*1 200 McFadden, (1950). S.W.2d 375 233 v. 217
stead. Sims to list voluntarily agreed for the parties the former rule applies, Here We arenot at a reasonable price. with a broker for sale the property Act thechancellorunder 340 a saleorderedby to decidewhether calledupon 1947,1 in some 1962), might 34-1215 (Repl. Ark. Stat. Ann. sale. to bea situationsbeconsidered forced added.) (Emphasis time, concludes, a case, for the first
In this
majority
settlement
from
court-ordered
resulting
property
partition
sale,
sale. I
rather than a forced
disagree.
is a voluntary
agreement
of financial
a debtor because
sale is
hurried sale by
A forced
“[a]
Here, as the
1365
ed.
(8th
2004).
Black’s Law Dictionary
hardship.”
were
due to financial hardship,
trial court recognized,
Johnsons
of a court-ordered
to sell their home
partition
forced
part
intend
that Robert did not
The trial court’s
their
property.
his homestead is not
to abandon
against
preponderance
such,
affirmed.
the trial court should be
evidence. As
join.
Gunter,
JJ.,
Corbin
KELLY III
HILL v.
Edward
Michele Kelly
James
Miller, for appellee/cross-appellant. This arises from an order appeal Jim Gunter, Justice. Sebastian Circuit Court a material County change circumstances to a modification of child justify owed III, Edward Hill, appellee, Michele Kelly, appellant, James for their three children. On Hill raises three appeal, allegations error, and We affirm the circuit brings court’s cross-appeal. *4 order as modified.
A recitation of the facts are contained
first appeal,
596,
v.
341 Ark.
ability of Administra III(b) language agreed, interpreting tive Number 10 holding Order income,and the trialcourt acknowl- is no of bonus history [t]here would even for a Kelly qualify of whether edged uncertainty calcula- bonusin the foreseeablefuture business given expense thereforereverseand remandfor tion thatwould be We required. of an order consistentwith this entry opinion. at 4.
Id. at 19 S.W.3d 2003, Hill, who had of all three On custody February children, in child and motion to filed a motion for increase enforce child custody, support, separation, property- settlement In her motion for increase in child agreement. support, Hill a material and substantial in circumstance that change alleged would a modification of the justify child-support payment $6,000. In her to enforce child motion custody, support, separa- tion, and she averred that agreement, Kelly property-settlement refused to divide their retirement accounts in accordance with their and assesseda tax and on the agreement penalty hypothetical division of the accounts. 24, 2003, On filed to Hill’s mo- February responses barred,
tion, that Hill was other affirmatively among pleading defenses, the doctrine of res and laches. He judicata, estoppel, filed a for decrease in child cross-petition support, requesting consideration of in the event that he was adjusting awarded of one or more of the minor children. In that custody he averred that his income for 2002 decreased and cross-petition, that he was entitled to a reduction in child under the He also filed a Chart. Family Support cross-petition, alleging he Hill one-half of the accounts their On agreement. July paid per 11, 2003, that, the circuit court ordered based an ad attorney litem’s recommendation and interviews with the two oldest chil- dren, the child remain in Hill’s was custody, awarded of the two oldest children. The circuit court custody reduced month for Kelly’s support payment obliga- per tions to child. his youngest *5 12, 2003, Hill filed an amended for
On motion August in increase child and an amended motion to enforce child and custody, support, separation, property-settlement agreement. also filed a motion for for the three children. In her She counseling for increased child she that the motion argued entry support, 11, 2003, order a modification in child July justified support. her motion to enforce child custody, support, separation, she maintained that at- property-settlement agreement, Kelly tax and to assess on various tempted accounts and that the accounts had not been hypothetical penalty divided. In
equally her motion for she for counseling, requested Kelly pay for the three children to assist of their counseling environment. change on 2003.
