Case No.: |
03-0288 |
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Complete Title of Case: |
†Petition for Review filed |
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In re the Marriage of: Jane E. Chen, Petitioner-Respondent, v. John J. Warner, Respondent-Appellant.† |
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Opinion Filed: |
May 6, 2004 |
Submitted on Briefs: |
August 13, 2003 |
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JUDGES: |
Dykman, Vergeront and Lundsten, JJ. |
Concurred: |
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Dissented: |
Dykman |
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Appellant |
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ATTORNEYS: |
On behalf of the respondent-appellant, the cause was submitted on the briefs of Linda Roberson, Anthony J. Lucchesi, and Laurel A. Kent of Balisle & Roberson, S.C., Madison. |
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Respondent |
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ATTORNEYS: |
On behalf of the petitioner-respondent, the cause was submitted on the brief of James Kurth of James Kurth, S.C., Wausau. |
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2004 WI App 112
COURT OF APPEALS DECISION DATED AND FILED May 6, 2004 Cornelia G. Clark Clerk of Court of Appeals |
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NOTICE |
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This
opinion is subject to further editing.
If published, the official version will appear in the bound volume of
the Official Reports. A
party may file with the Supreme Court a petition to review an adverse
decision by the Court of Appeals. See
Wis. Stat. § 808.10 and Rule 809.62. |
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Appeal No. |
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Cir. Ct. No. 98FA000386 |
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STATE OF WISCONSIN |
IN COURT OF APPEALS |
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In re the Marriage
of: Jane E. Chen, Petitioner-Respondent, v. John J. Warner, Respondent-Appellant. |
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APPEAL from an order of the circuit court for Wood
County: james m. mason, Judge.
Affirmed.
Before Dykman, Vergeront and Lundsten,
JJ.
¶1 LUNDSTEN, J. This
is a child support modification case in which one parent alleges that the other
is “shirking.” “Shirking” is an
unfortunate term because it connotes improper behavior, but, under the case
law, it encompasses behavior that is well motivated. However, we use the term to avoid confusion that might arise if
we employed some other term.
¶2 Dr.
John Warner, the father, asserts that Dr. Jane Chen, the mother, is shirking
because she voluntarily and unreasonably declined to return to work after first
quitting employment as a medical doctor and then watching her investment income
dwindle. Instead of returning to work,
Dr. Chen, who had more than a year earlier quit work to devote time to
parenting, sought an order for child support from the circuit court. Dr. Warner asserts that the circuit court
erred when it determined that Dr. Chen was not shirking and used her actual
income to determine child support. We
affirm the circuit court.
I. Background
¶3 Dr.
Jane Chen and Dr. John Warner have three daughters, born on October 11, 1991,
April 22, 1993, and July 12, 1995. In
1999, after an eighteen-year marriage, the parties divorced.
¶4 The
parties entered into a marital settlement agreement, which was later
incorporated into the judgment of divorce.
The parties agreed to joint custody, equal physical placement, and no
child support. At the time of the divorce
in 1999, both parents were employed as medical doctors in Marshfield. Dr. Chen was earning $19,670 per month,
which means an annual income of $236,040.
Dr. Warner was earning $21,371 per month, which translates into an
annual income of $256,452.[1]
¶5 Prior
to and after the divorce, both parties worked full time. After persistent and unsuccessful efforts to
obtain a part-time schedule so that she could spend more time parenting, Dr.
Chen voluntarily quit in May of 2000.
By quitting, Dr. Chen gave up her substantial current income,
contributions to her retirement plan, and job security. The undisputed testimony was that she was
performing at a high level and was the administrator of a profitable
department. If Dr. Chen had remained in
her job, she would have made $410,175 in 2002.
¶6 At
the time Dr. Chen quit in 2000, she was advised, based on market returns over
the past fifty years, that she could expect approximately 10% per year income
on her investments with a conservative investment plan. Since Dr. Chen had about 1.1 million dollars
in savings, she hoped to earn about $110,000 per year. She estimated her budget at $7,000 per month
or $84,000 per year.
¶7 Unfortunately,
the stock market declined dramatically in 2001 and Dr. Chen’s investment income
likewise dropped dramatically. That
year, her total income was $32,000.
Thus, Dr. Chen began to invade her principal in order to meet
expenses. At the same time, Dr. Chen
investigated the possibility of returning to work part-time. She was unable to locate work in the
Marshfield area, and she declined to pursue part-time work in communities
beyond commuting distance.
¶8 In
January of 2002, Dr. Chen filed a motion requesting that the divorce judgment
be amended to order Dr. Warner to pay child support. At that time, Dr. Warner was earning $472,000 per year and his
employer contributed an additional $73,000 per year to Warner’s retirement
plan. During an evidentiary hearing,
Dr. Chen detailed her activities with the children. Those activities are set forth in detail in the discussion
section below. Dr. Chen testified that
her monthly budget was about $7,000.
