              IN THE COURT OF APPEALS OF NORTH CAROLINA

                                   No. COA18-410

                               Filed: 18 December 2018

New Hanover County, No. 15 CVD 4537

THOMAS S. WALTON, Plaintiff,

             v.

JOSIE B. WALTON, Defendant.


      Appeal by plaintiff from orders entered 16 August 2017 by Judge Robin W.

Robinson in New Hanover County District Court. Heard in the Court of Appeals 29

November 2018.


      The Lea/Schultz Law Firm, P.C., by James W. Lea, III, for plaintiff-appellant.

      No brief for appellee.


      TYSON, Judge.


      Thomas S. Walton (“Husband”) appeals from the trial court’s 16 August 2017

order requiring him to pay $2,750.00 per month in alimony to Josi B. Walton (“Wife”).

We affirm in part, reverse in part, and remand.

                                   I. Background


      Husband and Wife were married on 3 October 1998 and separated with the

intent to remain separate and apart on 8 December 2015. The parties bore no

children during their marriage. On 18 December 2015, Husband filed a complaint
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                                    Opinion of the Court



for equitable distribution and a motion for an ex parte temporary order of

sequestration of the former marital residence.             An ex parte temporary order of

sequestration granting Husband the exclusive use of the marital residence was

entered that same day.

      Wife filed an answer on 22 December 2015 and asserted counterclaims for post-

separation   support,    alimony,    equitable     distribution,    interim   distribution,

sequestration of the marital home, attorney’s fees, and a temporary restraining order.

The trial court entered an order on post-separation support on 23 February 2016.

      The parties’ claims for equitable distribution and alimony were heard before

the trial court over multiple hearings on 11-13 January 2017, 14 February 2017, and

11 April 2017. On 16 August 2017, the trial court entered an order on alimony and

attorney’s fees (“the Alimony Order’). The Alimony Order requires Husband to pay

$2,750.00 per month in alimony to Wife. Husband filed timely notice of appeal of the

Alimony Order.

                                     II. Jurisdiction

      Jurisdiction lies in this court pursuant to N.C. Gen. Stat. § 50-19.1 (2017),

which permits the immediate appeal of an order adjudicating a claim for alimony.

                            III. Appellate Rule Violations

      We initially note multiple appellate rule violations regarding the record on

appeal. The first page of Husband’s contract with the transcriptionist to order a



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portion of the trial transcript is included within the record, but the second page is

missing and it is unclear whether Husband contracted for the transcript within

fourteen days of filing his notice of appeal on 14 September 2017. N.C. R. App. P. 7(a)

(“Within fourteen days after filing the notice of appeal the appellant shall contract

for the transcription of the proceedings or of such parts of the proceedings not already

on file”).

       On 30 November 2017, Husband filed a motion for extension of time to produce

the transcript pursuant to Rules 7(b)(1) and 27(c) of the Rules of Appellate Procedure

with the trial court. On the 15 December 2017, the trial court granted an extension

until 26 December to produce the transcript. On 22 December, Husband filed a

second motion with the trial court seeking an extension until 26 January 2018. The

trial court allowed this second motion on the same day. The transcript was delivered

on 24 January 2018.

       Rule of Appellate Procedure 7(b)(1) provide, in relevant part:

             [T]he trial tribunal, in its discretion and for good cause
             shown by the appellant, may, pursuant to Rule 27(c)(1),
             extend the time to produce the transcript for an additional
             thirty days. Any subsequent motions for additional time
             required to produce the transcript may only be made
             pursuant to Rule 27(c)(2) to the appellate court to which
             appeal has been taken.

N.C. R. App. P. 7(b)(1) (emphasis supplied).




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         Based upon Rule 7(b)(1), the trial court did not have jurisdiction to allow

Husband’s subsequent 22 December motion for extension of time, and the transcript

was not timely filed. Id.

         As of 25 May 2018, Husband had not yet filed his appellant brief. On that date,

Husband filed a motion for extension of time to file his brief, which this Court allowed

by an order dated 29 May 2018. The Court’s order gave Husband until 29 June 2018

to file his brief. On 25 June 2018, Husband filed a second motion for extension of

time to file his brief. This motion indicated Husband had mistakenly only contracted

to order transcripts for two of the five days of the trial on the parties’ equitable

distribution and alimony claims.        Husband informed this Court that he had

discovered his mistake and contracted with the transcriptionist to obtain the

transcript for the three additional days of trial. By an order entered the 25 June

2018, this Court granted Husband until 30 July 2018 to file his brief.

