Attempting to Avoid Child Support Obligations

Cash v. Cash, 2022-NCCOA-706.

Facts: Mother and father were set for a trial on modification of child support. Five days before the trial date, father filed and served an amended financial standing affidavit that reported that his current income was $0 because he was laid off from his employment as a masonry supervisor. At the hearing, mother’s attorney argued that father had not supplied any updated income information. Father testified that he started a new masonry business and was not seeking any other employment, instead focusing on his business. He testified to his business income and expenses. Mother asked father if he provided any of his business financial information before the hearing, and father testified that he did not. Father then called his former boss to testify that father had been laid off because of salary, and that he was the most recently hired supervisor. Boss also testified that he did not offer father a different position with a reduced salary because Boss knew father and knew that father would not accept the job. The trial court found that father was not credible and acted in bad faith to deliberately suppress his income to avoid the child support obligation. The trial court imputed income to father, and father appeals.

Issue: Did the trial court err in finding that father acted in bad faith to suppress his income?

Holding: No.

Reasoning: There are factors that assist a trial court in making a determination that a party has acted in bad faith to suppress income to avoid paying child support:

(1) failing to exercise his reasonable capacity to earn, (2) deliberately avoiding his family’s financial responsibilities, (3) acting in deliberate disregard for his support obligations, (4) refusing to seek or to accept gainful employment, (5) willfully refusing to secure or take a job, (6) deliberately not applying himself to his business, (7) intentionally depressing his income to an artificial low, or (8) intentionally leaving his employment to go into another business.

But that is not an exclusive list – other factors that provide insight as to whether a party is acting in bad faith are allowed, if reasoned, so long as they show a desire of one party to avoid reasonable support obligations.

In this case, father testified that he was refusing to seek employment, and his boss testified that father would never accept a job at his former employer for less salary. It certainly did not help that father and his boss were really good friends, and that of all 120 employees, only father was laid off. Moreover, failure provide updated financial documents as required by statute and local rules is evidence that a party is intentionally seeking to avoid or minimize child support because any income hidden is income not used for calculating the support obligation.

Notes: Would the outcome have changed if father timely provided updated financials of his business? Credibility seems to have played a large role in the trial court. If father had timely disclosed his business plans and provided evidence of all the financials, perhaps the trial court wouldn’t have found his circumstances so suspect. It also goes to show how important it is to pick good witnesses; picking your boss who also happens to be your good friend to testify on your behalf as to why only you were fired for company-wide salary reduction led to more credibility issues.