Opinion
No. 04-16-00830-CV
03-07-2018
IN THE INTEREST OF I.Z.K., a Child
MEMORANDUM OPINION
From the 285th Judicial District Court, Bexar County, Texas
Trial Court No. 2014-CI-15263
Honorable Solomon Casseb III, Judge Presiding Opinion by: Marialyn Barnard, Justice Sitting: Marialyn Barnard, Justice Rebeca C. Martinez, Justice Irene Rios, Justice REVERSED AND REMANDED
This appeal arises from a trial court's order modifying appellant father's (Father) child support obligation. In two related issues on appeal, Father argues the trial court abused its discretion by calculating his child support obligation based on his earning potential rather than his actual income. We reverse the trial court's order and remand the case for further proceedings consistent with this opinion.
BACKGROUND
Father and appellee mother ("Mother") were divorced in January 2016. The divorce decree named Father and Mother joint managing conservators of their child, I.Z.K., and Mother was given the right to determine I.Z.K.'s primary residence. The decree further provided that Father's net resources were $5,092.62 per month, and based thereon, the trial court ordered Father to pay $789.93 per month in child support. In April 2016, Father filed a petition to modify the child support order, seeking to decrease the amount of child support payments to zero. In his petition, Father asserted his circumstances had materially and substantially changed since the parties' divorce because he was discharged from the Army due to a disability. Father stated his only source of income consisted of disability retirement payments, and such payments are excluded from net resources. Father also claimed he was not receiving any additional income from other sources.
The trial court held a hearing on Father's request for modification. At the hearing, each party was represented by counsel. Additionally, an attorney from the Office of the Attorney General ("OAG") was present. The trial court heard testimony from Father, who testified that on January 27, 2016, he was discharged from the Army because of a physical disability. Father testified that as a result of his discharge, he was receiving $1,983.00 a month in disability retirement benefits from the United States Veterans Administration, but had no other income. In addition to his testimony, Father introduced — and the trial court admitted into evidence — a letter from the Department of the Army confirming Father's discharge based on a physical disability. On cross examination, Father testified that although he initially worked in transportation while he was in the military, he was subsequently reclassified as a musician in the Army band. Father stated that while in the band, he played the drums; however, he did not own any percussion instruments and the instruments he played belonged to the military.
In their briefs, both parties identify the Attorney General as an intervenor in the proceeding.
When asked whether he could currently work as a percussionist, Father testified the same condition that prevented him from playing the drums in the military also prevented him from pursuing the activity outside of the military. Father further explained that due to his medical condition, he could not undertake any activity that would elevate his heart rate or blood pressure. Father further testified that although he sought employment, he was unsuccessful because his medical condition excluded him from the jobs for which he applied. Father added, that because he was still transitioning out of the military and undergoing numerous medical procedures and tests, he was in the process of applying for social security benefits to help him meet his child support obligation.
During closing, Father's counsel argued Father's only source of income consisted of his monthly disability retirement payments, and under section 154.062 of the Texas Family Code, such payments are excluded from the calculation of child support obligations. See TEX. FAM. CODE ANN. § 154.062 (West. Supp. 2017) (outlining what resources should be included in calculation of net resources). Father's counsel continued, asking the court to modify Father's child support payments to zero.
The trial court then heard a brief statement from the OAG attorney, who argued the disability retirement payments Father received should be included in net resources. The court agreed and turned its attention to determining how much child support Father should pay. Mother's counsel then argued Father failed to produce any evidence establishing that he was entitled to a modification. According to Mother, Father was skilled as a musician and capable of caring for I.Z.K., and therefore, he was intentionally unemployed. Mother's counsel added Father could potentially work as a musician or give music lessons. Father's counsel then objected, arguing Mother's counsel was arguing outside the scope of her pleadings as she did not plead an affirmative defense of intentional underemployment or unemployment. The court overruled Father's objection, and the parties were subsequently excused.
Thereafter, the trial court rendered an order modifying Father's child support payments. The order contained the following findings:
The Court finds that [Father's] net resources are three thousand sixty-three dollars and zero cents ($3,063.00). Specifically, the Court finds that [Father's] net resources are based on one thousand nine hundred eighty-three dollars and zero cents ($1,983.00) from the United States Veterans Administration, and one thousand eight hundred dollars and zero cents ($1,080.00 [sic]) from teaching drum lessons for twenty (20) hours a week at fifteen dollars and zero cents ($15.00) per hour. The Court finds that a drummer instructor [Father] can earn fifteen dollars an hour ($15.00) or more. Alternatively, the Court finds that [Father] has not presented evidence that he is unemployable to avoid payment of child support.Father filed a timely notice of appeal.
