Posted by: koherston | June 25, 2012

Imputing Income for Determination of Child Support in Tennessee: Goodman v. Goodman

Facts: Early in the parties’ divorce proceeding, they entered an agreed temporary order setting Father’s child support based upon his projected income of $75,000 per year. A few months later, Father was terminated from that job and returned to his prior employment where his income was substantially lower at approximately $24,000 per year. Father sought to reduce his child support due to the substantial decrease in his earnings.the trial court ordered Father to pay support based upon income of $50,000 per year. Father was subsequently incarcerated for contempt, lost his job as a result, and took a job at Starbucks earning $8.95 an hour, which amounted to nearly $1600 per month. Again, the trial court found Fathers “earning capacity” to be $50,000 per year, set his child support obligation based upon this finding, found an arrearage of over $32,000, and ordered him to pay Mother’s attorney’s fees of $35,000. Father appealed.

On Appeal: The Court of Appeals reversed the trial court.

The Child Support Guidelines provide that imputing additional gross income to a parent is appropriate if a parent has been determined to be willfully and/or voluntarily underemployed or unemployed. However, to trigger this portion of the Child Support Guidelines and to calculate a child support award based upon earning capacity rather than actual income, there must be a threshold finding that the obligor parent is willfully and voluntarily underemployed or unemployed.

The Child Support Guidelines do not presume that any parent is willfully and/or voluntarily under or unemployed. The determination of whether a parent is a voluntarily underemployed may be based on any intentional choice or act that adversely affects a parent’s income. If a parent’s reasons for working in a lower paying job are reasonable and in good faith, the court will not find him or her to be willfully and voluntarily underemployed. Tennessee courts are particularly interested in whether a parent’s change in employment or amount of income is a voluntary or involuntary, and are more inclined to find willful and voluntary underemployment when a decision to accept a lower paying job is a voluntary. Accordingly, the touchstones for this inquiry are the reasonableness of the employment decision, and whether the choice to take a lower paying job was voluntary.

After reviewing the record, the Court concluded:

It is undisputed that Father’s actual income, at the time of the trial, was not $50,000 per year. Rather, the evidence showed that Father’s actual income, at the time of trial, was approximately $19,000 per year, with potential to make $42,000 when he is promoted to a manager position at Starbucks.

Because the trial court in this case failed to make any finding that Father was willfully or voluntarily underemployed, we [] reverse the judgment of the trial court basing Father’s child support obligation on his alleged earning capacity and remand for a determination of Father’s child support obligation based on his actual income.

Accordingly, the trial court was reversed. The award of attorney’s fees was also vacated.

Goodman v. Goodman (Tennessee Court of Appeals, Western Section, May 7, 2012).

Information provided by K.O. Herston: Knoxville, Tennessee Matrimonial, Divorce and Family Law Attorney.


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