Iliff v. Iliff

• Decision Date: 13 October 2010
• Docket Number: No. 09-0753,09-0753
• Parties: James Derwood Iliff, Petitioner, v. Jerilyn Trije Iliff, Respondent
• Court: Supreme Court of Texas

James Derwood Iliff, Petitioner,

v.Jerilyn Trije Iliff, Respondent

No. 09-0753

Supreme Court of Texas

Argued October 13, 2010

On Petition for Review from the

Court of Appeals for the Third District of Texas

Justice Wainwright delivered the opinion of the Court.

Under the Texas Family Code, may a trial court calculate child support based on earning potential, rather than actual earnings, when the obligor is intentionally unemployed or underemployed, but there is no proof that the obligor’s unemployment or underemployment is for the purpose of avoiding child support? Because the language of Texas Family Code section 154.066 does not require such proof, we hold that intent to avoid child support need not be proven for the trial court to apply the child support guidelines to earning potential instead of actual earnings. However, a trial court may properly consider an obligor’s intent to avoid child support as a factor, along with other relevant facts, in an intentional unemployment or underemployment analysis. We affirm the judgment of the trial court and the court of appeals.¹

I. Factual and Procedural Background

Jerilyn Trije Iliff and James Derwood Iliff married April 7, 1990 and had three children. During their marriage James was the primary earner, working in the chemical industry as a chemical specialist and account manager. Although there was some dispute during the divorce proceedings over the amount of his salary, Jerilyn testified James usually made $90,000 to $100,000 a year, and James’s W-2 for the year prior to the divorce showed earnings of $102,000. James quit his job in January 2006. After leaving his employment in the chemical industry, James had no steady gainful employment during the divorce proceedings. Despite the fact that James has Bachelor of Science and Master of Business Administration degrees and admits that he is not disabled and is fit to work, James’s only work since quitting his job consisted of operating a tractor and sporadic business management consulting for an estimated total earnings of $3,600 to $4,800 over a two-year period.

Jerilyn filed for divorce on June 28, 2006 in Hays County, six months after James resigned. The trial court entered the final divorce decree on May 5, 2008. The trial court appointed Jerilyn sole managing conservator of the children. James was appointed possessory conservator and was ordered to pay child support. Because the trial court determined that James was intentionally unemployed or underemployed, the trial court exercised its discretion and applied the child support guidelines to James’s earning potential, as opposed to his actual earnings. See Tex. Fam. Code § 154.066 (allowing the trial court to set child support based on earning potential where an obligor is intentionally underemployed). The trial court’s findings of fact and conclusions of law state:

James Derwood Iliff’s own testimony at trial showed that he made in excess of $100,000 in earnings in 2005, the year immediately prior to the filing of divorce. James Derwood Iliff testified at trial that he had left his employment voluntarily in December of 2005. He further testified that he was not disabled or unable to work and had plans to start his own business.

Determining that James’s monthly gross earning potential was no less than $5,000, the trial court calculated James’s net resources to be $3,662.09 a month and ordered James to pay $1,295.19 per month in child support for his three minor children.

At the court of appeals, James argued that the trial court abused its discretion by awarding child support in excess of the statutory guidelines because there was no evidence that James was intentionally unemployed or underemployed for the purpose of avoiding child support. Iliff v. Iliff, ___ S.W.3d ___ (Tex. App.—Austin 2009, pet. granted). The court held that the trial court did not abuse its discretion, rejecting James’s argument that the trial court was required to find that his unemployment or underemployment was for “the primary purpose of avoiding child support.” Id. While acknowledging that other Texas courts of appeals impose a requirement that intentional unemployment or underemployment be for the primary purpose of avoiding child support, the court reasoned that the language of section 154.066 does not require a court to consider avoidance of child support. Id. (citing Hollifield v. Hollifield, 925 S.W.2d 153, 156 (Tex. App.—Austin 1996, no writ)). We granted Jerilyn’s petition to resolve the split among the courts of appeals. Compare Hollifield, 925 S.W.2d at 156 (“Section 154.066 does not require the court to consider whether the obligor’s ‘voluntary unemployment’ was for the primary purpose of avoiding child support.”), with DuBois v. DuBois, 956 S.W.2d 607, 610 (Tex. App.—Tyler 1997, no pet.) (“[T]here must be evidence that the parent reduced his income for the purpose of decreasing his child support payments.”).

