New and Interesting Cases from the Texas Court of Appeals: Week of December 13th, 2009
A new case on Intentional Under Employment out of Dallas. In the Interest of J.G.L., a Child, 295 S.W.3d 424. The background facts are as follows: After a bench trial, the 254th Judicial District Court, Dallas County, Judge David Hanchen, entered a final decree of divorce in which the court deviated from child support guidelines on the basis that husband was voluntarily underemployed. Husband appealed. The trial court found that Husband’s monthly net resources were $4,779.90 in 2006, and $3,393.40 in 2007. The court further found Husband was obligated to support two children, one before the court and another from a previous marriage. The divorce decree shows the Texas Family Code guidelines direct child support payments of $593.77 per month based upon Husband’s 2007 monthly net resources. The court, however, found that “testimony shows that the obligor was voluntarily underemployed during 2007” and set child support payments at $825 per month. Based upon these findings, the trial court awarded Wife child support payments of $825 per month.
The Texas Family Code requires courts to make specific findings if “the amount of child support ordered by the court varies from the amount computed by applying the percentage guidelines.” Tex. Fam.Code Ann. § 154.130(a)(3) (Vernon 2008). Trial courts must provide “specific reasons” for the variance between the child support percentage guidelines and the child support awarded. Id. § 154.130(b)(5). Otherwise, the law presumes the guideline child support payments are in the best interest of the child. Id. § 154.123(a) (Vernon 2008). A finding of voluntary underemployment, for example, allows the court to set child support at the “earning potential” rather than the actual earnings of the child support obligor. Id. § 154.066 (Vernon 2008).
To begin the voluntary underemployment analysis, the trial court contemplates the obligor’s proof of current wages. In re K.N.C., 276 S.W.3d at 627; see also Zorilla v. Wahid, 83 S.W.3d 247, 253 (Tex.App.-Corpus Christi 2002, no pet.); DuBois v. DuBois, 956 S.W.2d 607, 610 (Tex.App.-Tyler 1997, no pet.). Once the obligor’s wages are established, the burden shifts to the obligee to demonstrate the obligor’s intent to decrease income for the purpose of reducing child support payments. In re K.N.C., 276 S.W.3d at 627. Evidence of intent, such as the circumstances of obligor’s education, economic adversities, business reversals, business background, and earning potential, gives rise to an inference of voluntary underemployment. In re P.J.H., 25 S.W.3d at 405-06; see also In re K.N.C., 276 S.W.3d at 627. These factors, however, are not exhaustive. Roosth v. Roosth, 889 S.W.2d 445, 454 (Tex.App.-Houston [14th Dist.] 1994, writ denied); see, e.g., Garner, 200 S.W.3d at 303 (where the trial court considered the gifts and financial support of the obligor’s extended family in determining his net resources).
Husband’s argument rests on his testimony and that of his employer, Lance McDade. McDade stated that by agreement Husband set his own schedule and did not work every day. He further testified that he assigned Husband’s projects and that Husband received a forty percent commission from the profits. McDade told the trial court that Husband earned $62,730 in 2005, $76,900 in 2006, and $54,300 in 2007. When asked about the earnings decline between 2006 and 2007, McDade indicated that he reduced Husband’s workload based on Husband’s emotional state and that his business decreased overall because of adverse economic conditions. He testified Husband did not ask for a reduction of his workload, and that he subsequently asked McDade to increase it. Husband told the court that in 2007 his income decreased more than the income of the business overall because McDade would assign more work in the downturn to those employees with lower commission percentages. There was is no evidence to the contrary.
Wife basically argued that Husband is incorrect that she must provide evidence of intentional underemployment and that the Court has discretion to weigh the testimony of the witness and other evidence. The Appeals Court cited In re P.J.H., 25 S.W.3d at 405-06 that established Wife had the burden at trial to present evidence of underemployment as a specific basis for departing from child support guidelines
Wife relies on In re A.B.A.T.W., 266 S.W.3d 580 (Tex.App.-Dallas 2008, no pet.), to demonstrate that Husband and McDade’s testimony created conflicting evidence which allowed the trial court to make a determination of Husband’s intent. However, in this case the Court found Wife neither testified nor provided other evidence to contradict Husband’s and his employers testimony about Husband’s intent to earn income. The Appeals Court conceded that although the Trial Court was not required to accept the testimony of Husband and his employer as true, the trial Courts rejection of that testimony as not credible would still leave the trial court without any evidence that Husband intended to work less in order to reduce child support payments and presumably that would be an abuse of discretion because there would be no evidence at all of any intentional underemployment. Presumably, if the mother had a chance to respond to the Court of Appeals she would argue that if the Court found the employee/employer testimony not credible regarding why there was a reduction in income then the Trial Court was free to presume other reasons, like intentional underemployment, could be attributed to the drop in income. Again presumably, the Court of Appeals would respond that inconsistent testimony alone regarding a drop in income is not a “specific reason” under the Family Code. The Court remanded the case to set child support according the guidelines.