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                                                                         New Mexico Compilation
                                                                       Commission, Santa Fe, NM
                                                                      '00'04- 15:35:53 2017.04.13

       IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 2017-NMCA-036

Filing Date: February 2, 2017

Docket Nos. 34,257 and 34,564 (consolidated)

COLETTE C. JURY,

       Petitioner-Appellant,

v.

VICTOR R. JURY,

       Respondent-Appellee.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Deborah Davis Walker, District Judge

Caren I. Friedman
Santa Fe, NM

Bishop Law P.C.
Julie Bishop
Albuquerque, NM

for Appellant

Kerry Kiernan, P.C.
Kerry Kiernan
Albuquerque, NM

for Appellee

                                          OPINION

WECHSLER, Judge.

{1}     This case arises from the district court’s denial of Petitioner Colette C. Jury’s motion
to modify the child support decree (the 2010 decree) that resulted from the dissolution of the
marriage between Petitioner and Respondent Victor R. Jury. After considering evidence of
the parties’ updated financial information, the district court ruled that the 2010 decree was

                                               1
not subject to modification because neither party demonstrated material and substantial
changes in circumstances affecting the welfare of the children.1

{2}     Petitioner claims that the district court’s ruling resulted from its erroneous
determination of the parties’ gross monthly incomes and, by extension, child support
obligations. Respondent argues that, even if the district court miscalculated the parties’ gross
monthly incomes, its determination that no material and substantial changes in circumstances
affecting the welfare of the children occurred is dispositive.

{3}     District courts have discretion to deviate from the child support guidelines, NMSA
1978, § 40-4-11.1 (2008), as provided in NMSA 1978, Section 40-4-11.2 (1989). However,
such discretion does not extend to the process of calculating the parties’ gross monthly
incomes. Calculation of the parties’ gross monthly incomes must conform to the child
support guidelines or precedential appellate court interpretation of the child support
guidelines. Therefore, to the extent that the district court improperly deviated from the child
support guidelines in calculating the parties’ gross monthly incomes, we reverse and remand
for recalculation.

{4}     We recognize, however, that recalculation alone does not resolve the central issue
raised on appeal. Petitioner asks this Court to conclude that changes in income indicated by
the parties’ updated financial information entitled her to a modification of the 2010 decree
as a matter of law. Because the testimony and evidence offered at trial does not support a
modification at common law, we are unable to so conclude. However, if recalculation of the
parties’ gross monthly incomes results in a deviation upward of more than twenty percent
of the existing child support obligation, Petitioner is entitled to “a presumption of material
and substantial changes in circumstances” as provided by NMSA 1978, Section 40-4-
11.4(A) (1991).

{5}     The district court’s deviation from the child support guidelines in calculating the
parties’ gross monthly incomes potentially deprived Petitioner of a presumption of material
and substantial changes in circumstances to which she was entitled as a matter of law. If, on
remand, the district court’s recalculation of the parties’ gross monthly incomes results in a
presumption of material and substantial changes in circumstances under Section 40-4-11.4,
the district court shall reconsider whether Petitioner is entitled to a modification of the 2010
decree in light of this opinion.

{6}     Petitioner additionally argues that the district court lacked evidence to support its
prospective reduction of the amount of child support awarded in the 2010 decree.
Respondent argues that the reduction was appropriate but agrees that the district court’s
failure to articulate how it determined the recalculated amount requires remand. Because


       1
       Respondent also filed a motion to modify the 2010 decree, which was denied.
Respondent does not appeal this denial.

                                               2
Respondent agrees that error occurred, we decline to provide additional legal analysis. On
remand, the district court shall determine whether, and to what extent, the 2010 decree was
subject to modification given the changes in circumstances occurring on or around June 1,
2015.

{7}    Because our reversal and remand undermines the district court’s rationale for
awarding certain attorney fees, such awards to Respondent in the amounts of $15,000 and
$750 are reversed. However, we affirm the district court’s award of attorney fees arising
from post-judgment proceedings in the amount of $1,500 to Respondent.

BACKGROUND

A.     The 2010 Decree

{8}     On September 11, 2006, Petitioner filed a petition to dissolve her marriage to
Respondent. The district court’s February 22, 2010 judgment and order finalized numerous
matters between the parties, including the child support obligation. At the time of the 2010
decree, the parties had two minor children of the marriage, ages thirteen (Son) and nine
(Daughter). Respondent derived the majority of his income from his employment at, and
shareholder interest in, Summit Electric Co., Inc. (Summit Electric) and his shareholder
interest in Jury & Associates, LLC (Jury & Associates). Petitioner did not work outside the
home.

{9}     Substantial testimony and evidence related to the parties’ income and financial
resources was offered at trial. Exhibits 16 and 16A, which were filed as supplemental
exhibits to the appellate record on July 14, 2016, appear to have featured prominently in the
district court’s 2010 determination. Exhibits 16 and 16A contained statements of
Respondent’s gross income, cash received, income taxes paid, and net income for the years
2001 through 2009. Applying the financial information in these exhibits, the district court
concluded that Respondent had an “earning capacity” of $750,000 per year. In its ruling
from the bench, the district court explained that $750,000 was not Respondent’s actual gross
annual income, but instead represented a conscious deviation downward. While discussing
specific evidence of Respondent’s then-current year earnings, the district court stated “I
think, if anything, the $750[,000] is low.”

{10} After arriving at an annual income of $750,000, the district court subtracted $120,000
paid by Respondent to Petitioner in spousal support. It then divided the total amount by
twelve, resulting in a gross monthly income for Respondent of $52,500.

{11} The district court calculated Petitioner’s income by combining her spousal support
award and $4,000 per month of imputed earning capacity. It then divided the total amount
by twelve, resulting in a gross monthly income for Petitioner of $14,000.

{12}   Having calculated the parties’ combined gross monthly income to be $66,500, the

                                             3
district court calculated the percentage of combined gross monthly income. It credited
Respondent with seventy-nine percent of the parties’ combined gross monthly income and
Petitioner with twenty-one percent of the parties’ combined gross monthly income.

{13} The district court then determined the basic child support obligation to be $10,707.
Although the child support guidelines in effect in February 2010 did not allow for basic
calculation of a combined gross monthly income of $66,500, the district court elected to
apply the historical formula to determine the basic child support amount.2

{14} The district court also calculated the total child support obligation, the retained
portion based upon custody, and the parties’ individual child support obligations. The
custodial calculation was based upon the children residing with Petitioner fifty-five percent
of each month and residing with Respondent forty-five percent of each month. The district
court calculated Petitioner’s monthly obligation to be $1,518 and Respondent’s monthly
obligation to be $6,978. It reconciled these obligations to result in $5,460 owed by
Respondent to Petitioner each month. It reduced this amount by twenty-one percent of
additional expenses, including the cost of the children’s health care insurance and private
school tuition. After these reductions, Respondent’s total monthly child support obligation
was $4,872. In accordance with Section 40-4-11.4(B), the district court ordered that the
parties exchange updated financial information each year. The merits of the 2010 decree are
not on appeal or subject to reconsideration by this Court.