She asked the circuit court to order child support in the amount of
$4,000 per month.
¶9 The
circuit court determined that Dr. Warner could afford to pay child support and
that Dr. Chen was not shirking. The
court declined to use Dr. Chen’s earning capacity and ordered Dr. Warner to pay
$4,000 per month in child support.
II. Discussion
¶10 The
only issue on appeal is whether the circuit court erred when it declined to use
Dr. Chen’s earning capacity and instead used her actual income when determining
whether and in what amount to order child support. Dr. Warner alleges “shirking.”
He asserts that Dr. Chen voluntarily and unreasonably chose to forgo
employment and seek child support payments.
A. Standard of Review and Legal Principles
Applicable to Shirking
¶11 Courts
use earning capacity, rather than actual earnings, to determine child support
and maintenance payments when the party in question is shirking. See Abitz v. Abitz, 155
Wis. 2d 161, 166, 455 N.W.2d 609 (1990).
Shirking is an employment decision to reduce or forgo income that is
both voluntary and unreasonable under the circumstances. Finley v. Finley, 2002 WI App
144, ¶15, 256 Wis. 2d 508, 648 N.W.2d 536; Sellers v. Sellers,
201 Wis. 2d 578, 587, 549 N.W.2d 481 (Ct. App. 1996).[2]
¶12 The
voluntariness of a decision to reduce or forgo income is a question of fact,
and we do not disturb a finding of fact unless it is clearly erroneous. See Smith v. Smith, 177
Wis. 2d 128, 133, 501 N.W.2d 850 (Ct. App. 1993) (treating whether a parent
voluntarily terminated his employment as factual question). A party asserting that his or her reduction
in income was involuntary has the burden of proof on that topic. Id. at 134.
¶13 Turning
to the reasonableness prong, we accord “appropriate deference” to circuit court
determinations of the reasonableness of decisions to reduce or forgo
income. In Van Offeren v. Van
Offeren, 173 Wis. 2d 482, 496 N.W.2d 660 (Ct. App. 1992), we
explained:
The
issue in this case is whether [the child support payor] unreasonably
terminated his employment at Johnson Wax.
The legal standard of reasonableness presents a question of law. Ordinarily, an appellate court need not
defer to the trial court’s determination of a question of law; however, because
the trial court’s legal conclusion as to reasonableness is so intertwined with
the factual findings supporting that conclusion, an appellate court should give
weight to the trial court’s reasonableness conclusion. We therefore review the trial court’s ruling
as a question of law, but one to which we must pay appropriate deference.
Id. at 492-93 (citations omitted); accord Sellers,
201 Wis. 2d at 587. We interpret this
standard of review to mean that if the circuit court reached a conclusion that
a reasonable court could reach based on the record before the court, we will
defer to that conclusion. Deferring to
circuit court determinations in family law cases is the norm, and we see no
reason to deviate in this instance.
Further, we are unable to discern any other meaning from Van
Offeren. Cf. Finley,
256 Wis. 2d 508, ¶¶13-15 (treating shirking decision as a discretionary
determination).
¶14 The
burden of showing reasonableness is on the party who reduces or forgoes
income. That party has the burden of
justifying his or her decision. See,
e.g., Kelly v. Hougham, 178 Wis. 2d 546, 556, 504 N.W.2d
440 (Ct. App. 1993) (“[A child support payor’s] decision to leave a well-paying
job to pursue his postgraduate education objectives contributed significantly
to the parties’ changed circumstances.
He must justify his decision in light of his obligations to his
children.”).
¶15 Shirking
cases typically speak in terms of shirking as an issue involving the
payor. E.g., id.
at 555; Smith, 177 Wis. 2d at 136; Van Offeren,
173 Wis. 2d at 492 (“Shirking is established where the obligor
intentionally avoids the duty to support or where the obligor unreasonably
diminishes or terminates his or her income in light of the support
obligation.”). However, shirking
analysis also applies to a payee. See
Finley, 256 Wis. 2d 508, ¶¶12-13 (applying shirking analysis to a
payee).[3]
¶16 In
this case, the voluntariness of Dr. Chen’s decision is not disputed. We address only the reasonableness of her
decision.
B. The
Reasonableness of Dr. Chen’s Decision
¶17 Dr.
Warner, the party ordered to pay child support, makes only one argument on
appeal. He asserts that the circuit
court erred when it declined to use Dr. Chen’s earning capacity when
determining whether and in what amount to order child support.
¶18 We
begin by clarifying the “decision” at issue.
Dr. Chen made decisions at two points in time. In 2000, she voluntarily quit her full-time job after failing to
obtain an agreement from her employer allowing her to work reduced hours. At that time, Dr. Chen had the expectation
that her savings of more than one million dollars would produce sufficient
income to meet her child support obligations.
In 2001, after steep declines in the markets and her investment income,
Dr. Chen explored part-time work options.
