Logan v. Bush

Decision Date07 December 2000
Docket NumberNo. 20000090.,20000090.
PartiesJudy M. LOGAN, f/k/a Judy M. Bush, Plaintiff and Appellant, v. John M. BUSH, Defendant and Appellee.
CourtNorth Dakota Supreme Court

621 N.W.2d 314
2000 ND 203

Judy M. LOGAN, f/k/a Judy M. Bush, Plaintiff and Appellant,
John M. BUSH, Defendant and Appellee

No. 20000090.

Supreme Court of North Dakota.

December 7, 2000.

Opinion Denying Rehearing January 30, 2001.

621 N.W.2d 315
Thomas Dayton Fiebiger, Fargo, ND, for plaintiff and appellant

Daniel E. Bertsch, Assistant State's Attorney, Regional Child Support Enforcement Unit, Fargo, ND, for defendant and appellee.

MARING, Justice.

[¶ 1] Judy Logan appealed from an amended judgment modifying her child support obligation. We affirm in part, reverse in part, and remand for further proceedings.


[¶ 2] Judy Logan and John Bush were divorced in 1990. The parties were awarded joint custody of their three minor children, with physical custody alternating every three months. An amended judgment was entered on January 31, 1994, granting custody to Bush with Logan to have summer visitation "not exceeding two months." Logan was ordered to pay child support as follows:

Plaintiff shall pay and the Defendant shall receive child support for the three minor children, in an amount of $758.00 per month. Said payments will be prorated upon a ten month (10) period to reflect an average payment of $632.00 per month. Payment of the amount in child support shall continue until the child attains the age of eighteen (18) years or if, upon attaining the age of eighteen (18) years, the child has not yet graduated from high school and continues to reside with Defendant, until the child's graduation from high school, but in no event shall the child support obligation continue beyond the child's nineteenth (19th) birthday.

[¶ 3] Logan remarried and moved to California, where her income increased substantially. The parties' eldest daughter, Stephanie, turned eighteen in August 1997 and graduated from high school in May 1998. Despite these changes in circumstances, neither party sought modification of the support provisions of the 1994 amended judgment, and Logan continued to pay child support based upon $758 per month.

[¶ 4] In 1999, Bush authorized the Regional Child Support Enforcement Unit to establish an appropriate support obligation. On September 7, 1999, the State, on Bush's behalf, brought a motion to amend the 1994 amended judgment and

621 N.W.2d 316
increase Logan's child support obligation. Logan responded by filing a motion for correction of judgment under N.D.R.Civ.P. 60(a), seeking a credit for child support paid on behalf of Stephanie Bush after May 1998

[¶ 5] In September 1999, while the matter was pending, Logan's husband quit his job in California and joined the active duty component of the Army Reserves. He was assigned to Arizona. Logan then quit her nursing job in California and moved to Arizona, where she accepted a lower paying nursing position. When Logan left California she was earning $30 per hour; her Arizona position paid $22 per hour. Logan receives additional income as a member of the Army Reserves.

[¶ 6] A hearing was held before a referee on December 14, 1999. The referee issued findings of fact and conclusions of law, ordering Logan to pay child support of $1,682 per month for the two minor children, based upon imputed income under N.D. Admin.Code § 75-02-04.1-07(9); concluding Logan was not entitled to an adjustment of support for extended visitation under N.D.Admin.Code § 75-02-04.1-08.1; and concluding Logan was not entitled to a credit for alleged overpayment of support for Stephanie after May 1998. The district court affirmed the referee's findings of fact and conclusions of law, and a second amended judgment was entered on March 15, 2000. Logan appealed.


[¶ 7] Logan argues her child support should have been calculated solely upon her reduced income in Arizona, and that it was error to impute income to her under N.D.Admin.Code § 75-02-04.1-07(9) based upon her prior income in California.

[¶ 8] We recently summarized our standard of review of determinations on matters of child support:

Child support determinations involve questions of law which are subject to the de novo standard of review, findings of fact which are subject to the clearly erroneous standard of review, and may, in some limited areas, be matters of discretion subject to the abuse of discretion standard of review. A court errs as a matter of law when it fails to comply with the requirements of the child support guidelines in determining an obligor's child support obligation. As a matter of law, the district court must clearly set forth how it arrived at the amount of income and level of support. The trial court's findings of fact in making its child support determination are overturned on appeal only if they are clearly erroneous. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if no evidence exists to support it, or if, on the entire record, we are left with a definite and firm conviction that a mistake has been made.

