuit court). We do not ordinarily protect the identity of parties to divorce and paternity actions, usually limiting that practice to cases where children are parties or the victims. In this case, however, we will follow the parties' leads, but will substitute pseudonyms instead of initials for readability. 2 half the time; John is alleged by Chris to be the child's primary caregiver at
present.
The settlement agreement also "permit[ed]" (according to Chris's brief)
John to apply for Social Security disability benefits, which he has been
receiving since 2008. Those benefits included a sum for all six children,
including approximately $175 per month for the child in this case, paid to him
as the representative payee.
After the marital settlement, Chris unsuccessfully sought to have the
paternity action dismissed. In October 2007, he was found to be the child's
father. In January 2008, the mother moved to have Chris ordered to pay child
support. They eventually entered an agreed order under which he would pay
$775 per month in support and owe no arrearage, and the mother would be
responsible for the child's health insurance. Apparently, the parties' incomes 2
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she agreed to a lower support amount in anticipation that she would receive
Social Security dependent benefits for the child when Chris retired in a few
years, but no other evidence supports this claim. Chris paid his support
obligation regularly until March 2013.
In November 2011, Chris turned 67 and applied for Social Security
retirement benefits. At that time, he advised the Social Security Administration
that the child in this case was his child. He was advised that the child would
be eligible for dependent benefits, but that the custodial parent would have to
complete an application for the child. Chris claims that he advised the mother
2 Both are practicing attorneys with substantial incomes. 3 of this on that day and that he had agreed to meet her at the Social Security
office to complete the process. Chris also claims the mother fought going
through with the Social Security application process until compelled by the
trial court. The mother claims that she did not know the child was eligible for
these benefits until 2012, when she received a notice from the Social Security
Administration stating that Chris was receiving benefits.
In an effort to move the matter forward, Chris filed a motion in March
2012 to have his support obligation offset by the amount of the Social Security
dependent benefits due to the child, which were later determined to total $1256
per month, and recoupment of any overpayment of support paid since he
began receiving Social Security benefits in May 2011 and the child became
eligible for dependent benefits. Much wrangling between the parties ensued.
Chris alleges that much of the delay in getting benefits for the child was
due to the fact that the child was already receiving benefits under John's
disability benefits. (Chris alleges that the mother was intentionally committing
fraud with respect to the two sets of Social Security benefits.) The mother
agrees to some extent about the source of the delay, claiming that it was the
result of her ex-husband, John, having obtained benefits for the child without
her knowledge and his having to appear at the Social Security office to
straighten things out, but also claiming that none of the delay is attributable to
her. (She, of course, denies any fraud.)
Eventually, in March 2013, the child was awarded Chris's benefits,
including a $23,780 lump-sum award of back benefits for the period of May
2011 to March 2013. The lump sum was sent to the mother. Shortly thereafter, 4 Chris asked that the amount and any future support payments be paid into
escrow until his motion for an offset could be decided. According to the
representations of her lawyer to the trial court, the mother had not received the
award at that point, as it had been mistakenly sent to John. The court took the
matter under submission. A few days later, the mother alleged that she had
since received and immediately spent the full lump sum, and thus it was not
available to be paid into escrow, despite having notice that a motion was
pending before the court to escrow the funds.
Eventually, the trial court ordered that Chris get "a dollar for dollar credit
against his monthly child support obligation for any monies the child receives
as a result of his Social Security retirement benefits," meaning he would owe
nothing, as the benefit to the child exceeded his support obligation. To reach
this result, the court concluded that this was the "equitable outcome" and saw
no reason that the SSA retirement benefits should be treated any differently
than disability benefits are treated under KRS 403.211(15). 3
The court also ordered the mother to repay the "overpayment" for the 22
months between the beginning of the child's eligibility for benefits and the
court's order (a total of $17,050), noting that she "has the funds available for
3 That provision states: A payment of money received by a child as a result of a parental disability shall be credited against the child support obligation of the parent. A payment shall not be counted as income to either parent when calculating a child support obligation. An amount received in excess of the child support obligation shall be credited against a child support arrearage owed by the parent that accrued subsequent to the date of the parental disability, but shall not be applied to an arrearage that accrued prior to the date of disability. The date of disability shall be as determined by the paying agency. KRS 403.211(15). 5 repayment as a result of the lump sum payment from Social Security for
retroactive benefits," and that "it would be unfair and unjust to [Chris] for this
Court to deny him the ability to recoup his overpayment from those funds."
