1. Child Support, Custody, and Visitation--child support--calculation of income--
business losses
The trial court on remand in a child support action correctly computed defendant's
income under the Child Support Guidelines by considering defendant's business loss but not
balancing that loss against his income. The court's findings are reasonable and satisfy the
requirements of the mandate on remand, particularly in light of a finding that defendant was
trained as an airline pilot but was not looking for work with freight carrier airlines even though
such work was available. The “Potential Income” section of the Guidelines permits a court to
consider potential income when a defendant is voluntarily unemployed or underemployed.
2. Child Support, Custody, and Visitation--child support--amount ordered not paid
while appeal pending--contempt
The trial court properly found that defendant was in willful contempt where defendant
appealed a modified order and continued payments at the old amount. Defendant would have
been entitled to a setoff for the overpayment if the order had been reversed; his calculated and
deliberate decision to pay the lower amount was at his peril.
3. Child Support, Custody, and Visitation--child support--attorney fees
The trial court did not abuse its discretion by awarding attorneys fees to plaintiff's
counsel in a child support action where defendant had substantial assets in the form of his
retirement and investment accounts, his home, aircraft, a boat, and a business, while plaintiff's
income was $41,000 per year, with modest bank accounts totaling approximately $2,000.
Appeal by defendant from orders entered 9 April 1998 by
Judge Thomas G. Foster, Jr. in Guilford County District Court.
Heard in the Court of Appeals 19 April 1999.
Hatfield & Hatfield, by Kathryn K. Hatfield, for plaintiff-
appellee.
Thigpen, Blue, Stephens & Fellers, by T. Byron Smith, for
defendant-appellant.
EDMUNDS, Judge.
Plaintiff is the mother of a minor child fathered by
defendant. In 1987, plaintiff filed this action against
defendant for support of their minor child. In 1990, the trial
court ordered defendant to pay $950 per month in support. By
1995, defendant had retired early from his work as a pilot for
USAir and opened his own business (WRA, Inc.), which reduced his
annual income. Later that year, defendant moved for a reduction
in support, and in October 1995, the trial court reduced his
child support payment to $525 per month. At the same time, the
trial court ordered a hearing to determine arrearage owed by
defendant. On 12 June 1996, that amount was set at $6,935. The
June order also continued the matter for a review of child
support consistent with North Carolina's Child Support
Guidelines. In October 1996, the trial court found defendant had
either earnings or an earning capacity of $77,000 per year and
that WRA, Inc., a Sub-Chapter S company, showed a $52,000 loss,
which passed through to defendant's personal tax return. Based
on its findings, the trial court ordered defendant to pay child
support in the amount of $900 per month. Defendant appealed that
decision to this Court while continuing to pay only $525 per
month. On appeal, this Court held that “the trial court did not
abuse its discretion in considering all of defendant's available
sources of income in arriving at his gross income.” Burnett v.
Wheeler, 128 N.C. App. 174, 177, 493 S.E.2d 804, 806 (1997). We
also stated,
We are unable to determine if the trial court
concluded that even with a $52,000 loss the
defendant's income was $77,000, or if the
trial court chose not to find the loss
credible at all and therefore did not factor
it into its computation.
. . . Because we are unable to
determine what the trial court decided
relative to the evidence of loss submitted by
defendant, we remand for more specific
findings indicating the trial court's
treatment of the $52,000 loss and its
computation of defendant's gross income.
Id. at 176, 493 S.E.2d at 806. On remand, the trial court
entered an order finding that it did consider defendant's $52,000
business loss when calculating defendant's income and in setting
child support. The trial court again set defendant's support
obligation at $900 per month.
Within two weeks of this Court's order remanding the case,
plaintiff moved for attorney's fees and requested the trial court
to find defendant in contempt for failing to pay $900 per month
in support. After the trial court entered its findings on
remand, it ruled on plaintiff's motions, awarding attorney's feesto plaintiff and holding defendant in civil contempt for failing
to make his full monthly child support payments. From these
orders, defendant appeals.
[1]Defendant first argues the trial court incorrectly
computed his gross income under the Child Support Guidelines,
contending the trial court erred when it considered WRA, Inc.'s
business loss but failed to balance that loss against defendant's
income. We disagree. This Court earlier concluded that the
trial court properly considered all of defendant's available
resources in determining his gross income. That decision is the
law of the case for this appeal. See Sloan v. Miller Building
Corp., 128 N.C. App. 37, 41, 493 S.E.2d 460, 463 (1997) (citing
Transportation, Inc. v. Strick Corp., 286 N.C. 235, 210 S.E.2d
181 (1974)). We remanded solely for clarification of whether the
trial court had considered defendant's $52,000 loss in its
determination that defendant's annual earnings or earning
capacity was $77,000. On remand, the trial court made the
following finding of fact:
[T]he presiding Judge having reviewed his
notes from the trial in this matter finds
that he did take the $52,000 loss from WRA,
Inc. into account when he found that
Defendant's income from all sources was at
least $77,000. Defendant has owned this
business for twenty years and it has often
shown a loss. Further, Defendant's
credibility on the subject of this businessis minimal. When making this finding the
presiding Judge considered the Defendant's
retirement accounts totaling $722,384, stocks
valued at $60,000, land, a house, and a boat
purchased in 1994 for $74,000.
