Appeal by plaintiff from orders entered 25 January 2005 and 14
February 2005, by Judges Jane V. Harper and Rebecca T. Tin, in
Mecklenburg County District Court. Heard in the Court of Appeals
12 January 2006.
Marnite Shuford for plaintiff-appellant.
Billie R. Ellerbe for defendant-appellee.
Plaintiff Timothy McKyer appeals from two child support
orders: (1) an order concluding that he is not entitled toretroactive child support; and (2) an order calculating his
permanent child support obligation. We hold that the trial court
properly declined to award Mr. McKyer retroactive child support for
a period when he had primary physical custody because Mr. McKyer
failed to make the showing required by Biggs v. Greer, 136 N.C.
App. 294, 524 S.E.2d 577 (2000). With respect to the permanent
child support order, we uphold the trial court's decision to impute
income to Mr. McKyer, but remand for further findings of fact
regarding the calculation of the child support amount.
The McKyers were married in 1991 and separated in 2000.
During the marriage, the couple had two sons, one born in 1995 and
one born in 1998. From 1986 until 1998, Mr. McKyer played
professional football for seven National Football League teams. In
1995, the couple moved to Charlotte, North Carolina, while Mr.
McKyer played for the Carolina Panthers. Although the family
remained in Charlotte, Mr. McKyer later played for the Atlanta
Falcons and, in 1998, won the Super Bowl with the Denver Broncos.
In May 2000, the McKyers separated, and Mr. McKyer moved out of the
Mr. McKyer stopped playing football after the 1997-1998 season
and hired an agent to help him find employment in communications as
a radio host or football commentator. When that effort failed, he
enrolled as a part-time student at the University of North Carolina
in Charlotte; he continued to work towards a college degree
throughout the proceedings below. At the time of the hearings atissue, Mr. McKyer worked one day per week at a local golf driving
range as a "supervisor/manager/ball guy" and collected modest
monthly payments from investments.
The McKyers' tortuous path through the North Carolina court
system began in June 2000, when Mr. McKyer brought an action
seeking primary custody of the couple's children. On 17 April
2001, District Court Judge Regan A. Miller entered an order
awarding primary custody to Mr. McKyer and visitation to Ms. McKyer
(the "April 2001 Custody Order"). The April 2001 Custody Order
found that Mr. McKyer was "not voluntarily reducing or minimizing
his income to avoid his financial obligations to his family," but
also limited Ms. McKyer's obligation to provide child support "at
this time to providing medical insurance through her employer for
Ms. McKyer appealed from the April 2001 Custody Order. This
Court affirmed, concluding that competent evidence in the record
supported the trial court's findings of fact and that the trial
court did not abuse its discretion by awarding custody to Mr.
McKyer. McKyer v. McKyer
, 152 N.C. App. 477, 567 S.E.2d 840, 2002
N.C. App. LEXIS 2134, 2002 WL 1901827 (2002) (unpublished)
(hereinafter "McKyer I
"), disc. review denied
, 356 N.C. 438, 572
S.E.2d 785 (2002).
In the meantime, on 3 October 2001, Judge Miller entered an
equitable distribution order (the "Equitable Distribution Order").
The Equitable Distribution Order distributed the parties' marital
and divisible property and debts and ordered the sale of themarital home. As part of the equitable distribution, Ms. McKyer
retained the larger share of the home and was to remit a
distributive payment to Mr. McKyer of $41,961.00. On 31 October
2001, Mr. McKyer appealed the Equitable Distribution Order.
(See footnote 1)
Court affirmed the Equitable Distribution Order in McKyer v.
, 159 N.C. App. 466, 583 S.E.2d 427, 2003 N.C. App. LEXIS
1542, 2003 WL 21791638 (2003) (unpublished) (hereinafter "McKyer
"), disc. review denied
, 358 N.C. 235, 593 S.E.2d 781 (2004).
On 5 December 2001, Mr. McKyer filed a new complaint seeking
past and future child support, an order compelling Ms. McKyer to
maintain medical insurance on the children, and pro rata
reimbursement of the children's past and future uninsured medical
expenses. On 13 February 2002, Judge Miller dismissed this
complaint on the grounds that he lacked subject matter jurisdiction
because the complaint sought to address issues raised in the appeal
of the April 2001 Custody Order.
