Opinion
No. C3-02-1541.
Filed February 11, 2003.
Appeal from the Ramsey County District Court, File No. F494928.
Scott K. Reinke, (pro se appellant)
Grace M. Reinke, (pro se respondent)
Considered and decided by Wright, Presiding Judge, Stoneburner, Judge, and Anderson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant challenges the district court's modification of his child support obligation by imputing income to appellant based on a 40-hour workweek, claiming that he was not voluntarily underemployed. We affirm the amount of the child support award as modified, based on appellant's actual, rather than imputed, income.
FACTS
The parties' marriage was dissolved on September 22, 1994. Respondent-mother Grace Reinke was awarded sole physical custody of the parties' two children, subject to visitation by appellant-father Scott Reinke. Father was ordered to pay guideline child support in the amount of $372.61 per month, based on his monthly net income of $1,308.70. Starting May 1, 1996, father's child support obligation increased to $387 per month in accordance with the cost of living adjustment.
In earlier proceedings to modify child support, father consistently claimed a decrease in his income, while mother consistently claimed an increase in father's income. In its orders of August 7, 1998, April 11, 2000, and July 7, 2000, the child support magistrate found no change of circumstances warranting modification, and father's obligation remained at $387 per month.
On March 25, 2002, Ramsey County brought a motion to modify father's child support obligation, based on mother's request for an administrative review and financial investigation. An evidentiary hearing was held before a child support magistrate. At the hearing, the Ramsey County child support officer submitted two alternative calculations of father's child support obligation. The first calculation was based on father's current hourly wage and a 40-hour workweek, which was greater than the number of hours father actually worked. After subtracting taxes and father's union dues, the child support officer arrived at a net monthly income of $1,791.34. Using the child support guidelines, she calculated father's support obligation to be $537 per month. The second calculation used father's actual income for 2001. From father's average net monthly earnings of $1,713.43, the child support officer calculated father's support obligation to be $514 per month.
Father argued that his child support obligation should not be based on a 40-hour workweek because his full-time employer only guaranteed 35 hours per week. The record establishes that father has worked for the same employer since the parties' dissolution in 1994. At that time, he earned $10.43 per hour and worked 40 hours per week. In 1998, father's employer reduced his workweek to 35 hours, while increasing his earnings to $11.23 per hour. Father submitted a copy of his employment contract, which stated that "[t]he regular work week [should] consist of five (5) shifts of seven (7) hours beginning on Monday and ending on Friday of each week."
Based on the testimony and evidence adduced at the hearing, the magistrate found that father was able to work 40 hours per week, that he averaged more than 35 hours per week in the past, and that during the third quarter of 2001 he averaged 39 hours per week. Finding father voluntarily underemployed, pursuant to Minn. Stat. § 518.551, subd. 5b(d) (2000), with the ability to earn an average net monthly income of $1,791.34 based on a 40-hour workweek, the magistrate set father's guideline support obligation at $537 per month.
Father moved for review by the district court. He argued that the magistrate erred in basing his child support obligation on a 40-hour workweek because his full-time employer guaranteed only 35 hours per week. After an independent review, the district court affirmed the magistrate's decision in its August 20, 2002, order. Father appealed.
DECISION
The district court has broad discretion to provide for the support of the parties' children. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). We will not reverse a district court's determination of net income used to calculate child support if it has a reasonable basis in fact. Strauch v. Strauch, 401 N.W.2d 444, 448 (Minn.App. 1987).
Under the child support guidelines found in Minn. Stat. § 518.551, subd. 5(b) (2002), an obligor's child support obligation is calculated as a percentage of his or her monthly net income. Ordinarily, an obligor's monthly net income is equal to his or her actual monthly gross income minus the deductions specified under the guidelines. Id.; Putz v. Putz, 645 N.W.2d 343, 348 (Minn. 2002). The court may modify an existing child support order upon a showing by either party of a substantial change in circumstances. Minn. Stat. § 518.64, subd. 2 (2002). If the district court finds that an obligor is "voluntarily unemployed or underemployed," then the district court must calculate the support obligation "based on a determination of [the obligor's] imputed income." Minn. Stat. § 518.551, subd. 5b(d) (2002). "Imputed income" is defined as "the estimated earning ability of a parent based on the parent's prior earning history, education, and job skills." Id. It is essential that the district court "carefully examine the evidence presented by the parties and make thorough and accurate findings of fact regarding the obligor's monthly income." Putz, 645 N.W.2d at 348.
According to the record in this case, father has worked for the same employer in the same position since at least 1994. His net monthly income in 1994 was $1,308.70. Based on the financial information from the third quarter of 2001, father's actual average net monthly earnings were $1,713.43. This $500 increase in net monthly income was a sufficient basis for the modification of his child support obligation, because it would result in an increase in father's guideline support obligation from $387 to $514. See Minn. Stat. § 518.64, subd. 2(b)(1) (2002) (modification of support warranted when application of child support guidelines to current circumstances results in support that is at least 20 percent and at least $50 per month higher than current order). Thus, the district court correctly determined that a modification of father's obligation was warranted.
The district court erred, however, in basing the amount of father's child support on imputed income. Before a court may impute income to an obligor, there must be evidence of choice in the matter of underemployment. Murphy v. Murphy, 574 N.W.2d 77, 82 (Minn.App. 1998). The evidence does not support the district court's conclusion that father's underemployment (a workweek that is less than 40 hours) was voluntary. It was father's employer, not father, who reduced father's hours of work per week. Moreover, while 40 hours may be a standard full-time workweek, Minn. Stat. § 518.551, subd. 5b(d), requires the district court to consider an obligor's earning ability based on "prior earning history, education, and job skills." From our review of the record, it is clear that father has worked for the same company for more than eight years, his hourly pay has increased over these years, and his actual workweek has always fluctuated between 35 to 40 hours per week. Father's circumstances of employment and earning history, therefore, warrant calculation of his child support obligation based on his actual income. We note that both the county and mother asked the court for a modification based on father's actual income that would have resulted in a child support obligation of $514 per month.
Because an obligor's choice of underemployment is a condition precedent to imputation of income, Murphy, 574 N.W.2d at 82, the district court erred in basing father's support obligation on imputed income. While we affirm the district court's determination that father's increase in income warranted modification of his child support obligation, we modify the amount of father's child support based on his actual monthly income and set it at $514 per month.