ANALYSIS
In two related issues on appeal, Father argues the trial court abused its discretion by calculating his child support obligation based on his earning potential rather than his actual income. Specifically, Father first argues there was no evidence to support the trial court's finding that his monthly net resources were $3,063.00 because there was no evidence he was intentionally unemployed or underemployed, or that he could earn more than his actual income. Father further contends the trial court abused its discretion because it erred in considering the issue of intentional unemployment or underemployment when Mother failed to plead it as an affirmative defense.
Standard of Review
A trial court may modify a child support order when there has been a material and substantial change in circumstances. Id. § 156.401(a)(1). We review a trial court's ruling regarding a parent's child-support obligation under an abuse of discretion standard. Reddick v. Reddick, 450 S.W.3d 182, 187 (Tex. App.—Houston [1st Dist.] 2014, no pet.); Melton v. Toomey, 350 S.W.3d 235, 238 (Tex. App.—San Antonio 2011, no pet.); In re M.P.M., 161 S.W.3d 650, 654 (Tex. App.—San Antonio 2005, no pet.). A trial court abuses its discretion when it acts in an arbitrary and unreasonable manner and without reference to any guiding rules or principles. Reddick, 450 S.W.3d at 187; Melton, 350 S.W.3d at 238; M.P.M., 161 S.W.3d at 654. "In family law cases, legal and factual sufficiency challenges do not constitute independent grounds for asserting error, but are relevant factors in determining whether the trial court abused its discretion." Reddick, 450 S.W.3d at 187; see M.P.M., 161 S.W.3d at 654. "To determine whether the trial court abused its discretion because the evidence is legally or factually insufficient to support the trial court's decision, we consider whether the trial court (1) had sufficient evidence upon which to exercise its discretion, and (2) erred in its application of that discretion." Thompson v. Smith, 483 S.W.3d 87, 92 (Tex. App.—Houston [1st Dist.] 2015, no pet.); Reddick, 450 S.W.3d at 187. When considering the first prong of this test, we conduct a traditional sufficiency review. Thompson, 483 S.W.3d at 92; Reddick, 450 S.W.3d at 187. We then proceed to determine whether, based on the elicited evidence, the trial court made a reasonable decision. Thompson, 483 S.W.3d at 92-93; Reddick, 450 S.W.3d at 187.
When conducting a legal sufficiency review, we consider all the evidence in the light most favorable to the finding under review, indulging every reasonable inference that would support the finding. Thompson, 483 S.W.3d at 93; M.P.M., 161 S.W.3d at 654. We also credit favorable evidence if a reasonable factfinder could do so and disregard contrary evidence unless a reasonable factfinder could not. Thompson, 483 S.W.3d at 93; M.P.M, 161 S.W.3d at 654. When conducting a factual sufficiency review, we weigh all the evidence in a neutral light and will sustain a factual sufficiency challenge only if we conclude that the evidence supporting the finding is so weak that the finding is clearly wrong and manifestly unjust. Thompson, 483 S.W.3d at 93; M.P.M., 161 S.W.3d at 654. As the trier of fact, the trial court is the sole judge of the credibility of the witnesses and the weight to be given their testimony. Thompson, 483 S.W.3d at 93; M.P.M., 161 S.W.3d at 654.
Intentional Underemployment/Unemployment
As set out above, Father argues the trial court abused its discretion in finding that his monthly net resources were $3,063.00 because there was no evidence he was intentionally unemployed or underemployed or that he could earn more than his actual, proven income. For support, Father relies on Iliff v. Iliff, arguing Mother failed to meet her burden to produce evidence establishing he was intentionally unemployed or underemployed. 339 S.W.3d 74 (Tex. 2011).
