Mahmoud Adel Sharaf v. Amanda Kay Sharaf

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
April 5, 2022
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2021AP523 Cir. Ct. No. 2020FA11

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III

IN RE THE MARRIAGE OF:

MAHMOUD ADEL SHARAF,

PETITIONER-APPELLANT,

V.

AMANDA KAY SHARAF,

RESPONDENT-RESPONDENT.

APPEAL from orders of the circuit court for St. Croix County:
SCOTT R. NEEDHAM, Judge. Affirmed.

Before Stark, P.J., Hruz and Gill, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2021AP523

¶1 PER CURIAM. Mahmoud Sharaf appeals from a series of orders
that modified his monthly child support obligation.1 He contends that the circuit
court erroneously exercised its discretion in numerous ways. We reject each of
Mahmoud’s arguments and affirm.

BACKGROUND

¶2 Mahmoud and Amanda were married in December 2013 and have
twin sons who were born in May 2015. Mahmoud petitioned for divorce in
November 2016 in Eau Claire County. The Honorable Michael Schumacher
entered a judgment of divorce on December 8, 2017.

¶3 When setting Mahmoud’s child support obligation,
Judge Schumacher determined that Mahmoud, who was employed as a
cardiologist, had an annual income of $625,000. Amanda was not employed
outside the home at the time of divorce. Judge Schumacher found that Amanda
had previously worked as a pharmaceutical sales representative earning $100,000
per year. Judge Schumacher noted, however, that the parties had agreed Amanda
would not work outside the home after their children were born. Under these
circumstances, Judge Schumacher determined that it was appropriate to impute
$75,000 in annual income to Amanda, which represented the amount of
maintenance to which she was entitled for a five-year period under the parties’
prenuptial agreement.

1
Because Mahmoud and his former spouse, Amanda Sharaf, share a last name, we refer
to them by their first names throughout the remainder of this opinion.

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¶4 Based on the parties’ respective incomes, and applying the
twenty-five percent standard set forth in the administrative code,
Judge Schumacher determined that Mahmoud was required to pay $7,889 per
month in child support, effective January 1, 2018. Judge Schumacher rejected
Mahmoud’s request to deviate from the percentage standard, concluding that the
greater weight of the credible evidence did not support a determination “that use
of the 25 percent standard is unfair to the children or to any of the parties.”2 See
WIS. STAT. § 767.511(1m) (2019-20).3

¶5 On October 25, 2019, Amanda filed a motion to modify legal
custody, physical placement, and child support. She also moved for a change of
venue to St. Croix County. Amanda’s motion to change venue was granted.
Amanda then refiled her motion to modify legal custody, physical placement, and
child support in St. Croix County. On December 15, 2020, Mahmoud moved to
dismiss Amanda’s motion to modify child support. As relevant to this appeal,
Mahmoud argued there had been no substantial change in circumstances that
would warrant a modification of child support. In the alternative, if the circuit
court determined that modification was appropriate, Mahmoud asked the court to
“consider whether a deviation from the [twenty-five percent] standard is
appropriate.”

2
Mahmoud appealed from the divorce judgment and a postdivorce order, and Amanda
cross-appealed. See Sharaf v. Sharaf, No. 2018AP735, unpublished slip op. ¶¶1-2 (WI App
Sept. 4, 2019). Among other things, Mahmoud argued that Judge Schumacher had erroneously
exercised his discretion by failing to deviate from the twenty-five percent standard. Id., ¶¶42, 44.
We rejected that argument and affirmed Judge Schumacher’s decision as to child support. Id.,
¶48.
3
All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise
noted.

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¶6 During a hearing on December 22, 2020, the circuit court denied
Mahmoud’s motion to dismiss, concluding that a substantial change in
circumstances had occurred because more than thirty-three months had elapsed
since the entry of the last child support order—i.e., the December 8, 2017 divorce
judgment. See WIS. STAT. § 767.59(1f)(b)2. In a written order entered the same
day, the court then found, based on the divorce judgment, that Amanda had an
earning capacity of $100,000 per year. Adding that amount to Amanda’s annual
maintenance of $75,000, the court determined that Amanda’s gross monthly
income was $14,583.33.

