in the Interest of S.C., R.C., and L.C., Children

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-17-00377-CV
___________________________
IN THE INTEREST OF S.C., R.C., AND L.C., CHILDREN
On Appeal from the 16th District Court
Denton County, Texas
Trial Court No. 2006-10925-16
Before Walker, Kerr, and Pittman, JJ.
Memorandum Opinion by Justice Pittman
MEMORANDUM OPINION
Appellant M.C. (Father) appeals the trial court’s order modifying the amount of
his child support obligation upward instead of downward. In two issues, he contends
that the trial court abused its discretion by (1) finding that he is intentionally
underemployed, considering that Appellee L.T. (Mother) had the burden to provide
evidence and (2) departing from the child support guidelines and basing child support
on his potential earnings instead of his actual income. Because we hold that the trial
court did not abuse its discretion by finding that Father is intentionally
underemployed or by applying the child support guidelines to his potential earnings
instead of his actual income, we affirm the trial court’s judgment.
BACKGROUND FACTS AND PROCEDURAL HISTORY
Father and Mother divorced in January 2007. Their three children—S.C., R.C.,
and L.C., were then eight, six, and four years old, respectively.1 In July 2015, Father,
who remarried after the divorce, received net proceeds of approximately
$100,000 from the sale of his separate-property residence, was earning $140,000 per
year at his new job, and filed a petition to modify the parent-child relationship based
on a mediated settlement agreement he and Mother entered into in January 2015.
Father lost his job in December 2015, and Mother filed a counterpetition in January
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The children were all teenagers during the June 2016 modification trial at issue
here and are now nineteen, eighteen, and fifteen, respectively. The agreed divorce
decree provides that middle child R.C. has a disability and will not be capable of self-
support.
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2016. The parties then went back to mediation. By March 2016, they had reached a
partial settlement agreement, leaving the amount of Father’s child support (and other
issues) to be determined by the trial court.
After more than four months of no employment, Father had another new job
by mid-May 2016, and he wanted the trial court to reduce his monthly child support
payments for the three children from $1,800 to $1,143 based on his new annual salary
of $60,000. Conversely, Mother asserted that Father was intentionally
underemployed, and she sought increased child support based on his earnings
potential. After the June 2016 trial in which Father and Mother both testified, the
trial court found that Father was intentionally underemployed in his field and ordered
him to pay $2,267.54 per month in child support for the three children, with the
monthly child support obligation to decrease to $1,889.62 when one child reached the
age of eighteen or graduated from high school (whichever came later), married,
enlisted, died, or had disabilities removed; and to $1,511.70 when a second child met
one of those criteria.
In August 2017, more than a year after the trial, the trial court signed the final
modification order, incorporating previously issued findings of fact. Father filed a
timely motion for new trial, which the trial court denied, and Father then filed this
appeal.
Father raises no issues in his brief regarding the trial court’s denial of his
motion for new trial.
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FINDINGS OF FACT
The trial court issued the following findings of fact:
2. [Father]’s net resources per month are deemed . . . to be
$7,433.48;
3. [Father] began employment with iWThealth on or about May 15,
2016 earning a base salary of $60,000.00 per year. [He] is eligible
for commissions through this employment, but, as of the date of
the hearing, had not earned any commissions. [Father] testified
that he is not actively seeking other employment.
4. [Father] was involuntarily terminated from his previous
employment effective December 31, 2015 and received $7,000 in
severance.
5. [Father] was subsequently unemployed in January, February,
March, April, and half of May 2016.
6. [Father] received unemployment compensation of
$958.00 biweekly for the months of March, April and first two
weeks of May 2016.
7. Between December 2015 and May 2016, [Father] applied for
numerous jobs. He received one offer of employment for 100%
commission and he rejected that offer. During such time period,
he also engaged in day trading.
8. In 2015, [Father] sold a residence that he owned prior to his
marriage to his current spouse and received a net amount of
approximately $100,000.00 from such sale.
9. [Father] owns a condominium in Florida that is valued at
approximately $175,000.00 for [which he] states he receives no
income.
10. [Father’s] employment with Medhost started in April 2015 and
ended December 31, 2015. His salary for that period was
$140,000.00 per year, plus commissions. In 2015, [Father] earned
approximately $80,000.00 from his employment with Medhost.
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11. [Father]’s earnings for 2013 and the three previous years were
approximately $150,000.00 in each year. In 2014, [he] earned over
$140,000.00 in seven months of employment.
12. [Father] has worked in the health care sales industry since the date
of the prior order.
13. [Father] has obtained a master’s degree since the date of the prior
order.
