RAMONA MASON,
Plaintiff,
v
.
JESSE ERWIN,
Defendant.
Timothy M. Stokes for plaintiff-appellee.
Hoover, Williams & Exum, P.A., by Donnie Hoover, for
defendant-appellant.
EAGLES, Chief Judge.
Jesse Erwin (“defendant”) appeals from a district court order
increasing his monthly child support obligation. Defendant asserts
several arguments on appeal, including: (1) that the trial court
erred in awarding an increase in child support based on defendant's
imputed income; (2) that the trial court erroneously awarded
attorney fees to plaintiff; (3) that the trial court incorrectly
found that the child's reasonable monthly needs had increased; (4)
that the award of retroactive child support was erroneous; and (5)
that the trial court failed to credit defendant for overpayment of
child support. After careful review of the record, briefs, and
arguments of counsel, we affirm.
Defendant is the biological father of a minor child named Joy,
who was born 26 June 1991. Plaintiff, Ramona Wilson, is thebiological mother and has custody of Joy. On 19 September 1991,
plaintiff commenced an action for child support against defendant.
Defendant signed a voluntary support agreement on 9 March 1992. In
this agreement, defendant acknowledged his paternity of Joy and
stated that he would pay $54 each week as child support.
In October 1995, defendant's wife won a prize in the Canadian
lottery valued at approximately $4.4 million in American currency.
Mrs. Erwin invested most of her winnings in a revocable trust. She
pays all of the household expenses for herself and defendant from
the income received from the trust. Defendant retired on 31
December 1995; he was 52 years old and had over 25 years of service
with UPS. Before his retirement from UPS, defendant earned $19.38
per hour or approximately $3,350 each month. After his retirement,
defendant received a pension of $1,500 per month.
On 20 March 1996, defendant and plaintiff changed the amount
of child support by signing a second voluntary child support
agreement which increased defendant's child support obligation to
$300 per month. The agreement was incorporated into a consent order
on 15 April 1996. Defendant paid $300 monthly according to the
terms of the 1996 order. On 16 September 1998, plaintiff filed a
motion to increase child support.
After hearing evidence regarding the child's needs and
testimony on defendant's financial status, the trial court issued
an order increasing defendant's child support obligation to $922
per month. The trial court based its order upon its imputation of
income to defendant in the amount of $5,000 each month. Defendantappealed the order to this Court, which reversed the portion of the
order imputing income to defendant and remanded the cause for
additional factual findings on defendant's income. See Mason v.
Erwin, 146 N.C. App. 110, 553 S.E.2d 247 (2001)(unpublished). This
Court also reversed the award of attorney fees and the award of
retroactive child support. Id.
On remand, the trial court issued a second order without
hearing further evidence. The amended order increased defendant's
child support responsibility to $622 per month and awarded
retroactive child support. Defendant was required to provide
health insurance for the minor child and to pay 77 percent of her
uninsured health care expenses. The trial court also ordered
defendant to pay plaintiff's attorney fees. From this order,
defendant appeals.
Defendant argues that the trial court abused its discretion on
remand by modifying the child support agreement and increasing his
child support obligation. Defendant contends that the trial court
incorrectly imputed income to him and again based the increase in
child support on that imputed income. We disagree.
“Child support orders entered by a trial court are accorded
substantial deference by appellate courts and our review is limited
to a determination of whether there was a clear abuse of
discretion.” Leary v. Leary, 152 N.C. App. 438, 441, 567 S.E.2d
834, 837 (2002) (citing White v. White, 312 N.C. 770, 324 S.E.2d
829 (1985)). Defendant argues that the trial court abused its
discretion by awarding plaintiff an increase in child support. When this action was filed in 1998, plaintiff and defendant were
operating under a consent order which required defendant to pay
plaintiff $300 each month for Joy's support. Our General Assembly
set the standard for adjusting a pre-existing child support award
as follows: “An order of a court of this State for support of a
minor child may be modified or vacated at any time, upon motion in
the cause and a showing of changed circumstances by either party .
