Mayo v. CrazovichMayo v. Crazovich
Judy B. Mayo Crazovich appeals from a judgment which decreased the child support obligation of her ex-husband, Paul L. Mayo, to $68 per mоnth. We affirm.
Appellant, Judy B. Mayo Crazovich, and appellee, Paul L. Mayo, were married on November 24, 1972, in West Monroe, Louisiana. Two children were born of the marriage, Brittany, born November 30, 1973, and Haylea, born September 2, 1977. Following а legal separation of the parties on September 7, 1979, a judgment of divorce was rendered on October 1, 1980. This judgment awarded custody of the minor children to Judy Mayo and ordered Mr. Mayo to pay child support in the amount of $300 per month. Since the divorce, both parties have remarried.
On January 17, 1992, Judy Mayo Crazovich filed a rule against Mr. Mayo for contempt (alleging failure to pay child supрort and medical expenses), for attorney fees, for the amount of alleged past-due child support, and for an increase in child support. On May 20, 1992, Paul Mayo filed a rule to reduce child support asserting that he had suffered а severe decrease in income and that one of the children had reached the age of majority. Both rules were heard on July 20, 1992.
After hearing all of the evidence, the trial court rejected and dismissed Mrs. Crazovich‘s rule for an increase in child support and contempt. Applying
Ordinarily, even a consent judgment fixing child support may not be modified absent a showing of a substantial chаnge in circumstances to support the modification.
The child support guidelines are set forth in
On appeal, Mrs. Crazovich contends the trial court erred in fixing the child support award at only $68 per month. She asserts the trial court failed to consider the fact that Mr. Mayo had voluntarily quit a higher paying job to go into business for himself, which substantially lowered his income. She contends that her ex-husband is simply shifting his income to a later date by creating substantial equity in his poultry business. Under
The evidence in this case shows that in June of 1984, Paul Mayo and a partner started their own cementing company, Mayo and White Cementing, Inc. Mr. Mayo continued wоrking for this company until November of 1991. He expected to make over $30,000 in 1991. As evidenced by his 1991 tax return, which is filed in the record, Mr. Mayo in fact made only $15,000 that year due to financial problems that the company was experiencing. Paul Mаyo testified that he decided to leave the cementing business and start his own poultry farm with the hope of earning more money. He borrowed $20,000 from the Bank of Jena to purchase land for his poultry farm. Mr. Mayo also borrowed $308,000 from Mariоn State Bank, which was used to build chicken houses and purchase equipment. Since he has started his business, Mr. Mayo has sold two flocks of chickens, receiving $10,028 in income, while incurring $9,795 in operating expenses, which included repayments of loans. Each time a flock of chickens is sold, $8,000 is paid directly to Marion State Bank to pay off the construction loan.
Appellant also contends the trial court erred in reaching the conclusion that Paul Mayo had only $301 in actual income since starting his poultry business. She contends the trial сourt erred in calculating his income by simply deducting his business expenses from his gross receipts. She asserts that Mr. Mayo paid $20,500 to the bank for repayment of loans which were used to construct chicken houses for his poultry business. Appellant contends that nothing is mentioned about the payment of notes as being an ordinary and necessary business expense under
The child support guidelines establish the “basic child support obligation” for one or more children based on the combined “adjusted monthly gross income” of the parents. Norred v. Norred, 591 So.2d 396 (La.App. 2d Cir.1991), writ denied, 592 So.2d 1319 (La.1992). Gross income is defined in
(4) “Gross income” means:
. . . .
(c) Gross receipts minus ordinary and necessary expenses required to produce income, for purposes of income from self-employment, rent, royalties, proprietorship of a business, or joint ownership or a partnershiр or closely held corporation. “Ordinary and necessary expenses” shall not include amounts allowable by the Internal Revenue Service for the accelerated component of depreciation expеnses or investment tax credits or any other business expenses determined by the court to be inappropriate for determining gross income for purposes of calculating child support.
. . . .
The trial court referred to the above statute when determining Paul Mayo‘s income since he was self-employed. The trial court subtracted the operating expenses from the total earnings to calculate that Mr. Mayo had slightly over $300 in gross income since starting his poultry business. Included in the category of operating expenses were payments on the loans which Mr. Mayo had taken out to start his business. Obviously, the trial court considered these loans as ordinary and necessary expenses which were rеquired to produce income.
We have located no jurisprudence which discusses the meaning of an ordinary and necessary expense which is required to produce an income. However, it is obvious that if there were no business loans in the instant case, Paul Mayo would have no poultry business. The record indicates that the defendant depleted his savings account and borrowed $20,000 from the Bank of Jena, with his father as surety, in order to obtain 80 acres free and сlear so that the property could be mortgaged to the bank for the loan of $308,000 he obtained to begin his poultry business. In order for the bank to make the loan, the bank required that it receive payments directly from ConAgra (the chickеn processing plant which contracted with Mr. Mayo) in the amount of $8,000 per flock.
Defendant testified that ConAgra projected he could raise five and one-half flocks a year, which would amount to payments of something over $40,000 оn the bank loan. He has four chicken houses which cost approximately $75,000 each. He had hoped that his gross return would be $21,000 per year per house, but that sum has not materialized. Clearly, the defendant is in the early stages of a new
Under these circumstances, we conclude that the trial court‘s decision to treat the payments on the loans as an ordinary and necessary business expense was not clearly wrong. Thus, the trial court correctly applied
Finally, appellant contends the trial court erred when it failed to consider the income of Mr. Mayo‘s present spouse when determining the proper amount of child support. She contends that if Mr. Mayo only had $300 in income over the past seven months, then obviously he was receiving significant expense-sharing benefit from his second wife‘s income.
(6) “Income” means:
. . . .
(c) The court may also consider as income the benefits a party derives from expense-sharing or other sources; however, in determining the benefits of expense-sharing, the court shall not consider the income of another spouse, regardless of the legal regime under which the remarriage exists, except to the extent that such income is used directly to reduce the cost of a рarty‘s actual expenses.
. . . .
The use of the word “may” is permissive, and, therefore, consideration of second spouse income is discretionary with the trial court. The standard of review is whether the trial court abused its discretion. Norred v. Norred, supra; Crockett v. Crockett, 575 So.2d 942 (La.App. 2d Cir. 1991).
In the instаnt case, Paul Mayo testified that his current wife earned a little over $20,000 per year as a school teacher. Paul Mayo also testified that since November 1991, his family had been living off of a $2,000 tax refund from the IRS, a $300 tax refund from the state, the equity that they had in their house, and his wife‘s salary. Considering Mr. Mayo‘s current financial condition, it is clear that his current wife‘s salary is essentially the sole financial resource of the current Mayo household. The extent to which this income reduced which actual expenses of Mr. Mayo is not disclosed by the record. We, therefore, cannot say that the trial court abused its discretion when it failed to include the income of the current Mrs. Mayo in calculating Mr. Mayo‘s incomе.
In summary, Paul Mayo filed a rule to decrease his child support payments of $350 per month because one of his daughters had reached the age of majority and also because he had suffered a significant decrease in income. After hearing the evidence, the trial court found a change of circumstances because of Mr. Mayo‘s decreased income and rendered judgment fixing child support at $68 per month for one child, in accordancе with the guidelines. In so doing, the trial court concluded Mr. Mayo‘s income was significantly decreased and that he was not voluntarily underemployed. Concluding that the trial court‘s determinations were not clearly wrong, the judgment appealed from is affirmed at appellant‘s cost.
AFFIRMED.