FAMILY LAW INNS OF COURT 2013-2014

CHILD SUPPORT

Mind Numbing ... or is it?

Group Five

Judge Samantha Ward

"YOU HAVE JUS'l' CROSSED OVER lNro ...

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February 5,2014

Marian McCulloch - Master- Group Chair Ingrid Hooglander - Barrister - Co-Chair Michael McGinn -Master Clif Curry - Master Allison Perry - Master Joe Hood - Master Kevin Astl- Barrister Nicole Coppock - Barrister Serna Yildirirn - Barrister Kelli Mitchell - Associate Lara Davis - Associate Courtney Bueno - Associate

FACT PATTERN

Fred and Ethel graduated from law school together and joined the same intellectual law practice in 2001. Both did well at the firm. After approximately six months at the firm, Ethel discovered that she was pregnant and the parties were married shortly thereafter. The twins, Max and Emma were bom in September 2002. Fortunately, the law firm where they both worked provided very flexible scheduling, the parties employ a live -in nanny who has been with the parties since the child's birth and the parents shared parenting duties equitably and earned a similar income.

Ethel was assigned to a very lucrative law firm team. Over time, she began to work more hours and her income increased rapidly. Fred complained that she spent too much time working, but he enjoyed a lavish lifestyle and the parties typically remained in a financial position which made it difficult for the Ethel to forego her high income due to their expenses and debt. The parties began to argue over financial issues, among other things. In 2007, Ethel was earning approximately $100,000.00, including $50,000.00 in bonuses (not guaranteed). Fred was earning approximately $70,000.00.

Fred decided to take some additional undergraduate courses in order to become eligible to take the patent exam and increase his income. Between 2007 and the present, Fred has taken several college courses. Unfortunately, he has not accumulated a sufficient number of credits to qualify for the exam. He has, however, accumulated an additional $50,000.00 in student loans, towards which he has not made any payments. Ethel was aware that Fred was taking classes. However, she was under the impression that Fred was borrowing only what was necessary to pay tuition and had no idea of the magnitude of the loans until recently.

In 2008, Ethel engaged in a brief affair with, Simon, the partner with whom she worked. Overcome with guilt, she left the firm shortly thereafter for a different job, garnering an increase in income. She wished to avoid remaining at the firm where the indiscretion might become public. She retained her 401 K from her employment there. (It is now valued at $300,000.00).

A few months later, Ethel discovers she is pregnant. She discloses the affair to her husband and explains that she left the former firm to avoid continuing the affair. The parties discussed the situation and contemplated divorce. The Husband sought the advice of an attorney. The parties decided to attempt a reconciliation, sought marriage counseling and agreed to raise the child together. Georgie, a daughter, was born in June 2009. According to the Fred, he was under the impression that the child might be his and that he expected Ethel to tell him if she learned that the child was definitely not his. According to Ethel, Fred knew from the beginning that he was not the Father, because they were not intimate during the time Georgie was conceived.

Simon also left the firm shortly after the affair, transferring to Virginia, near

Page J of 5

Washington D.C., where intellectual property lawyers can typically earn significantly more income than in Florida.

Fred and Ethel, who could also earn significantly more in Virginia, had often discussed the possibility of moving together to Virginia. During these discussions, both parties had discussed the advantages, including being significantly closer to both of their families. Fred and Ethel both have siblings who enjoy close, loving and involved relationships with their nieces and nephew and all live within 2 hours of Washington D.C.

In December of 2009, Fred was terminated by the law firm. His 401K was liquidated at that time, with Fred receiving $50,000.00, net of assets. Fred indicates that all of the funds were spent.

The parties sold their former home and purchased a home in 2008. They recently refinanced and now owe an $800,000.00 mortgage amortized over 15 years. It is located very close to Ethel's work, to facilitate her schedule. They paid a premium for this location, solely due to proximity to her workplace. The current value of the home is $1,000,000.00.

In February of 2010, Fred accepted employment as a contract attorney for 30 hours per week at the annual salary of $70,000.00. Fred indicates that he requires a flexible schedule to meet the needs of the children. He also indicates that he find practicing law too stressful if required to work too many hours. He continues to earn this amount.

The twins are involved in a variety of activities. Max is a very talented baseball player. Emma is a very talented piano player. Traditionally, the nanny has taken the children to appointments and activities such as lessons and practices, with both parents participating equitably in games, recitals and other family activities.