This Court is deferential to determinations of child support
by district court judges, who see the parties and hear the
evidence first-hand. See Taylor v. Taylor, 128 N.C. App. 180,
182, 493 S.E.2d 819, 820 (1997) (citing Moore v. Moore, 35 N.C.
App. 748, 751, 242 S.E.2d 642, 644 (1978)). An exercise of
discretion by a trial judge in calculating the support guidelines
will be reversed only if it is “'manifestly unsupported by
reason.'” Kennedy v. Kennedy, 107 N.C. App. 695, 700, 421 S.E.2d
795, 798 (1992) (quoting White v. White, 312 N.C. 770, 777, 324
S.E.2d 829, 833 (1985)). Although Judge Foster declined the
opportunity dangled before him by this Court to find that
evidence of defendant's loss lacked all credibility, he found the
credibility “minimal.” The above-quoted findings are reasonable
and satisfy the requirements of our mandate on remand. They are
particularly compelling when considered with the trial judge's
finding in his order of 25 October 1996, that defendant, trained
as an airline pilot, was not looking for work with freight
carrier airlines even though such work was available. The trial
court properly considered these facts under the “Potential
Income” section of the Child Support Guidelines. That sectionpermits a court to consider potential income when a defendant is
“voluntarily unemployed or underemployed.” Child Support
Guidelines, 1999 Ann. R. N.C. 33; see Osborne v. Osborne, 129
N.C. App. 34, 497 S.E.2d 113 (1998). This assignment of error is
overruled.
[2]Defendant next argues the trial court erred when it
found him in contempt. We disagree. Defendant was ordered on 24
October 1995 to make monthly child support payments of $525.
This order was modified on 25 October 1996 to require monthly
support payments of $900. Defendant appealed the modified order
on 11 November 1996 and continued to make payments of $525. On
16 December 1997, this Court remanded the case for further
findings on the modified order. On 31 December 1997, plaintiff
moved to have the trial court hold defendant in contempt for
accrued arrearage under the modified order. On 8 April 1998, the
trial court made findings of fact as required by remand, again
ordered that defendant pay child support of $900 per month, and
found defendant in civil contempt for violation of its earlier
order. “One who wilfully violates an order does so at his
peril.” Joyner v. Joyner, 256 N.C. 588, 591, 124 S.E.2d 724, 727
(1962). “If the order from which an appeal is taken is upheld by
the appellate court, wilful failure to comply with the order
during pendency of the appeal is punishable by contempt onremand.” Quick v. Quick, 305 N.C. 446, 461, 290 S.E.2d 653, 663
(1982) (citations omitted). Although Joyner and Quick were
decided prior to the enactment of the current version of N.C.
Gen. Stat. § 50-13.4(f)(9) (Cum. Supp. 1998) (granting the trial
court continuing jurisdiction to hear contempt proceedings even
while an appeal is pending), the quoted holdings remain valid.
Having never lost jurisdiction over this issue, the district
court could hold a contempt hearing at any time.
The trial court found defendant's violation of its order
willful. We agree.
Although the statutes governing civil
contempt do not expressly require willful
conduct, see N.C. Gen. Stat. §§ 5A-21 to
5A-25 (1986), case law has interpreted the
statutes to require an element of
willfulness. In the context of a failure to
comply with a court order, the evidence must
show that the person was guilty of “knowledge
and stubborn resistence [sic]” in order to
support a finding of willful disobedience.
Sharpe v. Nobles, 127 N.C. App. 705, 709, 493 S.E.2d 288, 290-91
(1997) (citations omitted). Defendant had full notice of the
order requiring him to pay $900 per month. Had he paid that
amount, he would have been entitled to a setoff for the
overpayment if the order had been reversed. See Boyles v.
Boyles, 70 N.C. App. 415, 419, 319 S.E.2d 923, 927 (1984).
Instead, he made a calculated and deliberate decision to pay thelower amount. He did so at his peril. The trial court properly
found that defendant was in willful contempt.
[3]Finally, defendant contends the trial court erred in
awarding attorney's fees to plaintiff's counsel. N.C. Gen. Stat.
§ 50-13.6 (1995) grants the court discretion to award fees to an
interested party who acts in good faith but has insufficient
means to defray the expense of the suit. The record in this case
indicates defendant had substantial assets in the form of his
retirement and investment accounts, his home, an aircraft, a
boat, and a business. In contrast, plaintiff's income was
$41,000 per year, with modest bank accounts totaling
approximately $2,000. The court did not abuse its discretion in
ordering attorney's fees.
The order of the trial court is affirmed.
Affirmed.
Chief Judge EAGLES and Judge JOHN concur.
*** Converted from WordPerfect ***