Opinion
No. 05-14-00480-CV
03-07-2016
IN THE INTEREST OF B.Q.T., A CHILD
On Appeal from the 255th Judicial District Court Dallas County, Texas
Trial Court Cause No. DF-12-07404-S
MEMORANDUM OPINION
Before Justices Francis, Myers, and Stoddart
Opinion by Justice Stoddart
Father appeals the trial court's order establishing current and retroactive child support obligations. In two issues, Father contends the trial court abused its discretion in setting child support because the evidence does not support the net resources found by the trial court. For the reasons explained below, we find no abuse of discretion and affirm the trial court's order.
Father and Mother were not married, but purchased a house together. On April 22, 2009, they had a child. They lived together until October of 2011, when Father moved out. Father testified Mother agreed he could give her his interest in the house in lieu of paying child support. Father deeded his interest in the house to Mother on October 24, 2011 and stopped making his share of the mortgage payments.
The Office of the Attorney General (OAG) filed this suit affecting the parent-child relationship on April 17, 2012, seeking appointment of conservators and an order for current and retroactive child support and medical support. On July 19, 2012, the associate judge signed an order finding Father's monthly gross resources were $6,598.17, his monthly net resources were $4,909.79, and ordering child support of $903 per month and cash medical support of $200 per month beginning August 1, 2012. In addition, the associate judge ordered retroactive child support in the amount $6,534 for the period between December 1, 2011 and July 19, 2012. Father timely requested a de novo hearing before the district judge. After the hearing, the trial court confirmed the associate judge's order and findings on child support, retroactive child support, and medical support.
A. Standard of Review
We review the trial court's order establishing child support for an abuse of discretion. Iliff v. Iliff, 339 S.W.3d 74, 78 (Tex. 2011). The test for an abuse of discretion is whether the trial court acted in an arbitrary and unreasonable manner or whether it acted without reference to any guiding principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex. 1985). In family law cases, the abuse of discretion standard overlaps with traditional sufficiency standards of review; as a result, legal and factual sufficiency are not independent grounds of error but are relevant factors in our assessment of whether the trial court abused its discretion. In re A.B.P., 291 S.W.3d 91, 95 (Tex. App.-Dallas 2009, no pet.). The trial court does not abuse its discretion if some evidence of a substantial and probative character exists to support the trial court's decision. In re S.E.K., 294 S.W.3d 926, 930 (Tex. App.-Dallas 2009, pet. denied). The trial court is in the best position to observe the witnesses and their demeanor, and we give the court great latitude when determining the best interest of the child. Id.
B. Applicable Law
Under Texas law, child support is generally determined by calculating the child support obligor's monthly "net resources" and applying statutory guidelines to that amount. See TEX. FAM. CODE ANN. §§ 154.061(a) (West 2014), 154.062 (West Supp. 2015), 154.125 (West Supp. 2015); see also § 154.122 (West 2014) (amount of support determined by the child support guidelines is presumed to be appropriate amount of support). Net monthly income is determined by applying the obligor's gross income to the tax chart prepared by the Title IV-D agency pursuant to family code section 154.061(b). TEX. FAM. CODE ANN. § 154.061(b). The statute then requires certain additions and subtractions from monthly net income to arrive at the net resources of the obligor for child support purposes. See id. §§ 154.061-.070.
Resources include several types of income, including self-employment income, and receipts. Id. § 154.062(b). The language of section 154.062(b) indicates the legislature intended that "all receipts of money that are not specifically excluded by the statute (section 154.062(c)), whether nonrecurring or periodic, whether derived from the obligor's capital or labor or from that of others, must be included in the definition of 'resources.'" In re P.C.S., 320 S.W.3d 525, 537 (Tex. App.—Dallas 2010, pet. denied). Once net resources are calculated, the statutory guidelines are applied to determine the amount of child support. TEX. FAM. CODE ANN. § 154.0125. The trial court may order additional amounts of child support "as appropriate, depending on the income of the parties and the proven needs of the child." Id. § 154.126(a).