The Court of Appeals reversed, holding that Chris was not entitled to a
credit under KRS 403.211(15), reviewing the matter de novo. Because Chris
was not entitled to a credit, he was also not entitled to recoup any previous
support payments.
We granted discretionary review to answer the question whether a trial
court may order such a credit and, if so, whether recoupment is appropriate.
II. Analysis
This case essentially presents two broad questions. First, may a trial
court give a credit against a child-support obligation for Social Security
retirement benefits paid to a dependent child? Second, if a court may award
such a credit, may it also apply the credit retroactively and order recoupment
of already paid support upon a lump-sum award of back dependent benefits?
A. A trial court may award a credit for Social Security retirement benefits against a child-support obligation.
1. Standard of Review
Before turning to the merits of the parties' contentions, we must first
address the appropriate standard of review.
Chris claims that the Court of Appeals should have applied an abuse-of-
discretion standard to the trial court's decision to give the dollar-for-dollar
credit. He notes that the trial court did not rely on KRS 403.211 in awarding
the credit but instead decided that equity demanded treating retirement
6 benefits the same way that disability benefits are treated under that statute. He
also notes that support decisions are otherwise reviewed for abuse of
discretion.-
The mother claims the proper standard is de novo, and thus the Court of
Appeals did not err. She argues that by comparing retirement and disability
benefits, the trial court was necessarily applying KRS 403.211(15), which
applies only to disability benefits and says nothing about retirement benefits,
and therefore does not apply at all.
As the courts of this Commonwealth have repeatedly stated, trial courts
have broad discretion in determining child-support matters. See Artrip v. Noe,
311 S.W.3d 229, 232 (Ky. 2010) ("The trial court is vested with broad discretion
in the establishment, enforcement, and modification of child support."); Van
Meter v. Smith, 14 S.W.3d 569, 574 (Ky. App. 2000) ("[T]his state's domestic
relations law is founded upon general statutory guidelines and presumptions
within which the trial court has considerable discretion. The trial court has
discretion in many instances, moreover, to deviate from the statutory
parameters, but only if it makes findings clearly justifying the deviation.").
"[T]hat discretion extends, pursuant to KRS 403.211(2)-(4), to deviations from
guidelines-determined child support amounts." Commonwealth, Cabinet for
Health and Family Services v. Ivy, 353 S.W.3d 324, 329 (Ky. 2011).
Nevertheless, the mother argues, the trial court's discretion does not extend to
granting Chris a credit for the dependent benefits paid for the child.
Thus, the appropriate standard of review is two-fold as there are actually
two separate questions respecting the credit. As to the more fundamental 7 question of whether a trial court's discretion extends, at all, to granting a credit
for retirement benefits paid to a dependent child, the standard is de novo
because that is a purely legal question. But if the trial court has such
discretion, the appropriate standard in reviewing the trial court's decision
granting the credit is abuse of discretion.
2. May a trial court grant a credit for Social Security retirement benefits?
The mother, as noted above, basically argues that the trial court has no
power at all to grant a credit. Her argument is premised largely on the fact that
KRS 403.211(15) only mentions a credit for disability benefits, not retirement
benefits, and thus the trial court necessarily erred in acting under this statute.
She argues that this Court cannot add words to KRS 403.211(15) giving trial
courts the discretion to award credits, and that this Court is bound by the
pronouncements of the General Assembly.
This argument has a mistaken premise. It assumes the trial court acted
under KRS 403.211(15). The trial court did not act under this statute, and
instead acted under its general power to determine child-support obligations.
Indeed, the court expressly stated that treating the retirement benefits in this
way was the "equitable outcome," and that it was simply treating retirement
benefits "in the same manner" as disability benefits. Thus, it is evident that the
trial court acted under its broader statutory mandate, not the specific guidance
of KRS 403.211(15), and was exercising the discretion inherent in that general
statutory grant of authority to determine child-support questions.
8 Though she does not expressly make the argument, the mother's claim is
better understood as one based on the canon of statutory interpretation known
as expressio unius (short for expressio unius est exclusio alterius or "the
expression of one thing is the exclusion of another"). Though not named as
such, this is the rule applied by the Supreme Judicial Court of Maine in Wong
v. Hawk, 55 A.3d 425 (Me. 2012), on which the Court of Appeals relied heavily
in this case. Expressio unius is the "familiar and general rule ... that the
mention of one thing implies the exclusion of another." Fox v. Grayson, 317
S.W.3d 1, 8 (Ky. 2010) (quoting Jefferson County v. Gray, 198 Ky. 600, 249
S.W. 771, 772 (1923)). If this rule controls this case, then the legislature's
choice to mention disability benefits, but not retirement benefits, would imply
an intention to exclude retirement benefits and set a limit on a trial court's
discretion in this area.
