in the Interest of E.A.E., O.E., C.B.E., C.E., C.E., and C.E., Children ( 2010 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-09-162-CV
IN THE INTEREST OF E.A.E., O.E.,
C.B.E., C.E., C.E., AND C.E.,
CHILDREN
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FROM THE 233RD DISTRICT COURT OF TARRANT COUNTY
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MEMORANDUM OPINION1
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This is an appeal from the trial court’s denial of appellant Noble
Ezukanma’s motion to reduce child support for his six children. In four issues,
appellant contends that (1) the trial court abused its discretion by denying his
motion to reduce child support because he had been ―terminated from his
practice, sued for malpractice, and had been unable to generate virtually any
income in his attempt to start his new practice,‖ (2) the evidence is legally and
factually insufficient to support the trial court’s finding that there was not a
1
See Tex. R. App. P. 47.4.
material change in appellant’s circumstances warranting a reduction, (3) the
evidence was legally and factually insufficient to support the finding that
reduction of support would not be in the children’s best interest when the child
support was already above statutory guidelines, and (4) appellant conclusively
established a material change in circumstances warranting a reduction. We
affirm.
Factual and Procedural Background
After appellant and appellee Lawreta Njideka Ezukanma were divorced, in
a subsequent suit to modify the parent-child relationship, the trial court ordered
appellant to pay $5,400 per month in child support on the first day of each month.
In June 2008, the Tarrant County Domestic Relations Office IV-D Child Support
Monitoring Program (DRO) on behalf of appellee the Attorney General of Texas
filed a motion to enforce asking that appellant be held in contempt for failing to
make certain of the ordered payments. The DRO alleged that as of June 9,
2008, appellant’s total cumulative arrearage was $23,044.78.
Appellant responded to the DRO’s motion by filing a motion to modify the
parent-child relationship, in which he moved the trial court to reduce his child
support payments because of ―changed circumstances.‖ He also subsequently
paid all past due amounts for January through July 2008 in July 2008 and his
payment for August 2008 on August 28, 2008. However, he did not make any
child support payments from September 2008 through February 2009, during the
pendency of the motion to modify. After a hearing, the trial court denied
2
appellant’s requested child support reduction, found him $28,656.58 in arrears
(for the September 2008 through February 2009 child support payments), found
that he willfully and intentionally failed to obey the trial court’s child support order
by failing to make payments on March 1, April 1, and June 1, 2008, and held him
in contempt for 180 days for each violation of the court’s order, with the
sentences to be served concurrently. Appellant filed a petition for writ of
mandamus and habeas corpus challenging the provisions of the contempt order.
Those petitions are currently pending in cause number 2-09-464-CV. This
appeal is from the trial court’s denial of appellant’s motion to reduce child
support.
Standard of Review
We review a trial court’s decision on whether to modify child support for an
abuse of discretion. In re B.S.H., 308 S.W.3d 76, 78 (Tex. App.––Fort Worth
2009, no pet.); In re P.J.H., 25 S.W.3d 402, 405 (Tex. App.––Fort Worth 2000,
no pet.). If there is some probative and substantive evidence to support the
judgment, the trial court did not abuse its discretion. B.S.H., 308 S.W.3d at 78;
P.J.H., 25 S.W.3d at 405. Legal and factual sufficiency of the evidence are
relevant factors in determining whether a trial court has abused its discretion but
are not independent grounds for asserting error. Hardin v. Hardin, 161 S.W.3d
14, 19 (Tex. App.––Houston [14th Dist.] 2004, pet. granted, judgm’t vacated
w.r.m.); In re A.J.J., No. 02-04-00265-CV, 2005 WL 914493, at *1 (Tex. App.––
Fort Worth Apr. 21, 2005, no pet.) (mem. op.). The party seeking to modify a
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child support order has the burden to prove a material and substantial change in
circumstances. In re C.C.J., 244 S.W.3d 911, 918 (Tex. App.––Dallas 2008, no
pet.); In re Z.B.P., 109 S.W.3d 772, 781 (Tex. App.––Fort Worth 2003, no pet.).
Findings of fact entered in a case tried to the court have the same force
and dignity as a jury’s answers to jury questions. Anderson v. City of Seven
Points, 806 S.W.2d 791, 794 (Tex. 1991). The trial court’s findings of fact are
reviewable for legal and factual sufficiency of the evidence to support them by
the same standards that are applied in reviewing evidence supporting a jury’s
answer. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996); Catalina v. Blasdel,
881 S.W.2d 295, 297 (Tex. 1994).
We may sustain a legal sufficiency challenge only when (1) the record
discloses a complete absence of evidence of a vital fact; (2) the court is barred
by rules of law or of evidence from giving weight to the only evidence offered to
prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a
mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital
fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998),
cert. denied, 526 U.S. 1040 (1999); Robert W. Calvert, "No Evidence" and
"Insufficient Evidence" Points of Error, 38 Tex. L. Rev. 361, 362–63 (1960). In
determining whether there is legally sufficient evidence to support the finding
under review, we must consider evidence favorable to the finding if a reasonable
factfinder could and disregard evidence contrary to the finding unless a
reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228
4
S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827
(Tex. 2005).
