Ghidotti v. Barber

• Decision Date: 28 December 1998
• Docket Number: No. 11,Docket No. 109112,11
• Citation: Ghidotti v. Barber, 586 N.W.2d 883, 459 Mich. 189, 1998 WL 898841 (Mich. 1998)
• Parties: James A. GHIDOTTI, Plaintiff-Appellee, v. Brenda BARBER, Defendant-Appellant. Calendar
• Court: Michigan Supreme Court

Page 883

586 N.W.2d 883

459 Mich. 189

James A. GHIDOTTI, Plaintiff-Appellee, v. Brenda BARBER, Defendant-Appellant.

Docket No. 109112.

Calendar No. 11.

Supreme Court of Michigan.

Argued Oct. 7, 1998.

Decided Dec. 28, 1998.

Violet K. Hinton, Battle Creek, MI for the plaintiff-appellee.

Jeanne M. McGuire, Battle Creek, MI and Michael O. Nelson, Grand Rapids, MI for the defendant-appellant.

Anne N. Schroth, Ann Arbor, MI, amici curiae, for Legal Services Association of Michigan and Women Lawyers Association of Michigan.

BRICKLEY, J.

This appeal raises the question whether the custodial mother of two minor children, ages fourteen and thirteen, whose sole source of income is means-tested public assistance, ¹ can be deemed to be voluntarily unemployed and thereby have an income imputed to her as the basis for her child support obligation to a noncustodial third child. The statutorily authorized Michigan Child Support Formula Manual prohibits the imputation of means-tested public assistance benefits as income. While a trial court may enter an order of support that deviates from the formula, it may not do so without setting forth in writing or on the record why following the formula would be unjust or inappropriate. ² Additionally this Court has required the trial court to evaluate a number of factors in determining the actual ability and likelihood of earning the imputed income. Sword v. Sword, 399 Mich. 367, 249 N.W.2d 88 (1976). The Michigan Child Support Formula Manual also requires the evaluation of certain equitable factors when deciding to impute income. In the instant case, the trial court failed to comply with these requirements. Accordingly, we reverse the judgment of the Court Appeals and remand this case to the trial court for a new calculation of the support order.

I

Plaintiff James Ghidotti and defendant Brenda Barber are the parents of James Allen Ghidotti, Jr., born November 30, 1987. The parties were never married. Judge Kingsley of the 37th Circuit Court granted physical custody of James Jr. to his father, the plaintiff, on May 18, 1993.

Defendant has custody of two minor daughters, ages fourteen and thirteen, from a previous marriage. The father of the two girls, defendant's ex-husband, is incarcerated and does not pay child support. At the time this case was before the trial court, defendant and her daughters received $356 a month in Aid to Families with Dependent Children benefits. At the same time, plaintiff earned approximately $370 a week from employment.

Pursuant to an order from the trial court, the friend of the court for Calhoun County conducted a child support review of defendant's obligation to her noncustodial son, James Jr. The friend of the court prepared two recommendations regarding defendant's child support obligations. ³ The first recommendation, which was based on defendant's actual income, set the support level at $0.00. When calculating the second recommendation, the friend of the court determined that defendant did not suffer from any condition or restriction that would preclude her from obtaining gainful employment. Accordingly, the friend of the court deemed defendant to be voluntarily unemployed and calculated an imputed income for defendant equaling $170 a week. The imputed income equaled what defendant would earn if she worked at a minimum wage job for forty hours a week. The second recommendation, which was based on defendant's actual income, plus her imputed income, set defendant's child support obligation at $33 a week; this amount included $22 a week for child support and $11 a week for child care.

On May 16, 1994, the trial court heard testimony regarding the child support review. Defendant argued that, because she was receiving AFDC and food stamp support for her other two children, she could not be required to pay child support. The court disagreed and set the level of child support at $33 a week, imputing income to defendant and adopting the second calculation of the Friend of the Court.

Defendant appealed this ruling, but the Court of Appeals denied leave. This Court remanded the case to the Court of Appeals as on leave granted. 449 Mich. 861, 535 N.W.2d 794 (1995). The Court of Appeals affirmed the trial court's award of child support at the rate of $33 a week, holding that

the fact that a party receives an ADFC grant is irrelevant when determining whether a parent is voluntarily unemployed and the amount of child support that a voluntarily unemployed noncustodial parent will pay for the benefit of the noncustodial child. [222 Mich.App. 373, 380, 564 N.W.2d 141 (1997).]