On 27 March 2003, Mr. McKyer filed a motion to modify the
April 2001 Custody Order, seeking primarily to change the
visitation provisions. Ms. McKyer's response requested that the
court change primary custody of the two children to her and impute
income to Mr. McKyer for purposes of calculating child support. On
30 October 2003, Mr. McKyer filed an additional "Motion in the
Cause for Temporary and Permanent Child Support," seeking to havethe April 2001 Custody Order modified and/or vacated and seeking "a
temporary and permanent order of child support retroactive and
prospective to April 17, 2001."
In August 2004, District Court Judge Rebecca T. Tin entered
three orders, one addressing additional equitable distribution
matters, the second addressing child custody (the "August 2004
Custody Order"), and the third providing for temporary child
support (the "August 2004 Temporary Support Order"). In the August
2004 Custody Order, Judge Tin found: (1) a significant change of
circumstances had occurred since the April 2001 Custody Order; (2)
it was no longer in the best interests of the children that they be
in the primary physical custody of Mr. McKyer; and (3) it was in
the children's best interests that primary physical custody be
granted to Ms. McKyer. Accordingly, the August 2004 Custody Order
denied Mr. McKyer's initial motion for modification, granted Ms.
McKyer's motion to change custody, and awarded Mr. McKyer
visitation. Mr. McKyer appealed from this order on 23 August 2004.
In the August 2004 Temporary Support Order, Judge Tin found
that any child support awarded to Mr. McKyer should be made
retroactive to 30 October 2003 and calculated the amount owed by
Ms. McKyer, under the Child Support Guidelines, for the period from
1 November 2003 until 31 May 2004. Judge Tin did not, at that
time, address Mr. McKyer's request for retroactive child support
for the period 17 April 2001 through 30 October 2003. Judge Tin
further found that Mr. McKyer had a present temporary obligation to
pay child support to Ms. McKyer beginning 10 June 2004 in theamount of $210.35 per month. The August 2004 Temporary Support
Order reserved any ruling on defendant's motion to impute income to
Mr. McKyer until the matter of permanent child support could be
addressed, but provided that Mr. McKyer "is hereby ordered to seek
gainful employment immediately. He shall provide the Court with at
least thirty (30) places where he has sought employment."
Mr. McKyer immediately filed a motion to amend the August 2004
Temporary Support Order. He sought recalculation of the parties'
child support obligations and the striking of the "seek employment
order" based on the finding in the April 2001 Custody Order that
Mr. McKyer was "not voluntarily reducing or minimizing his income
to avoid his financial obligations to his family." On 5 October
2004, Mr. McKyer filed another motion entitled "Motion to Dismiss
and/or Stay Temporary Child Support Order and Entry of Permanent
Child Support Order Pending Appeal." He contended in the motion
that he was entitled to have both the August 2004 Temporary Support
Order and the entry of any permanent child support order dismissed
or stayed because this Court had not yet resolved his appeal of the
August 2004 Custody Order. Subsequently, however, Mr. McKyer's
appeal of the August 2004 Custody Order was dismissed for failure
to timely settle the record on appeal. On 31 August 2005, Mr.
McKyer sought review of this dismissal by filing a petition for
writ of certiorari. This Court denied the petition on 16 September
On 13 January 2005, District Court Judge Jane V. Harper
conducted a hearing addressing Mr. McKyer's motion to amend theAugust 2004 Temporary Support Order, Mr. McKyer's October 2004
motion to dismiss or stay that order, and the issue of permanent
child support. Judge Harper subsequently entered an order (the
"January 2005 Permanent Support Order"), concluding that the trial
court did not lose jurisdiction over the child support issues
following Mr. McKyer's appeal of the custody order. The January
2005 Permanent Support Order modified the parties' prior child
support obligations, imputed income to Mr. McKyer, and calculated
Mr. McKyer's permanent child support obligation. Mr. McKyer timely
appealed this order.
On 14 February 2005, Judge Tin ruled on Mr. McKyer's 30
October 2003 motion to modify the April 2001 Custody Order to grant
him child support from 17 April 2001 through 30 October 2003 (the
"February 2005 Support Order"). The February 2005 Support Order
concluded that Mr. McKyer was precluded, under res judicata
principles, from receiving retroactive child support from the entry
of the April 2001 Custody Order until 30 October 2003 _ the date
Mr. McKyer had filed his motion seeking retroactive child support.
