Pataky v. Pataky

• Decision Date: 16 September 2003
• Docket Number: No. COA02-616.,COA02-616.
• Citation: 585 S.E.2d 404,160 NC App. 289
• Court: North Carolina Court of Appeals
• Parties: Diana Mae PATAKY, Plaintiff, v. Kenneth PATAKY, Defendant.

585 S.E.2d 404

160 NC App. 289

Diana Mae PATAKY, Plaintiff, v. Kenneth PATAKY, Defendant.

No. COA02-616.

Court of Appeals of North Carolina.

September 16, 2003.

Tate Law Offices, by C. Richard Tate, Jr., High Point, for plaintiff-appellee.

Joyce L. Terres, High Point, for defendant-appellant.

LEVINSON, Judge.

This appeal arises from an order establishing child support for the parties' minor children. The parties were married in 1988 and separated in 2000; two minor children were born of the marriage. The parties entered into a Separation Agreement and Property Settlement Agreement (the "Agreement") on 25 September 2000. The Agreement, which provided for joint legal and physical custody of the minor children, also stated that defendant:

will pay for the children's health insurance, after-school care, extra-curricular expenses, school supplies and clothing. In addition, Husband will maintain college savings funds for the children. Since both parties will be providing support for the children equally, no child support payments shall be paid by either party.

On 26 June 2001, plaintiff filed a complaint against defendant, alleging in pertinent part that defendant had violated the Agreement by failing to provide equal financial support for the children, or to pay for the children's clothing. She requested that permanent child support be set at a reasonable amount.

Pursuant to the Agreement, the parties share physical custody of the children on an every-other-week basis. Although defendant's formal education and degrees were in the liberal arts and education, during the parties' marriage he worked as a computer programmer, earning approximately $65,000 a year. However, after the parties entered into the Agreement but before the filing of plaintiff's complaint, defendant gave notice of his intention to quit his job to pursue graduate education in a field more closely related to his formal education. Defendant testified that this plan was discussed between the parties prior to execution of the Agreement. He planned to continue working until plaintiff had finished with school, and then return to school and obtain the qualifications for employment as a school counselor. Plaintiff graduated with "a two-year degree at GTCC" in May 2001, and defendant quit his job and returned to school about two months later.

Defendant further testified that he had developed a plan to meet his financial obligations to his children under the Agreement while he was in school. In addition to his scheduled custody of the children every other week, defendant cared for the children when plaintiff attended evening classes and on "dozens of occasions" when plaintiff was not available. During trial, the judge held that "[t]he separation agreement is too vague to be enforced with regard to the purchase of clothing." Accordingly, the court did not allow either party to introduce receipts or other evidence documenting the amount each had spent on clothing. Defendant testified he had paid for the children's clothing and health insurance.

Plaintiff testified that she was a "stay-at-home mom." She also testified that she worked part-time as a nanny, worked in a spa as a massage therapist, and was studying for an "aesthetics" license, which would qualify her to provide other salon services such as body wraps and facials.

The trial court found, in part, the following:

(4) The parties' separation agreement provided that the parties would alternate physical custody of the children and provided that Defendant would pay for the children's health insurance, after-school care, extra-curricular activities and clothing and that neither party would pay child support.

....

(6) That at the time of the filing of this action on June 26, 2001, the Defendant was employed as a computer systems manager with the United States Federal Courts in Greensboro, earning a salary of approximately $65,000.00 per year. Defendant had notified the Plaintiff prior to the Plaintiff's filing the Complaint, that he intended to leave this position because he had been accepted in a masters' degree program at the University of North Carolina at Greensboro. Plaintiff objected to the Defendant's leaving his employment.

(7) Defendant had applied to graduate school in December 2000 and was notified that he had been accepted in a masters' program for school counselors in the spring of 2001.

(8) Defendant's last day of work was July 12, 2001. Defendant voluntarily resigned in order to become a full-time student. Defendant testified that he is now in school full-time and is redirecting his career towards being a school counselor in which career he would earn a significantly lower wage. Defendant has a master's degree in education and is a highly intelligent individual and had performed satisfactorily at his prior position. Defendant's expected date of graduation is May of 2003.

(9) Plaintiff produced an e-mail sent to her in November 2001, by the defendant in which the Defendant stated that he is "unemployed by choice."