Kelly responded August Hill filed a motion to to with Act 337 require Kelly comply 26, 2003, of 2003 on the circuit court to September requesting order to income information for the Kelly provide previous 15, 2003, calendar Act 337. year, On October provided by that Hill breached their responded, arguing confidentiality agree- ment tax returns to third by disclosing parties by making remarks that he was of tax fraud in the of their guilty presence children. He order, that the court enter a requested protective Hill, sanctions and order impose against fees to be attorneys’ paid motion, Hill. In the he the circuit court to cross-petitioned hold Hill in of court for her refusal contempt alleged comply 20, 2004, with visitation orders. On the circuit court January returns, ordered Hill to 2002 tax to refrain from produce disclosing returns, the contents of those tax and to discontinue discussing their financial affairsin the of the children. The circuit presence court denied for Kelly’s petition court and set a contempt summer visitation schedule for 2004. The circuit court held a hearing On May 17, 2005,
October order, circuit court entered an ruling the motion dismissed, was and found that there counseling had been a material in circumstances that change a modifica- justified tion in child-support payments accordance required Kelly with Ark. Code Ann. 9-14-107(a)(l) The circuit 2005). (Supp. court found from Administrative Order Number 10 the applicable rates to be used to calculate child to be for three 25% children, children, 21% for two 15% one child because income exceeded the Kelly’s chart. The court further found the effective date of the motion for to be the changing custody effective date for calculating court al- support. Ultimately, lowed Hill income from the date of the motion until was with the custody two older children changed going and the with Hill. From the date of remaining *6 of the court allowed a credit 21% change custody, against due to Hill for the
income before Kelly calculating support child, and then income as reduced 15% youngest applied Kelly’s the credit. the court Hill to contribute to the by Finally, required of the two children in Kelly’s custody support by calculating Hill’s based income. The support net result included a $39,198 upon imputed minimum-wage balance of
lump-sum, accrued-support Hill, due to as well as the current amount of support $4,653 month to be used The circuit court also per prospectively. found was entitled to a credit of a Kelly against of$39,198 balance orthodontic paying expenses. claims for contribution to the fund children’s Kelly’s for reimbursement college travel
of were denied. The court also expenses ruled that would continue to claim the three children as Kelly income-tax The circuit court further dependants denied purposes. to receive a refund aof of Kelly’s cross-petition portion entered, Hill’s After the circuit court’s order was Hill alimony. filed her notice of on timely October filed appeal Kelly 17, 2005, on November 2005. From the October cross-appeal order, both their parties bring appeals.
For her first Hill that the circuit point appeal, argues court erred in income for the financial of adjusting Kelly’s support the two oldest children in the amount of determining support owed to Hill for the child. by Hill youngest Specifically, contends that the circuit court’s net income reducing Kelly’s was a deviation from the set forth in guidelines that, Administrative Order Number 10. She asserts in addition to the 21% reduction for his financial for the two oldest children, is credited with the amount of Hill’s for the Further, children in she makes the custody. Kelly’s argument she did not receive the same credit for the financial of her child; that there was no evidence that would youngest presented need for an that the circuit support any court’s adjustment; is based “the erroneous adjustment that ‘the father finding has contributed all funds to the two children in his ” and that the allocated reduction of net custody;’ 21% income has no on what is on the two children. bearing spent that the circuit court’s of his response, Kelly argues adjustment for their child was not in error. child-support obligation he contends that the circuit court’s Specifically, rulings comply with Administrative Order Number 10. from child-support review for an appeal
Our standard
record,
reverse a
will not
and we
on the
is de novo
order
*7
v.
erroneous. Ward
it is
unless
clearly
the circuit court
of fact by
A
is
clearly
(2005).
