Facts: Mother and Father divorced after 11 years of marriage.

For most of the marriage, Father worked as a web developer, and Mother stayed home with the children. Father earned $85,000 a year.

Before their separation, Father changed jobs and made $102,000 a year. Four months later, when the divorce was filed, Father lost that job.

After a period of unemployment, Father found another job as a web developer making $87,500 a year.

The parties stipulated that, for child support purposes, Father’s income should be $87,500.

To set child support, the trial court found Father’s income to be $100,000 per year. The trial court explained that Father’s tax returns for three nonconsecutive years showed an average income of $94,000. It also found he would receive rental income from a duplex he received in the divorce.

Father appealed.

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

The Tennessee Child Support Guidelines presume that both parents contribute to the financial support of a child in pro rata proportion to the actual income available to each parent. The fairness of a child-support award depends on an accurate determination of each parent’s gross income or ability to support.

Generally, a parent’s gross income equals his or her earning capacity or ability to support. Certain situations may arise, however, where a court will impute income to a parent. To impute income means to assign or attribute an income level to the parent that may not reflect the parent’s actual gross income.

Tennessee law provides that imputing additional gross income to a parent when setting child support is appropriate when:

• the parent is willfully or voluntarily underemployed or unemployed;
• there is no reliable evidence of income; or
• the parent owns substantial nonincome-producing assets.

The Court found the trial court erred by imputing income to Father:

It is unclear from the trial court’s order precisely how it arrived at the $12,500 figure that it imputed to [Father] in addition to this $87,500 yearly salary. There was no evidence at trial that [Father] still had contract labor jobs available to him, and although there was testimony concerning the amount of rental income that the duplex was capable of producing, [Father] testified that he was personally living in the duplex at the time of trial and was only receiving rent for the other half. Regardless, the trial court expressly found that [Father] was voluntarily unemployed and underemployed while the divorce was pending; however, at the time of trial, the parties were seemingly in agreement, based on their stipulation regarding [Father’s] income, that this was no longer the case. [Father] had secured employment making a comparable salary to the one he had enjoyed during the majority of the parties’ marriage.

Holding that the record supports no finding that Father was voluntarily underemployed at the time of trial, the trial court’s judgment was reversed.

K.O.’s Comment: It is odd for a trial court to effectively overrule the parties’ stipulation. Stipulations are encouraged and enforced by the courts because they expedite litigation. The more typical scenario is when a party tries to renege on a stipulation, in which case Tennessee law provides that stipulations will be rigidly enforced by the courts.

Kanski v. Kanski (Tennessee Court of Appeals, Middle Section, October 29, 2018).