Applicable Law
In calculating a child support payment, the trial court must first determine the obligor's net resources, which includes current wage and salary earnings from all sources. See TEX. FAM. CODE ANN. § 154.062(b). This court has additionally recognized that "[a] parent's duty to support their child is not limited to the parent's ability to pay from current earnings, but also extends to the parent's ability to pay from any and all sources that might be available." In re N.M.D., No. 04-13-00849-CV, 2014 WL 3339627, at *2 (Tex. App.—San Antonio July 9, 2014, no pet.) (mem. op.); In re S.M.B., No. 04-10-00115-CV, 2011 WL 2238222, at*3 (Tex. App.—San Antonio Jun. 8, 2011, no pet.) (mem. op.). Section 155.066 of the Texas Family Code provides that "[i]f the actual income of the obligor is significantly less than what the obligor could earn because of intentional unemployment or underemployment, the [trial] court may apply the support guidelines to the earning potential of the obligor." TEX. FAM. CODE ANN. § 154.066; see Iliff, 339 S.W.3d at 79-80. Thus, to base a parent's child support obligation on a parent's earning potential rather than actual income, the trial court must first find that the obligor is intentionally unemployed or underemployed. Iliff, 339 S.W.3d at 80. "Intentionally unemployed or underemployed" means the obligor "consciously chooses to remain unemployed or underemployed." Id. A parent qualified to obtain gainful employment cannot avoid his or her child-support obligations by voluntarily remaining unemployed or underemployed. Id. at 81.
Deciding whether a parent's child-support obligation should be set based on earning potential as opposed to actual earnings is a case-by-case determination. Id. at 82. In Iliff, the Texas Supreme Court recognized that the trial court's analysis imposes shifting burdens of proof on the obligor and the obligee. Id. Initially, the obligor must offer proof of his or her current wages. Id. The obligee then bears the burden of showing that the obligor is intentionally unemployed or underemployed. Id. The burden then shifts to the obligor to offer evidence in rebuttal. Id.
Application
Here, the trial court found Father's net resources to be $3,063.00 based on his monthly disability retirement payments and potential earnings he could receive if he taught drum lessons. It is undisputed that Father produced evidence that his actual income was $1,983.00 based on monthly disability retirement benefits. The record reflects Father produced a copy of his discharge letter, stating he was being discharged due to a physical disability. Father also testified he was receiving $1,983.00 a month in disability retirement benefits from the United States Veterans Administration, but no other income. Accordingly, under Iliff, the burden shifted to Mother to demonstrate that Father was intentionally underemployed or unemployed. See id.
At the hearing, Mother's counsel argued during closing that Father was capable of working because he was capable of caring for I.Z.K. Mother's counsel further argued, "I don't know how he's not employable with skills as a musician. I don't know how he can't give music lessons." However, the record reflects that Father testified he could not work as a percussionist due to his medical condition, and he did not own a set of instruments. Moreover, there is no evidence to support a finding that Father could make additional income from teaching drum lessons for twenty hours a week at $15.00 an hour. Other than speculation by Mother's counsel that Father could work as a musician or give music lessons, there is nothing in the record to explain how the trial court reached this figure. Absent actual evidence, mere speculation that Father could work as a percussionist or give music lessons is insufficient to show intentional underemployment or unemployment. See Reddick, 450 S.W.3d at 190-91 (stating testimony that father is capable of working more without additional evidence of how father could do more is insufficient to show intentional underemployment). Here, Mother failed to produce any evidence of missed opportunities or deliberate choices Father made to remain unemployed. See id.; see also Trumbull v. Trumbull, 397 S.W.3d 317, 320 (Tex. App.—San Antonio 2013, no pet.) ("But to support a finding of intentional underemployment, it is not enough to simply establish that the obligor is failing to maximize his potential.").
We note that the trial court mistakenly calculated Father's earning potential to be "$1,080.00" based on teaching drum lessons for twenty hours a week at $15.00 an hour, and that mistaken calculation was used to configure Father's net resources.
We note that the Attorney General filed a letter in this court, conceding "there is no record evidence to determine Father's earning potential as a percussionist or otherwise intentionally unemployed or underemployed."
Because Mother produced no evidence of Father's earning capacity other than a mere belief that he could work as a percussionist and give music lessons, we hold Mother failed to carry her burden to prove Father was intentionally underemployed. Accordingly, we conclude the evidence is legally and factually insufficient to support the trial court's finding of Father's net resources to be $3,063.00. We therefore hold the trial court abused its discretion in calculating Father's child support obligation based on earning potential rather than actual income. Because we sustain Father's challenge to the sufficiency of the evidence, we need not address his other issues challenging the modification order.
CONCLUSION
Based on the foregoing, we reverse the trial court's order modifying Father's child support obligation and remand the cause for further proceedings consistent with this opinion.
Marialyn Barnard, Justice