In 2015, I wrote two blog posts summarizing the law relating to the use of contempt to enforce orders to pay support. No Default Judgment in Contempt (May 1, 2015) and Contempt: Establishing Ability to Pay (May 8, 2015). Recent appellate opinions justify revisiting this topic.
It is not uncommon for third parties to assert rights or claims against parents litigating child custody and child support. For example, grandparents frequently want the court to grant them visitation rights as part of a custody order resolving a dispute between the child’s mother and father. Similarly, the IV-D child support enforcement agency or a non-parent who has been caring for a child often need to assert rights or claims in child support cases pending between the child’s parents.
Before these people can assert claims or rights in an existing case, they must become parties to the case through the process of intervention.
In 2016, the court of appeals held that a voluntary support agreement that modified an existing child support order was void because neither party filed a motion to modify as required by GS 50-13.7. Catawba County ex. Rel. Rackley, 784 SE2d 620 (N.C. App. 2016). On September 29, 2017, the North Carolina Supreme Court reversed the court of appeals and held that the order was not void.
This is important. Among other things, this decision means that if a court accepts a consent order for modification and the requirements of GS 50-13.7 have not been met, the consent order nevertheless is valid and enforceable. However, GS 50-13.7 still requires that a motion be filed and that the court conclude there has been a substantial change in circumstances before modifying a child support or a child custody order can be modified. The failure to comply with the statute is legal error that will support reversal by the court of appeals if there is a direct appeal.
Effective January 19, 2017, the federal Department of Health and Human Services (DHHS) adopted a final rule titled “Flexibility, Efficiency, and Modernization in Child Support Enforcement Programs.” 81 Federal Register 93492 (Dec. 20, 2016). This rule mandates numerous changes to the policies and procedures of state child support enforcement programs, but one change of particular importance to state trial courts involves the use of contempt procedures to enforce child support obligations. According to the Comments to the new rules, the change in the federal regulations regarding the use of contempt is intended to ensure that the “constitutional principles articulated in Turner v. Rogers, 564 U.S. 431 (2011)[addressing the rights of obligors in child support contempt proceedings], are carried out in the child support program, that child support case outcomes are just and comport with due process, and that enforcement proceedings are cost-effective and in the best interest of the child.” 81 FR at 93532.
Unlike other civil judgments, custody and support orders can be modified when there has been a substantial change in circumstances since the order was entered. This rule is codified in North Carolina at GS 50-13.7 and every state in the country has a similar statute.
While this authority is broad and straight forward, there are other statutory provisions that place significant limits on a court’s subject matter jurisdiction to modify a custody or support order – whether the order originally was entered in NC or in some other state or country. These statutory provisions were enacted for the purpose of discouraging parents from running from state to state in the hope of obtaining a more favorable court order.
***UPDATE TO POST MAY 2, 2016: On April 26, 2016, the NC Supreme Court granted a temporary stay of the Court of Appeals ruling in the case discussed in this post. See SC docket #152P16-1.
***UPDATE TO POST OCTOBER 2, 2017: On September 29, 2017, the NC Supreme Court reversed the opinion of the Court of Appeals discussed in this post. See Catawba County ex rel. Rackley v. Loggins.
On Tuesday this week, the court of appeals held that a consent order modifying an existing child support order was void because no motion to modify was filed before the consent modification was entered by the court. In Catawba County ex. rel. Rackley v. Loggins, (NC App, April 5, 2016), the court held that GS 50-13.7 clearly requires that a motion in the cause requesting modification be filed in order to invoke the subject matter jurisdiction of the court to enter any further orders in the support case. Without the motion, the court has no subject matter jurisdiction to act.
Unfortunately, it is not uncommon in North Carolina for orders to be entered modifying existing custody and support orders without anyone actually filing a motion to modify. This practice is especially common when all parties in the case agree to the modification. The court of appeals now has made it clear that this practice of ignoring required procedure results in invalid, unenforceable orders.
Prospective child support is the support ordered to be paid for the support of the child in the future. However, the court of appeals has held that all orders for prospective support must be effective as of the date the complaint seeking support was filed unless the trial court makes specific finding of fact to support ‘deviating’ from the general rule. Ex. rel. Miller v. Hinton, 147 NC App 700 (2001). This means that prospective support generally includes amounts ordered for a period of time before the support order is entered, but only that time period between the date of the filing of the complaint and the time of the entry of the child support order. And of course, GS 50-13.4 provides that the amount of prospective support generally is determined by application of the child support guidelines.
But what about orders for support for a period of time before a complaint or motion for support is filed?
In my last post, Imputing Income: Voluntary Unemployment is Not Enough, I wrote about the bad faith rule; the long-established rule that child support and alimony orders must be based on the actual present income of the parties unless there is cause to impute income. When income is imputed, a support order is based on earning capacity rather than actual income. The bad faith rule provides that earning capacity can be used only when a party is intentionally depressing actual income in deliberate disregard of a support obligation.
So what findings of fact are sufficient to establish bad faith?
Beware. A child support or alimony order should never contain the word “capacity” or the words “ability to earn” unless it also contains the words “bad faith.”
Maybe that statement is a little extreme, but it is intended to make a point. Alimony and child support obligations must be determined based on actual present income. Earning capacity rather than actual income can be used only when a party is intentionally depressing actual income in deliberate disregard of a support obligation. In other words, it is not appropriate for an order to be based on what a person should be earning- or on minimum wage – rather than on what that person actually is earning unless evidence shows the party is acting in bad faith and the court actually includes that conclusion of law in the order.
An indigent parent in a child support case is entitled to appointed counsel only for contempt proceedings. But child support cases can be complex. Where should appointed counsel draw the line when representing these parents? Should they limit representation to the actual contempt proceeding or do they delve further? Is the underlying order valid? Is there a good cause to adjust the arrears or is there a change of circumstances justifying a modification of support? Judges must approve the fee applications for the time spent on cases, so counsel should take care to act within the scope of their representation.