When reviewing an assertion that the evidence is factually insufficient to
support a finding, we set aside the finding only if, after considering and weighing
all of the evidence in the record pertinent to that finding, we determine that the
evidence supporting the finding is so weak, or so contrary to the overwhelming
weight of all the evidence, that the answer should be set aside and a new trial
ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on
reh=g); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965); In re King’s Estate, 150
Tex. 662, 244 S.W.2d 660, 661 (1951).
Analysis
A trial court may order a child support obligor’s payments modified if,
among other reasons, the obligor’s circumstances ―have materially and
substantially changed‖ since the date of the child support order’s rendition. Tex.
Fam. Code Ann. § 156.401(a) (Vernon 2008); In re A.J.J., 2005 WL 914493, at
*2. Here, appellant challenges the legal and factual sufficiency of the trial court’s
finding that his circumstances had not materially and substantially changed and
the following ancillary findings supporting that finding:
that credible testimony was offered as to appellant’s ability to work
additional shifts as an emergency room doctor;
that appellant had instructed his employers to withhold additional funds
from his paycheck for taxes and retirement and that this instruction was
5
made ―to reduce the sum of money available to be withheld for child
support‖;
that appellant’s financial statement, which was admitted, showed that on or
about June 5, 2008, his mortgage payment was $3547 per month, his cash
flow surplus was $7614 per month, his annual salary was $75,000 per
month, and his annual commissions were $240,000;
that a bank statement for Ezukanma Group of Companies 2 for 3/01/08
through 3/31/08, which was admitted, showed a beginning balance of
$196,936.36 and an ending balance of $60,779.66;
that a bank statement for Ezukanma Group of Companies for 4/01/08
through 4/30/08, which was admitted, showed a beginning balance of
$60,779.66 and an ending balance of $14,773.62;
that a bank statement for Ezukanma Group of Companies for 7/01/08
through 7/31/08, which was admitted, showed a beginning balance of
$18,621.58 and an ending balance of $2,002.47;
that ―credible evidence was presented to show that [appellant] is
intentionally underemployed in an effort to avoid paying child support for
his six children‖;
2
Although the name on the bank statement is listed as ―Ezukanma Group
of Companies, Inc. d/b/a Noble One Properties,‖ appellant’s counsel represented
to the court that the statements were appellant’s, which he had provided in
discovery. There is no evidence that Ezukanma Group of Companies, Inc. is
related to appellant’s former or new physician’s practice group.
6
that appellant failed to present any evidence that decreasing child support
would be in the children’s best interest; and
that a malpractice suit that had been filed against appellant did not show a
material and substantial change in circumstances because evidence about
that suit had been offered at the hearing in 2007 when appellant’s child
support obligation was initially set at $5,400 per month.
Appellant contends the evidence is legally and factually insufficient to support
the trial court’s finding that he did not prove a material and substantial change in
his circumstances, i.e., there is no evidence that appellant did not suffer a
substantial and material change, or in the alternative, that the trial court’s failure
to so find is against the great weight and preponderance of the evidence. See
City of Keller, 168 S.W.3d at 807, 827; Cropper v. Caterpillar Tractor Co., 754
S.W.2d 646, 651 (Tex. 1988); see Herbert v. Herbert, 754 S.W.2d 141, 144 (Tex.
1988).
Applicable Facts
At the February 2009 hearing on the motion to modify, appellant testified
that although he is a doctor, he was terminated from his nine-year practice
effective May 15, 2008. [rr at 29, 36] The medical group that had previously
employed him paid him net income of $4,273.79 in 2008 3; however, the group
3
According to appellant, the practice group deducted substantial sums from
his pay for legal expenses it claimed he owed in connection with a malpractice
suit against him. But the trial court did not allow evidence of the suit and
7
also paid some funds directly for appellant’s child support obligations between
January and June 2008. According to appellant, four other doctors were
terminated from the practice at the same time and had sued the practice for
unpaid salaries, but appellant had not joined the suit because he could not afford
to pay a lawyer. Appellant admitted that in January 2008, he cashed in his
retirement insurance in the amount of $216,000; he used it to pay bills and child
support, and he invested $21,000 of it in a new physician’s practice group. That
group does hospital consults for physicians with patients in the hospital who have
pulmonary disease. However, he and the other doctors were subject to a
noncompete agreement with their former practice group, which prohibited them
from practicing within ten miles of their former location on South Adams in Fort
Worth.
