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