Earning Capacity Law and Vocational Experts in Support Cases

Earning Capacity Law and Vocational Experts in Support

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mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: [email protected] • website: www.lorman.com • seminar id: 402980

Laura MorganFamily Law Consulting

Brett TurnerNational Leal Research Group, Inc.

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Earning Capacity Law and Vocational Experts

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mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: [email protected] • website: www.lorman.com • seminar id: 402980

Prepared By:Laura Morgan

Family Law Consulting Brett Turner

National Leal Research Group, Inc.

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USING VOCATIONAL EXPERTS IN CHILD SUPPORT AND SPOUSAL SUPPORT CASESBrett R. Turner, Senior Attorney, National Legal Research Group, Charlottesville, Virginia

Laura W. Morgan, Family Law Consulting, Amherst, Massachusetts

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Sources

Laura W. Morgan, Child Support Guidelines: Interpretation and Application ch. 5 (Wolters Kluwer Supp. 2017)

Stan Owings, A Lawyer’s Guide to Understanding Earning Capacity Assessment and Earning Capacity Options (ABA 2009)

Edward M. Masse, Candace E. Mazze, Putting a Vocational Expert to Work in a Divorce, 36‐WTR Fam. Advoc. 26 (2014)

David W. Griffin, Earning Capacity and Imputing Income for Child Support Calculations: A Survey of Law and Outline of Practice Tips, 26 J. Am. Acad. Matrim. Law. 365 (2014)

Martin A.Kranitz, Understanding the Vocational Evaluation, 35‐SUM Fam. Advoc. 38 (2012)

Ngan Tran, Use of Vocational Experts in Determining Alimony Award, 20 J. Contemp. Legal Issues 237 (2011)

John E. Sargent, Understanding the Role of a Vocational Expert, 20 No. 6 Prac. Litigator 41 (2009)

Brett R. Turner, Earning Capacity and Spousal Support: The Uses and Abuses of Vocational Evidence in Divorce Cases, 14 Div. Litig. 213 (Dec. 2002)

Robert J. Durst, II, Maximizing the Impact of a Vocational Expert, 21‐SPG Fam. Advoc. 30 (1999)

EARNING CAPACITY (EARNING POTENTIAL):IMPUTING INCOME

Every state’s child support guidelines and alimony (spousal support or maintenance) statute base the award on primarily on INCOME.

Every state’s child support guidelines and alimony (spousal support or maintenance) statute also provides that in determining the award, the court may consider the “earning capacity” of the payor and payee.

Examples:

1. In California, “[t]he court may, in its discretion, consider the earning capacity of a parent in lieu of the parent's income, consistent with the best interests of the children.”

2. In Florida, “[m]onthly income shall be imputed to an unemployed or underemployed parent if such unemployment or underemployment is found by the court to be voluntary on that parent's part, absent a finding of fact by the court of physical or mental incapacity or other circumstances over which the parent has no control. In the event of such voluntary unemployment or underemployment, the employment potential and probable earnings level of the parent shall be determined based upon his or her recent work history, occupational qualifications, and prevailing earnings level in the community if such information is available.”

3. In New York, “an amount imputed as income based upon the parent's former resources or income, if the court determines that a parent has reduced resources or income in order to reduce or avoid the parent's obligation for child support.”

4. In Texas, “[i]f the actual income of the obligor is significantly less than what the obligor could earn because of intentional unemployment or underemployment, the court may apply the support guidelines to the earning potential of the obligor.”

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MORE EXAMPLES

Ala. R. Jud. Admin. R. 32(B)(1) (income means ability to earn if unemployed or underemployed)

Alaska Civ. R. 90.3, Commentary III(C) (court may calculate child support based on determination of potential income)

Ariz. C.S.G., 5(e) (court may attribute income to parent whose earnings are reduced as a matter of choice and not for reasonable cause)

Colo. Rev. Stat. §14‐10‐15(A)(4) (if parent is voluntarily unemployed or underemployed, child support shall be calculated on a determination of potential income)

La. Rev. Stat. Ann. §9:315(6)(b) (income means potential income if party is voluntarily unemployed or underemployed)

Md. Fam. Code Ann. §12‐201(b)(2) (income includes potential income if parent is voluntarily impoverished)

Mass. C.S.G., II(H) (court may consider potential earning capacity)

N.J. Rules, Appendix IX (one of the factors to be considered in determining child support is the earning ability of each parent)

MORE EXAMPLES

Ohio Rev. Code Ann. §3113.215(A)(1)(b) (income means for a parent who is unemployed or underemployed that which he or she could be earning at full capacity)

Pa. R. Civ. Pro. 1910.16‐5(c)(1) (where a party voluntarily assumes a lower paying job, there will be no modification of support)

Va. Code Ann. §20‐108.1(B)(3) (court shall consider: “imputed income” to a party who is voluntarily unemployed or voluntarily underemployed; provided that income may not be imputed to the custodial parent when a child is not in school, child care services are not available, and the cost of such child care services is not included in the computation)

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NOT THE SAME AS NOT BELIEVING THE EVIDENCE

It is important to distinguish disbelieving a party’s evidence from true imputation of income based on earning capacity.

