Rhonda Reece HAMMOND, Appellant, v. Jeff Favor HAMMOND, Appellee.
No. 2-94-064-CV.
Court of Appeals of Texas, Fort Worth.
April 27, 1995.
898 S.W.2d 406
therefore, the catch-all provision of section two governs. That provision provides that the judgment shall earn interest at the rate published by the Consumer Credit Commission in the Texas Register, with a minimum rate of ten percent (10%).
Richard L. Turner, Mesquite, for appellee.
Before LATTIMORE, LIVINGSTON and DAY, JJ.
OPINION
LIVINGSTON, Justice.
Appellant, Rhonda Reece Hammond, brings this appeal to challenge the trial court‘s order granting appellee, Jeff Hammond‘s, motion to modify child support. Appellant contends the evidence is factually and legally insufficient to support the trial court‘s finding that appellee‘s circumstances had materially and substantially changed since entry of the divorce decree and agreed order.
We reverse and remand for a new trial.
Jeff and Rhonda Hammond divorced on January 30, 1987. Appellant was appointed managing conservator of the parties’ two minor children, and appellee was appointed possessory conservator. The agreed decree required appellee to pay child support and maintain insurance coverage for the children. Child support was set at $300.00 per month per child until September 1987 at which point it increased to $400.00 per month per child.
In May 1993, appellee filed a motion to modify the original divorce decree, seeking primarily a reduction in his child support obligation. A hearing was held on August 4, 1993, where appellee testified that he was unable to pay the child support due to his financial condition. After considering the matter, the trial court determined that appellee‘s circumstances warranted a reduction in child support. The trial court then signed an order reducing appellee‘s child support obligation to $202.58 (25% of net resources) per month for both children.
In her sole point of error, appellant contends there is no or insufficient evidence to support the trial court‘s finding that appellee‘s circumstances had materially and substantially changed since the entry of the original divorce decree.
A trial court has considerable discretion in setting the amount of child support, a ruling that will not be disturbed on appeal unless the complaining party shows a clear abuse of discretion. MacCallum v. MacCallum, 801 S.W.2d 579, 582 (Tex.App.-Corpus Christi 1990, writ denied). The trial court is also accorded broad discretion in determining whether the movant has met his burden of proof. Cannon v. Cannon, 646 S.W.2d 295, 297 (Tex.App.-Tyler 1983, no writ). An abuse of discretion occurs when the trial court acts without reference to any guiding rules or principles; in other words, if the act was arbitrary or unreasonable. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990); Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985), cert. denied, 476 U.S. 1159, 106 S.Ct. 2279, 90 L.Ed.2d 721 (1986).
The “best interest of the child” is the trial court‘s primary consideration in determining questions of child support.
During the hearing on his motion to modify, appellee testified that in September 1992, he suffered from a herniated disk which significantly reduced his ability to work. As a result, his income was drastically reduced. In May of 1993, appellee underwent surgery on his back, preventing him from working for a minimum of ninety days after the surgery. Appellee is self-employed and, other than his business, has no other sources of income. At the time of the hearing, appellee earned approximately $800 per month from his business, after expenses and taxes. The only evidence appellee introduced was an unsigned, unfiled 1992 tax return to document his inability to pay the current child support obligations. Based on this tax return, the trial court apparently calculated appellee‘s current net resources. Applying the child support guidelines set forth in section 14.055 of the Texas Family Code (enacted subsequent to their original divorce), the court arrived at an adjusted child support obligation of $202.58 per month for both minor children.
Despite appellee‘s testimony concerning his financial condition at the time of the hearing, he failed to introduce evidence of a substantial and material change in his circumstances since the granting of the original child support order. Appellee testified that he had “a high paying job” at the time of the divorce in January 1987. However, without more specific testimony in the record of how much appellee was making at the time of the divorce, we are unable to make the requisite comparison and determine whether there was a material and substantial change in appellee‘s circumstances.1 See State v. Hernandez, 802 S.W.2d 894, 896 (Tex.App.-San Antonio 1991, no writ) (without some testimony as to how much a party was making at the time of divorce, evidence suggests nothing more than a mere scintilla of evidence that circumstances have materially and substantially changed); Baker, 719 S.W.2d at 676 (a bare assertion that a party was making more money at time of divorce, without some testimony of how much, is no more than a mere scintilla of evidence that circumstances have changed); see also Liveris v. Ross, 690 S.W.2d 60, 61 (Tex.App.-Houston [14th Dist.] 1985, no writ). While the record contains evidence of several financial setbacks suffered by appellee between the time of the divorce and the hearing on his motion to modify, those losses cannot be placed in proper context due to the lack of evidence detailing appellee‘s complete financial standing at the time of the divorce. Appellee even testified on cross-examination that he provided no evidence of his financial resources as of January 30, 1987. It is therefore impossible to determine whether the alleged setbacks indicate a material and substantial change in circumstances as specifically required by the statute and Liveris or merely reflect fluctuations customary in appellee‘s personal and business dealings. Id. at 61.
