Reprinted from the November 14, 2014 Mongoose newsletter.
Some judge named “Pratt” was just reversed in Reddick v. Reddick, No. 01-12-00576-CV (Tex. App. – Houston [1st Dist.] 10/23/2014). This case is an excellent reminder that not every parent who could in theory earn more should be found to be intentionally underemployed.
Click here to read the entire case, which provides this summary of the law:
A parent who is qualified to obtain gainful employment cannot evade his or her child support obligation by voluntarily remaining unemployed or underemployed. Concurrently, the court must consider a parent’s right to pursue his or her own happiness with a parent’s duty to support and provide for his or her child. The court must engage in a case-by-case determination to decide whether child support should be set based on earning potential as opposed to actual earnings. Once the obligor has offered proof of his or her current wages, the obligee bears the burden of demonstrating that the obligor is intentionally unemployed or underemployed. The burden then shifts to the obligor, if necessary, to offer evidence in rebuttal.
Trial courts should be cautious of setting child support based on earning potential in every case in which an obligor makes less money than he or she has in the past. Although some financial resources are indispensable to raising and providing for a child, the financial analysis will often not be the end of the court’s consideration.
A court properly considers the obligor’s proffered rebuttal evidence of the reasons for an obligor’s intentional unemployment or underemployment. This includes such laudable intentions by obligors who alter their employment situations to spend more time with their children, to live closer to their children in order to attend their events and be more involved in their lives, or to provide their children with better health benefits.
Other objectives are also factors, such as whether an obligor alters his or her employment situation to start a new business, to gain further education, to become a public servant, or to address health needs. An active but unfruitful pursuit of employment may also be relevant to the court’s child support determination, as well as economic conditions that legitimately preclude full employment.
But, we are mindful that such explanations are not always sincere, and the judge as fact finder has latitude to consider the testimony and evidence to make the necessary determinations. Such discretion must be exercised within the limits set by the Texas Family Code, particularly Chapter 154 including the child support guidelines, and should always focus on the best interest of the child.
To facilitate appellate review and to encourage consistency in the exercise of this discretion across the state, the trial court must make a finding of intentional unemployment or underemployment and its decision to base child support on earnings potential rather than actual earnings must be supported by the record.