540 S.W.3d 281
Ark.2018Background
- Parents (Dare and Frost) never married; one child (R.D.). Virginia court previously ordered $400/mo support and "liberal visitation" with an alternating-holiday schedule and two weeks summer; parties later informally expanded summer time to 3–4 weeks.
- Dare moved to Arkansas with R.D.; Frost began paying $425/mo. In 2015 Dare curtailed Frost's extra visitation and demanded more support.
- Frost registered the Virginia orders in Saline County (2016) and sought modification of visitation, alleging Dare’s unwillingness to co-parent was a material change. Dare counterclaimed to increase child support based on Frost’s current income and stock-portfolio gains.
- Circuit court found a material change, increased summer visitation to four weeks and set holiday schedule; it denied imputing additional income and excluded unrealized stock-portfolio growth from income, ordering support based on Frost’s reported pay.
- Court of Appeals affirmed visitation modification but remanded on child support to consider stock gains; Supreme Court granted review of the child-support remand and considered all issues on appeal.
Issues
| Issue | Plaintiff's Argument (Dare) | Defendant's Argument (Frost) | Held |
|---|---|---|---|
| Whether a material change in circumstances justified modifying visitation | Dare: No; changes are petty parental discord and custodial parent’s attitude is not per se material | Frost: Yes; Dare’s conduct (restricting agreed extra visitation, exposing child to negative communications) impaired co-parenting and harmed child relationship | Court affirmed: facts supported material change and modification in visitation |
| Whether unrealized growth in Frost’s stock portfolio must be included as income for child-support calculations | Dare: Growth and realized gains/dividends should count as income under Admin. Order No. 10 | Frost: Portfolio increases are unrealized reinvestment; he does not receive cash and thus has no income to include | Court held: Record insufficient to treat unrealized portfolio growth as income; realized disbursements must be included if and when received |
| Whether dividends/realized capital gains shown on tax returns should be treated as income for support | Dare: Taxed profits and realized gains are income and should be included | Frost: Profits were reinvested and not accessed as cash income | Court held: On this record, insufficient detail to recharacterize portfolio activity as income; but cash distributions/realized gains are income when received |
| Whether the trial court should impute additional income to Frost based on lifestyle | Dare: Frost’s expenses exceed reported income — court should impute income up to earning capacity | Frost: Employed; household income includes spouse’s contribution; no evidence he works below capacity | Court held: No error in declining to impute income; no proof Frost is underemployed or intentionally reducing earnings |
Key Cases Cited
- Brown v. Brown, 387 S.W.3d 159 (Ark. 2012) (standard for visitation modification and deference to circuit court on credibility and child’s best interest)
- Powell v. Lane, 289 S.W.3d 440 (Ark. 2008) (granting review treats appeal as initially filed in Supreme Court)
- Dare v. Frost, 522 S.W.3d 146 (Ark. App. 2017) (court of appeals affirmed visitation modification; remanded on child-support consideration of stock gains)
- Evans v. Tillery, 204 S.W.3d 547 (Ark. 2005) (definition of "income" under Administrative Order No. 10 to be interpreted broadly for child’s benefit)
- McWhorter v. McWhorter, 58 S.W.3d 840 (Ark. 2001) (Administrative Order No. 10 supports including various assets and other income sources in child-support calculation)
- Helvering v. Bruun, 309 U.S. 461 (U.S. 1940) (realization of gain can occur in noncash forms; principles on realization of economic gain)