¶7 The circuit court next found that Mahmoud “had 2018 gross income
of $711,607.00 ($613,053 wages and $98,544 investment income)” and “had 2019
gross income of $667,997.00 ($583,015 wages and $84,972 investment income).”
The court further found that Mahmoud’s “year to date income computed annually
would indicate 2020 wage income of $624,500.00.” Adding Mahmoud’s 2019
investment income to that amount, the court found that Mahmoud’s projected
gross income for 2020 was $709,472, or $59,122 per month. Given the parties’
respective percentages of physical placement, and applying the high-income payer
formula, the court ordered Mahmoud to pay $8,886 per month in child support,
retroactive to November 1, 2020.

¶8 Amanda sought reconsideration of the circuit court’s decision,
arguing the court had erred by determining that her annual income included both
her yearly maintenance and an earning capacity of $100,000. The court granted
Amanda’s motion without a hearing in an order dated January 11, 2021. The court
explained:

While Judge Schumacher did find that Ms. Sharaf had
earned approximately $100,000.00 as a pharmaceutical

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representative, he concluded “that $75,000.00 represents
her earning capacity.” This figure represented the
$75,000.00 that Dr. Sharaf was ordered to pay as
maintenance for a period of five years. Judge Schumacher
further found that the [parties’] original plan of not having
Ms. Sharaf work outside the home and the likelihood that
she would not do so until the children are in school or the
five years of maintenance ends, was a sufficient basis to
conclude that her earning capacity was $75,000.00. No
evidence was presented during the hearing before this
Court that would negate those findings and conclusions
entered by Judge Schumacher on December [8], 2017. Nor
has Dr. Sharaf filed any response to [Amanda’s motion for
reconsideration].

Based on its revised determination as to Amanda’s income, the court set
Mahmoud’s child support obligation at $9,600 per month, retroactive to
November 1, 2020.

¶9 On the same day that the circuit court entered its order granting
Amanda’s motion for reconsideration, Mahmoud filed his own motion for
reconsideration of the court’s December 22, 2020 decision. In support, Mahmoud
submitted his final pay stub for the year 2020, which showed that his gross wages
for that year totaled $602,194.47, rather than $624,500, as the court had projected.
Mahmoud also argued that the court had erred by including his investment income
as part of his gross income when calculating child support. In the alternative,
Mahmoud argued that if his investment income was properly included in his gross
income, then the court should consider his average investment income over the
past five years, rather than using his 2019 investment income. Mahmoud also
asserted that the court’s determination of his gross income “unfairly inflate[d] his
actual income,” which justified a deviation from the percentage standard set forth
in the administrative code. Mahmoud further argued that the court had correctly
attributed $175,000 in annual income to Amanda.

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¶10 The circuit court considered and denied Mahmoud’s motion for
reconsideration during a hearing on February 3, 2021. The court rejected
Mahmoud’s argument that it had erred by concluding Amanda’s annual income
was $75,000, rather than $175,000. The court further found that Mahmoud had
failed to present any newly discovered evidence that would justify reconsideration
of the court’s prior decision; he had merely presented “updated” evidence. The
court also stated it had appropriately considered a “three-year average” when
determining Mahmoud’s investment income. The court mentioned, however, that
changes in Mahmoud’s investment income and the fact that the children had
started school—thereby allowing Amanda greater flexibility to work outside the
home—could provide grounds for a future motion to modify child support.

¶11 On March 4, 2021, Mahmoud filed a motion to recalculate child
support. He asserted the circuit court had used “inaccurate information” when
calculating child support because his W-2 for 2020 showed that his actual wages
were “considerably lower” than the amount the court had projected. Mahmoud
also asserted that the investment income the court had attributed to him did not
“accurately reflect the true income from [his] investments.” Mahmoud further
argued that the court had “double counted” his qualified dividends, which resulted
in the court overestimating his income by nearly $20,000.4

¶12 The circuit court held a hearing on Mahmoud’s motion on April 26,
2021. During the hearing, Eric Winkler, a certified public accountant, testified on

4
Although Mahmoud specifically raised the above issues in his March 4, 2021 motion,
he also clarified that he was not conceding either: (1) “the accuracy or legitimacy of the imputed
income attributed to Amanda”; or (2) “the inclusion of investment income in the calculation of
[his] income for child support purposes.”

