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

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

Collect Child Support and Alimony from Disability Payments

If your child’s other parent receives Social Security Disability Income (SSDI), your child should receive an auxiliary benefit from Social Security. The auxiliary benefit may not cover monthly child support due you. The disabled parent may owe past due child support. Your former spouse may owe you alimony. You can collect these obligations by income assignment paid directly from the obligor’s disability benefit.

         As a general rule, SSDI payments are exempt from garnishment, attachment or other legal process. This is called an anti-assignment provision. It protects persons on disability from most creditors. But by federal law, the anti-assignment provision does not apply to collection of child support or support alimony. The government does not want parents or former spouses who can pay to allow their exes or children to become public charges.

Each state has a process for withholding up to 65% of a person’s disability income for the payment of child support or support alimony. In Oklahoma, the income withholding notice/order must be signed by a judge or hearing officer. The income assignment must then be filed and served on the office manager at any Social Security District or Branch Office. The addresses and telephone numbers of Social Security District and Branch Offices may be found in the local telephone directory. The income assignment proceeds will be paid to you through your state’s support registry.

It is important to know what type of benefit the disabled parent or former spouse receives. There are two types of Social Security benefits. The first type consists of old-age and disability insurance benefits (SSDI). The second type of Social Security benefit is Supplemental Security Income (SSI). SSI benefits are designed to help aged, blind, and disabled people who have little or no income. It provides cash to meet basic needs for food, clothing, and shelter.

SSDI benefits are funded by Social Security taxes. SSI benefits are funded by general tax revenues. Social Security Disability is considered a substitute for income. SSI is considered a supplement to income based on need. Because of the different purposes of the two types of Social Security, and the different ways the two benefits are funded, SSDI benefits are subject to income withholding, but SSI benefits are not.

By David A. Tracy

42 U.S.C. §407 – Anti-assignment provision for SSDI benefits

42 U.S.C. §659 – Exception for child support and support alimony

42 U.S.C. §666 – Order to withhold income for support shall be provided under state law

Income Withholding Order/Notice Form

Social Security Ruling 79-4 – authorizing collection of child support and alimony from disability income

SSA’s Program Operations Manual System, Section GN02410.200 – Notes SSI payments not subject to garnishment or income withholding

5 CFR Part 581 – Processing Garnishment Orders For Child Support And/Or Alimony

No To Child Support Judgment in Small Claims Court

One man’s effort to give effect to his private child support arrangement fails for lack of jurisdiction in Oklahoma’s Small Claims Court.

The father in Parsons v. Klingamon had been ordered in District Court to pay $250.00 per month in child support to the mother.  The 1996 decree did not provide for health insurance as the child was Native American and had access to free medical care.  Father claims that in 2007 he and Mother agreed to a private arrangement for him to pay her $150.00 per month in child support.  Father would also buy health insurance for the child (Mom and Dad were both unhappy with tribal health care).

In 2009, Mother asked the Oklahoma Department of Human Services (DHS) to collect the unpaid portion of court-ordered child support.  Father objected to a DHS assignment of income, claiming he was current under the private agreement.  While a DHS administrative case was pending, Father filed a small claims case against Mother.  He sought $2,500.00 “for child support payments” he claimed had been wrongfully withheld from his pay for child support.

The small claims judge granted Father a judgment.  The trial court considered this to be a dispute between two parties to a third party beneficiary contract.  The court granted judgment on a theory that Mother was being unjustly enriched by the DHS withholding.

DHS entered the case and filed a motion to vacate, citing 3 legal grounds for their claim that the small claims court could not enter the judgment it did.  The trial court declined to vacate.  On appeal, the Oklahoma Court of Civil Appeals makes it clear that only the District Court, not the Small Claims Court, has jurisdiction over matters relating to child support.  Despite the efforts of the small claims judge to cast this case as a contract matter, it was a child support case.  The trial court had exceeded its jurisdiction.  Judgment reversed.

The appellate court noted Father still has recourse in administrative and district court.  The opinion did not pass on the merits of Father’s claims.