Our New Jersey family law and divorce lawyers are in a New Jersey Family Court on a weekly basis seeking a child support award or modify an existing one for our clients. Many times one of the parent’s income is not a concrete number. In that case, the court will impute income to best reflect what it will be in the coming year (please refer to my blog, "How is New Jersey Child Support Determined When One Parent's Income is in Dispute?" to learn more about imputation of income). As a practicing attorney for over twenty years I have found that many of our clients would like to understand what standards are being utilized New Jersey’s Child Support Guidelines.
Among other things, a court might impute income “based on potential employment and earning capacity using the parent’s work history.” But what if the parent changes careers? Will the court still look to the parent’s work history? What if the parent remains in the same field of work, but changes jobs? Does that count as a career change? These were many of the issues that the New Jersey Appellate Division addressed last week in the case of Provost v. Provost.
In the case the parties divorced in 2001. Three children were born of the marriage, one in 1993, one in 1995, and the last in 1997. Incorporated into the dual final judgment of divorce, the parties executed a settlement agreement in which they agreed to share joint legal custody of the children; however, the mother was designated as the primary residential parent.
Additionally, the agreement provided that the father would pay child support until the children were emancipated. The parties specifically defined emancipation to mean “the completion of the child’s formal education on a matriculated basis, whether it be graduation from a four year undergraduate school or high school, so long as the child is diligently pursuing formal education and obtaining passing grades.” Furthermore, the parties agreed to negotiate the issue of college expenses and tuition.
In July 2009, the father lost his job as a mechanic at Porsche. His tax return from the previous year reflected gross income of $68,016 annually. Although the father did spend a few months looking for a new job, he eventually decided to open his own auto repair shop where he allegedly earned much less money.
A few years later in December 2011, the father sought to modify his child support obligation. The court found that his income had significantly gone down once he was fired from the Porsche dealership. However, the court found that the father failed to present competent proof of a “diminished earning capacity as a mechanic or a good faith attempt at finding another mechanic’s position following his termination.” Because of these factors, the judge decided to impute the father’s income at $68,016, the amount he had earned in 2008. The judge stated that the figure was the best indicator of the father’s true earning capacity. The father, unhappy with the decision, moved for reconsideration, yet was unsuccessful.
In 2013, the wife moved to compel her ex-husband to pay for college expenses for the minor children. She also sought an increase in child support. The father cross-moved for a reduction in his support obligations, arguing that he was still making less money than he had while working at Porsche. The application for college expenses was denied as to the oldest child who was already emancipated. Yet, the court conducted a hearing to review the father’s support obligation regarding the other two children, one a full time college student and the other who was still living with his mother.
On March 13, 2014 the court rendered a decision to uphold the imputation of the father’s income. The court found that the father had voluntarily chosen to change his career once he was terminated from Porsche. The court also increased the father’s child support obligation and required him to contribute $6200 toward his middle child’s college tuition for the 2013-2014 school year. Additionally, the court stated that the father was responsible for 50% of the middle child’s college tuition going forward. Furious with the decision, the father appealed.
On appeal the father argued that the trial court erred by imputing income to him because he was involuntarily unemployed, sought employment and found an appropriate job. He argued that the court erroneously found that his actions amount to a change in careers.
In analyzing the decision of the trial court, the New Jersey Appellate Division first looked to the case of Storey v. Storey, which held that to obtain a change of circumstance based on current earnings, “a person who has selected a new, less lucrative career must establish that the benefits he or she derives from the career change substantially outweigh the disadvantages to the supported spouse. Absent that showing, a judge should deny the motion for a change in circumstance, in effect imputing prior earnings unless the obligor establishes, in the alternative, that his capacity to earn is diminished, in which case the judge should impute earnings consistent with the obligor’s capacity to earn in light of his or her background and experience.”
Applying the holding from Storey to the case at hand, the Appellate Division believed that it was unable to conclude based on the evidence presented that the father had changed careers. Although to some extent, it was clear that he did change jobs because he went from being an employee at a car dealership to opening his own mechanical repair business, the father remained in the same line of work. Therefore, the court could not sufficiently determine whether he truly changed careers. The Appellate Division therefore reversed the findings of the trial court and remanded the case for further proceedings consistent with its opinion.
To learn more about New Jersey Child Support, please contact my office today.