14. The Court finds that [Father’s] actual income . . . is significantly
less tha[n] what he could earn because of intentional
underemployment. The Court finds that child support should be
set based on [Father]’s earnings potential, which the Court finds
to be $125,000.00 per year.
15. No evidence was admitted regarding [Mother’s] net resources . . . .
16. The percentage applied to [Father]’s net resources for child
support is thirty percent (30%).
17. The amount of child support ordered by the Court is [computed]
by applying the percentage guidelines contained in 154.125(a) to
the amount of $125,000.00 being deemed to be [Father]’s earnings
potential.
18. The amount of child support that the Court ordered, based on
gross resources of $125,000.00, to be paid by [Father], beginning
June 1, 2016, is as follows:
a. $2,230.04 per month for 3 children; and thereafter
b. $1,858.37 per month for 2 children; and thereafter
c. $1,486.70 per month for 1 child.2
19. The amount of child support that would be calculated if based on
gross resources of $60,000 00 is as follows:
a. $1,145.86 per month for 3 children; and thereafter
2
We note that these amounts are less than those actually ordered: $2,267.54 per
month for 3 children; $1889.62 per month for 2 children; and $1,511.70 for 1 child.
Father does not address these discrepancies.
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b. $954.88 per month for 2 children; and thereafter
c. $763.90 per month for 1 child[].
20. The amount of child support that the Court ordered [Father] pay
for January, February, March, and April of 2016 is $467.00 for
each month.
DISCUSSION
Father challenges the trial court’s modification in two issues: first, he contends
that the trial court abused its discretion by finding that he was intentionally
underemployed because the burden of providing evidence of intentional
underemployment shifted to Mother, who provided none; and second, he contends
that the trial court abused its discretion by departing from child support guidelines
and ordering child support based on his potential earnings instead of his actual
earnings.
I. We Review the Trial Court’s Decision for an Abuse of Discretion.
We review the trial court’s modification of child support for an abuse of
discretion. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990). A trial court abuses
its discretion if it acts arbitrarily or unreasonably or does not analyze or apply the law
properly. Iliff v. Iliff, 339 S.W.3d 74, 78 (Tex. 2011). In family law cases, whether the
evidence supporting the trial court’s decision is legally and factually sufficient is
relevant in deciding whether the trial court abused its discretion, In re P.S., 505 S.W.3d
106, 109 (Tex. App.—Fort Worth 2016, no pet.), but a trial court does not abuse its
discretion by basing its decision on conflicting evidence as long as some evidence
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supports its decision. Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009); In
re Barber, 982 S.W.2d 364, 366 (Tex. 1998) (orig. proceeding); see In re E.P.C.,
381 S.W.3d 670, 688 (Tex. App.—Fort Worth 2012, no pet.) (en banc) (“The
evidence . . . is obviously conflicting, but we do not resolve the conflicts, for that is
within the factfinder’s province.”).
II. For a Trial Court to Modify Child Support, the Modification Must Be in
the Child’s Best Interest and the Child, Conservator, or Other Party Must
Have Experienced Materially and Substantially Changed Circumstances.
Generally, as applicable here, a court with continuing, exclusive jurisdiction
over matters involving a child may modify a child support order if “the circumstances
of the child or a person affected by the order have materially and substantially
changed” and if the modification is in the child’s best interest. Tex. Fam. Code Ann.
§§ 156.001, 156.402 (West 2014), § 156.401(a) (West Supp. 2018); Reagins v. Walker,
524 S.W.3d 757, 761 (Tex. App.—Houston [14th Dist.] 2017, no pet.); see also Iliff,
339 S.W.3d at 81 (“[I]n child support decisions, the ‘paramount guiding principle’ of
the trial court should always be the best interest of the child.”). Both parents alleged a
material and substantial change of circumstances in their pleadings. The children’s
best interests were at issue, with Father claiming his requested reduction3 was in their
3
Father’s amended petition does not explicitly request a reduction in his current
child support obligation; however, his motion to enter the agreed order and his
summary of requested relief as to child support make clear that he wanted child
support to be reduced based on the job he began in May 2016.
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best interests and Mother claiming her requested increase in child support would
serve the children’s best interest.
III. A Trial Court May Base Child Support on an Obligor’s Earnings
Potential If He Is Intentionally Underemployed.
