                IN THE COURT OF APPEALS OF TENNESSEE
                            AT NASHVILLE
                                 January 23, 2014 Session

   STATE OF TENNESSEE EX REL. DAWN MOSS v. WILLIAM MOSS

               Appeal from the Chancery Court for Williamson County
                No. 33311IVD1783023     Robbie T. Beal, Chancellor


                 No. M2013-00393-COA-R3-CV - Filed April 24, 2014


       In this post-divorce action, Mother and Father both sought to modify the child support
obligation of Father. The trial court, inter alia, found that Father had an annual income of
$65,000 and held that there had been a significant variance. The court raised Father’s child
support obligation to $233.00 per month, applied a downward deviation of $83.00, and
ordered support to continue past age 21 for one of the children due to her disabilities. Father
appeals, contending that the court erred in its calculation of his income. We affirm the
method used to determine Father’s income; we vacate the child support obligation and
remand for a redetermination of the support amount.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed in
                    Part and Vacated in Part; Case Remanded

R ICHARD H. D INKINS, J., delivered the opinion of the court, in which P ATRICIA J. C OTTRELL,
M. S., P. J., and A NDY D. B ENNETT, J., joined.

Russ Heldman, Franklin, Tennessee, for the appellant, William Barry Moss.

Robert E. Cooper, Jr., Attorney General and Reporter; William E. Young, Solicitor General;
and Warren A. Jasper, for the appellee, State of Tennessee.

Jennifer Lynn Cole, Franklin, Tennessee, for the appellee, Dawn A. Moss.

                                         OPINION

I. F ACTS & P ROCEDURAL H ISTORY

       Dawn Moss (“Mother”) and William Moss (“Father”) were divorced in 2008; three
children were born of the marriage, two sons—William Colt , born April 30, 1993, and Lucas
Cord, born January 29, 1997—and one daughter—Dustyne Perry, born December 20,
1991—who is severely disabled. Father was designated primary residential parent and was
ordered to pay $83 per month in child support.

       On January 12, 2012, Father filed a motion which, inter alia, sought an order
requiring [Mother] “to reimburse [Father] for overpayment of child support resulting from
the emancipation of minor children and/or awarding him child support.”1 In response, the
State of Tennessee, on behalf of Mother, requested that Father’s motion be denied
contending that Father “failed to submit a valid argument.” 2

       On March 28 Mother filed a petition for modification of child support, contending that
there had been “a significant variance between the Tennessee Child Support guidelines and
the amount of child support currently ordered.” Father filed an answer and counterclaim in
which he admitted that the child support obligation should be modified, sought to modify his
alimony obligation, and requested that he “be given credit for overpayment of child
support.” 3

       Mother’s petition and Father’s answer and counterclaim were heard on November 29,
2012. On January 7, 2013, the court entered an order finding that Father had the “ability to
earn” $5,416.66 per month, that Mother had the “ability to earn” $1,666.66 per month, and
that Colt was emancipated. The court held there was a significant variance and that a
downward deviation from the presumptive child support obligation was warranted due to
“economic hardship and child, Dustyne’s, needs.” Accordingly, the court raised Father’s
child support obligation to $233.00 per month but applied a downward deviation of $83.00;
the court also ordered support to continue past age 21 for Dustyne due to her disabilities.4
Father appeals.




        1
           Father also sought repayment of interest he had been required to pay Mother with respect to a
$250,000 judgment previously awarded in the 2008 divorce; Father later moved to strike this portion of his
motion. The award of interest was the subject of a prior appeal which can be found at Moss v. Moss, No.
M2010-01064-COA-R3-CV, 2011 WL 1459170 (Tenn. Ct. App. Apr. 15, 2011); the award of interest is not
at issue in the present appeal.
        2
         The State provided child support enforcement services to Mother pursuant to Title IV-D of the
Social Security Act, 42 U.S.C. § 651 et seq., and Tenn. Code Ann. § 71-3-124(c).
        3
            Father’s counterclaim included all issues raised in his January 12 motion with respect to child
support.
        4
            The order stated that the issue of alimony was not tried and was “expressly reserved.”