Appellee has failed to meet his burden of proof necessary to support a modification of a child support order. Point of error one is sustained. Accordingly, we hold that the trial court abused its discretion in finding evidence of a material and substantial change in appellee‘s circumstances and, therefore, the trial court‘s judgment is reversed and remanded for a new trial.
LATTIMORE, Justice, dissenting.
Because there is some probative evidence to support the trial court‘s decision to modify
When, as in this case, a party seeks to modify child support under
(c) After a hearing, the court may modify an order or a portion of a decree that:
....
(2) provides for the support of a child if the circumstances of the child or a person affected by the order or portion of the decree to be modified have materially and substantially changed since the date of its rendition....
In the instant case, Jeff Hammond, as obligor, had the burden to show that his circumstances had materially and substantially changed since rendition of the January 30, 1987 divorce decree. During the hearing on his motion to modify, Jeff gave numerous examples of material and substantial changes in his financial condition. For example, in September of 1992, Jeff suffered from a herniated disk which significantly reduced his ability to work1 and, consequently, his income; in May of 1993, Jeff underwent surgery on his back, preventing him from working for a minimum of ninety days thereafter; Jeff is currently self-employed and, other than his business, has no other sources of income; during his recovery, Jeff employed an individual specifically to operate the business which, due to a loss of accounts, only covered loans and operating expenses; as of the time of the hearing, Jeff paid himself approximately $800 per month from the business, after expenses and taxes; Jeff introduced an unsigned, unfiled 1992 tax return to document his income status at the time of the hearing;2 and Jeff has no other assets. The trial court found that Jeff‘s decreased income constituted a material and substantial change in circumstances and granted a modification.
Rhonda Hammond argues on appeal that Jeff failed to produce sufficient evidence of a material and substantial change of circumstances since entry of the original child support order. Specifically, Rhonda points to the lack of concrete evidence of Jeff‘s financial condition at the time the divorce.3 She contends that without more specific testimony or other evidence in the record of Jeff‘s income at the time of the divorce, the trial court abused its discretion in modifying the original order of support. See Liveris v. Ross, 690 S.W.2d 60 (Tex.App.-Houston [14th Dist.] 1985, no writ). This argument was embraced in the majority opinion, which finds no evidence of material and substantial change.
In contrast, I believe there is some probative evidence of material and substantial change sufficient to bestow the trial court with discretionary authority to modify the order. The record contains evidence of Jeff‘s serious health problems and several financial setbacks suffered between the time of the divorce and the motion hearing. In addition, the trial court was presumably cognizant of
The majority, however, adopts the opposite approach. According to the majority, to establish the requisite change in circumstances, the movant must bring forth evidence of (1) the financial circumstances of the affected parties at the time the original support order was entered, and (2) their financial circumstances at the time the modification is sought. See Clark v. Jamison, 874 S.W.2d 312, 317 (Tex.App.-Houston [14th Dist.] 1994, no writ); Penick v. Penick, 780 S.W.2d 407, 408 (Tex.App.-Texarkana 1989, writ denied). Presumably, such evidence enables the trial court to compare the relative change in circumstances and then make a determination of whether the change was material and substantial. Regardless of any other evidence that may indicate a need to modify the original support order, if the movant, as in this case, fails to bring forth sufficient evidence of the ability to pay child support at the time of the original order and at the time the modification is sought, the majority interprets this as no evidence of material and substantial change. I dissent because the majority adopts a strict standard that is unreasonable and contrary to common sense.
Since 1975, a person affected by a child support order could petition the trial court for modification of that order upon a showing of a material and substantial change in that person‘s circumstances.4 Act of June 2, 1975, 64th Leg., R.S., ch. 476, § 29, 1975 Tex.Gen.Laws 1253, 1265-66. This statutory change was an apparent codification of the then-existing practice in state court.