With respect, however, to the period from 30 October 2003 until the
entry of the August 2004 Custody Order switching custody to Ms.
McKyer, the order concluded that Mr. McKyer was entitled to
retroactive child support. Mr. McKyer also timely appealed the
February 2005 Support Order.
 First, Mr. McKyer argues that his appeal of the August
2004 Custody Order precluded any subsequent proceedings in thismatter, including entry of the January 2005 Permanent Support Order
and the February 2005 Support Order. With respect to this issue,
N.C. Gen. Stat. § 1-294 (2005) (emphasis added) provides: "When an
appeal is perfected as provided by this Article it stays all
further proceedings in the court below upon the judgment appealed
from, or upon the matter embraced therein; but the court below may
proceed upon any other matter included in the action and not
affected by the judgment appealed from
." This Court has held,
based on N.C. Gen. Stat. § 1-294, that "once a custody order is
appealed, the trial court is divested of jurisdiction over all
matters specifically affecting custody
." Rosero v. Blake
, 150 N.C.
App. 250, 252-53, 563 S.E.2d 248, 251 (2002) (emphasis added),
rev'd on other grounds
, 357 N.C. 193, 581 S.E.2d 41 (2003), cert.
, 540 U.S. 1177, 158 L. Ed. 2d 78, 124 S. Ct. 1407 (2004).
In this case, Mr. McKyer does not contend that the 2005 child
support orders exceeded the scope of the trial court's authority
under N.C. Gen. Stat. § 1-294. Instead, Mr. McKyer argues that the
law of the case doctrine required dismissal or stay of further
proceedings while Mr. McKyer's appeal of the August 2004 Custody
Order was pending. In support of this argument, Mr. McKyer points
to the fact that when Ms. McKyer appealed the April 2001 Custody
Order, the trial court dismissed Mr. McKyer's new child support
complaint for lack of subject matter jurisdiction. While Mr.
McKyer claims that McKyer II
summarily affirmed this dismissal, the
record on appeal contains no notice of appeal from the dismissaland the text of McKyer II
stated that it was only affirming the
equitable distribution order.
The parties, however, seem to agree that the dismissal order
was encompassed within this Court's concluding statement in McKyer
that "we have reviewed Mr. McKyer's remaining assignments of
error and have found them to be without merit." McKyer II
N.C. App. LEXIS 1542 at *21-22, 2003 WL 21791638 at *8.
Nonetheless, this conclusion provides no hint of the basis for any
affirmance and, consequently, there is no ruling that can
constitute the law of the case for further proceedings. See Hayes
v. City of Wilmington
, 243 N.C. 525, 536, 91 S.E.2d 673, 681-82
(1956) ("[A]s a general rule when an appellate court passes on a
question and remands the cause for further proceedings, the
questions there settled become the law of the case, both in
subsequent proceedings in the trial court and on subsequent appeal
. . . .").
In any event, the April 2001 Custody Order expressly addressed
the issue of child support, the subject of the December 2001
complaint that was dismissed. That December 2001 action,
therefore, fell within the scope of N.C. Gen. Stat. § 1-294.
Because Mr. McKyer provides no argument regarding how his appeal of
the August 2004 Custody Order, which did not address child support,
divested the trial court of jurisdiction to decide questions of
child support, this assignment of error is overruled.
 Second, Mr. McKyer argues that Judge Tin erred in refusing
to modify the April 2001 Custody Order to award Mr. McKyer
retroactive child support from 17 April 2001, the date the initial
custody order was entered, through 30 October 2003, the date Mr.
McKyer filed his motion seeking child support.
(See footnote 2)
support" is either (1) support awarded for a period prior to the
date a party filed a complaint seeking child support, or (2) a
retroactive increase in the amount provided in an existing support
order. Cole v. Cole
, 149 N.C. App. 427, 433, 562 S.E.2d 11, 14
In this case, the April 2001 Custody Order was an existing
order providing for payment of child support by Ms. McKyer in the
form of health insurance and payment of uninsured medical expenses.
