Broadhead v. Broadhead

COURT OF APPEALS OF VIRGINIA

Present: Judges Frank, Clements and Senior Judge Coleman
Argued by teleconference

TOM A. BROADHEAD, JR.
OPINION BY
v. Record No. 0396-07-2 JUDGE ROBERT P. FRANK
JANUARY 29, 2008
ANNE E. BROADHEAD

FROM THE CIRCUIT COURT OF HENRICO COUNTY
L. A. Harris, Jr., Judge

Larry D. Diehl (Edward D. Barnes; Brandy M. Poss; Barnes &
Diehl, P.C., on briefs), for appellant.

Deanna D. Cook (Bremner, Janus, Cook & Stone, on brief), for
appellee.

Tom A. Broadhead, Jr., father, petitioned the trial court to reduce his child support

obligation to his former wife, Anne E. Broadhead, mother, based on a reduction in his earnings.

After an ore tenus hearing, the trial court determined that father was voluntarily underemployed,

comparing his current position and salary level to that he held at the time of the initial award.

Accordingly, the trial court imputed income to father.1 Based on its findings, the trial court

ordered a reduction in child support from $890 to $800 per month. On appeal, father contends

that the trial court erred in finding that he was voluntarily underemployed and in imputing

income to him from the job he held at the time of the initial award. Both parties request an

award of attorney’s fees and costs associated with this appeal. For the following reasons, we

reverse the decision of the trial court and remand for the trial court to determine whether father is

1
The trial court also imputed income to mother, finding that she was voluntarily
underemployed. However, mother conceded this point at trial and does not appeal the trial
court’s decision to impute income to her. Thus, that issue is not before us on appeal.
voluntarily underemployed in his current position, in accordance with this opinion. Further, we

decline to award attorney’s fees and costs to either party.

BACKGROUND

Father and mother married in 1985 and had two children, one born in 1994 and one born

in 1996. The trial court entered a final decree of divorce on April 3, 2001, and, pursuant to an

agreement by the parties, ordered father to pay $1,800 per month in child support to mother. 2

Both parties shared physical and legal custody of the children.

On January 31, 2003, the parties amended their agreement as to child support, reducing

the amount father paid to mother to $890 per month. 3 The parties never sought an order from the

trial court reflecting this reduction; however, both parties abided by the new agreement for the

next two years. During the instant proceedings in the trial court, mother maintained that, though

the parties’ 2003 agreement had never been entered as an order in court, she was bound by their

agreement and did not seek any increase in the support amount.

In 2005, both parties filed motions seeking primary physical custody of the children, and

mother also filed a motion seeking sole legal custody and seeking a change in support. On April

25, 2006, the trial court entered a consent decree resolving these issues, and the parties

2
The final decree of divorce, in which mother was named as plaintiff and father as
defendant, actually stated, “The amount of support to be paid by the plaintiff to the defendant for
the support and maintenance of the children is $1,800.00 per month, that obligation already
having begun, and is continuing each and every month thereafter until further order of this
court.” (Emphasis added).
This was clearly a clerical error by the trial court. Under the addendum to the parties’
separation agreement, dated March 15, 2001, father had agreed to pay mother $1,800 per month.
Indeed, father continued to pay $1,800 per month to mother for the two years following the entry
of the final decree, at which time the parties reached a separate agreement as to the amount of
support. In light of this treatment by the parties, we will assume for purposes of this opinion that
the final decree ordered father to pay $1,800 per month in child support to mother.
3
We note that the parties reached this agreement to reduce the amount of child support
two months before father left his employment with Capital One.
-2-
maintained joint legal and joint physical custody of the children. The trial court also granted

mother’s motion to withdraw her petition to amend child support.

On May 24, 2006, father filed a motion to decrease child support. In response, on June 2,

2006, mother filed a motion to increase child support and a motion for wage assignment. The

trial court heard evidence ore tenus on August 28, 2006.

Father testified that, at the time the final decree was entered, he was working for Capital

One in Richmond in the corporate counsel department, as the assistant general counsel in charge

of the business line groups. Father earned about $150,000 in salary, with a potential to earn large

bonuses. Between his salary and annual bonus, father earned approximately $250,000 in 2001.

Mother also worked at Capital One at that time, earning approximately $61,000 per year. Both

father and mother resided in the Richmond area.

