Husband and Wife married in 1992. They had one child together. In 2009, Husband filed for divorce; Wife responded and asked for child and spousal support. During their marriage, Husband worked on commission for a company averaging (at the time of divorce) about $24,000 per month. Wife did not work. Based on Husband’s income, the trial court awarded Wife temporary child support in the amount of $2227 per month and spousal support of $4773 per month.
In 2010, Husband asked the court to reduce his support obligations because his salary had been reduced. His company’s biggest client did not renew its contract and his income declined substantially because of it. In 2011, the court granted Husband’s request and lowered his child support obligation to $1275 per month and spousal support to $2840 per month.
Later that same year, both Husband and Wife requested changes in support. Husband wanted a decrease in support because his company fired him, and Wife wanted the original support ordered reinstated.
During the hearing, a vice president of Husband’s former company testified that Husband asked the VP to reassign him and divert some of his compensation to reduce his income. The VP said that Husband told him that he (Husband) was embroiled in a very bitter divorce and Husband wanted to minimize his earnings. The VP agreed to reassign Husband to a lower paying job, but refused to tamper with any compensation agreements. Husband decided to retain his current jobs status. The VP also stated that Husband’s sales began to drop, and when he investigated, the VP discovered that Husband had diverted some of the company’s business to Husband’s father’s competing business. Husband had also been improperly giving credit for his sales to another sales person and splitting the commissions with him. Because Husband had been a good employee, the company was willing to give Husband a second chance at employment if he agreed to three things: (1) Fully confess his misconduct; (2) pay the company restitution for the costs of his misconduct; and (3) sign a last chance agreement. Husband refused, and the company fired him.
The trial court found for Wife (regarding child support) stating that Husband’s lack of income was by his own doing; that is, his unwillingness to work. The court based Husband’s income for support purposes, not on his current income, but on his prior income with his former company. Husband appealed.
The Appellate Court agreed with the trial court. Under Family Code Section 4058(b), a trial court can consider the earnings capacity of a parent instead of actual income, consistent with the best interests of the child. Earnings capacity includes the ability to perform a job and the opportunity to work. Here, Husband had both the ability to perform the job for his former company as well as the opportunity to do so. He declined to do so. To grant the higher support was clearly in the best interests of the child.