Mr. McKyer argues in passing that "[a]rguably, it can be stated
that the order of 17 April 2001 was at best an interim order that
could be modified and subject to retroactive child support at any
time." See Miller v. Miller
, 153 N.C. App. 40, 47-48, 568 S.E.2d
914, 919 (2002) (noting that although a permanent support order may
not be retroactively modified in the absence of a substantial
change in circumstances, a temporary support order may be
retroactively modified without showing such a change). Mr. McKyerdid not, however, make this argument below. See
N.C.R. App. P.
10(b)(1) ("In order to preserve a question for appellate review, a
party must have presented to the trial court a timely request,
objection or motion, stating the specific grounds for the ruling
the party desired the court to make if the specific grounds were
not apparent from the context."). Nor is this contention
consistent with the proceedings following the entry of the order:
the order was appealed to this Court; an opinion was filed
affirming the order; and, subsequently, the parties sought
modification of the order based on substantial changes in
Because the April 2001 Custody Order was not a mere interim
order, we are addressing the second type of retroactive child
support described in Cole
, 149 N.C. App. at 433, 562 S.E.2d at 14.
In Biggs v. Greer
, 136 N.C. App. 294, 301, 524 S.E.2d 577, 583
(2000) (emphasis omitted), this Court, after surveying the law in
other jurisdictions and prior opinions of our appellate courts,
summarized the law in North Carolina governing "a retroactive
increase in the amount provided in an existing support order":
Motions for retroactive reimbursements or
increases in child support where there is an
existing court order should be allowed but
sparingly and only under the limited
circumstance constituting a true sudden
"emergency situation that required the
expenditure of sums in excess," of the
existing child support order.
at 303, 524 S.E.2d at 585 (citation omitted) (quoting Fuchs v.
, 260 N.C. 635, 641, 133 S.E.2d 487, 492 (1963)). The Court
reversed an award of retroactive child support because"the instant record reflects no competent evidence sufficient to
support findings sustaining the conclusion of law that there
existed a sudden, extraordinary emergency constituting a
substantial and material change in circumstances, affecting the
welfare of the minor children." Id.
at 305-06, 524 S.E.2d at 586
(internal citations and quotation marks omitted). See also Fuchs
, 260 N.C. 635, 641, 133 S.E.2d 487, 492 (1963) ("[T]he
order making the increased [child support] retroactive to and
including February 1963, without evidence of some emergency
situation that required the expenditure of sums in excess of the
amounts paid by the plaintiff for the support of his minor
children, is neither warranted in law nor equity.").
In support of his argument that he demonstrated a substantial
change of circumstances sufficient to warrant retroactive child
support, Mr. McKyer points only to the fact that, subsequent to the
April 2001 Custody Order, Ms. McKyer received $249,179.77 from the
sale of the marital home, which he argues amounted to a substantial
change in circumstances. Mr. McKyer presented no evidence of any
emergency situation occurring between 17 April 2001 and 30 October
2003 and makes no argument suggesting that we recognize any other
circumstances as justifying retroactive child support. Mr. McKyer
has not even offered any explanation as to why child support should
be retroactive to 17 April 2001, as opposed to the date that Ms.
McKyer received the proceeds from the sale. In short, as occurred
at 639, 133 S.E.2d at 491, Mr. McKyer has offered evidence
only that the other spouse had an increase in income. Fuchs
require that we uphold the district court's refusal to award
retroactive child support.
(See footnote 3)
Mr. McKyer argues alternatively that the trial court erred
when deciding this issue by not considering his evidence regarding
the reasonable needs of the children and his actual expenses during
the period 17 April 2001 through 30 October 2003. Because Mr.
McKyer had made no showing that he was entitled to a retroactive
increase in child support, the court's failure to consider this
evidence was at most harmless error. As Mr. McKyer makes no other
argument explaining why the April 2001 Custody Order should have
been modified to provide child support prior to 1 November 2003,
this assignment of error is overruled.
 Mr. McKyer also argues that the district court erred in
failing to consider Ms. McKyer's receipt of $249,179.77 as non-
recurring income within the meaning of the North Carolina Child
Support Guidelines for purposes of setting the amount of temporary
and permanent child support owed by Mr. McKyer. See
Support Guidelines, 2006 Ann. R. N.C. at 48-49 (noting that when
"income is received on an irregular, non-recurring, or one-time
basis, the court may average or prorate the income over a specified
period of time or require an obligor to pay as child support a
percentage of his or her non-recurring income that is equivalent tothe percentage of his or her recurring income paid for child
support"). We hold that Mr. McKyer has failed to demonstrate that
these sales proceeds constituted non-recurring income.
