Berg v. Ullman Ex Rel. Ullman

MESCHKE, Justice.

[¶ 1] Misty Ullman appealed an order denying her motion to increase Derek Berg’s support for their child, Peter Michael. We affirm in part, reverse in part, and remand for complete development of Derek’s income and for correct application of the law imputing income to an underemployed parent.

[¶ 2] Peter was bom December 2, 1994, to Misty and Derek while they were unmarried high school students. The director of social services sued for Peter in April 1995 to establish Derek’s paternity and his support duty. A judgment was entered March 20, 1996, declaring Derek to be Peter’s natural father and ordering Derek to pay monthly child support. Because Derek was still in high school and newly employed part-time at minimum wage at a pizza franchise, Derek’s support obligation was set at $50 monthly, *219and Derek was required to pay $10 monthly on a $485 arrearage for the ten months from April 1995 through January 1996. Apparently anticipating Derek’s full-time employment after his high school graduation in May 1996, the judgment directed re-assessment of Derek’s “ongoing child support obligation in light of any material change in [his] ability to pay....”

[¶ 3] After a June hearing, a judicial referee found “a material change in [Derek’s] circumstances ... based upon the fact that [he] has now graduated from high school;” Derek resides with his parents and pays $50 per month in rent; and he “suffers from no disabilities and is able to earn a full-time, minimum wage income of at least ... ($625.00) per month in take-home pay.” Despite the direction in N.DAdmin.C. 75-02-04.1-02(10) that “[e]aeh child support order must include a statement of ... how that net income was determined,” the referee’s order did not show how Derek’s monthly net income was found to be $625. However, neither side sought review and the order became final. From his $625 monthly income, the referee ordered Derek to pay $102 child support.

[¶ 4] On February 25,1997, Derek sued to clarify and enforce his “right of reasonable visitation” in the paternity judgment. On May 19, 1997, while settlement of visitation was pending, Misty moved “for an increase in [Derek’s] child support obligation on the grounds that he is underemployed.” Her affidavit alleged Derek “is grossly underemployed” because she had “reason to believe from North Dakota Job Service that the average pizza delivery person makes significantly more money than [Derek] is making at this time.”

[¶ 5] Derek’s affidavit disputed “that pizza delivery persons in Fargo earn more than minimum wage.” To evidence his earnings, Derek attached a single two-week pay stub showing gross year-to-date wages through June 29, 1997 of $4,125.42. Derek insisted he “cannot afford to pay any additional amount in child support at this time” because “my regular monthly expenses already exceed my income.” At “an average of $317 per pay period” for 13 two-week pay periods until then, Derek “anticipated annual income of $8,250,” less taxes of $880, for a net annual income of $7,370. Dividing that by 12 for a net monthly income of $614, Derek said he was earning “only slightly less than the amount imputed to me in the last order.”

[¶ 6] At an August 1997 hearing, Derek testified he was age twenty, had finished high school in 1996, and had worked as a delivery driver and a pizza maker for “pretty close to two years.” He had not “looked for other employment” “[b]ecause I believe it’s a good enough job.” He agreed he had not been working full time, but he said, “I’m doing pretty close to full time.” He had not “looked for any jobs where you could find employment full time” “because I’ll be starting school this fall.” He agreed “there would have been nothing keeping [him] from getting a full-time job” if he began school at Northwest Technical College, but he felt it “would be very hard.” He admitted applying for college after Misty moved to increase support.

[¶ 7] Derek testified to purchasing a 1990 Chrysler LeBaron Convertible in June 1997, and to obligating himself for $118 a month for two years “to fix up my car.” He said he had no other source of income besides his wages and tips. His last pay stub showed $38.75 in tips for that two-week period, he agreed, but when asked “how much do you normally make in each pay period for tips,” he had “no idea.”

[f 8] Misty’s counsel argued for more income to be imputed to Derek than what he was earning:

This man is making — has chosen by his own admission to work part time. He has not looked for other jobs.... He’s worked less than 40 hours a week. He thinks it’s a pretty good job. He’s making — he’s paying I think $108 a month for the support of his child. He’s had money for buying another ear. He’s had money obviously to do what he wishes to do, live in an apartment, live away from home. He now says he’s going to go back to school_ [H]e never thought about doing that until after these motions were made.
*220... A high school graduate can do more than work part time delivering or making pizzas.
... the statute makes it very difficult to prove but under the Wage and Benefit Survey, which is attached to this, it states and it shows what an average of a person would make making pizzas — I’m sorry, being a delivery person if he can deliver pizzas, which I don’t think he’s being totally forthright in what he makes in tips. I think he probably does a lot better than that in his tips, and that’s up to the Court to decide. If he — an average high of what ... he’d be making 77 percent of what he would be making in — by way of what other delivery people make. Making four seventy-five when he could make five twenty-two and six seventeen even at the minimum and that’s not being — that’s not asking for a lot for him to do that.

