IN RE MARRIAGE OF CHEN v. Warner, 2003AP288.

• Decision Date: 06 May 2005
• Docket Number: No. 2003AP288.,2003AP288.
• Citation: 2005 WI 55,695 NW 2d 758
• Parties: In re the Marriage of: Jane E. Chen, Petitioner-Respondent, v. John J. Warner, Respondent-Appellant-Petitioner.
• Court: Wisconsin Supreme Court

2005 WI 55

695 NW 2d 758

In re the Marriage of: Jane E. Chen, Petitioner-Respondent, v. John J. Warner, Respondent-Appellant-Petitioner.

No. 2003AP288.

Supreme Court of Wisconsin.

Oral Argument: February 4, 2005.

Opinion Filed: May 6, 2005.

For the respondent-appellant-petitioner there were briefs by Linda Roberson, Holly J. Slota and Balisle & Roberson, S.C., Madison, and oral argument by Linda Roberson.

For the petitioner-respondent there was a brief by James Kurth, Wausau, Kent A. Tess-Mattner and Schmidt Rupke Tess-Mattner & Fox, S.C., Brookfield, and oral argument by Kent A. Tess-Mattner.

¶1 SHIRLEY S. ABRAHAMSON, C.J

This is a review of a published decision of the court of appeals¹ affirming an order of the circuit court for Wood County, James M. Mason, Judge. The circuit court granted Jane E. Chen's (the mother's) motion to amend the child support portion of a divorce judgment to require John J. Warner (the father) to pay $4,000 per month in child support. The circuit court rejected the father's argument that the mother's actions constituted "shirking" and declined to use the mother's earning capacity rather than her actual income in determining whether to award child support.

¶2 The court of appeals affirmed the circuit court's order that the mother's decision to forgo employment outside the home to become an at-home full-time child care provider was reasonable and did not constitute shirking. We affirm the decision of the court of appeals.

¶3 Two issues are presented. The first is the correct standard of appellate review applicable to the circuit court's determination of reasonableness. The circuit court determined that the mother's failure to return to work was reasonable and did not constitute shirking. We conclude that the proper standard of appellate review of a circuit court's determination of reasonableness in a child support shirking case is that an appellate court should independently determine the issue of reasonableness, giving appropriate deference to the circuit court.

¶4 The second issue is whether the circuit court erred in determining that the mother's decision to forgo employment outside the home and become an at-home full-time child care provider was reasonable under the circumstances. Examining the issue of reasonableness independently as a question of law, yet giving appropriate deference to the circuit court, we conclude that the mother's decision was reasonable under the circumstances. A number of factors weigh on this conclusion. The parents agreed that, if feasible, it was better for the children to have a parent at home full time instead of having both parents working full time or part time outside the home. The mother was unable to find part-time employment within commuting distance of the home. The father was able to make additional expenditures for the children without an impact on his standard of living or his short-term or long-term financial health.

I

¶5 The material facts are undisputed. The case at bar arises out of a post-divorce motion to modify child support. The mother and father, both physicians, were divorced in 1999 after an 18-year marriage. They have three children, born in 1991, 1993, and 1995.

¶6 The judgment of divorce incorporated the parties' agreement. It provided for joint custody and equal physical placement. The children spent alternating weeks with each parent. The judgment provided that neither party would pay child support to the other; each would be responsible for the children's daily expenses when they were in his or her care.² Reasonable clothing expenses and other mutually agreed-upon expenses incurred on behalf of the children were equally divided. The father, however, was to pay $400 per child per month into a fund for the children's future education.

¶7 At the time of the divorce, both parties were employed full time at the Marshfield Clinic. The mother earned $19,670 per month, or $236,000 per year. The father earned $21,371 per month, or $256,452 per year. Both parents worked outside the home during the marriage.

¶8 After the divorce, the mother sought to reduce her employment to be more available for the children, who were of school age or nearing it. Both parents apparently agree that it is in the best interests of their children to have, if feasible, child care provided by a parent. The father testified at the child support modification hearing that, when possible, it was important to have a parent at home full time with the children rather than have someone else care for the children.

