Devine v. Hennessee

VANDE WALLE, Chief Justice.

[¶ 1] Robert Devine appealed from a fifth amended judgment reducing the amount of child support his ex-wife, Rebekah Hennessee, is required to pay each month. We affirm the judgment.

I

[¶ 2] Devine and Hennessee were divorced in 2001. The parties have two minor children together. Both children were born in 1996. Devine and Hennessee were awarded joint legal custody of the children. Devine was granted primary residential responsibility of the children, subject to Hennessee’s reasonable and liberal visitation rights. The original judgment has been amended several times. Under the fourth amended judgment, entered September 2011, Hennessee was ordered to pay $1,200 per month in child support. The amount was based on her income while she was serving in the United States Air Force. The amount was reduced due to travel expenses incurred for parenting time, as Hennessee was stationed at Ram-stein Air Base in Germany.

[¶ 3] Hennessee was medically discharged from the Air Force in April 2013, and filed a motion to amend her child support obligations. Hennessee argued that, as a result of her discharge, her monthly income had decreased, thus warranting recalculation of her child support. Devine resisted the motion, and argued that Hennessee did not answer his discovery and production requests for information concerning her disability payments or documenting her inability to work.

[¶ 4] Prior to the motion hearing, Hen-nessee filed a request to testify telephoni-cally from Tucson, Arizona, where she has been living since 2012. Hennessee claimed she did not have the financial means to travel from Tucson to Grand Forks for the hearing. Devine resisted Hennessee’s motion. The court granted Hennessee’s motion to appear telephonically. At the hearing, Hennessee testified she served in the Air Force for over eighteen years but that she was not currently employed. She testified that the training and experience she received in the Air Force does not transfer over to employment in the civilian sector.

[¶ 5] Hennessee testified she was medically discharged from the Air Force in April 2013. Hennessee explained she was medically discharged because she was diagnosed with major depression and borderline personality disorder. She also testified she underwent three ankle surgeries and was no longer able to complete the requisite physical training. Hennessee testified she is currently receiving $1,533 in retirement pay each month, and that her Veterans Affairs (“VA”) benefits were still being processed. Hennessee testified that once her VA benefits are processed, she will no longer receive her retirement pay and will instead only receive disability pay. Hennessee testified she did not know how much she would receive for disability pay or when the disability payments would commence. She testified the $1,533 she receives in retirement pay is her only source of income.

[¶ 6] Hennessee testified she is not looking for employment because she attends VA classes for depression, sees a therapist for depression and post traumatic stress disorder (“PTSD”), and sees a psychiatrist for cognitive behavior therapy. Hennessee also stated she was planning on starting school near her home in Tucson. She testified the GI Bill would cover her tuition and provide a housing allowance.

*683[¶ 7] On cross-examination, Hennessee testified she had not enrolled in school and had not signed up for the GI Bill. She testified that her therapy is about eight or nine hours a week. Hennessee stated she received Devine’s discovery requests for a copy of her 2011 and 2012 tax returns, but that she did not provide him with a copy of either return. She testified that in her move from Germany back to the United States in April 2012, the documents were misplaced and are still in storage. Hen-nessee also testified she contacted the IRS for her 2011 and 2012 returns, but she has not received them yet. Hennessee admitted she did not provide Devine with any documentation to support her testimony that she was discharged for depression, borderline personality disorder and the three ankle surgeries. Hennessee testified she received the discovery request but did not produce any documents because she did not believe that Devine needed to know that information about her.

[¶ 8] Devine testified at the hearing in person. Devine stated he has custody of the two minor children, ages sixteen and seventeen. Devine testified he is an eighty-percent disabled veteran with acute anxiety, PTSD, and severe depression. Devine testified the disability rating has nothing to do with civilian employment. Devine also testified, based on his military experience, that the Air Force has a federal job code that provides a list of civilian occupations that veterans are qualified for after they leave the military. Devine stated that, as the minor children have gotten older, they have increased expenses from school activities and sports, car insurance, exchange programs, and various other costs.

[¶ 9] Following the hearing, the district court entered a memorandum opinion and order finding that Hennessee’s income was drastically reduced through no fault of her own. The court determined her current income is $1,538 per month. The court found Devine failed to show that another amount should be imputed to Hennessee. The court also found that Devine did not bring a motion to compel Hennessee’s disability and financial records that he sought in discovery. The court determined that, based on Hennessee’s net yearly income of $18,396, the proper child support calculation was $416 per month.

II

[¶ 10] Devine argues the district court erred in modifying Hennessee’s child support and impermissibly shifted the burden of proof to the non-moving party. This Court’s review of a district court’s child support determination is well-established. “Child support determinations involve questions of law which are subject to the de novo standard of review, findings of fact which are subject to the clearly erroneous standard of review, and may, in some limited areas, be matters of discretion subject to the abuse of discretion standard of review.” Schwalk v. Schwalk, 2014 ND 13, ¶ 8, 841 N.W.2d 767. “If the district court fails to comply with the child support guidelines in determining an obligor’s child support obligation, the court errs as a matter of law.” Machart v. Machart, 2009 ND 208, ¶ 14, 776 N.W.2d 795.

