SUMMARY

July 3, 2019

2019COA104

No. 18CA0250, In re Marriage of Gibbs — Family Law — Postdissolution — Modification and Termination of Provisions for 

Maintenance, Support, and Property Disposition — Imputed 

Income

This opinion answers the unresolved question of whether a 

district court can, for the purpose of calculating maintenance, 

impute to a party rental income from that party’s primary residence 

when the primary residence has never been used as a rental 

property. A division of the court of appeals concludes that a district 

court cannot impute rental income to a party when that party has 

never used the residence as an income-producing asset. 

The summaries of the Colorado Court of Appeals published opinions 

constitute no part of the opinion of the division but have been prepared by 

the division for the convenience of the reader. The summaries may not be 

cited or relied upon as they are not the official language of the division. 

Any discrepancy between the language in the summary and in the opinion 

should be resolved in favor of the language in the opinion.
COLORADO COURT OF APPEALS 2019COA104

Court of Appeals No. 18CA0250

Larimer County District Court No. 12DR408

Honorable Devin R. Odell, Judge

In re the Marriage of

Carl Joseph Gibbs, 

Appellant,

and

Joellen Elizabeth Gibbs,

Appellee.

ORDER AFFIRMED IN PART, REVERSED IN PART,

AND CASE REMANDED WITH DIRECTIONS

Division IV

Opinion by JUDGE LIPINSKY

J. Jones and Martinez*, JJ., concur

Announced July 3, 2019

Thomas & Associates Law Firm LLC, Joseph G. Williams, Greenwood Village, 

Colorado, for Appellant

Alison Ruttenberg, Louisville, Colorado; Vigil Law Offices, P.C., Frank G. Vigil, 

Lakewood, Colorado, for Appellee

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. 

VI, § 5(3), and § 24-51-1105, C.R.S. 2018.
1

¶ 1 Three years after the district court entered permanent orders 

in his dissolution of marriage case, husband, Carl Joseph Gibbs, 

sought to modify or terminate his maintenance obligation to wife, 

Joellen Elizabeth Gibbs, under section 14-10-122(1)(a), C.R.S. 

2018. Husband argued that his alleged loss of income resulting 

from a shoulder injury he incurred three years following the entry of 

the permanent orders constituted a substantial and continuing 

change in his circumstances that warranted a decrease in his 

maintenance payments. 

¶ 2 The district court denied husband’s motion based on its 

calculation of husband’s monthly income, including imputed rental 

income from husband’s primary residence. 

¶ 3 We affirm the portion of the decision addressing husband’s 

self-employment income and reverse the portion imputing rental

income to him because husband never used the residence as an 

income-producing asset. We remand to redetermine husband’s 

maintenance obligation without considering imputed rental income.

I. Background

¶ 4 The parties’ marriage ended in 2013. In the permanent

orders, the district court awarded wife $1,850 in monthly
2

maintenance until the death of either party, the remarriage or civil

union of wife, or further court order.

¶ 5 In September 2016, husband moved to modify or terminate his 

maintenance obligation. He alleged that, as a result of a severe

shoulder injury, he was no longer able to perform labor-oriented

work. He further alleged that he had been diagnosed with stenosis,

which would require surgery and affect his ability to work for the

rest of his life.

¶ 6 Following a hearing at which husband, wife, and a physician

testified, the court found that husband had not shown a 

substantial and continuing change in his circumstances and,

therefore, denied husband’s motion.

II. Husband’s Income

¶ 7 Husband contends that the district court abused its discretion

in determining that his income was $6,500 per month for purposes

of calculating maintenance.

A. Standard of Review

¶ 8 We review a district court’s order continuing or modifying

maintenance for an abuse of discretion. In re Marriage of Kann,

2017 COA 94, ¶ 75, ___ P.3d ___, ___. A district court abuses its
3

discretion when its decision is manifestly arbitrary, unreasonable,

or unfair. In re Marriage of Gromicko, 2017 CO 1, ¶ 18, 387 P.3d 

58, 61.

¶ 9 We defer to the district court’s factual findings unless they are

clearly erroneous. In re Marriage of Connerton, 260 P.3d 62, 66

(Colo. App. 2010). The district court must make sufficiently explicit

findings of fact to give the appellate court a clear understanding of

the basis of its order. In re Marriage of Rozzi, 190 P.3d 815, 822

(Colo. App. 2008).