When Fred continued to express no interest in increasing his income, this caused some marital discord. The discord worsened over time, as Fred increased the amount of time he spent attending to the children and enrolled them in expensive lessons and workshops.

The Husband also began taking the children alone to "their" vacation home which had been used often by the family for many years. The cabin, located within two hours of the parties home, is titled in the name of Fred alone since before the marriage, at which time it was valued at $200,000.00. The property was owned free and clear at that time. Fred and Ethel discussed the property before the marriage and agreed that the property would remain solely Fred's if he paid the expenses from non-marital funds . Ethel has encouraged Fred to rent the property for this purpose. The owner of a

nearly identical property next door is rented fourteen weeks of the year for $1500.00 per week net of cleaning an management expenses. Fred has refused to rent the property

Page 2 of 5

because he did not want to risk the property being unavailable when the family wanted to use the property. All expenses on the property have been paid, including real estate taxes, maintenance and repairs, nelling an average of approximately $5000.00 per year. A porch and deck were added to the property during the marriage at an expense of $20,0000.00. The Husband has no other source of non-marital funds. The current value of the property is $400,000.00.

The parties have credit card and other debt in the amount of $100,000.00, all of which is in joint names. Ethel was not aware of $50,000.00 of this debt, placed on cards the Wife was not aware existed. The Wife has a retirement 401 K with her new employer with $200,000.00 in it. The Husband no longer has any retirement accounts.

The live-in nanny is paid $20,000.00 per year, in addition to room and board. She has been with the family since the birth of the twins. Both parents agree that it is important to the family for her to remain with the children. Before the Husband began increasing the children's activities, she was able to provide transportation to all of their activities. She believes that it would be possible for the children to have plenty of activities and, if properly scheduled, she could provide adequate transportation for the children's activities without the Husband foregoing full time employment. She believes that both Fred and Ethel are good parents and genuinely care for the children.

Currently, the employers for both Fred and Ethel provide insurance for them. The children are covered under a Cadillac insurance policy at the Wife's firm which costs $750.00 per month deducted from her paycheck. Thankfully, all fam.ily members are healthy and additional medical expenses do not exceed $500.00 per year for any family member.

Recently, Ethel's firm has offered to transfer her to its Virginia office. She would receive a significant pay raise. Her employer has offered assistance in finding employment for Fred. She shared her desire to move with Fred, who now indicates that he now does not want to uproot the children and wishes to remain in Florida.

The parties, now at odds on financial issues again and with no agreement as to where to live, the parties contemplate dissolution of the marriage. Ethel still desires to move to Virginia with the children. She now earns $200,000.00 with her employer and would earn $300,000.00 if she accepts the transfer to Virginia.

Ethel contacted many of her colleagues to discuss the proposed move and Simon heard about the possibility of both Ethel's move to Virginia and her possible divorce through the grapevine. He looked Ethel up on facebook and sees a photo of her with Georgie, who is the splitting image of his sister, Meghan, right down to an unusual family dimple. He contacts Ethel to discuss Georgie, now wondering if she might be his child. If so, he would like to have a relationship with her. He leaves a message for Ethel regarding the possibility that he is Georgie's biological father and his desire to have a relationship if that is the case. He was unaware of the details and

Page 3 of 5

timing of Georgie's birth and understood that there was little chance a child could have resulted from their brief relationship as Ethel was using an IUD and they had used protection as well. He is willing to provide support for Georgie. Fred insists that he is devastated by the mere possibility that Georgie is not his child, and forbids Ethel from contacting or providing any information to Simon. Ethel believes that Simon should be permitted to spend time with the child and would accept his support.

Both Fred and Ethel have very good relationships with all three children. Emma does not have a preference about moving. She can obtain excellent piano training in Virginia, perhaps better that available in Florida. Max has misgivings about the move and is concerned that it will decrease the amount of time he can dedicate to his baseball due to the weather. Georgie has a very close and loving relationship with her brother and sister, who adore her.

Now, it seems divorce is inevitable. Each party approaches different team members about the divorce and their rights.

Ethel would like to obtain a divorce from Fred and move to Virginia. This will increase her income and provide new opportunities for the children. She wants to move with them and the nanny. She believes the Fred should also move and that he could easily obtain equivalent or better employment in Virginia. She indicates that such a move has been contemplated for years and that both parties agreed to the move in the past. She believes that she should be able to retain the retirement accounts, the vacation home should be treated as marital property and that and the marital home should be split with the proceeds divided between the parties. She wishes to retain her vehicle, which is paid for and has a value similar to the Husband's vehicle. She believes that the contents of the marital home, in an estimated value of $10,000.00 should be split.