Appellant testified that this noncompete agreement had affected the new
practice’s ability to obtain patients; for instance, they had to turn down a contract
to treat John Peter Smith Hospital patients because that hospital is within the ten
mile radius. Appellant testified that he had received net income from the new
practice group, but the trial court did not allow him to testify about income from
the new practice in detail because he had failed to timely produce paycheck
stubs and monthly profit and loss statements for the practice in discovery.
However, appellant also testified that he did not receive any paychecks from the
subsequent judgment because both predated the August 2007 hearing at which
the trial court set appellant’s child support obligation at $5,400 per month.
8
new practice in 2008. According to appellant, the new practice was having
trouble with cash flow. It did not receive any payments from Medicaid or
insurance companies for the first three months it was open; according to
appellant, those were the practice’s only source of income. However, appellant
anticipated that the new practice would begin to generate income.
Appellant had attempted to obtain work as an emergency room doctor; he
stated that he had filled out applications and signed a contract with Harris, but
the trial court did not allow him to testify about the contract because he had not
provided it in discovery. Appellant testified that he had not paid the mortgage on
his residence since August 2008. According to appellant, he paid $525,000 for
the house, and it had a primary lien of $364,000 and a secondary lien of
$200,000. When asked whether that meant he owed $560,000 on the house,
appellant said yes. He did not think he could sell the house for the amount of
loans he had outstanding on it.
Appellant testified that he owns a duplex in Wedgewood on which he owes
$116,000, but he said he would not be able to make any money by selling it. He
said that he had rented it ―at one point‖ but that he could not keep it rented. He
also said that the rent did not cover the expenses on the property. Appellant also
had a vehicle, which he had not attempted to sell but for which he could not
make any profit because he owed money on it. He testified that he also had a
401k worth about $60,000 but that he was unable to borrow against it.
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Appellant also claimed that he had tried to borrow money from banks and
relatives but was not able to borrow any money. Lawreta testified that appellant
had asked her to loan him money to pay the child support payments that he
missed but that she told him she did not have any money.
On cross-examination, the Attorney General introduced evidence that
appellant’s income at his former practice had been approximately $30,000 per
month, and that in 2007, he reported $424,864 in income. Lawreta also
questioned appellant about a personal financial statement he had produced
during discovery. The statement was dated June 5, 2008; at that time, appellant
had failed to pay the monthly $5,400 in March 2008, April 2008, and June 2008.
However, he admitted that the statement showed he had $35,000 in the bank on
June 5, 2008. He also admitted he had a 401k of $89,000 at that time that he
could have cashed out. Appellant admitted that by subtracting liabilities from
assets on the statement he produced in discovery, it showed that as of June 5,
2008, he had a net worth of $195,400. He further admitted that he owned some
land in Nigeria but that he did not know its value.
The Attorney General introduced evidence that appellant voluntarily
requested that his former practice withhold additional funds from his paycheck for
federal income tax4; however, he denied doing so for the purpose of reducing his
4
Appellant denied that he asked for this increase in withholding after the
August 2007 hearing at which the trial court set his $5,400 per month obligation.
He also denied making the request in November or December 2007; he said ―it
was way before then,‖ but he did not remember the exact date.
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income so that there would not be enough left over to make his child support
payments as ordered. According to appellant, he asked for the reduction on his
accountant’s advice to cover amounts he owed the IRS. 5 But the Attorney
General introduced evidence that appellant received a tax refund of $18,119 for
the 2007 tax year.
Appellant explained that he owned a part interest in an office building on
South Adams with his business partners. He testified that he still owed about
$56,000 on a loan he had taken out to purchase that interest and that he could
not sell his interest to his other partners or a third party. 6
No Material and Substantial Change in Circumstances
Financial ability to pay child support depends not solely on earnings but on all
sources of income. In re G.J.S., 940 S.W.2d 289, 293 (Tex. App.––San Antonio
1997, no pet.); Clark v. Jamison, 874 S.W.2d 312, 317 (Tex. App.––Houston
[14th Dist.] 1994, no writ). The court may also take into consideration a parent’s
earning potential in determining a child support question. In re G.J.S., 940
S.W.2d at 293; In re Striegler, 915 S.W.2d 629, 638 (Tex. App.––Amarillo 1996,
5
Appellant did include an $18,000 tax obligation as a liability on his June 5,
2008 financial statement.