B. Self-Employment Income

¶ 10 Husband argues that the district court miscalculated his selfemployment income because it did not accurately calculate the

ordinary and necessary business expenses that needed to be 

deducted from his gross receipts, as required by section 

14-10-114(8)(c)(III)(A), C.R.S. 2018. We disagree.

¶ 11 In applying the maintenance guidelines, an individual’s gross

income from self-employment is calculated by deducting from gross

receipts the ordinary and necessary expenses required to produce

income. Id. Ordinary and necessary expenses do not include

business expenses that the district court finds are “inappropriate
4

for determining gross income.” § 14-10-114(8)(c)(III)(B). A selfemployed party’s gross income includes expense reimbursements 

or in-kind payments received in the course of self-employment if 

they are significant and reduce personal living expenses. 

§ 14-10-114(8)(c)(I)(X). 

¶ 12 The record reflects that, when the district court entered the

permanent orders, husband performed the manual labor of a 

framer for his own construction company. As a result of husband’s 

shoulder injury and pain from stenosis, he transitioned to a 

supervisory position at his girlfriend’s construction company. 

¶ 13 The court found that husband earned a $5,000 monthly salary 

as a supervisor. The court acknowledged that husband was 

required to use a portion of his salary to pay for certain business 

expenses, including a cell phone, general liability insurance, and 

auto insurance. However, the court found that these business 

expenses were offset by his ability to use a company vehicle and the 

cell phone for personal purposes. 

¶ 14 The record supports the district court’s finding that husband’s 

business expenses were offset by the value of the vehicle and cell 

phone. Husband testified that his business expenses for his cell 
5

phone, general liability insurance, auto insurance, and loan 

payment totaled $1,057 per month. He also testified that he was 

provided the vehicle at no cost to himself and was allowed to use 

the vehicle for personal use. Husband estimated that the monthly 

loan payment on his vehicle was around $800 and that he spent

around $300 per month in fuel. Husband further said that his 

construction company paid his cell phone bills. His monthly cell 

phone bill was $123. 

¶ 15 In finding that husband’s business expenses were offset by the 

in-kind payments he received from his girlfriend’s construction 

company, the court essentially added those payments to his salary, 

see § 14-10-114(8)(c)(I)(X); see also In re Marriage of Long, 921 P.2d 

67, 69 (Colo. App. 1996) (noting that in-kind payments might 

include a company car, free housing, or reimbursed meals), and 

then deducted his business expenses from his salary, see 

§ 14-10-114(8)(c)(III)(A). Because his monthly business expenses 

($1,057) were nearly the same as the monthly in-kind payments for 

the vehicle, fuel, and cell phone ($1,223), we discern no abuse of 

discretion in the district court’s calculation of husband’s selfemployment income.
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C. Imputed Rental Income

¶ 16 Husband argues that the district court erred in imputing 

$1,500 per month in rental income to him. We agree.

¶ 17 The record reflects that husband continued living in the 

marital residence following the dissolution of the parties’ marriage. 

His monthly mortgage payment on the five-bedroom, 2,500-squarefoot home was $2,552 at the time of the modification hearing.

Husband lived in the home with his girlfriend and her three 

children. They lived there together as a family. Husband testified 

that he paid the mortgage and, although his girlfriend did not pay 

rent, she paid for the utilities and groceries. 

¶ 18 The district court found that this arrangement was not a fair 

market exchange because husband’s portion of the utilities and 

groceries was only a small fraction of these costs. In addition, the 

district court imputed to husband rental income from the house, 

noting that husband “owns a large house — the former marital 

residence — that he could use to generate rental income. . . . [T]he 

property . . . is much larger than he needs for himself.”

¶ 19 The district court “estimate[d] that fair rental value would be 

at least $1,500 per month for a house of that size.” It therefore 
7

concluded that husband was “essentially receiving at least $1,500 

in income that he is gifting to [his girlfriend] and her children.” The 

district court found that “[t]he fact that [husband] chooses to forgo 

this income from an asset should not be used to penalize [wife].” 