         On 26 July 2018, Husband filed a third motion for extension of time to file his

brief. Husband explained in his third motion that the transcriptionist informed him

that she expected to deliver the complete transcript on the 26 or 27 of July. Once he

obtained the complete transcript, Husband intended to file a motion to amend the

record on appeal to incorporate the additional three days of testimony. By an order

entered 30 July 2018, this Court granted Husband until 9 August 2018 to file his

brief.



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       On 7 August 2018, Husband filed a motion to amend the record on appeal. This

motion requested inclusion of the transcript for the three additional days of trial and

Husband’s financial standing affidavit that had been submitted at trial. Husband

subsequently filed his brief on 9 August. By an order entered 21 August 2018, this

Court allowed Husband’s motion to amend the record.

       The Supreme Court of North Carolina has emphasized that “a party's failure

to comply with nonjurisdictional rule requirements normally should not lead to

dismissal of the appeal.” Dogwood Dev. & Mgmt. Co. v. White Oak Transp. Co., 362

N.C. 191, 198, 657 S.E.2d 361, 365 (2008). This Court has held the failure to timely

produce a trial court transcript is a nonjurisdictional defect. N.C. State Bar v.

Sossomon, 197 N.C. App. 261, 270, 676 S.E.2d 910, 917 (2009) (“Rule 7 is a

nonjurisdictional defect”); see Lawrence v. Sullivan, 192 N.C. App. 608, 666 S.E.2d

175, 181 (2008) (“we do not deem these nonjurisdictional failures [under N.C. R. App.

P. 7(a)(1)] on the part of plaintiff to be so egregious that they warrant dismissal of

plaintiff’s appeal”).

       Our Supreme Court also explained in Dogwood that an appellate court should

impose a sanction only when a party’s nonjurisdictional rules violations rise to the

level of a “substantial failure” under N.C. R. App. P. 25 or a “gross violation” under

N.C. R. App. P. 34. Dogwood, 362 N.C. at 199, 657 S.E.2d at 366.            Without a

substantial or gross violation, this Court should not impose any sanction at all, but



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instead “the appellate court should simply perform its core function of reviewing the

merits of the appeal to the extent possible.” Id.

      Wife has not filed an appellee brief to argue Husband’s rule violations are

substantial or gross. Neither have Husband’s rule violations hindered our ability to

review the merits of the case. This Court previously held in Sossomon that an

appellant’s failure to timely file a trial transcript in not a “substantial failure” or

“gross violation” to warrant the imposition of sanctions. Sossomon, 197 N.C. App. at

273, 676 S.E.2d at 918.

      Husband’s failure to timely file the transcript and brief would have subjected

his appeal to dismissal under Rule 25, had a motion to dismiss been filed by Wife.

N.C. R. App. P. 25. In the absence of a substantial or gross violation of the appellate

rules arising from Husband’s failure to timely file the transcript and brief, and the

absence of a filed motion to dismiss, we follow our Supreme Court’s instruction in

Dogwood, decline to impose sanctions, and “review[] the merits of the appeal to the

extent possible.” Dogwood, 362 N.C. at 199, 657 S.E.2d at 366.

      We strongly emphasize the importance of complying with the appellate rules

and urge counsel to timely file materials within the applicable deadlines and follow

the procedures specified in Rules 7(b)(1) and 27(c)(1)-(2) for obtaining extensions of

time. N.C. R. App. P 7(b)(1), 27(c)(1)-(2).

                                IV. Standard of Review



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             Decisions regarding the amount of alimony are left to the
             sound discretion of the trial judge and will not be disturbed
             on appeal unless there has been a manifest abuse of that
             discretion. When the trial court sits without a jury, the
             standard of review on appeal is whether there was
             competent evidence to support the trial court’s findings of
             fact and whether its conclusions of law were proper in light
             of such facts.