[¶ 11] Section 14-09-08.4(4), N.D.C.C., provides that, if a child support order was entered at least one year before the filing of a motion for amendment, the district court must order the amendment of the child support order to conform with the amount required under the child support guidelines, “unless the presumption that the correct amount of child support would result from the application of the child support guidelines is rebutted.” “The party seeking modification under *684N.D.C.C. § 14-09-08.4 has the burden of proving the existing level of support does not conform to the guidelines.” Schwalk, 2014 ND 13, ¶ 9, 841 N.W.2d 767.

[¶ 12] Here, the fourth amended judgment was entered at least one year before Hennessee filed her motion for amendment. As the party seeking an amendment to the child support order, Hennessee had the burden of proving the existing level of support was not in accordance with the child support guidelines. The court was required to amend Hennes-see’s child support obligation if it did not conform with the proper amount as provided in the child support guidelines. See, e.g., Torgerson v. Torgerson, 2003 ND 150, ¶ 8, 669 N.W.2d 98.

[¶ 13] At the hearing, Hennessee testified that her income had decreased as a result of her discharge from the Air Force in 2013. Hennessee did not provide documentation of her discharge, current income, medical disability, or retirement pay. In support of her motion to amend, Hennessee included an affidavit and a proposed disability rating document from the VA, however, the document was never entered into evidence. As a result, the court could only rely on Hennessee’s telephonic testimony and affidavit to determine her income.

[¶ 14] Based on this evidence, the court found Hennessee “is receiving service connected disability pay of $1,533 per month. The Plaintiff [Devine] has failed to show that another amount should be imputed to the Defendant [Hennessee]. When he got incomplete information from the Defendant he did not bring a motion to compel.” Devine argues the court, by these findings, shifted the burden to him to disprove Hen-nessee’s income.

[¶ 15] We conclude the district court did not shift the burden of proof to Devine, the non-moving party, to show that the existing level of support did not conform with the guidelines. The court first placed the onus on Hennessee going forward to prove that her child support payments did not conform with the guidelines. It was only after the court accepted Hennessee’s argument that her support obligations did not conform with the guidelines that the court reviewed and rejected Devine’s arguments. Although the court determined Devine failed to rebut Hennes-see’s evidence, the court did not begin with the presumption that Hennessee’s support was incongruous with the guidelines. We conclude the court did not improperly shift the burden of proof to Devine.

Ill

[¶ 16] Devine argues the district court erred in relying upon insufficient evidence or evidence not admitted at the hearing to determine Hennessee’s income. This Court has previously stated that a proper finding of net income is essential to determine the correct amount of child support under the child support guidelines. Entzie v. Entzie, 2010 ND 194, ¶ 6, 789 N.W.2d 550. To properly determine an obligor’s child support obligation, “[u]nder the child support guidelines, 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.” Krueger v. Krueger, 2011 ND 134, ¶ 23, 800 N.W.2d 296. The child support guidelines specifically detail:

Income must be sufficiently documented through the use of tax returns, current wage statements, and other information to fully apprise the court of all gross income. Where gross income is subject to fluctuation, regardless of whether the obligor is employed or self-employed, information reflecting and covering a peri*685od of time sufficient to reveal the likely extent of fluctuations must be provided.

N.D. Admin. Code § 75-02-04.1-02(7). This Court has also stated, because a proper finding of income is essential to determine the correct amount of child support under the child support guidelines, as a matter of law, a trial court must clearly set forth how it arrived at the amount of income and the level of support. Berge v. Berge, 2006 ND 46, ¶ 8, 710 N.W.2d 417.

[¶ 17] Sworn testimony is admissible as evidence the court may consider. Meier v. Said, 2007 ND 18, ¶ 26, 726 N.W.2d 852. This Court has also held that affidavits filed in support of a motion to amend child support are evidence the district court may consider in deciding the motion. Schwalk, 2014 ND 18, ¶ 12, 841 N.W.2d 767. “The trial court is the ultimate arbiter of the credibility of the witnesses and the weight to be given their testimony.” Weiss v. Anderson, 341 N.W.2d 867, 371 (N.D.1983).

[¶ 18] Devine argues Hennessee did not sufficiently document her income because she did not provide the court with tax returns, income statements, her military discharge, or any records of her military retirement or disability pay. However, Hennessee did provide the court with sworn testimony concerning her military discharge and her decrease in income. Hennessee also provided the court with a sworn affidavit in support of her motion to amend child support. The affidavit stated that Hennessee was medically discharged from the Air Force and that her new monthly income, based on her retirement pay, was $1,580 per month.