[¶ 9] Derek’s counsel argued, like she did in this court, Derek was earning “close to” minimum wage so no more should be imputed. For example:

The guidelines set forth when you impute income and they decide it, that I think if you impute income at the federal minimum wage $102 a month is all you can expect in child support.
[[Image here]]
The guidelines require that people earning significantly less in order to impute income. There’s no testimony here that he is earning significantly less.

Unfortunately, the court blindly accepted this argument:

... we’re already making him a 40-hour-a-week pizza delivery guy at minimum wage so I think it’s a misstatement of the facts to talk about him in a part-time capacity when it’s my understanding that the child support that’s been imputed to him is based on a 40-hour week minimum wage, right?

Haltingly, Misty’s counsel tried to argue otherwise:

... So giving him the benefit of the doubt, he’s still choosing to work part time at a minimum wage job, and he has for over two years, instead of trying to find something else.
... when he came in the last time and playing, quote unquote, the game with the Court he was working only working part time. They then argued at that juncture he hasn’t had the money because he’s only working part time.

[¶ 10] But, mainly, Misty’s counsel argued Derek had abilities to earn more:

... My position is this: He is underemployed. He has the ability to do a heck of a lot better than to be pizza delivery guy for two years, whether it be part time or almost full time, and if the Court awarded to his abilities, which this statute is intended for, he would then be in a position where I think you would find that he would able to go and do delivery work. And if it’s delivery work delivering pianos or delivering furniture, that’s what this chart shows. He certainly has that ability. There are other things other than delivering pizzas .... even taking into consideration that his tips may be low and you may not buy that, that he’s undoubtedly pocketing more money than what he says, it appears that he could certainly do a lot better. It’s been two years he hasn’t found a better job.

[¶ 11] The trial court was troubled, but felt it had no way to impute greater earnings to Derek:

... I can’t impute skills to him that he doesn’t have right now. He’s a low skilled laborer and I’m satisfied he can’t be very proud of the fact that he only pays $102 a month for child support. That can’t be something that he’s proud of. And I’m hopeful that that’s not something that he wants to continue for very much longer in the future. But I certainly have no basis on which to impute a higher child support amount to him. The Court imputed half of that amount to him while he was in high school. And after he graduated from high school, just about a year ago, and got a job working at Domino’s the figure was raised to 102. And, as I mentioned earlier, that’s imputing a full 40-hour week to him. Now he could be working two jobs. He doesn’t elect to do that. I’m satisfied he could be *221making more money, but I don’t have the grid available. I don’t have the evidence in front of me that would allow me to plug him into something higher than where he’s at.

The court held “there is no basis to impute income in addition to the income imputed by the amended judgment,” and refused to increase Derek’s child support.

[¶ 12] On appeal, Misty contends the trial court erred in deciding Derek “is not underemployed ... when he willfully chooses to work part-time at a minimum wage job that pays significantly less than the community average when he could make significantly more than minimum wage if he worked full-time.” She argues:

... According to the Fargo Wage & Benefit Survey of 1996 published by Job Service North Dakota presented as evidence by [Misty] at the trial, the average delivery driver working full-time in Fargo makes more than minimum wage. The average gross wage of a delivery driver in Fargo is $5.82 per hour according to the survey, and thus the average gross monthly salary of a delivery person based on $5.82 per hour in the Fargo area would be $1,008.80- This is significantly more than what [Derek] is actually making at this time. Currently, he is making only 75 per hour and thus his gross monthly income if he works full-time is $823.33 [sic]. However, he has never worked full-time since his child was born, and even at the time of the trial, he claimed he was trying to work full-time, but even then, he was working less than forty hours. In addition, he works sometimes as a pizza maker and sometimes as a pizza delivery person and therefore makes less in tips than he would if he was working full-time as a delivery person. He could be working full-time either at this job or a different job as a delivery driver, but he has chosen to only deliver part-time.

(our emphasis). Unfortunately, two of the three alternative ways in the guidelines, at N.D.Admin.C. 75-02-04.1-07(3)(b) and (c), to impute income based on earning capacity are not available on this sparse record.