. . .” G.S. § 50-13.7(a)(2001). The definition of “changed
circumstances” has been delineated by this Court:
A voluntary decrease in a parent's income,
even if substantial, does not constitute a
changed circumstance which alone can justify a
modification of a child support award. A
voluntary and substantial decrease in a
parent's income can constitute a changed
circumstance only if accompanied by a
substantial decrease in the needs of the
child. In determining whether the party has
sustained a decrease in income, the party's
actual earnings are to be used by the trial
court if the voluntary decrease was in good
faith. If the voluntary decrease in income is
in bad faith, the party's earning capacity is
to be used by the trial court in determining
whether there has in fact been a decrease in
income. The burden of showing good faith
rests with the party seeking a reduction in
the child support award.
Mittendorff v. Mittendorff, 133 N.C. App. 343, 344, 515 S.E.2d 464,
466 1999)(emphasis in original)(citations omitted). Where a parent
seeks a reduction in his child support obligation, the trial court
must find a voluntary reduction in a parent's income combined with
an increase or decrease in the child's needs in order to find
“changed circumstances” that justify a child support modification.
See King v. King, ___ N.C. App. ___, 568 S.E.2d 864 (2002); Wolf v.Wolf, 151 N.C. App. 523, 566 S.E.2d 516 (2002); Mittendorff, 133
N.C. App. 343, 515 S.E.2d 464 (1999); Burnett v. Wheeler, 133 N.C.
App. 316, 515 S.E.2d 480 (1999); Chused v. Chused, 131 N.C. App.
668, 508 S.E.2d 559 (1998).
Here, it is undisputed that defendant retired from UPS with
over 25 years of service with that company. Furthermore, both
parties agree that defendant retired within three months after his
wife began collecting her lottery winnings. As part of defendant's
retirement, he surrendered a salary of approximately $3,350 per
month in exchange for a monthly pension worth $1,500. Neither
party contests the fact that the reduction in defendant's income
results from a voluntary action by defendant. However, the parties
strongly contest whether defendant's retirement qualifies as an
action taken in bad faith. The North Carolina Child Support
Guidelines state:
If either parent is voluntarily unemployed or
underemployed to the extent that the parent
cannot provide a minimum level of support for
himself or herself and his or her children
when he or she is physically and mentally
capable of doing so, and the court finds that
the parent's voluntary unemployment or
underemployment is the result of a parent's
bad faith or deliberate suppression of income
to avoid or minimize his or her child support
obligation, child support may be calculated
based on the parent's potential, rather than
actual, income.
N.C. Child Support Guidelines, 2003 Ann. R. (N.C.) 33, 35. The
primary issue is “whether a party is motivated by a desire to avoid
his reasonable support obligations. To apply the earnings capacity
rule, the trial court must have sufficient evidence of theproscribed intent.” Wolf, 151 N.C. App. at 527, 566 S.E.2d at 519.
The earnings capacity rule can be applied if the evidence presented
shows that a party has disregarded its parental obligations by:
(1) failing to exercise his reasonable
capacity to earn, (2) deliberately avoiding
his family's financial responsibilities, (3)
acting in deliberate disregard for his support
obligations, (4) refusing to seek or to accept
gainful employment, (5) willfully refusing to
secure or take a job, (6) deliberately not
applying himself to his business, (7)
intentionally depressing his income to an
artificial low, or (8) intentionally leaving
his employment to go into another business.
Wolf, 151 N.C. App. at 526-27, 566 S.E.2d at 518-19 (citing Bowes
v. Bowes, 287 N.C. 163, 214 S.E.2d 40 (1975)). The situations
enumerated in Wolf are specific types of bad faith that justify the
trial court's use of imputed income or the “earnings capacity”
rule.