II. Standard of Review

A trial court has discretion to set child support within the parameters provided by the Texas Family Code. Rodriguez v. Rodriguez, 860 S.W.2d 414, 415 (Tex. 1993); see also Tex. Fam. Code §§ 154.121–.123. “A court’s order of child support will not be disturbed on appeal unless the complaining party can show a clear abuse of discretion.” Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990) (per curiam) (citation omitted); see also Rodriguez, 860 S.W.2d at 415. A trial court abuses its discretion when it acts arbitrarily or unreasonably, without reference to guiding rules or principles. Worford, 801 S.W.2d at 109; Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). A trial court also abuses its discretion by failing to analyze or apply the law correctly. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992).

III. Law and Analysis

Texas Family Code section 154.066 provides that “[i]f the actual income of the obligor is significantly less than what the obligor could earn because of intentional unemployment or underemployment, the court may apply the support guidelines to the earning potential of the obligor.” Tex. Fam. Code § 154.066. The question this case presents is: In order to set child support based upon earning potential of the obligor under section 154.066, must the trial court determine that the obligor’s unemployment or underemployment is for the purpose of reducing child support?

A. Disagreement Among the Courts of Appeals

Twelve of the fourteen Texas courts of appeals have answered this question in the affirmative, interpreting Texas Family Code section 154.066 to require proof that the obligor is intentionally unemployed or underemployed for the purpose of avoiding child support. See, e.g., DuBois, 956 S.W.2d at 610. Prior to the Tyler Court of Appeals holding in DuBois, there was no uniform interpretation of “intentional unemployment or underemployment.” Compare Baucom v. Crews, 819 S.W.2d 628, 633 (Tex. App.—Waco 1991, no writ) (setting child support based on earning potential simply because the obligor “voluntarily became underemployed by choosing to resign from the employment he had”), with Woodall v. Woodall, 837 S.W.2d 856, 858 (Tex. App.—Houston [14th Dist.] 1992, no writ) (requiring evidence that the obligor’s “income reduction was designed to obtain a decrease in his child support obligation”). After 1997, the vast majority of the Texas courts of appeals adopted the DuBois rule and began to consistently recite its “intent to avoid child support” standard.²

Although many of the courts of appeals cases recite the DuBoisstandard, they loosely apply it, providing little or no analysis of how the particular facts of the case indicate a parent’s intent to avoid child support. For example, in Schaben-Maurerv. Maurer-Schaban, a husband was unemployed for six years before his wife filed for divorce, because, as the wife testified, “[the husband] simply liked sleeping late into the day, watching television, playing on the computer all night, and not having to go to a job.” 238 S.W.3d 815, 827 (Tex. App.—Fort Worth 2007, no pet.). The court of appeals did not examine any evidence that the husband was unemployed for the purpose of avoiding child support, but relied on evidence that the husband did not want to hold down a job. Id. After citing the DuBois standard, the court of appeals held that the husband was intentionally underemployed. Id. at 827–28. But the deficiency in this conclusion is the failure to actually apply DuBois—a parent cannot be unemployed for the purposes of avoiding child support when the parent became voluntarily unemployed six years before the divorce. Straying from strict adherence to a purpose requirement, many courts of appeals infer intent to avoid child support from “such circumstances as the parent’s education, economic adversities, business reversals, business background, and earning potential.” See, e.g., Garner v. Garner, 200 S.W.3d 303, 307 (Tex. App.—Dallas 2006, no pet.) (citing In re P.J.H., 25 S.W.3d at 406). Innocuous facts such as a graduate degree or past jobs are not particularly indicative of a parent’s motive or intent to avoid child support obligations.

To interpret “intentional unemployment or underemployment, ” we first turn to the text of the statute.

B. Statutory Construction

In construing a statute, the court’s purpose is to give effect to the Legislature’s expressed intent. “Our role... is not to second-guess the policy choices that inform our statutes or to weigh the effectiveness of their results; rather, our task is to interpret those statutes in a manner that effectuates the Legislature’s intent.” McIntyre v. Ramirez, 109 S.W.3d 741, 748 (Tex. 2003). Where statutory language is unambiguous and only yields one reasonable interpretation, “we will interpret the statute according to its plain meaning.” Id; see also City of Rockwall v. Hughes, 246 S.W.3d 621, 625–26 (Tex. 2008) (“[W]e construe the statute’s words according to their plain and common meaning unless a contrary...