THE BITE OF PAST-DUE CHILD SUPPORT

April 16, 2013 § 1 Comment

MCA 85-3-4 deals with execution of garnishments in Mississippi. Most garnishments are limited to 25% of “disposible income,” as defined in federal law. But if the judgment is for past-due child support, the garnishment may be as much as 50-65% of disposible income. That’s quite a bite.

In the MSSC case of Reasor v. Jordan, decided April 4, 2013, Frankie Reasor had gotten custody of his daughter from his ex-wife, Rose Jordan, in a modification case. He was also tagged with a hefty $24,000 judgment for past-due child support and unpaid medical expenses  of the child that predated the modification. The chancellor popped Frankie with a 55% garnishment, and, both impoverished and aggrieved, he appealed.

Here’s how Justice King’s majority opinion addressed the issue:

¶27. The Court has addressed this issue previously in Sorrell v. Borner, 593 So. 2d 986 (Miss. 1992). In Sorrell, the parents divorced, the mother was awarded custody, and the father was ordered to pay child support. Id. at 986. Later, the father sought a change in custody. Id. In response, the mother filed a counterclaim for past-due child support. Id. The chancellor awarded the father custody but held him in arrears, entering a judgment in favor of the mother for back child support. Id. The mother obtained a sixty-five percent garnishment on the father’s wages. Id. at 988. Aggrieved, the father filed a petition to modify the order (by offsetting his arrearage by the mother’s child-support obligation), and the chancellor denied his petition. Id. at 986-87.

¶28. On appeal, the father challenged the order, arguing that the garnishment should have been limited to twenty-five percent. Id. at 988. Although the father failed to attack the garnishment in his pleadings, the Court noted that the father made an oral objection at the hearing. Id. at 989. Reviewing the applicable statutes, the Court determined that:

The judgment awarded was for past due child-support, but [the mother] no longer had custody of the children. In our opinion, the legislature did not contemplate the exception language to be used in this situation, and [we] are of the opinion that the restriction listed in § 85-3-4(2)(a) should apply to the garnishment here.

Id. at 988. Accordingly, the court reversed and remanded the chancellor’s judgment. Id. at 988-89.

¶29. Applying the Court’s reasoning in Sorrell, the withholding restriction in Section 85-3-4(2)(a)(i) should apply to Reasor as well. Like Sorrell, Reasor complained about the amount of the garnishment during his hearing. Also, when the judgment was awarded for past-due child support, Jordan no longer had custody of the child. Thus, the chancellor erred by ordering a fifty-five-percent withholding. Instead, the garnishment should have been limited to twenty-five percent of Reasor’s disposable income. Accordingly, we vacate the order and remand for a proper determination of withholding.

The main thing to take from this case is to be aware of the generous garnishment provisions as they relate to unpaid support. As I read the statute, they would apply not only to child support, but also to alimony.

When you read this case, look also at the MRCP 81 issues raised by the way that the original chancellor handled the case. I agree with Justice Pierce’s concurrance/dissent on this issue. R81 requires notice. I don’t agree that Mr. Reasor got proper notice in this case. Chalk this up as another case added to the confusion over how R81 works.

THE MISCHIEF OF “FAMILY SUPPORT”

April 4, 2013 § 3 Comments

I’ve spoken here before about the mischief that can arise when one uses the ambiguous term “family support” instead of terms of art such as “child support,” “alimony,” and “property division” that are familiar to our courts. As I said in a previous post, the repercussions can be quite unexpected and unpleasant for your client.

In a decision handed down March 11, 2013, the US Tax Court in the case of DeLong v. Commissioner of Internal Revenue, ruled that the term “family support” creates an alimony obligation, and not a child support obligation.

You can read the decision for yourself, but it essentially turns on the point that since the obligation is not specifically denominated as child support the IRS will not consider it such.

This case arises out of a California divorce judgment. Note that the opinion states that the tax court will look to state law for how the state would treat the obligation. If this were a Mississippi case, the tax court would, to the best of my knowledge, find no helpful authority because the term “family support” is unknown under our law.

