Lambert v. Lambert

FRIEDLANDER, Judge,

dissenting.

I agree with the majority's determination that the trial court did not err in dividing the marital properly evenly between the parties. I respectfully disagree, however, with the majority's determination that the trial court properly imputed Father's pre-incarceration income in calculating his initial support obligation.

We are writing on a more or less blank slate on this issue. The cases relied upon by the trial court, Holsapple v. Herron, *718649 N.E.2d 140 and Davis v. Vance, 574 N.E.2d 330, are not on point because they involved a modification of child support, not the initial determination of the obligation. Thus, as the majority notes, this is a question of first impression in Indiana. Davis and Holsapple involved situations in which a parent had already been ordered to pay support, and thereafter sought an order abating support while the obligor was incarcerated. The question in this case is, does the Davis/Holsapple rationale extend to cases in which the court is setting the initial support amount? That is, should a trial court ignore the financial consequences on a noncustodial parent of pre-divoree conviction and/or incarceration when calculating the initial child support obligation? I believe it should not.

I believe it is useful to examine the decisions that the majority decides today should be extended. Holsapple was decided after Davis, and in fact, depended exclusively upon Davis as support for its decision. The Davis panel cited two decisions in appellate courts of our sister states in support of its decision. It noted that in Parker v. Parker 152 Wis.2d 1, 447 N.W.2d 64, 66 (Ct.App.1989), review denied, the court determined "child support need not terminate during incarceration." It also noted the North Dakota Supreme Court's determination that "a child support obligor's incarceration ... does not constitute a material change of circumstances justifying a modification of child support payments." Koch v. Williams, 456 N.W.2d 299, 300 (N.D.1990). The Davis panel found those two cases persuasive, and in fact indicated those decisions played a significant role in its holding, stating, "We agree with and adopt the Wisconsin and North Dakota approaches." Davis v. Vance, 574 N.E.2d at 331. I note, however, that both cases have since been overturned and are no longer good law in Wisconsin and North Dakota, respectively.

In North Dakota, following legislative provisions that effectively rendered Koch: moot, that state's supreme court determined that a trial court now may impute income when a child support obligor has reduced his or her income, but it is not obligated to do so. See Logan v. Bush, 621 N.W.2d 314 (N.D.2000). In Marriage of Rottscheit, 262 Wis.2d 292, 664 N.W.2d 525, 585 (2003), the Wisconsin Supreme Court abandoned the Parker ruling and held instead, "[IIncearceration is an appropriate factor for courts to consider in reviewing a petition for modification, but the fact of incarceration alone is insufficient for a court to modify, or refuse to modify, a child support order." Thus, the two states cited as authority in Davis no longer adhere to the rule Mother herein advocates. Moreover, other states have weighed in on the side of permitting a reduction of support due to incarceration.

Bendixen v. Bendixen, 962 P2d 170 (Alaska 1998), In re Marriage of Walters, 575 NW2d 739 (Iowa 1998), Wills v. Jones, 340 Md. 480, 667 A.2d 331 (1995), and Leasure v. Leasure, 378 Pa.Super. 613, 549 A.2d 225 (1988) all address the question of whether a noncustodial parent's incarceration may be considered in setting the child support amount. Those cases. squarely addressed the central argument made by Mother-and the primary rationale for the holdings in both Holsap-ple and Davis, ie., that a child support obligor should not be permitted to reduce his or her obligation based upon the consequences of voluntary conduct. Desecrip-tively dubbed "voluntarily impoverished," see Wills v. Jones, 340 Md. 480, 667 A.2d 331, or a "self-inflicted" decrease in earning capacity, see Marriage of Walters, 575 N.W.2d 739, the courts in Bendizen, Waiters, Wills, and Leasure all agreed that incarceration is indeed a result of voluntary conduct, but disagreed that such fore*719closed the possibility of reducing child support therefore as a result of the concomitant reduction in income.

In making that determination, the courts all placed great significance on what one court termed the parent's "motivations and intentions", Wills v. Jones, 667 A.2d at 335, in committing the offense resulting in incarceration, which then results in "voluntary impoverishment". Id. I, too, believe the obligor's motivation for committing the crimes is the paramount inquiry in deciding whether the child support obligation should be reduced because of incarceration. See Bendixen v. Bendixen, 962 P.2d at 172 ("[nJlot every voluntary act that has negative economic consequences amounts to voluntary unemployment.... [To be considered voluntarily unemployed, a parent must engage in voluntary conduct for the purpose of becoming or remaining unemployed"); In re the Marriage of Walters, 575 N.W.2d at 748 (ordering a reduction in child support upon its conclusion that the obligor's "reduction in income and earning capacity [was] the result of his criminal activity which, although voluntary, was not done with an improper intent to deprive his children of support"); Wills v. Jones, 667 A.2d at 339 ("we hold that a prisoner is only 'voluntarily impoverished' as a result of incarceration if the crime leading to incarceration was committed with the intention 'of becoming incarcerated or otherwise impoverished"); and Leasure v. Leasure, 549 A.2d at 227 ("Mncar-ceration is usually an involuntary situation. While it may be possible to envision a parent avoiding child support by going to prison, we find it highly unlikely in the instant case"). _._