finding
The Arkansas General has Assembly provided ap- child method for the amount of determining support propriate reference to a be the noncustodial family- parent by paid Bland, 210, 238 chart. Davis v. 367 Ark. S.W.3d support Annotated 9-12-312(a)(2) 2002) Arkansas Code (2006). (Repl. § states: or initially a reasonable amount of determining support, the court shall review to be the noncustodial paid by parent, chart. It shall to the most recent revision of the family support refer that the be rebuttable for the award of child support presumption amount in the chart is the correct family amount contained support or to be awarded. a written Only upon of child support the record that the specific finding application chart would be or as determined estab- unjust under inappropriate, chart, lished criteria set forth in the family shall be rebutted. presumption
The issue involves court’s calculations in reaching its modification of The authority child-support payments. circuit court’s modification of child is found Ark. at 9-14-107, Code Ann. which in provides pertinent part: (a)(1) A gross income an amount change payor to or more than equal more than one twenty percent (20%) hundred dollars ($100) month shall constitute a per material change of circumstances sufficient to the court for modification of petition to the according family chart after appropriate deductions. *8 10,
Section I of Administrative Order No. which addresses court, the and of the circuit sets forth further authority scope for modification guidelines orders. Section I pro- vides in pertinent part:
All orders or child granting modifying support (including orders) shall agreed contain the court’s determination of the payor’s income, recite the amount of under the required guidelines, and recite whether the court deviated from the Family Support Chart. If the order varies from the it guidelines, shall include a justification of the order varies as be why under may permitted V Section hereinafter. It shall be sufficient in a case to particular rebut the that the amount of child presumption calculated correct, to the pursuant is if the Family Chart court enters Support in the case a written within the the specific Order that calculated, factors, so amount after consideration of all relevant child, the best interests of the or including is unjust inappropriate. 10, Under Administrative Order Number “income” means “any form of less deductions for:... payment... (4) proper paid [presently for other court order.” Ark. Ct. Admin. dependents by Sup. 10, Order No. 11(4). §
Section III of Administrative Order Number 10 the allows circuit court the to consider income exceeds payor’s chart. In our curiam re In Guidelines family-support per opinion, 647, 644, 291, Child 314 Ark. 863 S.W.2d 294 Support, App’x sup- we stated: “For self-employed payors, curiam), (1993) (per last federal and state income be calculated based year’s shall port Also the current and estimates for year. returns tax quarterly is of earning the amount the capable court shall consider payor Id. etc.” life-style, based on a net worth property, approach chart, amount stated in the income exceeds the When payor’s for one established: are then following percentages for three and 25% 21% for two depen- dependents; dependent; 10, The chart 111(b). Ark. Admin. Order No. dents. Ct. Sup. § decreases so that the amount structured support per Barnes, v. of added Barnes the number dependents. proportion Ark. 835 (1992). 843 S.W.2d Further, court has the to make any authority deviations to chart under following provision: b. Factors. factors warrant may adjust- Additional Additional shall ments the child include: support obligations 7. The required givenby payor dependent children, the absenceof evenin a court order ...[.] No. Ct. Admin. Order V. Sup.
Based these directives from Administrative Or turn to the circuit court’s order. Under der Number Section I, the court’s order “shall contain [1] court’s determi nation of the payor’s income, [2] recite the amount of required under the guidelines, [3] recite whether the court *9 from Ark. deviated Chart.” Ct. Admin. Family Support Sup. 10, First, No. I. the circuit court’s order in this case Order § calculations income contains substantial based Kelly’s upon that, tax returns. We have said based the child- upon previous for formula for guidelines support self-employed payors, child is based on the last federal and state calculating year’s support for current income-tax returns and estimates quarterly Here, In re Child the circuit See Guidelines supra. year. Support, court, 2001, 2002, and after the income-tax returns reviewing income; 2003, deducted income determined adjusted Kelly’s gross business, to Arkansas attributable his wife their Northwest through Services, Inc.; and the amount of Collection figured Billing from the to and determined the income business attributable Kelly; 210 for 2003 and for
monthly averages payments child-support $35,605 $41,384, to be to Pursuant respectively. Code Ann. 9-14-234 1995), circuit court ruled (Supp. properly 6, these modifications were set child-support February 2003, the effective date of the to motion filing We modify. that, income, conclude the circuit figuring Kelly’s court’s modifications on this date. child-support properly begin Second, under section I of Administrative Order Number the circuit court’s order the amount of “recitefs] under the Because support income required guidelines.” Kelly’s levels, exceeded the chart the circuit court child-support applied guidelines’ found 111(b). percentages Here, that, the circuit court ruled when the income properly chart, exceeds the amount for the 25% three support children, children, 21% for two for one child. See Thus, Administrative Order No. Section 111(b).
court calculated properly obligation 21% of Kelly’s by calculating income, $35,605 above Kelly’s $41,384, noted adjusted to arrive at a logical allowance for the two children in his care. income was as follows: adjusted Support Adj.