There are some serious side-effects from a case such as this. Child support is not deductible by the payer, and it is not income to the payee. Alimony is, however, deductible by the payer, and it most definitely is income to the payee. So, in this case, Mr. Delong got to deduct the payments under the divorce judgment, and the former Mrs. D. gets a bill for income taxes on the payments. If you had negotiated the settlement for Mrs. Delong and that is what she expected as an outcome, then you’re in good shape. If, on the other hand, she was not expecting a tax bill, you’d better look out.

And if the judge, in a comatose moment, injects that kind of language into a judgment, protect your client by filing a timely MRCP 59 motion to get the judge to correct the ambiguity.

In Mississippi, payments are either alimony, or child support, or property division. Denominate them as such, allocating the specific amounts under each. Never use combined language like “Husband shall pay to wife the sum of $2,500 each month as alimony and child support.” And never use ambiguous, non-legal language like “family support” when there are perfectly suitable, meaningful terms like “child support,” “alimony” and “property division” that do the job quite well.

Thanks to Justin Cobb, Esq.

NON-SUPPORT AGREEMENTS

March 25, 2013 § 3 Comments

I am regularly presented PSA’s and agreed judgments that include a provision that the non-custodial parent will not pay any child support to the custodian. I don’t like it, for reasons that I have expounded on here before.

In my opinion, such agreements are not only undesirable, they are void.

The case of Houck v. Ousterhout, 861 So.2d 1000 (Miss. 2003) may be dispositive. Timothy James Houck and his former wife, Guyolyn Ousterhout, had been involved in various modifications and contempt actions as their children moved in varying numbers from household to household. In 1996, after several inconclusive skirmishes in court, they entered into an agreed judgment that recited that “[m]aterial changes ha[d] occurred in the life of Timothy … which prevent[ed] him from being able to pay his child support as directed. They agreed that Timothy would pay Guyolyn $1,500 in exchange for her waiver of any claim to “past, present and future child support payments,” and further that they agreed “to forever release one another from any obligation, now or in the future, of child support payments by or to either party.”  

Notwithstanding the agreement, the parties found themselves yet again in litigation, in which Guyolyn asked, among other things, for nullification of the agreed order. The chancellor did void the agreed judgment as against public policy, and awarded Guyolyn a judgment against Timothy in the sum of $89,848.65. Timothy appealed.

The MSSC affirmed:

¶ 8. The modification relieving Houck of any obligation to pay child support to a custodial parent is null and void. Child support payments are made to the custodial parent for the benefit of the child. Tanner v. Roland, 598 So.2d 783, 786 (Miss.1992); Lawrence v. Lawrence, 574 So.2d 1376, 1381 (Miss.1991). The child’s right to his parent’s support cannot be bargained or contracted away by his parents. Tanner, 598 So.2d at 786; Calton v. Calton, 485 So.2d 309, 310-11 (Miss.1986).

¶ 9. We have consistently held that child support payments vest in the child as they accrue. Once they have become vested, just as they cannot be contracted away by the parents, they cannot be modified or forgiven by the courts. Tanner, 598 So.2d at 786; Varner v. Varner, 588 So.2d 428, 432-33 (Miss.1991); Premeaux v. Smith, 569 So.2d 681, 685 (Miss.1990); Thurman v. Thurman, 559 So.2d 1014, 1016-17 (Miss.1990); Cumberland v. Cumberland, 564 So.2d 839, 847 (Miss.1990); Brand v. Brand, 482 So.2d 236, 237 (Miss.1986). Each payment that becomes due and remains unpaid “becomes ‘a judgment’ against the supporting parent.” Tanner, 598 So.2d at 786; Brand, 482 So.2d at 237; Cunliffe v. Swartzfager, 437 So.2d 43, 45-46 (Miss.1983); Howard v. Howard, 191 So.2d 528, 531 (Miss.1966). The only defense thereto is payment. Tanner, 598 So.2d at 786; Varner, 588 So.2d at 433. That two of the children are now emancipated does not preclude Ousterhout from seeking recovery of the arrearage from Houck. Tanner, 598 So.2d at 786; Varner, 588 So.2d at 433.