During this latter time period, Dr. Chen opted not to pursue work
opportunities that would take her away from the children every other week. When she failed to locate part-time work
that would not significantly interfere with her parenting, Dr. Chen sought
child support from Dr. Warner.
¶19 Dr.
Warner argues that both decisions, individually and collectively, constitute
shirking. Dr. Chen contends that both
decisions were reasonable. We, however, conclude that
the appropriate focus is on Dr. Chen’s most recent decision to remain
unemployed.
¶20 So
far as this record reveals, if Dr. Chen’s investment plan had worked, she would
not have sought child support.
Moreover, Dr. Warner himself argues that regardless the reasonableness
of Dr. Chen’s initial decision, it was unreasonable for Dr. Chen to seek child
support rather than return to work when her investment income dropped. Dr. Chen does not argue that there is no
work available. As discussed below, it
is undisputed that Dr. Chen could likely find work if she were willing to work
in a far-off community every other week.
What Dr. Chen does assert is that it was reasonable for her not to
pursue such opportunities because of the benefit conferred on the children by
her ability to parent when the children were not actually under the care and
supervision of Dr. Warner. Thus, the
pertinent question is whether Dr. Chen’s decision not to pursue available work
that would take her away from the children every other week was reasonable.
¶21 The
determination of reasonableness does not involve a “set list of factors.” Wallen v. Wallen, 139 Wis. 2d
217, 225, 407 N.W.2d 293 (Ct. App. 1987).
Rather, courts must look to the particular circumstances of each
case. The parties here debate the
following factors: (1) Dr. Chen’s
motives; (2) whether her decision was reasonable because it was foreseeable at
the time of the divorce; (3) whether Dr. Chen pursued opportunities; (4)
Dr. Warner’s ability to pay child support; and (5) the benefit to the
children. We address each of these
factors in the sections below and then explain why the circuit court’s
determination that Dr. Chen was not shirking is supported by the record.[4] Before proceeding, we pause to respond to
the dissent’s sua sponte suggestion that this case be remanded so that the
circuit court may consider whether Dr. Chen should be required to spend down
some portion of her assets, rather than receive child support. We stress that it would have been reasonable
for the circuit court to analyze Dr. Chen’s financial situation with an eye
toward assessing whether she should spend down assets before receiving child
support. However, Dr. Warner has never
made the argument, and we cannot fault the circuit court for failing to address
it.
Dr. Chen’s Motives
¶22 Dr.
Warner does not argue that Dr. Chen acted in bad faith or with improper motives
when she declined to pursue job opportunities after her investment plan
failed. At the same time, Dr. Warner
points out that shirking may exist in the absence of bad faith or improper
motives. We agree. Even when a reduction in income is
voluntary, “no bad faith need be shown for an order to be based on that
spouse’s earning capacity, rather than his or her actual present
earnings.” Roberts v. Roberts,
173 Wis. 2d 406, 411, 496 N.W.2d 210 (Ct. App. 1992); see also Van
Offeren, 173 Wis. 2d at 496.
¶23 We
turn to Dr. Chen’s argument that her good motivations should weigh in favor of
a reasonableness finding. Dr. Chen
details evidence showing that she sacrificed much to become a full-time parent
and, therefore, she must have had the children’s benefit in mind, not her
own. This, she contends, supports the
circuit court’s non-shirking decision.
¶24 We
conclude that Dr. Chen’s motivation is important, but only to the extent that
it is undisputed that she was not improperly motivated. As we explained in footnote 2, a finding
that an income reduction decision is motivated by a desire to avoid child
support is one of many possible unreasonable reasons to reduce income. At the same time, good motives, standing
alone, do not necessarily weigh in favor of reasonableness. Even well-motivated persons make
unreasonable decisions.
¶25 To
be clear, we do not hold that good motives are never relevant. Good motives may be relevant when the
existence of such motives make it more likely that some other factor does or
does not exist. For example, the
undisputed facts here show that Dr. Chen was actually motivated by a desire to
help her children by being a much more active parent. Because benefit to the children is an issue in this case, a court
might find that Dr. Chen’s motivation to help the children with school issues
makes it more likely that she will continue to spend substantial time assisting
the children in that respect. However,
in this case, there is no factual dispute on that topic. Dr. Warner has not suggested that any of Dr.
Chen’s testimony about her activities with the children is untrue or
exaggerated. He does not suggest that
her activities are a subterfuge of any type.
¶26 Furthermore,
we do not hold that good motives, by themselves, never directly support a
finding of reasonableness. Rather, we
simply fail to discern any reason why Dr. Chen’s good motives are relevant to
the determination of shirking in this case.
Expectation Prior to the Divorce
¶27 Dr.
Chen argues that her decision is reasonable because the marital settlement
agreement contemplated that child support would be ordered if there were a
significant change in income. Dr. Chen
also argues that Dr. Warner knew, prior to and during the pendency of the
divorce, that Dr. Chen was interested in part-time status and that such a
change might result in Dr. Warner paying child support. We agree with Dr. Warner that neither of
these arguments has merit.
