MEMO TO:
Alexsei Demo US
RESEARCH ID:
#40007200aba280
JURISDICTION:
State
STATE/FORUM:
Washington D.C., United States of America
ANSWERED ON:
May 11, 2022
CLASSIFICATION:
Family law

Issue:

Under what circumstances will a court impute income to a custodial parent when determining child support?

Facts:

Mother and Father have been married for six years and have two children ages two and three. For the last two years, Father has been a stay-at-home parent. Mother filed for divorce and Father became the custodial parent of both children with Mother having weekly visitation. Father seeks child support from Mother. Mother argues that income should be imputed to Father because he has a JD and an ability to work. The Father argues that he cannot work because he needs to take care of the children who are not yet in school.

Conclusion:

If a judicial officer determines that a parent is voluntarily unemployed or underemployed due to the parent's bad faith or deliberate effort to suppress income to avoid or minimize the parent's child support obligation, or to maximize the other parent's obligation, the judicial officer may impute income to the parent for the purpose of calculating child support. (D.C.Code § 16–916.01)

When a parent under a child support order quits a well-paying job, the ability to pay is not merely a function of actual earnings but is to be derived, more broadly, from earning capacity in the current job market, given one's educational background and work experience. (Freeman v. Freeman, 397 A.2d 554 (D.C. 1979))

In Saxon v. Zirkle, the District of Columbia Court of Appeals affirmed a trial court's imputation of income to the mother (who had primary physical custody). The trial court had imputed the income based on reviewing various factors, such as the mother's current lack of diligence in seeking employment as a substitute teacher and her previous income, education, work experience, and professional licenses. The Court of Appeals affirmed, holding that the evidence presented allowed the trial judge to reasonably determine that the mother's unemployment was voluntary and thus met the requirements for imputation of income under D.C.Code § 16–916.01.

In Guyton v. Guyton, the father, who was obligated to pay child support pursuant to a divorce decree, lost his job. The trial court determined that he should have no difficulty in finding a new job and imputed an income to him according to that determination. The District of Columbia Court of Appeals reversed, distinguishing Freeman, supra, as having involved a case of voluntary unemployment and holding that a showing had not been made that current economic conditions would allow the father to earn the imputed income in the foreseeable future.

In Prisco v. Stroup, the District of Columbia Court of Appeals applied Virginia law in a case involving an unemployed custodial mother who sought to compel an increase in child support payments. The trial court redetermined the amount, but in doing so, imputed income to the mother on the basis that her job search did not reflect a sincere desire for employment. The Court of Appeals reversed, finding that the trial court erred on various points in considering the adequacy of the mother's search and that the record did not actually establish that her unemployment was voluntary. 

Law:

Subsection (d)(10) of D.C.Code § 16–916.01 provides that if a judicial officer determines that a parent is voluntarily unemployed or underemployed due to the parent's bad faith or deliberate effort to suppress income to avoid or minimize the parent's child support obligation, or to maximize the other parent's obligation, the judicial officer may impute income to the parent for the purpose of calculating child support:

(10) If the judicial officer finds that a parent is voluntarily unemployed or underemployed as a result of the parent's bad faith or deliberate effort to suppress income, to avoid or minimize the parent's child support obligation, or to maximize the other parent's obligation, the judicial officer may impute income to this parent and calculate the child support obligation based on the imputed income. The judicial officer shall not impute income to a parent who is physically or mentally unable to work or who is receiving means-tested public assistance benefits. The judicial officer shall issue written factual findings stating the reasons for imputing income at the specified amount.