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No. 2021AP523

Mahmoud’s behalf. Based on his review of Mahmoud’s tax returns, Winkler
opined that Mahmoud’s total income for the year 2020 was $585,528, rather than
the $709,472 previously determined by the court. In particular, Winkler opined
that the court had double counted certain dividends when calculating Mahmoud’s
income. Winkler also testified that Mahmoud had suffered capital losses in the
amount of $13,304 in 2020. Winkler further testified, as a general matter, that
“[u]sing capital gains and losses to determine one’s income … is speculative
simply because the market is usually responsible for the capital gains and/or losses
one receives.” Winkler also testified as to the difference between the Box 1 and
Box 5 wages reflected on Mahmoud’s 2020 W-2. He explained that Box 1
represents an individual’s gross income minus certain tax deductions, such as
deductions for retirement account contributions or health insurance, whereas
Box 5 (Medicare wages and tips) represents all gross income, including any
pre-tax deductions.

¶13 Mahmoud testified that the dividends, capital gains, and capital
losses reflected on his tax returns related to investments that he had held for many
years, even before the parties were married. He testified the investments were
“intended as retirement vehicles” because, as a medical doctor, he did not have a
pension. He further testified that the investments were managed by financial
advisors and that when particular investments were bought and sold, those
transactions did not result in “money that comes into [his] pocket.”

¶14 Based on the evidence presented during the April 26, 2021 hearing,
Mahmoud argued the circuit court should use the Box 1 wages from his 2020
W-2—$554,870—as his gross income when calculating child support. Using that
figure, Mahmoud argued that his monthly child support obligation should be
$7,582.83. Mahmoud argued his investment income should not be included in his

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No. 2021AP523

gross income because it was “highly speculative and clearly outside of his
control.”

¶15 Referencing the broad definition of “gross income” set forth in WIS.
ADMIN. CODE § DCF 150.02(13) (Dec. 2021),5 Amanda argued that both
Mahmoud’s Box 5 wages and his investment income should be included in his
gross income for purposes of calculating child support. Amanda acknowledged
that investment income fluctuates. She argued, however, that using a three-year
average of Mahmoud’s investment income would account for that fluctuation. An
assistant corporation counsel, representing the county child support agency, agreed
with Amanda that the circuit court should use Mahmoud’s Box 5 wages when
determining his child support obligation. However, “for purposes of ease,”
counsel requested that the court not include Mahmoud’s investment income in his
gross income.

¶16 In a written order dated April 28, 2021, the circuit court determined
that its prior “finding of 2019 investment income was erroneous and a double
counting of capital gains and dividends.” The court therefore corrected the
amount of child support ordered on December 22, 2020 (which had already been
revised by the court’s January 11, 2021 order) to $9,385 per month, retroactive to
November 1, 2020.

¶17 The circuit court then found, based Mahmoud’s 2020 W-2, that his
Box 5 wages for 2020 were $593,870. The court refused to exclude Mahmoud’s
investment income from his gross income, instead concluding that, going forward,

5
All references to WIS. ADMIN. CODE ch. DCF 150 are to the December 2021 register.

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it would be “fair and reasonable” to use a “three year rolling average” of
Mahmoud’s investment income when calculating his gross income. Applying this
method, the court concluded that Mahmoud’s gross income for 2020 was
$653,957. Based on the parties’ shared placement of the children, and using the
high-income payer formula, the court therefore ordered Mahmoud to pay $8,880
per month in child support, retroactive to March 1, 2021.

¶18 Mahmoud sought clarification of the circuit court’s April 28, 2021
order on two grounds. First, he argued that the court should have used his actual
2020 income, rather than his projected income, when revising his child support
obligation for November and December 2020. Second, he renewed his objection
to the court using his Box 5 wages to determine his gross income.

¶19 The circuit court denied Mahmoud’s request for clarification. With
respect to Mahmoud’s first argument, the court concluded that revising
Mahmoud’s child support obligation for November and December 2020 based on
information first provided to the court in January 2021 “would be reopening the
evidence and contrary to determinations made by the Court in subsequent
hearings.” As for Mahmoud’s second argument, the court noted that the assistant
corporation counsel had urged the court “to use Box 5 W-2 income as it accurately
reflects ‘total’ wages and not taxable wages.” The court stated that conclusion
was consistent with Wisconsin law. Mahmoud now appeals.

DISCUSSION

¶20 A circuit court has discretion to modify a parent’s child support
obligation after finding that a substantial change in circumstances has occurred.
Winkler v. Winkler, 2005 WI App 100, ¶23, 282 Wis. 2d 746, 699 N.W.2d 652;
see also WIS. STAT. § 767.59(1f)(a). In this case, the circuit court determined that

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No. 2021AP523

a substantial change in circumstances had occurred based on the passage of time
since the entry of the last child support order. See § 767.59(1f)(b)2. Mahmoud
does not challenge that determination on appeal. The issue is therefore whether
the court erroneously exercised its discretion when it modified Mahmoud’s child
support obligation. A circuit court properly exercises its discretion when it
examines the relevant facts, applies a proper standard of law, and uses a
demonstrated rational process to reach a reasonable conclusion. LeMere v.
LeMere, 2003 WI 67, ¶13, 262 Wis. 2d 426, 663 N.W.2d 789.

