Forced Resignation Serves as Basis For Child Support And Alimony Reduction

Resignation Letter

(Photo credit: Graham Ballantyne)

When the boss says “resign or I’ll fire you,” and you resign, is that a good faith reduction in income?  Can you use your change in income to reduce your child support and alimony?  A recent Supreme Court of Oklahoma opinion orders such a modification.

The parents in Garcia v. Garcia divorced in 2008.  The decree ordered father to pay child support to mother, and to pay support alimony to the ex-wife for 6 years.  At the time of the divorce, father was a school principal.

Father moved to reduce his child support and alimony obligations after he lost his job.  The father testified his superintendent told him to resign or be fired.  Figuring it would be easier to find another job in education if he quit rather than being fired, father chose to quit.  His resignation letter did not say he was resigning under threat of being fired.  Since leaving his job, father testified he’d made 53 job applications and sent 35 resumes, resulting in one interview.

Father asked the court to base his modified support obligations on earnings at minimum wage.  Mother argued that father either resigned his job voluntarily or committed acts that led to his dismissal.  Since father caused the actions that changed his circumstances, he should not be relieved of his support obligations.   The trial court and the Oklahoma Court of Civil Appeals agreed with mother. Both courts reasoned that Father’s job loss was due to his own misconduct, therefore his resignation was voluntarily self-induced. The lower courts relied on earlier case-law holding that voluntary underemployment or unemployment does not justify a reduction in support.

The Supreme Court of Oklahoma tweaked the test a bit after reviewing cases from Oklahoma and other states. Rather than voluntary or involuntary reduction, the test now is whether, based on all the circumstances, a reduction in income is done in bad faith to avoid a support obligation.  “A court must look to the particular circumstances involved and it is critical to determine whether the reduction in income was in good faith or bad faith.” In the Garcia case, the court ultimately determined that father’s decision to resign and not face termination was coerced, and was not done in bad faith to avoid his support obligations.

By David Tracy

 

Settlement Agreement Prevents Child Support Modification Effort

The Supreme Court of Oklahoma gives effect to a settlement agreement between divorced parents requiring both parents to agree in writing to any child support modification.

The parents in Scungio v. Scungio divorced in 2009.  The couple adopted 3 children during their marriage.  Two of the children had special needs.  In a settlement agreement incorporated into a decree dissolving the marriage, the parents agreed as follows:

  • Two of the children will likely remain disabled into adulthood, and the parents will remain responsible for them
  • Mother will be sole custodian of the minor children
  • Father will pay directly to mother a percentage of his salary that exceeds the child support guidelines, and will continue to do so until the children become self-supporting, regardless of age, or go to college and turn 22
  • The agreement cannot be modified except in writing signed by both parties (“no modification”)
  • The agreement will be construed under the laws of the State of Oklahoma (“governing law”)

After the trial court granted the divorce from the bench, but before the written decree was filed, the Oklahoma Department of Human Services (DHS) entered the case.  DHS was providing services to the children, and was a necessary party for “child support, medical support, and any debt due the State of Oklahoma.”  DHS, who was not a party to the settlement agreement, filed a motion to modify (“reduce”) child support in administrative court.

Mother moved to dismiss DHS’s motion.  She argued the “no modification” provision of the Settlement Agreement required the parents to agree in writing to modify child support.  Father, seizing an opportunity provided by DHS, argued that the “no modification” provision of the Agreement directly conflicts with the “governing law” provision.  This created an ambiguity, according to father.  As a result, the Agreement cannot serve as a clear waiver of the application of statutes allowing or child support modification.

The administrative law judge kicked the case to district court.  The trial court denied mother’s motion to dismiss, and held that the parties’ agreement did not waive application of the statute allowing for  modification of child support. Mother appealed.

The Supreme Court of Oklahoma reversed the trial court, saying the parents “clearly demonstrated their intent that there be no modification of child support without their mutual assent.”  The DHS motion must be dismissed.  The trial court must still decide the amount Father is behind in his child support payments and set a payment schedule for arrears.

The court also decided an important procedural issue in this case.  District courts and DHS administrative courts have concurrent jurisdiction over child support matters.  As a result, it is not necessary for a moving party to file a new motion to modify child support once a case is transferred from administrative court to district court.
by David Tracy

Couple Still Fighting Over House Ten Years After Divorce

This small building stands next to the church ...

People getting a divorce generally do not make good business partners.  One Oklahoma couple learned this the hard way.  After trying to maximize the return on their marital residence, they ended up back in court ten years later.

The Original Plan
When the couple divorced in 1995, they entered into a settlement agreement which placed the marital residence  in a Trust “established for the purpose of holding title to and selling same.”  Their stated goal was to get the highest and best price for the house.  The trust provided that wife would continue to live in the house.  Neither the trust nor the settlement agreement were incorporated into the decree dissolving the marriage.