B.     The 2014 Denial of the Parties’ Motions to Modify the 2010 Decree

{15} Respondent provided updated financial information to Petitioner on November 14,
2011. On December 6, 2011, Petitioner filed a motion to modify the 2010 decree based upon
a “deviation upward of greater than twenty percent of the existing child support
obligation[.]” Respondent filed a motion in opposition on April 16, 2013, as well as his own
motion to modify the 2010 decree on January 7, 2014. He based his motion to modify the
2010 decree upon allegations of substantial changes in circumstances to the custodial time
sharing and changes in the parties’ incomes.

{16} On January 30, 2012, the district court appointed James W. Francis, CPA, as a Rule
11-706 NMRA expert in the case. He prepared a report that (1) analyzed the parties’ 2011
gross incomes and (2) updated Exhibit 16A from the November 2009 trial with Respondent’s


       2
        Prior to the 2008 amendment of Section 40-4-11.1, the child support guidelines
provided a formula for the calculation of basic child support to an infinite amount of
combined gross monthly income. See § 40-4-11.1(K) (1995) (providing that “[f]or gross
monthly income greater than $8,000, multiply gross by the following percentages: 11% [for
one child,] 16.1% [for two children,] 18.8% [for three children] . . .”). Application of the
pre-amendment formula to the parties’ combined gross monthly income results in $10,707
per month.

                                             4
financial information from 2009 through 2011.

{17} The trial was conducted between April 30, 2014 and May 2, 2014. Francis testified
as to his conclusions about the district court’s previous determination of Respondent’s gross
income, stating,

       [In 2009] the judge . . . took an average of the prior eight or nine years [of]
       after-tax cash income, averaged those out, and it came up to about $750,000.
       . . . The court then . . . subtracted from that $750,000, $120,000, which was
       the spousal support that [Respondent] was paying, $10,000 a month. That left
       a balance of $630,000, which the court divided by twelve, and said that
       [Respondent’s] monthly income for child support purposes was $52,500. So,
       if the court were to follow the exact same model . . . [Respondent’s] income
       for 2011, using the deviations that I described, would be $2,785,363. But
       that’s just for 2011.

{18} Francis additionally testified that Respondent’s 2011 gross income was comprised
of salary from Summit Electric and pass-through earnings proportionate to his ownership
shares in Summit Electric and Jury & Associates. On direct examination, counsel for
Petitioner implied that the 2010 decree resulted from an improper application of the child
support guidelines because the district court deducted income taxes paid from Respondent’s
gross income. Francis replied that pass-through income from certain corporate entities is,
sometimes, subtracted from gross income by courts as cash not received by the party. On
cross-examination, Francis agreed with counsel for Respondent that S-corporations
frequently pass through profits to shareholders for the purpose of paying income taxes.

{19} The parties testified as to the welfare of their children, essentially agreeing that the
children lack for nothing and are well provided for by both parents. The parties also agreed
that Son, of his own volition, currently resided with Respondent full-time, but disputed the
date on which this transition occurred. Based upon motions filed during 2012, the district
court ruled that Son ceased residing with Petitioner in late 2011.

{20} The district court denied both parties’ motions to modify the 2010 decree. As
rationale for its denial, the district court offered the following statements:

       I did the best job I could [in 2009]. And I think it’s very interesting to note
       that, according to the report that you both stipulated into evidence and you
       both essentially agreed with, number-wise, that [Respondent’s] income after
       deduction for the tax payment was $711,562 [in 2009], and I put his income
       at $750,000. I think, all things considered, that was pretty close. I estimated
       that [Petitioner’s] earning capacity, in addition to her spousal support, was
       about $4,000, based on the testimony that I heard and I think it’s still at that
       point.


                                              5
....

And I said at the time, I don’t want to see you back in a year, or two years.
I knew that [Respondent] . . . by all accounts, he’s a very capable
businessman. He runs a very successful company. The income fluctuates up
and down, through the last eleven years. There is a huge variation from year
to year. So I was well aware at the time that I could pick a number and then
the next year the numbers would be twice that much.

....

Now, under the statute, and there was a quote from Spingola [v. Spingola,
1978-NMSC-045, 91 N.M. 737, 580 P.2d 958,] the court can only modify
child support if there is a material and substantial change in circumstances
which would, since the last order was entered, which would warrant the
modification of the child support.

....

I picked what I thought was a reasonable number [in 2009]. If [Petitioner]
didn’t like that number, she should have appealed at the time. I can’t now go
back and fix that number.

....

[Petitioner] did argue that [Respondent’s] income has increased. Maybe,
maybe not. If you look at, you know, we don’t even have the number for this
year. I don’t have the numbers for 2013. I don’t even have the numbers for
2012; 2011, the numbers were good. And I’m looking . . . at the numbers that
were calculated based on the method that was recently approved by the Court
of Appeals in the Clark [v. Clark, 2014-NMCA-030, 320 P.3d 991]
decision[.]

....

If I look at 2011, it’s one thing; if I look at the last three years, it’s
something; if I look at the last ten, it’s one thing; if I look at the last eleven,
it’s something totally different. So I don’t know if his income has gone up,
because of . . . again, when a judge hears numbers from zero to a million, I
have discretion to pick any number I want in that range. And there is
evidence to support my decision. I thought under the circumstances a ten-
year average was appropriate. So I arrived at income figure for
[Respondent’s] earning capacity at $813,463.


                                        6
       ....

       If you take . . . the deduction for the spousal support, that brings it down to
       $693,463; that puts it at $57,788 a month, as opposed to $52,500 a month[.]
       ...

       That’s not to me something that is statistically significant. It’s not a twenty
       percent change in his income. If we use the old worksheets, which I really
       don’t want to do because there are no worksheets that apply to this current
       situation.

       ....

       But if we put this number on the old guidelines, there wouldn’t be a twenty
       percent change in that bottom baseline child support amount.

       ....

       So basically, what I’m finding is that neither side carried his or her burden
       of proof to show that there’s been a change, a substantial change materially
       affecting the welfare of the children. So we don’t get to the cap issue. We
       don’t get to the Spingola [, 1978-NMSC-045] analysis. Both motions are
       denied. The child support remains the same.

{21} The district court reiterated its rationale and the income calculation methodology in
a subsequent hearing on May 16, 2014. That hearing resulted in an order, entered on June
10, 2014, which provided that (1) a hearing on attorney fees would be held on August 28,
2014 and (2) the parties must submit proposed findings of fact and conclusions of law as to
all appellate issues within fifteen days after the hearing on attorney fees. Petitioner orally
indicated that she would not appeal.

C.     Attorney Fees and Findings of Fact and Conclusions of Law

{22} The August 28, 2014 hearing on attorney fees resulted in an award of $15,000 to
Respondent. In support of its award, the district court stated, “[Petitioner’s] initial motion
was to increase child support. She did not get an increase in child support. [Respondent]
prevailed on that issue. That’s how I can decide [that Respondent is entitled to attorney
fees].” Additionally, the district court’s ruling included a reduction in Respondent’s child
support obligation, effective June 1, 2015, based on Son’s pending eighteenth birthday and
graduation from high school. Both parties indicated that they would not appeal.

