Penny v. Green, 3754.

• Decision Date: 08 March 2004
• Docket Number: No. 3754.,3754.
• Citation: 357 S.C. 583,594 S.E.2d 171
• Court: South Carolina Court of Appeals
• Parties: LaRue D. PENNY, Jr., Respondent/Appellant, v. Sally Z. GREEN, f/k/a Sally Z. Penny, Appellant/Respondent.

357 S.C. 583

594 S.E.2d 171

LaRue D. PENNY, Jr., Respondent/Appellant, v. Sally Z. GREEN, f/k/a Sally Z. Penny, Appellant/Respondent.

No. 3754.

Court of Appeals of South Carolina.

Heard January 13, 2004.

Decided March 8, 2004.

Michael R. Ellisor, of Lexington, for appellant-respondent.

Cynthia Barrier Castengera, of Newland, N.C.; J. Mark Taylor and C. Vance Stricklin, Jr., both of West Columbia, for respondent-appellant.

HEARN, C.J.:

LaRue D. Penny, Jr. (Husband) and Sally Z. Green (Wife) both appeal from a family court order reducing Husband's child support and alimony obligations. Husband also appeals Wife's award of attorney's fees. We affirm in part, reverse in part, and remand.

FACTS

Husband and Wife were divorced in February 1998. The family court judge adopted the parties' settlement agreement and ordered Husband to pay $2,750 per month in alimony until May 2002, with incremental decreases after that date. Husband was also ordered to pay $1,500 per month in child support until May 2002, with the amount decreasing to $1,000 per month after that date.

In 1999, between the divorce and the initiation of this action, Wife moved to Atlanta with the children. In the fall of 2000, Husband left his Columbia pediatric practice and moved to Atlanta, in part to be closer to his children. Another factor in his relocation was that Husband remarried and his current wife's two children also live near Atlanta.¹ Husband filed this action for a reduction in his support obligations, claiming his financial circumstances had changed significantly. Wife answered, denying Husband was entitled to a decrease, and requested an increase in alimony, admonishment of Husband for late support payments, enforcement of Husband's debt payment obligations under the divorce decree, and payment of attorney's fees and costs.

In the 1998 divorce proceeding approving the parties' agreement, Husband's sworn financial declaration stated his annual income was $140,000. In this action for a reduction, however, Husband claimed his income at the time of the divorce was actually $165,226. He testified that his new employment in Atlanta provided him with a minimum salary of $100,000, based on a three-day work week.

Following a merits hearing, the family court reduced Husband's alimony obligation to $2,000 per month and set his child support obligation at $1,206 per month.² The family court based its decision to grant Husband a reduction on Husband's decreased income, finding Husband had actually earned $168,996³ at the time of the divorce and imputing a salary of $120,000 to Husband at the time of this action. The family court also awarded Wife the value of $24,627 in attorney's fees by directing Husband to pay $7,000 in addition to the offset credit from his support overage. Wife appeals both orders, arguing the family court erred in reducing Husband's support obligations. Husband appeals the final order, arguing the family court should have further reduced his support obligations and asserting that the court should have awarded him, not Wife, attorney's fees.

STANDARD OF REVIEW

In appeals from the family court, this court has the authority to find the facts in accordance with its view of the preponderance of the evidence. Rutherford v. Rutherford, 307 S.C. 199, 204, 414 S.E.2d 157, 160 (1992). This broad scope of review does not, however, require this court to disregard the findings of the family court. Stevenson v. Stevenson, 276 S.C. 475, 477, 279 S.E.2d 616, 617 (1981). Neither is the court required to ignore the fact that the trial judge, who saw and heard the witnesses, was in a better position to evaluate their credibility and assign comparative weight to their testimony. Cherry v. Thomasson, 276 S.C. 524, 525, 280 S.E.2d 541, 541 (1981).

LAW/ANALYSIS

I. Wife's appeal

Wife argues the family court erred in reducing Husband's child support obligation at the temporary hearing and in reducing Husband's alimony and child support obligations at the final hearing. We agree.

"Family courts are empowered to modify child support upon a proper showing of a change in either the child's needs or the supporting parent's financial ability." Henderson v. Henderson, 298 S.C. 190, 196, 379 S.E.2d 125, 129 (1989) (citation omitted); see Stevenson, 276 S.C. at 477,

279 S.E.2d at 617 (finding the issue of child support is subject to continuing review by the family court). "To warrant a modification in child support, the change of circumstances must be either substantial or material." Fischbach v. Tuttle, 302 S.C. 555, 557, 397 S.E.2d 773, 774 (Ct.App.1990).

