Sherman v. Sherman

• Decision Date: 09 November 2004
• Docket Number: No. WD 61208.,WD 61208.
• Citation: 160 S.W.3d 381
• Parties: Francis E. SHERMAN, Appellant, v. Janet Ann SHERMAN, Respondent.
• Court: Missouri Supreme Court

160 S.W.3d 381

Francis E. SHERMAN, Appellant, v. Janet Ann SHERMAN, Respondent.

No. WD 61208.

Missouri Court of Appeals, Western District.

November 9, 2004.

Rehearing Denied December 21, 2004.

Joe Don Butcher, Blue Springs, MO, for Appellant.

Jim R. Petrie, Raytown, MO, for Respondent.

Before: BRECKENRIDGE, P.J., and EDWIN H. SMITH and HOWARD, JJ.

VICTOR C. HOWARD, Judge.

Francis E. Sherman (Husband) appeals the judgment of the Circuit Court of Jackson County dissolving his marriage to the respondent, Janet A. Sherman (Wife), with respect to the court's award of child support and division of property.

Husband raises three points on appeal. In Point I, he claims that the trial court erred in awarding Wife child support, as calculated pursuant to the court's Form 14 worksheets, based, in part, on imputing gross monthly income to Husband of $1,000 for earnings from the family business, FNJ Maintenance Company (FNJ) because the imputation of income to Husband was not supported by substantial evidence. In Point II, Husband claims that the trial court erred in rebutting its presumed child support amounts (PCSAs) as being unjust and inappropriate for not being "sufficient to cover the reasonable needs of the children" and ordering him to pay $1,500 per month in child support because in doing so, the court failed to consider all relevant factors, as required by Rule 88.01.¹ In Point III, he claims that:

The trial court erred in the division of marital property because case law and § 452.330, R.S.Mo., 1998, holds that if the division of marital property is not fair it is an abuse of discretion such as in this case where the division is so heavily weighted in favor of respondent that it amounts to an abuse of discretion.

We affirm the trial court's judgment in all respects except its award of child support, which, as explained below, is reversed and remanded for further consideration.

Facts

The parties were married on April 28, 1983, in Kansas City, Jackson County, Missouri. Two children were born of the marriage: Nicole Sherman, born on May 20, 1984; and Alicia Sherman, born on August 4, 1987. Husband filed a petition for dissolution of marriage in the Circuit Court of Jackson County on August 21, 2000. Wife filed an answer and counter-petition for legal separation on October 10, 2000. The petition and counter-petition were taken up and heard by the trial court on November 9 and December 7, 2001.

During the marriage, Husband was employed by Carondelet Health Center and its predecessors (Carondelet). At the time of trial his annual gross income was $76,646.38. Wife was also employed at Carondelet during the marriage as a labor and delivery room nurse. However, after being diagnosed with multiple sclerosis in April of 1997, she was forced to resign in September of that same year. At the time of trial, as a result of her condition, she was receiving Social Security disability benefits of $940 per month and social security benefits for the children of $480 per month.

During the marriage, the parties started a family business, FNJ, which provided contract maintenance services for businesses. There was considerable testimony at trial concerning the amount of income, if any, that was still being generated by FNJ. Husband testified that, although FNJ had been profitable in the past, it was no longer a viable concern, having lost its last maintenance contract. Wife contended that Husband, using his best efforts, was capable of earning income from FNJ of $769 per month and requested that the court impute this amount.

The trial court entered its judgment of dissolution on February 22, 2002, dissolving the parties' marriage and awarding them joint legal and physical custody of the children. The trial court ordered Husband to pay Wife $1,500 per month in child support. In addition, Husband was ordered to pay 78% of all medical and dental expenses not reimbursed by insurance; to tithe a sufficient amount to cover Alicia's tuition expense at St. Thomas More Grade School; and to pay 78% of all costs, including tuition, associated with Nicole's attending Notre Dame de Sion High School. In dividing the parties' property and debts, the trial court awarded Husband the condominium located in Marco Island, Florida, with the stipulation that it be sold and the first $150,000 in proceeds be paid to Wife. In its judgment, the trial court also awarded Wife $935 in monthly maintenance. With respect to its maintenance award, the trial court ordered that it was to continue until the $150,000 in condominium sale proceeds were paid, at which time the maintenance would automatically decrease to $185 per month.