If a child-support obligor’s actual income “is significantly less” than his
earnings potential “because of intentional unemployment or underemployment,”
section 154.066(a) of the Texas Family Code allows the trial court to apply child
support guidelines to an obligor’s earnings potential instead of his actual income when
determining child support. Tex. Fam. Code Ann. § 154.066(a) (West 2014); Iliff,
339 S.W.3d at 81. As the Supreme Court of Texas has explained,
The law has long recognized parents have a legal duty to support
their children during their minority. A parent who is qualified to obtain
gainful employment cannot evade his or her child support obligation by
voluntarily remaining unemployed or underemployed. Concurrently, the
court must consider “a parent’s right to pursue his or her own
happiness” with a parent’s duty to support and provide for his or her
child. The court must engage in a case-by-case determination to decide
whether child support should be set based on earning potential as
opposed to actual earnings. Once the obligor has offered proof of his or
her current wages, the obligee bears the burden of demonstrating that
the obligor is intentionally unemployed or underemployed. The burden
then shifts to the obligor, if necessary, to offer evidence in rebuttal.
. . . . Although some financial resources are indispensable to
raising and providing for a child, the financial analysis will often not be
the end of the court’s consideration. A court properly considers the
obligor’s proffered rebuttal evidence of the reasons for an obligor’s
intentional unemployment or underemployment. This includes such
laudable intentions by obligors who alter their employment situations to
spend more time with their children, to live closer to their children in
order to attend their events and be more involved in their lives, or to
provide their children with better health benefits. Other objectives are
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also factors, such as whether an obligor alters his or her employment
situation to start a new business, to gain further education, to become a
public servant, or to address health needs. An active but unfruitful
pursuit of employment may also be relevant to the court’s child support
determination, as well as economic conditions that legitimately preclude
full employment. But, we are mindful that such explanations are not
always sincere, and the judge as fact finder has latitude to consider the
testimony and evidence to make the necessary determinations. Such
discretion must be exercised within the limits set by the Texas Family
Code, particularly Chapter 154 including the child support guidelines,
and should always focus on the best interest of the child. To facilitate
appellate review and to encourage consistency in the exercise of this
discretion across the state, the trial court must make a finding of
intentional unemployment or underemployment and its decision to base
child support on earnings potential rather than actual earnings must be
supported by the record.
Iliff, 339 S.W.3d at 81–82 (citations and footnotes omitted). Although Iliff did not
involve a modification and section 154.066 does not appear in the modification
chapter of the Texas Family Code, the Iliff Court recognized that “the same
intentional unemployment/underemployment analysis under section 154.066 may be
applied in both original child support orders and modifications . . . .” Id. at 81 n.5; see
Tex. Fam. Code Ann. § 156.402; Reddick v. Reddick, 450 S.W.3d 182, 187 (Tex. App.—
Houston [1st Dist.] 2014, no pet.); Coburn v. Moreland, 433 S.W.3d 809, 832–33 &
n.23 (Tex. App.—Austin 2014, no pet.).
IV. The Trial Court’s Finding that Father Is Intentionally Underemployed Is
Supported by Factually Sufficient Evidence.
In his first issue, Father contends that the trial court abused its discretion by
finding that he is intentionally underemployed when Mother failed to put on evidence
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demonstrating his intentional underemployment. In essence, Father challenges the
factual sufficiency of the evidence supporting the finding.
A trial court’s findings of fact have the same force and dignity as a jury’s
answers to jury questions and are reviewable for legal and factual sufficiency of the
evidence to support them by the same standards. Catalina v. Blasdel, 881 S.W.2d 295,
297 (Tex. 1994); Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991); see
also MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 663 n.3 (Tex. 2009).
When the appellate record contains a reporter’s record, findings of fact on disputed
issues are not conclusive and may be challenged for the sufficiency of the evidence.
Sixth RMA Partners, L.P. v. Sibley, 111 S.W.3d 46, 52 (Tex. 2003); Allison v. Conglomerate
Gas II, L.P., No. 02-13-00205-CV, 2015 WL 5106448, at *6 (Tex. App.—Fort Worth
Aug. 31, 2015, no pet.) (mem. op.). We defer to unchallenged findings of fact that are
supported by some evidence. Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC,
437 S.W.3d 518, 523 (Tex. 2014).
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 credible
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); Cain v. Bain,
709 S.W.2d 175, 176 (Tex. 1986); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965).
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The factfinder is the sole judge of the credibility of the witnesses and is
responsible for resolving conflicts in the evidence, weighing the evidence, and
drawing reasonable inferences from basic facts to ultimate facts. City of Keller v. Wilson,
168 S.W.3d 802, 819 (Tex. 2005); Sw. Bell Tel. Co. v. Garza, 164 S.W.3d 607, 625 (Tex.
2004); Walker v. Walker, No. 02-13-00229-CV, 2014 WL 2619147, at *1 (Tex. App.—
Fort Worth June 12, 2014, pet. denied) (mem. op.).