{23} On September 30, 2014, the district court held a hearing to present the final order.
During this hearing, Petitioner raised a perceived inconsistency between the district court’s
oral rulings on May 2, 2014 and August 28, 2014 and requested a deadline for findings of

                                              7
fact and conclusions of law. The district court refused, stating, “We’re done. I’ve already
ruled. You’ve already stated on the record that nobody’s appealing. We can’t at this point.”
The district court entered separate orders on the merits and for attorney fees.

{24} On October 24, 2014, Petitioner filed a motion to reconsider numerous issues,
including the district court’s (1) denial of the motion to modify the 2010 decree on the
merits; (2) sua sponte reduction of Respondent’s child support obligation effective June 1,
2015; (3) award of attorney fees to Respondent; and (4) refusal to allow the submission of
findings of fact and conclusions of law. The district court held a hearing on Petitioner’s
motion to reconsider on October 29, 2014. This hearing resulted in a partial grant and partial
denial of Petitioner’s motion. With respect to findings of fact and conclusions of law, the
district court ruled that “[b]oth sides waived their right to submit findings and conclusions
under Rule [1-052 NMRA] and pursuant to my [June 10, 2014] order.” The district court
awarded $750 in attorney fees to Respondent for defending the motion.

{25} Petitioner filed a timely appeal to this Court. During the pendency of this appeal,
Respondent made efforts to depose Petitioner in accordance with Rule 1-069 NMRA and to
gather information related to enforcement of the district court’s award of attorney fees from
other sources. Petitioner filed various motions seeking protection from Respondent’s
enforcement efforts. On February 2, 2015, the district court awarded Respondent $1,500 in
attorney fees for costs incurred in defending Petitioner’s motions and filing related motions.
Petitioner appealed this award of attorney fees. Petitioner’s two appeals were consolidated
by order of this Court.

STANDARD OF REVIEW

{26} Child support determinations are made at the discretion of the district court and are
reviewed for abuse of discretion. Styka v. Styka, 1999-NMCA-002, ¶ 8, 126 N.M. 515, 972
P.2d 16. That discretion, however, “must be exercised in accordance with the child support
guidelines.” Id. A district court abuses its discretion if “it applies an incorrect standard,
incorrect substantive law, or its discretionary decision is premised on a misapprehension of
the law.” Klinksiek v. Klinksiek, 2005-NMCA-008, ¶ 4, 136 N.M. 693, 104 P.3d 559
(internal quotation marks and citation omitted). In determining whether a deviation from the
child support guidelines resulted from a mispprehension of law, we apply de novo review.
Id.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

{27} As an initial matter, we address the notable absence of findings of fact and
conclusions of law supporting the district court’s ruling. Neither Petitioner nor Respondent
requested or submitted proposed findings of fact or conclusions of law prior to the district
court’s deadline of September 12, 2014. Rule 1-052(A) provides that “[i]n a case tried by the
court without a jury, . . . the court shall enter findings of fact and conclusions of law when
a party makes a timely request.” As a general rule, a party’s failure to make such a request

                                              8
within ten days, or as otherwise ordered by the district court, operates as a waiver of the right
to specific findings of fact and conclusions of law. See Rule 1-052(B); Wagner Land & Inv.
Co. v. Halderman, 1972-NMSC-019, ¶¶ 7, 11, 83 N.M. 628, 495 P.2d 1075. However, the
absence of findings of fact and conclusions of law does not operate as a bar to appellate
review. See Rio Grande Sun v. Jemez Mountains Pub. Sch. Dist., 2012-NMCA-091, ¶ 22,
287 P.3d 318 (“Rule 1-052 was rewritten in 2001, and the current version omits reference
to preservation of error as this is a matter for the appellate rules.” (internal quotation marks
and citation omitted)). Petitioner argues on appeal that the district court’s misapprehension
of Section 40-4-11.1 resulted in its conclusion that the 2010 decree was not subject to
modification and asserts that the 2010 decree is subject to modification as a matter of law.
This Court may review Petitioner’s arguments on the record before us.

APPLICATION OF THE CHILD SUPPORT GUIDELINES AND RELATED
STATUTES

A.      Determination of Child Support Obligations

{28} The codification of child support guidelines arose in response to a lack of uniformity
of support awards across the country. Charles J. Meyer et al., Child Support Determinations
in High Income Families—A Survey of the Fifty States, 28 J. Am. Acad. Matrim. Law. 483,
484-85 (2016). In 1988, our Legislature enacted Section 40-4-11.1, which significantly
limited the discretion of the district courts in making determinations of child support
obligations. See Perkins v. Rowson, 1990-NMCA-089, ¶ 13, 110 N.M. 671, 798 P.2d 1057
(“[I]t is apparent that Section [40-4-]11.1 is a substantial change in the substance of the law,
and a significant restriction of the trial court’s formerly broad discretion in determining the
amount of a parent’s support obligation.”); see also Leeder v. Leeder, 1994-NMCA-105, ¶
6, 118 N.M. 603, 884 P.2d 494 (“[T]he guidelines are presumed to provide the proper
amount of child support[.]”). The scope of this limitation is expressed in Section 40-4-
11.1(A), which states, in pertinent part, “[i]n any action to establish or modify child support,
the child support guidelines . . . shall be applied to determine the child support due . . . Every
decree or judgment of child support that deviates from the guideline amount shall contain
a statement of the reasons for the deviation.” (Emphasis added.)

{29} While “deviation from the child support guideline amounts set forth in Section 40-4-
11.1” is permitted, no such deviation is authorized with respect to the district court’s
calculation of the parties’ gross monthly incomes. Section 40-4-11.2 (emphasis added); see
§ 40-4-11.1(C)(2), (K) (describing the inputs and methodology used to calculate gross
income for purposes of determining child support obligations). Section 40-4-11.1(C)(2)
defines “gross income” as “income from salaries, wages, tips, commissions, bonuses,
dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social
security benefits, workers’ compensation benefits, unemployment insurance benefits,
disability insurance benefits, significant in-kind benefits that reduce personal living
expenses, prizes and alimony or maintenance received[.]” Certain sources of income, such
as means-tested public assistance and child support payments received for other children,

                                                9
are exempted from gross income. Section 40-4-11.1(C)(2)(a). Certain expenditures, such as
spousal and child support actually paid, result in a reduction of gross income. Section 40-4-
11.1(C)(2)(c), (d).

{30} In circumstances in which income is derived from proprietorship of a business or
joint ownership of a partnership or closely held corporation, “ ‘gross income’ means gross
receipts minus ordinary and necessary expenses[.]” Section 40-4-11.1(C)(2)(b). As a
practical matter, this Court is “more concerned with a parent’s actual cash flow than we are
with income as represented on tax returns.” Major v. Major, 1998-NMCA-001, ¶ 5, 124
N.M. 436, 952 P.2d 37. An example of this “actual cash flow” principle arose in Clark, in
which this Court concluded that “Subchapter-S corporation funds actually distributed to the
shareholder-spouse must be attributed to the shareholder-spouse as [gross] income” unless
the distribution “was used for business purposes or to offset the payment [of] income taxes
resulting from any K-1 allocations.” 2014-NMCA-030, ¶ 12. The rationale underlying
Clark—that cash passed to a shareholder for the express purpose of paying income taxes is
not “available to apply toward the support of [the] children”—is consistent with our child
support jurisprudence. Major, 1998-NMCA-001, ¶ 9. To a certain extent, allowing for the
deduction of taxes paid on K-1 allocations muddles the definition of “gross income” in
Section 40-4-11.1(C). However, taxes paid on W-2 earnings are not deducted from gross
income for purposes of calculating child support obligations. See Boutz v. Donaldson, 1999-
NMCA-131, ¶ 25, 128 N.M. 232, 991 P.2d 517 (“We can discern no clear intent in the
statute to consider hypothetical tax consequences of reported income before it is inserted into
the child support tables. From a survey of the statutory language used in defining ‘gross
income,’ we see that the Legislature has included all kinds of income without any express
regard for the varying effect of taxes.”).