¶28 The
language in the marital settlement agreement does not assist Dr. Chen. It provides: “The parties’ waiver of child support is based upon the parties’
present income and, if there is a substantial change in their relative incomes,
it is recognized that the child support provisions may be modified within the
discretion of the court.” This language
simply acknowledges that a substantial change in income might, at a party’s
request, prompt the court to revisit child support. It sheds no light on whether Dr. Chen’s voluntary decision to
reduce her income was reasonable.
¶29 We
turn our attention to Dr. Chen’s argument that her decision was reasonable
because Dr. Warner knew before the divorce that Dr. Chen was interested in
part-time work so she could spend more time with the children. Dr. Chen points out that Dr. Warner knew
this before he signed off on the marital settlement agreement.
¶30 There
is indirect support for the proposition that, when a reduction in income is
jointly contemplated during marriage, a later decision to reduce income in
accordance with such understanding weighs in favor of a reasonableness
finding. See Sellers,
201 Wis. 2d at 588 (a parent’s decision to reduce income “represent[ed] a
diversion neither [parent] anticipated at the time of the marriage”). But that is not the situation here. There is no record of an agreement during
the marriage that Dr. Chen would eventually reduce her hours to facilitate more
parental involvement. We conclude that
Dr. Warner’s knowledge that Dr. Chen was interested in reducing her hours does
not make Dr. Chen’s decision to remain unemployed more reasonable.
Dr. Chen’s Employment
Opportunities
¶31 Dr.
Warner asserts that Dr. Chen made “only minimal efforts to obtain part-time
employment, when confronted with her declining investment income.” Dr. Chen asserts that there were no jobs
available that would permit her to continue parenting in the manner she
believed was most beneficial to her children.
This dispute requires clarification because the parties are, in effect,
arguing past each other.
¶32 The
underlying facts are not in dispute.
Since quitting her full-time job, Dr. Chen has continually sought
part-time employment in the Marshfield area.
However, she declined to pursue part-time jobs that would have taken her
completely away from the children every other week. For example, Dr. Chen believed that she could have obtained work
as a “temp” doctor every other week in communities such as La Crosse, Green
Bay, Milwaukee, or Janesville. But,
according to Dr. Chen’s undisputed testimony, none of these jobs were within a
reasonable commuting distance. Taking
any of these jobs would have meant that Dr. Chen would be largely unavailable
to her children every other week.[5]
¶33 Thus,
the question is not whether Dr. Chen failed to vigorously pursue available
work. The question is whether Dr.
Chen’s decision not to pursue available work that would take her away from the
children every other week was reasonable.
Dr. Warner’s Ability to Pay
¶34 We
next address Dr. Warner’s ability to pay child support. Dr. Warner does not argue that his ability
to pay is irrelevant for purposes of determining reasonableness. For that matter, Dr. Warner does not argue
that he cannot afford to pay child support.
Rather, Dr. Warner argues that Dr. Chen should not be able to engage in
the “luxury of reduced employment simply because [Dr. Warner] earns income
sufficient to support the family.” Dr.
Warner states: “If Dr. Chen’s decision
[not to earn income] appears reasonable at all, it is only because there was
another high-income child support obligor waiting in the wings.”
¶35 Dr.
Warner does not argue that his ability to pay child support is an inappropriate
consideration for purposes of shirking analysis. Obviously, if one working parent has no ability to pay additional
child support, the other parent’s voluntary decision to remain unemployed would
not likely be reasonable. Conversely,
if the other parent can easily afford child support, that factor may weigh in
favor of the reasonableness of a parent’s decision to remain unemployed. We conclude that ability to pay child
support is an appropriate shirking factor, but the weight to be given this
factor, if any, will necessarily vary from case to case.
¶36 Because
Dr. Warner’s income is so high, our consideration of this factor is much
simplified. Dr. Warner’s income and
retirement benefit, approximately $545,000 per year, are sufficiently high that
he is able to afford any reasonable level of child support without significant
detriment to his lifestyle or his ability to provide for himself or his
children now or in the future.
¶37 At
lower income levels, complicated questions may arise as to how to analyze
“ability to pay.” A divorced parent who
voluntarily reduces income does not know whether or in what amount the other
parent will be ordered to pay child support.
In cases where the incomes involved are neither clearly high enough nor
clearly low enough to reach a predictive determination of ability to pay, does
the reasonableness prong of shirking analysis intertwine with the amount
eventually ordered? Dr. Chen
effectively answers that question yes when she stresses that Dr. Warner can easily
afford to pay $4,000 per month in child support. We do not address the topic.
¶38 We
are not persuaded by Dr. Warner’s argument that Dr. Chen should not be able to
engage in the “luxury of reduced employment simply because the other parent
earns income sufficient to support the family.” This argument ignores the work involved in the active parenting
of three young school-age children.