In the equitable distribution proceedings, the McKyers'
marital residence was principally distributed to Ms. McKyer with an
order that it be sold.
(See footnote 4)
Although our courts have never addressed
whether, in the child support context, the conversion of an asset
to cash renders the cash income, courts in other jurisdictions have
routinely held that it does not. See, e.g.
, Rimpf v. Campbell
So. 2d 957, 961 (Ala. Civ. App. 2002) (noting that "the change in
the character of an asset . . . awarded in a divorce judgment does
not transform the asset into income"); Denley v. Denley
, 38 Conn.
App. 349, 353, 661 A.2d 628, 631 (1995) ("The mere exchange of an
asset awarded as property in a dissolution decree, for cash, the
liquid form of the asset, does not transform the property into
income."); Geiger v. Geiger
, 96 Ohio App. 3d 630, 635, 645 N.E.2d
818, 822 (1994) ("Converting a tangible or intangible asset into
cash is not income except to the extent, if any, that there is a
profit or gain."). Likewise, proceeds from the sale of an asset
under both Federal and State income tax laws are not considered
taxable income except to the extent the seller profits from thesale. See Commissioner v. Wilcox
, 327 U.S. 404, 407, 90 L. Ed.
752, 755, 66 S. Ct. 546, 548 (1946) ("The very essence of taxable
income . . . is the accrual of some gain, profit or benefit to the
taxpayer."), overruled on other grounds by James v. United States
366 U.S. 213, 6 L. Ed. 2d 246, 81 S. Ct. 1052 (1961). See also
N.C. Gen. Stat. § 105-134.5(a) (2005) (defining "taxable income" by
reference to federal standard).
In short, the mere fact that a non-recurring payment has
occurred, in the absence of evidence that the payment was "income"
at all, is alone insufficient to establish that the payment was
necessarily non-recurring income. See
N.C. Child Support
Guidelines, 2006 Ann. R. N.C. at 48-49 (addressing "non-recurring
income" under the heading of "Gross Income"). Mr. McKyer makes no
argument as to why receipt of the $249,179.77 constitutes "income."
Further, although we note that Ms. McKyer was able to obtain a
greater sales price than anticipated by the Equitable Distribution
Order, since Mr. McKyer has not argued that this increase
constitutes "income," we reserve for another day the decision about
how to treat, for child support purposes, the type of "gain"
experienced by Ms. McKyer on the sale of a distributed marital
asset. See Viar v. N.C. Dep't of Transp.
, 359 N.C. 400, 402, 610
S.E.2d 360, 361 (2005) ("It is not the role of the appellate courts
. . . to create an appeal for an appellant.").
Mr. McKyer next argues that Judge Harper erred in her January
2005 Permanent Support Order when calculating his income for childsupport purposes by (1) treating an annual school grant of
$1,800.00 as income and (2) improperly imputing to him $1,040.00 of
additional income per month. We address these arguments
A. Mr. McKyer's School Grant
 The trial court's consideration of a school grant of
$1,800.00 in calculating child support requires us to decide
whether that grant constituted part of Mr. McKyer's adjusted gross
income. N.C. Child Support Guidelines, 2006 Ann. R. N.C. at 48.
The Guidelines define gross income expansively to include "income
from any source . . . ." Id.
reimbursements or in-kind payments (for example, use of a company
car, free housing, or reimbursed meals) received by a parent in the
course of employment, self-employment, or operation of a business
are counted as income if they are significant and reduce personal
living expenses." Id.
at 49. On the other hand, the Guidelines
specifically exclude from the definition of income "benefits
received from means-tested public assistance programs." Id. See
2 Suzanne Reynolds, Lee's North Carolina Family Law
§ 10.8, at
533-34 (5th ed. 1999) (discussing calculation of income under the
North Carolina case law has not addressed whether educational
grants are income under the Guidelines. Although both parties cite
Wachacha v. Wachacha
, 38 N.C. App. 504, 248 S.E.2d 375 (1978), we
do not find this case instructive. The father in Wachacha
his job and returned to school, and this Court, in describing theevidence presented, recited that the father had "arranged to meet
his support and alimony obligations from his income under the GI
at 508, 248 S.E.2d at 378. The father in Wachacha
not, however, appealing or raising any question about whether the
money he received under the GI Bill could properly be considered
income, and the opinion contains no holding on that issue. Id.
