When the parties divorced in 2004, Father was ordered to pay $2,000 per month in child support. At that time, Father earned $25,000 per month and Mother was unemployed.
In 2006, Father petitioned to modify child support asserting that Mother's financial situation had improved via an inheritance. During the modification proceedings, Father also asked the court to attribute income to Mother who was still voluntarily unemployed. Mother argued that Father's income had increased significantly and that if the court attributed income consistent with full-time employment, it should consider and factor into its child support calculation the costs of childcare necessary to enable Mother to work full-time.
After a two-day trial, the court reduced child support to $1,686.99 and awarded Mother her attorney's fees. Father filed a motion for a new trial. Before the court could rule on that motion, Father filed a notice of appeal. Mother then filed a notice of cross-appeal.
Approximately a month after Mother filed her notice of cross-appeal, the court ruled on Father's motion for a new trial. The net effect of the ruling further reduced Father's child support obligation and vacated the order awarding attorney's fees to Mother.
Further motion practice ensued and in October 2007, Father filed a supplemental notice of appeal. A little over a month later, Mother filed another notice of appeal.
The timing of the first appeal and the cross-appeal
Whenever a party files an appeal, the first thing the Court of Appeals considers is whether it has jurisdiction to hear the appeal. Not every ruling is appealable and sometimes notices of appeal are filed prematurely. In this case, the Court of Appeals found that Father's initial appeal was premature because it was filed before the family court ruled on the motion for a new trial. Father's supplemental notice of appeal preserved the right for Father to appeal the family court's ruling on the motion for a new trial.
For the same reasons, Mother’s initial notice of cross-appeal was also premature. However, because Mother never filed a supplemental notice of cross-appeal, the Court of Appeals did not have jurisdiction to consider Mother’s cross-appeal.
Mother's direct appeal
Next, the Court of Appeals considered the procedural propriety of Mother’s direct appeal. The Court of Appeals concluded it, too, was defective. The reasoning here, put simply, is that the appealability from post-judgment orders is highly technical. Whenever a substantive ruling first becomes appealable, that is generally the order that must be appealed. Even if it was later reiterated or referenced in a subsequent ruling, that ruling may not be directly appealable. In this case, that technicality deprived the Court of Appeals of jurisdiction to consider Mother's direct appeal.
Attribution of childcare expenses
The Arizona Child Support Guidelines allow family courts to attribute income to parents, most commonly in cases where a parent is voluntarily unemployed or underemployed. Underemployment refers to a situation where a parent’s actual income is less than they could earn given their experience, credentials, or qualifications.
Income attribution is highly discretionary and never automatic. When a parent is voluntarily unemployed, like Mother was in this case, the Guidelines instruct family courts to consider how it affects the children subject to the child support order. Family courts weigh the reduction to income available to support the children against any benefits the children might receive from the parent’s choice.
Examples of benefits might include more time spent with the children or more time available to enhance a parent’s future earning capacity, usually by completing additional schooling or occupational training.
When courts decide to attribute income to a parent who receives child support, the Guidelines further instruct courts to consider any childcare expenses that would be incurred to enable that parent to work.
In most child support cases, attribution of income to an unemployed parent decreases the other parent’s child support cases. But in this case, the parents’ combined incomes already exceeded the child support calculator’s built-in ceiling. So attributing additional income to Mother did not affect the basic child support obligation. The hypothetical childcare expenses, however, did increase Father’s obligation.
The Court of Appeals concluded that this outcome was contrary to the spirit or purpose of the Guidelines and reversed this portion of the family court’s ruling.
Income for purposes of calculating child support
Father also argued that the family court miscalculated his income. Specifically, the court multiplied the price per share increase to stock options Father earned over three years during his employment and added that number to his income. Father argued that this incorrectly assigned all three years worth of stock options to his current income.
Family courts have considerable discretion to calculate a parent’s income for child support purposes. The Court of Appeals acknowledged that and agreed that the stock options, even unexercised, have some value as income. However, it disagreed with the family court’s methodology.
In doing so, it did not create any single valuation method that courts must follow, just the general directive that stock options be considered with other important context to determine their impact on a parent’s income.
Conclusion
While the child support calculator was created to provide greater clarity and consistency in child support orders, its inputs are still subject to tremendous judicial discretion. This is especially true in cases where parents receive income from sources beyond a traditional W-2 job. So we think every parent should take advantage of a free initial consultation with an experienced child support attorney even if only to confirm the inputs for the child support worksheet.