Father correctly contends that his lower annual pay alone does not allow us to
presume his intentional underemployment. After Father put on evidence that he
earns $60,000 annually at his new job at iWT Health, which “deals in workflow, in
[the] space that [he has] served in for most of [his] healthcare career,” Mother had the
burden to shown that Father’s actual current earnings are “significantly less than his
earnings potential,” Trumbull v. Trumbull, 397 S.W.3d 317, 321 (Tex. App.—Houston
[14th Dist.] 2013, no pet.) (internal quotation marks omitted), and that he is
intentionally underemployed. Tex. Fam. Code Ann. § 154.066; Iliff, 339 S.W.3d at 81–
82. Mother satisfied her burden.
First, Mother elicited testimony through cross-examination of Father, the trial
court admitted Mother’s proffered exhibits, and Father answered the trial court’s
unobjected-to questions, all of which supported the trial court’s unchallenged findings
that Father earned:
• approximately $80,000 for about eight months of work in 2015;
• $140,000 for only seven or eight months of work in 2014;
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• $150,000 in 2013; and
• $150,000, including commissions, during the prior three years when he
worked for Quantros.
Second, as the trial court pointed out, there was no evidence of “any sort of
industry downturn or that the industry [Father’s] in is shutting down. He doesn’t
work in the oil and gas industry or anything of that nature.” Third, Father testified on
cross-examination that he received only one other offer, which was for an all-
commission sales position requiring frequent travel, before taking his current job and
that the current job is only “slightly different” than the jobs he held in the previous
several years when he was earning more than double his current salary. Fourth, while
Father testified that he “would absolutely consider” an offer paying substantially more
money for a “dream job” if it came along, he admitted he was not currently looking
for a different job.
Fifth, Father also admitted on cross-examination that the $100,000 he netted
from the sale of his separate property home in 2015 ultimately went toward the new
home he purchased with his current wife.
Sixth, while Father testified that child support computed under his current
salary was in the children’s best interest—a claim Mother disputed in her testimony—
he also admitted that:
• the three children were teenagers;
• the then seventeen-year-old daughter was “involved in many activities”;
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• the then sixteen-year-old daughter is severely disabled, functions like an
eighteen-month-old, and is “needy”; and
• with standard possession during the school year, Mother physically
possesses the children the majority of the time.
We hold that Mother therefore satisfied her burden to prove that Father’s
current income is significantly less than his earnings potential and that he is
intentionally underemployed. The trial court as factfinder could have inferred that
Father’s months-long job search before accepting his current position was not as
intensive as it should have been, and no evidence indicated that Father’s pursuit of his
own happiness justifiably outweighed his duty to provide for his three teenagers, one
of whom has special needs. See Iliff, 339 S.W.3d at 82. The evidence is sufficient to
support the challenged finding; consequently, the trial court did not abuse its
discretion by finding that Father is intentionally underemployed. We overrule
Father’s first issue.
V. The Trial Court Correctly Applied the Child Support Guidelines to
Father’s Potential Earnings to Establish His Child Support Obligation.
In his second issue, Father contends that the trial court abused its discretion by
establishing child support based on his potential earnings instead of his actual income
and by not following the child support guidelines. Because we have upheld the trial
court’s finding that Father is intentionally underemployed, we hold that the trial court
did not abuse its discretion by computing child support based on his potential
earnings. See Tex. Fam. Code Ann. § 154.066(a); Iliff, 339 S.W.3d at 81.
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Further, as the trial court found, it followed the child support guidelines, basing
child support on Father’s earnings potential of $125,000 a year:
I base that on the fact that when I go back and average his annual
incomes from the employment that I’ve been given evidence of, it is
somewhere there in that neighborhood. And I think he has the
capability of getting a job that would pay that amount. He’s always done
that in the past until recently. And so that is what I believe that he could
do.
Taking Father’s salaries for 2010 through 2015, he earned about $150,000 for
the first four years, his partial-year earnings for 2014 reflected a yearly gross salary
potential of about $210,000, and his partial-year earnings for 2015 reflected a yearly
gross salary potential of $120,000. Adding those six amounts and dividing by six years
yields an average annual income potential of $155,000, and that does not take into
consideration the $100,000 net proceeds from the sale of his separate property home
in 2015. Accordingly, we hold that the trial court did not abuse its discretion by
applying the child support guidelines to Father’s potential earnings of $125,000, and
we overrule his second issue. See Tex. Fam. Code Ann. § 154.066(a); Coburn,
433 S.W.3d at 835.
CONCLUSION
Having overruled Father’s two issues, we affirm the trial court’s judgment.
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/s/ Mark T. Pittman
Mark T. Pittman
Justice
Delivered: October 25, 2018
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