But this "doctrine properly applies only when the unius (or technically,
unum, the thing specified) can reasonably be thought to be an expression of all
that shares in the grant or prohibition involved." Antonin Scalia 86 Bryan A.
Garner, Reading Law: The Interpretation of Legal Texts 107 (2012). The credit
provision in KRS 403.211(15) is not an expression of all that a trial court may
or must do in deciding the amount of child support owed or the source of
payments. The authority and responsibilities of a court in deciding child-
support questions are described across several provisions, KRS 403.211, .212.
and .213, each of which contains several subparts. And, as already noted, that
authority is broad, limited only by the requirements that the discretion be
exercised reasonably and in conformity with any applicable statutory limits. 9 This understanding is buttressed by the fact that the power of trial
courts to give credits for disability benefits did not originate in a statute
expressly giving such power, whereas the power appears to have been wholly
statutory in Maine. Instead, the discretion to give such a credit first appeared
in case law, which in turn was based on the General Assembly's statutory
grant of general discretion in deciding support matters. A statute expressly
allowing a court to give a credit for disability benefits was not enacted until
2000, see 2000 Ky. Acts ch. 430, § 18 (adopting what is now KRS 403.211(15)),
yet some version of the credit notion has been present in the law of this state
since at least 1980. See Hamilton v. Hamilton, 598 S.W.2d 767, 769 (Ky. App.
1980) (allowing consideration of Social Security death benefits in decision to
modify support). This Court expressly acknowledged the premise in 1985,
stating that "Kentucky follows the prevailing view of most jurisdictions in the
United States in that government benefits in the form of social security for
child support may be credited against the parent's liability under the decree or
agreement of settlement." Board v. Board, 690 S.W.2d 380, 381 (Ky. 1985).
Credits for disability benefits were specifically addressed in Miller v.
Miller, 929 S.W.2d 202, 205 (Ky. App. 1996), which predated the statutory
authorization by four years. In Miller, the court reasoned that because
disability benefits are a substitute for income, and that payment of such
benefits to the child directly (or, in reality, the mother or other custodian as the
representative payee) accomplished the purpose of a child-support order,
namely, making money available for the benefit of the child, they could be
credited against a support obligation. 10 When the General Assembly enacted KRS 413.211(15), it simply codified
what had already been the law of Kentucky. If anything, the legislature's
decision to codify the disability credit reflects a policy decision that the credit is
mandatory, because the statute uses the word "shall," and therefore is no
longer subject to a trial court's discretion. This was a narrow limit on a trial
court's power when addressing retirement benefits (removing the option of not
granting a credit), not a bar on giving a credit in other situations.
It is understandable that the General Assembly did not specifically
address retirement dependent benefits. The reality, at least in the past, is that
a person entitled to receive Social Security retirement benefits is far less likely
to have dependent children than a person receiving disability benefits.
Obviously, it is not impossible, as illustrated by this case. And it is becoming
far more common for children to be born to older parents, who may divorce or
may never be married at all and thus face support issues. But the General
Assembly's failure to address this does not control our interpretation of the
child-support processes.
The mother nevertheless argues that there is a distinction between
disability benefits and retirement benefits, and that even under the rationale of
Miller and similar cases, a credit for the latter is improper. She notes that the
disability-benefit and death-benefit cases note that those benefits "are not
gratuitous but are paid as a substitute for lost earning power and are similar in
nature to insurance benefits." Board, 690 S.W.2d at 382. She notes that
Chris's retirement benefits are not a substitute for any lost income; she also
11 notes that he continues to earn substantial income and is fully capable of
supporting the child.
Still, we see no significant distinction between disability and retirement
benefits, at least in this context. Certainly, disability benefits are a substitute
for lost income, but the important thing is that they are a type of income, albeit
indirect income paid to the child. Retirement benefits are also a type of income.
And they are not gratuitous; they are instead a type of delayed income based
on a history of paying into the Social Security system over a life's work. (In a
sense, they are for "lost" income, in that the money that was paid (as required
by law) into the Social Security system was not available for use by the person
at the time or as an investment.)