Period Ave. Mo. Rate Income Mo. Income $35,605 $7,477 $28,128 7-11-03 to 1-1-04 .21 $41,384 $8,691 $32,693 1-1-04 to 10-1-05 .21 Next, the court the rate of to 15% calculate the applied to owed Hill for the child. The calculations are as follows: $28,128 $32,693 7-11-03 to 1-1-04 1-1-04 to 10-1-05 Support Support for one x .15 for one child x .15 4,219 Monthly 4,904 $ Monthly $ (7-11-03 5.67 (1-1-04 months x 5.67 months x 21 1-1-04) 10-1-05) $23,921 Accrued Accrued support calculations, Based these cannot circuit say was erroneous. clearly
Third, under section I of Administrative Order Number *10 the circuit court’s order “recite must whether the deviated Here, Hill’s argu- crux of Chart.” from Family Support to deviations amounted deductions that these 15% ment is Order Administrative in enumerated guidelines from a mischaracterization However, is this argument Number calculations. the circuit court’s with
Here, is specific court’s order replete with of those calculations calculations, well as as explanations 10, that fully explain Order Number Administrative citations to credit to court allowed The reached those figures. how the court before children in his custody of the two for support Kelly The circuit child in Hill’s custody. for the one calculating support court made the following ruling: $172,924 above) (using the rates set out support accrued:
Total -127,034 actually paid: Support -6,694 chil- to Hill for two older (imputed support:
Mother’s minimum-wage upon dren based
income) Balance owed: calculations, ruled that the “net the circuit court these
After figuring 1, 2005 owed the father October amount of child by through $39,198.00.” calculations,the circuit court set From these prospec- $4,904, the amount of at the last rate of less tive to continue $251, attributed to Hill for which was minimum-wage imputation child, ordered of the one Kelly’smonthly child-support $4,653. to follow Admin- calculations to be These obligation appear Therefore, well- based our istrative Order Number 10. review, Num- well Administrative Order establishedstandard of as the circuit court modified Kelly’s ber we hold that properly children. for the Accordingly, obligations Kelly child-support the circuit court’s on this affirm rulings point. Hill that the her second argues
For appeal, point $4,540, a credit of circuit court erred Kelly against awarding owed, for all orthodontic by expenses arrearage paid should have been contends that the offset she Kelly. Specifically, $2,270, $4,540, exhibit as it was listed an half the amount of concedes this at trial. In Kelly point, by Kelly response, presented medical, dental, incurred and orthodontic all expenses noting divided between children are to be equally *11 212 Here,
Hill. both that the settlement parties agree agreement that the be shall for “parties provided equally responsible any medical, dental, orthodontic, unreimbursed counseling, prescrip- Therefore, tion we hold that the drug eyeglass expenses.” $4,540 court in circuit erred the credit for orth- awarding odontic Accordingly, circuit court’s expenditures. modify to order reflect a credit to ofHill for those expenses. For her third Hill that the circuit point argues appeal, erred in that the three ruling children shall be considered as for income-tax Hill dependents purposes. Specifically, contends that she should have been allowed tax for exemption child because he was in her youngest Hill asserts that custody. this from deviates the Arkansas Child ruling Guidelines. Support circuit court was in Kelly responds, arguing correct its because has Hill no income and that she “receives no benefit ruling from as a claiming for income tax dependent [her child] further contends that purposes.” Kelly Hill to claim that allowing husband, child as benefits Hill’s Steve Hill. dependent The circuit court has the to allocate authority dependents tax under 10, Administrative Order Number which purposes in relevant provides part:
f. Allocation Tax Dependents Allocation Purposes. of depen- of dents for tax belongs to the purposes custodial to parent pursuant However, the InternalRevenue Code. the Court have shall it, allocation, discretion grant to the dependency any part noncustodial if the benefit of the allocation parent to the noncus- todial parent substantiallyoutweighsthe benefit to the custodial parent. 10,
Ark.
Ct. Admin. Order No.
Sup.
111(b).
§
Tucker,
173,
In Dumas v.