¶ 10. Accrued child support payments cannot be extinguished by a court: “A court cannot relieve the civil liability for support payments that have already accrued.” Hailey v. Holden, 457 So.2d 947, 951 (Miss.1984) (citing Cunliffe, 437 So.2d at 43; Duncan v. Duncan, 417 So.2d 908 (Miss.1982); Howard, 191 So.2d at 528). We have found a chancellor to be in error for suspending execution on a judgment for past due child support. Brand, 482 So.2d at 238-39. We have likewise held that a chancellor erred in finding that payment of only that part of the past due child support which had accrued prior to the warring couple’s protracted child support litigation extinguished his liability. Cumberland, 564 So.2d at 847-48; see also Thurman, 559 So.2d at 1016-17 (Where a supporting parent had paid roughly half the amount owed under a prior decree for two months and none during the third month in question, the chancellor erred in finding that the parent was liable only for the difference between the unpaid amounts and the greatly reduced modified monthly obligation.). [Emphasis added]

To me, the principle is crystal clear: the chancellor can not approve an agreement that relieves a parent of the duty to support his or her child, either prospectively or retroactively.

A MINORITY CONUNDRUM

March 19, 2013 § 2 Comments

I posted here about a case pending in my court in which a lawyer had filed a motion to void two agreed judgments for custody that had been executed by a 19-year-old mother. The basis for his motion was that the mother lacked the legal capacity to execute the judgments, and that they were not binding on her in any way.

The lawyers have settled the case, and the now-22-year-old mother has signed an agreed order that has the effect of supplanting the previous agreed judgments. So the concern about her legal capacity is moot in that case.

Still, the state of the law has me concerned. I did not find any authority for an unmarried minor to enter into an agreed judgment in  a case of this sort. Neither did my staff attorney or even other judges who took the time to answer my query on our listserv. I found no authority, either, for subsequent ratification or approval by the court, although other states have addressed the ratification issue.

The reason for my concern is that a married minor is considered emancipated for the purpose of dealing with divorce, custody and support, but an unmarried minor is in a legal limbo vis a vis his or her offspring. Is there any legal or policy reason, given Mississippi’s high rate of unmarried parenthood, why we do not go ahead and recognize that young, unmarried parents, at least in the 18-21 age group, should not also be considered emancipated for the purpose of dealing with child custody and other parentage issues? Young people in that age group are emancipated by law to deal with their choses in action, so why do we not emancipate them by statute to deal with their parentage issues?

I wish that the legislature would look at this issue in light of the reality many of see every day in our state: children are having children. We have to have effective ways to deal with that.

WHEN VISITATION GOES BAD

October 30, 2012 § 1 Comment

It’s becoming more customary for the parties to provide in custody settlements for the non-custodial parent to have more visitation than the usual “standard visitation” (i.e., every other weekend, split of holidays, and some summer). Sometimes it works splendidly. When it does not, it can be a mess.

The latter is what happened in the COA case of Goolsby v. Crane, decided October 23, 2012. In that case, Michael Goolsby and his ex-wife, Angela Crane, agreed that Angela would have sole physical custody, and Michael would have visitation with his daughters every other weekend, and, in addition, from Monday afternoon to the return to school on Wednesday morning in non-weekend-viaitation weeks. After a while the parties agreed to deviate from the schedule to move Michael’s mid-week visitation to Wednesday-to-Friday-morning.

Things began to unravel when Angela filed pleadings to get an increase in child support and a family master increased it by $171 a month and ordered Michael to pay DHS $250 in attorney’s fees.

Michael filed a Rule 59 motion and then filed a counter-petition to modify custody and child support. He wanted the custody changed to joint physical due to the extent of his visitation, and he wanted the child support reduced based on the amount of time he had the children with him.

At trial the chancellor rejected the modification, finding that there was no proof of a material change in circumstances that adversely affected the children to the extent that custody should be changed. He did, however, find that the visitation schedule was not working, and he modified it to conform more to “standard” visitation, eliminating the mid-week visitation. His findings were based primarily on the testimony of the testimony of the 13-year-old daughter, who said that it interfered with her school work and made her uncomfortable for some other, personal reasons. The chancellor also increased the child support, although he recalculated it and found a figure somewhat less than that determined by the family master.

