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Boyd v. Crocker

Court of Appeals of Arkansas, Division IV

February 22, 2017



          Bristow & Richardson, PLLC, by: Kristofer E. Richardson, for appellant.

          Tiner, Cobb & Byars, by: Kara L. Byars, for appellee.

          PHILLIP T. WHITEAKER, Judge.

         Appellant Jason Boyd appeals the order of the Craighead County Circuit Court imputing income to him and ordering him to pay child support based on that imputed figure. Boyd contends that the circuit court erred as a matter of law in its application of the "net-worth method" of calculating income for a self-employed payor.[1] We affirm.

         Boyd and appellee Candace Crocker were engaged in a relationship that led to the birth of a child, G.B. Crocker filed a petition to establish paternity. Boyd admitted that he was G.B.'s father, but the parties litigated the issues of visitation, custody, and child support. The circuit court granted custody of G.B. to Crocker, set a visitation schedule for Boyd, and set the amount of child support. Boyd does not appeal the court's rulings on custody or visitation; rather, his only issue on appeal pertains to the issue of child support.

         In determining an appropriate amount of child support, courts are to refer to the family support chart contained in Supreme Court Administrative Order Number 10, which provides a means of calculating child support based on the payor's net income. Browning v. Browning, 2015 Ark.App. 104, 455 S.W.3d 863; Cowell v. Long, 2013 Ark.App. 311. The definition of income is intentionally broad and is designed to encompass the widest range of potential income sources for the support of minor children. Montgomery v. Bolton, 349 Ark. 460, 79 S.W.3d 354 (2002); Stuart v. Stuart, 99 Ark.App. 358, 260 S.W.3d 740 (2007). Case law has specifically held, however, that the definition of income for purposes of support may differ from income for tax purposes. See Stuart, supra; Huey v. Huey, 90 Ark.App. 98, 204 S.W.3d 92 (2005); Delacey v. Delacey, 85 Ark.App. 419, 155 S.W.3d 701 (2004); Brown v. Brown, 76 Ark.App. 494, 68 S.W.3d 316 (2002).

         Our standard of review for an appeal from a child-support order is de novo on the record, and we will not reverse a finding of fact by the circuit court unless it is clearly erroneous. Hall v. Hall, 2013 Ark. 330, 429 S.W.3d 219; Brown v. Brown, 2014 Ark.App. 455, 440 S.W.3d 361. In reviewing a circuit court's findings, we give due deference to that court's superior position to determine the credibility of the witnesses and the weight to be accorded to their testimony. Brown, supra. Moreover, it is the province of the trier of fact to resolve conflicting testimony. Crismon v. Crismon, 72 Ark.App. 116, 34 S.W.3d 763 (2000). As a rule, when the amount of child support is at issue, we will not reverse the circuit court absent an abuse of discretion. Id. However, a circuit court's conclusion of law is given no deference on appeal. Id. With these standards in mind, we examine the evidence received by the circuit court and its rulings on the issue of child support.

         The circuit court had undisputed evidence that Boyd was a self-employed farmer for purposes of calculating child support. With respect to Boyd's income, Crocker took the position at trial that Boyd lived an extravagant lifestyle and could pay a higher amount of child support. Boyd, in contrast, contended that his monthly income for calculating child support was only $3, 500, based on his affidavit of financial means. To support their respective positions, Crocker and Boyd presented evidence of Boyd's bank records, tax returns, and lifestyle.

         Concerning Boyd's bank records, bank statements from his family's farming business, dated March 2013 through December 2014, were introduced into evidence. Total monthly deposits by Boyd into that bank account ranged from $3, 500 to more than $10, 000. Bank records from his personal checking account, dating from February 2013 to December 2014, reflected deposits ranging from $5, 000 to nearly $25, 000 per month and total withdrawals or expenditures ranging from $4, 900 to over $20, 000 per month. In response to this evidence of deposits and withdrawals from his accounts, Boyd did not disagree that he had deposited $131, 594 into his checking account in 2013 and had not paid taxes on the money. He also did not disagree that an average figure of "about $14, 731 per month" had been deposited into his checking accounts during 2014. Although Boyd testified that the deposits into his account were "not all income, " he also stated that he did not "have a source of income other than this Boyd Farms checking account." Despite the wide range of deposits and the large number of months in which deposits in excess of $10, 000 were made, Boyd asked the court to find his monthly income to be $3, 500, based on his affidavit of financial means.

         With respect to his tax returns, Boyd contended that his records for the last three years showed that he had a negative income on his tax returns and that he had "not paid any taxes lately." The last time he recalled paying taxes was "probably four years ago." Boyd claimed losses of $285, 000 in 2012 and "about $200, 000" in each of the last two years, but he was not certain whether the losses were "a personal loss or a Boyd Farm loss or what." Citing his 2012 Arkansas income tax form, Boyd claimed as his total income negative $252, 000. He was "honestly not sure" whether he had told the IRS that his income was a negative $200, 000 to $300, 000 per year. He further asserted that he "[did]n't deal with the accounting" and hadn't "had to pay in any income taxes in the last two years." He did not "recall reporting [his] income to Social Security."

         The court also heard evidence about Boyd's lifestyle. Boyd testified that he was living in a house that he had just built for approximately $55, 000 on land that he owned. He bought a new truck in 2014 for $50, 000 and had an $800 per month car payment. He recently sold a boat for $51, 500 and recently bought a camper and an ATV for $20, 000 and $18, 000 respectively. He sold a four-wheeler in 2014 for $7, 000, and he sold his house in Paragould for $275, 000 "because [he] couldn't afford the mortgage." Boyd also admitted that he used his personal checking account to pay expenses on things like a housekeeper, truck accessories, boat insurance, lake visits and hotel rooms, payments on his several vehicles, construction of his house, and, eventually, child-support payments of $400 per month.[2]

         Based on the evidence presented at the hearing, the circuit court imputed monthly income of $11, 105 to Boyd and set his child-support payments at $1, 606 per month. Boyd timely appealed the circuit court's ruling, and he now argues that the circuit court erred in the methodology used to calculate his income.

         On appeal, Boyd argues that the circuit court committed reversible error in calculating his child-support obligation as a self-employed person. Pursuant to Administrative Order No. 10(III)(c), for self-employed payors like Boyd, "support shall be calculated based on the last two years' federal and state income tax returns and the quarterly estimates for the current year. . . ." Here, the court found that Boyd was self-employed, had a farming operation with his father, and had "reported a large loss of income on his tax returns for several years, although he claims to have no personal knowledge of his finances with regard to income taxes." Noting that Boyd's 2014 tax returns were not available, the court specifically found that his 2012 and 2013 returns were unreliable.[3] Pursuant to Administrative Oder No. 10 (III)(c), when a court finds a self-employed person's tax returns unreliable, "the court shall consider the amount the payor is capable of earning or a net worth approach based on property, life-style, etc." ...

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