Anderson v. Anderson, 503 S.W.2d 124 (Tex.Civ.App.---Corpus Christi 1973, no writ) exemplifies pre-amendment practice. In Anderson, a father filed a motion seeking to reduce his child support obligation in which he alleged that his circumstances had materially and substantially changed. Id. at 125. The appellant/movant testified that his annual income had decreased since the original order of support was entered. Id. at 126. As a direct consequence, appellant had fallen behind on his child support payments, prompting the appellee to initiate contempt proceedings. Id. at 125. In response, the trial court found that there had been a change in appellant‘s financial condition since the initial child support order was entered, but only reduced appellant‘s monthly child support obligation from $400 to $300, an amount still in excess of appellant‘s financial means. Id. Holding that the trial court abused its discretion, the Corpus Christi Court of Appeals weighed a number of factors including appellant‘s fluctuating salary, remarriage, lifestyle, availability of other assets, and the needs of the children. Id. at 126-27. The evidence of appellant‘s inability to pay was not contradicted or refuted, although it was of a nature that could have been contradicted, if untrue. Id. at 127.
The evidence in this case clearly shows that appellant, at the time of the [modification] hearing, simply did not earn enough to properly provide for the children of his first marriage, and, at the same time, supply him with a minimum living. His support payments must be made to correspond to his financial ability to pay when his income from all sources is considered. The division of that income between father and children must take into consideration the right of a father to self subsistence in accordance with his income; there is some minimum amount necessary for a bare subsistence, and less than such amount renders a child support order unenforceable. In cases such as this, where hardship is inevitable, both the father and the mother should reduce their individual personal living expenses to an absolute minimum. While the trial court may well determine that the father must make every sacrifice in order to provide support for his dependent children suitable to their circumstances in life, still the father must be permitted to retain enough of his earnings to pay the necessary expense of living and earning a living.
Id. (citations omitted). Ultimately, the Anderson court concluded that the trial court erred, not in modifying appellant‘s child support obligation, but in failing to set an amount commensurate with his ability to pay, notwithstanding the fact that appellant was able to pay more than the reduced amount at the time of the divorce. Id. What is evident in this and other cases that predate the 1975 amendment to section 14.08 is that trial courts, as well as courts of appeal, considered many factors when analyzing whether a change in circumstances warranted modification of the original order of support. See, e.g., Duke v. Duke, 448 S.W.2d 200 (Tex.Civ.App.-Amarillo 1969, no writ).
A close reading of the Texas Family Code, however, reveals that section 14.08 is silent as to the quantum of evidence required to show a material and substantial change in circumstances. Presumably for that reason, courts of appeals, ostensibly engaging in statutory interpretation, have attempted to surmise the legislative intent behind the statute. It is that interpretation upon which the majority‘s holding is premised.
One of the first cases to review section 14.08 was Bergerac v. Maloney, 556 S.W.2d 586 (Tex.Civ.App.-Dallas 1977, writ dism‘d). In that case, appellant appealed from an order which increased the amount of his child support obligation. Id. The trial court found that the needs of appellant‘s children had materially and substantially changed since the entry of the original order. Id. On appeal, appellant alleged that the trial court‘s finding was simply unsupported by the evidence. Id. The Dallas Court of Appeals recognized that section 14.08 provided for modification “if the circumstances of the child or a person affected by the order or portion of the decree to be modified have materially and substantially changed since the entry of the order or decree....” Id. at 587 (emphasis in original) (citing
This narrow interpretation of section 14.08 was later reinforced in Moreland v. Moreland, 589 S.W.2d 828 (Tex.Civ.App.-Dallas 1979, writ dism‘d), in which the Dallas Court of Appeals cited Bergerac for the proposition that to show a material and substantial change, a movant is required to adduce evidence of the circumstances of the children and parties at the time the prior decree was rendered and of the circumstances at the time the prior order is sought to be modified. Id. at 829 (emphasis in original). See also Labowitz v. Labowitz, 542 S.W.2d 922 (Tex.Civ.App.-Dallas 1976, no writ). According to Moreland, such evidence enables the trial court to ascertain whether there has indeed been a material and substantial change justi-
After reviewing section 14.08 in light of the rules of statutory construction, I believe the narrow interpretation embraced by the majority is unwarranted and contrary to the spirit of the statute.
