Divorce

Personal Expenses Paid by Spouse’s Family Business Aren’t Exempt from a Family Court Income Calculation

Jun 16, 2015

In a possible attempt to hide income from the court, one father has been found to make nearly $10,000 a month, when he may have claimed to only make $2,000. At the time of the divorce decree in August of 2010, Stacey and Derrick Whitt agreed to Derrick making a payment of $810 each month toward paying the mortgage and other household expenses, in lieu of any other form of maintenance or child support. However, in April of 2012, Stacey filed a motion to increase that payment and set a separate child support payment. She claimed that Derrick had lied about the amount of income he was receiving from a trucking business owned by his family, having reported in an interrogatory (a written question that a party to a lawsuit is required to answer truthfully, which can be used as evidence in court) that he only earned $2000 a month, despite earning much more. The court appointed an accountant to determine how much the trucking company was worth, and how much Derrick appeared to be making each month. The accountant determined that Derrick’s actual income was $9,940 per month, not $2,000, and the family court ordered Derrick to pay $1,387 in child support each month. When Derrick asked the court for clarification between the order requiring an $810 payment each month and the one requiring a $1,387 payment each month, the family court determined that Derrick had committed fraud on the court by misrepresenting his income. The court also ordered that he pay the $1,387 payment retroactively, dating back to when the original divorce decree was entered, with credit given for the $810 payments already paid.

Derrick appealed the family court’s judgment that he had committed fraud and filed a separate motion for a reduced child support payment, claiming his income had been erroneously calculated. The court hearing Derrick’s appeal determined that, since the family court had not held a special evidence-based hearing on whether or not Derrick had committed fraud on the court, the family court didn’t have a right to conclude that he had done so. Additionally, since neither party seemed to be able to produce the interrogatory where Derrick had allegedly claimed he only made $2,000 a month, the court hearing the appeal ordered the family court to conduct an evidence-based hearing on whether Derrick deliberately misled that court about how much he made.

In regards to Derrick’s request for a recalculation of his child support payment, the court found that Derrick had misunderstood the circumstances under which a child support payment will be reduced. Derrick argued that the accountant had made a mistake by including money that the trucking company paid on his behalf for his personal expenses, as part of Derrick’s income. However, the court disagreed with Derrick’s argument and held that money paid for Derrick’s personal expenses should be considered Derrick’s income. Since Derrick did not present evidence that the accountant’s assessment was incorrect, or that the company had stopped paying as many of Derrick’s personal expenses on his behalf, the child support payment remained at $1,387.

Fighting for the child support payment you and your children deserve can be hard enough, even without dishonesty on your former spouse’s behalf. If you’re in the midst of a divorce or custody fight, ensure that you’re supported by knowledgeable and compassionate attorneys who will fight zealously on your behalf. Contact the law offices of Greta Hoffman for a free consultation on your family law matter, at 859-535-0264.