Opinion ID: 2827194
Heading Depth: 2
Heading Rank: 2

Heading: whether the chancellor’s decisions on

Text: MODIFICATION OF CHILD SUPPORT AND CONTEMPT WERE MANIFESTLY ERRONEOUS. ¶31. The chancellor denied Drake’s request for a downward modification of child support based on his reduced income. The chancellor denied the request upon a finding that Drake’s income was substantially the same as at the time of the divorce. The chancellor found that 20 Tonia’s remarriage and changed circumstances warranted a modification for her to share in college expenses equally. ¶32. We first observe that the chancellor found that Drake was in arrears. The doctrine of unclean hands prevents a payor from obtaining a modification if he is in arrears unless the payor proves an inability to pay. Lane v. Lane, 850 So. 2d 122, 126 (Miss. 2002). However, the entry of a judgment for arrearages cleanses the payor’s hands and revives the matter of modification. Id. Because the chancellor entered a judgment for arrearages, the chancellor did not err by reviewing the merits of Drake’s request for modification. ¶33. Drake argues that the chancellor erred in denying his request for a downward modification of child support. First, he argues that the chancellor departed from the statutory guidelines without adequate explanation. Drake correctly recognizes that a chancellor must reference the child-support guidelines contained in Mississippi Code Section 43-19-101(1) (Rev. 2009) in awarding child support. Wallace v. Bond, 745 So. 2d 844, 847 (Miss. 1999). An award that departs from the guidelines must be supported by specific findings that the application of the guidelines would be unjust or inappropriate in the particular case. Miss. Code Ann. § 43-19-103 (Rev. 2009). However, in a child-support modification decision, the chancellor first must find that a material change in circumstances warrants a modification before determining the amount of child support with reference to the guidelines. Wallace, 745 So. 2d at 848. Because the chancellor found no material change in circumstances, the chancellor did not reach the issue of setting the amount of child support. And Drake cannot now complain of the amount of child support awarded in the divorce judgment, because he 21 did not appeal that issue; this matter is before this Court on Drake’s appeal from the order on modification and contempt. ¶34. Second, Drake argues that the chancellor erred by imputing income to him and failing to recognize the reduction in income Drake suffered because his loan to Legacy was not repaid. The divorce judgment set child support at 22% of his net income of $7,300 per month, rather than his reported net income of $4,730 per month. As discussed in the Court of Appeals’ opinion, the chancellor found Drake’s income to be $7,300 per month after adding his monthly draws from the $156,555 Legacy loan repayment to his $4,730 income. Before the Court of Appeals, Drake argued that the chancellor had erred by counting the loan repayment both as an asset and as income. Lewis, 54 So. 3d at 243. The Court of Appeals found no error, stating “[w]e know of no provision of the law that states that income can only be considered if it is achieved from non-diminishing assets . . . .” Id. But the Court of Appeals cautioned that “the chancellor’s treatment of the loan will most likely mean that the amount of child support will have to be adjusted in the future, once Drake has recouped the value of the loan.” Id. at n.2. ¶35. In the modification proceedings, Drake and his tax preparer testified that Drake never recouped the value of the loan due to the closure of Legacy in August 2008, after which he received no further repayment and “wrote off” approximately $156,000. This evidence was undisputed. The chancellor found from Drake’s current 8.05 financial statement that Drake’s income of $4,613.04 per month was substantially the same as the $4,730 per month he had reported in the divorce proceedings. The chancellor also stated that “[e]ven if Drake’s 22 income has dropped since 2007, he is capable of earning a substantial income comparable to that which he earned at that time and he has substantial assets, and the Court finds that the request to modify child support should be denied.” The chancellor noted his finding in the divorce judgment that Drake had investments that provided a source of income. ¶36. The chancellor failed to address the fact that Drake’s monthly income no longer included repayments from the Legacy loan. We find that this was manifest error. As the Court of Appeals recognized, the deduction of the loan repayment from Drake’s income may necessitate a modification of child support. We are cognizant that, ordinarily, the fact that the reduction in income was foreseeable at the time of the divorce would bar modification. Shipley v. Ferguson, 638 So. 2d 1295, 1298 (Miss. 1994). Nonetheless, due to the chancellor’s inclusion of the loan, a finite resource, in determining Drake’s adjusted gross income, we find that it would be inequitable to preclude modification under the circumstances. Therefore, we reverse and remand for the chancellor to revisit the issue of modification due to Drake’s reduction in income due to the end of the loan repayment. Any imputation of income should be supported by findings of fact. See Gray v. Gray, 745 So. 2d 234, 237 (Miss. 1999). ¶37. Drake also argues that equitable considerations demand that the modification of college expenses and any further modifications ordered by the chancellor should be retroactive to the date that the Court of Appeals remanded the case, or to the original trial date in October 2010. This issue is without merit. It is well-established that, even if a petition for modification is pending, child-support payments vest when due and, once vested, cannot 23 be forgiven or modified. McBride v. Jones, 803 So. 2d 1168, 1170 (Miss. 2002). Therefore, any modification granted by the chancellor must be prospective only.