I. Failure to deviate from the percentage standard

¶21 On appeal, Mahmoud’s overarching argument is that the circuit
court erroneously exercised its discretion by failing to deviate from the percentage
standard set forth in the administrative code when setting his child support
obligation. Mahmoud asserts the court essentially held “that once it determined
that a form of income falls within the code’s definition of gross income, it ha[d] no
choice but to include it in the payor’s gross income under the percentage
standards.” Mahmoud contends that determination was erroneous, as WIS. STAT.
§ 767.511(1m) provides that a court may deviate from the percentage standard if,
after considering sixteen enumerated factors, the court determines by the greater
weight of the credible evidence that use of the percentage standard “is unfair to the
child or to any of the parties.” In essence, Mahmoud argues the court failed to
adequately explain why it decided not to deviate from the percentage standard, in
light of the arguments and evidence that Mahmoud presented.

¶22 In response, Amanda notes that WIS. STAT. § 767.511(1m) requires a
circuit court to make a determination as to whether a deviation from the
percentage standard would be unfair to the child or to any of the parties only when

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No. 2021AP523

a party has made a “request” for a deviation. Amanda contends that in this case,
Mahmoud “did not at any point request the [circuit] court to deviate from the child
support guidelines.” Amanda asserts that Mahmoud’s arguments in the circuit
court were instead focused on how the court should calculate his gross income for
purposes of determining his child support obligation. Under these circumstances,
Amanda contends the court was not required to provide any explanation for its
decision to adhere to the percentage standard. See also WIS. STAT. § 767.511(1n)
(requiring a court to explain its reasoning either in writing or on the record if the
court decides to deviate from the percentage standard based on the factors set forth
in § 767.511(1m)).

¶23 Mahmoud responds that he did, in fact, ask the circuit court to
deviate from the percentage standard in his December 15, 2020 motion to dismiss.
During a subsequent hearing on December 22, 2020, however, Mahmoud’s
attorney noted that Judge Schumacher had applied the twenty-five percent
standard. Mahmoud’s attorney then stated, “Arguably, … there should be no
deviation from [the] 25 percent standard unless the Court believes that that would
be appropriate.” However, Mahmoud later argued in his brief in support of his
motion for reconsideration that the court’s prior determination of his gross income
“unfairly inflate[d] his actual income,” which justified a deviation from the
percentage standard.

¶24 “A litigant must raise an issue with sufficient prominence such that
the [circuit] court understands that it is being called upon to make a ruling.”
Bishop v. City of Burlington, 2001 WI App 154, ¶8, 246 Wis. 2d 879, 631
N.W.2d 656. Here, assuming without deciding that Mahmoud sufficiently raised
the issue of whether the court should deviate from the percentage standard, we
agree with Amanda that Mahmoud has not shown that the court erroneously

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exercised its discretion by failing to do so. Mahmoud essentially argues on appeal
that the court should have deviated from the percentage standard by declining to
include certain items in his gross income for purposes of calculating child support.
He also contends that the court failed to adequately address whether its child
support award was fair to the parties. Finally, Mahmoud asserts that the court
erred by adhering to Judge Schumacher’s prior determination that Amanda had an
earning capacity of $75,000 per year. We reject each of these arguments, for the
reasons explained below.6

II. Investment income

¶25 Mahmoud first argues that the circuit court erred because it “failed to
appropriately account for the fluctuating nature of the investment income in this
case.” Mahmoud notes that he received dividends totaling $29,798 in 2018,
$22,926 in 2019, and $39,848 in 2020. He further observes that his capital gains
were $48,184 in 2018 and $44,154 in 2019, but he sustained capital losses of
$13,304 in 2020. Given these “volatile fluctuations,” Mahmoud contends it is
fundamentally unfair to include his investment income in his gross income for
purposes of calculating child support. He further asserts that because of these
fluctuations, including his investment income in his gross income for purposes of
calculating child support will require the parties to continuously return to court to
relitigate the issue of child support, which will unnecessarily “breed disputes

6
Mahmoud asserts that the circuit court failed to adequately explain why it denied his
requests to deviate from the percentage standard. He contends that failure, in and of itself,
provides a basis for us to reverse the court’s orders. “Although the proper exercise of discretion
contemplates that the circuit court explain its reasoning, when the court does not do so, we may
search the record to determine if it supports the court’s discretionary decision.” Randall v.
Randall, 2000 WI App 98, ¶7, 235 Wis. 2d 1, 612 N.W.2d 737. Here, as explained below, the
record supports the court’s discretionary determinations regarding child support.