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II. S TANDARD OF R EVIEW

        The statutes and regulations on child support are intended to “assure that children
receive support reasonably consistent with their parent or parents’ financial resources.” State
ex rel. Vaughn v. Kaatrude, 21 S.W.3d 244, 249; see also Tenn. Comp. R. & Regs. 1240-02-
04-.01(3)(e). Courts are therefore required to use child support guidelines developed by the
Tennessee Department of Human Services “to promote both efficient child support
proceedings and dependable, consistent child support awards.” Kaatrude, 21 S.W.3d at 249;
see also Tenn. Code Ann. § 36-5-101(e); Tenn. Comp. R. & Regs. 1240-02-04-.01(3)(b), (c).

        Setting child support is a discretionary matter. Kaatrude, 21 S.W.3d at 248. Thus,
we review the amount of a child support award to determine whether the trial court abused
its discretion. Id. Under the abuse of discretion standard, we must consider “(1) whether the
decision has a sufficient evidentiary foundation; (2) whether the trial court correctly
identified and properly applied the appropriate legal principles; and (3) whether the decision
is within the range of acceptable alternatives.” Id.

III. A NALYSIS

        Father contends that the trial court “imputed” an annual income of $65,000 to him and
that, because the court made no finding that he was willfully or voluntarily underemployed,
this was error. We do not agree that the court imputed income to Father. Rather, consistent
with the child support guidelines and applicable case law, the court properly averaged
Father’s income over a period of years as the starting point in the determination of his child
support obligation.

       In establishing Father’s income, the court stated:

               I think the Court has to look at the general trends of his business. But
       with that being said farming income is just like any other type of business
       income that is somewhat [cyclical] in nature. You are going to have good
       years and you are going to have bad years. . . . [A]s long as that is his choice
       then the Court is going to some degree average out his income.
               The Court did that really last time for purposes of the divorce. The
       Court came up with a figure of 75 grand based upon the general productivity
       of the farm. If you take the last four years it averages out to be about 60. So
       the Court may have overestimated it just a touch, but on the same token that
       is how the Court deals with someone who owns especially a farm and to some
       degree any type of business that again is dependant on either economy or in
       this case nature. This is not the first farm case the Court has heard obviously

                                              3
        and the Court believes it is appropriate, again not necessarily to average it, but
        to use his – but to use his past earnings as the guide to what his earnings
        should be and what his earnings should be based on.
                . . . The Court believes an estimation of $75,000 a year is an over
        estimation of what typical earnings should be or should be computed at. The
        Court believes in this case it is appropriate to drop those earnings only
        $10,000. I’m going to drop his ability to earn to $65,000 per year.
                Again, that is a little more than the average, to very briefly explain that.
        Especially in the business of farming, a lot of expenses, a lot of what the Court
        would consider to be living expenses, are taken up by the farm. The mortgage
        on the home obviously, as well as the trucks he drives and such are all farm
        equipment or business deductions. So the Court again one more time is going
        to set his income at or his ability to earn at $65,000 a year.

The court’s determination was based on an exhibit, entitled “Gross Earnings Exhibit for
Defendant,”5 which provided the following information regarding Father’s income:

2012            Gross Income from Farming                                 $ 373,116
                Less Total Expenses from Farming                          $ -479,503
                Plus Depreciation on Farm Equipment                       $ 108,000
                Income for [2012] less Depreciation Expense               $ 1,613

2011            Gross Income from Farming                                 $ 363,948
                Less Total Expenses from Farming                          $ -479,503
                Plus Depreciation on Farm Equipment                       $ 110,143
                Income for 2011 less Depreciation Expense                 $ 5,412[6 ]
2010            Gross Income from Farming                                 $ 408,172
                Less Total Expenses from Farming                          $ -394,405
                Plus Depreciation on Farm Equipment                       $ 113,497
                Income for 2010 less Depreciation Expense                 $ 126,264[7 ]


        5
          When moving to have this document admitted as an exhibit, counsel for Father stated that the
parties had agreed prior to trial that Father’s income should be calculated by taking his gross income from
farming, subtracting his expenses, and adding back in depreciation on farm equipment. This document
provided those figures and the calculation of Father’s income from 2009 to 2012.
        6
           It appears that there is a mathematical error in calculating Father’s income for 2011. According
to these figures, Father’s income should be a negative $5,412.
        7
          There is also a mathematical error in calculating Father’s income for 2010. According to these
figures, Father’s income should be $127,264.