In the former case, the court is saying, “You said you earn X, but I think you truly earn Y, based on a lifestyle analysis, or your bank accounts, or other evidence.”

In the latter case, the court is saying, “Yes, I believe you earn X, but you COULD earn Y; Y is your earning capacity.”

Courts impute income because a party should not voluntarily decrease income or not work to earning capacity to the detriment of a former spouse and/or child.

How paralyzing can this be? A philosophy of guidelines is that an obligation should not deter major life decisions, but of course it does.

WHY A VOCATIONAL EXPERT?

In the world of our grandparents, alimony upon divorce was almost a given. Not so anymore. All people (with some well‐defined exceptions) are expected to work to their “earning capacity.”

The Uniform Marriage and Divorce Act (UMDA), enacted in eight states and relied in as a model in others, makes this especially clear, making “maintenance” of limited duration and for the purpose of “rehabilitation.” (Let’s call this “first wave” reform of alimony.)

The UMDA recommends that courts consider the following factors in making decisions about alimony awards without considering fault: (1) the financial resources of the party seeking maintenance, including marital property apportioned to him, his ability to meet his needs independently, and the extent to which a provision for support of a child living with the party includes a sum for that party as custodian; (2) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment; (3) the standard of living established during the marriage; (4) the duration of the marriage; (5) the age and the physical and emotional condition of the spouse seeking maintenance; and (6) the ability of the spouse from whom maintenance is sought to meet her own needs while meeting those of the spouse seeking maintenance.

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WHY A VOCATIONAL EXPERT

In states where the “rehabilitation” model holds sway, a vocational expert is essential.

In California, for example, there are many provisions in the family code that have been nicknamed the “get a job” sections. Thus, Cal. Family Code § 4331(a) provides that a vocational evaluation may be requested by any party.

And at least one Florida appellate court has made the presentation and consideration of a rehabilitation plan by an expert a prerequisite of a rehabilitative alimony award by its divorce courts. Fullerton v. Fullerton, 709 So. 2d 162, 164 (Fla. App. 5th Dist. 1998) (citations omitted) (reversing divorce court's “rehabilitative” award.


There was a backlash against this idea that any person (yes, mostly women) could just pick up after being out of the work force and get any job any where. In essence, “earning capacity” was overestimated by the UMDA and similar statutes.

In the 1980s and later, alimony reforms recognized this overestimation, and began looking to earning capacity as proven by the evidence (let’s call this “second wave” reform of alimony). SeeLaura W. Morgan, Alimony: Where are We Now?, 34‐WTR Fam. Advoc. 8 (2012).

“In response to the denial of long term awards for those most in need of them, the ‘second wave’ of reform took place in the 1990's and expanded the factors justifying an award beyond ‘need’. This new legislation encouraged courts to base awards more on the unique facts of a case and less on broad assumptions about need and the obligation to become self‐supporting in spite of the loss of earning capacity that often occurs in long term marriages. The use of vocational experts to measure earning capacity became more widespread and there were attempts to quantify the value of various aspects of homemaker services as part of a support award.” Mary Kay Kisthardt, Rethinking Alimony, 21 J. Am. Acad. Matrim. Law. 61 (2008).

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Alimony has become unpopular in many states, with limits being placed on its availability. For example, in Indiana, alimony is available only in three circumstances: (1) for as long as a spouse cannot support herself due to a physical or mental incapacity; (2) when a spouse cannot support herself due to a physically or mentally incapacitated child; or (3) up to three years of “rehabilitative maintenance” based on (a) the educational level of each spouse, (b) interruptions in a spouse's education, training, or employment based on homemaking or caregiving responsibilities, (c) the earning capacity of each spouse, and (d) the time and expense necessary to acquire sufficient education or training to enable the spouse who is seeking maintenance to find appropriate employment. In other states, legislatures have entirely eliminated permanent alimony. This represents the trend of limits placed on alimony by the states in recent years (“third wave” reform of alimony).

Again, there is an emphasis on earning capacity and rehabilitation.


What does that leave us with? The need to prove “earning capacity” in both the alimony and child support realm.

“Earning capacity” is also relevant when there has been sudden change in income, due to quitting a job, retirement, imprisonment, going on strike, staying home after the birth of a child, changing jobs, etc.

Judges aren’t experts in earning capacity, so we need evidence of earning capacity.

Parties usually cannot testify as to all the elements necessary to prove earning capacity. So, ….