The district court added the $1,500 in imputed rental income to 

husband’s $5,000 monthly salary for a total income of $6,500 per 

month. 

¶ 20 For purposes of calculating maintenance, potential income is 

properly imputed to a party who is voluntarily unemployed or 

underemployed. See § 14-10-114(8)(c)(IV); see also People v. 

Martinez, 70 P.3d 474, 476-81 (Colo. 2003) (discussing imputing 

income to an unemployed or underemployed parent for purposes of 

calculating child support). Unrealized income from an investment 

asset that earns interest or distributes dividends is also properly 

imputed to a party. See In re Marriage of Bregar, 952 P.2d 783, 

786-87 (Colo. App. 1997) (interest imputed on portion of capital 

gain from stock sale used to reduce margin account debt); In re 

Marriage of Laughlin, 932 P.2d 858, 861-62 (Colo. App. 1997) 

(interest imputed on portion of capital gain from sale of business 

used to construct addition to home and to pay mortgages); In re 
8

Marriage of Tessmer, 903 P.2d 1194, 1196 (Colo. App. 1995) 

(interest and dividends on a retirement account were income, 

although not withdrawn and subject to penalty if withdrawn); In re 

Marriage of Armstrong, 831 P.2d 501, 503-04 (Colo. App. 1992) 

(income earned on portion of inheritance imputed to the father).

¶ 21 But no Colorado statute addresses whether potential rental 

income can be imputed to a party for purposes of calculating 

maintenance. Nor does any Colorado statute address whether 

potential rental income from a party’s primary residence that has 

never before earned rental income can be imputed to that party for 

purposes of calculating maintenance. We answer this second, and 

more narrow, question “no.” 

¶ 22 No evidence in the record shows that the residence ever 

produced income. There is also no evidence indicating that 

husband was acting in bad faith by staying in the residence to

inflate his monthly expenses and avoid paying maintenance to wife. 

By imputing rental income to husband, the court effectively 

recharacterized husband’s home from a primary residence to an 

income-producing rental property. This was, in our view, an abuse 

of discretion. 
9

¶ 23 In In re Marriage of Mugge, 66 P.3d 207 (Colo. App. 2003), a 

division of this court considered a parent’s unrealized income in the 

form of an undistributed retirement account. Mugge held that it 

was improper to “consider unrealized income for child support 

purposes solely because a parent could liquidate an asset or change 

its character into an asset capable of producing income.” Id. at 

212. Like the father’s undistributed retirement account in Mugge, 

husband’s primary residence in this case would not generate 

income unless its character were changed. Id. Moreover, we are 

unaware of any case holding, in effect, that a party in a dissolution 

of marriage case may be compelled to relocate to a smaller 

residence or to rent a portion of his or her home. 

¶ 24 For these reasons, we conclude that, where a party has not 

historically earned rental income from his or her primary residence, 

potential rental income from that asset cannot be imputed to the 

party for purposes of calculating maintenance. See id. at 213 

(noting that several other statutory income categories expressly 

require payment to the recipient). 
10

¶ 25 We therefore remand this case to the district court to 

redetermine maintenance without imputing to husband potential

rental income from his primary residence.

III. Husband’s Argument that He Is Not Underemployed

¶ 26 We next turn to husband’s contention that the district court 

erred in finding him underemployed. 

¶ 27 The district court found that husband “has chosen a position 

that is comfortable and familiar to him, but there is no evidence 

that he has attempted to find the highest paying position possible 

given his experience.” But the district court did not make findings

regarding the amount of additional income husband could be 

earning. Thus, the district court did not impute any income to 

husband on grounds of underemployment, and we need not 

address husband’s argument on this point. 

IV. Husband’s Other Arguments 

¶ 28 Because the district court must redetermine maintenance

based on the parties’ circumstances at the time of that hearing, we 

need not address husband’s arguments that he has experienced a 

substantial decrease in his income warranting a modification of 
11

maintenance and that he would be impoverished if the district court 

does not modify his maintenance obligation.

V. Conclusion

¶ 29 We affirm the portion of the district court’s order calculating 

husband’s self-employment income, reverse the portion imputing 

rental income to husband, and remand the case for redetermination 

of maintenance, as provided herein.

JUDGE J. JONES and JUSTICE MARTINEZ concur.