{31} Just as Section 40-4-11.1(C) provides the sources of, and allowable deductions from,
gross income, Section 40-4-11.1(K) provides temporal direction for calculating gross
income, stating, “Use current income if steady. If income varies a lot from month to month,
use an average of the last twelve months, if available, or last year’s income tax return.”
(Emphasis added.) Our appellate interpretations are consistent with the statutory language.
See Spingola, 1978-NMSC-045, ¶ 13 (holding that a child support determination “requires
that evidence of [an obligor’s] current financial resources be fully considered” (emphasis
added)); Boutz, 1999-NMCA-131, ¶ 10 (holding that it was error to use “income from other
than the year in question”). While no New Mexico appellate court has expressly considered
the appropriateness of multi-year averaging, other jurisdictions allow multi-year averaging
when self-employment or business income is subject to fluctuation. See, e.g., In re Marriage
of Garrett, 785 N.E.2d 172, 178 (Ill. App. Ct. 2003) (affirming the district court’s use of a
three-year average of self-employment income as a physician); Roberts v. Roberts, 924 So.
2d 550, 553 (Miss. Ct. App. 2005) (affirming the district court’s use of a three-year average
of self-employment income from pharmaceutical sales); Gress v. Gress, 743 N.W.2d 67, 74-
75 (Neb. 2007) (affirming the district court’s use of a three-year average of self-employment
income from farming and stating “it appears that both here and elsewhere, a [three]-year
average tends to be the most common approach in cases where a parent’s income tends to

                                              10
fluctuate [and] even among the jurisdictions which permit an average of more than [three]
years, courts appear reluctant to use more than a [five]-year average”); see also Zimin v.
Zimin, 837 P.2d 118, 123 (Alaska 1992) (affirming the district court’s use of current self-
employment income from commercial fishing and stating “although income averaging is
clearly appropriate [when income fluctuates], a ten-year average is generally not a reliable
indicator of an obligor parent’s current earning capacity”).

{32} After calculating each party’s gross monthly income, that amount is combined and
entered into Section 40-4-11.1(K), Worksheet B. Using the parties’ combined gross monthly
income and each party’s percentage of combined income, the district court must determine
the basic monthly support by reference to the basic child support schedule. Section 40-4-
11.1(K). The basic child support schedule provides the presumptive amount of child support
for combined gross monthly income up to $30,000. Section 40-4-11.1(A), (K). Unlike other
jurisdictions, our Legislature has not specifically authorized district courts to use discretion
in calculating child support obligations when gross monthly income exceeds the maximum
amount on the basic child support schedule. Cf. Colo. Rev. Stat. § 14-10-115(7)(E) (2016)
(“The judge may use discretion to determine child support in circumstances where combined
adjusted gross income exceeds the uppermost levels of the schedule of basic child support
obligations[.]”); see also Meyer, supra, at 500 n.68 (noting that “New Mexico does not have
any high income instruction”). In the absence of direction from our Legislature with respect
to the calculation of child support obligations when the parties’ combined gross monthly
income exceeds $30,000, we presume that a district court retains broad discretion.3 See
Peterson v. Peterson, 1982-NMSC-098, ¶ 9, 98 N.M. 744, 652 P.2d 1195 (“Child support
determinations are an area of the law in which trial court are allowed broad discretion.”). As
such, if the parties’ combined gross monthly income exceeds $30,000, the district court must
determine the basic monthly support after considering

       [(1)] the total financial resources of both parents, including their monetary
       obligations, income, and net worth; [(2)] the life-style the children would be
       enjoying if the father and the mother were together and the non-custodial
       parent had his [or her] present income level; and [(3)] whether the income,
       surrounding financial circumstances, and station in life demonstrated an
       ability by the father [or mother] to provide additional advantages to [their]
       children above their actual needs.


       3
          Relevant legal scholarship indicates that enacted child support guidelines provide
a presumptive minimum amount of child support in high-income scenarios. See Laura W.
Morgan, The High-Income Parent, Child Support Guidelines Interpretation & Application
§ 8.07 (2016) (“[W]here the guidelines do not contain an express formula, some states use
a presumption that the highest amount provided for in the guidelines is the correct amount.
. . . [T]hese states allow deviation. Thus, a court must first presumptively determine support
as the highest amount provided in the guidelines, but the court may deviate upward from the
presumed amount based on the specific needs of the child[.]” (emphasis added)).

                                              11
Padilla v. Montano, 1993-NMCA-127, ¶ 36, 116 N.M. 398, 862 P.2d 1257 (citing Spingola,
1978-NMSC-045, ¶ 24).

{33} After calculating the basic monthly support, whether using the basic child support
schedule or otherwise, the district court must continue to apply Worksheet B of Section 40-
4-11.1 to determine (1) the amount transferable from the obligor to the obligee and (2) any
reduction of this amount based upon the obligee’s contribution to health and dental
premiums, work-related child care, and extraordinary costs including, but not limited to,
extraordinary medical, dental, and counseling costs, extraordinary educational expenses, and
transportation and communication expenses necessary to implement custodial arrangements.
Section 40-4-11.1(H), (I), (K). The previously determined percentage of combined income
figures prominently in this series of calculations. See § 40-4-11.1(K) (applying the
percentage of combined income to determine each party’s share of the basic monthly support
and each party’s share of additional payments and expenses).

{34} Numerous precedential opinions hold that a district court’s failure to calculate gross
income as per Section 40-4-11.1(A) and Section 40-4-11.1(K) is error. For example, in
Boutz, the obligor’s gross income included dividend earnings from investments that
fluctuated from year to year. 1999-NMCA-131, ¶ 9. At trial, the district court rejected
evidence indicating the amount of dividend earnings in the first half of 1996 and instead used
dividend earnings from 1995. Id. This Court concluded that the use of 1995 dividend
earnings was error. Id. ¶ 10. In so holding, we noted that “[t]he [district] court did not
explain its . . . reliance on what was arguably stale information” and that the error was
compounded by the district court’s use of 1996 income calculations for the obligee. Id. ¶¶
9-10; see also id. ¶ 10 (“Calculating [the parties’] dividend earnings by different methods
violates one of the express goals of the statute: making awards more equitable[.]” (alteration,
internal quotation marks, and citation omitted)). Similarly, in Klinksiek, the district court
excluded rental income from the obligee’s gross income. 2005-NMCA-008, ¶ 2. This Court
reversed, holding that Section 40-4-11.1(C)(2) requires calculation of “income from any
source.” Klinksiek, 2005-NMCA-008, ¶¶ 7, 12. Additionally, in Tedford v. Gregory, the
petitioner filed for retroactive child support from her alleged natural father. 1998-NMCA-
067, ¶ 1, 125 N.M. 206, 959 P.2d 540. The district court awarded petitioner $50,000 but
failed to explain how it calculated that amount. Id. ¶ 32. This Court reversed, holding that
“the [district] court should first determine both the mother’s and the father’s income during
the applicable time periods [and s]uch findings should be made before applying any
deviation from the standard child support guidelines.” Id. ¶¶ 31, 34.