More importantly, Dr. Chen did not quit “simply” because of Dr. Warner’s
ability to pay. If she had, her
decision would not even arguably qualify as reasonable.
¶39 We
turn to Dr. Warner’s “race to resign” argument. For purposes of this argument, Dr. Warner focuses attention on
the fact that both he and Dr. Chen were high-income earners at the time Dr.
Chen quit her job. Dr. Warner argues
that a decision in favor of Dr. Chen would encourage “dual high-income
[divorced parents] to engage in a race to retirement or resignation.” In Dr. Warner’s view, the first-in-time
parent to resign wins the race and unilaterally forces the other parent to foot
the bill.
¶40 Dr.
Warner’s prediction, however, seemingly assumes that the “winner” maintains
substantially the same lifestyle without the burden of employment. However, even with respect to the temporary
time period child support is awarded, Dr. Warner presents an unlikely scenario,
because a parent who resigns cannot expect payments that amount to disguised
maintenance.
¶41 Further,
Dr. Warner’s “race to resign” argument assumes there are substantial numbers of
dual high-income divorced parents who want to, and are actually willing to,
quit a career to become a full-time parent.
Dr. Warner does not support this speculation. As the facts recited in the background section of this opinion
exemplify, a person who drops out of a career for several years to parent
typically gives up substantial financial security and prestige. He or she also faces an uncertain return to
the workforce. Will a job be available
in the same geographic location? Will
the parent need to restart his or her career in an entry-level job? Will the decision to parent be viewed later
as a lack of commitment by prospective employers? We also note that there is no indication Dr. Warner has any
interest in quitting his job. That is,
there is no reason to think that, if Dr. Warner had realized he could beat Dr.
Chen to the punch by resigning first and seeking child support, he would have
done so.
Benefit to the Children
¶42 Both
parties contend that a proper “shirking” consideration in this case is the
benefit the children derive from Dr. Chen’s decision to remain unemployed. We agree this is an appropriate factor. See Kelly, 178 Wis. 2d
at 558. The parties do, however,
dispute whether the benefit to the children is significant enough to make Dr.
Chen’s decision reasonable. In this
section, we set forth the evidence bearing on the benefit to the children.
¶43 The
record reveals that, prior to the time Dr. Chen quit, Dr. Chen’s and Dr.
Warner’s involvement with the children was fairly typical of dual full-time
working parents with high incomes. Both
parents attended school and pre-school functions when they could, but not
regularly. They hired a nanny to assist
with the children. For the most part,
one or both parents were available at dinnertime, after dinner, and on
weekends. Dr. Warner, who still works
full-time, attends parent-teacher conferences, attends some of the children’s
school activities, and spends as much as three hours a night assisting with
homework during the weeks the children are with him. Dr. Warner schedules substantial vacation time with the children.
¶44 The
physical placement is equal: the
children spend every other week with each parent. Dr. Chen’s involvement with the children has increased
substantially since she quit her job, both during the weeks she has placement
and the weeks she does not. Dr. Chen
provides volunteer services in each of the children’s classrooms and acts as a
driver or chaperone for nearly all of their class field trips. Dr. Chen’s involvement in these activities
has allowed her to develop a close working relationship with each of the
children’s teachers. This, in turn,
gives her the opportunity to deal quickly with areas of concern that might
arise. For example, Dr. Chen testified
that one daughter is “extremely sensitive and she will burst into tears in
school.” Dr. Chen explained that she
was able to explain to the teachers “what causes it and what to do when it
happens and that it’s – it’s something that has decreased over time.” As another example, Dr. Chen testified that
she was able to work with teachers on another daughter’s “organizational
problems.”
¶45 Dr.
Chen has also become very active in the children’s non-school activities. These activities include dance, tae kwon do,
piano, swimming, and knitting. Dr. Chen
takes the children to all of these activities each week and usually stays to
see how they are doing and to monitor their participation. Dr. Chen helps the children with piano by
helping them with music theory and helping them prepare and practice for
recitals and competitions.
¶46 Dr.
Chen gave an example of an opportunity she thinks would not have been pursued
if both she and Dr. Warner still worked full time. One of their daughters was interested in an advanced art program. Dr. Chen met with the daughter’s art
teacher, decided which pieces of art to submit, had the art matted and framed,
and took the daughter to the three-hour screening test.
¶47 Dr.
Chen testified that her involvement enables her to get to know her daughters’
friends and the families of those friends.
Dr. Chen testified that she makes arrangements for her daughters to play
with friends and she also steers the children away from possible trouble. Dr. Chen gave as an example one daughter who
wanted to sleep over at a friend’s house.
Dr. Chen was familiar with the family and knew that the parents did not
supervise their children, that the parents were heavy smokers, and that the
home was “extremely dirty.” Dr. Chen
concluded that the sleepover was not a “safe arrangement.” She spoke with her daughter about it and the
daughter agreed it would not be a good idea to spend time at that girl’s house.
¶48 Dr.