Retirement benefits are, in essence, income from a government-required
investment, the benefits of which are realized only after a certain age. And
dependent benefits are like the income of an investment trust or an annuity
whose benefits are paid to a third party (here, the child). Van Meter, 14 S.W.3d
at 573. The benefits, regardless of whether they stem from disability or
retirement, are an "indirect transfer of income from [Chris] to [the child] for
which [Chris] would be entitled to credit." Id. Thus, the principle is the same for
both retirement and disability benefits. Both are sufficiently analogous to
other third-party payments to the child, such as "an insurance policy or a
private trust" to allow them to be treated as coming indirectly from the parent.
Id. "There is no difference in the amount of payment for child support. The only
change is the source of those payments." Board, 690 S.W.2d at 382.
12 In a sense, the benefits paid for the child are like independent financial
resources. Though they are paid to the mother, because the child is a minor,
they do not belong to the mother, nor are they for her benefit. At the same
time, Chris never has access to the funds, as they are paid directly to the
mother, bypassing him entirely. Cf. Barker v. Hill, 949 S.W.2d 896, 897 (Ky.
App.1997) (treating SSI benefits due to the child, which are not for parent's lost
income, as an independent financial resource). The independent financial
resources of a child are a proper consideration in deciding child-support
questions, KRS 403.211(3)(d), as is " [a]ny similar factor of an extraordinary
nature specifically identified by the court which would make application of the
guidelines inappropriate," KRS 403.211(3)(g), which would further support the
trial court's authority to take the benefits into account. Of course, the court did
not proceed under these provisions to modify the amount, and instead
employed a credit. Nonetheless, this further evinces the trial court's general
discretionary authority over support matters to reach a fair and just result.
Thus, this Court concludes that trial courts have the discretion to award
a credit for Social Security retirement benefits paid to the dependent child. This
authority does not stem from KRS 403.211(15) but from a trial court's general
authority and discretion to determine child-support questions. The simple fact
is that nothing in our statutory scheme prohibits such a credit.
3. The trial court did not abuse its discretion in awarding the credit to Chris.
Having determined that the trial court had the discretion to award the
credit, this Court must now determine whether that discretion was abused in
13 this case. "The test for abuse of discretion is whether the trial judge's decision
was arbitrary, unreasonable, unfair, or unsupported by sound legal principles."
Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999).
This Court cannot say that the trial court abused its discretion under
this standard. Although "[t]his discretion is far from unlimited[,] ... generally,
as long as the trial court gives due consideration to the parties' financial
circumstances and the child's needs, and either conforms to the statutory
prescriptions or adequately justifies deviating therefrom, this Court will not
disturb its rulings." Van Meter, 14 S.W.3d at 572. We are convinced that the
trial court gave due consideration to all the relevant circumstances. The court
justified its decision by noting that granting the credit was the equitable
outcome.
It is important that the trial court employed a credit, rather than
reducing Chris's child support obligation. If the benefit payments ceased for
some reason, Chris would still be obligated to pay, as there would no longer be
anything for which to give him a credit. Cf. Board, 690 S.W.2d at 382 ("Should
the social security benefits be changed, the mother or custodian can look to the
estate for satisfaction of the basic obligation which remains intact."). But just
as in Miller, this means that the purpose of the support order is being satisfied
because substantial money, more even than required by the agreed support
order, is available for the benefit of the child.
The mother claims that she settled for a lower child-support payment in
anticipation of the child's receiving dependent benefits as a supplement.
Although this may be part of an argument for seeking modification of the 14 support agreement, assuming she could show a continuing change of
circumstances, it does not make the trial court's decision here an abuse of
discretion.
B. Recoupment of the 22 months' support payments was proper.
In her cross-appeal, the mother argues that even if a credit was
appropriate, the trial court erred in ordering her to pay back the $17,050 in
support that Chris paid during the 22 months the child was eligible for
dependent benefits before the benefits (and lump-sum back payment) were
awarded. Specifically, she claims that this recoupment award violates the
Social Security Act's anti-attachment provision and the rule that support can
only be modified prospectively.
