TN Father Earned $48K Income Dropped to $27K Owed Same Child Support

Tennessee law case summary on income determination in Tennessee child support and family law from the Tennessee Court of Appeals.  See Comment at end of case about different outcome under current law.

Lee v. Lee, 1993 WL 526366 (Tenn. Ct. App., 1993).

Glenn Lee appealed the order dismissing his petition for reduction in child support after his divorce.

At the hearing in June of 1992, Mr. Lee testified without contradiction that, since the divorce in 1990, he changed employers, that his new employer paid him $530 per week advance on commissions, a $500.00 per month car allowance, and an expense account.  Mr. Lee also testified that he received a guaranteed quarterly commission of $3,000, but that this was discontinued in April 1992.  Instead, Mr. Lee was entitled to a payment of commission which exceeded his weekly draw of $530.  He also testified that he did not expect to receive any of these commissions for the rest of 1992.  However, on cross examination, Mr. Lee testified that at the time of the divorce in 1990, he earned approximately $48,000 per year.  Mrs. Lee earned about $27,000 annually.  By agreement, Mr. Lee was ordered to pay $1,000 per month child support, which both parties understood that it exceeded the child support guidelines based on Mr. Lee’s income.

Mrs. Lee relied on the formula for fixing gross income as income from any source less reasonable expenses required to produce that income, and insisted that Mr. Lee’s monthly $500 car allowance should have been included in his income for purposes of applying child support guidelines.  However, there was no evidence that the car allowance of Mr. Lee—who was a field sales rep—exceeded the amount of the actual car expenses.  The court of appeals noted that “car allowance,” “expense allowance,” or “expense reimbursement” does not appear in the items includable in gross income; only that that excessive travel or car expenses are not deductible from self employment income. (Emphasis added by the court).  As a result, a car allowance was reimbursement for expenses, and was not income except to the extent that it exceeded the expenses being reimbursed.

The appellate court found that the trial court record showed that the anticipated gross income of Mr. Lee for the period immediately after the hearing was $530 per week or $27,600 annually.  Mrs. Lee testified that she earned approximately $27,000 a year and that the amount of her expenses had not changed since the date of the divorce decree.  The trial court, said the court of appeals, correctly found that the income of Mr. Lee had changed from approximately $48,000 per year to $27,600 per year.  This was a reduction of approximately 42.5%.

The trial court found that there had been no change in the income or expenses of Mrs. Lee, and there was no evidence presented to contradict that finding.  It found that the need for support had not decreased, and again, there was no evidence to contradict that finding.  However, the trial court did not find that the needs of the children required a deviation from the guidelines, and the court of appeals said that there was no evidence in the record to support such a finding.  The 42.5% reduction in Mr. Lee’s income was a sufficient substantial and material change of circumstances to authorize the modification of the award of child support effective the date of trial.

Absent evidence supporting a deviation from the child support guidelines, they are presumed to supply the correct amount of support, and trial courts are given wide discretion in setting or modifying support.  Appellate courts are authorized to reverse or modify only where a preponderance of the evidence is contrary to the conclusions of the trial courts.   Here the court of appeals believed that the evidence weighed against denial of the petition for reduction of child support, and in favor of a judgment sustaining the petition.  No evidence was found to justify a deviation from the guidelines which prescribed support for the two children amounting to 32% of the monthly income of the non-custodial parent ($735).  Even though Mr. Lee’s income decreased, the need for the support of the children had not decreased.  The petition to reduce the amount of Mr. Lee’s child support was denied.

Lee v. Lee, 1993 WL 526366 (Tenn. Ct. App., 1993).

See original opinion for exact language.  Legal citations omitted.

Comment: This case is provided as an example of a detailed discussion concerning income determination in a Tennessee child support modification action.  The outcome may be different under the current Tennessee child support guidelines and case law concerning modification.

Memphis divorce attorney, Miles Mason, Sr., JD, CPA, practices family law exclusively with the Miles Mason Family Law Group, PLC. To learn more about Tennessee child support laws and guidelines, read and view:

A Memphis child support attorney from the Miles Mason Family Law Group can help you with Tennessee child support issues including setting or modifying child support. Contact an attorney today at (901) 683-1850.

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