In 2002, Capital One transferred father to a position heading the government regulatory

regulation group, which operated as the lobbying arm for the company. Father had requested to

retain his original position, as he did not have the “training and background to be an effective

leader” of the regulatory regulation group. Father testified that the position required one to have

fifteen to twenty years of experience in federal lobbying and governmental relations, while father

had “virtually none.” However, father stated that Capital One had instituted a policy of

switching mid- to senior-level managers into different roles to “broaden their experience.”

Based on this policy, he was transferred.

Father stated that he was not very successful in his new position, and, in March 2003, he

and his superiors reached a “mutual agreement” that father should leave that position so that

Capital One could fill his role with someone “who had experience.” Father’s old position at

Capital One in the corporate counsel department was no longer available, and he did not possess

the proper business experience to transfer to another department. Under the terms of father’s

-3-
departure, he received severance pay for one year, at the same level of salary he had when

employed, payment of his tuition to obtain a master’s degree in business administration, and a

statement by Capital One that father was leaving through no fault of his own.

While father was receiving his severance pay from Capital One, he took the opportunity

to establish a private equity fund where he was the principal investor, shareholder, and partner.

While working for this company, which currently operates under the name Mirabilis Ventures,

father took no salary. Based on the bonus and severance pay he received from Capital One,

father earned $283,000 in 2003. Father continued to pay $890 per month in child support to

mother pursuant to their January 2003 agreement.

In August 2004, father began working in Baltimore with CitiFinancial as its general

counsel. Father found this job through a recruiter. CitiFinancial paid father $160,000 in salary,

with the potential to earn up to 100% of his salary in bonuses each year, for a potential total of

$320,000. Father worked in Baltimore Monday through Friday, but continued to live in

Richmond on the weekends to spend time with his children.

Initially, the children spent Monday and Tuesday with father’s new wife while father

worked in Baltimore. This arrangement prompted mother to file her motion seeking primary

physical custody of the children.

In order to maintain joint physical custody of his children, father worked out an

arrangement with CitiFinancial to work at home on Mondays and Tuesdays. This arrangement

lasted four to five months, at which time CitiFinancial decided that they needed father in

Baltimore full-time. Father determined that he was not willing to change his custody

arrangement with his children, and resigned his position in August 2005.

Father returned to the same recruiter who had found him the job with CitiFinancial, but

father testified that the recruiter found nothing available in the Richmond area at his salary level,

-4-
given his experience. Father testified that he also reviewed the jobs advertised in the newspaper

and on online job-posting websites, but that he could not find “any jobs in the Richmond area . . .

that pa[id] anything like Capital One does.” 4 Father further stated that he “wasn’t willing to

work where [he] wouldn’t be able to have custody of [his] children.”

A few weeks after he left his position with CitiFinancial, father began working again for

the private equity fund Mirabilis as a “senior strategist.” Father’s base salary was $150,000,

“with the possibility of bonuses based on company performance.” Father was paid a bonus of

$20,000 in 2006 based on the company’s performance in 2005. At the time of the August 2006

hearing, father was still working at Mirabilis.

At the hearing to change child support, mother conceded that she should have income

imputed to her, as she voluntarily left her position at Capital One and was currently

“underemployed.” Mother also conceded that, based on the evidence at the hearing, there was

not “sufficient evidence to grant [mother] an increase” in child support. However, mother

argued that father did not meet his burden to prove that there was a material change in

circumstances to reduce child support from $890 per month.

In an order dated January 17, 2007, the trial court found that there was a material change

in circumstances since the 2001 order, in that both parties were earning substantially less money

in 2006 than they had been in 2001. 5 The trial court determined that, under the child support

guidelines using the actual current income of both parties, father would be required to pay

4
Mother did not present any evidence that jobs comparable to father’s job at Capital One
or CitiFinancial were available to husband in Richmond.
5
The trial court noted that, “The Court will deal with the parties’ agreement dated
January 31, 2003. However, since the last agreement was not made into an Order, the Court is
dealing with the Final Decree dated of April 3, 2001.” The trial court went on to find a “material
change in circumstances” since the entry of the final decree, “in that both of the parties are
earning much less income.” Whether the trial court evaluated the change in circumstances from
April 3, 2001, or January 31, 2003, is of no real consequence; both parties maintained the same
positions and approximate salary levels on those two dates.
-5-
mother $751 per month. However, the trial court found that both parties were “voluntarily

underemployed.” The trial court noted specifically that father was not underemployed for

leaving CitiFinancial, as “he left that position to retain his custody rights with his children at a

time when there was a pending custody motion filed by [mother], because [father] worked out of

town.” Instead, the trial court found that father was voluntarily underemployed “because he

voluntarily left Capital One where he was making a greater amount of money.” The trial court

never determined whether father was underemployed in his current position.

