- 870 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

Jason L. Armknecht, appella

Alita M. Armknecht, 

as Alita M. Reynolds, a

___ N.W.2d ___

Filed August 24, 2018. No. S-17-377.

1. Modification of Decree: Child Support: Appeal and Error. 

Modification of a dissolution decree is a matter entrusted to the discretion of the trial court, whose order is reviewed de novo on the record, 

and which will be affirmed absent an abuse of discretion by the trial 

court. The same standard applies to the modification of child support.

2. Evidence: Appeal and Error. In a review de novo on the record, an 

appellate court is required to make independent factual determinations 

based upon the record, and the court reaches its own independent conclusions with respect to the matters at issue.

3. ____: ____. When evidence is in conflict, the appellate court considers 

and may give weight to the fact that the trial court heard and observed 

the witnesses and accepted one version of the facts rather than another.

4. Judges: Words and Phrases. A judicial abuse of discretion exists if the 

reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters 

submitted for disposition.

5. Child Support. As a general matter, the parties’ current earnings are to 

be used in calculating child support.

6. Rules of the Supreme Court: Child Support. In general, child support payments should be set according to the Nebraska Child Support 

Guidelines.

7. Child Support. Use of earning capacity to calculate child support is 

useful when it appears that the parent is capable of earning more income 

than is presently being earned.

8. ____. The court may add “in-kind” benefits derived from an employer 

or other third party to a party’s income for purposes of calculating 

child support.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

09/21/2018 12:09 AM CDT
- 871 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

9. ____. In determining child support, a court’s findings regarding an individual’s level of income should not be based on the inclusion of income 

that is entirely speculative in nature.

10. Courts: Child Support. The trial court has discretion to choose whether 

and how to calculate a deduction for subsequent children.

11. Child Support. No precise mathematical formula exists for calculating 

child support when subsequent children are involved, but the court must 

perform the calculation in a manner that does not benefit one family at 

the expense of the other.

12. Modification of Decree: Child Support: Proof. The party requesting a 

deduction for his or her obligation to support subsequent children bears 

the burden of providing evidence of the obligation, including the income 

of the other parent of the child.

Appeal from the District Court for Gage County: Daniel

Bryan, Jr., Judge, Retired. Affirme

Louie M. Ligouri, of Ligouri Law Office, for appellant.

Mark J. Krieger and Terri M. Weeks, of Bowman & Krieger, 

for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, 

JJ., and Derr and Urbom, District Judge

Urbom, District Judge

INTRODUCTION

Jason L. Armknecht appeals the modification order entered 

by the district court for Gage County, which modified his child 

support obligation to his former wife, Alita M. Armknecht, 

now known as Alita M. Reynolds. Jason argues the district 

court erred in the calculation of child support. For the reasons 

set forth below, we affirm the order of the district court.

BACKGROUND

Jason and Alita married in September 1997 and divorced in 

November 2007. They have three children: Logan Armknecht, 

born in 1998; Rees Armknecht, born in 1999; and Alexia 

Armknecht, born in 2004. In the decree, Alita was granted 

physical custody of all three children, subject to Jason’s 
- 872 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

parenting time, and Jason was ordered to pay child support in 

the amount of $950 per month. The decree ordered that such 

child support would be reduced to $700 for two children and 

$475 for one child.

In April 2016, Jason filed a complaint for modification of 

the decree on the basis that the parties’ middle child, Rees, had 

“expressed a strong and consistent desire” to live with Jason 

and had been staying with him since January 1, 2016. Jason 

sought modification of custody with respect to Rees and a 

reduction in his child support obligation due to such change in 

custody. Alita counterclaimed for modification of child support, 

alleging there had been a material change in circumstances that 

would result in an increase in Jason’s support obligation of 

more than 10 percent.

At the time of trial, Logan had reached the age of majority, 

Rees was living with Jason, and Alexia remained living with 

Alita. The parties stipulated that the split custody computation for child support would be retroactive to May 1, 2016, 

which was the first month following the filing of the complaint 

for modification. The evidence also showed that Jason had 

two subsequent children at the time of trial: a child born in 

February 2015, and a child born in October 2016.