Social Security benefits are protected by what is commonly known as an
anti-attachment provision. It states:
The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
42 U.S.C.A. § 407.
This Court has held, in accordance with the Supreme Court's
pronouncements on the subject, that this provision does not shield a person's
Social Security payments, once made, 4 because it is aimed largely at preventing
4 There is even an exception to this anti-attachment provision for child-support obligations that would allow a garnishment action against the Social Security Administration. See 42 U.S.C. § 659(a) ("Notwithstanding any other provision of law (including section 407 of this title ...), ... moneys (the entitlement to which is based upon remuneration for employment) due from, or payable by, the United States ... 15 the Social Security Administration from becoming a collections agency and to
prevent the depletion of a person's whole means of subsistence. See
Commonwealth, Cabinet for Health and Family Services v. Ivy, 353 S.W.3d 324,
338 (Ky. 2011) (applying Rose v. Rose, 481 U.S. 619 (1987)). The trial court's
recoupment order does not attempt to bind the Social Security Administration
in any way, aimed as it is only at recouping monies already paid out. Nor would
the recoupment order deprive the child of her entire means of support. Chris's
support payments are only part of the overall support due to the child; the
mother also has a statutory duty to support her child, and she has a
substantial income. Moreover, Chris is not seeking to lower the amount of
support he owed. That money was properly paid. Nor is he trying to recoup the
amount of the Social Security benefits that exceed his support obligation.
Instead, he is only seeking to recoup the amount that was effectively paid twice
once the Social Security lump-sum payment was made.
That said, the mother cites a Supreme Court case with language strongly
suggesting that anti-attachment provisions like this one make the associated
(including any agency, subdivision, or instrumentality thereof) to any individual ... shall be subject, in like manner and to the same extent as if the United States ... were a private person, ... to any other legal process brought ... by an individual obligee, to enforce the legal obligation of the individual to provide child support or alimony."). Though this does not extend to Supplemental Security Income, Sykes v. Bank of America, 723 F.3d 399, 405 (2d Cir. 2013); Commonwealth, Cabinet for Health and Family Services v. Ivy, 353 S.W.3d 324, 339 (Ky. 2011), it expressly includes Social Security retirement and disability benefits, see 42 U.S.C.A. § 659(h)(1)(A)(ii) (defining covered moneys as "periodic benefits ... or other payments ... under the insurance system established by subchapter II of this chapter"). This exception would allow Chris's Social Security benefits to be garnished if he was not paying his support obligation. But he, in fact, seeks the opposite: he would dip into the child's dependent benefits to recoup his already paid support. If the § 407 anti-attachment provision applied to this case, the exception in § 659 would not. 16 benefits payments sacrosanct and beyond invasion, even once paid. See
Philpott v. Essex County Welfare Bd., 409 U.S. 413, 415-16 (1973) ("On its face,
the Social Security Act in § 407 bars the State of New Jersey from reaching the
federal disability payments paid to Wilkes. The language is all-inclusive .... But
§ 407 does not refer to any 'claim of creditors'; it imposes a broad bar against
the use of any legal process to reach all social security benefits. That is broad
enough to include all claimants, including a State.").
But later iterations of the Supreme Court have declined to read such
language so broadly, and concluded instead that they have the limited
purposes discussed above. See Rose, 481 U.S. at 630. Though the Supreme
Court has not expressly receded from Philpott, the holding in Rose is certainly
inconsistent with it. And Philpott, had it been addressed in Rose, would have
been readily distinguishable because the beneficiary in the older case had no
other income except for the state-paid benefits that the state was seeking to
recoup upon the payment of the lump-sum amount for back Social Security
benefits. In that instance, the state's attempt to recoup would have consumed
70 to 80% of the man's income for the relevant time period. That is not the case
here, where the recoupment would return only a fraction of the money
available to the child, and was aimed only at the amount that amounted to a
double-payment of support. Even after recoupment, an amount equal to all of
the Social Security payments made should be available (though allegedly
already spent) for the child's benefit.
That leaves the mother's argument that the trial court's order violated
the rule against retrospective changes to child support. "In this jurisdiction, it 17 is settled that support payments, once accrued, are fixed and may not be
modified by the trial court, and any change in the amount of support only
operates prospectively." Clay v. Clay, 707 S.W.2d 352, 353 (Ky. App. 1986).
Thus, "restitution or recoupment of excess child support is inappropriate
unless there exists an accumulation of benefits not consumed for support." Id.
at 354. To support such a decision, the trial court must make a finding that
there has been an accumulation of benefits, which is unlikely to occur except
in "an exceptional case." Id.