Here, the trial court made sufficient findings of fact to
support its conclusion that defendant retired and voluntarily
reduced his income “in deliberate disregard of his obligation to
provide reasonable support for Joy.” The trial court stated that
it found defendant's testimony about the reasons for his retirement
to be unpersuasive. Defendant cited health concerns and accidents
on the job as the reasons for his retirement. However, sufficient
evidence existed to rebut defendant's testimony about health
problems, namely his own promise to retire if he ever won the
lottery. In addition, the trial court found that defendant's
actual income of $1,500 per month was mostly unencumbered income,
since defendant effectively had no monthly expenses or bills forwhich he was solely responsible. Despite this readily available
pension income, the evidence tended to show that defendant was
reluctant about his responsibility to provide support for Joy.
Defendant knew of extensive and expensive dental work that Joy
needed in 1995, but refused to pay for that dental care. At the
time plaintiff informed defendant of the needed dental care,
defendant was still employed full-time. The trial court found that
defendant willingly increased his child support payments from $52
per week to $300 per month in March 1996. However, the trial court
also noted that according to defendant's actual income of $1,500
and the Child Support Guidelines, defendant should have been
presumptively paying at least $380 per month. Also, the trial
court found that defendant claimed that he could not provide
insurance for Joy in March 1996 but did apply for insurance in
October 1998 after the motion to modify child support was filed.
We view all this evidence in the context of defendant's voluntary
decision to retire though he was an able-bodied, 52 year old worker
with no physical disabilities who was capable of earning sufficient
funds to provide for his daughter. Accordingly, we hold that the
trial court did not abuse its discretion by computing defendant's
child support obligation according to the earnings capacity rule.
The Child Support Guidelines direct that “[t]he amount of
potential income imputed to a parent must be based on the parent's
employment potential and probable earnings level based on the
parent's recent work history, occupational qualifications and
prevailing job opportunities and earning levels in the community.” N.C. Child Support Guidelines, 2003 Ann. R. (N.C.) 33, 35. Here,
the trial court imputed a monthly income of $3,359 to defendant.
Defendant earned this amount monthly in his last job prior to
retirement, based upon calculations of a forty-hour work week and
defendant's earnings of $19.38 per hour. Defendant failed to
persuade the trial court that he could no longer perform that job
because of age, disability, illness or any factor beyond
defendant's choosing. Therefore, the trial court did not abuse its
discretion when it imputed income to defendant in the amount of
$3,359 per month. Accordingly, this assignment of error is
overruled.
Defendant further argues that the trial court erred in
awarding plaintiff attorney fees. Defendant states that the trial
court's findings of fact are not sufficient to support the award of
attorney fees to plaintiff. Defendant contends that plaintiff has
failed to show that defendant refused to provide adequate support.
We disagree.
The standard for the award of attorney fees in a child support
action is as follows:
In an action or proceeding for the custody or
support, or both, of a minor child . . . the
court may in its discretion order payment of
reasonable attorney's fees to an interested
party acting in good faith who has
insufficient means to defray the expense of
the suit. Before ordering payment of a fee in
a support action, the court must find as a
fact that the party ordered to furnish support
has refused to provide support which is
adequate under the circumstances existing at
the time of the institution of the action or
proceeding . . . .
G.S. § 50-13.6 (2001). Here, the trial court specifically found as
a fact that (1) plaintiff was “a party acting in good faith to
obtain reasonable support for her daughter”; (2) that plaintiff
lacked sufficient means to pay her attorney fees; and (3) that
defendant “refused to provide support which was reasonable under
the circumstances existing in September 1998 . . . .” These
findings of fact are sufficient to support the trial court's
conclusions of law. Also, the findings of fact are supported by
evidence in the record and by other findings of fact. For example,
the finding that plaintiff was unable to afford her attorney fees
was buttressed by the additional finding that she had debts
totaling over $3,700 and it took plaintiff six months to save the
money necessary to pay her attorney's retainer. Defendant failed
to present evidence to rebut plaintiff's evidence that she was a
party acting in good faith. Finally, the trial court found that
defendant was paying an inadequate amount of support on the date
the motion for modification of child support was filed. To support
this finding, the trial court made the following finding of fact:
20. Applying the Child Support Guidelines to
father's “actual” income of $1,500 per month,
his obligation would be $380 per month, plus
60% of [uninsured medical, dental and
prescription] expenses.