Michael appealed. His arguments and the COA’s conclusions:

  • The court rejected the argumant that it was error for the chancellor to refuse to modify custody, and then to modify visitation. The COA pointed out that there was a substantial basis to support both decisions. All that needs to be shown to change custody is that the visitation schedule is not working, and there was ample proof here.
  • The extent of visitation that was agreed did not amount to a relinquishment of control or abandonment of responsibility by Angela that would amount to a material change. The cases cited by the court beginning at ¶ 22 are cases you need to have in your repertoire of important modification cases, particularly Arnold v. Conwill, 562 So.2d 97, 100 (Miss. 1990), a case I’ve discussed here before. 
  • And, finally, the COA rejected (beginning at ¶ 29) Michael’s argument that liberal visitation by the non-custodial parent is tantamount to joint legal custody.

When you craft an agreement incorporating visitation that extends beyond the usual, make sure the language leaves no doubt as to who has what form of custody. Don’t swap around terms like “visitation” and “custodial time.” Instead of simply going along with what your client is proposing for visitation, play devil’s advocate and tease out some of the possible pitfalls that you’ve experienced and that your client may not even have thought of. Are there other ways to provide more time for the non-custodial parent that might not be so disruptive as they proved to be in Goolsby? One size does not fit all.

WINNING TACTICS FOR CHILD SUPPORT MODIFICATION

October 23, 2012 § 3 Comments

There is more to proving your case for an increase in child support than simply proving that the payer’s income has increased.

In the case of Adams v. Adams, 467 So. 2d 211, 215 (Miss. 1985), the MSSC laid out 10 factors that the trial court must consider in determining whether an increase is warranted. You have to put proof into the record to support as many factors as apply in your case. The factors are:

  1. Increased needs caused by advanced age and maturity of the children;
  2. Increase in expenses;
  3. Inflation factor;
  4. The relative financial condition and earning capacity of the parties;
  5. The physical and psychological health and special medical needs of the child;
  6. The health and special medical needs of the parents, both physical and psychological;
  7. The necessary living expenses of the paying party;
  8. The estimated amount of income taxes that the respective parties must pay on their incomes;
  9. The free use of residence, furnishings, and automobiles; and
  10. Any other factors and circumstances that bear on the support as shown by the evidence. (citing Brabham v. Brabham, 226 Miss. 165, 176, 84 So. 2d 147, 153 (1955).

Expenses of private school are a legitimate factor to consider in modification proceedings, although the expenses are inadequate standing alone. Southerland v. Southerland, 816 So. 2d 1004, 1007 (¶13) (Miss. 2002).

Educational expenses may be properly considered with the increased needs of older children and their increased extracurricular activities in order to justify an increase in child support. Havens v. Brooks, 728 So. 2d 580, 583 (¶9) (Miss. Ct. App. 1998).

Remember that the keystone consideration for modification is a change in expenses of the child.  You must put on proof that establishes what the expenses were at the time of the judgment you are seeking to modify, as well as proof of the expenses at the time of trial.  Most importantly:  It is not adequate to prove only that the income of the paying parent has increased.

So here are a few tactics that may help:

  • Alter your 8.05 to add a column on both the income page and on the expenses pages for the date of the divorce or judgment you are seeking to modify. For example, if you are seeking to modify a judgment entered May 5, 2001, add a column headed “MAY 5, 2001.” Then get your client to itemize her income from back then, as well as the expenses. The expenses should show an increase; if they don’t, you have a probably fatal flaw in your case. It is not necessary that your client have documentation to support her figures, although that would help bolster her credibility. Your client can base her figures on her recollection, or, if she has an 8.05 from 2001, use that document. By juxtaposing the figures for the earlier date with current figures, you are making it easy for the judge to view how the expenses have increased. Also, you are providing proof in specifics, and not generally.
  • See if you can get the other side to admit the consumer price indexes for the relevant periods. You can use RFA’s or get the attorney on the other side to stipulate, thus establishing “the inflation factor” of Adams.
  • If you can’t prove the inflation factor any other way, ask your client based on her experience whether prices in general for goods and services for the children have gone up or down during the relevant period. At least you will give the judge something to sink her teeth into on the inflation point.
  • Do enough discovery to obtain copies of tax returns for the payer both at the time of the prior judgment and currently.
  • Be sure to discount expenses your client agreed to share. For instance, if your client agreed to pay one-half of the private school tuition, include only her one-half in the children’s expenses.
  • Expenses have to be reasonable. Don’t expect the judge to find a substantial increase in expenses based on activities that are out of proportion to the parties’ accustomed standard of living or are not necessary. A middle-income case in which the child has taken up a hobby of raising show ponies that cost thousand of dollars and involve expensive travel to shows around the country and abroad will likely receive negative attention, while a case in which the child has struggled in school and needs the added expense of tutoring and ADD medication would likely receive positive attention. 