The Plot Thickens

Ten years pass without an offer on the house.  The wife still lives there, and is renting rooms to tenants.  Husband files suit asking the court to remove wife as trustee, and appoint a receiver for the house.  After a contested hearing, the trial court first took control of the trust and ordered the parties to cooperate in selling the house.  After 10 months passed without a sale, or even a listing agreement, the trial court appointed a receiver to take control of the property.  Wife appealed, and the Oklahoma Court of Civil Appeals affirmed the appointment of a receiver.

The Lesson Learned
Despite the best laid plans of the couple, they failed to maximize their investment in the marital residence.  The take-away from this couple’s misfortune – do your best to sever all financial ties to your former spouse in the divorce documents.  Lingering financial connections leave opportunity for continuing discord, and abuse of fiduciary relations.

by David Tracy

Attorney Fees Awarded For Husband’s Contempt Of Temporary Orders in Oklahoma Divorce

    Assume your divorce case is pending.  You have a temporary order in place directing the other party to pay child support and make the car payment.  The other party does not follow the court orders, and you cite the other party for contempt of court.  If you are successful, can you ask for a judgment for attorneys fees?  In Buckingham v. Buckingham, the Oklahoma Court of Civil Appeals says yes, you can ask.

Mrs. Buckingham filed her divorce petition.  The assigned judge issued a temporary order.  The order directed Mr. Buckingham to pay child support and make car payments.  Mrs. Buckingham filed an application for contempt alleging Mr. Buckingham failed to pay as ordered.  The court held a jury trial.  The jury found Mr. Buckingham guilty of contempt for failure to pay on the car as ordered (but not guilty as to child support payments).  The divorce was still pending.

Mrs. Buckingham’s attorneys filed her motion to assess attorneys fees regarding the contempt action.  The contempt judge (who was not the divorce judge) heard evidence on the motion before the divorce judge granted a decree of dissolution, and granted the judgment for attorneys fees related to the contempt action after the other judge entered a decree of dissolution.  Mr. Buckingham appealed.  He argued there is no statutory authority for an award of attorney fees to enforce a temporary order in a domestic case.

The American Rule regarding attorney fees is that each party pays their own unless there is a contract or a statute authorizing a different outcome.  The appellate court holds that 43 O.S. §110(E) authorizes awarding attorney fees related to enforcement of a temporary order.

Sooner State Court Resolves Dueling Child Support Orders Dilemma

Two states claim jurisdiction to enter an initial child support order.  In this case, the Minnesota order is over $500.00 per month more than the Oklahoma order.  The Uniform Interstate Family Support Act (UIFSA) provides the means to resolve disputes over child support jurisdiction.  In Hanger v. Hanger, the Oklahoma Court of Civil Appeals defers to the child support order entered in Minnesota.

The mother in Hanger moved from Oklahoma to Minnesota.  The date of her move proved a critical factor in resolving this dispute.  Mother claimed she and the children had been Minnesota residents for 6 months when she filed there for divorce, child custody and child support. Father claimed Mother and the children had only been in Minnesota for 5 months.  Husband filed his own petition to dissolve the marriage, and establish custody in Oklahoma. Husband filed his Oklahoma petition 6 days before Mother filed in Minnesota.  Wife served husband with her petition before he served her.

The Minnesota court determined after a hearing that the children had lived in Minnesota for 6 months before mother filed her petition.  This made Minnesota the home state of the children.  Father did not appeal that decision.

Decisions in both states determined that Minnesota had subject matter jurisdiction over child custody, and that Oklahoma was an inconvenient forum for custody issues.

The states entered conflicting orders regarding child support.  Minnesota entered the first order, claiming that responsibility because father’s Oklahoma petition did not specifically ask for a child support order.  The trial court in Oklahoma determined that father was first to file a petition, and the petition raised by inference the issue of child support.  The Oklahoma judge ruled that child support should be determined in the home state of the obligor parent.  Wife appealed the Oklahoma decision.

UIFSA, adopted in all 50 states, contains rules to resolve competing orders establishing child support.  The Oklahoma Court of Civil Appeals resolved this particular dispute using Section 204 of UIFSA.  The Oklahoma Court held on appeal that it should defer to the Minnesota court because

  • Mother filed her Minnesota action before the Oklahoma case was at issue
  • Mother raised a timely challenge to the Oklahoma support order, and
  • Minnesota is the home state of the children.

UIFSA supports a preference for initial child support jurisdiction in the home state of the child.  This same preference controls subject matter jurisdiction in the Uniform Child Custody Jurisdiction and Enforcement Act, and the federal Parental Kidnapping Prevention Act.  This increases the likelihood of one court assuming continuing exclusive jurisdiction of child custody and support issues.  If the child has no home state, the Comment to UIFSA Section 204 suggests “first filing” will continue to control.

by David Tracy