Holland v. Holland

• Decision Date: 05 April 2005
• Docket Number: No. COA03-1501.,COA03-1501.
• Court: North Carolina Court of Appeals
• Parties: Norwood Mark HOLLAND, Plaintiff v. Janice Martin HOLLAND, Defendant.

610 S.E.2d 231

169 NC App. 564

Norwood Mark HOLLAND, Plaintiff v. Janice Martin HOLLAND, Defendant.

No. COA03-1501.

Court of Appeals of North Carolina.

April 5, 2005.

Wyrick, Robbins, Yates & Ponton, L.L.P., by K. Edward Greene and Donald L. Beci, Raleigh, for plaintiff-appellant.

Tharrington Smith, L.L.P., by Lynn P. Burleson and Jill Schnabel Jackson, Raleigh, for defendant-appellee. CALABRIA, Judge.

Norwood Mark Holland ("plaintiff") appeals from an amended order entered 10 January 2003 directing him to pay permanent child support for his minor child, attorney's fees to the custodial parent, Janice Martin Holland ("defendant"), and eighty percent of the minor child's uninsured medical or dental expenses. Plaintiff additionally appeals from a 3 March 2003 order denying his Rule 59 and Rule 60 motions pertaining to the trial court's 3 December 2002 child support order. We reverse and remand.

Plaintiff and defendant were married 21 December 1997, separated 6 October 2000, and divorced 15 November 2001. One child was born to the parties on 17 November 1998. On 17 January 2001, plaintiff filed a complaint for, inter alia, child custody and child support. In his first claim for relief, plaintiff alleged it would be in the best interest of the minor child for the parties to be awarded joint custody. Plaintiff further alleged that he and defendant owed a duty of support to the minor child and were capable of providing adequate support.

Defendant filed an answer and counterclaims on 23 January 2001, which included, inter alia, counterclaims for child custody, child support, and reasonable attorney's fees. Approximately three months later, the trial court entered a temporary child support order requiring plaintiff to pay defendant $1,077.91 per month, but declined to enter an order for child custody until the parties had attended custody mediation, scheduled for May 2001.

On 16 October 2001, approximately five months after entry of the temporary child support order, plaintiff filed a motion to modify the order claiming the amount ordered was unreasonable and requesting a determination by the trial court of a reasonable and fair amount of child support. On 15 November 2001, the parties consented to custody and visitation. Pursuant to a consent order, custody of the minor child was awarded to defendant; plaintiff was awarded visitation privileges. This consent order did not include any reference to plaintiff's previously filed motion to modify the temporary child support, and the record does not reflect whether the trial court ever ruled on this motion.

A few months after the consent order for custody and visitation, on 2 August and 27 September 2002, hearings were held regarding child support. The trial court found plaintiff and defendant were both employed. Plaintiff had been employed since 1988 as a farmer and managed his mother and father's farm as well as his own farming operation. Defendant was employed as an administrative assistant at a local church, earning a monthly net income of approximately $1,600.00 with expenses in excess of her monthly income. The trial court summarized plaintiff's 2001 farming activities, and its pertinent findings of fact focused on his 2001 income and expenses. The trial court found, in pertinent part, the following facts: (1) plaintiff's yearly gross income was $99,376.00; (2) plaintiff deducted $65,006.00 for accelerated depreciation expenses; (3) plaintiff's adjusted gross income was $34,370.00; and (4) plaintiff was capable of providing child support in the amount of $1,061.38 per month beginning 1 December 2002 and was also capable of paying reasonable attorney's fees. The trial court additionally found neither party requested a deviation from the North Carolina Child Support Guidelines (the "Child Support Guidelines"). Based on these facts, the trial court entered a child support order on 3 December 2002 ordering plaintiff to pay: (1) child support in the amount of $1,061.38; (2) eighty percent of the child's uninsured medical or dental expenses, with defendant to pay the remaining twenty percent; and (3) $5,000.00 to defendant as attorney's fees.

On 9 December 2002, plaintiff filed a motion for relief from judgment, for amendment of the child support order, and for a new trial based on the trial court's use of his 2001 tax return to determine child support rather than his income at the time of the hearing. On 10 January 2003, the trial court entered an amended order. The trial court's findings of fact, conclusions of law, and orders were identical to the prior order with the exception that plaintiff was found to be capable of and ordered to provide child support in the amount of $1,055.99 per month instead of $1,061.38.