                                                    4
2009             Gross Income from Farming                             $ 436,688
                 Less Total Expenses from Farming                      $ -444,106
                 Plus Depreciation on Farm Equipment                   $ 117,838
                 Income for 2009 less Depreciation Expense             $ 110,420

Father testified that this decline was due to extreme drought affecting the area.

       In calculating child support obligations, this Court has held that current income may
be established by averaging a parent’s fluctuating income:

       The guidelines specifically allow averaging in determining gross income when
       establishing a prospective award: “[v]ariable income such as commissions,
       bonuses, overtime pay, and dividends, etc., should be averaged and added to
       the obligor’s fixed salary.” Tenn. Comp. R. and Regs. 1240-2-4-.03(3)(b).[ 8 ]
       Although that provision of the guidelines applies to variable components of
       income, the reasoning is just as applicable to situations where a parent is self-
       employed or whose total income is variable.
                                            ***
       While our courts have approved or endorsed a two year period for purposes of
       averaging, see, e.g., Norton v. Norton, No. W1999-02176-COA-R3-CV, 2000
       WL 52819 at *7 (Tenn. Ct. App. Jan. 10, 2000) (no Tenn. R. App. P. 11
       application filed), other time periods have also been used. See, e.g., Siegel v.
       Siegel, No. 02A01-9708-CH-00198, 1999 WL 135090 at *6 (Tenn. Ct. App.
       March 5, 1999) (no Tenn. R. App. P. 11 application filed) (“Based on the
       entire record, it appears that Husband’s earnings for the entire twelve months
       of 1996 best reflect his income and earning capacity for the purpose of
       determining child support and alimony.”); Alexander, 34 S.W.3d at 460 (four
       years income averaged). The time period to be used lies within the discretion
       of the trial court based upon the facts of the situation.

Smith v. Smith, M2000-01094-COA-R3-CV, 2001 WL 459108, at *5–6 (Tenn. Ct. App. May
2, 2001).

        Averaging Father’s income over a four year period to determine his current income
for child support purposes is authorized by Tenn. Comp. R. & Regs. 1240-02-04-.04(3)(b)




       8
           This provision is now found at Tenn. Comp. R. & Regs. 1240-02-04-.04(3)(b)

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and in so doing the court properly applied the appropriate the legal principles.9 The court’s
analysis also accounted for the fact that Father’s personal mortgage and vehicle expenses
were inappropriately deducted as business expenses; this is specifically provided for by the
Child Support Guidelines and is likewise appropriate.10 The court did not abuse its discretion
in the method used for setting Father’s income.

        As noted earlier, there is a miscalculation in the exhibit submitted by Father as
evidence of his income11 ; when calculated correctly, Father’s average income for the time
period was $58,471.25, rather than $60,927.25. As a result of the miscalculation, the order
setting support lacks sufficient evidentiary support.

IV. C ONCLUSION

       For the reasons set forth above, we affirm the setting of Father’s income at $65,000,
vacate that portion of the order which sets Father’s child support obligation, and remand for
a redetermination of his obligation.




                                                           _________________________________
                                                           RICHARD H. DINKINS, JUDGE




        9
             In contrast, imputing income is authorized:

        (I) If a parent has been determined by a tribunal to be willfully and/or voluntarily
        underemployed or unemployed; or
        (II) When there is no reliable evidence of income; or
        (III) When the parent owns substantial non-income producing assets, the court may impute
        income based upon a reasonable rate of return upon the assets.

Tenn. Comp. R. & Regs. 1240-02-04-.04(3)(a)2(i). The court made no such findings here.
        10
          The Child Support Guidelines provide that in calculating income for a self-employed parent, that
“excessive car expenses or excessive personal expenses, or depreciation on equipment, the cost of operation
of home offices, etc., shall not be considered reasonable expenses.” Tenn. Comp. R. & Regs. 1240-02-04-
.04(3)(a)3. Father testified that his mortgage payment for his farm and home was roughly $1,700 per month.
        11
              See footnotes 8 and 9.

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