In Freeman v. Freeman, 397 A.2d 554 (D.C. 1979) ("Freeman"), the District of Columbia Court of Appeals held that when a parent under a child support order quits a well-paying job, their ability to pay is determined not only on the basis of their actual earnings but also on their earning capacity (at 556):

Second, while it is true, as Mr. Freeman contends, that an order of child support must take into account a parent's ability to pay, see Brown v. Brown, D.C.App., 343 A.2d 59 (1975) (per curiam); Truslow v. Truslow, D.C.App., 212 A.2d 763 (1965), it is well established that a parent subject to a court order to support children cannot escape that duty by voluntarily reducing his or her income, either by a self-imposed curtailment of earning capacity (here, resigning from a $24,000 per year job), see Tydings V. Tydings, D.C.App., 349 A.2d 462 (1975) (per curiam) (husband retired early and remarried), or by starting a second family. Hamilton v. Hamilton, D.C.App., 247 A.2d 421 (1968); Armstrong v. Armstrong, D.C.App., 241 A.2d 735 (1968); Kephart v. Kephart, 89 U.S.App.D.C. 373, 193 F.2d 677 (1951), cert. denied, 342 U.S. 944, 72 S.Ct. 557, 96 L.Ed. 702 (1952). It follows that, when a parent under a child support order quits a well paying job, the ability to pay is not merely a function of actual earnings but is to be derived, more broadly, from earning capacity in the current job market, given one's educational background and work experience.

In Saxon v. Zirkle, 97 A.3d 568 (D.C. 2014), the parents separated and the mother was awarded primary physical custody with the parents having joint legal custody and the father having a right of visitation. The mother, a real estate agent and substitute teacher, was unemployed following the separation. She cited a temporary attempt to homeschool the child and a decline in the real estate market as a reason for the reduction in her income. The trial court, first considering the question of alimony and then extending the same approach to child support and to the ability to pay Rule 11 sanctions, imputed income to the mother of $24,000 on the basis that her unemployment was voluntary. The trial court reached this conclusion on the basis of various facts related to the mother's current lack of diligence in seeking employment as a substitute teacher, previous income, education, experience, and professional licenses. The District of Columbia Court of Appeals upheld the trial court on this point, finding that the evidence presented allowed the trial judge to reasonably determine that the mother's unemployment was voluntary and thus met the requirements for imputation of income under D.C.Code § 16–916.01 (at 572-573):

We conclude that there was sufficient evidence to support the conclusion that Ms. Saxon was voluntarily unemployed and that $24,000 in income should be imputed to her in all three contexts at issue. As to voluntary unemployment, there was evidence that Ms. Saxon had a bachelor's degree and prior work experience as a real-estate agent, had earned as much as $189,000 a year as a real-estate agent, and was not diligently looking for employment, even though she expected to be able to substitute teach. That evidence permitted the trial judge reasonably to conclude that Ms. Saxon had voluntarily limited her income for purposes of affecting the child-support determination. Cf. Freeman v. Freeman, 397 A.2d 554, 556 (D.C.1979) (record supported trial court's finding that husband voluntarily reduced income by quitting well-paying job and making minimal effort to find employment commensurate with skills).

With respect to the amount of income imputed, Ms. Saxon herself indicated that she was exploring substitute teaching, had been told by three different principals that schools in Virginia were “always looking for [substitutes].” Furthermore, although there was no evidence or finding as to whether Ms. Saxon had all of the credentials required to qualify as a substitute teacher in Fairfax County, her acknowledged expectation that she would be able to substitute teach there provided sufficient

[97 A.3d 573]

support for the trial court's reliance on that prospect. In addition, Ms. Saxon does not dispute that the minimum salary for a substitute teacher in Fairfax County, Virginia is approximately $24,000. This evidence adequately supported the trial court's determination to impute $24,000 in income to Ms. Saxon.

[...]

Second, Ms. Saxon argues, for the first time on appeal, that the trial court made no express finding of bad faith as required under D.C.Code § 16–916.01(d)(10). The record, however, supports such a finding, and the trial court expressly referred to the bad-faith requirement in the child-support order. “[T]rial judges are presumed to know and apply the proper legal standards.” Wright v. Hodges, 681 A.2d 1102, 1105 (D.C.1996); see also In re C.T., 724 A.2d 590, 597 (D.C.1999) (“Trial court rulings come to us with a presumption of correctness.”). We therefore see no basis for reversal, particularly given the absence of objection by Ms. Saxon in the trial court. Cf. Lewis v. United States, 567 A.2d 1326, 1330–31 (D.C.1989) (trial court's failure to make express finding by clear and convincing evidence that prior bad act had occurred was not plain error, where counsel did not request finding).

