Facts: Mother and Father are the never-married parents of Child. Father petitioned to lower his child support.

Mother sought discovery related to Father’s business records, bank and investment account statements, and his receipt of an inheritance from his father.

Father moved to limit discovery and for a protective order, arguing that the relevant evidence of his income is readily obtainable through his federal tax returns.

The trial court found that Father’s income tax return was reliable evidence of his actual income and ordered Father to give Mother only documents reflecting his net and gross income, e.g., tax return, paystub, etc. As for Mother’s request for discovery related to Father’s inheritance, the trial court ordered Father to produce responsive materials for the trial court to review in camera.

The trial court found that the Mother’s income was $17,000 per month and the Father’s income was $8700 per month. Father’s child-support obligation was reduced to $155 per month.

Mother appealed, arguing that the trial court erred in refusing to allow discovery of Father’s inheritance, his investment accounts, and his online gambling accounts.

On Appeal: The Court of Appeals vacated the trial court’s ruling.

A trial court’s discovery decisions are generally subject to the deferential abuse of discretion standard of review. However, in child support cases, the trial court’s discretion must be exercised within the strictures of the Child Support Guidelines.

Parties may generally obtain discovery regarding any matter, not privileged, which relates to the topic involved in the pending action. The information sought through discovery must have some logical connection to proving the case and/or obtaining the prayed-for relief.

The income of the obligor parent is generally the most important finding in a child support proceeding. Further, the integrity of a child support award depends on the trial court’s accurate determination of both parents’ gross income.

The Guidelines recognize the importance of having reliable information regarding a parent’s current ability to support when establishing a child support order. When the evidence of a parent’s income is incomplete, the courts and the parties find themselves in a serious quandary. However, the Child Support Guidelines are not intended to let parents avoid their obligation to support their children simply by keeping inadequate records of their income and expenses or by resisting appropriate discovery requests for this information.

Tennessee courts recognize that a parent’s reported income may not truly reflect their ability to provide support.

When determining a parent’s gross income for the purpose of setting child support, Tennessee courts must include all income from any source, whether earned or unearned. Although the primary focus is the income regularly acquired by the obligor, under the Guidelines, money received by inheritance can be considered as income. Inherited amounts may be averaged over a period of years rather than counted as income for only one year.

Additionally, capital gains are considered in the calculation of income, and proration of gains over time is allowed. Further, when a parent’s income is variable, the Guidelines let the court determine income by averaging. Under the Guidelines, all capital gains, including those from an isolated transaction, should be considered in calculating gross income for the purpose of setting child support. Thus, while the Guidelines afford the court discretion to average variable income or prorate one-time income amounts such as an inheritance or capital gain, it does not let the court merely disregard a source of income.

The Court found error in the trial court’s limitations on discovery:

Although the trial court apparently conducted an in camera review of documents related to Father’s inheritance, it did not permit Mother to access these documents in discovery. Similarly, the trial court did not permit discovery of Father’s Ameritrade or Bank of America accounts. Sources of income for purposes of determining child support include interest income, dividend income, net capital gains, and inheritance. As such, any information regarding Father’s inheritance and income he received from his investments was relevant to the issue of his child-support obligation. Accordingly, the trial court abused its discretion when it denied Mother’s motion to compel Father to produce documents related to same. In other words, the trial court’s discovery rulings did not permit a full examination of all sources of Father’s income as required by the Guidelines. Therefore, we reverse those rulings and remand for full discovery of Father’s income and income potential, including his inheritance, Ameritrade account, Bank of America account, and other discoverable accounts as required under the Guidelines.

The Court vacated the trial court’s ruling and remanded the case for further proceedings.

K.O.’s Comment: The opinion repeatedly refers to a Rule 26.03 protective order as an “order of protection.” In family law, those are two very different things.

Source: Collins v. Harrison (Tennessee Court of Appeals, Middle Section, April 24, 2024).

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