Summary
The Nebraska Supreme Court reviewed a modification of child support obligations following the dissolution of Barbara and James Hotz’s marriage. The court held that alimony between the parents must be excluded from total monthly income when calculating child support in modification proceedings, upheld the denial of depreciation deductions and the calculation of Barbara’s earning capacity, and affirmed an 80-percent summer abatement of her child support obligation.
Topics
Practice areas
Questions Presented
- Whether the district court erred in failing to include alimony payments in the parties' total monthly incomes when calculating child support obligations in a modification proceeding.
- Whether the district court erred in calculating Barbara's earning capacity.
- Whether the district court erred in failing to deduct claimed depreciation from James's total monthly income.
- Whether the district court erred in abating Barbara's child support obligation by 80 percent for the months of June, July, and August.
Holdings
- The Nebraska Child Support Guidelines exclude alimony between parents from their total monthly incomes for the purpose of calculating child support obligations for their children in modification proceedings.
- The district court did not abuse its discretion in calculating Barbara's earning capacity based on the evidence presented.
- The district court did not abuse its discretion in not deducting James's claimed depreciations because he failed to produce the required five years of tax returns and other evidence.
- The district court did not abuse its discretion in abating Barbara's child support obligation because the substantial increase in her support obligation in the modification order was a material change in circumstances justifying an adjustment under Neb. Ct. R. § 4-210.
Key quotations
“This is income of both parties derived from all sources, except all means-tested public assistance benefits which includes any earned income tax credit and payments received for children of prior marriages. . . . If applicable, earning capacity may be considered in lieu of a parent’s actual, present income . . . . Earning capacity is not limited to wage-earning capacity, but includes moneys available from all sources.” (301 Neb. 102, 108)
“The purpose of alimony is to provide for the continued maintenance or support of one party by the other when the relative economic circumstances and the other criteria enumerated in this section make it appropriate.” (301 Neb. 102, 111)
“We hold that the NCSG excludes alimony between parents from their total monthly incomes for the purpose of calculating child support obligations for their children in modification proceedings.” (301 Neb. 102, 111)
Factual background
In 2015, the court dissolved the marriage of Barbara and James Hotz and awarded custody of their three minor children to both parties, with Barbara receiving custody of the oldest child and James custody of the other two. James was ordered to pay $253 per month in child support until the oldest child reached majority, after which Barbara would pay James for support of the younger children. James was also ordered to pay Barbara $750 per month in alimony for 70 months. In 2016, Barbara moved to modify child support, alleging James's income had increased. At trial, the parties presented differing calculations of their incomes, with Barbara proposing a gross monthly income of $1,560 for herself and $5,794 for James, while James calculated his income at $3,116 and Barbara's at $3,431.
Procedural history
The district court dissolved the marriage of Barbara and James Hotz in 2015, split custody of their three minor children, ordered James to pay child support and alimony. In 2016, Barbara filed a complaint to modify the decree, alleging James's income had increased. The district court modified the child support order and abated part of Barbara's child support obligation during the summer months. James appealed, and the Nebraska Supreme Court granted his motion to bypass the Court of Appeals.