Chen testified that she had recently spent time looking for a child-friendly
church and found one that fit their needs.
The girls now attend church services and Sunday school and have recently
gone to a “vacation Bible school.”
¶49 Dr.
Warner did not argue below, and does not argue before this court, that Dr.
Chen’s testimony is inaccurate or that the examples she gives do not constitute
benefits to the children. Rather, Dr.
Warner argues that the benefits are limited.
Dr. Warner relies on his own uncontested testimony that the children
were thriving before Dr. Chen quit working. He accurately points out that there is no evidence in the record
that any change occurred requiring Dr. Chen to quit work to care for the
children. Dr. Warner testified: “I think that the care provided during the day
by their long-term nanny combined with our care in the evening when we returned
from work was doing a very good job of raising them.” Dr. Warner also notes that the children were all school age with
no special needs at the time Dr. Chen declined to return to work and instead
sought child support.
Application of Factors
¶50 In
the subsections above, we conclude that neither Dr. Chen’s good motives nor Dr.
Warner’s knowledge that Dr. Chen was considering reducing her hours weighs in
favor of finding Dr. Chen’s decision to forgo all employment reasonable. We also explain that Dr. Chen, as of the
time of the hearing, did not have employment opportunities that would permit
her to supervise and assist the children during the weeks they have placement
with Dr. Warner. Indeed, the question
here is whether it is reasonable for Dr. Chen to forgo part-time work so that
she can parent during the weeks she does not have placement. Accordingly, we focus on Dr. Warner’s
ability to pay and the benefits the children derive from having Dr. Chen
available every week.
¶51 Dr.
Warner’s main argument regarding the benefits to the children is that the
children were doing well before Dr. Chen quit and they are doing well now. He also states that the benefit of having a
full-time parent is substantially less when children are, as here, school
age. These arguments have merit but, at
the same time, the benefits described by Dr. Chen, though difficult to measure,
are significant. It is hard to argue
with the proposition that children benefit when parents know who their friends
are and actively steer the children away from bad influences. Similarly, even high-performing children may
encounter difficulties in school or miss opportunities for enrichment. Thus, a reasonable judge could find that Dr.
Chen’s efforts benefit the children and that benefit is enhanced by Dr. Chen’s
ability to supervise and assist every week, not just every other week.
¶52 Dr.
Warner argues that Dr. Chen, in effect, asks this court to make a general value
judgment and adopt a blanket rule elevating stay-at-home parenting over
income-earning, regardless of the placement schedule and the other particular
facts of the case. We do nothing of the
sort. We readily acknowledge that it is
difficult to assess the comparative benefits of Dr. Chen working every other
week and not working at all. Further, this
is not a case in which either party offered expert testimony or statistical
evidence of the short- or long-term benefits to school-age children from having
an active, involved full-time parent such as Dr. Chen. We hold only that, in this case, a
reasonable trial judge could determine that Dr. Chen’s decision to forgo
part-time work—work that would take her away from the children every other
week—was reasonable in light of Dr. Warner’s ability to pay child support and
the benefits to the children.[6]
By the Court.—Order affirmed.
No. |
03-0288(D) |
¶53 DYKMAN, J. (dissenting). Dr. Chen is a millionaire.[7] Dr. Warner is a millionaire.[8] They were divorced in 1999, and share equally in the placement of their three children, each parent having physical placement of the children during alternating weeks. Until this post-divorce proceeding, neither party paid the other maintenance or child support, and each paid for the children’s care when they were with them. Dr. Warner has remarried. The record does not include the income of Dr. Warner’s wife. Dr. Chen lives with a significant other, whose income for 2001 was $8,049.
¶54 In May of 2000, Dr. Chen retired, at age forty-three. She testified that she did so to stay home with her children. Had she not retired, her 2002 gross income would have been $405,491. She testified that because her securities had decreased in value, she needed more income. She estimated her household budget at $5,000 per month, and wanted Dr. Warner to pay $4,000 of that. Dr. Warner did not submit a budget showing the cost of supporting the children for the half-year they were with him. The trial court granted Dr. Chen’s motion and ordered Dr. Warner to pay child support of $4,000 per month.
¶55 The majority affirms this result, deferring not to the trial court’s determination that Dr. Chen’s decision to retire was reasonable, but instead concluding that a reasonable judge could conclude that Dr. Chen’s decision not to seek part-time work was reasonable. I question the reasonableness of a decision to retire at age forty-three and depend upon income from securities. Those securities were valued at a time when even poorly informed persons knew that the stock market had reached an all-time high. There is no evidence of the type of securities Dr. Chen held when the stock market declined. But, given Dr. Chen’s testimony that she sought the advice of a financial consultant before retiring, I do not take issue with the majority’s conclusion that we need not examine Dr. Chen’s initial decision to retire. But I disagree with the majority’s decision of what to review and the standard of review it uses to review later action (or inaction) of Dr. Chen.
