{ "id": 11918246, "name": "NANETTE RAMSEY SCHROADER, Plaintiff v. TERRY RANDALL SCHROADER, Defendant", "name_abbreviation": "Schroader v. Schroader", "decision_date": "1995-11-21", "docket_number": "No. COA94-1281", "first_page": "790", "last_page": "798", "citations": [ { "type": "official", "cite": "120 N.C. App. 790" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "61 ALR3d 657", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "weight": 3, "opinion_index": -1 }, { "cite": "89 ALR2d 7", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "weight": 3, "opinion_index": -1 }, { "cite": "177 S.E.2d 465", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1970, "pin_cites": [ { "page": "457" } ], "opinion_index": 0 }, { "cite": "9 N.C. App. 681", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8553620 ], "year": 1970, "pin_cites": [ { "page": "683" } ], "opinion_index": 0, "case_paths": [ "/nc-app/9/0681-01" ] }, { "cite": "389 S.E.2d 87", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1990, "opinion_index": 0 }, { "cite": "326 N.C. 47", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 5307232, 5305858, 5306250, 5309008, 5309684 ], "year": 1990, "opinion_index": 0, "case_paths": [ "/nc/326/0047-03", "/nc/326/0047-04", "/nc/326/0047-02", "/nc/326/0047-05", "/nc/326/0047-01" ] }, { "cite": "385 S.E.2d 157", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "opinion_index": 0 }, { "cite": "96 N.C. App. 241", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8521240 ], "year": 1989, "opinion_index": 0, "case_paths": [ "/nc-app/96/0241-01" ] }, { "cite": "453 S.E.2d 531", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1995, "opinion_index": 0 }, { "cite": "118 N.C. App. 19", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11916361 ], "year": 1995, "opinion_index": 0, "case_paths": [ "/nc-app/118/0019-01" ] }, { "cite": "458 S.E.2d 217", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1995, "opinion_index": 0 }, { "cite": "119 N.C. App. 242", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11914383 ], "year": 1995, "opinion_index": 0, "case_paths": [ "/nc-app/119/0242-01" ] }, { "cite": "443 S.E.2d 96", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "opinion_index": 0 }, { "cite": "114 N.C. App. 808", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8528024 ], "year": 1994, "opinion_index": 0, "case_paths": [ "/nc-app/114/0808-01" ] }, { "cite": "421 S.E.2d 795", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "799", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "107 N.C. App. 695", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527921 ], "year": 1992, "pin_cites": [ { "page": "703", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/nc-app/107/0695-01" ] }, { "cite": "248 S.E.2d 375", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1978, "opinion_index": 0 }, { "cite": "38 N.C. App. 504", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554748 ], "year": 1978, "opinion_index": 0, "case_paths": [ "/nc-app/38/0504-01" ] }, { "cite": "368 S.E.2d 11", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1983, "pin_cites": [ { "page": "13" }, { "page": "13" }, { "page": "14" }, { "page": "14" } ], "opinion_index": 0 }, { "cite": "90 N.C. App. 254", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523787 ], "weight": 3, "year": 1983, "pin_cites": [ { "page": "256" }, { "page": "256" }, { "page": "256" } ], "opinion_index": 0, "case_paths": [ "/nc-app/90/0254-01" ] }, { "cite": "306 S.E.2d 822", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "pin_cites": [ { "page": "824" } ], "opinion_index": 0 }, { "cite": "64 N.C. App. 149", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526364 ], "year": 1983, "pin_cites": [ { "page": "153" } ], "opinion_index": 0, "case_paths": [ "/nc-app/64/0149-01" ] } ], "analysis": { "cardinality": 814, "char_count": 18512, "ocr_confidence": 0.769, "pagerank": { "raw": 2.033200852544177e-07, "percentile": 0.7468582145136647 }, "sha256": "918d54c1833f141c34c3d2af38030ac7e22abb4c72217afaa72c590de9c52205", "simhash": "1:b37ac34cec63e9e2", "word_count": 2998 }, "last_updated": "2023-07-14T16:17:04.771230+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges JOHNSON and MARTIN, Mark D., concur." ], "parties": [ "NANETTE RAMSEY SCHROADER, Plaintiff v. TERRY RANDALL SCHROADER, Defendant" ], "opinions": [ { "text": "ARNOLD, Chief Judge.