Other states have considered whether educational grants are
income for child support purposes, with several concluding that
such grants are income because they need not be repaid. Compare In
re Marriage of Syverson
, 281 Mont. 1, 12, 931 P.2d 691, 698 (1997)
(concluding that educational grants, which were not loans and were
not expected to be repaid, constituted income for purposes of child
support) with In re Marriage of Rocha
, 68 Cal. App. 4th 514, 517,
80 Cal. Rptr. 2d 376, 377 (1998) (concluding student loans, unlike
grants, were not income for child support purposes because they
needed to be repaid). On the other hand, other states have
concluded that some types of grants and tuition reimbursements are
not income for child support purposes, regardless whether they need
to be repaid. See In re Marriage of Mellott
, 32 Kan. App. 2d 1031,
1033-34, 93 P.3d 1219, 1221-22 (2004) (concluding, based on child
support guidelines similar to North Carolina's, that tuition
reimbursements from an employer not exceeding cost of tuition are
not income for child support purposes because they "do not reduce
a person's living expenses" since "adult college education does not
fall into the same category as expenses for housing, food, and
transportation, which are included as imputed income ifreimbursed"). See also
Wyo. Stat. Ann. § 20-2-303(a)(ii) (2005)
("Means tested sources of income such as Pell grants, aid under the
personal opportunities with employment responsibilities (POWER)
program, food stamps and supplemental security income (SSI) shall
not be considered as income.").
In any event, the findings of fact of the trial court
regarding Mr. McKyer's $1,800.00 grant are insufficient for us to
review whether it is properly classified as income for child
support purposes under our Child Support Guidelines. The trial
court made no findings as to whether this sum was a "benefit . . .
from means-tested public assistance programs," whether it
significantly reduced his "personal living expenses," or whether
there are any limits upon how Mr. McKyer may use these funds. We,
therefore, remand this issue to the trial court for further factual
B. Imputation of Income
 Mr. McKyer also argues that the trial court erred in
imputing $1,040.00 per month income to him in the January 2005
Permanent Support Order. Judge Harper concluded, based on her
findings of fact, that "[p]laintiff has deliberately suppressed his
income and acted in deliberate disregard of his obligation to
provide reasonable support to his children. Defendant is entitled
to have the court impute additional income to plaintiff in order
that reasonable support may be provided for the parties' children."
Generally, a party's ability to pay child support is
determined by that party's actual income at the time the award is
made. Atwell v. Atwell
, 74 N.C. App. 231, 235, 328 S.E.2d 47, 50
(1985). A party's capacity to earn may, however, be the basis for
an award where the party "deliberately depressed his income or
deliberately acted in disregard of his obligation to provide
support." Sharpe v. Nobles
, 127 N.C. App. 705, 708, 493 S.E.2d
288, 290 (1997).
Before earning capacity may be used as the basis of an award,
there must be a showing that the actions reducing the party's
income were taken in bad faith to avoid family responsibilities.
Bowers v. Bowers
, 141 N.C. App. 729, 732, 541 S.E.2d 508, 510
(2001). Yet, this showing may be met by a sufficient degree of
indifference to the needs of a parent's children. In Roberts v.
, 174 N.C. App. 369, 621 S.E.2d 191 (2005), appeal
, 360 N.C. 364, 629 S.E.2d 608 (2006), the supporting
spouse had remarried a wealthy doctor and ceased working. The
trial court found that, by failing to seek or obtain employment,
she had demonstrated a "naive indifference" to the needs of her
at 379, 621 S.E.2d at 198. This Court affirmed the
trial court's conclusion that this indifference amounted to an
"intentional and willful avoidance and showed a deliberate
disregard of her responsibility to support her children," and held
that this was a sufficient basis upon which to impute income. Id.
Judge Harper made the following findings of fact to support
her decision to impute income: 11. In addition to paying his own monthly
mortgage and household bills, and $55/month
child support, H spent about $2500 on the
children's Christmas gifts in 2004. The court
notes that H's $55/month payment is less than
W spends for the children's health insurance.