Step up the vocational expert who will need to testify to: Specific positions available

Specific qualifications of the position compared to the specific qualifications of the party

Specific wages/salaries of the positions

Specific chances the party would be hired

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DETERMING EARNING CAPACITY

Earning capacity is the PRECISE AMOUNT of income a person could earn by making all reasonable efforts to maximize income.

If there is nothing a party reasonably do that will increase his/her actual earnings, then actual earnings and earning capacity are the same, and income cannot be imputed.

A person’s earning capacity is a QUESTION OF FACT based on the evidence in the record.

The five big factors in determining earning capacity:EARNINGS HISTORY

(1) EARNINGS HISTORY. Courts generally will not impute income to a parent at a level more than the parent ever earned in the past, especially if that parent has been out of the job market for a number of years.

The obvious exception is the newly minted degree (see next slide), or deliberately turning down a job that pays more.

This evidence does not require a vocational expert.

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The five big factors in determining earning capacity:EDUCATION

(2) EDUCATIONAL ATTAINMENTS. Courts do not like parents who do not utilize their education to maximize income, even if the party has not earned at that level before.

Examples: Werblood v. Birnbach, 41 Conn. App. 728, 678 A.2d 1 (1996) (husband's earning capacity was determined by fact that both husband and wife had doctoral degrees, husband had more years postdoctoral work, yet husband made less than others in profession with comparable levels of experience); Rivers v. Rivers, 21 S.W.3d 117 (Mo. Ct. App. 2000) (husband's earning potential based on law degree, though husband was nonpracticingconsultant); Pfister v. Pfister, 146 A.D.3d 1135, 47 N.Y.S.3d 140 (3d Dept. 2017) (wife had two Master's degrees and was certified school counselor; court emphasized her advanced degrees and rejected her argument that she should not be required to work full time); Decker v. Decker, 148 A.D.3d 1272, 48 N.Y.S.3d 827 (3d Dept. 2017) (trial court did not abuse its discretion in imputing $125,000 of annual income to father for purposes of calculating child support, after finding that he possessed master's degree in civil and environmental engineering and that his past employment history demonstrated that he could earn well in excess of imputed amount); K. v. B., 13 A.D.3d 12, 784 N.Y.S.2d 76 (App. Div. 1st Dep't 2004) (court properly imputed annual income of $60,000 to husband for purposes of calculating child support payable by him upon divorce, where husband possessed both architect's and real estate broker's license and had extensive training and experience in both fields); but see In re Marriage of Peterson, 80 Wash. App. 148, 906 P.2d 1009 (1995) (though husband held law degree, he had never practiced law but was a bail bondsman; it was error to impute income as though he were a practicing attorney).

The five big factors in determining earning capacity:SPECIFIC OCCUPATION‐AL QUALIFICATION

(3) SPECIFIC OCCUPATIONAL QUALIFICATIONS. A court will not impute income at an occupational level the party has not or can not obtain. In other words, the amount of income for a specific job must match the qualifications of the party to whom income is imputed.

Examples: 23In re Marriage of Bardzik, 165 Cal. App. 4th 1291, 83 Cal. Rptr. 3d 72 (4th Dist. 2008) (father failed to present evidence, such as mother's resume, want ads for persons with the credentials of mother, opinion testimony that a person with mother's credentials could readily secure a job with a given employer, or pay scales correlating ability and opportunity with the income to be imputed, to establish mother's ability and opportunity to earn income); Walker v. Walker, 936 S.W.2d 244 (Mo. Ct. App. 1996) (evidence that husband could “weld a little” and that there were welding jobs available paying $7.00 per hour was not enough to impute where there was no evidence that husband possessed qualifications for job); Torgerson v. Torgerson, 669 N.W.2d 98 (N.D. 2003) (imputation of the salary of an experienced farm manager was not proper to former husband, a self‐employed farmer, for child support purposes, absent evidence that husband possessed the necessary qualifications of an experienced farm manager or was earning significantly less than prevailing amounts earned in the community by similarly situated persons).

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The five big factors in determining earning capacity: PARTY’S PHYSICAL AND MENTAL CONDITION

(4) THE PARTY’S PHYSICAL AND MENTAL CONDITION. Closely aligned to a party’s earnings history and qualifications, a court will not impute income if the party’s current physical and/or mental condition would prevent the party from performing the job.

The five big factors in determining earning capacity:JOB OPPORTUN‐ITY

(5) THE PREVAILING JOB OPPORTUNITIES IN THE APPROPRIATE GEOGRAPHIC AREA , AND WHAT THOSE JOBS PAY.

First, the case law provides that a party is not required to relocate to find a better job. This is especially true in child support cases; the courts reason that a party has the right to maintain a residence.

Second, the evidence must be specific as to what the specific job would pay for this specific party.