Plan your modification case for success. Remember that you can use summaries and compilations to present your evidence. And the clearer and better your 8.05’s are, the greater you chances of success.

CHILD SUPPORT AS A MIRAGE

August 21, 2012 § 1 Comment

Any agreement that provides for child support must be found by the judge to be adequate and sufficient, and it must be definite and specific enough to be enforceable.

Most agreements meet those requirements. You won’t go far astray if the child support is within the statutory guidelines and the language awarding it is clear and unambiguous as to how it was calculated, the exact amount to be paid, the due dates, and its duration (e.g., “until further order of a court of competent jurisdiction,” or “until the minor child is emancipated by operation of law or order of this court,” etc.).

These requirements don’t stop lawyers from presenting some pretty fanciful child support arrangements that sometimes make chancellors scratch their heads. Here are some that have been proven not to be allowable under Mississippi law, that you should avoid:

  • An unspecified amount. In Lowrey v. Lowrey, 919 So.2d 1111, 1112 (Miss.App. 2005), the court rejected a provision that the mother would pay child support in the form of buying clothes for her children “in an amount that she can afford.” The provision is so indefinite as to be unenforceable. It also violates the fundamental principle that a person can not be held in contempt for failure to comply with a court order that is too vague or ambiguous to be understood. The court in Lowrey said at ¶33, “As it stands, a finding of adequacy and sufficiency depends upon enforceability of the child support provisions contained in a property settlement agreement.”
  • Percentage child support. A provision that “husband shall pay 14% of his adjusted gross income as child support” is unacceptable. In Hunt v. Asanov, 975 So.2d 899, 902 (Miss.App. 2008), the court stated, “Before a party may be held in contempt for failure to comply with a judgment, ‘the judgment must be complete within itself … leaving open no matter or description or designation out of which contention may arise as to meaning’”  [Citations omitted]. In order to determine what the father’s obligation might be or might have been, the court must look beyond the four corners of the judgment to extraneous earnings data and other information that in all likelhood is in controversy. The argument may be made that the case of Rogers v. Rogers, 919 So.2d 184, 188-89 (Miss.App. 2005) is contra. In that case, the COA held as unambiguous a provision that the husband would pay “14% of his adjusted gross income or $600 a month.” The argument raised by appellant there was that the apparent dichotomy betweeen 14% and $600 created an unresolvable ambiguity. The court rejected that argument and found the language clear, as did the chancellor. Rogers, however, did not directly address the problem of enforceability created by the need of the trial court to consider extraneous evidence to make a complete judgment, and the court pointed out that the $600 amount specified was clear enough to give the appellant an idea of his obligation. I do not see Rogers as an endorsement of percentage child support.
  • Amount tied to unspecified return. In Rudder v. Rudder, 675, 678 (Miss. 1985), the court found a provision that the husband would pay any income or divident received from “any investments in the name of the child” was too “indefinite in amount, type, whereabouts, and the name of the holder.” The court held that the award was worthless, as a practical matter, to the custodial parent for enforcement. This type of support order is a subspecie of percentage child support. It requires the court to look to material extraneous from the four corners of the judgment in order to enforce it.
  • Lump sum. In Pittman v. Pittman, 909 So.2d 148, 153 (Miss.App. 2005), the court reversed a chancellor’s award of $26,000 in residential equity as additional child support that he said was more ” … in the nature of child support than accumulated assets.” The COA held that the chancellor has no authority to make an award of lump sum child support. If the chancellor lacks such authority, then I am certain that a chancellor lacks authority to approve such an agreement between the parties. Note: Professor Bell says that the statute authorizing guardians to settle claims on behalf of wards has been held to allow lump sum settlements in paternity actions. Bell on Mississippi Family Law, 2d Ed., §11.06[2][b], p. 321.