\nPlaintiff\u2019s first assignment of error is that the court erred by finding and concluding as a matter of law that plaintiff cannot claim as a change of circumstances her decision to quit her job and enroll in college. Plaintiff, having primary custody of the children, voluntarily left her employment to enroll as a full-time college student. As a basis for modification of child support, she claimed that her decision to go back to school resulted in a decrease in her income and justified an increase in defendant\u2019s child support obligation. The trial court made the following finding of fact concerning plaintiff\u2019s employment and income history:\n5. Plaintiff has remarried; her last name is now Agnew. Her income has diminished since August of 1991, when she worked at a rest home she had started (with help from Defendant\u2019s parents), and also for a beauty salon. In late September, 1991, she moved from Dana (in Henderson County) to Mars Hill, N.C., where she still lives, and began working (for less money) for Asheville Federal Savings Bank. Her reason for changing to a lower-paying job was that the salon job was temporary, whereas the Asheville Federal one was permanent. She quit work at Asheville Federal in June, 1993, having reached the maximum advancement possible there without a college degree, and enrolled as a full-time student as [sic] Western Carolina University, in Speech and Language Pathology, a six-year program. She earns a little money ($839.64 gross in 1993) waiting tables, and works about eight weeks a year in the office at her father\u2019s tobacco warehouse, where she grossed $3,075 in 1992.\nThe court concluded as a matter of law that plaintiff could not claim as a change of circumstances \u201ca change that she brought about herself.\u201d The court further stated, \u201cGranted, Plaintiffs income is now lower than it formerly was, but this is because of her voluntarily quitting her employment.\u201d\nIf a trial court finds that a party was acting in bad faith by deliberately depressing her income or otherwise disregarding the obligation to pay child support, the party\u2019s earning capacity may be the basis for the award; or in the case of a motion for modification, the motion may be denied. O\u2019Neal v. Wynn, 64 N.C. App. 149, 153, 306 S.E.2d 822, 824 (1983); Fischell v. Rosenberg, 90 N.C. App. 254, 256, 368 S.E.2d 11, 13 (1983); Wachacha v. Wachacha, 38 N.C. App. 504, 248 S.E.2d 375 (1978). These principles apply regardless of whether the custodial parent or non-custodial parent is requesting modification of child support. Fischell, 90 N.C. App. at 256, 368 S.E.2d at 13. Under the 1991 version of the North Carolina Child Support Guidelines, \u201ceven if the court determines that a parent is voluntarily unemployed or underemployed, the court is vested with discretion regarding whether or not to impute income.\u201d Kennedy v. Kennedy, 107 N.C. App. 695, 703, 421 S.E.2d 795, 799 (1992) (emphasis added); see North Carolina Child Support Guidelines A(3) (August 1, 1991).\nIn Fischell, the custodial father voluntarily reduced his income by returning to school, and the trial court denied his motion to increase the mother\u2019s child support obligation on the grounds that his decrease in income was voluntary. We held that \u201cthe trial court erred in concluding that [movant\u2019s] reduction in income could not be considered on his motion to increase [non-movant\u2019s] child support obligations.\u201d Fischell, 90 N.C. App. at 256, 368 S.E.2d at 14. Accordingly, in the case at hand, we find that the trial court erred as a matter of law in concluding that \u201c[p]laintiff cannot claim, as a change of circumstances, a change that she brought about herself.\u201d\nThus, a voluntary decrease in income, absent a finding of bad faith, may be considered to support a finding of changed circumstances. However, if the decrease is voluntary, the movant has the additional burden of showing that the changed circumstances relate to child-oriented expenses. Id. at 256-57, 368 S.E.2d at 14. We have recently established that an involuntary decrease in income is sufficient alone to constitute changed circumstances for the purposes of modification of child support, even in the absence of any evidence showing a change in the child\u2019s needs. Pittman v. Pittman, 114 N.C. App. 808, 443 S.E.2d 96 (1994); see also Askew v. Askew, 119 N.C. App. 242, 458 S.E.2d 217 (1995); McGee v. McGee, 118 N.C. App. 19, 453 S.E.2d 531 (1995). Because plaintiff\u2019s reduction in income here was voluntary, the Pittman rule is inapplicable.\nTo warrant modification of child support in the case at hand it was necessary for plaintiff to show a change of circumstances relating to the needs of the children, and the trial court concluded that this factor was not \u201cproven to the Court\u2019s satisfaction.\u201d Thus, although the trial court erred in concluding that plaintiff cannot claim a voluntary reduction in income as a change of circumstance, plaintiff failed to meet the additional burden of showing a change in circumstances to modify child support.