Lauer v. Lauer, 2000 ND 82, ¶ 3, 609 N.W.2d 450 (citations omitted); see also Christl v. Swanson, 2000 ND 74, ¶ 7, 609 N.W.2d 70; Buchholz v. Buchholz, 1999 ND 36, ¶ 11, 590 N.W.2d 215.

[¶ 9] Under the Child Support Guidelines, an obligor's ability to pay child support is not determined solely upon actual income, but also takes into account the obligor's earning capacity. Buchholz, 1999 ND 36, ¶ 13, 590 N.W.2d 215; Otterson v. Otterson, 1997 ND 232, ¶ 10, 571 N.W.2d 648. Accordingly, N.D.Admin.Code § 75-02-04.1-07(9), which was adopted effective August 1, 1999, provides:

Notwithstanding subsections 4, 5, and 6, if an obligor makes a voluntary change in employment resulting in reduction of income, monthly gross income equal to one hundred percent of the obligor's greatest average monthly earnings, in any twelve consecutive months beginning on or after thirty-six months before commencement of the proceeding before the court, for which reliable evidence is provided, less actual monthly gross earnings, may be imputed without a
621 N.W.2d 317
showing that the obligor is unemployed or underemployed.

[¶ 10] Logan argues our prior cases clearly require a showing of underemployment, through evidence demonstrating the obligor is earning less than the prevailing amounts earned by other persons with similar work history in the community, before income may be imputed under the guidelines. Logan cites Lauer, 2000 ND 82, 609 N.W.2d 450, Henry v. Henry, 2000 ND 10, 604 N.W.2d 234, and Nelson v. Nelson, 547 N.W.2d 741 (N.D.1996), in support of her argument. Those cases, however, involved application of other imputation of income provisions in N.D.Admin.Code § 75-02-04.1-07, not subsection 9. The only case which mentions subsection 9 is Lauer, in which we concluded the district court had not made a finding the obligor had voluntarily changed employment and had not applied subsection 9 in determining child support.

[¶ 11] Section 75-02-04.1-07(9) unambiguously allows imputation of income without a showing of underemployment. Under this guideline provision, the court is authorized to impute income based upon the obligor's prior earning history, without a showing the obligor is unemployed or underemployed, if the obligor has voluntarily changed employment resulting in a reduction in income. Our prior cases addressing other imputation of income provisions are inapposite. They do not support the argument that one must show unemployment or underemployment before income may be imputed under N.D.Admin.Code § 75-02-04.1-07(9).

[¶ 12] Logan also asserts that her decision to change jobs was reasonable under the circumstances and therefore, under the "rule of reason" adopted in Olson v. Olson, 520 N.W.2d 572 (N.D.1994), income may not be imputed to her. Logan argues that, if income may be imputed whenever an obligor voluntarily changes jobs, it will place inordinate restrictions upon the obligor's freedom to make employment decisions.

[¶ 13] In Olson, 520 N.W.2d at 574, this Court held:

In effect, we are adopting a "rule of reason." If the obligor's voluntary change in employment and earnings is reasonable under all of the circumstances, including the best interests of the children, then additional income cannot be imputed based on earning capacity, and child support should be computed upon actual net monthly income. If, however, an obligor with an established earnings history voluntarily, without good reason, places himself in a position where he is unable to meet his child support obligations, income compatible with his prior earnings history may be imputed in calculating child support under the guidelines.

[¶ 14] Olson was decided before the promulgation of N.D.Admin.Code § 75-02-04.1-07(9). The current guidelines do not expressly incorporate a "reasonableness" rule which would preclude imputation of income when an obligor's voluntary reduction of income was "reasonable." We do not mean to imply, however, that the obligor's reasons for changing employment, and reasonableness of her actions, are wholly irrelevant to the decision to impute income under N.D.Admin.Code § 75-02-04.1-07(9). That section provides that the court "may" impute income when an obligor has voluntarily reduced her income. When a court may do something, it is not mandatory but is generally a matter within the court's discretion. Christl, 2000 ND 74, ¶ 7, 609 N.W.2d 70; Buchholz, 1999 ND 36, ¶ 11, 590 N.W.2d 215. Thus, the court may consider the reasons for the obligor's change of employment when exercising its discretion in determining whether to impute income under N.D.Admin.Code § 75-02-04.1-07(9).

[¶ 15] A parent has a duty to support her children to the best of her abilities, not simply to her inclinations. Henry, 2000 ND 10, ¶ 6, 604 N.W.2d 234;

621 N.W.2d 318
Otterson, 1997 ND 232, ¶ 10, 571 N.W.2d 648. The guidelines represent an effort to balance an obligor's freedom to make employment decisions with the duty to diligently and fully support her children. See Henry v. Henry, ...

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