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between the parents, incur litigation fees, and expend judicial resources.” For
these reasons, Mahmoud asserts that the court should have exercised its discretion
to exclude his investment income from the child support calculation.

¶26 We disagree. First, we note that Mahmoud’s argument that the
circuit court should have simply ignored his investment income is contrary to WIS.
ADMIN. CODE § DCF 150.02(13)(a)2., which expressly states that a parent’s
“gross income” for purposes of calculating child support includes “[i]nterest and
investment income.” Second, in its April 28, 2021 order, the court expressly
found that it was “fair and reasonable” to use a three-year average of Mahmoud’s
“interest, dividend[s], and capital gains/losses” when calculating his gross income,
“given the fluctuations in the market and investment strategies.” The court
reasoned that using a three-year average would provide a “more accurate
reflection of [Mahmoud’s] investment income” than simply using the investment
income he had earned during the previous year. Mahmoud has not shown that the
court’s decision to consider a three-year average of his investment income did not
appropriately account for the fluctuating nature of that income and was an
erroneous exercise of discretion.

¶27 Moreover, while Mahmoud argues that the circuit court’s decision to
include his investment income in his gross income was unfair to the parties, the
court could reasonably determine that simply ignoring Mahmoud’s investment
income would be unfair to Amanda and the children because it would exclude a
significant source of income that would have otherwise been available for the
children’s support. Furthermore, as Amanda correctly notes, WIS. STAT.
§ 767.59(1f)(b)2. creates a rebuttable presumption that “the expiration of
33 months after the date of the entry of the last child support order” constitutes a
substantial change in circumstances sufficient to justify a modification of child

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support. Consequently, every thirty-three months, either party will be permitted to
seek a modification of Mahmoud’s child support obligation based on fluctuations
in his investment income. Under these circumstances, we reject Mahmoud’s
argument that the court erroneously exercised its discretion because its treatment
of his investment income was unfair to the parties.

III. Capital gains

¶28 Mahmoud next argues that the capital gains at issue in this case are
not “income” for purposes of calculating child support. He contends, as a general
matter, that capital gains represent “the appreciation or loss of value of an asset,
not a payout plan nor an income stream.” As such, Mahmoud asserts that capital
gains do not fall within the term “investment income” in WIS. ADMIN. CODE
§ 150.02(13)(a)2. Consequently, he contends the circuit court erred when it
included his capital gains in his gross income for purposes of calculating child
support.

¶29 Mahmoud fails to acknowledge, however, that in addition to
including nine specifically enumerated categories of income—including “[i]nterest
and investment income,” see WIS. ADMIN. CODE § DCF 150.02(13)(a)2.—the
term “gross income” also includes “[a]ll other income, whether taxable or not,”
subject to certain exceptions not applicable here. WIS. ADMIN. CODE
§ DCF 150.02(13)(a)10. In addition, Mahmoud concedes that this court has
previously held that a circuit court has discretion to treat the capital gain realized
from the sale of an asset awarded to one party in the property division as that
party’s income for purposes of calculating child support. See Maley v. Maley, 186
Wis. 2d 125, 128, 519 N.W.2d 717 (Ct. App. 1994); see also Cook v. Cook, 208
Wis. 2d 166, 182, 560 N.W.2d 246 (1997). This court has also stated that “if an

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income is reported as income for income tax purposes, that income is deemed
derived and realized whether it has been distributed or not.” Stevenson v.
Stevenson, 2009 WI App 29, ¶27, 316 Wis. 2d 442, 765 N.W.2d 811. Based on
these authorities, we reject Mahmoud’s argument that the circuit court could not,
as a matter of law, treat his capital gains as part of his gross income when
calculating child support.