Fred is fine with Ethel going to Virginia if she is willing to leave the nanny and the children in Florida. His position is that he should be permitted to continue to work his almost full time schedule while devoting his attention to the children, whom he believes should not be uprooted. He believes that the vacation home remains his separate property. He wants to remain in the marital home and have the Wife supplement his income with adequate child support and alimony to retain the nanny, the marital home and allow the children to continue with their extensive activities. He believes that Ethel, with her very lucrative position, could afford to provide for visitation expenses for the children and that her relationship with the children could be preserved with a combination of weekend visitations, extended time during summer and school breaks (to the extent it does not interfere with Max's baseball schedule) and that Ethel will be required by her employer to travel to Florida frequently, when she will be able to spend additional time with the children. Fred wishes to be awarded all of the contents of the home so that the children will be in familiar surroundings and suggests that it will cost as much to move half of the home contents as they are worth. Since he believes that his income will be permanently depressed due to his contributions to raising the children, he seeks an award of permanent alimony.

l't Step

IMPUTATION OF INCOME When is income imputed?

Requires a two-step process

---

Voluntary? (absent findmgs of mcapaClty Ot'

other circ1lllllitance)

-If

unemployed or underemployed spouse

-----,-l---, ~ i Court must determine I Has the unemployed -

whether subsequent spouse used his best underemployment efforts to gain resulted from spouse' s employment earning the pursUit of own interest same level of mcome (or or through less than higher) in his previous diligent & bona fide employment?

-

2Dd Step efforts to find employment paymg income at level equal to or better than formerly received

*Note: a court cannot IDlpute mcome at a level never earned by that party j

Not used best efforts:

Party seeking to impute income must present competent and substantial evidence to support that the spouse can earn the amount of income sought to be imputed. Competent substantlal evidence includes recent work history, occupational quallficatlons, and preVaIling earnings ill the community.

, *Note: Party seekmg to impute mcome must present specillc evidence regardmg the avrulable jobs

I in the community for wluch the

I underemployed party is qualified.

... Such eVidence mcludes what the poSition might pay, what skills are required for the position, whether the

f underemployed party's skills are ~ . current and whether those sloBs can t, be apphed to the POSItIon. ----.....I

Used best efforts: ! Party seeking to impute I income must present a !

i specific job

I I . -".'

Involuntary?

No Imputation

CASE LAW

In imputing income to an unemployed or underemployed party, the

party seeking to impute income must show that the unemployment or

underemployment is voluntarily. Florida Statutes §61.30(2)(b). A court

may impute income to a party who has no income or is earning less than is

available to her based upon a showing that the party has the capability to

earn more by the use of her best efforts. Cleary v. Cleary, 872 So.2d 299

(Fla. 2d DCA 2004); Solomon v. Solomon, 861 So.2d 1218 (Fla. 2d DCA

2003); La Flam v. La Flam, 854 So.2d 809 (Fla. 2d DCA 2003); Ritter v.

Ritter, 690 So.2d 1372 (Fla. 2d DCA 1997); Koeppel v. Holyszko, 643 So.2d

72 (Fla. 2d DCA 1994). The party seeking to impute income has the burden

to show that the underemployed party has voluntarily chosen to earn less,

and that the underemployed party has the ability to remedy the situation.

Cushman v. Cushman, 585 So.2d 485 (Fla. 2d DCA 1991). Before imputing

Income, the court must determine whether the individual's

underemployment resulted through less than diligent and bona fide efforts to

find employment paying income at a level equal to or better than that

formerly received. ld.

If the party seeking to impute income can prove that the other party is

voluntarily underemployed and has not used her best efforts to remedy the

situation, the Court may impute income. However, income may not be

imputed at a level that the underemployed party has never earned, absent

special circumstances. Hinton v. Smith, 725 So.2d 1154 (Fla. 2d DCA 1998)

citing Stein v. Stein, 701 So.2d 381 (Fla. 4th DCA 1997). Additionally, the

party seeking to impute income must present competent and substantial

1

evidence to support the conclusion that the underemployed party could earn

the amount of the imputed income. Hinton v. Smith, 725 So.2d 1154 (Fla.

2d DCA 1998). Competent and substantial evidence includes recent work

history as well as occupational qualifications and prevailing earnings in the

community. Id. The trial court cannot impute income based solely on past

earning power, because past income may not reflect a present ability to pay.