Prisco v. Stroup, 3 A.3d 316 (D.C. 2010) involved a request by the custodial mother, an unemployed attorney, to compel a child support increase pursuant to a support agreement governed by Virginia law. The trial court recalculated the amount, but in doing so imputed income to the mother on the basis that her job search did not reflect a sincere desire for employment. Part of its basis for doing so was the testimony of the father, also an attorney, that the demand for qualified attorneys with similar experience as the mother's exceeded the supply. The District of Columbia Court of Appeals reversed, finding that the trial court erred on various points in considering the adequacy of the mother's search and finding that the record did not actually establish that her unemployment was voluntary (at 321-322):

We hold that, even when we view the evidence in the light most favorable to Mr. Stroup, the trial court was plainly wrong in imputing an income to Ms. Prisco. First, the court, after acknowledging that Mr. Stroup was not qualified to testify as an expert on the relevant job market, credited him as someone who has “extensive experience hiring attorneys for his firm.” This holding is clearly erroneous in light of Mr. Stroup's concession that he did not have such experience and his admission that he had not been involved in his firm's hiring in any capacity since 2005. As a result, it was error for the court to adopt Mr. Stroup's statement that his firm's demand for talented attorneys was not being met. Furthermore, the court's conclusion is directly controverted by the firm's admission that they had actually received an excess of job applications. Second, in finding her job search inadequate, the court only credited Ms. Prisco's direct job applications, which numbered over one hundred. The court did not credit her testimony, which was not refuted by Mr. Stroup, that she contacted recruiting firms, which would have vastly expanded the number of firms to which Ms. Prisco applied. Third, the court

[3 A.3d 322]

found that Ms. Prisco had declined a job offer because it involved travel to Europe, but the record indicates otherwise. Instead, Ms. Prisco testified that the firm had informed her that “they could not understand how [she] could possibly fit within their organization because of the travel requirements.” She then inquired if there were any other jobs she could perform, given that they did not think she could travel. The answer was no. Nothing in the record indicates that she turned down an offer or claimed that she could not travel. The record thus belies the trial court's finding that the failure of Ms. Prisco to take that job was a “personal choice.” Fourth, the court erred in finding a lack of diligence in Ms. Prisco's failure to follow up with a contact from Mr. Stroup. The court found that Ms. Prisco did not follow up with a particular firm because it was in Virginia (at the time, she lived in Maryland). The record indicates that Ms. Prisco received a letter from Mr. Stroup, which contained a list of about twenty firms that were seeking attorneys. She followed up with almost all of them. That she failed to contact one out of the many potential contacts hardly supports a finding of bad faith. Finally, the trial court plainly erred when it found that Ms. Prisco's search was not “diverse and comprehensive” because she had not applied for any teaching positions, or positions of counsel. The record instead shows that Ms. Prisco applied for a great variety of positions, including, among others, high school science teacher, IT contact manager, legal editor, senior licensing manager, and Patent Agent. Based on the documentation that Ms. Prisco provided, which Mr. Stroup was not able to refute, it cannot be said that she limited her job search such that she was voluntarily unemployed.

In Freeman, supra, both parents stipulated that the father would pay monthly child support incident to a divorce. The father had a Master's degree in Public Health and had been earning $24,000 a year; however, he quit that job in order to write a book and take care of his new baby with his new wife and only made minimal efforts to find other employment. He sought to have his child support payments suspended or reduced. The trial court imputed income to the father on the basis of "baby-sitting services" provided to his new wife and ordered child support payments calculated on such an imputed basis. The Court of Appeals affirmed (at 556-557):

In the present case, the trial court valued Mr. Freeman's ability to pay by reference, first, to his role as a babysitter, not to the professional roles for which he is qualified.1 It was not unreasonable for the trial court to find that Mr. Freeman's babysitting services were worth $400 per month; and it is irrelevant whether this value was derived by reference to what he could earn as a babysitter in the community or by deeming his in fact to be earning $400 per month from his second wife, on the theory that she would have to be paying someone else to babysit if not Mr. Freeman. Second, Mr. Freeman in effect conceded that his second wife's $24,000 income provided support for his own needs. Thus, the trial court properly could view the $400 per month earnings imputed to Mr. Freeman as being substantially available for child support.

