A child support case involving Patricia Anne Gho Massey and Gregory Joel Casals was adjudicated by the Tennessee Court of Appeals. The mother petitioned to increase the father's child support payments, claiming he misrepresented his income. After an evidentiary hearing, the juvenile court found the father's testimony incredible and determined he earned significantly more than stated. Consequently, the court raised his monthly child support obligation retroactively to the petition's filing date, mandated he cover the child's private school tuition, and awarded attorney's fees to the mother. The father appealed, contesting the court's reliance on his testimony over his tax returns, suggesting the mother was voluntarily underemployed due to her part-time work, and opposing the tuition requirement. The appellate court affirmed the juvenile court's judgment. The background of the case includes ongoing disputes since 1997 regarding child support and custody, initiated after the parents separated. The father's child support obligations have undergone several modifications since their initial agreement in 1997.
In the January 2004 proceedings concerning child support, the trial court based its decision partly on a December 2003 job offer letter from Harmonic Capital Partners, LLC, which stated that the Father would earn $70,000 annually. Throughout the legal disputes, both parties changed attorneys multiple times, and none from the trial court represented them on appeal. On August 24, 2005, the Mother filed a petition to increase child support and sought to hold the Father in contempt for allegedly misrepresenting his income during the trial. She argued that the December 2003 letter conflicted with a mortgage application signed by the Father in March 2004, where he claimed to earn $240,000 annually as the sole owner of Harmonic Capital Partners, LLC.
On January 31, 2006, the Father petitioned to reduce child support, citing his termination from Harmonic Capital Partners in December 2005. Following a hearing on December 5 and 11, 2006, Juvenile Court Referee Claudia Haltom found the Father repeatedly untruthful regarding his income, determining he had intentionally misrepresented it to the court. The Referee noted a lack of credible income proof and inconsistencies with the Father's personal expenses and lifestyle, which suggested income well above the reported $70,000.
The Father submitted a letter claiming a $70,000 salary, which he later indicated was solicited for the child support hearings. His mortgage application stated a monthly income of $20,000, claiming ownership of Harmonic Capital Partners and listing significant assets and liabilities not inclusive of his wife. The court concluded that either perjury or bank fraud occurred, noting that the Father's explanations for income inconsistencies lacked supporting documentation or evidence of business expenses despite substantial credit card payments totaling $141,930.60 in 2004.
Mr. Casals claims he was terminated from his job at Harmonic Partners LLC on December 16, 2005, and seeks a reduction in his child support obligation from $763.00 monthly. He has been renovating his home in Memphis, Tennessee, funded by his wife's student loans while she attends law school. His wife has worked part-time in 2006, but he is unaware of her earnings. Mr. Casals has two children attending private school. Referee Haltom found Mr. Casals lacked credibility regarding his income and determined it to be $20,000 per month, based on his mortgage application from March 2004. Following a hearing, a juvenile court judge recused himself, and Judge William A. Peeler was assigned. Mr. Casals challenged the constitutionality of Tennessee Code Annotated section 71-3-124(c), which was dismissed by Judge Peeler. The hearing included testimonies from several parties and extensive evidence regarding the financial situations of both parents.
On July 30, 2008, Judge Peeler issued an order reflecting Mr. Casals’ evasiveness and financial acumen, revealing he owned several investment companies and reported significant stock trading activities in 2004 and 2005. Despite living a high standard of living, including a $568,000 home purchase and extensive renovations, he previously claimed an annual income of only $70,000 to reduce his child support. The court noted Mr. Casals displayed a lack of knowledge about his finances and his wife's income, and the tax returns submitted were incomplete and contradictory. The court found no reliable evidence of his wife's income or how he maintained his lifestyle on the income he reported.
Mr. Casals reported a monthly income of $20,000 and claimed to be the sole owner of Harmonic Capital Partners in a loan application, contradicting his representations to the Court. He attempted to clarify that this figure included his wife’s income; however, this was not supported by the application or any reliable evidence, including tax returns. The Court deemed Mr. Casals' income as stated in the March 2004 mortgage application as the most reliable proof, concluding he misrepresented his income to obtain a reduction in child support. Consequently, Judge Peeler found the financial documents provided by Mr. Casals to be untrustworthy, increased his child support obligation retroactively to the date of the mother’s petition, and mandated that he cover private school tuition for the child in question, deviating from standard guidelines. Mr. Casals's petition to reduce child support was dismissed, and the mother was awarded attorney’s fees. Mr. Casals is now appealing on several grounds, including the trial court's determination of his income, the mother's alleged voluntary underemployment, the inclusion of private school tuition, and various errors in calculating retroactive child support. The appeal will review factual findings de novo with a presumption of correctness and legal conclusions without such presumption.