Arguably, this is such an exceptional case because there was an
accumulation of benefits available for recoupment. The trial court specifically
found the mother "has the funds available for repayment as a result of the
lump sum payment from Social Security for retroactive benefits." The mother,
of course, claims the trial court's finding was erroneous because she had
already spent the money. But there was proof to support the court's finding.
And more importantly, the no-recoupment rule does not apply to the
circumstances of this case. The rule is aimed at instances where the "support
order is reversed or vacated on appeal," at which point "there is a strong
inference that recoupment or restitution should be disallowed." Id. at 353. For
example, if support is set at a certain amount on day one, and the obligated
parent successfully challenges that amount as erroneously high on appeal,
resulting in a reduction of the support obligation, the no-recoupment rule
would ordinarily prevent the parent from being reimbursed the amount that
was overpaid between the trial court's order and the appellate decision.
18 But Chris did not obtain a modification of his support, either from the
trial court or on appeal. Instead, he paid his support obligation over a period of
22 months in which the child was later found entitled to receive Social Security
dependent benefits. Once those benefits were awarded, Chris properly obtained
a credit for those benefits against his support obligation going forward. He also
sought a credit against the past, already-satisfied obligation, which could only
be accomplished through a recoupment award.
The circumstances in this case are simply different from those where a
parent later obtains a modification of support on appeal. There was indeed a
lump-sum award here against which recoupment could be legitimately taken.
The trial court, by allowing Chris to recoup prior payments after the award of a
lump-sum Social Security dependent benefit, "did not retrospectively modify
the child support provisions of the order." Van Meter v. Smith, 14 S.W.3d 569,
572 (Ky. App. 2000). Instead, it gave him the credit he would have been
entitled to had the child been receiving its benefits from the first day of
eligibility. See Board v. Board, 690 S.W.2d 380, 381 (Ky. 1985) ("There is a
distinction between crediting an obligation with payment made from another
source and increasing, decreasing or terminating, or otherwise modifying a
specific dollar amount."). The child still received all the money that Chris was
obligated to pay—and then some, since the lump-sum award exceeded Chris's
support obligation during the 22-month period. The trial court simply
recognized the reality of what had happened: the child received her support
from a different source, after the fact. Thus, the no-recoupment rule is not
applicable to this case. 19 The only question is whether the trial court abused its discretion in
ordering the mother to reimburse Chris for the support payments made during
the 22 months when the child was eligible for Social Security benefits. This
Court concludes that it did not.
The trial court considered all the circumstances, and found that the
mother had "the funds available for repayment as a result of the lump sum
payment from Social Security for retroactive benefits." The mother points to
evidence that she had already spent the money by the time Chris sought the
recoupment, suggesting the funds were unavailable. But even if so, the
expenditures would have been made knowing that a motion for recoupment
was pending, and in an obvious effort to dispose of the fund available for
recoupment.
And Chris points out that there is evidence that some of the claimed
payments were made before the award, that it is less than clear that the
payments were made from the awarded funds, and that the mother had a
substantial income (presumably one sufficient enough to show that she could
have paid whatever she did out of her own pocket). It is apparent that the trial
court simply did not believe the mother's accounting of the funds. The court's
finding in that respect is not clearly erroneous.
Furthermore, the court concluded that it would be "unfair and unjust to
[Chris] ... to deny him the ability to recoup his overpayment from those funds."
This conclusion that the balance of the equities favored reimbursement for
Chris was not an abuse of discretion in light of all the circumstances.
20 III. Conclusion
As explained above, the trial court had the discretion to award Chris a
credit against his child-support obligation for Social Security retirement
dependent benefits paid to the child, and it was not an abuse of that discretion
under the circumstances of this case to award the credit. Moreover, the trial
court did not violate the no-recoupment rule since a fund was available that
had not been paid out during the child support period in question, and
because there was no modification of Chris's support obligation. Consequently,
it was not error to order the mother to reimburse him for support payments
made during the 22-month period in which the child was eligible for Social
Security benefits that were later paid as a lump sum. For those reasons, the
decision of the Court of Appeals is reversed, and the order of the trial court is
reinstated.
All sitting. All concur.
COUNSEL FOR APPELLANT/ CROSS-APPELLEE:
Callie Elizabeth Walton Gwin, Steinmetz 85 Baird 401 W. Main Street Suite 1000 Louisville, Kentucky 40202
COUNSEL FOR APPELLEE/CROSS-APPELLANT:
Nancy J. Shook 809 Bedfordshire Road Louisville, Kentucky 40222