¶56 To begin with, this opinion will be published, and therefore become precedent for future reduction of income cases which will almost never involve parents with the net worth, income and income potential of Dr. Chen and Dr. Warner. Though the majority disclaims that use, the reason for publication belies that disclaimer. See Wis. Stat. § 751.42(2) (2001-02) (Stating that officially published opinions of the court of appeals shall have statewide precedential effect.). The use of a “shirking” analysis here really does not matter because both parties could support their children without the other, using their income or their assets. But applying the holding here to cases involving persons of more modest means raises questions of public and social policy that need more analysis than the majority gives.
¶57 The result of a case is often driven by the standard of review used. The majority uses a deferential standard, concluding that a reasonable trial judge could reach the result found here. Assuming that the “reasonableness” of Dr. Chen’s decisions is the test, “reasonableness” is a question of law. A.Y. v. Ronnie J., 2004 WI App 58, ___ Wis. 2d ___, 677 N.W.2d 684. I recognize the “intertwining” exception to this conclusion, but here there is no intertwining. Instead, what we are really deciding, based on our own knowledge and beliefs, is that children raised by stay-at-home parents become better children, students, citizens and adults. We are deciding that the more money spent on children, the greater benefit to the children, and that the more activities children engage in, the better the child and ultimately the better the adult. We are deciding that a divorced parent can make a unilateral decision to retire that would be a joint decision in most marriages. While I intuitively agree with some of this, if judges are going to make those policy decisions without evidence, I question whether the answer to those decisions should depend upon which circuit judge is making the decision.[9] So, were I writing for a majority, I would not use a deferential standard of review, but review cases of this sort de novo.[10]
¶58 I would also review Dr. Chen’s decision differently. The majority focuses on Dr. Chen’s decision not to actively seek part-time work. That is not my analysis. Though I do not take issue with her decision to retire in 2000, the question for me is whether her decision not to return to full-time work is reasonable. Dr. Chen worked full time until shortly after she divorced. We do not know how either Dr. Warner’s wife or Dr. Chen’s significant other interact with the children, or what parenting benefits they can or will provide for them. We do not know whether Dr. Chen would obtain full-time work if she sought it.
¶59 Nor do I discount Dr. Warner’s “race to resign” concern. I do not share the majority’s disbelief that this will occur. Of course there are benefits and detriments to any career decision. I believe, however, that some persons who find working outside the home stressful and unrewarding will be willing to trade that lifestyle for what they perceive as a more leisurely lifestyle. Their willingness may be enhanced if they can make a unilateral decision and place the economic burden on another. While the majority disclaims any universality to its holding, the message is that if the income or assets of an ex-spouse are sufficient, retirement at an early age accompanied by evidence of child rearing activities will achieve the expected result. If the non-retiring spouse is wealthy enough to fund the retiring spouse’s decision, the desire of the non-retiring spouse not to pay what can be hidden maintenance is not considered.
¶60 Ultimately, I conclude that the majority’s “shirking” analysis is unsuited for a case such as this one.[11] A better one would be this: The decision to retire at an early age while obligated for child support is disfavored. Nonetheless, courts should accept that decision as long as the retiring parent has sufficient assets or income to meet the expected support obligation. The retiring parent will be required to use income and to liquidate his or her assets before requiring the non-retiring spouse to support the retiring spouse’s unilateral decision to retire.
¶61 I agree with the majority that “shirking” is an unfortunate term, better suited for cases where a support payer is unemployed or has changed jobs. Yet, the majority has shoehorned this case into a “shirking” analysis. The result is an inquiry into the reasonableness of Dr. Chen’s actions without considering Dr. Warner’s desire not to be bound by Dr. Chen’s unilateral decision, and not to pay for Dr. Chen’s retirement. Of course, both Dr. Chen and Dr. Warner are ultimately responsible for their children’s support. That overrides either of their economic interests.
¶62 Were I writing for a majority, I would remand to permit the trial court to inquire further into Dr. Chen’s income and to consider her $1,691,000 estate. The trial court, using the test I have suggested, would consider the nature of Dr. Chen’s assets, and when they would probably be exhausted. If Dr. Chen is capable of supporting her decision to retire, the trial court should require her to do so. If and when she is not, Dr. Warner should be prepared to assume his children’s economic needs. Because the majority does not reach this conclusion, I respectfully dissent.
[1] There are discrepancies in the record regarding income amounts at various points in time. None of the differences in the numbers affect our decision.