Evidence of

The incomes of Jason and Alita were highly disputed at trial. 

Both parties remarried, and both were currently employed by 

their respective spouses. The evidence showed that in 2015, 

Jason began working as a full-time sales associate for an 

insurance agency owned by his wife, Tasa Paul (Tasa). At the 

time of trial in February 2017, Jason’s two most recent pay 

stubs showed that he was earning $1,650 per month, although 

he earned significantly more the previous year. Jason’s 2016 

pay stubs showed that he earned $3,750 per month from 

January through May and $2,100 per month from June through 

December. Tasa testified that his salary was reduced in June 

2016 because she eliminated the marketing and overhead 

allowances that he had been given for the first part of that 
- 873 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

year. She explained that the agency had qualified for extra 

marketing dollars from the company at the end of 2015, so she 

decided to give Jason some extra marketing money to see if he 

could bring in more business. Starting in June, she went back 

to her previous practice of covering overhead expenses through 

the agency rather than having Jason pay for those expenses 

from his salary, and decided to eliminate some of the marketing expenses altogether because she decided the practice was 

not feasible.

Tasa testified that the reduction in Jason’s salary from 

$3,750 to $2,100 in June 2016 was unrelated to the filing 

of his complaint to modify child support in late April 2016. 

She further testified that Jason first met with his attorney in 

December 2015, after which his income actually increased in 

January 2016 before it was reduced in June. However, there 

was no testimony to explain why Jason’s salary was again 

reduced to $1,650 in January 2017. When asked about Jason’s 

earning capacity, Tasa testified that she did not believe it was 

greater than $24,000 annually at that time and explained that 

his salary was very typical for his level of experience in the 

industry. She testified that she expected Jason’s income to 

continue at an amount close to $2,100 per month through the 

calendar year.

Prior to working for Tasa, Jason was a self-employed construction worker. His tax returns for the 5 preceding years 

reflect that his income averaged $11,127 per year, or approximately $927 per month. However, his taxable income was 

greatly reduced due to deductions of business expenses in 

those years.

Alita testified that she works as an administrative assistant 

for BeachLifestyle Enterprises, LLC, which is a company 

owned by her husband, Gary J. Reynolds (GJ). Her income, 

as shown on her W-2 wage and tax statements, was $32,000 

in 2013; $11,769 in 2014; and $25,000 in 2015. There was no 

explanation provided for the fluctuation in her income from 

year to year, and she did not produce any evidence of her 

income for 2016 or the first part of 2017.
- 874 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

Another contested issue at trial was whether Alita was earning any additional income through “ViSalus,” a company for 

which both she and GJ are promoters. Jason submitted several photographs into evidence showing GJ and Alita holding 

placard-sized checks from ViSalus, payable to “GJ & Alita 

Reynolds” in various amounts. The first photograph was taken 

in 2012 and shows them holding one check for $100,000 and 

another for $250,000. When asked if the exhibit accurately 

depicted what was shown in the photograph, Alita indicated 

that both of their names were included on the checks for 

“recognition purposes only.” She further stated that “we only 

were able to receive that money if we continued at a certain level, and we did not.” The next photograph was taken 

in 2014 and shows another check made out to “GJ & Alita 

Reynolds” in the amount of $2 million. Another exhibit contains a promotional photograph of GJ and Alita, and states: 

“WE CONGRATULATE GJ & ALITA REYNOLDS FOR 

REACHING $2,000,000 IN ViSALUS EARNINGS.” The final 

photograph was taken in 2016 and shows GJ and Alita holding 

a large placard containing both of their names, stating: “OVER 

$4,000,000 ViSalus Lifetime Earnings Award.” At the bottom 

of the placard in smaller lettering, it further states: “NOT AN 

ACTUAL CHECK. REFLECTS TOTAL EARNINGS OVER 

TIME.” Alita testified that some of the sums shown on these 

checks were earned by GJ prior to their marriage.