6
Appellant listed the $56,000 loan on his financial statement as a secured
loan, along with a $200,000 loan that he indicated was secured by his
homestead. When asked why he had not listed the $200,000 second mortgage
on his financial statement, appellant said he must have made a mistake and
inadvertently left it off. However, a careful reading of the statement shows that
appellant did list that loan and also indicated that it was secured by his
homestead.
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writ denied). Thus, a trial court may properly deny reduction in child support of
an obligor who no longer makes the same level of income but who has assets at
his or her disposal with which to pay child support and who has an earning
capacity greater than what his or her current position pays. See In re G.J.S., 940
S.W.2d at 293.
Appellant contends that appellees confused his net worth with his ability to
make child support payments. While it was undisputed that appellant was
terminated from his prior practice, which temporarily reduced his income, the
evidence also showed that appellant had started a new practice and was actively
seeing patients in that practice in the same field in which he had previously been
practicing. See In re Striegler, 915 S.W.2d at 638 (holding trial court can
consider obligor’s earning potential). The trial court could also have inferred from
appellant’s failure to produce financial information about his new practice in
discovery that he was either intentionally underreporting income from that
practice or that he was trying to conceal that income. See Swate v. Crook, 991
S.W.2d 450, 453 (Tex. App.––Houston [1st Dist.] 1999, pet. denied) (holding that
trial court does not abuse its discretion by refusing to reduce child support
obligation if obligor fails to present evidence of current financial condition at time
of modification hearing), abrogated on other grounds by Smith v. Brown, 51
S.W.3d 376, 381 (Tex. App.––Houston [1st Dist.] 2001, pet. denied); see also
Tex. Fam. Code Ann. § 154.063 (Vernon 2008) (providing that trial court shall
require a party to ―furnish information sufficient to accurately identify that party’s
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net resources and ability to pay child support,‖ including current pay stubs).
Additionally, the trial court was not obligated to believe appellant’s general
testimony that he had tried to, but could not, generate income from his assets. 7
In re J.D.D., 242 S.W.3d 916, 922 (Tex. App.––Dallas 2008, pet. denied); In re
P.J.H., 25 S.W.3d at 406; cf. In re G.J.S., 940 S.W.2d at 293 (holding that trial
court could consider appellant’s assets in determining to increase appellant’s
child support obligation). Furthermore, contrary to appellant’s contentions, the
evidence did not show that he was unsuccessful in obtaining an emergency room
job; the evidence showed that he had filled out applications and signed a
contract.
Appellant contends that the $5,400 per month child support is
presumptively not in the children’s best interest because it is ―well beyond‖ the
family code’s child support guidelines and the children’s best interest would not
be served by their father being incarcerated for failure to pay that amount while
trying to develop a new practice. However, compliance with the statutory
guidelines is discretionary when a trial court is considering whether to modify an
existing child support order. Tex. Fam. Code Ann. § 156.402 (Vernon 2008); In
re G.J.S., 940 S.W.2d at 294; Escue v. Escue, 810 S.W.2d 845, 848 (Tex.
App.—Texarkana 1991, no writ). A child support order that is not in compliance
7
The trial court likewise was not required to believe appellant’s testimony
that he asked for additional income tax withholding because he owed the IRS
$18,000 when appellant also admitted that he had received a refund of over
$18,000 for year 2007 taxes.
13
with the guidelines does not by itself establish a material and substantial change
in circumstances. In re G.J.S., 940 S.W.2d at 294. And, faced with evidence
supporting the inference that appellant was attempting to avoid paying his child
support obligation, the trial court could have determined that it was in the
children’s best interest to take action that would impress upon appellant the
importance of paying that obligation as ordered.8
For these reasons, we conclude and hold that the evidence is both legally
and factually sufficient to support the trial court’s finding that appellant’s
circumstances had not materially and substantially changed 9 and, thus, that the
trial court did not abuse its discretion by denying appellant’s motion to reduce the
monthly amount of his child support payments.
We overrule all of appellant’s issues.
8
After the hearing, the trial court modified the contempt order to require
appellant to serve his jail sentence on only the second and fourth weekends of
each month.
9
Because we hold that the evidence is legally and factually sufficient to
support this finding on an ultimate issue, we need not address appellant’s
arguments that the evidence was legally and factually insufficient to support each
of the trial court’s ancillary findings related to that ultimate issue. See Tex. R.
App. P. 47.1; Main Place Custom Homes, Inc. v. Honaker, 192 S.W.3d 604, 625
(Tex. App.––Fort Worth 2006, pet. denied).
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Conclusion
Having overruled appellant’s four issues, we affirm the trial court’s
judgment.
TERRIE LIVINGSTON
CHIEF JUSTICE
PANEL: LIVINGSTON, C.J.; GARDNER and WALKER, JJ.
DELIVERED: September 16, 2010
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