Williamson v. Williamson, 217 N.C. App. 388, 390, 719 S.E.2d 625, 626 (2011)

(citations and quotation marks omitted). A trial court abuses its discretion when it

renders a decision that is “manifestly unsupported by reason or one so arbitrary that

it could not have been the result of a reasoned decision.” Briley v. Farabow, 348 N.C.

537, 547, 501 S.E.2d 649, 656 (1998) (citations omitted). The trial court’s conclusions

of law are reviewable de novo. Romulus v. Romulus, 215 N.C. App. 495, 498, 715

S.E.2d 308, 311 (2011) (citation omitted).

                                     V. Analysis

      Husband argues the trial court abused its discretion by imputing income to

him based upon his earning capacity for past part-time motorcycle repair work.

Husband asserts no competent evidence supports that he suppressed his income to

disregard his spousal support obligation. We disagree.

      The Alimony Order states, in relevant part:

             13. Plaintiff is employed by Corning Industries and grossed
             an average of $9,455.00 per month from Corning. In
             addition, Plaintiff grosses an average of $2,167.18 per
             month from his motorcycle repair business where Plaintiff
             charges a minimum of $35.00 per hour for labor, but, in
             2015, Plaintiff charged $40.00 per hour 95% of the time for

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his labor rate. Plaintiff is typically reimbursed for parts of
supply costs incurred, but taking into account some
reasonable and ordinary business expenses overhead, the
Court finds that Plaintiff has earned and has the ability to
earn an average of $1,500 per month from motorcycle repair
business. Plaintiff does not report [or] pay taxes upon his
motorcycle repair income. The court finds that Plaintiff’s
total gross monthly income was $10,955 per month at the
time of trial. (Emphasis supplied).

14. Plaintiff testified that he stopped working on
motorcycles January, 2016 due to no longer having
possession of the marital home. The court finds that based
from the evidence presented at trial in Plaintiff’s Exhibit
#13, the Plaintiff continued to purchase parts and other
items from Chaparral Motorsports online. The court finds
that Plaintiff continued to work on motorcycles or had the
ability to do so and that his supplemental income should be
added into his gross monthly income. Plaintiff went to the
marital home numerous times after Defendant reoccupied
it and same was evidence Plaintiff could have worked on
motorcycles as usual. His failure to do so was in bad faith
and in attempt to depress his income at trial and the Court
specifically rejects Plaintiff’s contention that he stopped
working on motorcycles at the marital home because he was
afraid Defendant would go into his shop and damage the
motorcycles. Plaintiff had the only keys to the shop and
Defendant never tried to get into the shop since the date of
separation and never damaged any motorcycles. The Court
finds $1,500 per month should be imputed to Plaintiff as
motorcycle repair income. (Emphasis supplied).

...

17. . . .
         a. Plaintiff is highly skilled as a motorcycle
         mechanic and [his] services are in high demand. He
         has the current ability to make at least $1,500 per
         month in motorcycle repairs.



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                    b. In 2015, working part time, Plaintiff grossed
                    $26,004 from motorcycle repair and has limited
                    expenses which reduce his gross.

                    c. Plaintiff works from a converted building on his
                    property and has no overhead, carries no stock, has
                    no rents or salaries and charges 10% on all parts
                    ordered.

                    d. His “Income Summary” lists no income for
                    motorcycle repair. The Court finds that adds an
                    average of $1,500 gross and net to his monthly
                    income.

                                    A. Bad Faith

       Alimony awards are “‘ordinarily determined by [the supporting spouse’s]

income at the time the award is made.’” Lasecki v. Lasecki, 246 N.C. App. 518, 535,

786 S.E.2d 286, 299 (2016) (emphasis omitted) (quoting Quick v. Quick, 305 N.C. 446,

457, 290 S.E.2d 653, 660 (1982)); see also Moore v. Onafowora, 208 N.C. App. 674,

678-79, 703 S.E.2d 744, 748 (2010) (holding trial court properly computed a husband’s

income from all sources, which included the husband’s “side business producing

parties”).

       The trial court may impute income based on the party’s earning capacity if the

trial court determines that the party suppressed his income in bad faith. Megremis

v. Megremis, 179 N.C. App. 174, 182, 663 S.E.2d 117, 123 (2006). Bad faith within

the context of alimony means “that the spouse is not living up to income potential in

order to avoid or frustrate the support obligation.” Works v. Works, 217 N.C. App. 345,



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347, 719 S.E.2d 218, 219 (2011) (citation and quotation marks omitted and emphasis

supplied). However, “evidence of a voluntary reduction in income is insufficient,

without more, to support a finding of deliberate income depression or bad faith.”