The trial court imputed income to mother in the amount of $7,750 per month, reflecting

her level of salary and bonuses when she left Capital One in December 2005. The trial court

then imputed income to father in the amount of $23,333 per month, reflecting his level of salary

and bonuses when he left Capital One in March 2003. As a result of that imputed income, the

trial court ordered father to pay mother $800 per month.

This appeal follows.

ANALYSIS

Voluntarily Underemployed

Father argues that the trial court erred in finding that he was voluntarily underemployed,

and subsequently deviating from the child support guidelines.

“Under familiar principles we view [the] evidence and all
reasonable inferences in the light most favorable to the prevailing
party below. Where, as here, the court hears the evidence ore
tenus, its finding is entitled to great weight and will not be
disturbed on appeal unless plainly wrong or without evidence to
support it.”

Hatloy v. Hatloy, 41 Va. App. 667, 671, 588 S.E.2d 389, 391 (2003) (quoting Pommerenke v.

Pommerenke, 7 Va. App. 241, 244, 372 S.E.2d 630, 631 (1988)) (alteration in original).

This case arose after the original divorce and child support order was entered. The

standard of proof and burdens in such circumstances are clear.
-6-
 “Once a child support award has been entered, only a
showing of a material change in circumstances will justify
modification of the support award. The moving party has the
burden of proving a material change by a preponderance of the
evidence.” Crabtree v. Crabtree, 17 Va. App. 81, 88, 435 S.E.2d
883, 888 (1993). “[A] party seeking a reduction in support
payments has additional burdens: ‘He must make a full and clear
disclosure relating to his ability to pay. He must also show that his
lack of ability to pay is not due to his own voluntary act or because
of his neglect.’” Edwards v. Lowry, 232 Va. 110, 112-13, 348
S.E.2d 259, 261 (1986) (emphasis added) (quoting Hammers v.
Hammers, 216 Va. 30, 31-32, 216 S.E.2d 20, 21 (1975)). Thus, in
order to prove a material change in circumstances that justifies a
reduction in support, a parent “must establish that he is not
‘voluntarily unemployed or voluntarily under employed.’”
Antonelli v. Antonelli, 242 Va. 152, 154, 409 S.E.2d 117, 119
(1991) (quoting Code § 20-108.1(B)(3)).

Virginia Dep’t of Soc. Servs. v. Ewing, 22 Va. App. 466, 470, 470 S.E.2d 608, 610 (1996).

In considering the appropriate amount of child support to be paid, “a trial court . . . is

required to impute income to a parent who is found to be voluntarily underemployed.” Niemiec

v. Dep’t of Soc. Servs., 27 Va. App. 446, 451, 499 S.E.2d 576, 579 (1998) (citing Code

§ 20-108.1(B)(3)). In deciding whether income should be imputed to a parent, and the amount of

such imputed income, “the trial court must ‘consider the [party’s] earning capacity, financial

resources, education and training, ability to secure such education and training, and other factors

relevant to the equities of the parents and the children.’” Blackburn v. Michael, 30 Va. App. 95,

102, 515 S.E.2d 780, 784 (1999) (quoting Niemiec, 27 Va. App. at 451, 499 S.E.2d at 579). The

“court may [also] impute income based on evidence of recent past earnings.” Brody v. Brody,

16 Va. App. 647, 651, 432 S.E.2d 20, 22 (1993).

We must determine whether father met his burden to establish that he was not

“voluntarily underemployed.” In Hatloy, we determined whether, for purposes of imputing

income, a father seeking reduction of his existing child support obligation met his burden of

proving he was not voluntarily underemployed. There, we distinguished between the father’s

-7-
burden of proof and the burden of proof imposed on parties seeking imputation of income to the

other party at the time of an initial support award, as follows:

Although the word, “imputation,” is used in this context,
the burden of proof remains on husband, not on wife who is
arguing for imputation, unlike cases asking for imputed income at
the time of the initial award. Here, the trial court had previously
set an amount of support, based on husband’s then-salary from [his
job at the time of the initial award]. Thus, wife’s request for
imputation is basically an argument in support of continuing the
initial award. Husband, on the other hand, is asking the court to
reduce the previously set support amount. In meeting his burden
on the motion to reduce the awarded support, husband must prove,
among other issues, that he should not have his previous income
from [his job at the time of the initial award] imputed to him.

