Belcher v. Terry, No. 20530

• Court: Supreme Court of West Virginia
• Writing for the Court: WORKMAN
• Citation: 420 S.E.2d 909,187 W.Va. 638
• Parties: , 61 USLW 2176 Darlene BELCHER and Melissa Arnold, Plaintiffs Below, Petitioners, v. Mary TERRY, Acting Director of the Child Advocate Office, West Virginia Department of Human Resources, and Taunja Willis Miller, Secretary of the West Virginia Department of Health and Human Resources, Defendants Below, Respondents.
• Docket Number: No. 20530
• Decision Date: 16 July 1992

Page 909

420 S.E.2d 909 187 W.Va. 638, 61 USLW 2176 Darlene BELCHER and Melissa Arnold, Plaintiffs Below, Petitioners,
v.
Mary TERRY, Acting Director of the Child Advocate Office,
West Virginia Department of Human Resources, and Taunja
Willis Miller, Secretary of the West Virginia Department of
Health and Human Resources, Defendants Below, Respondents. No. 20530. Supreme Court of Appeals of
West Virginia. Submitted Jan. 28, 1992.
Decided July 16, 1992.

Page 910

[187 W.Va. 639] Syllabus by the Court

1. West Virginia Code § 48A-5-3(o) (Supp.1991) makes it a misdemeanor for a source of income to knowingly and willfully conceal the fact that the source of income is paying income to an obligor with the intent to avoid withholding from the obligor's income of amounts payable as support.

2. " 'Matured installments provided for in a decree, which orders the payment of monthly sums for alimony or child support, stand as "decretal judgments" against the party charged with the payments.' Syl. Pt. 1, Goff v. Goff, W.Va. , 356 S.E.2d 496 (1987)." Syl. Pt. 1, Hudson v. Peck, 183 W.Va. 300, 395 S.E.2d 544 (1990).

3. A source of income is liable to an obligee for any amount of child support which the source of income fails to withhold from the obligor's wages where the [187 W.Va. 640]

Page 911

source of income knowingly and willfully enters into an agreement to pay an obligor his wages in cash in order to assist the obligor in evading child support payments. To establish that a source of income is knowingly and willfully engaged in such conduct, the obligee must produce clear, cogent and convincing evidence that the source of income had knowledge of the obligor's intent to evade child support payments through receipt of cash wages.

4. Punitive damages are recoverable against an obligor and the source of income where evidence demonstrates that the obligor and the source of income knowingly and willfully engaged in a cash wage agreement so that the obligor could evade paying child support.

5. An obligee of a child support order can institute proceedings against obligors and sources of income to obtain payment of child support where the Child Advocate Office fails or refuses to bring such action.

6. The Child Advocate Office has the authority to institute civil actions for compensatory and punitive damages against sources of income for failing to withhold child support payments. The existence of such authority in the Child Advocate Office in no way limits the right of obligees to themselves institute civil actions against sources of income where the Child Advocate Office fails or refuses to bring action.

Daniel F. Hedges, Charleston, for petitioners.

Jeffrey K. Matherly, Asst. Atty. Gen., Charleston, for respondents.

WORKMAN, Justice:

This case is before the Court upon an August 27, 1991, order of the Circuit Court of Kanawha County which certified the following question to this Court:

Is the employer of an obligor of child support or alimony who enters into a cash payment arrangement for the services of his employee in order to assist the obligor in avoiding the duty of payment of child support or alimony liable for actual and punitive damages resulting therefrom. ¹

The lower court answered this question in the affirmative. Upon review of the arguments of the parties and all the matters of record submitted before the Court, we agree with the lower court's answer to the certified question.

BELCHER

This action involves two separate obligors who have attempted to evade their respective child support obligations by entering into cash employment arrangements with their employers. The stipulated facts ² reveal that on October 6, 1987, the obligor, Timothy Belcher, and the petitioner, Darlene Belcher, were granted a divorce in which Mr. Belcher was ordered to pay thirty dollars per month child support. Mr. Belcher paid nothing in 1988, a total of ninety dollars in 1989 and nothing in 1990.

Since the late fall of 1989, Mr. Belcher was employed by Dennis Browning d/b/a Dude's Used Auto Sales, as a mechanic. Mr. Belcher and his employer entered into an agreement whereby the employer paid Mr. Belcher's wages in cash without making

Page 912

[187 W.Va. 641] any payroll deductions and without reporting the payment of these wages or paying any payroll taxes to the appropriate state and federal authorities.

In January 1990, the petitioner filed a request for services with the respondent Child Advocate Office (hereinafter referred to as CAO) in the Lincoln County office. The petitioner's request provided the CAO with information and evidence regarding Mr. Belcher's employment status. From January 1990 through June 1990, the petitioner continually advised the CAO of the obligor's continued employment, the type of employment and the specific location of the employment. The CAO consistently denied the existence of the obligor's employment, refused to investigate the petitioner's reports that the obligor was employed, refused to take legal steps to recover the support payments due, and maintained that there was absolutely no potential for collecting any child support.

Consequently, in July 1990, the petitioner filed a complaint in the Circuit Court of Lincoln County, West Virginia, against the obligor and his employer, seeking a declaration relative to nonpayment of child support on the part of the obligor and the unlawful employment remuneration arrangement between the obligor and his employer. As a result of this complaint, a settlement order ³ was entered on December 10, 1990, between the petitioner, Mr. Belcher, and his employer. The CAO never took any action against the employer.

ARNOLD

On November 29, 1990, the petitioner, Melissa Arnold, completed an application for CAO services and provided it to the CAO office. In the application, the petitioner notified the CAO of Roger Arnold's, the obligor's, employment. No action was taken by the CAO concerning the petitioner's application.

Then, on January 24, 1991, the petitioner was granted a divorce from the obligor. Pursuant to the order granting the divorce, which was entered on February 11, 1991, the obligor was required to pay $250 per month in child support. The stipulated facts indicate that the obligor has failed to make any child support payments.

The facts further indicated that after Mr. Arnold's child support obligation became clear, he told the petitioner that he switched to a cash employment arrangement to defeat his duty to pay child support. Since March 1991, the obligor has been employed by George Stone d/b/a George Stone, Inc., under an arrangement whereby the employer paid the obligor's wages in cash without making any payroll deductions and without reporting the payment of the wages or paying the appropriate payroll taxes to state and federal authorities. The obligor works for this employer six days a week on a full-time basis. Moreover, the petitioner observes the obligor in his employment almost every day.

In March 1991, the petitioner provided the CAO in Lincoln County with information and evidence regarding the obligor's employment status. The petitioner again in April 1991 informed the CAO about the obligor's employment. The petitioner has still not received a single child support payment, nor has she received any information from the CAO regarding her case. Moreover, according to the petitioner, a review of the petitioner's CAO file by counsel

Page 913

[187 W.Va. 642] on July 22, 1991, indicated not a single activity in the file relative to this petitioner or obligor since it was opened. Unlike the Terry case, no lawsuit has been filed by petitioner Arnold against the obligor and/or his employer.

I.

The first issue is whether a source of income ⁴ who knowingly and willfully enters into an agreement with an obligor of child support to pay the obligor his wages in cash so that the obligor can conceal his employment and evade paying child support is liable for actual and punitive damages resulting from the agreement with the obligor. The petitioners maintain that the sources of income are liable for actual and...