IN THE INTEREST OF THE CHILDREN OF KNIGHT
317 P.3d 210
| Okla. Civ. App. | 2013Background
- Mother (Sara Knight) filed paternity/child-support action in 2010; Father (David Lincoln) admitted paternity. Trial occurred November 2011; judgment entered February 29, 2012.
- Trial court averaged Father’s reported income (2008–2011) and imputed annual income of $198,006.20, using $16,500.52 gross monthly for child-support calculation.
- Trial court awarded child support of $1,221.08 plus $102.35 medical support ($1,323.43 total) and found arrearage of $47,622.12 for Nov. 1, 2008–Feb. 10, 2012.
- Father challenged income findings on appeal, arguing the court failed to deduct ordinary business expenses from self-employment and rental income, and failed to deduct corpus (cost basis) from ranch sale proceeds.
- Court of Civil Appeals found errors of law (failure to deduct ordinary business expenses and failure to subtract ranch corpus), recalculated income, and modified support to $1,259.91/month with arrearage $45,526.83.
Issues
| Issue | Plaintiff's Argument (Knight) | Defendant's Argument (Lincoln) | Held |
|---|---|---|---|
| Whether trial court properly imputed income to Father | Imputation appropriate based on Father’s lifestyle, deposits, asset purchases | Imputation improper; income should reflect actual reported cash flow | Imputation was supported by record; no abuse of discretion imputing income based on evidence of willful underemployment and lifestyle inconsistencies |
| Whether ordinary and reasonable business expenses must be deducted from self-employment/rental income | Mother implicitly argued use of reported gross figures was acceptable | Father: must deduct ordinary and reasonable expenses per §118B(E)(1) | Court: trial court erred by not deducting allowable farm and rental expenses; court deducted specified expenses on appeal |
| Whether proceeds/gain from sale of real property (ranch/homestead) count as income and whether corpus must be deducted | Mother treated realized capital gain as income for support | Father argued sale proceeds not income (reinvestment or corpus) | Court: capital gains are includable as income; corpus/principal must be deducted to compute gain; homestead exemption cannot be used to avoid child support |
| Whether trial court properly calculated arrearage and visitation | Mother sought full arrears without set-off; standard visitation requested | Father sought offset for day care/food/clothing he provided and challenged standard visitation due to residence | Court declined set-off (no documentation); modified arrearage per recalculation; visitation affirmed (no timely objection at trial) |
Key Cases Cited
- Eisner v. Macomber, 252 U.S. 189 (income includes gain from sale of capital)
- Thomas v. Thomas, 932 P.2d 54 (Okla. Civ. App. 1996) (return of corpus is not income)
- Bond v. Bond, 916 P.2d 272 (Okla. Civ. App. 1996) (appellate court should render judgment trial court should have entered in equity)
- Merritt v. Merritt, 73 P.3d 878 (Okla. 2003) (child support proceedings reviewed under equitable standards)