¶30 In the alternative, Mahmoud argues that even if capital gains may be
treated as income for purposes of calculating child support, the circuit court
erroneously exercised its discretion by doing so here. In support of this argument,
Mahmoud again cites the fluctuating nature of his capital gains and losses. He
further asserts that because the children already have “ample support,” the capital
gains “would not normally be available for the support of the children” but would
instead “be reinvested for [his] retirement.” He also argues that his investments
are “not subject to [his] control” because he does not actively manage or make
decisions regarding them. Instead, he contends the investments are controlled by
fund managers who make decisions “based on a variety of factors that do not have
to do with funds available to pay support.”7

¶31 We reject these arguments and conclude the circuit court did not
erroneously exercise its discretion by treating Mahmoud’s capital gains as income
when calculating child support. As discussed above, the court appropriately
accounted for the fluctuating nature of the capital gains by using a three-year

7
In a separate section of his brief-in-chief, Mahmoud argues that because of his inability
to “control or access” his investments, the circuit court also erred by treating the dividends from
those investments as income for purposes of calculating child support. We reject that argument,
for the same reasons we conclude below that Mahmoud’s alleged lack of control over the
investments did not preclude the court from treating his capital gains as income.

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average of Mahmoud’s capital gains and losses when determining his gross
income. And, while Mahmoud asserts that the children had “ample support” from
other sources, the court could reasonably conclude that failing to treat the capital
gains as income would be unfair to Amanda and the children, as it would
artificially exclude a portion of Mahmoud’s income that could otherwise be used
for the children’s support.

¶32 Furthermore, although Mahmoud contends that his capital gains
should not be treated as income because they are “reinvested for [his] retirement,”
he cites no legal authority in support of the proposition that a parent may reduce
his or her child support obligation by reinvesting for retirement funds that would
otherwise be treated as income for purposes of calculating child support. 8 In
addition, we reject Mahmoud’s argument that the capital gains should not be
treated as income because he does not have “control” over his investments.
Although a fund manager may make the necessary day-to-day decisions regarding
Mahmoud’s investments, Mahmoud does not dispute Amanda’s assertion that the
investments “are Mahmoud’s personal investment assets over which he has control
to direct a fund manager or to manage them on his own.” Mahmoud cites no legal
authority supporting his claim that the capital gains should not be treated as
income simply because he chooses not to personally manage his investments. We
therefore reject Mahmoud’s argument that, under the specific factual
circumstances of this case, the circuit court erroneously exercised its discretion by
treating his capital gains as income for purposes of child support.

8
To the contrary, WIS. ADMIN. CODE § DCF 150.02(13)(a)7. expressly states that the
term “gross income” includes “[v]oluntary deferred compensation, employee contributions to any
employee benefit plan or profit-sharing, and employee contributions to any pension or retirement
account whether or not the account provides for tax deferral or avoidance.”

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IV. W-2 Box 5 wages

¶33 Mahmoud also contends that the circuit court erred by using his W-2
Box 5 wages when determining his gross income, rather than his Box 1 wages. He
asserts that the court failed to provide any explanation for its decision to use the
Box 5 wages. He further contends that the court did not address his argument that
it was inappropriate to use the Box 5 wages because they “included mandatory
contribution[s] to health insurance for the children and also included contributions
to his 401k in the form of 50% matching contributions from his employer.” He
argues that in this case, where the children “are already amply supported,
including or adding back in that ‘extra’ money which Congress wants to
incentivize people to earmark for certain purposes as part of the child support
award is not necessary.”

¶34 We conclude the circuit court did not erroneously exercise its
discretion by using Mahmoud’s Box 5 wages when determining his gross income.
We agree with Amanda that although Mahmoud “may elect to take advantage of
the government’s decision to incentivize health and retirement savings, … this
does not diminish his gross income for the purposes of child support.”
Furthermore, as noted above, the administrative code expressly provides that a
parent’s “gross income” includes voluntary deferred compensation, employee
contributions to employee benefit plans or profit-sharing, and employee
contributions to pensions or retirement accounts. WIS. ADMIN. CODE § DCF
150.02(13)(a)7. While Mahmoud asserts that his Box 5 wages include employer
contributions to his 401k, he does not develop any argument or cite any legal
authority in support of the proposition that such contributions cannot be treated as
income for purposes of calculating child support. On this record, the court could

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reasonably conclude that it was appropriate to use Mahmoud’s Box 5 wages,
rather than his more limited Box 1 wages, when determining his gross income.