Hatloy, 41 Va. App. at 672 n.3, 588 S.E.2d at 391 n.3.

Aside from having to prove a material change in
circumstances, husband had to prove that this change warranted a
support modification. In discharging this burden, one of the
circumstances that the chancellor must consider is whether the
changed circumstances arose from his own voluntary
underemployment. A trial court may use its broad discretion in
deciding whether a material change in circumstances warrants a
modification in the amount of support.

Reece v. Reece, 22 Va. App. 368, 373, 470 S.E.2d 148, 151 (1996) (citation omitted) (footnote

omitted).

Unless the trial judge misapplies the legal standard or misallocates the burden of proof,

the question of “‘[w]hether a person is voluntarily unemployed or underemployed is a factual

determination,’” O’Hara v. O’Hara, 45 Va. App. 788, 798, 613 S.E.2d 859, 864 (2005) (quoting

Blackburn, 30 Va. App. at 102, 515 S.E.2d at 784), one firmly placed “‘within the [sound]

discretion of the trial court,’” Sargent v. Sargent, 20 Va. App. 694, 703, 460 S.E.2d 596, 600

(1995) (quoting Calvert v. Calvert, 18 Va. App. 781, 784, 447 S.E.2d 875, 876 (1994)).

Employing the most deferential standard of appellate review, we reverse factual findings “only if

-8-
plainly wrong or not supported by credible evidence.” Budnick v. Budnick, 42 Va. App. 823,

841, 595 S.E.2d 50, 59 (2004).

The record shows that father experienced the material change in circumstance necessary

for the trial court to review his child support obligation, namely, that his actual income was much

lower in 2006 than at the time of the initial award.

Here, the trial court determined that father did not voluntarily leave CitiFinancial, but

found that father was voluntarily underemployed based on his departure from Capital One

“where he was making a greater amount of money.” The proper analysis evaluates whether

father is currently voluntarily underemployed, based on the position he holds, his current income

level, the reasonableness of father’s efforts to find employment, and the availability of other

positions at higher income levels, given his education and experience. Blackburn, 30 Va. App. at

102, 515 S.E.2d at 784. These factors must be considered in light of the other circumstances

surrounding this case, such as the custody arrangement between the parties and the ability of

father to obtain a position that allows him to maintain that custody arrangement. See Reece, 22

Va. App. at 376-77, 470 S.E.2d at 152-53 (holding that, where husband had strong familial ties

to Richmond, he was not voluntarily underemployed based on his refusal of a job opportunity

requiring him to relocate to a different state). It is only when considering all of these factors that

the trial court can determine whether, in the party’s current position, he is voluntarily

underemployed.

In determining whether father’s move to employment at a lower income level would

warrant the imputation of income, it is certainly appropriate to weigh the sequence of events

leading to his current employment beginning with his departure from Capital One, the position

he held at the time of the initial award. However, any such determination must be made in

context of the principal concern: whether father is currently voluntarily underemployed.

-9-
 First, the circumstances under which father left his position at Capital One could hardly

be considered voluntary. Father was transferred, against his request to remain in his original

position, into a role that required substantial experience and expertise that father did not have.

After father predictably did not succeed in this position, he and his superiors reached a mutual

agreement that father should leave so that the company could hire someone with more

experience. Further, the company did not have any other positions for father at that time. Father

characterized his departure as an “opportunity to leave . . . with dignity.” Under the terms of this

agreement, Capital One not only offered father one year of severance pay, maintaining his salary

level, but also agreed to continue paying father’s tuition to pursue a master’s degree. Capital

One also agreed that father was leaving through “no fault of [his] own.”