[¶ 19] Although there is sparse documentation concerning Hennessee’s income, we conclude Hennessee’s sworn affidavit and sworn testimony constitute adequate “other information” to “fully apprise the court of all gross income.” N.D. Admin. Code § 75-02-04.1-02(7). The district court made a credibility determination when it accepted Hennessee’s testimony concerning her military discharge and her reduction in income.

[¶ 20] Devine also argues the court erred by relying on “Exhibit A,” Hennes-see’s proposed disability rating from the VA. “Exhibit A” was filed with Hennes-see’s motion to amend support but was not admitted into evidence. “Exhibit A” indicates the VA proposed classifying Hennessee with a ninety-percent service-connected disability, but at- the hearing, Hennessee testified she had a seventy-percent service-connected disability. The court found “[Hennessee] first thought her income would be $1,689 based on 90% disability but she is now classified at 70%, so her income is $1,533 per month.” From this record, we do not believe the court actually relied on “Exhibit A.” Ultimately, we conclude the court properly relied on Hennessee’s testimony and affidavit. This information was adequate to sufficiently document her income.

IV

[¶ 21] Devine argues the court erred in failing to consider all possible sources of income when it determined Hennessee’s child support obligations. Devine specifically argues the court failed to consider possible GI Bill money Hen-nessee would be receiving for school and housing. The court determined, “whether [Hennessee] does enroll in school and receives GI Bill benefits is speculative, as is speculating as to what her disability rating may finally be.” When Hennessee begins receiving her disability benefits, or GI Bill education benefits, this may constitute a material change in circumstances as justifying a modification of child support.

*686[¶ 22] Devine also argues the court failed to impute any potential income to Hennessee based on her ability to work. Under the support guidelines, an obligor’s ability to pay child support is not determined solely upon actual income, but also takes into account the obligor’s earning capacity. Logan v. Bush, 2000 ND 208, ¶ 9, 621 N.W.2d 314. “Gross income,” for purposes of calculating child support obligations, means income from any source and in any form. N.D. Admin. Code § 75-02-04.1-01(4)(a). Gross income does not include certain benefits received from public assistance programs, or certain employee benefits over which the employee does not have a significant influence or control. N.D. Admin. Code § 75-02-04.1-01(4)(a)(l) and (2).

[¶ 23] “Determination of whether an individual is underemployed is within the discretion of the trial court.” Torgerson v. Torgerson, 2003 ND 150, ¶ 10, 669 N.W.2d 98. “A trial court abuses its discretion only when it acts in an arbitrary, unreasonable, or unconscionable manner, or when its decision is not the product of a rational mental process leading to a reasoned determination.” Knoll v. Kuleck, 2004 ND 199, 116, 688 N.W.2d 370. Imputing income is appropriate when an individual is underemployed. Torgerson, 2003 ND 150, ¶ 10, 669 N.W.2d 98. “A court may find an obligor is underemployed and impute the obligor’s income, if ‘the obligor’s gross income from earnings is significantly less than the statewide average earnings for persons with similar work history and occupational qualifications.’ ” Halberg v. Halberg, 2010 ND 20, ¶ 16, 777 N.W.2d 872 (quoting N.D. Admin. Code § 75-02-04.1-07(1)(b)). The Code states that an obligor is presumed to be underemployed if the obligor’s gross income from earnings is less than: “a. Six-tenths of the statewide average earnings for persons with similar work history and occupational qualifications; or b. A monthly amount equal to one hundred sixty-seven times the federal hourly minimum wage.” N.D. Admin. Code § 75-02-04.1-07(2). “The district court must properly determine an obligor’s income under the child support guidelines before the court can find an obligor underemployed and impute income to the obligor.” Entzie, 2010 ND 194, ¶ 15, 789 N.W.2d 550.

[¶ 24] The court noted that Devine argued Hennessee is underemployed and that her current income should be imputed at sixty percent of her military pay of $75,642. The court did not specifically make a finding whether Hennessee was underemployed or any findings concerning what the statewide earning average is for a person of similar work history and occupational qualifications. Hennessee did testify that her job in the Air Force entailed working behind a desk at a computer. She also testified she could likely secure a position as a secretary.

[¶ 25] Applying the facts, we conclude the district court did not abuse its discretion in declining to make a finding that Hennessee was underemployed. The court ostensibly reasoned that Hennessee’s mental and physical health conditions precluded her from further employment. The court found that Hennessee stated she could not hold a job at the current time. The court also noted that Hennessee is not looking for another job at this time and that she is seeking treatment for her mental health issues. Although Hennessee’s income is significantly less than what she was earning in the Air Force, the court appeared to reason that the same mental and physical health limitations that forced her Air Force discharge are still impeding Hennessee’s ability to earn the same income now.

*687V

[¶26] We affirm the judgment reducing the amount of child support Hennessee is required to pay each month.

[IT 27] CAROL RONNING KAPSNER, LISA FAIR McEVERS, and DANIEL J. CROTHERS, JJ., concur.