No. 95-549

IN THE SUPREME COURT OF THE

1996

STATE OF MONTANA

IN RE THE MATTER OF THE PATERNITY

AND CUSTODY OF T.J.H.,

a minor child

APPEAL FROM: District Court of the Eleventh Judicial District,

In and for the County of Flathead,

The Honorable Ted 0. Lympus, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Richard DeJana, Kalispell, Montana

For Respondent:

James C. Bartlett, Hash, O'Brien &

Kalispell, Montana

Bartlett,

I

v.mp.ui

Submitted on Briefs: June 4, 1996

2 2 13% Decided: August 22, 1996
Justice James C. Nelson delivered the Opinion of the Court.

The mother of the minor child appeals the findings of fact,

conclusions of law, and order entered by the Eleventh Judicial

District Court, Flathead County increasing child support from $200

a month to $261 a month. We affirm in part, reverse in part, and

remand for further proceedings.

ISSUES

1. Did the District Court err in imputing wages of $12,000 to

the mother and Was this imputation of income supported by

substantial evidence?

2. Did the District Court properly apply 40.30.1520 (3), ARM,

in considering that the husband was supporting two children from

his present marriage in addition to the child for which the child

support increase was sought?

3 . Did the District Court properly implement 46.30.1508 (2),

ARM, in not adding the husband's bonus to his gross income?

BACKGROUND

Upon the father's petition for paternity and custody of the

minor child, on August 10, .1993, the mother and father stipulated

to joint custody, that the mother would be designated as the

primary residential parent and that child support would be

determined within 60 days. In its initial findings of fact,

conclusions of law and order entered May 29, 1985, the District

Court had ordered the father to pay the mother $200 a month for

child support.

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On June 22, 1995, the mother moved the District Court to

redetermine support for the minor child, which motion the father of

the child opposed. The mother is a part time waitress and she

agreed to impute $8,772 as her income. The mother stated that she

may be able to increase her work hours from 15 to 30 hours a week

to a full 40 hours a week. The father stated that $12,000 should

be imputed to the mother as income because she is able to work full

time. The father is a supervisory employee at Plum Creek where he

earns an annual salary of $44,055. He is also supporting two

children from his present marriage.

The District Court heard the matter on August 30, 1995, and

requested that both parties submit proposed findings of fact and

conclusions of law. After considering the evidence presented and

the trial memoranda, the District Court modified the existing

support order, taking into consideration that the husband supports

two other children. The court imputed an income of $12,000 to the

mother, and determined that father's bonus is income for his hard

work and therefore is income for the benefit of his second family.

The mother appeals these findings of fact, conclusions of law and

order entered by the District Court.

STANDARD OF REVIEW

We review a district court's findings of fact in child support

modification cases to determine whether they are clearly erroneous.

In re Marriage of Kovash (1995), 270 Mont. 517, 521, 893 P.2d 860,

862-63. However, we review-a district court's overall decision on

modification of child support awards to determine whether the

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court's interpretation of the law was correct. Marriaqe of Kovash,

893 P.Zd at 863.

DISCUSSION

1 . Did the District Court err in imputing wages of $12,000 to

the mother and was this imputation of income supported by

substantial evidence?

The mother contends that the District Court based its

imputation of income of $12,000 to her on a finding for which there

was not substantial evidence. She therefore argues that the

court's decision was clearly erroneous. On the other hand, the

father argues that the District Court heard evidence that the

mother was capable of doing the same type of work full time and

therefore she was underemployed.

The guideline at issue, 46.30.1513, ARM, states:

DETERMINATION OF IMPUTED INCOME

(1) "Imputed income" means income not actually earned by

a parent, but which may be attributed to the parent

because the parent is voluntarily unemployed, is not

working full-time when full-time work is available, or

the parent is intentionally working below his or her

ability or capacity to earn income.

(2) Income may be imputed according to one of two

methods as appropriate:

(a) Determine employment potential and probable net

earnings level based on the parent's recent work history,

occupational qualifications, and prevailing job

opportunities and earnings level in the community. . .

(c) Whenever income is imputed to an unemployed parent

who is providing in-home care for the child for whom

support is being calculated, and if that parent would be

required~to incur child care expenses if employed at the

imputed level, then the imputed income should be reduced

by the reasonable value of the parent's child care

service.

(d) Income should not be imputed if any of the following

conditions exist:

(i) the reasonable costs of day care for the

parties' dependant children will offset, in

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whole or in substantial part, the amount of

income the custodial parent can earn.

