Summary
In Moncada v Moncada, 81 Mich. App. 26; 264 N.W.2d 104 (1978), this Court considered a case where the defendant voluntarily left a job, thus voluntarily reducing his income.
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Docket No. 30461.
Decided January 24, 1978.
Appeal from Eaton, Richard Robinson, J. Submitted June 13, 1977, at Grand Rapids. (Docket No. 30461.) Decided January 24, 1978.
Complaint by Jean Moncada against Joe Moncada for divorce. Divorce granted. Defendant subsequently petitioned for a reduction in his weekly child support payments. The court ordered his obligation for current payments reduced and further ordered that the difference between the former and the revised payments would continue to accrue for the duration of defendant's unemployment. Defendant appeals. Reversed and remanded.
Greater Lansing Legal Aid Bureau, Inc. (by Philip E. Hodgman and Chris Campbell), for defendant.
Petitioner was brought before the lower court on a motion to show cause why he should not be held in contempt for failure to make weekly child support payments of $133. Mr. Moncada was without work at the time, and was receiving unemployment compensation of $136 per week. He petitioned the lower court to reduce his weekly payments to a level commensurate with his income. The court ordered that his obligation for current payments be reduced to $105 per week, but that a further $28 per week (the difference between the former and the revised payments) would continue to accrue for the duration of his unemployment. From this order petitioner appeals as of right.
Petitioner had previously been employed as a construction worker with a gross income of $338 per week. It was on the basis of this income that his support payments had been set at $133 weekly. Petitioner lost this job, and the circumstances under which he did so define the issues herein raised.
Petitioner testified that he reported to work as usual at 8 a.m. on a Monday morning. He worked until noon, when a piece of machinery broke and everyone was sent home. He reported back to work the next morning, but by 11:30 the machinery still hadn't been repaired. Petitioner, who had work to do at home and was not being paid for his time at the job site, thought that the equipment might not be repaired that day, and asked his employer if he could leave. His employer expressed indifference, and petitioner went home.
At the time of the hearing on his petition to modify support, petitioner still hadn't returned to work. A letter from the treasurer of the company was read into evidence. According to this letter, petitioner had voluntarily walked off the construction site, which act the company regarded as self-termination of employment. However, this letter was contradicted by a subsequent letter from the president of the company, who stated that petitioner had been temporarily laid off from work, and would be put back on the payroll at a later date. This version of events was corroborated by petitioner's testimony that he began receiving unemployment compensation immediately after termination of his employment. See MCLA 421.29(1)(a); MSA 17.531(1)(a).
Petitioner testified that after losing his construction job he had worked part-time picking pickles, and had applied part of his $150 to $200 of earnings from this work to the payment of child support. Petitioner further testified that he was seeking work through friends and through cooperation with the Michigan Employment Security Commission.
At the conclusion of the hearing the trial court announced its order, and, addressing petitioner, stated:
"I figure your unemployment problems are self-generated, and you are responsible for them, or at least you contributed to it."
The central questions on this appeal are whether the foregoing evidence was sufficient to establish that petitioner contributed to his own decrease in income and, if so, whether this was a legally sufficient ground for refusing him the relief he sought.
In Causley v LaFreniere, 78 Mich. App. 250, 254-255, n 2; 259 N.W.2d 445 (1977), this Court addressed the apparent conflict in the authorities regarding the standard of review on appeals from orders for child support. As we explained in Causley, the lower court's decision is presumed correct, and the appellant bears the burden of showing that decision to be clearly erroneous. However, because of the history of appellate review in equity, the appellant may establish clear error here more readily than in cases historically heard at law.
The evidence in the instant case regarding petitioner's loss of his job is ambiguous. The record is silent on the question of whether petitioner ever returned to the work site, under what circumstances he was informed that he had in fact lost his job, and whether he made any effort to regain it. However, on the evidence admitted, we cannot say that the lower court clearly erred in finding that petitioner's act in leaving the work site rendered him responsible, at least in part, for the loss of his employment. The question then becomes whether this is good cause for denying a reduction in child support.
The father's income is one of the factors to which a court must look when entertaining a petition for modification of child support. McCarthy v McCarthy, 74 Mich. App. 105, 109; 253 N.W.2d 672, 674 (1977). Indeed, this Court has speculated that "in some cases a reduction in income would compel a modification". See Cymbal v Cymbal, 43 Mich. App. 566, 568; 204 N.W.2d 235, 236 (1972). However, the father's duty to pay support is not limited by his income; the court may also look to the father's unexercised ability to earn. Travis v Travis, 19 Mich. App. 128, 130; 172 N.W.2d 491, 492 (1969). See also Baird v Baird, 368 Mich. 536, 541; 118 N.W.2d 427, 429 (1962).
Although we have found no Michigan cases directly on point, there is well-reasoned authority for the rule that voluntary reductions in income, if made in bad faith, will not warrant a modification of support payments. Nelson v Nelson, 225 Or. 257; 357 P.2d 536 (1960). See also 89 ALR2d 7, 54-58, Anno: Change in financial condition or needs of parents or children as ground for modification of decree for child support payments. We also believe that no modification is warranted where the father voluntarily worsens his financial position through unconscionable disregard for the welfare of his dependents. Cf. Cullimore v Laureto and Sword v Sword, in footnote 1, supra. However, absent bad faith or willful disregard for the interests of the dependent children, a voluntary reduction of income is not an adequate reason for refusing modification of a support order.
In the related but arguably distinguishable area of contempt proceedings to enforce support orders there is precedent from this Court and the Supreme Court for viewing unrealized earning capacity in light of the father's state of mind. In Cullimore v Laureto, 66 Mich. App. 463; 239 N.W.2d 409 (1976), the Court reviewed a trial court order holding the defendant in contempt for failure to make support payments. MCLA 552.201; MSA 25.161. The trial judge had "found the defendant to be a recalcitrant, whether conscious or merely unconcerned". 66 Mich App at 465; 239 N.W.2d at 410. In affirming, the Court stated:
"The record amply supports a conclusion that this defendant comfortably accepts his unemployed status. Given the defendant's seven-year record of nonpayment and his self-proclaimed ability as a mechanic, it is difficult to dispute the judge's finding that he was able but unwilling to assume his support obligations." 66 Mich App at 466; 239 N.W.2d at 410.
The same issue was before the Michigan Supreme Court in Sword v Sword, 399 Mich. 367, 379; 249 N.W.2d 88, 92 (1976), wherein the Court stated:
"If the judge concludes from the testimony of defendant and others that defendant has `sufficient ability to comply with' the order or `by the exercise of due diligence could be of sufficient ability, and has neglected or refused' to comply, defendant may be found in contempt of court."
Nelson defined bad faith as follows:
"To find bad faith it would be necessary to show that defendant acted with a purpose of jeopardizing the interests of his children." 225 Or at 261; 357 P.2d at 538.
In this case the lower court denied petitioner an adequate adjustment of support obligations solely because he had "at least * * * contributed" to his own unemployment problems. There was no finding, nor any evidence to support a finding, that petitioner had acted in bad faith or willful disregard of his children's needs. Accordingly, the lower court's order was clear error. The case is reversed and remanded for further consideration of Mr. Moncada's petition in light of the views expressed herein. No costs.
M.J. KELLY, P.J., concurs in the result only.