Similarly, to justify modification of an alimony award, the changes in circumstances must be substantial or material. Thornton v. Thornton, 328 S.C. 96, 111, 492 S.E.2d 86, 94 (1997); see also S.C.Code Ann. § 20-3-170 (1985) (stating that changed conditions may warrant a modification or termination of alimony). Further, the change in circumstances must be unanticipated. Kelley v. Kelley, 324 S.C. 481, 486, 477 S.E.2d 727, 729 (Ct.App.1996). Several considerations relevant to the initial determination of alimony may be applied in the modification context as well, including the parties' standard of living during the marriage, each party's earning capacity, and the supporting spouse's ability to continue to support the other spouse. Id.

We find Husband failed to show a substantial or material change in circumstances. The family court's decision to reduce Husband's support was ostensibly based on two reasons, both of which we find to be erroneous. First, the family court found that Wife's income had increased at the time of the final hearing. At the time of the divorce, Wife's 1997 financial declaration stated her gross monthly income was $1,273, and, at the time of the present action, her 2001 financial declaration indicates monthly income of $2,269.92. It was error to base a reduction on this ground, however, because such a change was expected. By agreement of the parties, Husband's alimony payments were to be reduced over time, beginning only six months after the final order granting modification. Although the divorce decree does not explain the reason for the automatic decreases in Husband's support obligations, the record supports the family court's finding that they were in anticipation of Wife increasing her income. It thus was error for the family court judge to grant Husband a reduction on this basis. See, e.g., Brown v. Brown, 278 S.C. 43, 44, 292 S.E.2d 297, 297 (1982)

(finding that while the wife's income increased since the divorce, this increase cannot be used to justify a reduction in alimony because it was contemplated by the parties at the time of the divorce).

The family court's second basis for reducing support was the Husband's reduction in reported income. We find, however, that Husband's reduced income failed to constitute a substantial change impacting his ability to pay the obligations to which he originally agreed. This conclusion is based on our review of the family court's analysis of the Husband's initial income, his current income, and his imputed income.

Financial declarations are sworn documents required by Rule 20 of the South Carolina Rules of Family Court. Here the family court, which approved the parties' agreement in February 1998, relied on Husband's representation of $140,000 in annual income, as reflected in his financial declaration. In this action for reduction, however, Husband testified his income in 1997 had been under-reported by him and that it was actually $165,226. The family court then utilized this inflated figure as support for its decision to reduce Husband's support obligation, finding that Husband's income had decreased substantially since the 1998 divorce. This was error.

A party cannot misrepresent income and expenses on a financial declaration for purposes of having an agreement approved and then refute the accuracy of that document in a subsequent modification action. See Rogers v. Rogers, 343 S.C. 329, 332, 540 S.E.2d 840, 841 (2001)

(relying on original financial declaration rather than other records indicating an increased income in evaluating change of circumstances); see also Calvert v. Calvert, 287 S.C. 130, 336 S.E.2d 884 (Ct.App. 1985) (concluding husband was barred by res judicata from subsequent challenge of cost of living index incorporated in divorce decree). Therefore, we find the family court erred in allowing Husband to contradict his previous financial declaration in an effort to demonstrate a larger disparity from his present income. It was error for the family court to utilize Husband's inflated income of $168,996 rather than relying on the figure of $140,000 reported in Husband's original financial declaration. We find the correct annual income to attribute to Husband for purposes of evaluating his claim of changed circumstance is $140,000, as reflected in his 1998 financial declaration.

Regarding Husband's current income, we believe the family court was correct in imputing to Husband an annual income of $120,000, rather than the $100,000 per year urged by Husband. Initially we note that Husband's purported salary with his new practice in Atlanta is based on a one-year contract that guarantees him a minimum of $100,000, based on a three-day work week.

Moreover, under the Child Support Guidelines, "income" is defined as "the actual gross income of the parent, if employed to full capacity, or potential income if unemployed or underemployed." 27 S.C.Code Ann. Regs. 114-4720(A)(1) (Supp.2002). The Guidelines provide further that "[i]n order to impute income to a parent who is unemployed or underemployed, the court should determine the employment potential and probable earnings level of the parent based on that parent's recent work history, occupational qualifications, and prevailing job opportunities and earning levels in the community." Id. at 114-4720(A)(5)(b). Where a parent voluntarily lessens his or her...