V. Fairness

¶35 Mahmoud next argues that the circuit court erroneously exercised its
discretion by “not addressing the arguments raised as to overall fairness, including
issues of hidden maintenance, and increased child support without any increased
showing of need.” He further asserts that the court “strung together the numbers
resulting in the highest award Mahmoud would have to pay, without explaining
how or why it was fair to do so under the specific facts and circumstances of this
particular case.” Mahmoud specifically contends that it was unfair for the court to
increase his child support obligation given that: (1) the only change in
circumstances was the passage of time; (2) there was no evidence that the
children’s need for support had increased; and (3) the evidence showed that since
the divorce judgment was entered, Mahmoud’s wages had decreased from
$625,000 to $593,869.79.

¶36 Wisconsin courts apply a presumption that child support established
pursuant to the percentage standards in WIS. ADMIN. CODE ch. DCF 150 is fair.
See Ladwig v. Ladwig, 2010 WI App 78, ¶23, 325 Wis. 2d 497, 785 N.W.2d 664.
In this case, the circuit court could reasonably determine that Mahmoud had failed
to rebut that presumption. More specifically, the court could reasonably determine
that it was not unfair for Mahmoud—whose gross income for the year 2020
totaled $653,957—to pay $8,880 per month to support his two children, who spent
seventy-percent of their time with Amanda. This was an increase of $991 per
month over Mahmoud’s original child support obligation, as set forth in the
divorce judgment. Despite Mahmoud’s decreased wages from years prior, the

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court could reasonably conclude that such an increase was fair because the original
child support award did not take into account Mahmoud’s investment income.

VI. Projected earnings

¶37 Mahmoud next argues that, with respect to the child support award
that was effective on November 1, 2020, the circuit court erred by using
Mahmoud’s projected wages for the year 2020, rather than the actual wages
reflected on his 2020 W-2. In its December 22, 2020 decision on Amanda’s
motion to modify child support, the court determined that Mahmoud’s “year to
date income computed annually would indicate 2020 wage income of
$624,500.00.” Using that number, the court ordered Mahmoud to pay $8,886 per
month in child support, retroactive to November 1, 2020.

¶38 As discussed above, on January 11, 2021, Mahmoud moved for
reconsideration of the circuit court’s December 22, 2020 decision. In support of
his motion, Mahmoud submitted his final pay stub for the year 2020, which
showed that he had earned only $602,194.47 in wages that year, rather than the
$624,500 projected by the circuit court. The court denied Mahmoud’s motion for
reconsideration, concluding he had failed to present any newly discovered
evidence that would justify reconsideration of the court’s prior decision. Instead,
the court concluded Mahmoud had merely presented “updated” evidence that
could justify a future modification of child support.

¶39 We review a circuit court’s denial of a motion for reconsideration for
an erroneous exercise of discretion. Koepsell’s Olde Popcorn Wagons, Inc. v.
Koepsell’s Festival Popcorn Wagons, Ltd., 2004 WI App 129, ¶6, 275 Wis. 2d
397, 685 N.W.2d 853. “To prevail on a motion for reconsideration, the movant
must present either newly discovered evidence or establish a manifest error of law

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or fact.” Id., ¶44. On appeal, Mahmoud does not develop any argument in his
brief-in-chief that the court erred by concluding he had failed to present newly
discovered evidence in support of his motion for reconsideration.9 Nor does
Mahmoud argue that the court’s use of his projected wages in its December 22,
2020 decision was a manifest error of law or fact. As such, Mahmoud has failed
to show that the court erroneously exercised its discretion by denying his motion
for reconsideration.

¶40 Mahmoud instead argues that the circuit court erred when it denied
his subsequent request to modify the child support award effective on
November 1, 2020, based on the discrepancy between his projected and actual
2020 wages. Mahmoud notes that in its April 28, 2021 order, the court found that
it had improperly double counted certain amounts when calculating his investment
income. Mahmoud asserts the court therefore “retroactively corrected” his
investment income for 2020, but it nevertheless continued to use his projected
2020 wages, rather than his actual wages. Mahmoud argues it was an erroneous
exercise of discretion for the court “to only correct one aspect of the December 22
award (i.e., the double counting) but not explain why [the court] was not also
correcting the earnings or why it was appropriate … to still be using ‘projected’
income.”