\nPlaintiff next assigns error to the trial court\u2019s findings of fact and conclusion of law that there had been no showing that defendant\u2019s income had increased to constitute a change of circumstances. The trial court made the following findings of fact regarding defendant\u2019s income:\n3. Defendant\u2019s chief source of income is from a business called \u201cSchroader\u2019s Honda.\u201d This was also true at the time of the August judgment. The business sells motorcycles retail, and it also sells motorcycle parts through the mail at a discount. The business was formerly owned by Defendant\u2019s parents, during which time they thought to acquire a Honda Automobile dealership as well. Honda does not permit the same person to hold the franchise on its car and motorcycle outlets, and so Defendant\u2019s parents put the motorcycle franchise into Defendant\u2019s name. They kept ownership of the land on which the business is located, and they continue to draw all of the net profits from the business, shown on the business\u2019s books as \u201crent.\u201d This \u201crent\u201d varies wildly from month to month, unlike Defendant\u2019s salary of $400 per week. Defendant files income tax returns as the sole proprietor of the business, even though he, his parents, the bookkeeper and the C.P.A. who prepares the taxes, all understand that it is the parents who actually own the operation and make the important decisions affecting it. Whatever might be the tax consequences, present or future, of this arrangement, as a practical consequence it renders Defendant\u2019s tax returns useless as a source of reliable information about his disposable income.\n4. Defendant\u2019s evidence at this most recent hearing satisfied the Court that his only actual earned income is the salary he gets from the motorcycle business. His tax returns, however, reflecting the fiction that as the straw man who holds the franchise certificate he is in some sense the owner of the business, recite an adjusted gross income much higher than his $400/week salary: $58,228 in 1991, and $45,054 in 1992. Part of the difference is explained by the interest he draws from two NCNB (now Nationsbank) certificates of deposit, but this amounts to little more than $2000 per year. However, as far as the evidence shows, this same confusing income structure existed when child support was last judicially calculated, and Plaintiff has not shown to the Court\u2019s satisfaction that Defendant\u2019s true income differs in source or in amount from what it was in August of 1991, when Judge Coats found as a fact that it was $2,852.68 per month.\nBased on its findings of fact, the court concluded that\nPlaintiff cannot claim, as a change of circumstances, that Defendant\u2019s paper income has increased, where she has not shown any change in his actual income since the previous computation of child support. The guidelines are based on the assumption that real income is spent on the children, and regardless that accounting tricks and straw-man transactions have produced a paper income in Defendant\u2019s name, his actual, spendable income has not been shown to have increased.\nA trial court\u2019s findings of fact are conclusive on appeal if the trial court sits as the trier of fact and they are supported by competent evidence, even if there exists evidence that might sustain a finding to the contrary. Floto v. Pied Piper Resort, Inc., 96 N.C. App. 241, 385 S.E.2d 157 (1989), cert. denied, 326 N.C. 47, 389 S.E.2d 87 (1990). The evidence in this case supports the trial court\u2019s findings. Several witnesses associated with Schroader Honda testified that they considered defendant the owner and operator of the business in name only. The accountant testified that defendant\u2019s only actual income was his $400 per week salary, and all other business profits were paid to defendant\u2019s parents for rent of the real property occupied by the business. While this structure certainly seems unusual, the Guidelines instruct that income from operation of a business \u201cshould be carefully reviewed to determine an appropriate level of gross income available to the parent to satisfy a child support obligation. In most cases, this amount will differ from a determination of business income for tax purposes.\u201d North Carolina Child Support Guidelines A(2) (August 1, 1991). We therefore agree with the trial court that, as a matter of law under the Guidelines, plaintiff failed to show that defendant\u2019s actual, spendable income had increased to constitute a change of circumstances.