{35} In summary, Klinksiek and Boutz hold that a district court may not deviate from
Section 40-4-11.1 in calculating the parties’ gross incomes. Klinksiek, 2005-NMCA-008, ¶
7; Boutz, 1999-NMCA-131, ¶ 10. Boutz additionally implies that the district court must, to
the degree possible, calculate the parties’ gross incomes during the same time period. 1999-
NMCA-131, ¶ 10. Clark and Boutz outlined the intersection between gross income and
income taxes in the child support context. Clark, 2014-NMCA-030, ¶ 12; Boutz, 1999-
NMCA-131, ¶ 25. And Tedford clarified that gross income must be calculated prior to any

                                              12
allowable deviations from the child support guidelines. 1998-NMCA-067, ¶ 31. These
holdings, along with the plain language of the relevant statutes, guide our analysis of the
present case.

B.      Deviation From the Child Support Guidelines

{36} Section 40-4-11.2 provides that “[a]ny deviation from the child support guideline
amounts set forth in Section 40-4-11.1 . . . shall be supported by a written finding in the
decree, judgment or order of child support that application of the guidelines would be unjust
or inappropriate.” (Emphasis added.) As we have already clarified, it is error to deviate from
the child support guidelines in calculating the parties’ gross incomes except as authorized
by statute or appellate case law. However, it is also error to deviate from the child support
guidelines in any manner without providing written justification for such deviation. See §
40-4-11.2; Tedford, 1998-NMCA-067, ¶ 33 (“[W]e conclude that the trial court erred . . . in
failing to specify the reasons for the trial court’s decision in deviating from the child support
guidelines.”). As indicated in Section 40-4-11.2, acceptable reasons for deviation include
circumstances in which “application of the guidelines would be unjust or inappropriate” as
indicated by “substantial hardship in the obligor, obligee or subject children[.]”

C.      Modification of Child Support Obligations

{37} A district court may modify a child support obligation upon a showing of material
and substantial circumstances subsequent to the adjudication of the pre-existing child
support order. Section 40-4-11.4(A). As indicated by our Supreme Court in Spingola, a
petitioner must demonstrate a substantial change in circumstances affecting the welfare of
the children to justify a modification. See 1978-NMSC-045, ¶ 16 (“The issue before the trial
court on a petition to modify the amount of child support is whether there has been a
showing of a change in circumstances. The change must be substantial, materially affecting
the existing welfare of the child, and must have occurred since the prior adjudication where
child support was originally awarded.”). This requirement is referred to as “the traditional
changed circumstances requirement” and governs the vast majority of child support
modification determinations. Perkins, 1990-NMCA-089, ¶ 4.

{38} However, in 1990, our Legislature enacted Section 40-4-11.4, which provided “a
court may modify a child support obligation without showing material and substantial
change in circumstances if application of the child support guidelines in Section 40-4-11.1
. . . would result in a deviation upward or downward of more than twenty percent of the
existing child support obligation.” (Emphasis added.) This Court limited Section 40-4-11.4
(1990), at least impliedly, in Perkins, which held that “a showing of a substantial change in
circumstances is still required before the trial court can modify a parent’s child support
obligation.” 1990-NMCA-089, ¶ 3. After Perkins, our Legislature amended Section 40-4-
11.4 to provide that “[t]here shall be a presumption of material and substantial changes in
circumstances if application of the child support guidelines in Section 40-4-11.1 . . . would
result in a deviation upward or downward of more than twenty percent of the existing child

                                               13
support obligation[.]” Section 40-4-11.4(A) (1991). This Court has subsequently viewed
Section 40-4-11.4 to supersede Perkins and to abrogate the traditional changed
circumstances doctrine under the circumstances contemplated. See Boutz, 1999-NMCA-131,
¶ 2 (concluding that a proposed increase of more than twenty percent in the father’s child
support obligation constituted a change in circumstances “sufficient in an amount to justify
a court-ordered modification of child support”).

{39} We conclude that Boutz is consistent with the legislative intent embodied in Section
40-4-11.4. “[T]he Legislature, as the policy-making branch of government, can alter or
abrogate the common law[.]” City of Albuquerque v. N.M. Pub. Regulation Comm’n, 2003-
NMSC-028, ¶ 16, 134 N.M. 472, 79 P.3d 297. Our Legislature has twice enacted legislation
designed to limit the application of the traditional changed circumstances requirement in
favor of determining a petitioner’s entitlement to a modification based upon “a deviation
upward or downward of more than twenty percent of the existing child support obligation[.]”
Compare § 40-4-11.4 (1990), with § 40-4-11.4 (1991); see also Rhinehart v. Nowlin, 1990-
NMCA-136, ¶ 56, 111 N.M. 319, 805 P.2d 88 (Hartz, J., concurring in part and dissenting
in part) (“If the [L]egislature has spoken on a matter of public policy, the judiciary should
respect that policy in matters of statutory interpretation and common-law jurisprudence.”).
As such, we reiterate that, in cases in which application of the parties’ updated financial
information to the child support guidelines results in a deviation upward or downward of
more than twenty percent of the existing child support obligation, the party seeking
modification is entitled to a presumption of material and substantial changes in
circumstances justifying a modification.

{40} Of course, legal presumptions are generally rebuttable, and we agree with
Respondent that the Spingola factors provide analytical support for denying a motion to
modify child support even when application of Section 40-4-11.4(A) results in a presumption
of material and substantial changes in circumstances justifying a modification. See Spingola,
1978-NMSC-045, ¶ 24 (providing considerations relevant to determinations of child support
obligations, including “what life-style the children would be enjoying if the father and
mother were not divorced and the non-custodial parent had [their] level of income” and the
“ability of [a parent] to furnish additional advantages to his [or her] children above their
actual needs”). For example, if the updated financial information resulted in the obligor’s
child support obligation increasing by twenty percent, but the obligee failed to offer any
additional evidence justifying modification, the statutory presumption could be rebutted.

{41} However, Spingola also outlined principles that govern the use of judicial discretion
on a motion to modify child support. These principles include “judicious consideration,
honesty, common sense, and regular procedure for arriving at an equitable solution for
all[.]” Id. ¶ 20 (emphasis added). This language indicates that determinations of child
support obligations are intended to be equitable as between the parties. See DeTevis v.
Aragon, 1986-NMCA-105, ¶ 26, 104 N.M. 793, 727 P.2d 558 (holding that issues of child
support are subject to “a fair balancing of the equities in light of the best interests and
welfare of the children”); see also § 40-4-11.2 (allowing deviation from the child support

                                             14
guidelines if application “would be unjust or inappropriate”).