Based on the uncontested evidence presented at the hearing, it is clear that father’s

departure from Capital One was not voluntary. Thus, to the extent that the trial court found that

father “voluntarily” left his position at Capital One, we conclude, as a matter of law, that the trial

court erred. The record does not support the trial court’s finding.

However, the fact that, at some time in the past, father may have been involuntarily

terminated from his job at Capital One is not determinative of whether he is now voluntarily

underemployed. One could have been involuntarily terminated from a higher paying job, yet

income may still be imputed to father if he is now voluntarily underemployed.

The trial court determined that father did not voluntarily leave his position with

CitiFinancial, given the location of the position and the pending custody petition filed by mother

at the time. See Reece, 22 Va. App. at 376-77, 470 S.E.2d at 152-53. Mother did not assign

error to that finding by the trial court, so that finding is not before us on appeal.

However, a finding that father did not voluntarily leave his position at CitiFinancial does

not end the analysis of whether father is currently voluntarily underemployed. While father may

- 10 -
not have left the position with CitiFinancial voluntarily, based on his custody obligations to his

children, the trial court never considered whether father’s efforts to secure employment closer to

Richmond at a comparable level of income were sufficient to meet father’s burden to show that

he was not voluntarily underemployed. See Hatloy, 41 Va. App. at 672-73, 588 S.E.2d at 391-92

(holding that, though mother conceded father left his original position involuntarily when he was

terminated through no fault of his own, the court still had to determine whether father was

voluntarily underemployed by examining his efforts to find employment and by considering

whether father could have earned more money in a different position). Though father’s current

employment may be a bona fide and reasonable business venture, such a decision does not

necessarily preclude the imputation of income to father. See Antonelli, 242 Va. at 156, 409

S.E.2d at 119-20 (holding that a father who made a lateral move from a salaried to a

commissioned position, while made in good faith, bore the burden of the risk such a move

created and the trial court did not err in imputing income to him at the level of his prior salaried

position).

Thus, we find that the trial court erred in ruling that father voluntarily left his position at

Capital One. In reaching this ruling, the trial court failed to consider the other factors relevant to

an analysis of whether father is voluntarily underemployed in his current position. On remand,

the trial court must consider all of the relevant factors, particularly whether father’s efforts to

find a position were reasonable and whether other positions in the Richmond area were available

to father, utilizing his education and experience, at a pay level comparable to his former

positions with Capital One and CitiFinancial.

Attorney’s Fees

Both mother and father request attorney’s fees and costs associated with this appeal. We

have held:

- 11 -
 The rationale for the appellate court being the proper forum to
determine the propriety of an award of attorney’s fees for efforts
expended on appeal is clear. The appellate court has the
opportunity to view the record in its entirety and determine
whether the appeal is frivolous or whether other reasons exist for
requiring additional payment.

O’Loughlin v. O’Loughlin, 23 Va. App. 690, 695, 479 S.E.2d 98, 100 (1996).

In mother’s brief on appeal, she requested that “if this Court affirms the trial court’s

rulings, that the matter be remanded to the trial court to award her attorney’s fees and costs for

defending this appeal.” (Emphasis added). As we are reversing the decision of the trial court,

we need not consider mother’s request for attorney’s fees and costs associated with this appeal.

As to father’s request for attorney’s fees, we note that an award of attorney’s fees is not

proper where the question presented is one “about which there may have been a reasonable and

an honest difference of opinion at the time the appeal was taken.” Honaker & Feeney v. Hartley,

140 Va. 1, 15, 124 S.E. 220, 224 (1924). Here, mother was defending the ruling of the trial

court. Because we are reversing that ruling, this is an issue about which there was “a reasonable

and an honest difference of opinion.” Thus, we deny father’s request for attorney’s fees and

costs on appeal.

CONCLUSION

We hold that the trial court erred in finding that father voluntarily left his position at

Capital One. We further find that the trial court failed to consider the other factors relevant to an

analysis of whether father is voluntarily underemployed in his current position, particularly

whether father’s efforts to find a position were reasonable and whether other positions in the

Richmond area were available to father, utilizing his education and experience, at a pay level

comparable to his former positions with Capital One and CitiFinancial. We reverse the decision

of the trial court and remand for proceedings consistent with this opinion.

Reversed and remanded.
- 12 -