Finding of Voluntary Underemployment for Child Support Reversed in Memphis Divorce: Rogin v. Rogin

Facts: Mother and Father are the parents of two children. Both parents were educated at Ivy League universities and earned Masters of Business Administration degrees from Vanderbilt University. After approximately nine years of marriage, they divorced.

At trial in 2012, Father testified that he lost his job in October 2008 due to cutbacks in his department — real estate — and the general downturn in the economy at that time. Prior to being laid off, Father earned a maximum of $95,000 per year. He testified that he had been networking in order to gain new employment, but that he had not, three and a half years later, been successful in procuring full-time employment. His networking led to a number of part-time consulting jobs, however, which he had taken in order to further network. Father’s actual income at the time of trial was approximately $1487 per month.

Mother employed in occupational expert who opined that Father’s earning capacity was somewhere between $75,000 and $125,000 in light of his experience and education.

The trial court found Father to be willfully and voluntarily underemployed. For the purposes of determining child support, the trial court imputed income to Father of $36,000 per year, or $3000 per month.

Father appealed.

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

Father argued that his failure to maintain full-time employment consistent with his previous earnings was not the product of a willful failure to seek employment, but rather was the result of poor market conditions in his particular field, i.e., real estate.

Under the Child Support Guidelines, the trial court may impute income under certain limited circumstances.  The Guidelines provide that imputing additional gross income to a parent is appropriate if a parent has been determined by a tribunal 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 on earning capacity rather than actual net income, there must be a threshold finding that the obligor parent is willfully and voluntarily underemployed or unemployed.

The determination of whether a parent is voluntarily underemployed is a question of fact, which requires careful consideration of all the attendant circumstances. Such a determination may be based on any intentional choice or act that adversely affects a parent’s income.

When called upon to determine whether a parent is willfully and voluntarily unemployed or underemployed, the courts must consider the factors in the Child Support Guidelines (Tenn. Comp. R. & Regs. 1240-2-4-.04(3)(d)(2)), as well as the reasons for the party’s change in employment. 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. The courts are particularly interested in whether a parent’s change in employment or amount of income is voluntary or involuntary, and are more inclined to find willful and voluntary underemployment when a decision to accept a lower paying job is voluntary.

Tennessee courts will consider the reasonableness of the obligor parent’s occupational choices in light of surrounding circumstances. The trial court must consider whether the choice to take a lower paying job is made in good faith and whether some or all of the unrealized earning capacity should be included as imputed income.

In this case, it was undisputed that Father lost his most recent full-time employment due to lay-offs that were not within his control. Accordingly, the issue was not whether Father’s choice to take a lesser paying job caused him to be underemployed, but whether Father engaged in a pattern of willful behavior since the lay-off that resulted in substantially less income for Father and, therefore, less support for the children.

After reviewing the record, the Court reasoned:

From the totality of the evidence in the record, we cannot conclude that Mother has met her burden to show that Father is willfully and voluntarily underemployed. Father’s education and experience are in the real estate financial sector, a sector particularly affected by the downturn in the economy. From Father’s testimony, he used traditional means to seek employment in this field. In addition to traditional means, Father asked Mother’s financial advisors and her family for assistance in meeting potential employers. Father’s networking succeeded in finding Father sporadic consulting work, but failed to result in full-time employment at a level consistent with his previous employment…. The trial court made no adverse credibility findings against Father’s testimony concerning his sincere, yet fruitless, efforts to find a job. Indeed, even the trial court apparently had difficulty imputing income to Father at a rate consistent with either the vocational expert’s testimony, or Father’s most recent prior full-time employment. Instead, the trial court only imputed income to Father of $36,000 based on Father’s academic credentials. While Mother testified that she knew of several open jobs in banking that she felt Father was qualified for, nothing in Mother’s testimony indicates either that she informed Father of these openings or that he voluntarily chose not to pursue these opportunities. In addition, Mother did not testify as to the salary Father could earn at any of these positions. From the totality of the evidence, we must conclude that the evidence preponderates against the trial court’s finding that Father was willfully and voluntarily underemployed. As such, the trial court erred in imputing income to Father beyond his actual income and the trial court’s calculation of child support is, therefore, reversed.

Accordingly, the trial court was reversed and the case remanded.

K.O.’s Comment: Appellate attorneys should note that the Court complained about the appellate record containing several volumes, in large part due to the inclusion of various interrogatories, other discovery materials, and the depositions of all witnesses, in addition to transcripts of their trial testimony. The Court wrote, “It is too often the case that an Appellant includes all filings made in the trial court and every portion of the transcript of the hearing (including arguments of counsel) in contravention of the [Tennessee] Rule of Appellate Procedure [24(a)]. The problem with inclusion of extraneous filings that are clearly excluded from the appellate record is that it places upon this Court a duty that falls to the Appellant—to prepare a correct and complete record on appeal…. This Court endeavors to file its opinions in a timely manner; however, when placed in the position of having to review volumes of extraneous, unnecessary, and irrelevant filings, our goal is hindered and the interests of judicial economy are stymied.”

Rogin v. Rogin (Tennessee Court of Appeals, Western Section, July 10, 2013).

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

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K.O. Herston is a family-law attorney in Knoxville, Tennessee whose practice is devoted exclusively to family law, including divorce, child custody, child support, alimony, prenuptial agreements, and other aspects of family law.

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