{42} In summary, the child support guidelines limit the need for judicial discretion in the
vast majority of child support determinations. However, Section 40-4-11.4 requires that the
district court use discretion when faced with a statutory presumption of material and
substantial changes in circumstances. Spingola limits this discretion. A child support
determination must “arriv[e] at an equitable solution for all[.]” Spingola, 1978-NMSC-045,
¶ 20. Therefore, when faced with a presumption of material and substantial changes in
circumstances arising under Section 40-4-11.4, a district court does not have discretion to
deny modification of the existing child support obligation if doing so would perpetuate
inequities as between the parties.

THE DISTRICT COURT PROCEEDINGS AND RULING

A.      The Basic Child Support Amount

{43} Although the issue is not expressly raised on appeal, the district court’s calculation
of $10,707 as the basic amount of child support appears legally sound under the
circumstances. Both parties testified at trial that the children are well-provided for. Petitioner
testified that she “did not need more than [the adjusted amount of] $4,872” to provide for the
children. In cases in which the parties’ combined gross monthly income exceeds $30,000,
the district court has discretion to calculate the appropriate basic child support amount,
including by reference to the historical formula as occurred here. Peterson, 1982-NMSC-
098, ¶ 9 (“Child support determinations are an area of the law in which trial court are
allowed broad discretion.”).

B.      Spingola Analysis

{44} In light of the testimony described immediately above, a Spingola analysis does not
trigger a modification of the 2010 decree as a matter of law. We therefore disagree with
Petitioner’s argument that Respondent’s “enhanced financial position” necessarily requires
modification of the 2010 decree.

{45} Spingola holds that a “dramatic increase” in the obligor’s income may imply a
substantial change in circumstances and trigger a modification of child support. 1978-
NMSC-045, ¶¶ 13-14. In so concluding, our Supreme Court noted that “[i]t is ridiculous to
assume that the welfare of the children would not have improved considerably . . . [if] the
father’s income had doubled.” Id. ¶ 13. However, in Spingola, the father’s gross annual
income increased from $42,000 to $87,000 over a period of three years. Id. ¶ 3. This increase
in income resulted in a potential increase in the father’s monthly child support obligation
from $1,000 to $3,000. Id.

{46} Neither the level of income nor the proposed modification of the existing child
support obligation in Spingola is analogous to the present case. In 1978, an additional $2,000

                                               15
per month in child support certainly would have positively impacted the welfare of the
parties’ three children. This potential for positive impact is emphasized in the second and
third Spingola factors that direct district courts to consider the “welfare” of the children in
the context of (1) “what life-style the children would be enjoying if the father and mother
were not divorced and the [father] had his present level of income” and whether (2) “the
father demonstrates an ability . . . to furnish additional advantages to his children above their
actual needs[.]” Id. ¶ 24. We are, however, unable to conclude that these factors weigh
against Respondent in this case. Respondent’s gross income appears to have increased
substantially from the $750,000 calculated for purposes of the 2010 decree. But Respondent
provides child support, after adjustments, of $4,872 each month for his two children.
Petitioner testified at trial that her children “have far more privilege than the majority of
children.” Both she and Respondent testified as to the luxuries afforded to the children with
respect to housing, education, travel, vehicles, and other material possessions. In Spingola,
the father argued at trial and on appeal that his obligation to support his children extended
only to “necessities.” Id. ¶ 21. That is not the case here. Instead, we conclude that a Spingola
analysis does not favor Petitioner’s position on appeal under the circumstances of this case.
Cf. Downing v. Downing, 45 S.W.3d 449, 456 (Ky. 2001) (“[N]o child, no matter how
wealthy the parents, needs to be provided more than three ponies.”).

C.      Calculation of Gross Income

{47} Although the district court has discretion to determine $10,707 as the basic child
support amount, our review of the proceedings and record evidence reveals that the district
court improperly deviated from the child support guidelines in its calculation of the parties’
gross incomes for 2011. This miscalculation, which potentially deprived Petitioner of the
“presumption of material and substantial changes in circumstances” provided by Section 40-
4-11.4, constitutes an abuse of discretion requiring reversal and remand.

{48} We discern three distinct issues with the district court’s calculation of the parties’
gross incomes: (1) the subtraction of taxes paid from Respondent’s gross income; (2) the use
of a ten-year average to calculate Respondent’s gross income; and (3) the failure to calculate
Petitioner’s current income. We discuss each issue in turn.

1.      After Tax Income (Respondent)

{49} Gross income is calculated using pre-tax income. See § 40-4-11.1(K) (“Gross
Monthly Income: Includes all income[.]”); Boutz, 1999-NMCA-131, ¶ 25 (“We can discern
no clear intent in the statute to consider hypothetical tax consequences of reported income
before it is inserted into the child support tables.”). However, in its May 2, 2014 oral ruling,
the district court expressly indicated that the 2010 decree was based upon Respondent’s
income after deduction of tax payments. For 2011, the district court gave no indication
whether gross income was calculated pre- or post-tax in the present case, but it stated that
it was “looking at the numbers that were calculated based on the method that was recently
approved [in] Clark[.]” As discussed above, Clark held that funds distributed to a

                                               16
shareholder constitute gross income unless they are used to “offset the payment [of] income
taxes resulting from any K-1 allocations.” 2014-NMCA-030, ¶ 12. While Clark justifies
certain modifications to Respondent’s gross income, we question the degree to which the
district court may have done so. Petitioner’s Exhibit One provides various financial data,
including: “Respondent’s Cash Received [From All Sources],” “ Total Taxes Paid,” and
“After Tax Cash Income.” Petitioner’s Exhibit One differentiates between income received
from Respondent’s shareholder interests in Summit Electric and Jury & Associates and from
salary. Petitioner’s Exhibit One does not, however, differentiate between taxes paid on
shareholder income and salary income. This differentiation is important given the distinction
drawn above between the treatment of pass-through income used for payment of income
taxes under Clark and the treatment of traditional W-2 earnings. For example, Petitioner’s
Exhibit One provides the following data for 2011: $4,219,841 of cash received from all
sources; $1,434,478 of total taxes paid; and $2,785,363 of after tax cash income.
Respondent’s “After Tax Cash Income” results from subtracting $1,434,478 from
$4,219,841. However, even applying Clark, this calculation incorrectly applies Section 40-4-
11.1(K). “Cash Received [From All Sources]” details Respondent’s 2011 earnings:
$2,610,309 from his ownership interest in Summit Electric; $262,929 from his ownership
interest in Jury & Associates; $1,014,055 from salary; and $332,548 from other income. The
taxes paid on these four amounts are then blended together as “Total Taxes Paid.” This
calculation improperly combines income taxes paid on Respondent’s income from his
ownership interests in Summit Electric and Jury & Associates with income taxes paid on his
income received as salary and other income. In short, any taxes paid that are attributable to
Respondent’s salary and other income must be incorporated into gross income.