The kinds of alternative child support provisions that lawyers come up with is only limited by the imagination. It is the court’s duty, however, to make sure that the provisions are adequate and sufficient for the support and maintenance of the child. The further you stray from statutory guideline child support the more likely it is that you will be sent back to the drawing board.

When you draft an agreement you want it to produce tangible benefits for your client. The last thing you should want is for a court to find that language you threw together heedlessly is no more than an illusory mirage or an insubstantial chimera.

DOES ANYBODY ACTUALLY DO THIS?

May 10, 2012 § 7 Comments

The following is from the “Attorney Check List” section of the Civil Filing Form Instructions in the Uniform Data Collection Procedures (UDCP) mandated by the MSSC:

“In accordance with the Federal Social Security Act, Titla IV-D, §§ 454(2)(A) and 454A(e)(4), and Miss. Code Ann. § 43-19-31(l)(iii) (Supp. 2000), cases wherein child support is sought must provide the name, date of birth and Social Security number for all parties to the case to the State’s repository for this information (in Mississippi, the Department of Human Services). If child support is contemplated at the time of the initial pleading, filing party must complete Child Support Information Sheet. Initial pleadings wherein child support is contemplated must include this sheet prior to the clerk’s admitting the pleadings for suit; if, at any time after filing initial pleadings, child support becomes an issue and this sheet has not been submitted as part of the Court file, attorney for Plaintiff shall provide the completed form for the Court’s file. Any information not provided at the time of filing, but discovered at a later time up to disposition of the case, may be reflected in a more complete form being filed with the clerk’s office for the court file. The Child Support Information Sheet shall be submitted by the clerk to the AOC along with the disposition form … ” [Emphasis in original]

Do you know anybody who complies with this? The first MSSC order adopting UDCP and mandating reporting was in 1993, and the last amendment was ordered in 2001. Never during the time that I practiced law did I offer such a form to a clerk, either before or after initiating a suit, and I do not know of anyone else who did. I asked a clerk whether she had ever had a lawyer submit such a form, or whether she or the other clerks had ever refused to file pleadings for failure to submit the form, and the answer was negative on both counts. She also said that AOC has never raised the issue.

On another similar tack, we in the 12th District have required Wage Withholding Orders to be submitted in every child support case since they came to be in the 1980’s. Judge Warner insisted on it, and we did it, and continue to do it. Judges in other districts have told me that they not only do not require them, but that their predecessors did not.

All of this probably falls under the category of letting sleeping dogs lie, and I will. I just found these curious.

INCOME FOR CHILD SUPPORT

April 10, 2012 § 3 Comments

MCA § 43-19-101 should be familiar to you. It sets out the child support award guidelines. Since the guidelines are based on the payer’s income, it’s critical to understand just what and what is not included in income.

Subsection 3(a) tells us that we first have to “Determine gross income from all potential sources that may reasonably be available to the absent (i.e., noncustodial and paying) parent.” That’s an interesting phrase, “potential sources that may reasonably be available.” Notice that it does not refer to actual income. Potential sources that might come into play are to be considered.

Income under 3(a) includes, but is not limited to …

  • Wages and salary income. There is no exception for overtime; it’s included.
  • Income from self employment. Both reported and unreported income in this category is covered.
  • Income from commissions. Variable and seasonal income is included, and there are different approaches that the court can use to address it. Bonuses are included.
  • Income from investments. Dividends, interest and capital gains are income.
  • Interest income.
  • Interest earned from any trust account or property. It makes no difference whether it came from a “family trust” or similar creature; if it is income, it is included.
  • Paying parent’s portion of joint income of both parents. As reflected on the joint tax return.
  • Worker’s compensation.
  • Disability. You can read the rules for calculating child support when the payer is a social security recipient here.
  • Unemployment. No exemption from child support when the income source is unemployment benefits.
  • Annuity and retirement benefits.
  • IRA disbursements and withdrawals.
  • Any other payments made by any person, private entity, federal or state government, or any unit of local government. Any 1099 income would be included. Any refund of taxes paid in would be included.
  • Alimony.
  • Income earned from an interest in inherited property.
  • Any other form of earned income.

At the end of 3(a) is the statement: ” … gross income shall exclude any monetary benefits derived from a second household, such as income of the [paying party’s] current spouse.”

