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Lump Sum Child Support Payments

Lump Sum Child Support Payments

 

 

 

Several family law lawyers say a Sept. 20 Georgia Supreme Court ruling that affirmed a lower court’s grant of a lump-sum child support payment to cover 13 years of care sets a “dangerous” precedent because it grants one parent a large sum of cash without oversight. But the court said nothing in the child support statute precludes lump-sum payments. The ruling ensures that the custodial parent in the case will receive support for the couple’s two children while her former husband is in prison.

“I think the court was right that it had to be left with the trial judge to decide,” said Teresa A. Mann of Mann & Moran, who represented the custodial parent before the Georgia Supreme Court in the case. “That’s who is hearing the case. That’s who can determine what’s in the best interest of the children.”

The ruling states the principal issue in the case is whether trial courts have the authority under the child support child support guidelines statute, O.C.G.A. ยง 19-6-15, to order lump-sum payments.

“This is more of a pre-payment plan than a lump-sum payment,” said Randall M. Kessler, chairman-elect of the family law sections of the State Bar of Georgia and the American Bar Association. “Child support used to be based on the existing facts but this predicts the facts. It presumes the situation will not change,” said Kessler.

Lacey E. Roy and Scott J. Mullin were married in 2004, had two children and separated in June 2007, according to the decision. Lacey Mullin filed for divorce on Oct. 2, 2007. A short time later, Scott Mullin was arrested for possession of child pornography and lost his job as a senior systems engineer at Cox Newspapers, where he had been making about $80,000 per year. He had received an inheritance of about $422,000 and began living on that money, according to the decision.

The couple agreed to a partial settlement resolving all issues in the divorce except child support. A bench trial on child support was held May 13, 2009, and the following day Scott Mullin was sentenced in federal court, where he had pleaded guilty, to serve five years in prison. The divorce degree was entered May 20, 2009.

Based on a calculation that split the difference between his estimates of his earning power when he was released from prison and her estimates, Judge Bensonetta Tipton Lane of Fulton County Superior Court arrived at a monthly child support payment of $1,122. The judge then ordered the husband to pay his entire child support obligation for the next 13 years in a single payment of $175,163, which was later increased to $201,960 to correct a miscalculation about when the youngest child would graduate from high school.

The husband filed two motions for a new trial and to set aside the judgment, arguing the law, which had been amended on Jan. 1, 2007, did not authorize lump-sum child support payments. The trial court held a hearing and denied the motions Dec. 21, 2009.

The trial court explained that it ordered the lump-sum payment because Scott Mullin had entered guilty pleas to federal crimes, was about to begin serving a prison sentence, had lost his employment, and had spent more than half of his inheritance, with about $200,000 remaining.
The trial court cited Henry v. Beacham, 301 Ga. App. 160 (686 SE2d 892) (2009), where the Court of Appeals held that lump-sum payments were authorized by statute. In that case involving former Denver Broncos running back Travis Henry, a trust was established from which the other parent could make monthly withdrawals.

Kessler represented Henry in that case. He said at the time he thought the judge in that case went too far when he ordered Henry to pay $250,000 to create a trust for one of his children and then contribute $3,000 per month to the child’s support.
“In the Travis Henry case, they said assets could be used in case someone didn’t make a payment. But it wasn’t a pre-payment. It was collateral or a guarantee,” said Kessler. “In the Henry case, there was some recourse. The money was still there. This gives all the money to the recipient with no safeguards.”

Indeed, Kessler has returned to court seeking a modification. Henry is now in prison on a cocaine charge, according to Kessler, and no longer earning any money to pay into the trust.

Michael Mosberg, a partner at the New York firm Aronson Mayefsky & Sloan, said the Mullin case sets a “dangerous” precedent. Mosberg represented Marcie Gandolfini in her divorce against actor James Gandolfini and Peter Cook in his divorce against Christie Brinkley.
“I think it’s problematic. They’ve now set this aside for mom, and she has all of this discretion with respect to the money without any oversight,” said Mosberg. “The court could be confronted with issues like, what happens if mom blows through this money? Does dad get to come back and say mom violated fiduciary obligation? Can the money be recouped and how?”
Gregory D. Golden, who represented Scott Mullin before the Georgia Supreme Court, argued that child support payments were to be paid periodically, not all at once. The law enacted Jan. 1, 2007, which expanded the statute from three pages to 37 pages, does not specifically state lump-sum payments are allowed, he said.

Golden, in arguments before the Supreme Court, said that the parties had waived alimony. “[This] becomes a windfall to the appellee. It gives her funds, monies, property that she was not entitled to under the agreement or that the trial court has authority to award to her.”
Further, awarding a lump-sum amount of child support was in effect depriving Scott Mullin, as well as the children and their custodial parent, the right to modify the child support award going forward, he said at argument. That point was questioned by the Supreme Court justices during arguments, who indicated it would be appropriate for the parties to return to court as needed.

The statute states courts determine “in what manner, how often, to whom and until when” the support shall be paid and the ruling found that nothing in the statute expressly precludes lump-sum child support awards. The court found that the final determination was up to the trial court judge. “The statute as amended explicitly authorizes trial courts to exercise discretion in setting the manner and timing of payment. ... This language is certainly broad enough to encompass an order to pay a child support obligation all at once,” the decision says. Golden had argued the language in the statute indicated regular payments, not a single lump-sum payment. “When you read those three phrases together, it is clear that a periodic amount of child support was intended. If a lump-sum amount of child support was intended, then ‘how often’ doesn’t matter and ‘until when’ doesn’t matter,” he said.
Mann, the custodial parent’s lawyer before the Georgia Supreme Court, argued that while lump sums were not specifically authorized, they were not excluded. Mann said that lump-sum payments were always allowed as part of the law, and that the state Supreme Court provided clarification that a court had that as an option. “I don’t think this is going to be the answer to every child support case,” said Mann. “It’s very fact specific.”
Golden did not return a call for comment Wednesday.

Mosberg said modification hearings are a routine part of child custody and support cases in New York because things change. “That’s one of the reasons it’s a monthly payment. The overarching principal is what’s best for the child. That way the other parent can come back and say the child isn’t benefitting from the money.”

Mosberg also noted that Scott Mullin is “not a particularly sympathetic father. The court is doing what is appropriate under the circumstances to make sure mom has sufficient funds to support their child. But you can now assume that a lump sum is acceptable under the statutory framework of Georgia and I think it’s a very dangerous precedent. It’s the old ‘hard facts make bad law.'”
The case is Mullin v. Roy f/k/a Mullin, No. S10F1120.

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