Pataky v. Pataky, 160 N.C. App. 289, 307, 585 S.E.2d 404, 416 (2003) (citations

omitted), aff’d in part, review dismissed in part, 359 N.C. 65, 602 S.E.2d 360 (2004).

      Bad faith may be found “from evidence that a spouse has refused to seek or to

accept gainful employment; willfully refused to secure or take a job; deliberately not

applied himself or herself to a business or employment; [or] intentionally depressed

income to an artificial low.” Works, 217 N.C. App. at 347, 719 S.E.2d at 219 (citation

and quotation marks omitted).

      Pursuant to a sequestration order entered 23 February 2016, the marital home

was sequestered in favor of Wife. The sequestration order allowed Husband to use a

detached garage located at the marital residence as a repair shop.

      Husband asserts that “[t]he testimony at trial was clear that no motorcycle

repairs had been done since the separation of the parties.” Husband also asserts “It

is not unreasonable that [he] would not have come onto the premises to work on a

motorcycle when the house was sequestered to [Wife].”

      The testimony from the hearing provides competent evidence to support the

challenged portion of the trial court’s findings of fact 13 and 14. Husband testified

that he normally charged $40.00 per hour for motorcycle repair work. The last time



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Husband did motorcycle repair work was a couple of weeks before he left the marital

home. Husband had begun offering his motorcycle repair services for hire in “early

2001/2002[.]” Husband distributed flyers to advertise his motorcycle repair business.

Husband testified that he formed the decision to not do any motorcycle repair work

“[o]nce [he] moved out” of the marital home.

      He testified he did not continue his motorcycle repair business despite having

access to his workshop because he did not feel safe leaving a customer’s bike

unattended where Wife could damage it.             Husband also testified he keeps the

workshop locked up and he was the only one who has a key. Plaintiff testified he had

been to the workshop multiple times since the date of separation and he stored

multiple items in the workshop including “[w]ood tools, battery chargers, jumper

cables” and “electrical supplies, cleaning supplies, [and] air tanks.”

      Wife testified she had not been in the detached garage workshop since the date

of separation, does not have a key to the workshop, and has not done any damage to

the exterior or interior of the workshop.      Wife stated Husband has been to the

workshop almost every day since the date of separation, sometimes two or three times

a day, and that she has observed Husband bringing his and his girlfriend’s vehicles

to the workshop to work on them, but not motorcycles.

      The testimony elicited at the hearing provides competent evidence to support

the challenged portions of findings of fact 13 and 14, including the trial court’s finding



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Husband had acted in bad faith to depress his income. Williamson, 217 N.C. App. at

390, 719 S.E.2d at 626. The testimony provided a basis for a finding of bad faith

because it constitutes competent evidence Husband had deliberately not applied

himself to his motorcycle repair business after the date of separation or intentionally

depressed his income. See Works, 217 N.C. App. at 347, 719 S.E.2d at 219; Pataky,

160 N.C. App. at 307, 585 S.E.2d at 416. Finding of fact 14 indicates the trial court

expressly rejected Husband’s contention that he had stopped working on motorcycles

because he was afraid Wife would go into his workshop and damage customers’

motorcycles.

      The decision by Husband to cease his motorcycle repair business

contemporaneously with the decision by the parties to separate, in conjunction with

the evidence that Wife could not access or damage his clients’ motorcycles, is

competent evidence to support an inference of bad faith. Williamson, 217 N.C. App.

388, 390, 719 S.E.2d 625, 626; see Works, 217 N.C. App. at 347, 719 S.E.2d at 219;

see also Wolf v. Wolf, 151 N.C. App. 523, 527, 566 S.E.2d 516, 519 (2002) (listing a

spouse’s “deliberately not applying himself to his business” and “intentionally

depressing his income to an artificial low” as among several factors a court can

consider to find bad faith).