82 Ark.
213 that “an 1981), Ct. Niederkorn, (Mo. App. 616 S.W.2d in nature identical to one nearly a tax party exemption award a sum equal the other order that party pay to an Freeman, Ark. App. v. Freeman the value exemption.” 137, 141, 224 (1989). 778 S.W.2d case. mind, to the we turn present this With precedent *12 the Here, ruling regarding made the following circuit court the issue: tax-exemption the three to claim shallcontinue the defendant-father
24. That The court finds tax for income purposes. as dependents children ofthe twochildren all the support for of thatthe fatherisresponsible $4,653.00 of per the net amount of support and that in his custody than ofthe ismore 50% custody the childin the mother’s monthfor the childin her lifestyle. to maintain supportrequired to claim Here, allows Kelly the circuit court’s ruling a tax and receive exemption. child as a dependent Fontenot, consti this award to a noncustodial Under parent supra, However, under chart. from the tutes a deviation child-support Ark. Dumas, made by the circuit court findings, required supra, and, to Administrative Ann. 9-12-312(a) (2), Code pursuant § 10, determined whether the court 111(f), Number Order substan allocation to the noncustodial the benefit of the parent The circuit the benefit to the custodial parent. tially outweighed that, “the mother of the stopped court found by agreement parties, has not been birth of the last child and to the working prior Further, that the circuit court found since that date.” employed $4,653.00 for the child of month the “net amount of per than of the mother’s is more support required in the custody her Based these rulings, the child in upon to maintain lifestyle.” Hill, and the benefits to particu the circuit court weighed and Hill had a substantial income in of the fact that Kelly light larly status. For these income due to her had no current unemployed reasons, the circuit court erred on this we cannot point. say that the his first on Kelly argues For cross-appeal, point in award Hill an increase decision to circuit court’s retroactively evi- was clearly against preponderance dence. child- of a court-ordered modification
Retroactive
be assessed from the time
may only
petition
obligation
Ann.
9-14-234 (Supp.
for modification is filed. See
Code
Grable,
Here,
Grable v.
307 Ark.
relevant finding: wife, 8. The defendant’s a Kelly, Pam receives substantial annual business, income as 50% owner and manager of a Northwest Services, and Arkansas Collection The Inc. defendant is the Billing owner of the other not an 50% does receive income the from The business. client of is the primary business defendant’s medical practice,Western Plastic Arkansas and Reconstruction Sur- Center. Dr. gery Kelly Pam file a Kelly income tax return joint and all of Pam income Kelly’s from business billing reported on the joint return. Randy Philpot, defendant’s accountant testified that if some of the income was deducted Pam billing from Kelly and attributed to Dr. there would not be in Kelly change any their tax liability. Mr. conceded that Philpot all of the attributing income to billing Pam would reduce Kelly Dr. income for Kelly’s accountant, Kincade, The support purposes. plaintiffs Ken that testified a reasonable an office in salary manager Fort Smith $47,644.00. would be Pam testified that com- Kelly monthly she pensation receives from the billing is the sum of company $5,500.00 $66,000.00 The Court finds that sum annually. of $66,000.00 is a reasonable annual for the salary management the billing company income from that any billing company of distribution $66,000.00 court as a is considered excess of 50% ownership percentage on their owners based to the income each...[.] a minus income billing determined Pam Kelly’s court
The circuit amount, the From that amount. distribution for a total salary Kelly’s share. Kelly’s determined 50% represent circuit court $66,858, and 2003 were shares respective $7,792, $39,565, and respectively. this issue. court’s on with the circuit ruling
We agree
an increase in the amount
Here,
considered
the circuit court
rather than
attributable to
income from
billing company
in his
Hill.
to his
cross-appeal,
Contrary
argument
in the context of
Pamela
only
computing
considered
Kelly’s salary
Arkansas Collection
from Northwest
amount of income
Therefore,
Inc.,
Services,
of which he owns one-half.
and Billing
circumstance, and
a material
this increase constituted
change
review,
hold that the circuit court
based
our standard
erroneous on this
was not
point.
clearly
For his last
argues
cross-appeal, Kelly
point
to Hill.
circuit court erred in
a minimum-wage
salary
imputing
that she
comfortable
contends
“enjoys
very
Specifically,
not
an education and work
which is
and has
history
lifestyle
Hill asserts
a minimum
worker.”
consistent with
wage
response,
income
the circuit court
minimum-wage
properly imputed
her,
as she is an unemployed payor.
of Administrative Order
111(d)
Section
provides:
*14
full
income.If a
or
below
working
Imputed
payor unemployed
the reasons therefor. If
the court
consider
earning
may
capacity,
are reduced as a matter of choice and not for reasonable
earnings
cause,
her
attribute income to a
to his or
up
the court may
payor
life-style.
consideration of the
including
payor’s
earning capacity,
a
at
minimum
shall be attributed to
wage
payor
Income of
least
ordered to
child support.
pay
Barnes,
v.
