in the Interest of A. L. O., S. N. O., and C. E. O., Minor Children ( 2003 )

NO. 12-02-00349-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

IN THE INTEREST OF

§ APPEAL FROM THE

A.L.O., S.N.O., AND C.E.O.,

§ COUNTY COURT AT LAW

MINOR CHILDREN

§ HOUSTON COUNTY, TEXAS MEMORANDUM OPINION

Richard Zane Oliver ("Oliver") appeals from an order modifying his current child support and ordering payment of arrearages. In two issues, Oliver argues that the trial court abused its discretion in increasing his current child support and ordering retroactive child support. We affirm.

Background  

On January 18, 2001, Oliver and Leah Ann Oliver (now "Tabor") appeared before the Houston County Court at Law and agreed to a final decree of divorce. At the hearing, Oliver testified that he was unemployed. In the decree, Oliver was ordered to pay child support to Tabor in the amount of $450 per month for the couple's three minor children, A.L.O., S.N.O., and C.E.O. The decree also contained a provision which ordered Oliver, upon obtaining employment, to provide to Tabor proof of income, including but not limited to proof of any extra benefits provided through his job, such as use of a vehicle, expense account, and payment of health insurance benefits. Oliver was also required to furnish Tabor with proof of income from any business interest or investment. Further, the parties agreed that when Tabor received proof of Oliver's income, a modification order would be entered increasing Oliver's child support to thirty percent of his total net resources effective on the first of the month following his employment. The divorce decree was signed on April 19, 2001.

On August 30, 2002, Oliver filed a Motion for Clarification of Child Support Order alleging that the Attorney General was attempting to collect child support Oliver had already paid. Both the Attorney General and Tabor filed answers. On September 12, 2002, the Attorney General filed a Motion for Enforcement and Modification of Child Support Order requesting a judgment for arrearages and modification of child support. Hearings on the motions were held on September 24 and October 24, 2002.

At the October 24 hearing, Oliver stated that he was unemployed and receiving unemployment benefits when his child support payments were originally set. Oliver testified that he pays $221 per month in insurance premiums for his three children and that he understood he was to provide proof of income to Tabor when he obtained employment. He also stated that he understood his child support would be modified effective on the first of the month following his employment. Further, he understood that, if he waited to provide information regarding his employment, the effective date of modification would be retroactive to the first day of the month following his initial date of employment. Oliver stated that he "[wouldn't] have a problem" with the trial court finding that he should have paid some child support beginning February 1, 2002 because of his employment with Laredo Luxury ("Laredo").

Upon further examination, Oliver testified that he was employed by Dealer Special Finance Group ("DSFG") from December 2000 through February of 2001. He stated that he did not make any money as a result of this employment. Nonetheless, he did not believe that he furnished Tabor with information concerning this employment. He also did not inform Tabor upon his termination from DSFG as required by the divorce decree. Further, Oliver testified that he was employed by Kustom Kreations in 2001, selling conversion units. Oliver was provided with two demo vehicles, one for him and one for another salesman. His sales commissions were paid back to the company for use of the demo vehicle and reimbursement of expenses. However, he failed to supply Tabor with proof of income or benefits from this employment as required by the decree. He is no longer employed by Kustom Kreations but did not inform Tabor upon his termination from this employment.

In about November of 2001, Oliver became employed as general manager of Laredo, a partnership. His salary is $500 per week pursuant to an agreement made at the inception of the new company. Oliver stated that he is a managing member of Laredo, but denied being able to set his own salary. He testified that he receives no bonuses or commissions. Through his employment, he is provided with a company truck.

In response to Tabor's request in April 2001, Laredo sent a letter stating that Oliver's gross salary is $500 per week or $26,000 per year, and that he did not have a "company vehicle, insurance or any other expense accounts." Oliver stated that he did not receive the company truck until three weeks before the hearing. Tabor testified that she received a letter from Oliver on May 1, 2002 which included documentation of Oliver's employment and wages. The documentation included Oliver's W-2 for 2001 which listed "Oliver Family Enterprises, Ltd." as his employer.

