The case of Parham v. Parham provides an example of the principals governing imputation of income in spousal or child support purposes.
After Mr. and Ms. Parham’s divorce, Mr. Parham was ordered to pay $12,000 per month in spousal support and $1,477 per month in child support. These numbers were based on an annual salary of $344,786 per year. However, about a month after the spousal and child support order, Mr. Parham was told his company was “moving in another direction” and subsequently fired from his job. Mr. Parham then found a new job, but it paid $162,000 per year, making the spousal and child support payments much more burdensome. Mr. Parham looked to the court to modify his support obligations citing his new salary and Ms. Parham’s increased salary. Ms. Parham fought the potential change of support, citing that Mr. Parham was voluntarily underemployed. She claimed that Mr. Parham was voluntarily underemployed because he was fired for cause at his previous job because of his failure to remediate his work performance even after being warned. The circuit court agreed with Ms. Parham and found that Mr. Parham had not presented enough evidence to prove he was not fired for cause. The court then imputed the income he had at his previous job, meaning they treated him as if he still had the same income as at the time of the first support action. Despite that, the spousal support obligation was lowered to $9000 per month due to Ms. Parham’s increase in salary, but Mr. Parham’s child support obligation was raised to $1,651per month.
Court of Appeals Decision
Mr. Parham appealed, first claiming that the circuit court was under the impression that it had to impute his previous income because he was fired for cause, which would have been incorrect for the court. He cited Murphy v. Murphy which created the rule in Virginia that imputation of income to a voluntarily underemployed person is at the discretion of the court. The court of appeals found that the circuit court did not automatically impute Mr. Parham’s old income because: (1) the circuit court expressly acknowledged that it had discretion and (2) the circuit court modified the support obligation. Mr. Parham also argued that there was not enough evidence to establish his voluntarily underemployment or the imputation of his old income because he was not at fault for losing his old job and his new employment decision was reasonable and made in good faith. The court of appeals said the circuit courts findings of fact were not clearly erroneous and imputation was proper.
Help with Your Support Case
As Parham v. Parham illustrates, support arrangements can be life changing if you are left with a payment you can barely afford, therefore, a favorable outcome is extremely important. Hiring a great lawyer is the first step on the path to success in any suit and the lawyers at Smith Strong handle support cases on a regular basis and will use their knowledge and skills to advocate fiercely on your behalf. If you are in need of a lawyer for your support case, or if you have any other family law or estate related needs, or would like to attend one of our free seminars, please call Smith Strong today at (804) 325-1245 or (757) 941-4298.
Editorial Assistance By: Michael Gee - Law Clerk