      Husband may disagree with the credibility determination of the trial court, but

“it is within the trial court’s discretion to determine the weight and credibility that



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should be given to all evidence that is presented during the trial.” Phelps v. Phelps,

337 N.C. 344, 357, 446 S.E.2d 17, 25 (1994). Husband’s argument is overruled.

                             B. Wife’s Earning Capacity

      Husband also argues the trial court should have imputed income to Wife based

upon her earning capacity from making and selling chocolate.

      According to unchallenged finding of fact 32 in the Alimony Order:

             Defendant was a stay home wife and worked part time as
             a [Certified Nursing Assistant] when work became
             available. Defendant also started her own chocolates
             business but had to cease its operations when Plaintiff
             became bedridden for over a year recovering from a serious
             motorcycle accident. It was at this time that Defendant
             had to sacrifice the development and the career potential
             of her chocolate business in order to aid the Plaintiff in his
             recovery. . . .

                    During their marriage, part of the marital home was
             converted into a motorcycle repair shop for Plaintiff. . . .
             During this time Plaintiff was able to build up business
             while continuing to work out of the marital home.
             Defendant was not provided the same opportunity to
             continue to operate her chocolate business or convert part
             of the marital home into a work space.

      The trial court is only permitted to impute income by considering a party’s

earning capacity if it finds that party has acted in bad faith. Megremis, 179 N.C. App.

at 182, 633 S.E.2d at 123. The trial court made no finding that Wife had acted in bad

faith and did not err by failing to impute income to Wife. See id. Husband does not

argue the trial court should have found Wife had acted in bad faith. Husband’s



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argument that the trial court should have imputed income to Wife from her ability to

make chocolate is without merit and overruled.

                       C. Husband’s Girlfriend’s Contribution

      The trial court’s findings of fact and the evidence from the hearing show

Husband resides with a girlfriend (“Girlfriend”). In its Alimony Order, the trial court

reduced several of Husband’s claimed monthly expenses by one-half by imputing to

him what the court deemed he should be receiving as contribution from Girlfriend.

Finding of fact 17 states, in relevant part:

             17. . . . The Court finds Plaintiff’s “Income Summary”
             introduced at TAB 7 of his trial notebook to be very
             problematic because it does not include motorcycle repairs
             shop income or any contribution toward household
             expenses from Plaintiff’s live in girlfriend . . . . The Court
             also finds Plaintiff’s financial standing affidavit introduced
             at Tab 8 of his trial notebook to be very problematic as it
             contains several expenses the amounts of which the Court
             finds not to be reasonable, and others for which Plaintiff
             should be receiving contribution from [Girlfriend].
             Examples are:

             ...

             f. Does not include Plaintiff voluntarily paying all of the
             following expenses for himself and [Girlfriend] with no
             regular contribution from [Girlfriend]:

                    1. Mortgage $714 = 1/2
                    2. Homeowner’s insurance $112 = 1/2
                    3. Water/Trash $25 = 1/2
                    4. Cable $81 = 1/2
                    5. Trash collection $46 = 1/2
                    6. Laundry/Dry cleaning $63 = 1/2


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                    7. Groceries $225 = 1/2
                    8. Meals out $150 = 1/2
                    $1,416 = ½ [Girlfriend] should have to pay

             Said contribution by [Girlfriend] would add $1,416 back to
             Plaintiff’s monthly net income. (Emphasis supplied)

      Husband testified at the hearing that Girlfriend does help him pay some

expenses, but she does not contribute a regular percentage, and “She helps me as best

she can.” The trial court also made no findings regarding Girlfriend’s income or

ability to contribute the one-half of Husband’s expenses the trial court had found she

“should be” paying. See Broughton v. Broughton, 58 N.C. App. 778, 786, 294 S.E.2d

772, 778 (1982) (holding it was proper for the trial court to consider husband’s new

wife’s income to determine his ability to pay alimony to former wife, because she was

a member of the husband’s household (citing Wyatt v. Wyatt, 35 N.C. App. 650, 652,

242 S.E.2d 180, 181 (1978)).

      It appears the trial court has questioned both the reasonableness of Husband’s

expenses because of his live-in Girlfriend and imputed what it believed to be her share

of the expenses as income. While the trial court could have reduced the reasonable

expenses by the amount that it found Husband’s expenses were increased by having

Girlfriend live with him, it cannot reduce his expenses by that amount and impute

that as income that should be paid by Girlfriend. This would be double penalizing

Husband; the trial court must choose one option or the other. Additionally, the trial

court erred by imputing to Husband the amount Girlfriend should be paying without


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finding Husband acted in bad faith to inflate his expenses, or reduce his income, by

failing to seek contribution from her. See Lasecki, 246 N.C. App. at 535, 786 S.E.2d

at 299 (“The trial court may impute income to a party only upon finding that the party

has deliberately depressed his income or deliberately acted in disregard of his

obligation to provide support[.]” (citation and quotation marks omitted and emphasis

supplied)).