\nPlaintiff next contends that the switch of the obligation to carry medical insurance for the children from defendant to plaintiff was a change of circumstances. We disagree.\nUnder the Guidelines, health insurance should be provided by the parent who, through his employer, has the most comprehensive coverage at the least cost. North Carolina Child Support Guidelines C (August 1, 1991). Furthermore, the cost of that insurance coverage \u201cshould be deducted from that parent\u2019s gross income.\u201d Id. In this case, the original child custody and support judgment obligated defendant to maintain for the children his medical insurance coverage provided to him through his employer at $322 per month. In the order modifying custody, although defendant only requested a modification of custody based upon plaintiff\u2019s move from Henderson to Madison County, the court also took into account her new employment, which enabled her to obtain medical and dental insurance at a more economical cost of $80.19 every two weeks. Therefore, the court ordered a switch of the obligation to provide medical insurance coverage from defendant to plaintiff. The court concluded in the modified custody order that these terms were \u201cfair, reasonable, adequate and necessary[,]\u201d and the parties knowingly and voluntarily consented to the order.\nUpon plaintiff\u2019s motion in the cause for modification of child support based on the switch in insurance obligation, the trial court concluded that plaintiff could not claim the switch as a change of circumstances because it was \u201cpart and parcel of a consent Order which took into account . . . her change of employment, and the problems the parties encountered since the earlier order.\u201d We agree that the order modifying custody filed 22 November 1991 amounted to a consent decree between the parties. This Court has stated that\nIt is generally recognized that decrees entered by our courts in child custody and support matters axe impermanent in character and are res judicata of the issue only so long as the facts and circumstances remain the same as when the decree was rendered. The decree is subject to alteration upon a change of circumstances affecting the welfare of the child.\nTate v. Tate, 9 N.C. App. 681, 683, 177 S.E.2d 465, 457 (1970).\nAlthough a consent judgment to which the parties have bound themselves is modifiable by the court where it involves the court\u2019s inherent authority to protect the interests and welfare of the children of the marriage, plaintiff has failed to show a change in circumstances that affects the welfare of the children. Moreover, she does not even argue how the switch in insurance has affected her ability to pay her portion of child support. Rather, plaintiff merely asserts that defendant\u2019s child support obligation \u201cneeds to be recalculated based upon this change in maintenance of insurance.\u201d Since plaintiff has failed to meet the threshold burden of showing a change in circumstances, we find this assignment of error unpersuasive.\nAs for plaintiff\u2019s remaining assignments of error, we have carefully reviewed them and find them to be without merit.\nAffirmed.\nJudges JOHNSON and MARTIN, Mark D., concur.", "type": "majority", "author": "ARNOLD, Chief Judge." } ], "attorneys": [ "Stephen E. Huff for plaintiff appellant.", "Mullinax & Alexander, by William M. Alexander, Jr., for defendant appellee." ], "corrections": "", "head_matter": "NANETTE RAMSEY SCHROADER, Plaintiff v. TERRY RANDALL SCHROADER, Defendant\nNo. COA94-1281\n(Filed 21 November 1995)\n1. Divorce and Separation \u00a7 444 (NCI4th)\u2014 child support\u2014 plaintiffs voluntary reduction in income \u2014 no change of circumstances affecting needs of children\nAlthough the trial court erred in concluding that plaintiff could not claim a voluntary reduction in income because of her full time enrollment in college as a change of circumstances in a child support proceeding, plaintiff failed to meet the additional burden of showing a change of circumstances relating to the needs of the children.\nAm Jur 2d, Divorce and Separation \u00a7\u00a7 1082-1087.\nChange in financial condition or needs of parents or children as ground for modification of decree for child support payments. 89 ALR2d 7.\nDivorce: power of court to modify decree for support of child which was based on agreement of parties. 61 ALR3d 657.\n2. Divorce and Separation \u00a7 446 (NCI4th)\u2014 child support\u2014 defendant\u2019s income not increased\nThe trial court did not err in its findings of fact and conclusion of law that there had been no showing that defendant\u2019s income had increased to constitute a change of circumstances where the evidence tended to show that defendant was the owner in name only of his parents\u2019 business; defendant had a paper income which was not the same as his actual spendable income; and this same confusing income structure existed at the time child support was originally awarded.