In challenging the propriety of the court's use of imputed babysitting income, Mr. Freeman implicitly attacks the trial court's reliance, more broadly, on his present wife's income as the basis for concluding that at least $200 of the $400 was available for child support. We find no error here. The trial court did riot hold — nor do we — that a second wife's income can be deemed generally available to support a husband's children by a former marriage. The point is, rather, that if Mr. Freeman's ability to pay, under the circumstances, can be derived from his earning capacity in the current job market, given his educational background and work experience — a full accountability the trial court did not impose, see note 1, supra — it was not erroneous

Page 557

for the trial court to conclude that under present circumstances Mr. Freeman could afford $50 per week. By focusing on appellant's current situation, rather than on the hypothetical situation of a well-educated, experienced person who quit a $24,000 job, the court accepted appellant's own premise for his lifestyle and determined what he realistically could afford.

In Guyton v. Guyton, 602 A.2d 1143 (D.C. 1992), the parties divorced and child support payments were established in the decree. The non-custodial parent (the father) lost his job a number of years later. The trial court determined that the father should have no difficulty in obtaining a permanent, full-time job paying between $40,000 and $50,000 a year and imputed an income to him on that basis, calculating a modified child support order accordingly. The District of Columbia Court of Appeals reversed, distinguishing Freeman, supra, as having involved a case of voluntary unemployment. The Court held that a showing had not been made that current economic conditions would allow the father to realize the imputed income in the foreseeable future (at 1145-1146):

Appellant argues that the trial court erred in relying on Freeman v. Freeman, 397 A.2d 554 (D.C.1979) to establish his gross income and to calculate his support obligation under the circumstances of this case. We agree. The holding in Freeman resulted from a situation where the parent under a support obligation voluntarily quit a well-paying job and made minimal efforts to find employment commensurate with his skills. Instead, the father stayed home babysitting while his second wife worked. The court imputed to him as income the value of his babysitting services. Id. at 556. We held that under such circumstances, the parent's ability to pay is not a function of actual earnings, but must be considered more broadly to derive from his earning capacity in the current job market, given his educational background and work experience. Id. In a subsequent decision, this court adhered to the Freeman principle in determining ability to pay for a parent faced with a motion for contempt. Smith v. Smith, 427 A.2d 928, 932 (D.C. 1981). Similarly, a voluntary decrease in income will not justify a reduction in support payments. Hamel v. Hamel, 539 A.2d 195, 201 (D.C.1988).

There is no dispute in this case that appellant did not voluntarily leave his well-paying position. Moreover, the court concluded that appellant's inability to locate work since that time was not self-imposed. Further, there was no evidence that current economic conditions would assure that appellant would obtain employment earning between $40,000 to $50,000 each year in

[602 A.2d 1146]

the near future. Assuming the applicability of the Freeman principle in setting a guideline support award, it does not apply under the facts of this case where termination of employment and inability to locate new employment is involuntary. Additionally, it cannot apply without some evidence that current economic conditions show that the job can be secured and the income achieved. Therefore, we hold that the trial court erred in imputing to appellant an income which he was not earning and which it was not shown that current economic conditions would allow him to realize in the reasonable foreseeable future.

Authorities:
D.C.Code § 16–916.01
Freeman v. Freeman, 397 A.2d 554 (D.C. 1979)
Saxon v. Zirkle, 97 A.3d 568 (D.C. 2014)
Prisco v. Stroup, 3 A.3d 316 (D.C. 2010)
Freeman v. Freeman, 397 A.2d 554 (D.C. 1979)
Guyton v. Guyton, 602 A.2d 1143 (D.C. 1992)