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AREAS OF TESTIMONY FOR THE VOCATIONAL EXPERT

In sum, if a vocational expert is used, he/she must testify as to:

(1) The party’s history of earnings (although this can be testified to by the party him/herself);

(2) The specific educational attainments of the party;

(3) The specific occupational qualifications of the party;

(4) The specific physical and mental condition of the party, and how this impacts the party’s ability to find employment;

(5) The specific jobs available in the appropriate geographic area, and what those jobs pay;

(6) CAN THIS PARTY OBTAIN A SPECIFIC JOB AT A SPECIFIC WAGE.

WHO IS A VOCATIONAL EXPERT?

Persons who advertised themselves as such: Certifications in the area include Certified Rehabilitation Counselor (CRE) and Certified Vocational Evaluator (CVE).

Recruiters/headhunters

Operators of Temp Agencies

College placement advisors

Really, anyone who knows the market. E.g., Cal. Civ. Code sec. 4800(f) (for purposes of this section, vocational training consultant means an individual with sufficient knowledge, skill, experience, training, or education relating to interviewing, the testing and analysis of work skills, the planning of courses of training and study, the formulation of career goals, and the assessment of the work market to qualify as an expert in vocational training under the Evidence Code).

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FINDING A VOCATIONAL EXPERT

Knowledge of the job market in the particular geographic area

Knowledge of this particular party and his/her qualifications and education

Willingness to consider the facts (no dogma)

Ability to work with the client (if your expert)

Ability to communicate his/her findings persuasively

Ability to meet the general standards for admissibility under Daubert v. Merrell Dow Pharmaceuticals, and KumhoTire v. Carmichael.

PREPARING THE VOCATIONALEXPERT

Prepare like any other expert

Remember, SPECIFICS: this particular person, with these particular qualifications, qualified for this particular job, which he/she could apply for and get.

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EXAMINING A VOCATIONAL EXPERT:GOOD!

GOOD vocational testimony: SPECIFIC

Understandable by the court

Lack of obvious agenda/dishonesty

EXAMINING A VOCATIONAL EXPERT:BAD!

Fallacy I (Overgeneralization; Affirming the Consequent):

1. All successful family law attorneys have a J.D.

2. The husband has a J.D.

3. The husband can be a successful family law attorney.

All qualifications for the job have not been considered. The party has only SOME of the qualifications; what else do you need to be a successful family law attorney.

Both education AND experience have not been considered, and lack of experience by this husband has not been considered.

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Fallacy II (Hasty Generalization):

1. There are 10 open positions for apprentice bakers.

2. The people hired have high school degrees.

3. This father has a high school degree.

4. This father can get a job as an apprentice baker.

Need to consider who WAS NOT hired. Minimum credentials may not be enough.


Fallacy III (Incomplete Comparison):

1. Here is a want ad for a teaching job.

2. It says college degree required.

3. This mother has a college degree.

4. Mother can get this job.

Who was NOT hired? People with college degrees? There may be hidden requirements (a Master’s Degree?). Get the vocational expert to go behind/beyond the want ad.

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Fallacy IV (Historian’s Fallacy):

1. Hospitals are desperate for nurses.

2. The wife is a nurse.

3. This wife can work as a nurse.

What are the job requirements? Long shifts, night work, heavy lifting. Is this wife an older nurse? A mother with young children? Working conditions can matter to the specific party.


Fallacy V (Incomplete Comparison):

1. Refresher nurse training takes one year.

2. This wife is a former nurse and can handle the working conditions.

3. In one year, wife can be a nurse again.

Is the program available in the wife’s geographic area? What is the cost of the training? The admission requirements? Will the jobs be open in a year?

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Fallacy VI:

1. There are open position in the area for computer sales persons.

2. A college degree is required, and most applicants are accepted.

3. This person has a college degree.

4. He will be hired.

The problem here is similar to 1 and 2 above. What are this person’s specific qualifications other than a college degree? Did all the applicants have THOSE qualifications? And what about this person? Is he an introvert, depressed, does he have people skills? Not all people are suited for all jobs on paper. That’s why most jobs required a personal interview.

CROSS‐EXAMINING A VOCATIONAL EXPERT:BAD!

Fallacy VII (Incomplete Comparison):

1. A bank teller position requires a college degree.

2. This wife has a college degree, is trustworthy, and likes finance.

3. One in ten applicants is hired.

Is 10% chance good enough to testify to? Don’t different employers have different ideals? Is “liking finance” good enough without experience?

How much time, how many applications get to a position? Finding a job is a process, not an isolated event. Sometimes, the secret is VOLUME.

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FINAL THOUGHTS

“Earning capacity” is a FACTUAL question, not a legal one. Judges can’t determine earning capacity as a matter of law; you need EVIDENCE. This evidence has to be specific to this person and the job opportunities available.

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Notes

Documents

Earning Capacity Law and Vocational Experts in Support Cases