[¶ 13] “An obligor is ‘underemployed’ if the obligor’s gross income from earnings is significantly less than prevailing amounts earned in the community by persons with similar work history and occupational qualifications.” N.D.Admin.C. 75-02-04.1-07(l)(b). When an obligor is underemployed, the guidelines authorize three alternative ways to impute income:1

Except as provided in subsections 4 and 5, monthly gross income based on earning capacity equal to the greatest of subdivisions a through c, less actual gross earnings, must be imputed to an obligor who is unemployed or underemployed.
a. An amount equal to one hundred sixty-seven times the hourly federal minimum wage.
b. An amount equal to six-tenths of prevailing gross monthly earnings in the community of persons with similar work history and occupational qualifications.
c. An amount equal to ninety percent of the obligor’s greatest average gross monthly earnings, in any twelve months beginning on or after thirty-six months before commencement of the proceeding before the court, for which reliable evidence is provided.

N.DAdmin.C. 75-02-04.1-07(3)(our emphasis). Because subdivision c clearly does not apply, Misty had the burden to prove Derek’s occupational qualifications for more imputed earning capacity under subdivision b. Misty had to prove the amount Derek was earning was less than six-tenths of the prevailing earnings in the community of persons with similar work history and occupational qualifications. She failed to do so.

[¶ 14] Misty concedes Derek’s small earnings were more than sixty percent of the prevailing wage she sought. However, she argues the trial court still had judicial discretion to find Derek underemployed. For that *222purpose, Misty offered evidence from the 1996 Fargo Wage and Benefit Survey published by Job Service North Dakota.

[¶ 15] From this evidence, Misty argued Derek should be able to earn the average wage of a “merchandise deliverer” of $5.82 per hour, or even the average high wage of $6.17 per hour for that category. In his affidavit, Derek contested Misty’s position that he could earn more as a merchandise delivery person by insisting a pizza delivery person can only make minimum wages. While the wage rates for merchandise delivery are significantly more than Derek’s earnings, sixty percent of either of the wages urged by Misty is less than his current earn'ings.

[¶ 16] We have recognized publications by Job Service North Dakota are relevant evidence that can be judicially noticed to show prevailing wages in a community of persons with similar work histories and occupational qualifications. Kjos v. Brandenburger, 552 N.W.2d 63, 65-66 (N.D.1996); Nelson v. Nelson, 547 N.W.2d 741, 748 (N.D.1996). But our standard of review recognizes the trial court is in a far better position to weigh the evidence and judge the credibility of witnesses. Nelson at 747. Misty presented no evidence here to prove a pizza delivery person has the same occupational qualifications as a merchandise delivery person. She presented no evidence to show a greater amount of income could be imputed, based on Derek’s work history, education, and experience, beyond minimum wages. Thus, we affirm the trial court’s refusal to impute more income to Derek under N.D.Admin.C. 75-02-04.1-07(3)(b).

[¶ 17] Still, the trial court’s conclusion “that there is no basis to impute income in addition to the income imputed” previously was mistaken and clearly erroneous. As Heley v. Heley, 506 N.W.2d 715, 721 (N.D.1993) explained: “A mere recitation that the guidelines have been considered in arriving at the amount of a child support obligation is insufficient to show compliance with the guidelines.” Clearly, Derek has not been earning the minimum that the guidelines dictate.

[¶ 18] The guidelines require “monthly gross income based on earning capacity equal to the greatest of subdivisions a through c, less actual gross earnings, ... be imputed to an obligor who is ... underemployed.” N.D.Admin.C. 75-02-04.1~07(3)(our emphasis).2 Derek has been employed only part-time at a minimum wage job for two years. That circumstance alone compelled a finding of underemployment and a correct calculation of the “baseline” minimum to be imputed to an able-bodied obligor like Derek. As Schleicher v. Schleicher, 551 N.W.2d 766, 769 (N.D.1996) explained: “A proper finding of net income is essential to a determination of the correct amount of child support under the guidelines.” Further, “Section 75-02-04.1-02(10), N.D.A.C., requires that a child support order include a statement of the obligor’s net income and ‘how that net income was determined.’ ” Id.

[¶ 19] The “baseline” minimum imputation is “[a]n amount equal to one hundred sixty-seven times the hourly federal minimum wage.” N.D.Admin.C. 75-02-04.1-07(3)(a). A young and ablebodied parent is certainly underemployed when he is still working part-time at minimum wages two years after his child was bom, more than a year after grad*223uating from high school, and not attending college or trade school. Derek is obligated, at the very least, for child support from full-time employment at the current minimum hourly wage.

