Hollinsworth v. Hollinsworth

• Citation: 2008 SD 102,757 N.W.2d 422
• Decision Date: 29 October 2008
• Docket Number: No. 24811.,24811.
• Parties: Marnie Joanne HOLLINSWORTH, Plaintiff and Appellant, v. Jackie Don HOLLINSWORTH, Defendant and Appellee.
• Court: Supreme Court of South Dakota

757 N.W.2d 422

2008 SD 102

Marnie Joanne HOLLINSWORTH, Plaintiff and Appellant, v. Jackie Don HOLLINSWORTH, Defendant and Appellee.

No. 24811.

Supreme Court of South Dakota.

Considered on Briefs September 29, 2008.

Decided October 29, 2008.

H.I. King of Tonner, Tobin & King, LLP, Aberdeen, SD, for plaintiff and appellant.

Gregg Magera, Julia M. Dvorak of Siegel, Barnett & Schutz, LLP, Aberdeen, SD, for defendant and appellee.

MEIERHENRY, Justice.

[¶ 1.] Marnie Hollinsworth Lammle (Mother) appeals the circuit court's order reducing child support owed by Jackie Hollinsworth (Father). Mother claims that the circuit court erred (1) by deviating downward from the child support schedule based on Mother's underemployment and (2) by not deviating upward based on Father's alleged voluntary act of reducing his income. We reverse the circuit court's decision on issue (1) and affirm on issue (2).

FACTS

[¶ 2.] The parties were married on May 2, 1987. Mother worked as a dental assistant until the birth of the parties' first child in 1994. She then left the workforce to care for the child. She remained out of the workforce until after the birth of the parties' second child in 1996, when she became employed part-time. During the parties' marriage, Mother earned her Bachelor's Degree in Biology and began study towards a Master's Degree in Education, which she completed after the divorce.

[¶ 3.] The couple divorced in 2001. At the time of the divorce, they lived in Aberdeen, South Dakota. The divorce decree granted the parties joint custody of the two children, with Mother having primary physical custody. Father's child support obligation was set at $1,010.50 per month.¹

[¶ 4.] In May of 2007, the custodial arrangement changed and the oldest child decided to live with Father in Aberdeen, South Dakota. Mother had remarried and moved to Watertown, South Dakota, and had another child from the subsequent marriage. A stipulation and order changed custody of the parties' oldest child and ordered that child support be recalculated pursuant to SDCL 25-7-6.23.²

[¶ 5.] Shortly thereafter, Father petitioned for a referee hearing to recalculate the child support amount. At the time of the referee hearing, Mother worked part-time for South Dakota Game, Fish and Parks at less than minimum wage. Consequently, the referee imputed her income at minimum wage in the amount of $884 gross monthly income. The referee determined that Father's gross monthly income was $5,859. Based on these figures, the referee set Father's child support obligation at $752 per month.³ Both parties had requested a deviation. Mother requested a deviation per SDCL 25-7-6.10(5) because of her obligation to support her subsequent child. Father requested a deviation per SDCL 25-7-6.10(6) claiming that Mother voluntarily reduced her income by not working full-time utilizing her Masters degree. The referee denied both parties' deviation requests in its report to the circuit court.

[¶ 6.] Father objected to the referee's report in circuit court. His objections relevant to this appeal were: (1) that his income had decreased because his job status had changed since the referee hearing, and (2) that the referee erred in imputing minimum wage to Mother rather than imputing a salary more suitable to her education level. Mother did not object to the referee's first report.

[¶ 7.] To show his reduced income, Father presented evidence to the circuit court that his previous employer, a construction contractor, had terminated his employment for no fault of Father's, but as part of a business decision. As part of Father's termination, his employer offered to pay 90 days severance pay plus a $25,000 bonus if Father signed a contract not to compete as a construction contractor. Father decided to forgo the severance pay offer and start his own construction company in competition with his previous employer during the 90-day period.

[¶ 8.] Ruling on Father's objections, the circuit court rejected the referee's report and remanded the matter to the referee for a new hearing with directions (1) to consider Father's reduced income and (2) to consider whether a deviation should be granted for the voluntarily reduction of income by either party, i.e. Mother's underemployment and Father's decision to forego the severance pay. As a result of the new hearing, the referee issued a second report in which the referee calculated Father's monthly child support obligation at $552 based on his annual income of $70,000.⁴ The referee again denied both parties' requests for deviation.

[¶ 9.] Father objected to the referee's second report claiming that the referee erred by not granting a deviation based on Mother's underemployment per SDCL 25-7-6.10(6). Likewise, Mother objected to the referee's second report on the basis that the referee should have deviated from the schedule because Father voluntarily reduced his income per SDCL 25-7-6.10(6) by rejecting the severance pay and non-compete agreement.