Given this evidence of income through ViSalus, Jason 

argued that a portion of the income shown on GJ and Alita’s 

joint tax returns was attributable to her. Their joint tax returns 

showed a total income for each year as follows: $187,506 in 

2012; $387,483 in 2013; $33,548 in 2014; and $50,677 in 

2015. However, Alita testified that her personal income was 

limited to the wages shown on her W-2 wage and tax statements and that the remaining income shown on the joint tax 

returns was attributed to GJ’s wages and corporate income 

from his company.

In addition to the ViSalus evidence, Jason also presented evidence of nonwage benefits Alita received from her employer. 
- 875 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

In November 2014, BeachLifestyle Enterprises deeded a piece 

of real estate to GJ and Alita as joint tenants. They received the 

property free and clear and then sold it approximately 2 years 

later for $315,000. Alita also drives a BMW sedan, which she 

testified was given to her by her employer.

District Court Find

After the close of the evidence, the district court stated its 

findings as follows: “[T]he calculation of income that I’ve seen 

basically in the original decree really hasn’t changed dramatically here. And so I’m going to find that his is — I’m going to 

leave his at 3100 and hers at 3,333 a month.” It then instructed 

Alita’s counsel to prepare new child support calculations using 

those incomes, with credit for Jason’s two subsequent children, 

and submit an order to the court within 10 days.

The district court subsequently entered a written order 

awarding physical custody of Rees to Jason and finding that 

a material change in circumstances had occurred due to that 

change in custody. It found that the income of the parties at 

the time the decree was entered in 2007 was an appropriate 

estimation of their actual earning capacity. Given the varying 

number of children and subsequent children being supported at 

various times, the district court’s order split the child support 

computation into four different time periods, as shown in the 

chart below.

Split Subsequent Final

Date Custody Child Credit Support

May 1 to October $288 (F) $66

31, 2016 (3 children) (1 child) $222 (F)

November 1, 2016, $288 (F) $113

to January 31, 2017 (3 children) (2 children) $175 (F)

February 1, 2016, $3 (F) $113

to March 31, 2018 (2 children) (2 children) $110 (M)

April 1, 2018, $612 (F) $113

and thereafter (1 child) (2 children) $499 (F)
- 876 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

ASSIGNMENTS OF ERROR

Although Jason assigns seven errors on appeal, his assignments of error, as argued, can be consolidated into three. He 

argues the district court erred in (1) basing the child support 

order on the former income of the parties from 2007, rather 

than using their current incomes; (2) failing to make findings 

on contested matters at trial and instead adopting the child 

support calculations and order prepared by Alita’s attorney; 

and (3) improperly calculating the deduction for Jason’s subsequent children.

STANDARD OF REVIEW

[1] Modification of a dissolution decree is a matter entrusted 

to the discretion of the trial court, whose order is reviewed de 

novo on the record, and which will be affirmed absent an abuse 

of discretion by the trial court.1 The same standard applies to 

the modification of child support.2

[2,3] In a review de novo on the record, an appellate court 

is required to make independent factual determinations based 

upon the record, and the court reaches its own independent 

conclusions with respect to the matters at issue.3 However, 

when evidence is in conflict, the appellate court considers 

and may give weight to the fact that the trial court heard and 

observed the witnesses and accepted one version of the facts 

rather than another.4

[4] A judicial abuse of discretion exists if the reasons or 

rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in 

matters submitted for disposition.5

1 Johnson v. Johnson, 290 Neb. 838, 862 N.W.2d 740 (2015).

2 Id.

3 Becher v. Becher, 299 Neb. 206, 908 N.W.2d 12 (2018).

4 Id.

5 Connolly v. Connolly, 299 Neb. 103, 907 N.W.2d 693 (2018).
- 877 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

ANALYSIS

Determination of

Jason asserts that the district court erred in basing the child 

support order on the former income of the parties from 2007, 

rather than using their current incomes. In doing so, the court 

set Jason’s income at $3,100 per month, but he argues his current income at the time of trial was no more than $2,100 per 

month. Regarding Alita’s income, Jason argues the district 

court failed to consider evidence of her substantial earnings 

from ViSalus and significant nonwage benefits provided by 

her employer.