2.     Multi-Year Averaging (Respondent)

{50} Section 40-4-11.1(K) requires that gross income be calculated based on “current
income if steady[,]” or, if not steady, by reference to “last year’s income tax return.” As
discussed above, other jurisdictions allow multi-year averaging in cases in which the
obligor’s income fluctuates. However, we are aware of no other jurisdiction that permits the
use of a ten-year average in calculating current income. See Zimin, 837 P.2d at 123 (stating
“a ten-year average is generally not a reliable indicator of an obligor parent’s current earning
capacity”). In the present case, after stating that it did not have “the numbers for 2013” or
“for 2012,” the district court used a ten-year average to calculate Respondent’s gross
income, arriving at a total of $813,463 per year for 2011. Unfortunately, we are unable to
recreate the district court’s calculation using Petitioner’s Exhibit One. Our ten-year average
for the years 2002-2011 results in after tax cash income for Respondent of $976,155—a
difference of more than $160,000 from the district court’s total of $813,463. This disparity
emphasizes the rationale behind requiring the district court to explain deviations from the
child support guidelines in writing. See Tedford, 1998-NMCA-067, ¶¶ 32-33 (describing the
failure to “clearly indicate” how it determined the child support award as error). Because we
do not have the benefit of briefing on the topic, we decline to expressly decide whether and
to what extent multi-year averaging is allowable when calculating a party’s gross income for
purposes of determining child support obligations. Absent such a decision, Respondent’s

                                              17
actual gross income for 2011 remains unclear. As such, on remand, the district court shall,
in light of this opinion and other persuasive sources, make such a determination and clearly
indicate in its order the exact calculations used in determining the parties’ gross incomes.

3.     Current Income (Petitioner)

{51} Section 40-4-11.1(C)(1) defines “income” as “actual gross income of a parent if
employed to full capacity or potential income if unemployed or underemployed.” This
subsection empowers district courts to impute income as needed in order to accurately derive
the parties’ gross monthly incomes. See State ex rel. Human Servs. Dep’t v. Kelley, 2003-
NMCA-050, ¶ 13, 133 N.M. 510, 64 P.3d 537 (“The child support guidelines require the
imputation of income to an unemployed or underemployed parent to the level of employment
at full capacity.”). In 2010, the district court estimated Petitioner’s earning capacity to be
$4,000 per month and continued to impute that amount in the present case. However, the
record evidence includes Petitioner’s 2011 tax returns. In 2011, Petitioner reported an
adjusted gross income of $109,089 on her federal tax returns. Dividing $109,089 by twelve
provides a more accurate gross monthly income for Petitioner than the amount imputed for
the 2010 decree. We can discern no reason for the continued imputation of income when
evidence of actual gross income has been provided. Because the district court calculated
Respondent’s gross annual income through 2011, Petitioner’s 2011 tax return is the most
appropriate source from which to determine Petitioner’s gross income. See Boutz, 1999-
NMCA-131, ¶ 10 (holding that the district court must, to the degree possible, calculate the
parties’ gross incomes during the same time period).

D.     Inequities as Between the Parties

{52} Because we do not have the benefit of a Rule 11-706 expert on appeal, we are unable
to determine to any degree of certainty the extent to which recalculation of the parties’ gross
monthly incomes will affect Respondent’s child support obligation. While $10,707 appears
to be an appropriate basic child support amount, the district court could reconsider that
amount on remand. Nevertheless, because the parties’ gross monthly incomes and the
percentage of combined income are non-discretionary determinations, we provide the
following model to demonstrate the potential inequity that results from an incorrect
calculation of gross income.

{53} The 2010 decree, which applies Petitioner’s gross annual income of $168,000 and
Respondent’s annual after-tax cash income of $750,000, operates as follows:

 Part 1     Basic Support                                 Mother             Father      Combined
 1.         Gross Monthly Income                          $14,000           $52,500         $66,500
 2.         Percentage of Combined Income                     21%              79%                100%



                                              18
 3.            Number of Children                                                                     2
 4.            Basic Support from Table                                                      $10,707
 5.            Shared Custody Basic Obligation                                               $16,060


 6.            Each Parent’s Share                          $3,373          $12,688
 7.            Number of 24 Hour Periods                       201               164                365
               with Each Parent
 8.            Percentage with Each Parent                     55%              45%                100%
 9.            Amount Retained                              $1,855            $5,710
 10.           Each Parent’s Obligation                     $1,518            $6,978
 11.           Amount Transferred                                             $5,460
 Part 2        Additional Monthly Payments
 12.           Children’s Health and Dental                                     $300
 13.           Work-Related Child Care (NA)
 14.           Additional Expenses (Tuition)                                  $2,500
               Petitioner’s Contribution (21%)                $588
               Respondent’s Actual (Transferred)                              $4,872
               Obligation

{54} If we recalculate for 2011 assuming that (1) $10,707 remains the basic child support
amount, (2) Respondent’s gross income is calculated using a post-tax three-year average for
the years 2009, 2010, and 2011, which results in a total of $1,344,139,4 and (3) Petitioner’s
gross income of $109,089 is determined using her 2011 tax returns, the impact on
Respondent’s child support obligation is as follows:

 Part 1        Basic Support                             Mother           Father         Combined
      1.       Gross Monthly Income                         $9,090         $112,110         $121,101




           4
        The actual three-year average of $1,464,139 is reduced by $120,000 to account for
spousal support paid by Respondent. It is not increased in consideration of the district court’s
deduction of taxes paid on W-2 earnings as discussed above.

                                                 19
    2.     Percentage of Combined Income                     8%              92%


    3.     Number of Children                                                                     2
    4.     Basic Support from Table (static)                                             $10,707


    5.     Shared Custody Basic Obligation                                               $16,060


    6.     Each Parent’s Share                            $1,284         $14,775
    7.     Number of 24 Hour Periods with                    201              164               365
           Each Parent
    8.     Percentage with Each Parent                      55%              45%               100%
    9.     Amount Retained                                 $706           $6,648
  10.      Each Parent’s Obligation                        $578           $8,127
  11.      Amount Transferred                                             $7,549


 Part 2    Additional Monthly Payments
  12.      Children’s Health and Dental                                     $300
  13.      Work-Related Child Care (NA)
  14.      Additional Expenses (Tuition)                                  $2,500
           Petitioner’s Contribution (8%)                  $224
           Respondent’s Actual (Transferred)                              $7,325
           Obligation

The $7,549 basic amount transferred represents a thirty-eight percent increase over
Respondent’s basic amount transferred of $5,460 in the 2010 decree. The $7,325 actual
obligation represents a fifty percent increase over Respondent’s total amount transferred of
$4,872 in the 2010 decree. Such increases result in “a presumption of material and
substantial changes” as contemplated by Section 40-4-11.4(A).

{55} We understand that these numbers are, to a degree, hypothetical. However, we
believe that the impact on Petitioner’s percentage of combined monthly income, which was
twenty-one percent in the 2010 decree, requires consideration. This percentage has an
obvious effect on each party’s basic child support obligation. It also figures into the
additional payments and expenses portion of Worksheet B. The 2010 decree required

                                            20
Petitioner to pay twenty-one percent of the costs for the children’s health and dental
insurance and private school tuition. If Petitioner’s gross monthly income actually amounts
to approximately eight percent of the parties’ combined gross monthly income, an order that
results in Petitioner’s overpayment is inequitable as between the parties.