The court also notes that H spent more for the
boys' Christmas gifts than he believes he
should pay in child support over a period of
45 months, at $55/month, or 17 months at
$l45/month, the figure on the worksheet Ms.
Shuford [Mr. McKyer's attorney] submitted
after the January hearing. The $145 figure is
less than half what W must spend for child
care. It is less than a fourth what she must
spend for the boy's [sic] vision and
occupational therapy. It is not enough to
meet the children's reasonable needs and
expenses. Even the amount calculated by Mr.
Ellerbe [Ms. KcKyer's attorney], $588.85, does
not even cover the extraordinary expenses for
vision and occupational therapy for the boys.
12. Mr. Ellerbe's calculation includes
imputing a modest additional amount of income
to H: five days a week at the driving range
rather than one day, at $7.50/hour, for a
total of $1300/month rather than the
$260/month he actually earns. H's employer at
the driving range is very flexible. H can,
and does, take the boys with him to the
driving range, which they enjoy. No evidence
was presented that H could not work more hours
at this employment.
13. What was reasonable for H to do about
income several years ago is no longer
reasonable. He has not made concentrated
efforts to complete his education. He has
declined to seek work other than the
one-day-a-week job he currently has, which
began a few months ago. He paid less than a
third of the child support ordered by Judge
Tin. He shows no intention of contributing
significantly to his sons' financial needs.
These findings are supported by competent evidence and,
consequently, are binding on appeal. Meehan v. Lawrance
, 166 N.C.
App. 369, 375, 602 S.E.2d 21, 25 (2004). In turn, these findingsprovide ample support for the trial court's decision to impute
income to Mr. McKyer. Contrary to defendant's argument, the fact
that Judge Miller did not believe in 2001 that Mr. McKyer was "not
voluntarily reducing or minimizing his income to avoid his
financial obligations to his family" does not preclude a contrary
finding four years later.
Nevertheless, the findings of fact on this issue are
insufficient to support the trial court's determination of the
amount of income
that should be imputed to Mr. McKyer. A trial
court must "make sufficient findings of fact and conclusions of law
to allow the reviewing court to determine whether a judgment, and
the legal conclusions that underlie it, represent a correct
application of the law." Spicer v. Spicer
, 168 N.C. App. 283, 287,
607 S.E.2d 678, 682 (2005).
The trial court's basis for imputing $1,040.00 of additional
monthly income to Mr. McKyer was only that his employer at the
driving range was "very flexible." The court made no finding that
this employer would permit Mr. McKyer to work five days per week,
at $7.50 per hour, rather than the one day per week he had been
working prior to trial. Rather, the court found that "[n]o
evidence was presented that [Mr. McKyer] could not work more hours
at this employment." This finding is not sufficient to support the
amount imputed. While Mr. McKyer did indeed state that his job at
the golf range as a "supervisor/manager/ball guy" provided him with
flexible hours, we see no basis to conclude that this necessarily
means Mr. McKyer could move from a very limited, one day per weekpart-time job to full-time employment at the range. See McDonald
, 106 N.C. App. 18, 26, 415 S.E.2d 81, 85 (1992) ("The
determination of the ability to pay must be supported by the
evidence presented."). Moreover, the trial court made no findings
regarding either the availability of other full-time jobs that
would pay Mr. McKyer at least $7.50 per hour or the effect of Mr.
McKyer's status as a part-time student.
While we understand the trial court's view that Mr. McKyer
could likely work more hours per week than he did prior to the
January 2005 Permanent Support Order, the trial court failed to
make sufficient findings for us to conclude that the judgment, as
it presently stands, "represent[s] a correct application of the
, 168 N.C. App. at 287, 607 S.E.2d at 682.
Accordingly, although we affirm the trial court's conclusion that
income may be imputed to Mr. McKyer, we must remand for additional
findings of fact regarding the proper amount.
Affirmed in part, remanded in part.
Judge HUDSON concurs.
Judge TYSON concurs in the result only in separate opinion.
TYSON, Judge concurring in the result only.