Defendant was not paying the presumptive amount of child support
based upon his actual income. When the trial court imputed a
higher income to defendant, his child support obligation also
increased. Defendant's adherence to the consent order does not
prevent a modification of that order or his payment of attorneyfees. The parties maintain the right to contract child support
arrangements. However, once that contract is adopted as a consent
order, the trial court may modify the terms of the order according
to G.S. § 50-13.7. In re Custody of Mason, 13 N.C. App. 334, 185
S.E.2d 433 (1971), cert. denied, 280 N.C. 495, 186 S.E.2d 513
(1972). Therefore, the trial court's findings and conclusions that
defendant paid inadequate child support provides justification for
the trial court acting within its discretion to order defendant to
pay appropriate attorney fees. Accordingly, this assignment of
error is overruled.
Defendant next assigns error to the trial court's findings on
remand that the total reasonable monthly needs for the child were
$1,626, excluding health care and child care costs. Defendant
argues that the trial court erred by making insufficient findings
of fact to deviate from the presumptive child support award
outlined by the North Carolina Child Support Guidelines. The trial
court in this case awarded child support according to the North
Carolina Child Support Guidelines. The trial court was not
required to find specific, detailed facts with regard to the
child's reasonable expenses because it awarded the presumptive
amount of support to plaintiff according to defendant's imputed
income. This assignment of error is overruled.
Defendant assigns error to the trial court's award of
retroactive child support to plaintiff. Defendant argues that no
basis exists for an increase in child support and the award of
retroactive support was incorrectly calculated. We disagree. Since we have already concluded that the increased award of
child support was correct, defendant's argument here has no merit.
It is well settled that the modification of a child support order
takes effect on the date the petition for modification was filed.
See Mackins v. Mackins, 114 N.C. App. 538, 442 S.E.2d 352, disc.
rev. denied, 337 N.C. 694, 448 S.E.2d 527 (1994). Here, plaintiff
filed the modification petition on 16 September 1998. The trial
court concluded as a matter of law that the increase in child
support was effective on 16 September 1998. The trial court did
not explicitly state a specific amount that defendant owed in
retroactive support from the entry of its order on 26 October 2001
back to the petition filing date on 16 September 1998. Defendant's
assignment of error to the trial court's inclusion of a specific
amount of owed child support is without merit since the trial court
did not order payment of a specific amount in back child support
that defendant was to required to pay.
Defendant also argues that the trial court did not properly
credit him for child support payments made between the filing of
the modification petition and the date of the entry of the trial
court's amended child support order. Defendant contends that the
trial court failed to give him credit for the amounts he paid as a
result of the original November 1999 child support award by the
trial court. According to defendant, he paid at least $9,699 in
child support arrears and $7,600 in attorney fees as a result of
the November 1999 order that was vacated by this Court. However,
defendant presented no evidence of these payments to the trialcourt before the order on remand was issued. Both parties and the
trial court agreed that the order on remand could be issued without
further presentation of evidence. The trial court, in its final
child support order, has retained jurisdiction over this matter
specifically to make adjustments based on previous overpayments.
Therefore, the issue of alleged overpayment is not properly before
this Court because the trial court has not yet considered the issue
of defendant's possible overpayment. The final assignment of error
fails.
For the reasons stated, the trial court's order awarding child
support and attorney fees to plaintiff is affirmed.
Affirmed.
Judges MARTIN and GEER concur.
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