Father contends that the trial court erred in not using his tax returns and current pay stub to determine his income, citing the Guidelines on imputing income, which specify that reliable evidence includes tax returns and check stubs, but not mortgage applications. He references TENN. COMP. R. REGS. 1240-2-4-.04(3)(a)2 (iv)(II) (2009) and the case Brewer v. Brewer, arguing that imputing income should only occur when there is no reliable evidence. The Guidelines allow for imputed income in cases of willful or voluntary underemployment or when reliable income evidence is absent. In Brewer, the appellate court reversed the trial court's decision to impute income based on reliable evidence of the obligor parent's retirement account. In this instance, the trial court found Father's submitted income evidence unreliable, labeling his tax returns as “unsigned, incomplete, ambiguous, and contradictory.” However, the court did not impute income to Father, determining instead that his reported income from a 2004 mortgage application, which stated $20,000 per month, was reliable. Thus, the court established his income at $240,000 annually based on this application.
Father's assertion that the trial court was required to accept his tax returns and check stubs as reliable evidence of income was rejected, as the court found these documents unreliable. Consequently, the court's determination of Father's income for child support purposes was upheld. Regarding Mother's employment status, Father contended that the trial court erred by not finding her voluntarily underemployed and declining to impute income to her. The court's Guidelines stipulate that a parent must be proven willfully or voluntarily underemployed for income to be imputed, and the burden lies with the Father to demonstrate this.
During the trial, Mother testified that she transitioned from full-time to part-time work following the birth of her second child, coinciding with a restructuring at her job. After the birth of her third child, no full-time positions were available, and working part-time allowed her to better care for her young children. The trial court implicitly deemed Mother's decision to work part-time reasonable, dismissing Father's petition without explicitly addressing his claim of her underemployment.
Father argued that while Mother’s choice benefits her younger children, it does not benefit their fourteen-year-old child, asserting that she should be considered voluntarily underemployed. However, the court found that the Guidelines do not support this narrow perspective, emphasizing the importance of a parent’s reasonable decision to care for children, regardless of their age. Ultimately, the trial court’s implicit conclusion that Father failed to prove Mother was voluntarily underemployed was upheld, acknowledging the significance of her role as a stay-at-home parent.
The trial court's decision to require Father to pay private school tuition as an upward deviation from child support Guidelines was upheld. Father argued he lacked notice of this issue at the hearing since Mother did not include it in her modification petition. However, Mother's prior email to Father requesting he pay half the tuition indicated he was aware of the matter being considered. The court found that extensive testimony on private school tuition was presented, and Father did not object to the consideration of the issue based on lack of notice. The child involved had attended private school since kindergarten and recently switched to a more expensive institution. The trial court's discretion in this decision was deemed reasonable.
Additionally, Father claimed the trial court erred by not crediting him for child support payments made directly to Mother in 2005 and 2006. The court had retroactively modified his support obligation, giving him credit for payments made in 2007 and 2008, but the records showed no payments were made in the earlier years. The original child support order mandated that payments be made through the Central Child Support Receipting Unit, and the law generally does not allow credit for payments made outside this stipulated method. Consequently, the trial court correctly determined that Father was not entitled to credit for these payments. Finally, Father raised concerns about alleged errors in the calculation of his child support arrearage, but specific details of these claims were not provided in the summary.
Father claims the trial court made several errors regarding child support calculations, including: (1) applying a $20,000 monthly income figure retroactively since Mother’s 2005 petition; (2) not crediting him for 157 days of parenting time; (3) erroneously adding an extra month in calculations; (4) using incorrect health insurance premium amounts; (5) including past private school tuition payments from 2005; and (6) considering expenses for the child's extracurricular activities. Child support determinations are within the trial court's discretion. After reviewing the trial court's order and supporting records, the appellate court found no evidence undermining the trial court's calculations.
Father also argued that he was denied a de novo hearing, asserting that the worksheet used was a photocopy from a previous court order. The court noted that the hearing was extensive, with multiple witnesses and exhibits presented, affirming that Father had an adequate opportunity to present his case. Thus, the court concluded he received a proper de novo hearing as per Tennessee law.
Regarding the award of attorney's fees to Mother, Father contended it was erroneous due to lack of statutory authority, reliance on counsel's affidavit, and improper categorization as child support. However, under Tennessee law, trial courts can award reasonable attorney fees in child support modification cases. The court found no error in considering the affidavit, noting Father did not object to it. The trial court’s language indicated the fees were separate from child support obligations, and the appellate court upheld the trial court's discretion in awarding fees.
Ultimately, the appellate court affirmed the trial court’s decisions and assigned the costs of the appeal to Father.