The majority's opinion remands to the trial court for a
determination of whether the plaintiff's educational grant was a
'benefit . . . from means-tested public assistance programs,'
whether it significantly reduced his 'personal living expenses,' orwhether there are any limits upon how [plaintiff] may use these
funds. I disagree with the majority's rationale and basis for
remanding this issue. I vote to remand this issue for a
determination of whether plaintiff's educational grant is subject
to income taxation.
The majority's opinion also affirms the trial court's
conclusion that income may be imputed to plaintiff and remands for
additional findings of fact regarding the proper amount of income
to be imputed. I also disagree with the majority's rationale for
remanding this issue. I vote to remand this issue for a
determination of whether the trial court had jurisdiction to
consider imputation of income in light of the prior adjudication of
this issue in its April 2001 custody order, whether defendant has
shown a substantial change of circumstances to invoke modification,
and whether defendant is judicially estopped from re-asserting this
issue. Whiteacre P'ship v. Biosignia, Inc., 358 N.C. 1, 29, 591
S.E.2d 870, 889 (2004).
I. Plaintiff's Educational Grant
The majority's opinion notes that our appellate courts have
not addressed the issue of whether an educational grant is
considered income under the Child Support Guidelines. The
majority's opinion cites holdings from other jurisdictions and
lists following three factors for the trial court to consider on
remand: (1) whether the sum was a 'benefit . . . from means-
tested public assistance programs, (2) whether it significantly
reduced [plaintiff's] personal living expenses; and (3) whetherthere are any limits upon how [plaintiff] may use these funds.
However, the majority's opinion fails to determine whether an
educational grant is income to plaintiff.
The determination of whether an educational grant is
considered income for the purpose of the Child Support Guidelines
turns on whether the grant is subject to federal income taxation.
The Internal Revenue Code, 26 U.S.C. § 117 (2006), provides as
(a) General rule. Gross income does not
include any amount received as a qualified
scholarship by an individual who is a
candidate for a degree at an educational
organization described in section
(b) Qualified scholarship. For purposes of
this section --
(1) In general. The term qualified
scholarship means any amount received by an
individual as a scholarship or fellowship
grant to the extent the individual establishes
that, in accordance with the conditions of the
grant, such amount was used for qualified
tuition and related expenses.
(2) Qualified tuition and related expenses.
For purposes of paragraph (1), the term
qualified tuition and related expenses means
(A) tuition and fees required for the
enrollment or attendance of a student at an
educational organization described in section
(B) fees, books, supplies, and equipment
required for courses of instruction at such an
I would hold that an educational grant is income to under the
Child Support Guidelines only if it is subject to federal incometaxation. I would hold that it is not income if the grant is not
subject to federal income taxation. I vote to remand this issue to
the trial court for findings of whether plaintiff's educational
grant is income under the provisions of 26 U.S.C. § 117.
II. Imputation of Income
The majority's opinion affirms the trial court's conclusion
that income may be imputed to plaintiff and remands for additional
findings of fact regarding the proper amount of income which should
be imputed. The record does not contain findings that the trial
court properly considered this issue.
In its 17 April 2001 order, the trial court found as fact,
Husband is not voluntarily reducing or minimizing his income to
avoid his financial obligations to his family. In its 25 January
2005 order, the trial court concluded, plaintiff has deliberately
suppressed his income and acted in deliberate disregard of his
obligation to provide reasonable support to his children.
'Modification of a child support order involves a two-step
process. The court must first determine a substantial change of
circumstances has taken place; only then does it proceed to . . .
calculate the applicable amount of support.' Trevillian v.
Trevillian, 164 N.C. App. 223, 225, 595 S.E.2d 206, 207 (2004)
(quoting McGee v. McGee, 118 N.C. App. 19, 26-27, 453 S.E.2d 531,
535-36 (1995), disc. rev. denied, 340 N.C. 359, 458 S.E.2d 189
(1995)). The burden of showing a substantial change of
circumstances rests with the party seeking modification. Id. at
224, 595 S.E.2d at 207. In its 25 January 2005 order, the trialcourt failed to make a finding that defendant has alleged or shown
a substantial change in circumstances had occurred in order to
revisit the child support issue and impute income to plaintiff. I
vote to remand this issue to the trial court for a finding of
defendant asserting and showing a substantial change in
circumstances has occurred and whether defendant is judicially
estopped from asserting this issue. Whiteacre P'ship, 358 N.C. at
26, 591 S.E.2d at 887.