C. Analysis
In his first issue, Father contends the evidence is insufficient to show he had gross income necessary to support the trial court's calculation of monthly net resources.
The evidence at the hearing indicates Father had gross income for tax purposes of over $131,000 in 2011, a loss of $311 in 2012, and gross income of about $129,000 in 2013. His federal income tax returns for each of these years were admitted in evidence.
Father testified he injured his shoulder in January 2012 and could only do light-duty work. Father's bank statements from the first six months of 2012 show deposits totaling over $19,000 even though he testified he was not working. Father closed his checking account around the time he was ordered to pay child support by the associate judge.
Father contends his labor costs as shown on the tax returns significantly reduced his income, and that, after expenses, his income was about $7,000 in 2011, -$311 in 2012, and $13,000 in 2013. However, federal income tax regulations are distinct from the rules in the family code, and calculations prepared under one set of rules do not necessarily comply with the requirements of the other. Hudson v. Markum, 948 S.W.2d 1, 4 (Tex. App.—Dallas 1997, writ denied); Powell v. Swanson, 893 S.W.2d 161, 163 (Tex. App.—Houston [1st Dist.] 1995, no writ) (trial court must carefully examine federal income tax return in order to extract appropriate information without slavishly adopting its complete calculations).
The trial court's finding of monthly gross resources of $6,598.17 is somewhat less than the monthly income determined by Father's average gross income for the three years of tax information available. In Swaab v. Swaab, 282 S.W.3d 519, 526 (Tex. App.—Houston [14th Dist.] 2008, pet. dism'd w.o.j.), the court averaged several years of gross income shown in tax returns for a self-employed obligor with fluctuating income. Using this average gross income, the court determined an average monthly gross income and used the self-employed tax chart required by family code section 154.061(b) to determine the obligor's net resources. Id. at 526-27. The court of appeals determined the trial court did not abuse its discretion by applying the percentage guidelines to the amount of net resources. Id. We agree with this analysis.
Texas law supports averaging of resources where necessary. In re P.C.S., 320 S.W.3d at 537 n.10. Where an obligor's income fluctuates, a court may average such income for purposes of calculating child support obligations. Swaab v. Swaab, 282 S.W.3d 519, 526 (Tex. App.—Houston [14th Dist.] 2008, pet. dism'd w.o.j.) (averaging gross income shown on several tax returns to determine average gross income); Norris v. Norris, 56 S.W.3d 333, 341-42 (Tex. App.—El Paso 2001, no pet.) (averaging gross income for two year period in determining child support was not an abuse of discretion given fluctuation in obligor's income).
The court of appeals explained the calculation as follows:
According to his tax returns, David's total gross income for this period was $1,109,386, or an average annual income of $123,265. This amount represents a gross monthly income of $10,272, which exceeds that necessary to net $6,000 per month under the self-employed persons tax chart. TEX. FAM. CODE ANN. § 154.061(b). Thus, we conclude the trial court did not abuse its discretion in applying the percentage guidelines to the first $6,000 of David's net resources, resulting in the $1,200 child support award. Id. §§ 154.125(b), 154.126(a).
The monthly gross income found by the trial court in this case is less than the monthly average of the total amount of gross income shown on Father's tax returns. This indicates the trial court considered some deductions in calculating Father's monthly gross income. Because the evidence would support a higher monthly gross income applying the analysis in Swaab, we conclude the trial court did not abuse its discretion in determining the amount of monthly gross resources. See id. at 527.
Father complains that the trial court did not apply self-employment deductions described in family code section 154.065(b). The same argument was rejected by the court of appeals in Newberry v. Bohn-Newberry, 146 S.W.3d 233, 236 (Tex. App.—Houston [14th Dist.] 2004, no pet.). In Newberry, the court of appeals noted that section 154.065(b) is permissive; it provides that the trial court "may exclude from self-employment income" depreciation, tax credits, or any "other business expense shown by the evidence to be inappropriate" in making a determination of income available for the purpose of calculating child support. Id. (quoting TEX. FAM. CODE ANN. § 154.065(b)). The court rejected the appellant's argument saying:
The trial court may consider the additional deductions if evidence is presented during trial. Here, appellant's argument fails because no evidence was presented to the trial court that would have allowed the trial court to exercise its discretion to consider such evidence.Id. Here, Father presented no evidence that would have allowed the trial court to exercise its discretion to include additional self-employment deductions under section 154.065(b).
