Court of Appeals refuses to answer $64,000 question regarding husband’s income

Posted Monday, December 27th, 2010 by Gregory Forman
Filed under Alimony/Spousal Support, Child Support, Of Interest to Family Court Litigants, Of Interest to Family Law Attorneys, South Carolina Appellate Decisions

The December 22, 2010 Court of Appeals opinion in Sanderson v. Sanderson, 391 S.C. 249, 705 S.E.2d 65 (Ct. App. 2010), reversed the family court in its decision to impute $64,000 annual income to an unemployed husband for the purpose of setting his child support and alimony obligations.  While the Court of Appeals was probably correct in determining that the family court overstated husband’s earning capacity, it refused to answer the question of what his actual earning capacity was–instead remanding the issue back to the family court for its determination–and the opinion provides little guidance on how the family court should determine husband’s income on remand.

In Sanderson, husband had a master’s degree in technology and had been employed as the Corporate Director of Quality with the Cooley Group at a salary of $95,000 a year before his position was eliminated in February 2006 due to downsizing.  Husband had also done some adjunct teaching.  After being let go, Husband sought positions in his field, and even sought positions in which he was overqualified, such as at Home Depot, but claimed he could not find employment.  He admitted not seeking employment at McDonald’s or similar positions. Wife testified she believed Husband could find a job because he was from this country and knew how to “manipulate the system.”

At the time of trial, husband was unemployed and lived with his paramour.  The family court imputed income of $64,000 to him because he had worked in the technology industry and made that amount in 1994.  The Court of Appeals found this imputed earning capacity was an abuse of discretion:

When Husband earned $64,000 per year, it was in the field in which job opportunities have significantly decreased.  That earning capacity, even though it may have been accurate a decade earlier, does not clearly translate into a job market in which similar jobs are no longer readily available.  That being said, Husband is not permitted, as Wife argues, to simply do nothing because the job market has changed.  Furthermore, Husband admitted he had not sought all employment as he eschewed McDonald’s because of the low wages and high price of gas for transportation.  That Husband cannot find any employment is somewhat incredible.  The record shows he did earn some income from teaching although it was not full-time.  Based on all of the foregoing, we conclude the family court abused its discretion in imputing $64,000 annually to Husband.  Accordingly, we remand this matter to the family court for it to calculate Husband’s income based on the evidence in the record.

The Court of Appeals reversed and remanded the issue of the amount of income to be imputed to Husband to the family court “to be determined in accordance with the evidence presented at trial” (emphasis added).  Thus, the family court will not take additional evidence and testimony to decide Husband’s earning capacity. Why the Court of Appeals simply didn’t determine Husband’s earning capacity is inexplicable, especially since it didn’t provide much guidance as to how it would have determined Husband’s earning capacity.  For this family court judge on remand, it’s like having a boss who tells you your work is flawed but fails to provide guidance into correcting the flaw.

Judge Pieper filed an interesting concurring opinion in which he suggested the law on imputing income be clarified so that the party asserting voluntary underemployment or unemployment should carry the initial burden of proof on the issue.  His opinion notes that South Carolina case law is silent on this issue but that other states’ case law imposes this burden on the party arguing underemployment or unemployment.  Since his opinion did not command the majority, it is not yet South Carolina law.

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