Oliver resides in a house owned by a family limited partnership. Oliver's name is not on the deed. Tabor testified that she, Oliver, and the family limited partnership owned the house during the marriage. As a consequence of the divorce, she was "released" and her name was "tak[en] off" of the house. Oliver's name is on the bank note, although he characterized his name on the note as being "just a placement" in order to show "some sort of responsibility" from him. At another point in his testimony, Oliver denied being a co-signer on the house note, denied that he or Tabor were on the note to his knowledge, and denied that he and Tabor had any "bearing" on the note. The house note is $28,000 per year due on December 30. Oliver testified that the family partnership is ultimately responsible for the house note but also stated that, prior to the demise of his former business in June 2000, he was responsible for the note. Before that time, Oliver received a bonus each year to pay the house note. Since his business failed, the family partnership, Chuck and Gwen Oliver Limited Family Partnership, has paid the note. The partnership paid the house note in December 2000, the year he was unemployed, and in December 2001. On the date of the hearing, the next payment was due December 30, 2002, and Oliver testified that the family partnership would probably have to pay the note.

On November 14, 2002, the trial court signed an order clarifying the prior child support order, reducing Oliver's unpaid child support to judgment, and modifying his child support. At the January 18, 2001 hearing, the trial court found that Oliver testified that he was unemployed. Based upon the allegations of unemployment, the parties agreed and the trial court approved the decree, unlimited by section 156.401 ⁽¹⁾ of the Texas Family Code, ⁽²⁾ on the grounds that modification was expected shortly. However, the trial court found that, contrary to his testimony, Oliver was employed on January 18, 2001 and that Oliver was receiving substantial salary, investment returns, and other benefits by December of 2001. The trial court also found that, since the final decree,

there has been a material and substantial change in circumstances of the children or parties and the monthly amount of the child support award under the Order differs by either 20 percent or $100 from the amount that would be awarded in accordance with the child support guideline, which warrants the following modification of the existing child support order.

   Because Oliver's W-2 for 2001 listed Oliver Family Enterprises, Ltd. as his employer, the trial court found that the family partnership paid a substantial benefit to him, i.e., the house note of $28,000 per year. Thus, Oliver's gross resources, beginning January 2002, totaled $57,360 per year or $4,780 per month, including salary, house payment, and company truck payment. Oliver's net income totaled $3,581.87 per month with $221 per month deducted for the children's health insurance for total net resources of $3,360.87 per month. The trial court ordered an increase of child support in the amount of $1,008.26 per month to Tabor beginning November 1, 2002.

Further, the trial court found that (1) Oliver was in arrears as of October 24, 2002 which included "unpaid child support, any balance owed on previously confirmed arrearages, and retroactive support judgments," (2) Oliver violated orders of the trial court to provide documentation of wages and benefits on the first month following employment, and (3) the parties agreed, and the final decree ordered, that modification orders were to become effective on the first month following Oliver's employment. Evidence of wages and benefits from January 2001 to December 2001 was inconclusive, and the trial court declined to order retroactive child support for that period.

However, the trial court ordered modification effective January 1, 2002, the month following Oliver's employment, at the rate of $1,008.26 per month based on net resources of $3,360.87 per month. Therefore, the trial court rendered judgment against Oliver in the amount of $5,509.40 with interest at the rate of six percent per annum. The amount of the judgment is the "difference in the amount paid as child support and the amount of child support accrued in accordance with the agreement of the parties" and the orders of the trial court. Oliver was ordered to pay the child support judgment at the rate of $50.00 per month beginning November 1, 2002, until the arrearage is paid in full. This appeal followed.

Standard of Review  

A court's order of child support will not be disturbed on appeal unless the complaining party can show a clear abuse of discretion. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990); In re L.R.P., 98 S.W.3d 312, 313 (Tex. App.-Houston [1st Dist.] 2003, pet. dism'd). The test for abuse of discretion is whether the trial court acted without reference to any governing rules or principles. Worford, 801 S.W.2d at 109; In re L.R.P., 98 S.W.3d at 313. In other words, the issue is whether the trial court's actions were arbitrary or unreasonable. Worford, 801 S.W.2d at 109; In re L.R.P., 98 S.W.3d at 313.