Based on the evidence in the record, including Father's gross income for the three years available, we cannot conclude the trial court abused its discretion in determining the amount of Father's monthly gross income or monthly net resources. See Swaab, 282 S.W.3d at 527; see also TEX. FAM. CODE ANN. § 154.061(b). Thus, the trial court did not abuse its discretion by ordering child support within the guidelines based on the determination of Father's net resources. We overrule Father's first issue.
Father's second issue complains about the order for retroactive child support. Specifically, he contends the trial court did not consider evidence of his share of the equity in the house that he gave to Mother under their agreement regarding child support. Father testified the equity in the house was approximately $16,000 to $18,000, making his share worth approximately $8,000 to $9,000.
As applicable here, a court may order a parent to pay retroactive child support if the parent has not previously been ordered to pay support. TEX. FAM. CODE ANN. § 154.009(a)(1). The associate judge awarded retroactive child support for the period after Father stopped living with Mother in October 2011 to the date of the child support order.
There is some confusion in the briefing about the time period for which retroactive child support was awarded. The briefs of all parties assume it was ordered for fourteen months prior to the order, but the order states retroactive child support was ordered for the period from December 1, 2011 to July 19, 2012, the date of the associate judge's order. This is a period of just over seven months, not fourteen.
In ordering retroactive child support, the trial court considers the net resources of the obligor during the relevant time period and whether:
(1) the mother of the child had made any previous attempts to notify the obligor of his paternity or probable paternity;Id. § 154.131(b). There is no evidence in the record that Father provided any support during the time after he stopped living with Mother and before the associate judge's order for support. The amount of retroactive child support ordered is equal to Father's court ordered child support for that time period.
(2) the obligor had knowledge of his paternity or probable paternity;
(3) the order of retroactive child support will impose an undue financial hardship on the obligor or the obligor's family; and
(4) the obligor has provided actual support or other necessaries before the filing of the action.
Father complains that the court did not credit his share of the equity in the house against child support according to his agreement with Mother. But an agreement concerning support between the parties does not reduce or terminate retroactive support that the OAG may request unless the OAG is a party to the agreement. See TEX. FAM. CODE ANN. § 154.009(c). Here, there is no evidence the OAG was a party to any agreement between Father and Mother to accept the deed to the house in lieu of child support. Accordingly, the trial court did not abuse its discretion in determining the amount of retroactive child support due without regard to the agreement.
This section reads:
(c) Unless the Title IV-D agency is a party to an agreement concerning support or purporting to settle past, present, or future support obligations by prepayment or otherwise, an agreement between the parties does not reduce or terminate retroactive support that the agency may request.TEX. FAM. CODE ANN. § 154.009(c). --------
Father has not shown on this record that the trial court failed to consider his net resources during the relevant time period or the other factors in section 154.131. See id. § 154.131. Accordingly, we conclude the trial court did not abuse its discretion by awarding retroactive child support. We overrule Father's second issue.
We affirm the trial court's order confirming support obligation after appeal. 140480F.P05
/Craig Stoddart/
CRAIG STODDART
JUSTICE
JUDGMENT
On Appeal from the 255th Judicial District Court, Dallas County, Texas
Trial Court Cause No. DF-12-07404-S.
Opinion delivered by Justice Stoddart, Justices Francis and Myers participating.
In accordance with this Court's opinion of this date, the trial court's March 21, 2014 order in suit affecting the parent-child relationship, order confirming support obligation after appeal is AFFIRMED.
It is ORDERED that appellees the Office of the Attorney General of Texas and Thuy Nhu Nyugen recover their costs of this appeal from appellant Binh Quoc Tran. Judgment entered this 7th day of March, 2016.
Id.