Section 3(b)(i) requires that overpayments of taxes are to be included in gross income. That means that income tax refunds must be added back in. For low-income taxpayers who claim benefits such as earned income credit and head of household status, this can mean an increase in gross income by as much as $3,000 to $5,000, based on what I’ve seen in court. The trick is to figure out how much of that refund was attributable to the paying parent, and not to his spouse, and then to calculate his tax rate, social security deduction, etc. Don’t expect the judge to do all that math for you on a hunch as to what the proper percentages might be.

As a rule of thumb, you would do well to include anything that might even remotely be considered income. The judge will. If it looks like income, sounds like income, smells like income and feels like income, it most likely is.

One would think that the statute and its intent are straightforward and unmistakeable, but not from what I see in court. Witnesses often testify that they did not include bonuses “because I don’t know whether I’ll get one this year,” or commissions because “I never know from month to month what my commissions will be,” or overtime because “I don’t know when I’ll get some more overtime.” That’s simply not the law. Irregularity and umpredictability are factors that the court can consider, but they don’t warrant completely excluding those items from income.

As a practice matter, are you asking questions in your interrogatories, depositions and requests for production that address all those types of income?

WHICH EXPENSES GET DEDUCTED FOR CHILD SUPPORT

March 20, 2012 § Leave a comment

In Coggins v. Coggins, handed down from the COA February 14, 2012, the appellate court was faced with the appellant’s claim that the chancellor erred by refusing his request to deduct rental investment expenses from gross income in order to arrive at adjusted gross income for calculation of child support.

The COA stated:

“¶19. The inclusion of income and deductions for calculating adjusted gross income for child support is primarily mandated by statute. According to section 43-19-101, in calculating gross income, the chancellor must consider ‘gross income from all potential sources,’ including wages and salary income, income from self-employment, and income from investments. As the chancellor explained, section 43-19-101(3)(b) lists several deductions that may be subtracted from the gross income figure, such as federal, state, and local taxes, social-security contributions, and mandatory retirement and disability contributions, but it does not list business expenses. Additionally, the Mississippi Supreme Court has allowed the deduction of legitimate business expenses in the case of a selfemployed payor-spouse. See Nix v. Nix, 790 So. 2d 198, 199-200 (¶¶3, 5) (Miss. 2001) (The chancellor considered the payor-parent’s legitimate business expenditures for reasons of equity, in order to determine available income for child support; he was a self-employed plumber.). However, the chancellor found no caselaw, nor do we, that allows for a deduction of expenses related to investments or supplemental business enterprises, which would be taken from the gross income of the payor-spouse. Therefore, in arriving at the adjusted gross income figure, the chancellor must include income from many sources, but not all expenses. The allowable deductions for this figure are statutory, and they differ from the allowable deductions for income tax purposes, upon which Bill appears to base his calculations. “

The court went on to point out that, although the statute allows for deduction of the expenses of self-employment, the appellant in this case was not self employed. The expenses he claimed arose out of investments that were a secondary source of income. His secondary employment resulted in a loss, and the COA said: “If [the appellant] opts to continue this rental venture at a loss, it should not be done to the detriment of his child.” The COA upheld the chancellor’s decision.

This case highlights the need for you to be quite familiar with with the child support guideline statute when you present child support issues to the court, and when you draft child support provisions in property settlement agreements. I urge you to read the guidelines and discover exactly what it is that should and should not be included in the calculation of child support.

While I’m on the subject, let me urge you (once again) NOT to list expenses on your 8.05’s as “mandatory” when they are not. The word “mandatory” so loosely used by so many of you is applied to all manner of deductions that simply do not meet the requirement of the statute. The statute limitss deductions to “legally mandated deductions.” That’s the exact phrase. So if there is a law that requires it to be deducted, it is a “legally mandated deduction.” That would include federal and state income taxes, social security, Medicare, and PERS for state employees. Health insurance (for the time being) is not legally mandated, nor are dental or cancer insurance, United Way, IRA contributions, etc., etc., etc. When you gratuitously label a deduction as “mandatory,” you are making the judge have to explain in the opinion why the deduction is not allowed. More work for the judge, which violates the cardinal rule — if you want to win, make it easier for the judge to find in your favor.

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