Plaintiff asserts the trial court committed reversible error by improperly determining his income because the trial court based the child support order on defendant's 2001 tax return instead of his income at the time the amended order was entered. We agree.

In pertinent part, N.C. Gen.Stat. § 50-13.4(c1) (2003) states:

[T]he Conference of Chief District Judges shall prescribe uniform statewide presumptive guidelines for the computation of child support obligations of each parent ... and shall develop criteria for determining when, in a particular case, application of the guidelines would be unjust or inappropriate.... The purpose of the guidelines and criteria shall be to ensure that payments ordered for the support of a minor child are in such amount as to meet the reasonable needs of the child... having due regard to the estates, earnings, conditions, accustomed standard of living of the child and the parties, the child care and homemaker contributions of each party, and other facts of the particular case.

The Child Support Guidelines "apply as a rebuttable presumption in all legal proceedings involving the child support obligation of a parent...." N.C. Child Support Guidelines, 2005 Ann. R. N.C. 47. We review a trial court's child support orders under an abuse of discretion standard, Leary v. Leary, 152 N.C.App. 438, 441, 567 S.E.2d 834, 837 (2002), and failure to follow the Child Support Guidelines without support of proper findings of fact constitutes reversible error. Rose v. Rose, 108 N.C.App. 90, 93, 422 S.E.2d 446, 447 (1992).

Under the Child Support Guidelines, "[c]hild support calculations... are based on the parents' current incomes at the time the order is entered." N.C. Child Support Guidelines 2005 Ann. R. N.C. 49 (emphasis added). While the Child Support Guidelines provide that "[d]ocumentation of current income must be supplemented with copies of the most recent tax return to provide verification of earnings over a longer period[,]" id., this Court has "established that child support obligations are ordinarily determined by a party's actual income at the time the order is made or modified." Ellis v. Ellis, 126 N.C.App. 362, 364, 485 S.E.2d 82, 83 (1997) (emphasis added). "[T]he court must determine [the parent's] gross income as of the time the child support order was originally entered, not as of the time of remand nor on the basis of [the parent's] average monthly gross income over the years preceding the original trial." Lawrence v. Tise, 107 N.C.App. 140, 149, 419 S.E.2d 176, 182 (1992).

The trial court may deviate from this rule and consider "`a party's capacity to earn income ... if it is found that the party deliberately depressed [his] income or otherwise acted in deliberate disregard of the obligation to provide reasonable support for [his] child' ... [and] `that [the party's] actions which reduced his income were not taken in good faith.' "Ellis, 126 N.C.App. at 364,485 S.E.2d at 83 (quoting Askew v. Askew, 119 N.C.App. 242, 244-45, 458 S.E.2d 217, 219 (1995)). Additionally, after the trial court has determined the presumptive amount of child support based on a parent's current income, "the trial court may deviate from the presumptive amount if it determines that the ... amount `would not meet or would exceed the reasonable needs of the child considering the relative ability of each parent to provide support or would otherwise be unjust or inappropriate.'" Tise, 107 N.C.App. at 150, 419 S.E.2d at 182 (quoting N.C. Gen.Stat. § 50-13.4(c)).

In the instant case, child support hearings were held on 2 August and 27 September 2002, and the trial court entered the child support order on 3 December 2002. About six weeks later, on 10 January 2003, an amended order was entered. However, neither order included findings concerning plaintiff's 2002 income. Rather, in both orders, the trial court expressly based the child support amount on plaintiff's 2001 income. Due to the nature of plaintiff's farming business, and the fact that most of his crops would have been harvested and sold in the late summer and fall, it would have been difficult for the trial court to have computed plaintiff's 2002 income with any degree of accuracy. While we believe the trial court could have used plaintiff's 2001 income to determine his income for purposes of computing his child support obligation, the order fails to support this approach with the necessary findings of fact. See generally Greer v. Greer, 101 N.C.App. 351, 399 S.E.2d 399 (1991)

. Accordingly, we reverse and remand the order for findings concerning plaintiff's 2002 income and for the entry of a child support order on that basis.

Plaintiff also asserts the trial court erred in its method of computing his income from his 2001 tax return. Since it is likely to recur upon remand, we deem it necessary to address this issue.

The trial court's findings of fact 22, 23, and 24 read as follows:

22. The plaintiff's 2001 U.S. Individual Income Tax Return indicated an adjusted gross income of

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