¶9 The mother voluntarily left her full-time position at the Marshfield Clinic in May 2000 when she was unable to reduce her schedule there to part time.

¶10 Leaving her position was not a rash decision. Prior to terminating her employment, the mother had consulted with a financial advisor and was advised that from her $1.1 million savings, she could expect an annual income of about $110,000. This sum was significant, but was less than the income she earned as a physician. The estimate of $110,000 was based on stock market returns over the past 50 years. The mother's estimated budget was $7,000 per month, or $84,000 per year. Because her expected income exceeded her budget, the mother did not seek child support from the father.

¶11 The stock market decline in 2001 took a toll on the mother's investment income. That year she earned only $32,000. In response to the income decline, the mother began to look for employment and began invading her assets in order to meet her and the children's expenses. The job search failed to yield any part-time opportunities within commuting distance of her home, although she could have obtained alternating-week work in distant communities. She did not want to live away from home during alternate weeks, so she declined to pursue those opportunities.

¶12 In 2002, the mother filed a motion to amend the divorce judgment to require the father to pay child support. She asserted a substantial change in circumstances to justify a child support award. Her income had diminished substantially; the father's income had increased.

¶13 Had the mother continued employment at the Marshfield Clinic, she would have been earning $415,000 per year. The father was earning $472,000 per year when the motion was filed in 2002, nearly twice what he earned at the time of the divorce. In addition, his employer contributed $73,000 per year to his retirement plan. The father had assets of $1,218,185, not including securities. He was eligible for nine weeks of paid vacation per year and two weeks of paid meeting time. He maintains three residences.

¶14 The father's monthly budget was $8,400, leaving him with discretionary income of $12,000 per month. The mother requested $4,000 per month in child support based on a monthly budget of $7,000.

¶15 The circuit court ordered the father to pay child support in the amount of $4,000, but excused him from his obligation to pay $1,200 per month into the children's education fund. Thus, the net effect of the circuit court's order is to require the father to pay an additional $2,800 per month for the children's support.

¶16 Not working outside the home full time has enabled the mother to spend significantly more time with the children. This increased time with the children also includes periods during the weeks when the father has placement of the children. She shepherds the children to medical appointments, attends their school activities, does volunteer work at the school, communicates more with their teachers, transports the children to their various extracurricular activities (tae kwon do, ballet, knitting, dancing, piano lessons), and monitors their participation in all their endeavors.

¶17 The record is also replete with evidence of the father's involvement in the children's lives.

¶18 By all accounts, the children were doing well and their needs were met before the mother left employment at the Marshfield Clinic, and they have continued to do well thereafter.

¶19 The father argued in the circuit court and on appeal that the mother's termination of employment in 2000 and her refusal to seek part-time work outside the Marshfield area were unreasonable and amounted to shirking her obligation to support their children.

II

¶20 Before we decide the two issues presented, we must explain the legal principles involved in the present case. This is a child support modification case. The father asserts that in determining child support the circuit court should have used the mother's earning capacity, not her actual earnings. Obviously, in the present case there is a significant difference between the two numbers. A circuit court would consider a parent's earning capacity rather than the parent's actual earnings only if it has concluded that the parent has been "shirking," to use the awkward terminology of past cases. To conclude that a parent is shirking, a circuit court is not required to find that a former spouse deliberately reduced earnings to avoid support obligations or to gain some advantage over the other party. A circuit court need find only that a party's employment decision to reduce or forgo income is voluntary and unreasonable under the circumstances.

¶21 The parties, the circuit court, the court of appeals and this court agree that the mother's decision to reduce her income from employment outside the home was voluntary.

¶22 The focus of the parties' dispute is whether the mother's decision to forgo employment outside the home to become an at-home full-time child care provider was reasonable under the circumstances. If the mother's decision was reasonable, the circuit court's order increasing child support will be affirmed. If the mother's decision was unreasonable, the circuit court's order must be reversed. The circuit court determined that the mother's decision was reasonable under the circumstances. The court of appeals agreed.

¶23 The test of reasonableness under the...