9
In his reply brief, Mahmoud argues for the first time that when the circuit court denied
his motion for reconsideration, the court “erroneously maintained [that] the actual and updated
earnings information … was not newly discovered evidence for purposes of a reconsideration
motion.” We need not address arguments raised for the first time in a reply brief. A.O. Smith
Corp. v. Allstate Ins. Cos., 222 Wis. 2d 475, 492, 588 N.W.2d 285 (Ct. App. 1998). Moreover,
while Mahmoud asserts the court erroneously concluded that the updated wage information was
not newly discovered evidence, he does not develop any argument in support of that assertion.
We need not address undeveloped arguments. See State v. Pettit, 171 Wis. 2d 627, 646-47, 492
N.W.2d 633 (Ct. App. 1992).

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¶41 Mahmoud is correct that the circuit court’s April 28, 2021 order did
not specifically address why the court chose to use his projected 2020 wages,
rather than his actual wages, when correcting the child support award that was
effective as of November 1, 2020. However, in its subsequent decision denying
Mahmoud’s request for clarification of the April 28, 2021 order, the court rejected
Mahmoud’s argument that it should have revised his child support obligation for
November and December 2020 to account for his actual 2020 wages. The court
reasoned that revising Mahmoud’s prior child support obligation based on new
facts that were first provided to the court in January 2021 “would be reopening the
evidence and contrary to determinations made by the Court in subsequent
hearings.”

¶42 Mahmoud does not address the circuit court’s conclusion in this
regard. An appellant’s failure to address the grounds on which the circuit court
ruled constitutes a concession of the ruling’s validity. See Schlieper v. DNR, 188
Wis. 2d 318, 322, 525 N.W.2d 99 (Ct. App. 1994). Under these circumstances,
we reject Mahmoud’s contention that the court erroneously exercised its discretion
by failing to modify his prior child support obligation to account for the new
information he provided regarding his actual 2020 wages.

VII. Amanda’s earning capacity

¶43 Finally, Mahmoud argues that the circuit court erred by adhering to
Judge Schumacher’s use of $75,000 for Amanda’s earning capacity. As discussed
above, the court initially determined that for purposes of calculating child support,
Amanda’s income was $175,000 per year—the sum of the yearly maintenance she
received from Mahmoud ($75,000) and the annual income she had earned before
the children were born ($100,000). The court subsequently granted Amanda’s

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motion for reconsideration, however, and recalculated child support using
Amanda’s earning capacity of $75,000, as previously determined by
Judge Schumacher. The court continued to use Amanda’s earning capacity of
$75,000 in its April 28, 2021 order modifying child support.

¶44 Mahmoud argues that the circuit court’s continued use of $75,000 as
Amanda’s earning capacity was inconsistent with the court’s treatment of
Mahmoud’s investment income. Mahmoud emphasizes that while the court
adhered to Judge Schumacher’s determination of Amanda’s earning capacity, the
court deviated from Judge Schumacher’s decision by determining that Mahmoud’s
gross income included both his wages and his investment income. Mahmoud
asserts that “[i]f Judge Schumacher’s determinations were the touchstone for the
child support calculation,” then the court should have adhered to
Judge Schumacher’s decision that Mahmoud’s gross income included only his
wages. Mahmoud therefore contends that the court erroneously exercised its
discretion by failing to explain why it adopted Judge Schumacher’s determination
regarding Amanda’s earning capacity but deviated from Judge Schumacher’s
treatment of Mahmoud’s investment income.

¶45 As Amanda correctly notes, the circuit court was not required to
follow Judge Schumacher’s methodology from the 2017 divorce judgment when
recalculating Mahmoud’s child support obligation in 2021. The court adequately
explained in its January 11, 2021 order why it believed it was appropriate to adopt
Judge Schumacher’s determination regarding Amanda’s earning capacity.
However, the court’s decision to adopt one aspect of Judge Schumacher’s decision
did not obligate the court to adopt any of Judge Schumacher’s other
determinations. Moreover, as Amanda aptly observes, Mahmoud has not cited any
evidence that Judge Schumacher was aware of Mahmoud’s investment income and

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made an intentional decision to exclude it from Mahmoud’s gross income when
calculating child support.

¶46 In any event, based on the parties’ arguments and the evidence
presented during the April 26, 2021 hearing, the circuit court could reasonably
exercise its discretion to depart from Judge Schumacher’s prior decision by
including Mahmoud’s investment income in his gross income. As explained
above, the court’s decision to include Mahmoud’s investment income in his gross
income was not an erroneous exercise of discretion. Under these circumstances,
we reject Mahmoud’s argument that the court’s allegedly “inconsistent” treatment
of his investment income and Amanda’s earning capacity provides a basis to
reverse the court’s orders.

By the Court.—Orders affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

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