[2] We state the test as having two prongs even though some cases suggest there are two variations of shirking: those in which a parent voluntarily fails to earn to his or her full capacity with the purpose of avoiding child support and those in which a parent makes a voluntary and unreasonable decision regarding income. See, e.g., Rottscheit v. Dumler, 2003 WI 62, ¶21, 262 Wis. 2d 292, 664 N.W.2d 525; Sellers v. Sellers, 201 Wis. 2d 578, 587, 549 N.W.2d 481 (Ct. App. 1996); Kelly v. Hougham, 178 Wis. 2d 546, 555, 504 N.W.2d 440 (Ct. App. 1993). We clarify that cases involving a voluntary decision motivated by a desire to avoid child support comprise one type of case that fits under the general voluntary and unreasonableness standard. That is, reducing income for the purpose of avoiding child support is one of many possible unreasonable reasons to reduce income. If a circuit court finds that a parent’s decision to reduce income is motivated, even in part, to avoid child support, that finding supports the conclusion that the decision is unreasonable. Obviously, if child support avoidance is the only reason, the decision is unreasonable.
[3] The reader is cautioned that the determination of the income capacity of incarcerated persons for purposes of child support is not amenable to normal shirking analysis. See Rottscheit, 262 Wis. 2d 292, ¶38 (shirking analysis is inapplicable when the obligor is incarcerated for crimes unrelated to the avoidance of paying child support because “[i]n such cases, the unreasonable decision is to commit a crime, not to reduce income or avoid child support.”); see also Voecks v. Voecks, 171 Wis. 2d 184, 187-88, 491 N.W.2d 107 (Ct. App. 1992).
[4] Dr. Warner states that the circuit court “seemed to apply” an erroneous standard of law by requiring bad faith or intent to avoid support as a prerequisite to finding shirking. We are not persuaded. Our attention is directed to the following single reference by the circuit court to Dr. Chen’s intent: “That the market fell, and fell so badly, does not convert Chen’s innocuous, even benevolent decision, into malevolent shirking.” We do not interpret this statement as an indication that the circuit court believed it needed to find malevolence in order to find shirking. Rather, the court is observing that malevolent intent does not exist. If it did, such intent would weigh in favor of shirking.
[5] It may be that taking work on a “temp” basis would carry with it additional complications and expenses that might weigh in favor of Dr. Chen’s decision. However, Dr. Chen has not detailed such complications in either her testimony or her argument. Since Dr. Chen has the burden of demonstrating that her decision is reasonable, we decline to consider anything more than the fact that such work would take Dr. Chen away from the children every other week.
[6] The dissent worries that too much will be read into the majority opinion; that this case will be read as generally holding that a spouse may quit working whenever the other spouse is able to pick up the financial slack. That is not the holding of this case. This decision is publishable, not because it sets forth a general rule regarding the result that should be reached in this type of case, but because it clarifies the analysis that should be used. We very clearly state that the result in this case is a reasonable one, not the only reasonable one.
We will not take the time to dispute all of the assertions in the dissenting opinion, but one additional passage is hard to ignore. The dissent states: “We are deciding that the more money spent on children, the greater benefit to the children, and that the more activities children engage in, the better the child and ultimately the better the adult.” The majority opinion does nothing of the sort. Nothing in this opinion suggests that more money produces better children. Indeed, Dr. Chen’s decision not to return to work reduces the amount of money available for the children now and in the future. Also, there is no suggestion that more activities result in better children. The children in this case would have been involved in their many activities, regardless of Dr. Chen’s work schedule.
[7] At the time of her divorce, Dr. Chen’s November 1999 financial disclosure statement showed a net worth of $1,712,408. Her April 2002 financial disclosure statement showed a net worth of $1,691,000, a loss of $21,408 since 1999. There was no testimony as to the effect on value caused by some of the assets being held in pre-tax accounts.
[8] At the time of his divorce, Dr. Warner’s November 1999 financial statement showed his net worth as $1,712,408, the same as Dr. Chen’s. His March 2002 financial disclosure statement shows that he owns an automobile valued at $23,225, checking and savings accounts valued at $132,444 and real estate with equity of $408,200. Originally appended to his 2002 financial disclosure statement were attachments A through D, which listed the value of his tangible personal property, securities and two retirement accounts. The attachments are no longer appended to the financial disclosure statement. I conclude, however, that with a net worth of $1,712,408 in 1999 and income which increased from $230,000 in 1999 to $545,000 in 2002, Dr. Warner’s 2002 net worth exceeds a million dollars. There was no testimony as to the effect on value caused by assets held in pre-tax accounts.
[9] Faced with arguably similar facts, a trial court judge in Missouri imputed income to an unemployed custodial parent who had left lucrative employment as a physician, giving as a primary reason her desire to be home with her children. The Missouri Court of Appeals affirmed. Stanton v. Abbey, 874 S.W.2d 493, 500 (Mo. Ct. App. 1994).
[10] I do not suggest a de-novo standard if voluntariness is a part of a “shirking” analysis. Whether an action is voluntary in cases of this sort involves credibility and choosing between disputed facts. A deferential review acknowledges these factors.
[11] The supreme court concluded that a “shirking” analysis was inapplicable to a request for support modification where the requester was incarcerated resulting from a criminal conviction. See Rottscheit v. Dumler, 2003 WI 62, 262 Wis. 2d 292, 664 N.W.2d 525.