I believe the principle that applied in the foregoing jurisdictions with respect to the modification of an existing child support obligation applies as well in Indiana when the child support obligation is initially set. In reaching this conclusion, I note the Guidelines do not envision the assignment of blame when setting the support amount. Rather, it is generally a straightforward mathematical calculation utilizing a prescribed formula and plugging in the parents' respective incomes. Thus, with the limitedeexception' of voluntary underemployment or unemployment motivated by an intention to escape paying support, the child support obligation is based upon the parents' income, and not fault. No one has suggested here that Father's crimes were committed in order to become incarcerated so that Father's child support obligation would be lessened. If such were the case, I would agree that income should be imputed. Absent that, imputing pre-incgreeration income to Father is nothing more than an extra punishment. Punishment is not the point of a child support order.

I reject out of hand Mother's contention, and the majority's conclusion, that were my view to carry the day, it would represent a "reward" to Father for his criminal conviction. To put it plainly, using an incarcerated parent's actual income in calculating child support incentives nothing, at least with respect to the decisions then available to that parent. Indeed, leaving aside the loss 'of liberty and other significant negative aspects of incarceration, a prisoner's child support obligation will be reduced only in proportion to the prisoner's reduced ability to pay. "The prisoner's loss of income and subsequent reduced child support obligation cannot make the prisoner richer than before the commission of the crime." Wills v. Jones, 667 A.2d at 339. Neither can I agree with the majority's assertion that taking into account Father's current financial circumstances "overlook[s] the fact that the situation is one of his own making." Op. at 715. I do not propose to overlook anything, including Father's present circumstances and *720the reason he finds himself in this predicament. To the contrary, I believe that in reviewing this support order, we should be mindful of where he is and how he got there.

In the final analysis, the majority's holding today purposefully and completely ignores the reality of the situation in which Father and others similarly situated find themselves. As a result of incarceration, their income level has been drastically reduced, and a child support obligation based upon pre-incarceration income becomes impossible to pay. Thus, they remain incarcerated and unable to work, and the arrearage grows, while the present and future ability to pay the arrearage is significantly impaired. This reality was aptly described by Chief Justice Krivosha of the Supreme Court of Nebraska as follows:

We obviously recognize that the child support judgment will not be paid during the time that the parent is incarcerated, and therefore the judgment will simply accrue with interest. Such a situation provides little or no benefit to anyone. The children do not receive the benefit of the proceeds during the time they require the funds, and the parent is simply confronted with a large, nondis-chargeable judgment upon release from prison, at a time when the prospect of paying a large judgment with interest is extremely unlikely.

Ohler v. Ohler, 220 Neb. 272, 369 N.W.2d 615, 618-19 (1985) (Krivosha, J., dissenting).

Applying the foregoing principles to the instant case, Father owned a computer-consulting firm before he was convicted and incarcerated for molesting his nieces. He testified that his felony convictions will render it impossible for him to ever again work in that capacity, an assertion that Mother did not and does not now dispute. Father's only other source of income was from the proceeds of rental properties he owned at the time. Several of those properties were sold during the marriage, and in the dissolution decree the court ordered him to sell all of the remaining rental properties and split the proceeds with Mother. As a result, Father is no longer able to earn a living in his fields of expertise. There can be little doubt that the prospects for earning an income in the future that even approaches his pre-incar-ceration income are bleak. The law should not pretend it is otherwise because, among other things, that pretense will be of no benefit to his children.

In fact, this brings me back to the beginning point for reviewing support issues: the best interests of the child or children involved. As the majority notes, that is our guiding light in these cases. When we decide to impute income, we do so to remove an incentive for a parental decision that redounds to the child's detriment, Le., to become underemployed in order to pay less support. Surely imbedded in our decision-making process is an awareness that the decision (to become underemployed) is reversible. Thus, depending on when the decision to impute is rendered, it serves either as a disincentive for the parent to seek to underemploy himself or herself, or as an incentive to "undo" that decision and become fully employed. It cannot possibly have either effect in this case.

Finally, it is significant to me that the determination of income for purposes of calculating child support is not a one-time-only exercise. If Father's economic prospects brighten at any time in the future while he is obligated to pay child support, Mother is free to seek modification at that time. I note also that earned income is not the only relevant source of income and assets courts consider in determining the amount of the child support obligation, regardless of when the calculation is made *721(Le., whether at the time of the initial calculation or at subsequent modifications). Guideline 3(A)(1) of the Indiana Child Support Guidelines identifies other source of income: "pensions, interest, trust income, annuities, capital gains, social security benefits, workmen's compensation benefits, unemployment insurance benefits, disability insurance benefits, gifts, inheritance, [and] prizes". Thus, for instance, if Father were to inherit property in the future while he is still required to pay child support, Mother could petition the court at that time to modify support to reflect that asset. I would reverse the decision to impute to Father his pre-incarceration income for purposes of calculating his child support obligation, and remand with instruction to recalculate Father's support obligation consistent with the principles set out in my dissent.