Sallaberry v. Sallaberry, 27 So.3ni 234 (Fla. 4th DCA 2010).

In evaluating competent and substantial evidence, the Court must only

consider recent work history, as stale or foreign work history is irrelevant.

La Flam v. La Flam, 854 So.2d 809 (Fla. 2d DCA 2003). Moreover, the

party seeking to impute income must present specific evidence regarding the

available jobs in the community for which the underemployed party is

qualified. Such evidence includes what the position might pay, what skills

are required for the position, whether the underemployed party's skills are

current and whether those skills can be applied to the position. La Flam v.

La Flam, 854 So.2d 809 (Fla. 2d DCA 2003). Having a party testify

generally that there might be jobs available in the other party's field is not

sufficient proof. Green v. Green, 547 S02d. 1302 (Fla. 2d DCA 1989);

Brooks v. Brooks, 602 So.2d 630 (Fla. 2d DCA 1992). Additionally,

attainment of a degree alone does not guarantee employment or a particular

salary, and thus does not constitute sufficient evidence to support

imputation. Hinton v. Smith, 725 So.2d 1154 (Fla. 2d DCA 1998).

Lastly, if the Court finds that the underemployed party has used her

best efforts, it is up to the party seeking to impute income to present

evidence of a specific job. Brooks v. Brooks, 602 So.2d 630 (Fla. 2d DCA

1992). If the party seeking to impute income does not present evidence of a

specific job, the Court cannot impute income.

2

CONCLUSION

The party seeking to impute income has the burden of establishing

that the underemployed party is voluntarily under-employed. If the party

seeking to impute income can show that the underemployed party is

voluntarily under-employed, the party seeking to impute income must then

establish that the underemployed party has failed to use her best efforts to

secure a higher paying position. If the party seeking to impute income can

prove that the underemployed party has failed to use her best efforts, the

Court may impute income only after considering competent and substantial

evidence. If the Court finds that the underemployed party has used her best

efforts, it is the party seeking to impute income's burden to present a

specific position. The Court may not rely on assumptions or speculation

when imputing income. The Court must make specific findings of fact when

deciding the issue of imputation of income.

3

IMPUTATION OF INCOME FOR CHILD SUPPORT (New: Deadbeat)

--

Information concemmg

Parent's Income

unavailable

Automatic imputation & rebuttable presumption that parent has income equivalent to median full time work per Census

---'

! Go to Census data i

(

Parent fails to participate

Parent fails to supply adequate

information

OR To impute income at other than median requires findings competent substantial evidence that:

a.) Voluntary, and

I b.) IdentifY amount & source through evidence of income from available employment for which parent is suitably qualified by education, experience, current licensure, or geographic locatton, WIth due

i conslderatton to timesharing I except: ! calculate income based upon. 1 a.) income recOl'dll > 5 years old at tIme of I' trial

b.) income at level palent never earned . unless recently degreed, hcensed, certtfied,

relicenses. recemfied and thus quahfied for t consider traming & histoncal exercise of

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Reason For Adjustment

Extraordinary Medical, Psychological, Educational or Dental Expenses

Independent Income of Child Payment of Support For a Parent With A Demonstrated Need Which Has Been Regularly Paid Seasonal Variation In Income Seasonal Variation In Expenses Older Child With Greater Needs

Age Of Child - Other Special Needs Traditionally Met For Child From Family Budget Significant Time With Both Parents Reducing Cost of Other Parent Refusal of Parent Involvement in Child Activities

Other Parenting Plan Arrangements Extra Available Assets of Obligor Extra Available Assets of Obligee

Extra Available Assets of Child Impact OflRS Dependency Exemption or Waiver Guidelines Amount Exceeds 55% of Gross Income

Existing Expenses or Debts To Be Paid By Obligor Existing Expenses or Debts To Be Paid By Obligee Existence of Subsequent Children Where Upward Modification Sought

Income of Subsequent Children's Other Parent Where Upward Modification Sought The Other Parent Provides Homemaking Services Parent with Children Most Low Income Parent With Children Most Ability to Maintain Basic Necessities Likelyhood that a parent will not exercise contact All Children Not On Same Time-Sharing Schedule

Other Adjustments Needed To Achieve An Equitable Result

MONTHLY AMOUNTS

COMBINED WIFE HUSBAND

100 .000 100

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00