(10) Defendant has deliberately suppressed his income and acted in deliberate disregard of his obligation to provide reasonable support for the minor children, and therefore the Court attributes income of $65,000.00 per year to the Defendant based upon his earning capacity, or $5416 per monthly gross wages.

(11) The Defendant currently pays for health insurance for the two boys with a monthly cost of approximately $110 per month and the Defendant is given credit for this expense on the Worksheet B calculation.

(12) Plaintiff's maximum gross wage during the past several years is $360.00 per week, which she is presently earning or hopes to earn as a licensed massage therapist.... Plaintiff is paid per massage and averages about ten one-hour massages per week. Plaintiff did not work during the majority of the marriage of the parties.

(13) Plaintiff has not sought any other employment since the parties' separation since she is attempting to build her massage business. Plaintiff has recently re-initiated efforts towards a nursing degree in an effort to increase her earnings.

(14) Both parties owe a duty of support to the minor children of the parties, and should be required to pay a reasonable sum for the support of the minor children.

Based on these findings, the trial court concluded that defendant deliberately suppressed his income and acted in deliberate disregard of his obligation to provide reasonable support for the minor children. Applying Worksheet B of the North Carolina Child Support Guidelines, the trial court ordered defendant to pay $500 per month in child support payments. Defendant argues the trial court erred in (1) establishing an order of child support based on the presumptive child support guidelines without sufficient evidence of a "change in conditions or need" since the execution of the parties' Agreement, and (2) applying the capacity earnings rule with respect to his income.

I. RELATIONSHIP BETWEEN SEPARATION AGREEMENT AND CHILD SUPPORT GUIDELINES

The central issue for our determination is the impact, if any, of an unincorporated separation agreement that includes allowance for child support on a subsequent claim for child support. Since the amendment of N.C.G.S. § 50-13.4 in 1989, see 1989 ALS 529 (1989), which created the current child support guideline structure, no appellate decision has squarely addressed this issue. See, e.g., Rose v. Rose, 108 N.C.App. 90, 422 S.E.2d 446 (1992); Powers v. Parisher, 104 N.C.App. 400, 409 S.E.2d 725 (1991), appeal dismissed and disc. review denied, 331 N.C. 286, 417 S.E.2d 254 (1992). Accordingly, we first review the pertinent statutory and common law.

A. BACKGROUND

1. Statutory Law

Our legislature provided for judicial awards of child support as early as 1943:

After the filing of a complaint in any action for divorce, whether from the bonds of matrimony or from bed and board, both before and after final judgment therein, it is lawful for the judge of the court in which such application is or was pending to make such orders respecting the care, custody, tuition and maintenance of the minor children of the marriage as may be proper, and from time to time to modify or vacate such orders....

N.C.G.S. § 50-13 (1943) (repealed 1967); see Griffin v. Griffin, 237 N.C. 404, 411, 75 S.E.2d 133, 138-39 (1953).

In 1967, the General Assembly replaced G.S. § 50-13 with N.C.G.S. § 50-13.4(c), which provided, in pertinent part:

Payments ordered for the support of a minor child shall be in such amount as to meet the reasonable needs of the child for health, education, and maintenance, having due regard to the estates, earnings, conditions, accustomed standard of living of the child and the parties, and other facts of the particular case.

This first sentence of G.S. § 50-13.4(c) has remained substantially the same since 1967. Compare N.C.G.S. § 50-13.4(c) (2001) (adding "child care and homemaker contributions of each party" as considerations).

In 1975, pursuant to Title 42, Chapter 7, Title IV, Part D of the Social Security Act ("Title IV-D"), Congress established the Child Support Enforcement Program ("CSE program"). 93 P.L. 647, 88 Stat. 2337 (1975); see Kansas v. United States, 214 F.3d 1196 (10th Cir.), cert. denied, 531 U.S. 1035, 121 S.Ct. 623, 148 L.Ed.2d 533 (2000). The CSE program is a voluntary program "[f]or the purpose of enforcing the support obligations owed by absent parents to their children, locating absent parents, establishing paternity, and obtaining child support" in which states, in exchange for federal monies to operate child support enforcement regimens and provide AFDC (now TANF) dollars for eligible parents, agree to operate the program in accordance with federal law. 42 U.S.C. § 651 (2001); see Garrison v. Connor, 122 N.C.App. 702, 471 S.E.2d 644, cert. denied, 344 N.C. 436, 476 S.E.2d 116 (1996).

A 1984 amendment to Title IV-D required states participating in the CSE program to enact...