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FAMILY LAW 62: The court held that the trial court erred by imputing income to Defendant and increasing the amount of child support he pays to Plaintiff.

The parties have two children, and in 2012 an order was entered requiring Defendant to pay $460 in monthly child support to Plaintiff. In 2018 and early 2019, there was a flurry of friend of the court (FOC) investigations, referee hearings and recommendations, objections to recommendations, and trial court filings and hearings all with respect to setting the proper amount of child support. Ultimately, the trial court ordered Defendant to pay $500 per month in child support, which the court based in part on imputing income to Defendant, who worked as a contractor installing carpets. In its ruling from the bench, the trial court stated that it was “imputing a normative hourly wage for a carpet layer believing that Defendant at least has the ability to earn that amount either through his own business or as an employee” and that “it is fair and reasonable [to do so] in light of the historical context of the case.” The trial court never explicitly indicated the dollar amount that it was imputing to Defendant, but it appears that it may have been relying on the FOC’s earlier determination that a carpet installer could make $12.08 an hour, although the evidentiary basis for this figure is unclear.

STANDARD OF REVIEW

Generally, child support orders, including orders modifying child support, are reviewed for an abuse of discretion. This Court also reviews for an abuse of discretion a trial court's discretionary rulings that are allowed by statute or the Michigan Child Support Formula (MCSF), which would encompass a decision to impute income. However, whether the trial court properly applied the MCSF presents a question of law that we review de novo. 

ANALYSIS

A  trial court must use the formula established by the Friend of the Court Bureau when determining child support, unless. . . the formula would be unjust or inappropriate based on the facts of the case.”  Under the Michigan Child Support Formula (MCSF), the objective in determining the income of a parent is to accurately establish the amount of money a parent has available for support.  The MCSF authorizes a court to exercise its discretion to impute income to a parent, which typically occurs when there is a voluntary reduction of income or a voluntary unexercised ability to earn income.  When a parent is voluntarily unemployed or underemployed, or has an unexercised ability to earn, income includes the potential income that parent could earn, subject to that parent’s actual ability.  2017 MCSF 2.01(G)(2) provides: Use relevant factors both to determine whether the parent in question has an actual ability to earn and a reasonable likelihood of earning the potential income. “These factors generally ensure that adequate fact-finding supports the conclusion that the parent to whom income is imputed has an actual ability and likelihood of earning the imputed income.” Moreover, 2017 MCSF 2.01(G)(4) provides: Imputing an income to a parent to determine a support obligation by using any of the following violates case law and does not comply with this section. . . . . (a) Inferring based on generalized assumptions that parents should be earning an income based on a standardized calculation (such as minimum wage and full time employment, median income, etc.), rather than an individual's actual ability and likelihood. (b) Absent any information or indication concerning a parent’s ability, assuming that an individual has an unexercised ability to earn an income. (c) Failing to articulate information about how each factor in §2.01(G)(2) applies to a parent having the actual ability and a reasonable likelihood of earning the imputed potential income, or failing to state that a specific factor does not apply.

CONCLUSION

The trial court referred to the “historical context of the case” when it imputed income and modified child support. We, however, cannot ascertain what the court meant by the reference, and it did not connect the reference to the imputation factors. There was a wholesale failure to comply with the MCSF, and the trial court did not indicate the evidentiary basis for the “normative hourly wage.” Indeed, the court did not even expressly identify the dollar amount that constituted the purported “normative hourly wage.” Under these circumstances, we are compelled to reverse the court’s child support order and remand for compliance with the imputation provisions in the MCSF.

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