311 Ark.
upheld child where the chart amount for retroactive minimum trial that there was no evidence of judge recognized appellant’s take-home relevant time weekly no pay period. Finding discretion, error or abuse of we stated that the “[cjhancellor simply set the at the minimum level of an required unemployed Barnes, at at 843 S.W.2d person.”
Here, the circuit court found that Hill citing III(d), after the birth of working stopped youngest by agreement that, The court further parties. found she had a although sales, with a former college degree “there job pharmaceutical nowas evidence as to her presented For earning present capacity.” reasons, the those circuit court a to Hill imputed minimum-wage income for child for the two older children in the amount of$6,694.
We cannot that this say was in error. It ruling appears did not evidence as Hill’s or present lifestyle earning Because there was no evidence capacity. as to Hill’s presented current we hold that the earning circuit court capacity, properly income to Hill. imputed we affirm minimum-wage Accordingly, the circuit court’s on this issue. ruling
Affirmed as modified. JJ., dissent. Dickey,
Imber For her Justice, dissenting. Imber, Annabelle Clinton first Hill that the circuit court point appeal, erred argues when it income for the financial adjusted Kelly’s of their two oldest children in the amount of determining owed Hill for the child. She contends that specifically court’s reduction of net income 21% was deviation from set forth in support guidelines Administrative Order No. 10. I agree.
Under the of Administrative plain language Order No. income is defined under II: Section otherwise,
Incomemeans form of any or due payment,periodic individual, source, salaries, an regardless com- includingwages, missions,bonuses, workers’ compensation, disability,payments to a pursuant retirement pension and interestless program, proper deductionsfor: *15 tax; income
1. Federaland state Medicare, railroad (FICA), Security 2. for Social Withholding retirement; children; and for Medical insurance paid dependent courtorder. otherdependentsby
4. Presentlypaid supportfor Thus, income for added.) determining (Emphasis II, for other under section only “presently paid support purposes order” is deductible. Under properly dependents exceeds that shown on the when the income 111(b), family payor’s chart, then certain “of the monthly payor’s percentages defined in II” should be used to set and establish income as Section in the instant case amount of child The relevant percentages support. are for one for two for 15% 21% 25% dependent; dependents, As is a must be three dependents. self-employed payor, support on “the last two federal and state income tax calculated based years’ returns and estimates for the current SeeArk. Ct. year.” Sup. quarterly Admin. Order No. III(c).
The circuit court with Sections II III of the complied administrative order when it determined Kelly’s monthly averages $41,384 to be for 2003 and child-support purposes 2004. It was at this to the that the court point, according majority, deducted income from noted 21% Kelly’s monthly averages above, “to arrive at a allowance for the two logical support children in his care.” The court then the rate of applied calculate the child owed to Hill for the child in her The states that such a calculation custody. majority Administrative I to follow Order Number 10.” dis- “appear[s] agree.
The relies majority following apparently provision set forth in section V:
V. Deviation Considerations
b. Additional Factors. the child
Additional factors warrant may adjustments and shallinclude: obligations
7. The for support required given by payor dependent children, order;” even in the absence court of a This states that all of the listed factors under provision expressly Considerations”; is, V are section “Deviation that matters to be considered court whether a deviation is determining Thus, the circuit court’s of income for appropriate. adjustment Kelly’s the financial two oldest children in his care was in fact a deviation from the Administrative under Order support guidelines No. As to adjustment Kelly’s monthly average income, the circuit cited court V(b)(7) the administrative order, as well as its that “the father has contributed all of funds the two children in his custody.” not, view, Such circular does reasoning my satisfy set forth a requirement justification “why varies order be under Section V.” may permitted Ct. Sup. Admin. Order No. I. To cite the merely provision deviation, V, authorizes i.e. section does not to answer the begin that the question “Why?” father contributes all Similarly, say the funds to the children in his is inconsistent with custody the court’s decision to a minimum income to Hill impute wage and then to assess with her for those two children. reasons,
For the above stated I dissent. respectfully Dickey, J., joins this dissent.