Facts: Mother and Father are the never-married parents of Child.

The State petitioned to establish Child’s parentage and set child support. DNA testing confirmed Father’s parentage.

Father, who lived in Mississippi, testified he filed for bankruptcy in 2018 and was homeless for a while. He has no car and cannot get financing for a new vehicle because of the bankruptcy.

The father lives with a friend and pays his friend $250 per month for rent, including Internet and utilities. He spends $80-$100 per month on food. Although he has three children with his ex-wife, he pays no child support for those children.

Father works at a gas station. He earns $500 monthly, working 12-13 hours weekly at $10 per hour. He has asked for full-time work, but his employer said they do not have enough business to employ him full-time.

Father says he has not looked for work elsewhere because he has no transportation, and there is no public transportation where he lives.

Father’s tax documents show he earned $9000 in 2019, $6000 in 2020, and $6000 in 2021. He testified he received no other income.

The trial court found Father could work more than 13 hours a week and was willfully underemployed. The trial court also found Father did not produce reliable evidence of his income and imputed to Father the presumptive median gross income for men in Tennessee, i.e., $3646.75 per month. Father was ordered to pay child support of $589 monthly plus a judgment for retroactive support of almost $19,000.

Father appealed.

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

Tennessee law requires parents to support their minor children “in a manner commensurate with their own means and station in life.”

Income may be imputed if a parent is found to be willfully underemployed or when there is no reliable evidence of the parent’s income. These are two distinct inquiries. Willful underemployment occurs when a court concludes the parent has made unreasonable employment choices given their duty to support the child such that they earn substantially less income than they can. If there is no reliable evidence of actual income, the court must first determine if there is reliable evidence of the parent’s income potential. Lacking that, the court must impute income at the statutory amount.

For example, Tennessee courts have found no reliable evidence of gross income when a parent’s expenses exceeded their stated income, the parent’s lifestyle showed a higher income, because income-related documents were contradicted by other evidence of income, or because the evidence presented was incomplete.

The Court began by noting Father’s “claimed finances simply do not add up”:

Father’s W-2s for a part-time hourly employee are remarkably rounded numbers. Father’s W-2s reflect that he made not approximately but exactly $6000 in two consecutive years and exactly $9000 in another year. The evidence does not preponderate against the determination that Father’s accounting did not add up, and accordingly the conclusion that the W-2s were not adequate and reliable proof of his gross income is supported by the record.

When a court finds evidence of the parent’s gross income unreliable, the court should consider whether it can accurately assess the party’s income potential from reliable evidence. A finding of potential income must have an evidentiary basis. A court is not limited to the imputed statutory amount if there is reliable evidence of income potential.

The Court found the trial court erred by imputing the statutory amount through its errant approach to assessing whether Father produced reliable evidence of his income potential:

The trial court’s reasoning as to potential income was predicated upon its conclusion that Father did not produce reliable evidence of actual income, treating actual income and potential income as synonymous. At trial, all the evidence confirmed that Father was an unskilled worker and that his potential income hovered around the minimum wage. Father earned $10 per hour at a gas station. … There was no evidence that Father had education which would qualify him for a job with higher wages. … There was evidence introduced at trial which the trial court could have found was reliable evidence of Father’s potential income. The trial court did not address this evidence in considering income potential, instead concluding that because Father did not produce reliable evidence of actual income there was no reliable evidence of potential income.

A court may only impute the statutory amount when there is not reliable evidence as to both actual income and income potential. Accordingly, we conclude that the court abused its discretion in imputing the statutory amount when it failed to consider whether there was reliable evidence of Father’s income potential distinct from Father’s failure to produce reliable evidence of actual income, treating the two as synonymous….

The methodology for imputing income is based on a trial court’s findings regarding three inquiries: willful underemployment, reliable evidence of income, and reliable evidence of income potential. When a parent is found to be willfully underemployed or unemployed, the court does not use the statutory amount to impute income but instead imputes additional income that reflects earning capacity and that is based on past and present employment and on education and training. Alternatively, when there is no reliable evidence of income or of income potential, the court imputes gross income in the statutory amount. In the third alternative, when a parent’s proof of income is deemed unreliable but other reliable proof of income or income potential is introduced, the court no longer imputes the statutory amount. In such cases, Tennessee courts have basic child support awards on the parent’s potential income, so long as that potential income has been established by reliable proof.

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There is no evidence Father had training or education to qualify him for work earning higher wages …. The court did not consider the [Child Support Guideline] factors used in determining a reasonable imputed income for Father but instead relied on the statutory amount used when there is no reliable evidence of a parent’s income or income potential.

The Court vacated the trial court’s judgment awarding the imputed statutory amount because the record contained proof of Father’s income potential that the trial court could have deemed reliable had it considered income potential distinct from actual income. The case was remanded to the trial court to consider income potential or whether the case is better analyzed as one of willful underemployment.

Source: State ex rel. Collins v. Singh (Tennessee Court of Appeals, Western Section, July 9, 2024).

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