Change in Employment for Reduced Income--Not Necessarily Voluntarily Underemployment

July 14, 2022

Fox v. Fox, 2022 UT App 88 (Filed July 14, 2022)

Facts:  The parties married in 1997 and wife filed for divorce in 2018.  The parties had 6 children, 4 of whom were minors at the time of the divorce trial.  The parties lived in St. George and wife primarily cared for the child and husband worked as a neurosurgeon and by working 80-100 hours per week was making well above $1M per year or $110k per month. By the time of trial, husband has relocated to Florida and was working again as a neurosurgeon,50-60 hours per week, and earning approximately $1M per year or $80k per month. Husband and an expert testified that he was burned out physically and emotionally and that he could not keep up the long hours he used to do in St. George.  The expert testified that even his “reduced” salary of $80k per month was above the 90th percentile of all neurosurgeons in the nation.  Wife argued that he was voluntarily underemployed. The trial court found that he was not and based child support and alimony on husband’s income of $80k per month, awarding child support of almost $10k per month, and alimony of $15k per month. Wife appealed claiming that the higher income for husband should have been used and thus she was entitled to more child support and alimony.

Court of Appeals Opinion: [Wife] asserts that because [Husband] took a job in Florida that paid him less than what he had been making in St. George, the court should have concluded that [Husband] is voluntarily underemployed and should have calculated child support and alimony based on [Husband]’s previous St. George salary.

¶36 As an initial matter, we note that this entire issue is irrelevant to the alimony computation, given our determination (discussed above) that the trial court did not abuse its discretion in making its alimony award. Even using [Husband]’s Florida salary for purposes of computing [Husband]’s income, the trial court found that [Husband] had the financial ability to make up 100% of the difference between [Wife]’s income and her reasonable needs. [Again referring to the well-settled principle that the maximum allowable alimony award is the shortfall between the alimony recipient’s income and the reasonable monthly expenses—regardless if the payor spouse has additional available income.] Thus, even if we were to agree with [Wife] that [Husband] was voluntarily underemployed and that the trial court should have used his St. George salary in computing his income, [Wife]’s alimony award would not change. But because the issue could still matter to the child support calculation, we proceed to address the merits of [Wife]’s challenge to the trial court’s findings regarding voluntary underemployment. 

¶37 “A court may impute income to an underemployed spouse.” Rayner v. Rayner, 2013 UT App 269, ¶ 7, 316 P.3d 455 (quotation simplified). In order to do so, however, the court must determine that the spouse “is voluntarily . . . underemployed.” Id. (quotation simplified). We agree with [Wife] that [Husband]’s employment actions—in taking a new job in Florida—were voluntary. See id. (“A spouse is voluntarily unemployed or underemployed when he or she intentionally chooses of his or her own free will to become unemployed or underemployed.” (quotation simplified)). But [Wife] has not persuasively demonstrated that the trial court abused its discretion in determining that [Husband] was not underemployed.  ¶38 The determination as to whether a party is underemployed requires examination of all the relevant circumstances, and not just whether a party’s salary has recently dropped. Indeed, a party’s “current earnings, as compared to his [or her] historical income, is merely one element in the matrix of factual issues affecting the ultimate finding of whether [a party] is underemployed.” Hall v. Hall, 858 P.2d 1018, 1026 (Utah Ct. App. 1993); see also Vanderzon v. Vanderzon, 2017 UT App 150, ¶ 65, 402 P.3d 219 (stating that “income imputation shall be based upon employment potential and probable earnings as derived from employment opportunities, work history, occupation qualifications, and prevailing earnings for persons of similar backgrounds in the community” (quotation simplified)).  ¶39 In the present case, the trial court did not abuse its discretion in finding that [Husband] was not underemployed. Certainly, [Husband]’s income is lower in Florida than it was in St. George. And a drop in income can be an important factor in determining that a spouse is underemployed. See, e.g., Arnold v. Arnold, 2008 UT App 17, ¶ 7, 177 P.3d 89. But the mere fact that a spouse’s income has fallen does not necessarily mandate a finding of underemployment. In the present case, the court was presented with ample evidence to support its determination that [Husband]— despite his lower salary—was not underemployed. [Husband] had not left his profession—he was employed as a neurosurgeon in St. George, and he was employed as a neurosurgeon in Florida. And even in Florida, [Husband] still made a lot of money; indeed, [Husband]’s expert testified that [Husband]’s Florida salary—nearly $1 million per year— was above the 90th percentile for neurosurgeons nationwide, not just for doctors.

[Footnote 5 of the court of appeals opinion gives another example: By way of example, consider the hypothetical case of a successful attorney who leaves private practice to assume a seat in the judiciary. Especially given current market salaries for attorneys in private practice, it is not at all difficult to imagine the attorney experiencing a significant cut in salary upon taking the bench. But it would be hard to describe the hypothetical new judge as being, in any meaningful sense, underemployed.] 

The trial court also credited [Husband]’s testimony that the work schedule he had been maintaining in St. George was not sustainable, and that he was “over-worked and burnt out.” And in Florida, [Husband] was still working 50 to 60 hours per week, up to half again as much as a typical full-time job. All of this evidence supports the court’s finding that [Husband] was not underemployed, voluntarily or otherwise.  ¶40 Under these circumstances, we cannot say the court abused its discretion in finding that [Husband] was not voluntarily underemployed. While the court’s determination was perhaps not the only permissible one under the circumstances, it is “entitled to a presumption of validity,” Mullins v. Mullins, 2016 UT App 77, ¶ 20, 370 P.3d 1283 (quotation simplified), was supported by competent evidence, and did not constitute an abuse of discretion.   

To read the entire case, click HERE.

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