Section 311.011 of the Code Construction Act states that “words and phrases shall be read in context and construed according to the rules of grammar and common usage.”
Further, under the Code Construction Act, we must presume that by enacting or amending section 14.08, the Texas legislature intended a just and reasonable result. See
Finally, the evidentiary constraints of the majority‘s decision are simply contrary to common sense. Consider the following hypothetical. At the conclusion of a divorce proceeding, the trial court enters a child support order. Unfortunately for the obligor, the trial court sets an unreasonably high monthly obligation that ultimately goes unpaid, either
This scenario is distinguishable, of course, because in the instant case, Jeff Hammond failed to meet the majority‘s evidentiary requirement. But it does reflect the danger in wearing blinders when reviewing evidence intending to show material and substantial change in circumstances. In doing so, the majority omits consideration of other relevant factors that may constitute a material and substantial change in circumstances.
For this very reason, some appellate courts show signs of abandoning the majority‘s strict evidentiary standard, opting instead for a more common sense approach that considers all the circumstances underlying a trial court‘s decision to modify. Most recently, the Amarillo Court of Appeals in In re Edwards, 804 S.W.2d 653 (Tex.App.-Amarillo 1991, no writ), considered other relevant factors in determining whether the movant proved a material and substantial change in circumstances. In Edwards, the appellee/movant filed a motion to modify child support seeking to increase the obligor‘s child support payments. Id. at 654. After a hearing, the trial court increased the support payments on the recommendation of a court master. Id. Appellant then appealed the ruling on legal and factual sufficiency grounds. Id. at 655. As is true in the instant case, the court in Edwards recognized that the parties’ divorce predated the enactment of the Texas Family Code child support guidelines. See
Likewise in Escue v. Reed, 790 S.W.2d 717 (Tex.App.-El Paso 1990, no writ), the El Paso Court of Appeals focused exclusively on the obligor‘s net resources and the children‘s needs at the time of the modification hearing to determine the existence of a material and substantial change in circumstances that warranted an increase in child support payments. Id. at 718-20. At the modification hearing, the obligor testified that he had recently lost his single largest customer, causing a forty-five percent decrease in his total business and an $11,000 drop in his monthly revenues. Id. at 719. He also testified about his current monthly expenses, gross income, and monthly child support payments. Id. From this evidence, the trial court calculated the obligor‘s monthly net resources and, taking into account the needs of the children, calculated a new child support obligation using the new guidelines. Id.
The majority‘s opinion also contradicts the sound reasoning in Arndt v. Arndt, 685 S.W.2d 769 (Tex.App.-Houston [1st Dist.] 1985, no writ). In that case, the appellee filed a motion alleging that there had been a material and substantial change of circumstances since the prior support order was entered. Id. at 769-70. After a hearing, the trial court filed findings of fact and conclusions of law, in which it determined that due to the increased costs and expenses attributable to the child‘s needs, there was evidence that warranted an increase in child support. Id. at 770. Appellant challenged the trial court‘s decision on the grounds that the appellee‘s testimony of increased expenses was insufficient to show a material and substantial change in circumstances since the date of the prior order. Id. In response, the court of appeals made the following observation:
One way to demonstrate a substantial and material change in the needs of the child is to show the child‘s needs at the time of the prior support order and the child‘s needs at the time of the hearing, but that is not the only way. Contrary to the appellant‘s argument, the appellee is not required to offer evidence of her income and each expense at the time of the prior order and her income and each expense at the time of the hearing so that an overall comparison could be made. Her testimony showing a substantial increase in the designated expenses for the child, in the absence of evidence showing any decrease in expenses, was sufficient to establish her claim that there had been a material and substantial increase in the needs of the child.
Id. The court then distinguished Bergerac v. Maloney which I believe erroneously laid the foundation of the majority opinion. Id.
Instead of the strict standards adopted by the majority, I recommend an approach to determining a material and substantial change in circumstances that incorporates a review of the totality of all the circumstances. Only then would we endow the true arbiter of the facts, the trial court, with the discretion soundly to resolve the issue.
For the reasons discussed above, I would hold there is sufficient probative evidence of a material and substantial change in Jeff Hammond‘s financial circumstances to warrant modification in light of all the surrounding circumstances. The trial court, therefore, did not abuse its discretion.
Accordingly, I would affirm the judgment of the trial court.