[¶ 10.] Upon review, the circuit court modified the referee's report to grant Father's deviation request. The circuit court utilized SDCL 25-7-6.10(6) to determine that Mother was voluntarily underemployed. The court determined that Mother voluntarily elected to work part-time for approximately $10,000 per year rather than to work at a higher paying job more commensurate with her Master's Degree in Education. Based on Mother's underemployment, the court granted Father a downward deviation of $152 resulting in a child support obligation of $400 for Father. The circuit court affirmed the referee's denial of Mother's deviation request. Mother appeals raising two issues.

ISSUES

1) Whether the circuit court erred when it granted Father a deviation based upon Mother's voluntary underemployment.

2) Whether the circuit court erred by not granting a deviation based on Father's voluntary rejection of his employer's severance pay offer.

STANDARD OF REVIEW

[¶ 11.] "We review the decision to grant or deny child support under the abuse of discretion standard." Kauth v. Bartlett, 2008 SD 20, ¶ 8, 746 N.W.2d 747, 750 (citing Miller v. Jacobsen, 2006 SD 33, ¶ 18, 714 N.W.2d 69, 76) (additional citations omitted). When reviewing issues of statutory interpretation, we review de novo. Id. ¶ 9, 746 N.W.2d at 750 (citations omitted). "Statutes are to be construed to give effect to each statute [ ] so as to have them exist in harmony. It is a fundamental rule of statutory construction that the intention of the law is to be primarily ascertained from the language expressed in the statute." Id. ¶ 9, 746 N.W.2d at 750-51 (citing Huber v. Dep't of Pub. Safety, 2006 SD 96, ¶ 14, 724 N.W.2d 175, 179 (quoting State v. $1,010 in Am. Currency, 2006 SD 84, ¶ 8, 722 N.W.2d 92, 94 (additional citations omitted))).

ANALYSIS

Child Support Deviation Based on Mother's Voluntary Income Reduction.

[¶ 12.] The circuit court granted a deviation for Father based on Mother's voluntary reduction in income pursuant to SDCL 25-7-6.10(6). Mother argues that the circuit court abused its discretion in granting this deviation. Mother further asserts that the statute does not apply to her situation because she had not decreased her income. Father, however, contends that the deviation applies because Mother's underemployment is the equivalent of a voluntary reduction of income.

[¶ 13.] The obligation to support one's children "is not only a matter of public policy, but is also statutory." Kost v. Kost, 515 N.W.2d 209, 214 (S.D.1994) (citing SDCL 25-5-18.1; SDCL 25-7-6.1). The South Dakota support obligation schedule establishes monthly child support payments based on parental income. SDCL 25-7-6.2. This statute requires that "[e]xcept as provided in this chapter, the combined monthly net incomes of both parents shall be used in determining the obligation and divided proportionately between the parents based upon their respective net incomes." Id. The South Dakota Legislature enacted the provisions in Chapter 25-7 to provide guidance in child support determinations.

[¶ 14.] Chapter 25-7 provides additional guidance for calculating child support in special situations. Each parent is presumed capable of earning minimum wage. SDCL 25-7-6.4 "[I]t shall be presumed for the purposes of determination of child support that a parent is capable of being employed at the minimum wage and his child support obligation shall be computed at a rate not less than full-time employment at the state minimum wage." Id. In addition, SDCL 25-7-6.10 provides six factors that may be considered in order to deviate from the child support schedule. One of the factors for consideration is "[t]he voluntary act of either parent which reduces that parent's income."⁵ SDCL 25-7-6.10(6) (emphasis added). But, "[t]here may be no deviation from the guidelines unless there is an entry of specific findings concerning factors for deviation listed in SDCL 25-7-6.10." Schwab v. Schwab, 505 N.W.2d 752, 756 (S.D.1993) (citing Johnson v. Johnson, 451 N.W.2d 293 (S.D.1990)). Mother argues that the circuit court erroneously allowed a deviation for Father under SDCL 25-7-6.10(6) based on a finding that Mother had voluntarily reduced her income. We have previously affirmed deviations from the support obligation schedule based on voluntary reduction of income; however, none of our prior cases dealt with voluntary underemployment.

[¶ 15.] In a recent case, Kauth v. Bartlett, we determined that "[t]he language of the statutes does not authorize automatically imputing a higher income when someone voluntarily takes a lower paying job. The only statute that even refers to imputed income is SDCL 25-7-6.4, which merely creates a rebuttable presumption that a parent is capable of being employed at minimum wage." 2008 SD 20, ¶ 11, 746 N.W.2d 747, 751. The circuit court imputed Bartlett's former income for child support calculation rather than using his current lower income. Id. ¶ 12, 746 N.W.2d at...