Under the abuse of discretion standard, legal and factual insufficiency are not independent reversible grounds, but are relevant components in assessing whether the trial court abused its discretion. In re L.R.P., 98 S.W.3d at 313; Farish v. Farish, 921 S.W.2d 538, 542 (Tex. App.-Beaumont 1996, no writ). In making this determination, the reviewing court must view the evidence in the light most favorable to the actions of the trial court and indulge every legal presumption in favor of the judgment. Nordstrom v. Nordstrom, 965 S.W.2d 575, 578 (Tex. App.-Houston [1st Dist.] 1997, pet. denied); In re S.B.C., 952 S.W.2d 15, 17-18 (Tex. App.-San Antonio 1997, no writ). If there is some evidence of a substantive and probative character to support the judgment, the trial court did not abuse its discretion. Nordstrom, 965 S.W.2d at 578; In re S.B.C., 952 S.W.2d at 18.

Characterization of House Payment  

Oliver contends that the trial court abused its discretion by characterizing the lump sum house payment as income. He argues that the house note payment made by Oliver's family was paid prior to the divorce and is a financial obligation of both Oliver and his parents. Thus, Oliver asserts, payment of the house note by Oliver's parents in December 2001 would not be a change in economic conditions. Further, Oliver argues that inclusion of the payment as income in anticipation that it would be made in 2002 or subsequent years is not supported by the law or in the record. The Attorney General contends that, whether the house payment is compensation by Oliver's employer or a gift, it should be included as part of his net resources under the Family Code.

Applicable Law  

A trial court may modify a child support order if the circumstances of the child or a person affected by the order have materially and substantially changed since the date of the order's rendition. Tex. Fam. Code Ann. § 156.401(a)(1). Further, a child support order may be modified if it has been three years since the order was rendered or last modified and the monthly amount of the child support award differs by either twenty percent or $100 from the amount that would be awarded in accordance with child support guidelines. Tex. Fam. Code Ann. § 156.401(a)(2). In determining whether the circumstances of the child or a person have materially and substantially changed, evidence regarding the parents' or child's financial circumstances and needs at the time of divorce and the time of modification should be considered by the trial court. Farish, 921 S.W.2d at 541; In re Striegler, 915 S.W.2d 629, 635 (Tex. App.-Amarillo 1996, writ denied).

Under the Family Code, net resources, for calculating child support, include all wage and salary income and other compensation for personal services, including commissions, overtime pay, tips, bonuses, and all other income actually being received, including gifts and prizes. Tex. Fam. Code Ann. § 154.062(a), (b)(1), (5) (Vernon 2002). The duty to support a child is not limited to a parent's ability to pay from current earnings, but also extends to his or her financial ability to pay from any and all sources that might be available. In re Striegler, 915 S.W.2d at 638; Roosth v. Roosth, 889 S.W.2d 445, 455 (Tex. App.-Houston [14th Dist.] 1994, writ denied); Musick v. Musick, 590 S.W.2d 582, 586 (Tex. Civ. App.-Tyler 1979, no writ).

Analysis  

A family limited partnership paid the annual lump sum note for the house in which Oliver resides for two years before the modification hearing. Oliver complains that this lump sum payment does not reflect a change in economic circumstances nor is it income. First, evidence regarding Oliver's financial circumstances at the time of divorce and at the time of modification must be considered to determine whether Oliver's circumstances have materially and substantially changed. See Farish, 921 S.W.2d at 541; In re Striegler, 915 S.W.2d at 635. At the time of the divorce decree, Oliver testified that he was unemployed. At the modification hearing, Oliver testified that he was employed and that a family limited partnership paid the note on his residence. The payment, along with his employment, reflects a material and substantial change in Oliver's circumstances since the divorce decree. Therefore, because there is some evidence of a substantive and probative character to support a finding that Oliver's circumstances had materially and substantially changed since the divorce decree, the trial court's finding is not arbitrary or unreasonable or an abuse of its discretion. See Worford, 801 S.W.2d at 109; In re L.R.P., 98 S.W.3d at 313; Nordstrom, 965 S.W.2d at 578; In re S.B.C., 952 S.W.2d at 18.