{56} At oral argument before this Court, Respondent argued that inequities arising from
arguably incorrect percentages of combined income are mitigated by informal
understandings between the parties. As an example, Respondent implied that increases in the
children’s tuition have gone unaccounted for since entry of the 2010 decree. This may be the
case. However, a motion to modify child support focuses on the period between the previous
adjudication and the filing of a motion to modify by either party. Section 40-4-11.4(B)(1)
contemplates “an annual exchange of financial information . . . for the year preceding the
request [to modify.]” Regardless of practical, but non-judicially recognized or mandated
alterations to the 2010 decree, it is the terms of the 2010 decree that are at issue on remand.

{57} We recognize that the district court is empowered to deviate from the child support
guidelines as provided in Section 40-4-11.2. Because the parties’ combined gross monthly
income, by any measure, exceeds $30,000, the district court could make gross income and
percentage of combined income calculations exactly as described above and then elect to
reduce the basic child support amount as a matter of discretion. However, when faced with
a statutory presumption of material and substantial changes in circumstances, the district
court does not have discretion to deny a motion to modify if doing so would perpetuate an
objectively incorrect determination of the parties’ percentage of combined income.

{58} On remand, if the district court’s recalculation of the parties’ gross monthly incomes
results in a deviation upward or downward of more than twenty percent such that Petitioner
is entitled to a statutory presumption of material and substantial changes, the district court
shall consider the recalculated percentage of combined income attributable to Petitioner
independent of other considerations. If continued enforcement of the 2010 decree would
result in inequity between the parties, the 2010 decree must be modified.

ATTORNEY FEES

{59} This Court reviews awards of attorney fees for abuse of discretion. Bustos v. Bustos,
2000-NMCA-040, ¶ 24, 128 N.M. 842, 999 P.2d 1074. Rule 1-127 NMRA governs the
award of attorney fees in domestic relations cases and requires consideration of the
“disparity of the parties’ resources, prior settlement offers, the total amount of fees and costs
expended by each party, and the success on the merits.” Weddington v. Weddington, 2004-
NMCA-034, ¶ 27, 135 N.M. 198, 86 P.3d 623. No single factor is dispositive. See id. ¶ 28
(holding that “disparity is only one factor to be considered and disparity cannot support
reversal where the other factors weigh in favor of the award of attorney fees”).

{60} The district court concluded that Respondent was the prevailing party on the merits
and awarded attorney fees consistent with that conclusion in the amount of $15,000. The

                                               21
district court additionally concluded that several of the issues raised in Petitioner’s motion
to modify lacked merit and awarded Respondent $750 in attorney fees for the cost of
defending. The district court’s finding that Respondent prevailed on the merits, when viewed
in conjunction with record evidence of settlement offers made by Respondent, could support
an award of attorney fees. However, our reversal on the merits undermines the primary
rationale underlying the district court’s conclusion. The district court concluded that
Respondent was the prevailing party because “[Petitioner] did not get an increase in child
support.” This issue is open on remand. See Rabie v. Ogaki, 1993-NMCA-096, ¶ 18, 116
N.M. 143, 860 P.2d 785 (holding that “ordinarily the district court should reconsider an
award of attorney’s fees and expenses when the judgment is reversed and the matter
remanded to that court”). Therefore, we reverse the district court’s award of attorney fees
in the amounts of $15,000 and $750. The district court may reconsider the appropriateness
of awards of attorney fees to both parties, including appellate attorney fees, on remand.

{61} The same analysis does not apply to the district court’s February 2, 2015 award of
attorney fees arising from Respondent’s post-judgment enforcement actions. On September
30, 2014, the district court entered its judgment. Respondent thereafter began efforts to
enforce the awards of attorney fees in his favor. Rule 1-069(A) provides that, “[u]pon
request of the judgment creditor or a successor in interest, the clerk shall issue a subpoena
directing any person with knowledge that will aid in enforcement of or execution on the
judgment, including the judgment debtor, to appear before the district court to respond to
questions concerning that knowledge.” Respondent filed notice to depose Petitioner in
accordance with Rule 1-069 on November 4, 2014. Petitioner did not appear for this
scheduled deposition and filed various motions seeking protection from deposition and other
enforcement efforts. Respondent filed responses to the motions as well as a motion to
compel Petitioner’s deposition. He also appeared in court to litigate these motions.
Following a hearing on the merits, the district court denied Petitioner’s motions and awarded
Respondent attorney fees in the amount of $1,500.

{62} Petitioner argues on appeal that the district court was divested of authority to increase
its award of attorney fees because the matter was pending on appeal. Petitioner’s argument
presents a question of subject matter jurisdiction, which we review de novo. Weddington,
2004-NMCA-034, ¶ 13. Petitioner does not argue that this award constituted an abuse of
discretion by the district court. See State v. Garnenez, 2015-NMCA-022, ¶ 15, 344 P.3d
1054 (“We will not address arguments on appeal that were not raised in the brief in chief and
have not been properly developed for review.”).

{63} Generally speaking, the filing of notice of appeal by either party “divests the district
court of jurisdiction and transfers jurisdiction to the appellate court.” Murken v. Solv-Ex
Corp., 2006-NMCA-064, ¶ 9, 139 N.M. 625, 136 P.3d 1035. This rule is not absolute. Id.
The district court retains jurisdiction “to carry out or enforce the judgment.” Id. (internal
quotation marks and citation omitted). Rule 1-069 is solely related to enforcement of a
judgment and is collateral to the matters on appeal. See State ex rel. Howell v. Montoya,
1965-NMSC-005, ¶ 11, 74 N.M. 743, 398 P.2d 263 (interpreting Rule 69 of the Federal

                                             22
Rules of Civil Procedure and holding that “a new or independent action is not contemplated,
but . . . the supplementary proceedings authorized by [Rule 69] is only a continuation of the
original case for the purpose of discovery in aid of the enforcement of the judgment”
(emphasis added)); see also Kelly Inn No. 102 v. Kapnison, 1992-NMSC-005, ¶ 39, 113
N.M. 231, 824 P.2d 1033 (“[I]n collateral matters not involved in the appeal, . . . the trial
court retains jurisdiction.”).

{64} Because the district court had subject matter jurisdiction over the parties under Rule
1-069, we affirm the February 2, 2015 attorney fee award of $1,500 to Respondent.

CONCLUSION

{65} For the foregoing reasons, we reverse and remand to the district court. On remand,
the district court must use a figure for gross income consistent with the evidence offered at
trial, and the court must then enter each parties’ gross income into the child support
guidelines to determine whether there has been a deviation of more than twenty percent. If
not, the court still has to apply the factors in Spingola to determine whether there has been
a material and substantial change justifying modification. If there is a deviation of more than
twenty percent, the presumption does apply, and the court should first consider whether the
non-movant has rebutted that presumption. Even if the presumption is rebutted, the district
court must independently consider whether the recalculated percentage of combined income
attributed to each party is inequitable such that modification is required. The district court
must enter findings and conclusions that transparently supply the court’s underlying basis
for its determination whether to grant or deny the motion to modify, so that the parties are
clear as to the manner in which the court evaluated the motion to modify.

{66}   IT IS SO ORDERED.

                                               ____________________________________
                                               JAMES J. WECHSLER, Judge

WE CONCUR:

____________________________________
JONATHAN B. SUTIN, Judge

____________________________________
STEPHEN G. FRENCH, Judge




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