124 A.3d 430
Vt.2015Background
- Parents of a daughter (b. Apr 2006) litigated parentage, custody, and child support after break-up; mother filed parentage action in May 2010.
- Father is a minority (45%) owner of Tampa Palms Professional Center, a family-owned real estate development business that holds and manages income-producing property.
- Tampa Palms had two eminent-domain transactions: a 2008 sale producing a large taxable capital gain for the company (and a reported taxable share on father’s return), and a 2010 like-kind exchange that produced no taxable gain or distribution to father.
- Magistrate initially imputed annual income to father based on the 2008 capital gain (using a treasury-rate imputation) but declined to impute income from the 2010 transaction.
- Family division reversed the magistrate as to the 2008 imputation (treating proceeds reinvested as assets, not income) and affirmed the no-imputation decision for 2010; magistrate recalculated child support without imputing 2008 income. Mother appealed to the Supreme Court.
Issues
| Issue | Plaintiff's Argument (Patnode) | Defendant's Argument (Urette) | Held |
|---|---|---|---|
| Whether 2008 eminent-domain proceeds could be treated as father’s income for child-support calculation | 2008 capital gain was income to father and should be imputed into available income | Proceeds were reinvested by the company, converted to assets, and not available as current income to father | Court held 2008 proceeds were too remote and, if reinvested, were assets (income-producing) so not imputable as current income |
| Whether 2010 like-kind exchange proceeds could be imputed as income | 2010 transaction increased father’s asset base and economic capacity, so income should be imputed | 2010 resulted in no taxable gain or distribution to father; no money was available for personal use | Court held no imputation: no distribution, no increase in money available for personal living expenses; assets were income-producing and not subject to default imputation |
| Whether historic receipts can be used to impute income generally | Historic capital receipts demonstrate capacity and should count toward available income | Historic receipts alone do not make funds currently available; only relevant when used to show voluntary underemployment or fluctuating income | Court noted historic income can inform imputation decisions (e.g., voluntary underemployment or averaging), but not here because mother did not seek that use |
| Proper legal standard for what counts as available/actual income in child-support calculations | (Implicit) Broad reading that capital gains received by related entities can be attributed to parent | Income must be actual/available at time of calculation; assets producing income are treated differently | Court read statute to require current/actual available income; remote past gains or reinvested proceeds converted to income-producing assets are not imputable as current income |
Key Cases Cited
- Tetreault v. Coon, 167 Vt. 396, 708 A.2d 571 (Vt. 1998) (employment history relevant when deciding to impute income for voluntary underemployment)
- Cantin v. Young, 171 Vt. 659, 770 A.2d 449 (Vt. 2001) (statutory construction of what qualifies as gross income is reviewed de novo)
- Clark v. Clark, 172 Vt. 351, 779 A.2d 42 (Vt. 2001) (statute’s imputation of income from assets applies only to nonincome-producing assets)
- C.D. v. N.M., 160 Vt. 495, 631 A.2d 848 (Vt. 1993) (funds distributed to a parent for a specific corporate purpose, not available for living expenses, need not be counted as personal income)