Little v. Little
193 Ariz. 518 (1999)

Facts:

  • The parties divorced in November 1995, and Billy Little, an Air Force lieutenant, was ordered to pay $1,186 per month for the support of his two young children.
  • In August 1996, he resigned his commission in the Air Force, a position that paid $48,000 in yearly salary plus benefits, and chose to enroll as a full-time student at Arizona State University College of Law.
  • He then petitioned the court to reduce his child support obligation to $239 per month.

History:

  • The trial court concluded that appellant had failed to prove a substantial and continuing change of circumstances, and denied his request for modification.
    • He voluntarily left his employment to pursue his own ambition at the expense of his kids.
    • The award was still reduced to $972 per month, however, because Ms. Little landed a higher paying job.
  • The court of appeals, applying a good faith test to determine whether appellant acted reasonably in voluntarily leaving his employment, held that the trial court abused its discretion in finding that appellant’s decision to terminate his employment and pursue a law degree was unreasonable.

Issue:
The standard courts should apply in determining whether a non-custodial parent’s voluntary decision to leave his or her employment to become a full-time student constitutes a sufficient change in circumstances to warrant a downward modification of the parent’s child support obligation.

Holding:
Courts, rather than rely upon a good faith test, must balance a number of factors to determine whether to modify a child support order to reflect a substantial and continuing change of circumstances. Case REVERSED.

Reasoning:

  • Courts in sister jurisdictions have applied one of three tests to determine whether to modify a child support order when a parent voluntarily terminates his or her employment:
    • The Good Faith Test: Considers the actual earnings of a party rather than his earning capacity, so long as he or she acted in good faith and not primarily for the purpose of avoiding a support obligation when he or she terminated employment.
    • The Strict Rule Test: Disregards any income reduction produced by voluntary conduct and looks at the earning capacity of a party in fashioning a support obligation.
      • This is the Florida test.
    • The Intermediate Test: Balances various factors to determine whether to use actual income or earning capacity in making a support determination.
  • The court adopted the intermediate test, balancing the following factors to determine the reasonableness of the decision to terminate employment:
    • Whether the parent’s current educational level and physical capacity provide him or her with the ability to find suitable work in the marketplace;
      • If so, the decision to leave employment is less reasonable.
      • In contrast, if the additional training is likely to increase the parent’s earning potential, the decision is more likely to be found reasonable.
    • Age of the children;
    • The length of the parent’s proposed educational program, because it matters whether the children are young enough to benefit from the parent’s increased future income;
    • Whether the parent is able to finance his or her child support obligation while in school through other resources such as student loans or part-time employment; and
    • Whether the parent’s decision is made in good faith.
  • In this case, the Arizona Supreme Court agreed with the trial court that Mr. Little was not entitled to downward modification in his child support obligation.
    • First, the negative impact of the requested reduction on appellant’s children, had the trial court granted it, would have been substantial;
      • The family would’ve been below the poverty level.
    • Second, appellant holds Bachelor of Arts and Master of Business Administration degrees.
      • By asking the trial court to assume he will earn more money when he completes law school than he could have earned in the private business sector, invited the court to engage in speculation.
    • Third, the record does not reflect that appellant, upon leaving the Air Force, even attempted to obtain suitable employment in the Phoenix metropolitan area that would have allowed him to be close to his children and fulfill his financial obligations to them.
    • Fourth, appellant has been able to finance his law school education and most of his child support obligation through student loans.
      • Nothing in the record suggested that he was unable to obtain part-time employment to fulfill the remainder of his child support obligation.
    • Finally, the trial court specifically found that appellant failed to act in good faith and instead endeavored to further his own ambition when he chose to forego employment and become a full-time student.
  • Note: Courts can impute earnings on to individuals when they voluntarily reduce their earnings without good cause (i.e., treat them as if they were earning that money).
    • E.g., a guy with a Masters in X making $100k who decides to become a painter because it fulfills him.
      • Even though he’s now making chump change, court can still treat him as if was making $100k.

Rule: In determining whether a non-custodial parent’s voluntary decision to leave his or her employment to become a full-time student constitutes a sufficient change in circumstances to warrant a downward modification of the parent’s child support obligation, courts must balance a number of factors.