With respect to child support, both parties submitted Form 14 worksheets as required, which the trial court rejected. The court prepared two Form 14s, using different maintenance credits for Husband, $935 and $185, based on the automatic reduction in maintenance that was ordered. In its Form 14s, the trial court imputed $1,000 in gross monthly income to Husband, which it found he was capable of earning from FNJ, which was awarded to him as marital property. Using the $935 maintenance credit, the trial court calculated the PCSA as being $1,003 per month, and using the $185 maintenance credit, it calculated the PCSA as being $1,102. The court then rebutted both amounts as being unjust and inappropriate, finding the correct amount of child support to be $1,500 per month.

This appeal follows.

Point I

In Point I, Husband claims that the trial court erred in awarding Wife child support, as calculated pursuant to the court's own Form 14 worksheets, based, in part, on imputed gross monthly income to Husband of $1,000 for earnings from the family business, FNJ, because the imputation of income was not supported by substantial evidence. Specifically, he claims that the record did not support the imputation of income to him in that there was insufficient evidence from which the court could find that FNJ was, at the time of the hearing, a viable and profitable business from which Husband, exercising his best efforts, was capable of realizing income of, at least, $1,000 per month.

In calculating the PCSA, the trial court was required to determine each party's gross monthly income. In that regard, the trial court found that Husband's gross monthly income was $7,615 in both of its Form 14 worksheets, including $1,000 for the income the court found he was capable of earning from FNJ. However, as noted in the facts, Husband testified at trial that FNJ was defunct and had no income. He testified further that the company's sole remaining service contract had been terminated as of June 30, 2001; that he had not sought any other contracts; and that he had no intention of continuing the business in that it was no longer viable as a profitable enterprise due to increased labor costs and competition, and because he was tired of the business. Although Wife only requested an imputation of income to Husband of $769 per month, which according to Wife's testimony was based on Husband's income from FNJ in 2000, the trial court, in calculating the PCSA, imputed income to him from FNJ of $1,000 per month. Husband claims that the evidence was insufficient to support this imputation of income.

It has long been recognized in the law that a parent will not be permitted to escape the responsibility to support the parent's children by deliberately limiting his or her work to reduce income. Williams v. Williams, 55 S.W.3d 405, 414 (Mo.App. W.D.2001). To avoid such a situation, the trial court may impute income to the parent in determining the court's child support award, based on what the parent could earn by using his or her best efforts. Id. This fact is reflected in the Form 14 calculation of the PCSA. In determining a parent's gross monthly income, for purposes of Line 1, Form 14, income may be imputed "[i]f a parent is unemployed or found to be underemployed." Civ. P. Form No. 14, DIRECTIONS, COMMENTS FOR USE AND EXAMPLES FOR COMPLETION OF FORM NO. 14, Line 1: Gross Income, Direction (emphasis added). As such, the imputation of income is appropriate not only where a parent voluntarily quits employment without justification to avoid paying child support, a case of unemployment, but also where he or she voluntarily reduces work without justification to avoid paying child support, a case of underemployment. Perkins v. Perkins, 21 S.W.3d 184, 186 (Mo.App. S.D. 2000); Smith v. Smith, 969 S.W.2d 856, 858-59 (Mo.App. E.D.1998).

To impute income to a parent in determining an award of child support, there must be evidence in the record to support a finding that the parent has the capacity and opportunity to earn the income that is imputed. Monnig v. Monnig, 53 S.W.3d 241, 245 (Mo.App. W.D.2001). Thus, Civil Procedure Form No. 14, DIRECTIONS, COMMENTS FOR USE AND EXAMPLES FOR COMPLETION OF FORM NO. 14, Line 1: Gross Income, Comment H, provides:

When determining whether to include imputed income and, if so, the amount to include in a parent's `gross income,' a court or administrative agency shall consider all relevant factors, including:

(1) The parent's probable earnings based on the parent's work history during the three years, or such time period as may be appropriate, immediately before the beginning of the proceeding and during any other relevant time periods;

(2) The parent's occupational qualifications;

(3) The parent's employment potential;

(4) The available job opportunities in the community; and

(5) Whether the parent is custodian of a child whose condition or circumstances make it appropriate that the parent not be required to seek employment outside the home.

These factors are not all-inclusive or exhaustive, they are simply factors to be considered along with any other relevant factors in determining if and what amount to impute. The question then, in determining whether to impute income to a parent in calculating the Form 14 PCSA, is...