[¶ 20] The applicable federal minimum hourly wage when Misty moved to increase Derek’s child support was a recently enacted increased wage effective in October 1996. 29 U.S.C.A. § 206. Although this increase of the minimum wage by 50 cents per hour was not specifically called to the trial court’s attention, the current $4.75 per hour was mentioned, and it was the applicable and correct law.3 Also, Derek’s less than full-time employment was evident in this record, and the wage information he furnished was fragmentary, incomplete, and unsatisfactory.

[¶ 21] Derek offered only a single wage stub for a second two-week period in June.4 The stub obviously showed less than fulltime employment for the year-to-date — $4,125.42 in wages — when full-time, one hundred sixty seven hours per month at the minimum hourly wage of $4.75 for six months, would be $4,760. Thus, Derek was earning $635 less than the mandated “baseline” imputed earnings for the first six months of 1997. He thus earned at least $105 monthly less than the full-time employment at the correct minimum wage required by the guidelines for “baseline” imputation.

[¶ 22] Derek also failed to submit his 1996 tax return or complete information on his earnings. See N.D.Admin.C. 75-02-04.1-02 at subsection(7) (“Income must be documented through the use of tax returns, current wage statements, and other information sufficiently to fully apprise the court of all gross income.”); and at subsection(lO) (“Each child support order must include a statement of the net income of the obligor used to determine the child support obligation, and how that net income was determined.”). See also Helbling v. Helbling, 541 N.W.2d 443, 448 (N.D.1995). Derek’s incomplete documentation of his income and the trial court’s mistaken finding (“there is no basis to impute income in addition to the income imputed by the amended judgment dated July 24,1996”) are inconsistent with this plain record and a correct application pf the law.

[¶ 23] The minimum wage went from $4.25 to $4.75 in October 1996. See 29 U.S.C.A. § 206. At the monthly full-time employment of 167 hours required by the guidelines, the higher minimum hourly wage plainly calculates an increased support. The minimum wage is statutory; the regulation fixes 167 hours per month for imputed full-time employment; and the related tax rates and tables are public records,5 judicially noticea*224ble6 whenever the obligor fails to produce complete information to correctly calculate child support. The correct calculation is uncomplicated arithmetic that even an overworked trial judge should be able to do in moments.7 Even a small amount more in child support from additional imputed earnings will often make a significant difference to a struggling custodial parent at the low end of the economic scale.

[¶ 24] Public policy abhors allowing a parent to avoid the obligation to support a child. See N.D.C.C. § 14-09-08: “Parents shall give their children support and education suitable to the child’s circumstances.” In an era when even a welfare parent with custody must work and earn minimum wages, the courts must expect no less from a non-custodial parent.

[¶ 25] Because the trial court failed to require proper proof of income from the obli-gor, and also failed to correctly apply the guideline requiring imputation of the “baseline” minimum wages from full-time employment, we reverse and remand for proper development of Derek’s earnings and a correct application of the law of earning capacity to be imputed to an underemployed obligor.

[¶ 26] SANDSTROM and MAKING, JJ., concur.

. Compare N.D.Admm.C. 75-02-04.1-07(5):

Gross income based on earning capacity may not be imputed if the obligor shows that the obligor has average monthly gross earnings equal to or greater than one hundred sixty-seven times the hourly federal minimum wage and is not underemployed.

. The agency history for this regulation is helpful:

Subsection 3 is the heart of the section. It' requires imputation based on earning capacity equal to the greatest of three alternatives, less actual earnings. Subdivision a is the monthly equivalent income for working full-time at federal minimum wage. This will form the baseline, and it may be proved by judicial notice of the hourly federal minimum wage. Subdivision b presents all the proof difficulties and would ordinarily require expert testimony (which may be available from the local Job Service office). Subdivision c calculations are based solely upon the obligor’s actual wage history. It allows imputation in cases where the obligor has a significant income decline. In almost all cases, the choice will be between subdivision a or c. Subdivision b will be used in those rare cases which merit the potentially considerable investment in discovery and expert witness fees required. We assume most such cases would be handled by private attorneys.

(our emphasis). Summary of Comments Received in Regard To Proposed New N.D.Admin.C. Ch. 75-02-04.1, Child Support Guidelines, transmitted to Executive Director of North Dakota Department of Human Resources by Blaine Nordwall on December 18, 1990.

