Barber v. Cahill

• Decision Date: 19 June 1997
• Citation: 658 N.Y.S.2d 738,240 A.D.2d 887
• Parties: In the Matter of Julie L. BARBER, Respondent, v. James CAHILL, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 738

658 N.Y.S.2d 738

240 A.D.2d 887

In the Matter of Julie L. BARBER, Respondent, v. James CAHILL, Appellant.

Supreme Court, Appellate Division Third Department.

June 19, 1997.

McGovern, Kehoe & Mitchell (Thomas A. Mitchell, of counsel), Troy, for appellant.

James P. Walsh, Albany, for respondent.

Before MERCURE, J.P., and CASEY, PETERS, SPAIN and CARPINELLO, JJ.

CARPINELLO, Justice.

Appeal from an order of the Family Court of Albany County (Maney, J.), entered August 6, 1996, which granted petitioner's application, in a proceeding pursuant to Family Court Act article 4, to direct respondent to pay for support of his child.

Petitioner and respondent are the parents of a child born in 1995. In June 1995, a temporary order directing respondent to pay $25 per week in child support was entered. Subsequently, petitioner commenced this proceeding seeking permanent child support and arrears. Following a hearing, the Hearing Examiner determined respondent's adjusted gross income as a self-employed electrician to be $18,036 annually and, after deducting child support payments he paid for his three other children, awarded petitioner $25 per month in child support.

Following objections by petitioner, Family Court reversed this award and remitted the case to the Hearing Examiner for a recalculation of respondent's income. On remittal, the Hearing Examiner determined respondent's adjusted gross income to be $50,993.28 and, based on a combined parental income of $83,889, ordered him to pay $329.10 in biweekly child support, as well as 60% of the child's health insurance costs and childcare costs. With one exception, respondent's objections to the amended findings of fact and order on remand were denied by Family Court. ¹ Respondent appeals.

Respondent contends that, for the purposes of the Child Support Standards Act (Family Ct. Act § 413) (hereinafter CSSA), his income should have been determined solely on the basis of the figure reported on line 22 of his 1994 Federal income tax return, which was $14,316. We cannot agree. Family Court Act article 4 does not so narrowly define a parent's income (see, Family Ct. Act § 413[1][b][5] ) nor has this term been so narrowly defined by the courts (see, e.g., Matter of Liebman v. Liebman, 229 A.D.2d 778, 645 N.Y.S.2d 581; Matter of Smith v. Smith, 197 A.D.2d 830, 831, 602 N.Y.S.2d 963).

In connection with his self-employment, respondent reported gross receipts of $86,303 in 1994 and a gross profit of $47,582. Respondent claims that his income for the purpose of calculating child support should be adjusted to reflect various business expenses and depreciation listed on schedule C of his 1994 tax return. We find that Family Court could properly determine that the $7,958 claimed as depreciation was not an actual, out-of-pocket business expense incurred by respondent impacting his ability to pay child support (see, Matter of Westchester County Dept. of Social Servs. [Rosa B.] v. Jose C., 204 A.D.2d 795, 611 N.Y.S.2d 704).

With respect to the other business expenses outlined on schedule C, however, there is no evidence in the record that these expenses were not actually incurred by respondent in his business (cf., Matter of Liebman v Liebman, supra; Matter of Mireille J. v. Ernst F.J., 220 A.D.2d 503, 632 N.Y.S.2d 162). Although the statute itself contains no explicit authorization to deduct the business expenses of a self-employed individual from income (compare, Family Ct Act § 413[1][b][5][vii][A] ), "earnings" for the purpose of the CSSA has been defined as "gross income less allowable business expenses " (Bottitta v. Bottitta, 194 A.D.2d 510, 513, 598 N.Y.S.2d 304 [emphasis supplied] ). We find that Family Court erred in not allowing these business expenses, totaling $14,660 exclusive of depreciation, to be deducted from the gross profit reported on respondent's tax return.

We are also persuaded by respondent's contention that Family Court improperly imputed $8,671.28 to his total income. This figure represents alleged personal expenses charged to respondent's business account and paid with business funds. Although Family Court Act § 413 gives courts considerable discretion to impute income from various resources (see, Family Ct. Act § 413[1][b][5][iv] ), we note initially that there is nothing in the record to substantiate this figure. In any event, the record establishes that respondent utilized one bank account for both business and personal expenses. Respondent's payment of personal expenses from...