Defendant appealed the ruling of the Court of Appeals, and this Court granted leave on April 1, 1998. 456 Mich. 959, 577 N.W.2d 690.

II

At the time this case was decided, defendant was a recipient of AFDC, which the federal welfare program was called at that time. The Personal Responsibility and Work Opportunity Reconciliation Act, Pub L 104-193, 110 Stat 2105 (codified as 42 USC 601-1788), replaced AFDC with Temporary Assistance for Needy Families, TANF as part of the federal welfare reform program enacted in 1996. Because the Michigan Family Independence Agency has elected to use TANF funds as AFDC funds were used previously, to provide cash assistance to needy families with minor children, the analysis of defendant's situation remains the same.

The stated purpose of TANF can be found at 42 USC 601(a), which provides:

In general. The purpose of this part [42 USC 601 et seq.] is to increase the flexibility of States in operating a program designed to--

(1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;

(2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;

(3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and

(4) encourage the formation and maintenance of two-parent families.

In order to receive federal funds under the TANF program, a state is required to "establish guidelines for child support award amounts within the State." 42 USC 667(a). This statute also requires that

[t]here shall be a rebuttable presumption, in any judicial or administrative proceeding for the award of child support, that the amount of the award which would result from the application of such guidelines is the correct amount of child support to be awarded. A written finding or specific finding on the record that the application of the guidelines would be unjust or inappropriate in a particular case, as determined under criteria established by the State, shall be sufficient to rebut the presumption in that case. [42 USC 667(b)(2).]

The Legislature complied with these requirements when it enacted M.C.L. § 722.717(3); MSA 25.497(3), stating that "the court shall order support in an amount determined by application of the child support formula developed by the state friend of the court bureau." ⁴ The statute goes on to state that the court may enter an order of support that varies from that mandated by the guidelines, but only if the court determines from the facts of the case that application of the child support formula would be unjust or inappropriate and sets forth in writing or on the record the following:

(a) The support amount determined by application of the child support formula.

(b) How the support order deviates from the child support formula.

(c) The value of property or other support awarded instead of the payment of child support, if applicable.

(d) The reasons why application of the child support formula would be unjust or inappropriate in the case. [MCL 722.717(3); MSA 25.497(3).]

The Friend of the Court Bureau has written, distributed, and frequently revised the Michigan Child Support Formula Manual pursuant to this legislative mandate.

The relevant language of the manual states:

Imputation is not appropriate where:

1. A payee/payer source of income is a means tested income such as Temporary Assistance to Needy Families (TANF), Family Independence Payments (FIP)(formerly AFCD), Food Stamps, Supplemental Security Income (SSI), etc. [Michigan Child Support Formula Manual, tenth rev, 1998, p 8 (emphasis in the original).]

III

In reaching its decision in the present case, the Court of Appeals recognized the prohibition contained in the manual against imputation of means-tested public assistance benefits as income. ⁵ However, while acknowledging that defendant had no source of income other than AFDC and that this could not be counted as income for the purpose of a child support calculation, the Court of Appeals upheld the trial court's decision to deem defendant as voluntarily unemployed and thereby able to work:

[The court] apparently viewed [defendant] as it should and does view all unemployed yet employable noncustodial parents who, for one reason or another, have no job and claim an inability to financially support a child. [222 Mich.App at 377-378, 564 N.W.2d 141.]

The trial court's decision that defendant was employable was based on the finding of the Calhoun Friend of the Court's investigation that she "suffered from no condition or restriction that would preclude her from obtaining gainful employment." Id. at 375, 564 N.W.2d 141.

The Court of Appeals approval of imputation of income to a parent in defendant's situation is based on a misunderstanding of the applicable statutes and case law.

A

According to the applicable statutes, the child support formula "shall be based upon the needs of the child and the actual resources of each parent." MCL 552.519(3)(a)(vi); MSA 25.176(19)(3)(a)(vi). In applying this mandate, cases have broadened the limits of "actual resources" to include certain payers' unexercised ability to pay. See, e.g., Rohloff v. Rohloff, 161 Mich.App. 766, 411 N.W.2d 484 (1987) (a trial court may order...