.We should apply the right rule of law even if it was not properly presented to the trial court or to this court. See State v. Holecek, 545 N.W.2d 800, 803 (N.D.1996)(quoting LePire v. Workmen's Compensation Bureau, 111 N.W.2d 355, 359 (N.D.1961))("Questions not raised before the trial court will not he considered on appeal. But, ... ‘where a pertinent statute has been overlooked by both counsel and the court, resulting in plain error in a matter that is of public concern, this court will consider the error even though it is not brought to our attention by either of the parties.’ ”) (citation omitted); State v. Larsen, 515 N.W.2d 178, 182 (N.D. 1994)(quoting Elder v. Holloway, 510 U.S. 510, 512, 114 S.Ct. 1019, 1021, 127 L.Ed.2d 344 (1994))(“We have a duly to conduct appellate review ‘in light of all relevant precedents, not simply those cited to or discovered by the district court.' Otherwise, decisions might turn on 'shortages in counsels’ or the court’s legal research or briefing', and ‘could occasion appellate affirmation of incorrect legal results.’ ”) (citations omitted); Kamen v. Kemper Fin. Serv., Inc., 500 U.S. 90, 99, 111 S.Ct. 1711, 1717, 114 L.Ed.2d 152 (1991)(‘‘When an issue or claim is properly before the court, the court is not limited to the particular legal theories advanced by the parties, but rather retains the independent power to identify and apply the proper construction of governing law.”).

. The stub shows he worked 76.31 hours for the two week period, and his net pay was $248.65. 73.66 hours were at the rate of $4.75, but 2.65 hours were at $7.13, which is 1.5 of $4.75. This shows that Derek worked 2.65 hours over forty during one week, and nearly nine hours less than forty during the second. There is also an entry for $38.75 earned, with no hours shown, that implies he received tips not included in any wage calculation for child support.

. The rate for the standard deduction, 26 U.S.C.A. § 63(c)(2), is set out in 26 U.S.C.A. § 1; see Revenue Procedure 96-59 § 3.05. For amount of personal exemption, 26 U.S.C.A. § 151(d)(1); see Revenue Procedure 96-59 § 3.09. For the 1997 Tax Table, see 26 U.S.C.A. § 1; Revenue and Procedure 96-59 § 3.01. Rates for FICA and Medicare deductions are set out in 26 U.S.C.A. § 3101(a) & (b). For North Dakota’s, income tax withholding rate, see N.D.C.C. § -57-38-30.3(2).

. See N.D.R.Ev. 201(c) ("A court may take judicial notice, whether requested or not”) and (f) ("Judicial notice may be taken at any stage of the proceeding”).

. $4.75 x 167 = $793.25 monthly gross x 12 = $9,519.00 yearly gross, less $4,150.00 (standard deduction) and $2,650.00 (personal exemption) = $2,719.00 taxable income. Federal income tax from tax table on $2,719.00 is $407.00. State income tax is .14 x $407.00 = $56.98. FICA and Medicare deductions are 7.65% ($9,519.00 x .0765 = $728.20). $9,519.00— $407.00 — $56.98—$728.20 = $8,326.82 yearly net income. $8,326.82/12 = $693.91 monthly net income that tables a monthly child support of $133.00.

Moreover, the state and federal minimum wage for Derek increased to $5.15 on September 1, 1997. See N.D.Admin.C. 46-02-07-02.1; 29 U.S.C.A. § 206. $5.15 x 167 = $860.05 monthly gross x 12 = $10,320.60 yearly gross. $10,-320.60 less $4,150.00 (standard deduction) and $2,650.00 (personal exemption) = $3,520.60 taxable income. Federal income tax from tax table on $3,520.60 is $529.00. State income tax is .14 x $529.00 = $74.06. FICA and Medicare deductions are 7.65% ($10,320.60 x .0765 = $789.53). $10,320.60 — $529.00—$74.06— $789.53 = $8,928.01 yearly net income. $8,928.01/12 = $744.00 monthly net income that tables a monthly child support of $133.00. However, adding only the $38.75 in tips recorded on his June paycheck stub, Derek’s monthly net income would exceed $750.00 that tables a monthly child support of $168.00.

The trial court’s order here was entered on August 6, 1997. See N.D.Admin.C. 75-02-04.1-02(8) (“Jf circumstances that materially affect the child support obligation are very likely to change in the near future, consideration may be given to the likely future circumstances.”).