In the instant case, in her child support guidelines financial

affidavit, the mother stated that she worked 15 to 30 hours a week

at $5.20 an hour. The mother also testified that there was nothing

to prevent her from working another shift or working a 40-hour

week. Without tips, the mother could gross $10,816 working a 40-

hour week at $5.20 an hour. Therefore, the husband suggested

imputing income at $5.77 per hour, $5.20 base wage plus $.S? per

hour for tips, for a 40-hour work week for a total gross of

$12,000. Figuring income from tips and from the base hourly wage,

the mother could work less than a 40-hour week and still make

$12,000.

We hold that the District Court correctly imputed income to

the mother according to the methods set forth in 46.30.1513, ARM.

The court properly determined the mother's employment potential and

probable net earnings level based on her work history, occupational

qualifications, job opportunities, and earnings level in the

community. The mother testified that she anticipated being able to

work 40 hours a week and is not physically prevented from doing so.

The District Court's interpretation and application of 46.30.1513,

ARM, was correct and its findings were within the evidence

presented. Accordingly, we affirm the District Court's imputation

of income to the mother.

2. Did the District Court properly apply 40.30.1520 (3), ARM,

in considering that the husband was supporting two children from

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his present marriage in addition to the child for which the child

support increase was sought?

The mother contends that a court may consider the noncustodial

parent's other natural born and adopted children only when the

custodial parent petitions to increase child support. The mother

further contends that she did not petition for an increase in child

support but rather petitioned for the court to make a

redetermination of child support in which she sought to increase

that support.

Section 46.30.1520, ARM, provides in part:

ALIMONY, MAINTENANCE, PRE-EXISTING CHILD SUPPORT

OBLIGATIONS AND RESPONSIBILITY FOR OTHER CHILDREN

(1) The amount of alimony or spousal maintenance which a

parent is required to pay under a court or administrative

order should be deducted from gross income.

(2) For the support of children who are not subject of

the child support action:

(a) the amount of the order should be deducted from the

parent's gross income if there is a pre-existing support

order .

(3) Use of the deductions provided in this rule are

appropriate at the time of the establishment of a child

support order. In a proceeding to modify an existing

order, the following limitations apply: .

lb) If the custodial parent with a support order

petitions to increase'child support, all other natural

born and adopted children of the non-custodial parent may

be considered in determining whether to increase the

support order.

Here, the District Court correctly applied the guideline. Although

not labeled a petition to increase child support, the mother sought

a child support increase from an existing support order.

Therefore, in determining the increase, the District Court

correctly considered the father's other natural born and adopted

children. The District Court had the discretion to consider the

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father's present family support obligations. Accordingly, we hold

that the District Court correctly interpreted the law in its

determination to increase the child support.

3 . Did the District Court properly implement 46.30.1508(2),

ARM, in not adding the husband's bonus to his gross income?

The mother argues that.the husband's bonuses should have been

included in his gross income and thus figured in the child support

calculations. On the other hand, the husband contends that the

District Court correctly applied 46.30.1508(2), ARM, in excluding

his bonuses from his gross income. 46.30.1508, ARM, states in

part:

DETERMINATION OF GROSS INCOME

(1) In determining for each parent the resources which

can be made available for child support, the following

considerations apply:

(a) "gross income" means income from any source, except

as excluded in subsection cd), and includes but is not

limited to income from salaries, wages, commissions,

bonuses, earnings, profits, dividends, severance pay,

pensions, pre-retirement distributions . . .

(2) In determining a parent's gross income, do not

consider income attributable to subsequent spouses . .

. If a person with a subsequent family has income from

overtime or a second job, that income is presumed to be

for the use of the subsequent family, and is not included

in gross income for the purpose of determining support

for a prior family. The presumption may be rebutted upon

showing that the additional income is discretionary.

The District Court found that the husband's base income was $44,055

a year, but that he could obtain an additional sum based on merit

and extra time spent on the job. The court also found that the

husband was a salaried employee in a supervisory position.

We conclude that because the husband is a salaried employee in

a supervisory position, he works extra hours as any supervisory
employee would and does not earn the additional sum of money "from

overtime or a second job". We are not persuaded that his bonus,

which is strictly performance related, should be deemed a "second

job income" or "overtime" used for the support of his second family

under the guideline. Clearly his bonus is simply that, a bonus,

which should be added to his gross income and considered part of

his gross income. We hold that the District Court erred in its

interpretation of the guideline. Accordingly, we reverse and

remand to the District Court for a determination of child support

consistent with the guideline.

Affirmed in part, reversed in part, and remanded for further

proceedings consistent with this

Justices

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