Alita argues that the evidence clearly showed that Jason 

was earning $3,750 per month before he filed the complaint 

for modification. She argues that the reduction of his salary to 

$2,100 per month in June 2016 by Tasa was directly related to 

the filing of his complaint to modify in late April 2016. Alita 

argues that her income is limited to her earnings of $25,000 

per year as an administrative assistant for BeachLifestyles 

Enterprises, as shown on her W-2 wage and tax statements. 

She asserts that the ViSalus income is generated by GJ’s company, which he owned prior to their marriage and in which she 

has no ownership interest.

[5] As a general matter, the parties’ current earnings are 

to be used in calculating child support.6 However, it appears 

here, based on the statements made by the district court on the 

record, that it did not find either party’s evidence of current 

income to be credible. The court stated:

I know that, based on these circumstances, there’s no 

question you, from a judge’s standpoint, you’re looking 

at what we consider a little bit of a shell game here for 

— probably for both sides, based on the situations that 

they’re in.

6 Peter v. Peter, 262 Neb. 1017, 637 N.W.2d 865 (2002).
- 878 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

I mean, he’s just not working for a third party. He’s 

working for his wife.

She’s not just working for a third party. She’s working 

for her husband.

[6,7] Given the wide discrepancy of evidence of the parties’ 

current incomes and the fact that both parties’ incomes are controlled by their respective spouses, we cannot say that the district court erred in setting the parties’ incomes based on their 

earning capacities. In general, child support payments should 

be set according to the Nebraska Child Support Guidelines.7

However, the guidelines provide that if applicable, earning 

capacity may be considered in lieu of a parent’s actual, present 

income and may include factors such as work history, education, occupational skills, and job opportunities.8

 Use of earning 

capacity to calculate child support is useful when it appears 

that the parent is capable of earning more income than is presently being earned.9

Here, the evidence showed that Jason was earning $3,750 

per month at the time he filed the complaint for modification. 

Although there was testimony from Tasa that some of that 

income was to be used for marketing and overhead expenses, 

there was no evidence that any such expenses were ever 

incurred or paid by Jason. We find no abuse of discretion in the 

district court’s setting his income at $3,100 per month based on 

his earning capacity at the time the original decree was entered 

and based on the evidence of what he was earning at the time 

he filed the complaint for modification.

The district court set Alita’s earning capacity at $3,333 per 

month, even though her income had apparently decreased to 

only $2,000 per month as an administrative assistant for GJ’s 

company. Regarding her earning capacity, the court noted:

7 Freeman v. Groskopf, 286 Neb. 713, 838 N.W.2d 300 (2013).

8 Id.

9 Id.
- 879 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

Now, no one explained to me why she went from $3,[3]33 

down to what her husband’s willing to pay her, only about 

24. I think she — I’m sure she’s worth more than $24,000 

a year, and at least what she was claiming at $3,333, 

before — at the time she was divorced.

[8,9] Jason argues that Alita’s income should have been 

higher, because the court failed to consider her earnings from 

ViSalus and significant nonwage benefits she received from 

her employer. Although the ViSalus exhibits submitted by 

Jason appear to attribute substantial income to GJ and Alita, 

we agree with Alita that those photographs are not evidence of 

actual income. Regarding the nonwage benefits, there was no 

evidence that such benefits were a regular source of income 

for Alita. While a court is allowed to add “in-kind” benefits 

derived from an employer or other third party to a party’s 

income,10 a “‘court’s findings regarding [an individual’s] level 

of income should not be based on the inclusion of income 

that is entirely speculative in nature.’”11 Given the speculative 

nature of the ViSalus income and nonwage benefits, we cannot 

say that the district court erred in excluding those items from 

Alita’s income, and in setting her earning capacity at $3,333 

per month.

