Opinion
Record No. 0786-93-3
Decided: June 14, 1994
FROM THE CIRCUIT COURT OF THE CITY OF SALEM, Kenneth E. Trabue, Judge
Reversed and remanded.
Charles B. Phillips (Phillips, Doherty Swanson, on brief), for appellant.
Harvey S. Lutins (Lutins Shapiro, on brief), for appellee.
Present: Judges Barrow, Coleman and Koontz
Pursuant to Code Sec. 17-116.010 this opinion is not designated for publication.
In this appeal, we hold that the trial court erred by refusing to reduce Paul Douglas Richards's spousal and/or child support payments. A material change in circumstance had occurred in Richards's ability to pay the spousal and child support awards because he had a significant reduction in income. No credible evidence existed to support the trial judge's ruling that Richards's reduction in income was self-imposed. In fact, the evidence proved that Paul Douglas Richards had been involuntarily terminated from his employment and was only able to obtain other employment at a significantly lower salary. We hold, therefore, that, as a matter of law, a material change in circumstance occurred that required a modification of Richards's spousal and/or child support obligations. Accordingly, we reverse and remand the case for a hearing to modify either or both of the support awards as the trial judge may determine proper.
The provision in the parties' separation agreement providing for spousal support is a bilateral contract between sui juris parties that was incorporated in the divorce decree. As such, a court cannot alter the contractual obligation to pay spousal support unless the contract expressly allows such a modification. See Code § 20-109; McLoughlin v. McLoughlin, 211 Va. 365, 368, 177 S.E.2d 781, 783 (1970). Here, the parties' contract expressly provides that "spousal support [is] subject to future review and modification by a court of competent jurisdiction."
The parties executed a property settlement agreement dated November 19, 1990, that was incorporated into the divorce decree that same year. In the agreement, Paul Douglas Richards agreed to pay $2,800 per month spousal support and $2,000 per month child support for three minor children. A year later, while Paul Douglas Richards was employed at Lewis-Gale Clinic earning $154,000 a year, he contacted other medical partnerships to inquire about the prospect of employment. The vice president of Lewis-Gale, upon learning about these inquiries, immediately terminated Richards's employment. Richards later found employment with Oncology and Hematology Associates of Southwest Virginia, Inc., earning $90,000 a year.
Paul Douglas Richards filed a petition requesting that the trial court reduce both his spousal and child support obligations. At the modification hearing, Richards testified that he did not attempt to keep secret from the administration at Lewis-Gale Clinic his employment inquiries. The trial judge ruled that Richards's reduction in income was self-imposed because he did not keep secret his efforts to find other employment. Relying upon the holding in Antonelli v. Antonelli, 242 Va. 152, 156, 409 S.E.2d 117, 119 (1991), the court equated Richards's not keeping his employment inquiries secret from his employer to a voluntary termination, meaning Richards neglected or accepted the risk that, if discovered, he would be terminated. Thus, the trial court denied his request for a reduction in his support obligations.
On a petition to modify court-ordered spousal or child support, the moving party has the burden of proving by a preponderance of the evidence that a material change in circumstances has occurred. See Code Sec. 20-108.1(B) (3); Antonelli, 242 Va. at 154, 409 S.E.2d at 119. To justify a change in the amount of support, however, the nature of the changed circumstance must be such that would justify a modification of the support obligations. Antonelli, 224 Va. at 154, 409 S.E.2d at 119. In order to prove a material change, the moving party must establish that any reduction in income is not the result of being "voluntarily under-employed." In Antonelli, the Supreme Court stated, a party seeking a change in . . . support has the burden to prove by a preponderance of the evidence a material change in circumstances justifying modification of the support requirement. . . . [A] father seeking a reduction in support payments must also . . . show his claimed lack of ability to pay is not due to his own voluntary act or because of his neglect.
Id.
In Antonelli, the Court denied the father's request for a reduction in his child support obligation because he had voluntarily moved from a salaried position as a stockbroker to a commission broker position. Mr. Antonelli had made a calculated, voluntary decision to change employment. Although he expected to earn more in the new job, due to adverse economic conditions, he earned less. The Court held that because Antonelli was aware of the risk involved in voluntarily making the career change to a commission broker, the reduction in income suffered by Antonelli was a risk that he accepted. Id. at 156, 409 S.E.2d at 119-20.
Following a similar line of reasoning, in the case of Edwards v. Lowry, 232 Va. 110, 113, 348 S.E.2d 259, 261 (1986), the Court refused to reduce a father's child support obligation when he had been terminated from employment because he had stolen from his employer. The Court held that the father's termination and inability to support his children was due to his own voluntary, wrongful act, and even though a material change in circumstance had occurred, it did not justify the father being relieved of his obligation to support his children. Id.
The Antonelli holding is inapplicable to the facts in this case. Paul Douglas Richards was involuntarily terminated from his employment at Lewis-Gale. As a result of his termination, he suffered a $64,000 reduction in salary. No evidence suggested that when Richards inquired about other employment, he did so for the purpose or with the intention of being terminated at Lewis-Gale Clinic, and the trial judge did not so find. Unlike Mr. Antonelli, Richards did not voluntarily leave his job or purposefully seek to be terminated, thereby risking a reduction in his income and his ability to support his dependents.
No credible evidence supports a finding that Paul Douglas Richards's termination was "self-imposed" in the sense that he voluntarily sought to be terminated or was aware and accepted the risk that he likely would be terminated. The quality of Richards's work at Lewis-Gale Clinic had been satisfactory. Inquiring about other employment opportunities, without more, does not support a finding that Richards's termination was "self-imposed," or that he voluntarily terminated his employment, or that he was discharged due to his own fault. The Edwards decision is likewise not controlling. Richards was terminated without any wrongdoing on his part. The trial court erred in finding Richards's termination "voluntary" and in finding that his reduction in income was "self-imposed."
A material change in Paul Douglas Richards's economic circumstances occurred. His income has been significantly reduced. He pays $2,000 a month in child support and $2,800 in spousal support. According to Richards, his net monthly income is now less than the aggregate $4,800 support awards. When the divorce decree incorporated the agreement and his support obligation was $4,800, Richards's net monthly income was $5,500, leaving him $700 per month for his expenses. However, according to Richards, based on his current salary, his spousal and child support obligations exceed his net monthly income. Although the trial court has broad discretion in deciding whether a material change in circumstance warrants a modification in the amount of support, in the absence of evidence that Richards is voluntarily underemployed, the trial judge may not disregard that his present income is insufficient to pay the support awards, if that be the case. Additionally, as to child support, the trial court must consider the child support guidelines in view of the material change in the father's income and ability to pay. On remand, the court shall determine whether to modify Richards's child support obligation after considering the guidelines and whether to modify the spousal support obligation incorporated in the decree and as authorized by the agreement. See Code Sec. 20-109; McLoughlin, 211 Va. at 368, 177 S.E.2d at 783.
Accordingly, we reverse the trial court's ruling that no material change of circumstance occurred that warranted a modification of Paul Douglas Richards's spousal and child support obligations. We remand the case for the trial court to reconsider Richards's petition for modification of support in accordance with this opinion.
Reversed and remanded.