IN RE the Parental Responsibilities Concerning N.J.C., a Child, and Concerning N.E., Appellant and V.J.C., Appellee.
Modified on Denial of Rehearing. November 14, 2019.
[Copyrighted Material Omitted]
Douglas County District Court No. 12JV77, Honorable Natalie
T. Chase, Judge.
Fairfield and Woods, P.C., Lee Katherine Goldstein, Michael
R. McCurdy, Denver, Colorado, for Appellant.
J. Keil, Jr., Denver, Colorado, for Appellee.
As a matter of first impression, N.E. (mother) urges us to
conclude that deferred compensation in a nonqualified
plan is income for child support purposes
if it is being earned during a period when a parent is
obligated to pay child support. We disagree with her
arguments, and therefore affirm the juvenile court's
order adopting the magistrate's order modifying
mother's child support award from V.J.C. (father). We
also affirm the remaining portions of the juvenile
court's order denying mother's requests for attorney
fees and to reallocate costs paid for parental
responsibilities evaluations (PRE).
However, we remand for the juvenile court to consider
mother's request for appellate attorney fees under
section 19-4-117, C.R.S. 2019.
Appellate Standard of Review
This case arises out of the Uniform Parentage Act (UPA),
sections 19-4-101 to 130, C.R.S. 2019. Magistrates may
preside over UPA actions, but parties have the right to seek
a judge's review of the magistrate's findings and
rulings. § 19-1-108(1), (4)(b), (5.5), C.R.S. 2019.
"We defer to the magistrate's and district
courts' findings of fact if they are supported by the
evidence and we review conclusions of law de novo."
In re B.J., 242 P.3d 1128, 1132 (Colo. 2010).
Father's Deferred Compensation Plan
Mother and father are the unmarried parents of one child,
N.J.C. In 2013, and as part of the initial paternity
proceeding in this case, father's child support
calculation was based on the salary he earned working as a
cardiologist for his own medical practice.
[¶6] In 2016, father closed his practice and
accepted a job with Healthy Connections, Inc. (HCI), a health
care center providing medical, dental, and outreach services
to impoverished communities. Believing that father's
income had gone up at his new job, mother moved to increase
child support. Father, however, responded that his income had
Evidence presented at a hearing on mother's motion showed
that father's compensation package with HCI consisted of
a $150,000 annual salary and $200,000 of yearly deferred
compensation in a nonqualified plan. Father, who was then
fifty-two years old, testified that he would only receive the
deferred compensation after he retired from HCI at age
sixty-five. HCI's CEO, his brother, agreed that father
"does not receive — physically receive $200,000
above his salary," and he described the deferred
compensation as "an obligation at a future date and time
for [father's] benefit providing that he meets the
criteria after his retirement."
The CEO explained that the deferred compensation plan allowed
HCI to attract and retain qualified medical doctors, like
father, that it could not otherwise afford. He testified that
half of the ten to thirteen medical doctors on HCI's
staff were employed under the deferred compensation plan.
According to the CEO, while each plan was tailored to the
employee, they all had the same payout structure — the
employee had to retire from HCI at a certain age before he or
she would receive any deferred funds, which would then be
paid over ten years. As of the hearing date, the CEO said
that the deferred compensation plan was unfunded; in fact,
the CEO stated there was not even an account established with
which to pay deferred compensation.
Regarding father's specific deferred compensation plan,
the CEO submitted a letter to father's counsel (admitted
at the hearing as Exhibit A) detailing that father had no
control over the funds or the plan; the deferred amounts
belonged to HCI and were not protected in case of insolvency
or creditor claims; the deferred amounts were subject to
forfeiture if father was fired, quit, or retired before age
sixty-five; father would not be fully vested until he worked
at HCI for five years; and the funds were not taxable until
received by the employee.
Arguing that it was significant that father earned the money,
even if he did not actually receive it, mother asked the
magistrate to include the deferred compensation as income to
father. The magistrate declined to do so, based on the
restrictive provisions of father's plan described above.
The magistrate then modified father's child support
obligation, including in father's income only his salary
and nominal dividend and interest income.
The juvenile court judge adopted the magistrate's
decision not to include the deferred compensation, pointing
out the magistrate's reasoning that father could not
contribute to the plan, had no control over the funds, and
had no guarantee he would ever receive the money.
Deferred Compensation is Not Income
Section 14-10-115, C.R.S. 2019, applies to child support
obligations established or modified under the UPA. §
19-4-129, C.R.S. 2019. We review child support orders for an
abuse of discretion. In re Marriage of Garrett, 2018
COA 154, ¶8, 444 P.3d 812, 815. However, we review de novo
the legal ...