      The portion of finding of fact 17 indicating Girlfriend should be contributing

$1,416 monthly to Husband for expenses is not supported by any competent evidence.

The trial court calculated Husband’s net monthly income to be $9,133.76, which

includes the $1,416 the trial court found Girlfriend should be contributing monthly.

      We remand the matter to the trial court to determine whether Husband

inflated his monthly expenses in bad faith by failing to seek contribution from

Girlfriend or, if not, to determine Husband’s monthly income, expenses, and alimony

obligation without imputing $1,416 to him as a monthly contribution from Girlfriend.

See Works, 217 N.C. App. at 348, 719 S.E.2d at 219-20; Nicks v. Nicks, 241 N.C. App.

487, 504, 774 S.E.2d 365, 378 (2015) (remanding for trial court to determine whether

spouse acted in bad faith before it imputed income).

      Finding of fact 17 also indicates the trial court reduced by one-half seven other

monthly expenses Husband had claimed in his financial standing affidavit:

              g. Plaintiff has the following questionable expenses which
              the Court finds are not reasonable or are not being paid in


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             their current amount, and reduces down to ½:

                    1. Cell Phone $183
                    2. Hair/Nails $100
                    3. Vacation $154
                    4. Gifts $83
                    5. Gas $362
                    6. Uninsured medical bills $141
                    7. Church pledge $42
                    $1,065 reduced to $533

      “The determination of what constitutes the reasonable needs and expenses of

a party in an alimony action is within the discretion of the trial judge, and [the judge]

is not required to accept at face value the assertion of living expenses offered by the

litigants themselves.” Whedon v. Whedon, 58 N.C. App. 524, 529, 294 S.E.2d 29, 32-

33 (1982) (citing Clark v. Clark, 301 N.C. 123, 131, 271 S.E.2d 58, 65 (1980)).

“Implicit in this is the idea that the trial judge may resort to [her] own common sense

and every-day experiences in calculating the reasonable needs and expenses of the

parties.” Robinson v. Robinson, 210 N.C. App. 319, 329, 707 S.E.2d 785, 793 (2011)

(alteration in original and citation omitted).

      Although, the trial court was not required to accept Husband’s claimed

expenses at face value, finding of fact 17(g) provides no basis for why the trial court

determined one-half of those expenses were not reasonable. See id; Williamson, 217

N.C. App. at 390, 719 S.E.2d at 626 (“the standard of review on appeal is whether

there was competent evidence to support the trial court’s findings of fact”). By

reducing Husband’s claimed expenses by one-half without any finding explaining why


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they were unreasonable, and by imputing income to Husband based upon the

girlfriend’s failure to pay her share, the trial court effectively penalized Husband

without a finding of bad faith.

      Upon remand, the trial court must make findings of fact explaining why one-

half of Husband’s claimed expenses were unreasonable

                                    VI. Conclusion

      The trial court did not err in imputing income to Husband after finding he had

acted in bad faith by failing to continue the operation of his motorcycle repair

business. The trial court did not err by declining to impute income to Wife. The trial

court erred by imputing to Husband’s income the amount it determined Girlfriend

should be contributing without finding bad faith on Husband’s part by not seeking

contribution or considering Girlfriend’s ability to pay.

      We remand the matter to the trial court to determine whether Husband

inflated his expenses in bad faith by failing to seek contribution from Girlfriend or, if

not, to re-compute the amount of his alimony obligation in accordance with this

opinion. The trial court is to also make findings of fact explaining why it determined

half of Husband’s claimed expenses were not reasonable. It is so ordered.

      AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

      Judges INMAN and ARROWOOD concur.




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