The second issue is whether the lump sum house payment should be characterized as income. Oliver testified that the Chuck and Gwen Oliver Limited Family Partnership paid the note on the house. However, the trial court found that Oliver's employer, Oliver Family Enterprises, Ltd., paid the note on the house. Although there appears to be a discrepancy as to which family partnership paid the house note, that is not determinative. If the house note was paid by Oliver's employer, it is compensation for personal services and should be included in Oliver's net resources. If the house payment was paid by the other family limited partnership, it is a gift and properly included in his net resources. See In re L.R.P., 98 S.W.3d at 314 (noting that the plain language of the statute includes gifts and prizes in its definition of "all other income actually being received"). Therefore, because there is some evidence of a substantive and probative character to support a finding that the house payment should be characterized as income and included as part of Oliver's net resources for calculating child support, the trial court's finding is not arbitrary or unreasonable or an abuse of its discretion. See Worford, 801 S.W.2d at 109; In re L.R.P., 98 S.W.3d at 313; Nordstrom, 965 S.W.2d at 578; In re S.B.C., 952 S.W.2d at 18. Accordingly, Oliver's first issue is overruled.

Retroactive Child Support  

Oliver argues that the trial court ordered retroactive child support for a period of time not authorized by law. According to Oliver, retroactive modification of child support may not be ordered prior to the date of the filing of a motion to modify. Therefore, according to Oliver, the trial court abused its discretion by ordering retroactive support beginning nine months before the date of the Motion for Enforcement and Modification of Child Support. The Attorney General contends that Oliver waived his complaint for retroactive support because he failed to object at trial.

According to the Texas Family Code, a support order may be modified only as to obligations accruing after the earlier of the date of service of citation or an appearance in the suit to modify. Tex. Fam. Code Ann. § 156.401(b). Child support payments may not be modified once they have accrued. Willis v. Willis, 826 S.W.2d 700, 702 (Tex. App.-Houston [14th Dist.] 1992, no writ). Thus, a trial court may only order retroactive support obligations accrued since the motion to modify was filed. Holley v. Holley, 864 S.W.2d 703, 707 (Tex. App.-Houston [1st Dist.] 1993, writ denied). However, in order to present a complaint for appellate review, the record must show that a complaint was made to the trial court by a timely request, objection, or motion. Tex. R. App. P. 33.1(a)(1). The request, objection, or motion must state the grounds for the ruling that the complaining party sought from the trial court with sufficient specificity to make the trial court aware of the complaint. Tex. R. App. P. 33.1(a)(1)(A). The trial court must have ruled on the request, objection, or motion, either expressly or implicitly. Tex. R. App. P. 33.1(a)(2)(A). If the trial court refused to rule, the complaining party must have objected to the refusal. Tex. R. App. P. 33.1(a)(2) (B).

Oliver maintains that the trial court abused its discretion in ordering retroactive modification of child support beginning January 1, 2002. However, the record does not reveal that Oliver timely objected to the retroactive modification of his child support. Furthermore, Oliver, in essence, agreed to retroactive modification of child support by (1) testifying that he understood his child support would be modified effective on the first of the month following his employment, (2) testifying that he understood that, if he waited to provide information regarding his employment, the effective date of modification would be retroactive to the first day of the month following his initial date of employment, and (3) testifying that he "[wouldn't] have a problem" with the trial court finding that he should have paid some child support beginning February 1, 2002 because of his employment with Laredo. Therefore, he presents nothing for our review. Accordingly, Oliver's second issue is overruled.

Conclusion  

Based upon our review of the record, we conclude that the trial court did not abuse its discretion in increasing Oliver's child support. Further, we conclude that Oliver waived his complaint that the trial court abused its discretion in ordering retroactive modification of child support. Therefore, the judgment of the trial court is affirmed.

   SAM GRIFFITH

Justice

Opinion delivered July 31, 2003.

Panel consisted of Worthen, C.J., Griffith, J., and DeVasto, J.  

(PUBLISH)

1.

Section 156.401 of the Texas Family Code provides that a court may modify a child support order if the circumstances of the child or a person affected by the order have materially and substantially changed since the order's rendition or if it has been three years since the order was rendered or last modified and the monthly amount of the child support award under the order differs by either twenty percent or $100 from the amount that would be awarded in accordance with the child support guidelines. Tex. Fam. Code Ann. § 156.401(a) (Vernon 2002). Further, the child support order may be modified only as to obligations accruing after the earlier of the date of service of citation or appearance in the suit to modify. Tex. Fam. Code Ann.§ 156.401(b).

2.

All statutory references are to the Texas Family Code unless otherwise indicated.