Are You “Voluntarily Underemployed” If You Trade Self-Employment for a Lower-Paying Regular Job?

In Florida high net worth divorce cases, it is quite common for one party to accuse the other of intentionally earning less money in order to reduce potential alimony or child support obligations. Of course, mere allegations are insufficient. Florida law requires “competent, substantial evidence” to support such allegations.

Florida Appeals Court Reverses Decision Imputing Income to Former Husband

A recent decision from the Florida Fifth District Court of Appeal, Warner v. Warner, offers a good illustration of how judges examine such claims. In this case, the former husband and former wife were married just shy of 23 years. The former husband filed for divorce. Both sides requested child support, and the former wife requested alimony.

The former husband spent eight years working as a nurse anesthetist for a hospital before starting his own anesthesia business, which he ran for three years. While the divorce case was pending, the former husband decided to close his business and go back to working as an employee for a hospital. As relevant here, the former husband earned about twice as much income annually when he was self-employed than as a hospital employee.

The trial judge agreed with the former wife that the former husband’s decision to close his business was “voluntarily underemployed.” The court therefore imputed additional income to him. Essentially, the judge used the former husband’s self-employment income as a baseline when calculating his alimony and child support obligations.

On appeal, the Fifth District reversed that decision. It held there was “no competent, substantial evidence to establish the income [the former husband] could earn if he returned to self-employment.” Even if the former husband was voluntarily underemployed, the trial court still could only rely on “past average earnings” to establish a baseline for imputed income. This applied to both the calculations of alimony and child support.

As the Fifth District explained, the mere fact that a person chooses to leave or change jobs for a lower-paying position does not, in and of itself, justify an imputation of income. There must also be competent, substantial evidence that the decision was due to a lack of “bona fide efforts to find employment paying income at a level equal to or better than that formerly received.” In this case, the only evidence presented at trial on this issue was the former husband’s own testimony. He explained that he decided to close his business and return to hospital employment for a number of valid reasons. For example, hospital employment meant he could provide health insurance benefits for himself and his children. It also meant more consistent hours, which the former husband also cited as a benefit to his children.

Contact a Miami Alimony Lawyer Today

In determining an alimony award, a Florida court must examine the relative incomes and earning abilities of both parties. This can be an especially complex process in the case of a high net worth divorce. Our Miami alimony lawyers can provide you with professional advice and representation in this area. Contact Hamilton O’Neill today at 305-371-3788 to schedule a consultation with a member of our team.

Source:

scholar.google.com/scholar_case?case=8795338331151667656