\nAm Jur 2d, Divorce and Separation \u00a7 1085.\nChange in financial condition or needs of parents or children as ground for modification of decree for child support payments. 89 ALR2d 7.\nDivorce: power of court to modify decree for support of child which was based on agreement of parties. 61 ALR3d 657.\n3..Divorce and Separation \u00a7 447 (NCI4th)\u2014 child support\u2014 switch of medical insurance from defendant to plaintiff\u2014 no change of circumstances\nThere was no merit to plaintiff\u2019s contention that the switch of the obligation to carry medical insurance for the parties\u2019 children from defendant to plaintiff was a change of circumstances, since the switch was part of a consent judgment between the parties, and plaintiff failed to show a change in circumstances which affected the welfare of the children or how the switch affected her ability to pay her portion of child support.\nAm Jur 2d, Divorce and Separation \u00a7 1083.\nChange in financial condition or needs of parents or children as ground for modification of decree for child support payments. 89 ALR2d 7.\nDivorce: power of court to modify decree for support of child which was based on agreement of parties. 61 ALR3d 657.\nAppeal by plaintiff from order entered 13 June 1994 by Judge Robert S. Cilley in Henderson County District Court. Heard in the Court of Appeals 21 August 1995.\nPlaintiff and defendant were married on 15 September 1984. They had two children, Casey Ramsey and Jessie James Schroader, bom 5 December 1985 and 26 January 1988 respectively. The parties separated on 13 July 1990 and were divorced by judgment entered on 20 August 1991.\nAt the 20 August 1991 hearing, the parties stipulated to the evidence on the issues of child custody and support, and a child custody and support judgment was entered 22 November 1991. The judgment provided joint legal custody of the minor children, with plaintiff having primary physical custody. It further required defendant to pay child support pursuant to Worksheet B (Joint or Shared Physical Custody) of the North Carolina Child Support Guidelines (hereinafter \u201cthe Guidelines\u201d) in the amount of $258 per month, to maintain medical insurance coverage through his employment, and to pay 59% of all uninsured medical and dental bills of the minor children.\nOn 22 November 1991, the parties consented to an order modifying custody filed and entered, nunc pro tunc to 1 November 1991. The order stated that as a result of plaintiff moving her residence from Henderson County to Madison County and taking a new job that provided medical and dental insurance at an economic savings in comparison to defendant\u2019s coverage, a substantial and material change of circumstances had occurred, thereby justifying a modification of child custody for defendant. The court therefore ordered defendant to have custody of the children no less than 123 nights per year and ordered plaintiff to provide medical and dental insurance coverage through her employer. Except as specifically stated in the modification order, the child custody and support judgment remained in effect.\nOn 16 November 1992, plaintiff filed a motion in the cause (and subsequently filed two amended motions in the cause) requesting a modification of the child support provisions previously entered in Henderson County District Court. Plaintiff alleged the following change of circumstances had occurred to justify requiring defendant to pay an increased amount of child support: (1) plaintiff was required to maintain medical and dental insurance coverage on the children; (2) plaintiff had assumed a disproportionate share of the costs, and the Guidelines did not meet the reasonable needs of the children considering the relative abilities of the parties to provide support; (3) defendant\u2019s income had substantially increased and plaintiff\u2019s income had decreased; (4) defendant refused to voluntarily increase his child support contribution despite having an increased income; and (5) the actual time the children had spent with defendant was less than 123 nights in 1993, thereby rendering the use of Worksheet B of the Guidelines inappropriate for the calculation of child support.\nAfter a hearing on 13 April 1994, the trial court denied plaintiff\u2019s motion in the cause. Plaintiff appeals.\nStephen E. Huff for plaintiff appellant.\nMullinax & Alexander, by William M. Alexander, Jr., for defendant appellee." }, "file_name": "0790-01", "first_page_order": 824, "last_page_order": 832 }