Failure to Ma

Independent Calc

Jason argues that the district court erred in failing to make 

independent findings on contested matters and adopting the 

child support calculations prepared by Alita’s attorney, rather 

than making its own calculations based on its own findings.

Neb. Ct. R. § 6-1504(F) provides as follows:

A worksheet showing calculations under the Nebraska 

Child Support Guidelines shall be attached to every child 

support application, order, or decree and shall be prepared 

10 Gangwish v. Gangwish, 267 Neb. 901, 678 N.W.2d 503 (2004).

11 Gress v. Gress, 274 Neb. 686, 698, 743 N.W.2d 67, 78 (2007).
- 880 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

by the party requesting child support, except that in a contested matter the worksheet shall be prepared by the court 

and attached to the order or decree.

He also points to our decision in Brunges v. Brunges,

12 in 

which the trial court generally found in favor of one party 

and directed counsel for that party to prepare a decree, but 

did not make any specific findings or orders regarding the 

contested issues. We expressed our disapproval of such practice and stated, “[i]n an action for dissolution of marriage, 

specific findings of fact must be made as to various contested 

issues, and it is a trial court’s duty to make those findings 

independently.”13

Unlike Brunges, here, the district court, on the record, made 

findings establishing the monthly income for each party and 

then instructed Alita’s counsel to prepare new child support 

calculations using those incomes, with credit for Jason’s two 

subsequent children. The district court adopted the findings 

contained in the proposed order and the calculations contained 

in the worksheet prepared by Alita’s counsel. At that point, 

those proposed findings and calculations became the findings 

of the district court.

Credit for Jason

Subsequent Chil

Finally, Jason argues the district court erred in calculating 

the deduction for his subsequent children, as it resulted in an 

increase in Jason’s child support obligation for Alexia, even 

though the district court found no change in the parties respective incomes. He argues that the worksheets adopted by the 

district court erroneously attributed too much monthly income 

to Jason’s current wife, Tasa, when calculating what Jason’s 

support obligation would be for his two subsequent children. 

This had the effect of lowering his support obligation to his 

12 Brunges v. Brunges, 260 Neb. 660, 619 N.W.2d 456 (2000).

13 Id. at 669, 619 N.W.2d at 463.
- 881 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

two subsequent children, which in turn raised his support obligation for Alexia.

[10-12] The trial court has discretion to choose whether 

and how to calculate a deduction for subsequent children.14

When the court decides to allow a deduction, the calculation 

is left to its discretion so long as it considers the obligations 

to both families and the income of the subsequent child’s other 

parent.15 No precise mathematical formula exists for calculating child support when subsequent children are involved, but 

the court must perform the calculation in a manner that does 

not benefit one family at the expense of the other.16 The party 

requesting a deduction for his or her obligation to support 

subsequent children bears the burden of providing evidence 

of the obligation, including the income of the other parent of 

the child.17

Here, the district court included worksheets demonstrating 

that it calculated Jason’s subsequent child credit by determining how much child support he would owe to each family under the guidelines, after deducting the support obligation to the other family from his income. It then computed 

the difference between the amount of support Jason would 

owe without any subsequent children and the amount he 

would owe with each subsequent child. That amount was then 

deducted from his monthly support obligation as a credit for 

his subsequent children. We believe this method of calculating the subsequent child credit considers the obligations to 

both families and does not benefit one family at the expense 

of the other.

Although Jason argues that the worksheets attributed too 

much monthly income to Tasa when calculating what his 

14 Schwarz v. Schwarz, 289 Neb. 960, 857 N.W.2d 802 (2015).

15 Id.

16 Id.

17 Id.
- 882 -

Nebraska Supreme Court Advance S

300 Nebraska Report

ARMKNECHT v. ARMKNECHT

Cite as 300 Neb. 870

support obligation would be for his two subsequent children, 

we note that Jason did not submit any proposed calculations 

regarding his support obligations for his subsequent children. 

We find no abuse of discretion in the calculations used to 

determine Jason’s subsequent child credit.

CONCLUSION

For the reasons set forth above, we affirm the judgment of 

the district court.

Affirm