NOT DESIGNATED FOR PUBLICATION

ARKANSAS COURT OF APPEALS

OLLY NEAL, Judge

DIVISION IV

CA00-1157

JUNE 6, 2001

JANICE HURLEY

AN APPEAL FROM THE MILLER APPELLANT COUNTY CHANCERY COURT

v. [E-98-4976-2]

JAMES M. HURLEY HONORABLE JAMES SCOTT APPELLEE HUDSON, JR., CHANCERY JUDGE

REVERSED AND DISMISSED

Appellant Janice Hurley and appellee Dr. James Hurley were divorced on December 9, 1998. By agreement of the parties, appellant was granted custody of their minor child, and appellee was ordered to pay $11,050.00 per month as child support. At the time of divorce, the parties entered into a property settlement agreement setting forth certain assets to be acquired by each of the parties. In March of 2000, Dr. Hurley filed a motion to modify his child support obligation, alleging that there had been a change in circumstances sufficient to decrease the amount of child support. Following a hearing held on May 31, 2000, the chancery court found that a change in circumstances had occurred. After considering several factors in deviating from the family support chart, the chancery court reduced appellant's child support obligation to $3,750.00 per month. Appellant has appealed from the reduction of appellee's child support obligation and argues that: 1) in deviating from the guidelines for the noncustodial parent's child support as established by the per curiam order of the supreme court, the trial court erred in considering the income of the custodial parent as "other income or assets available to support the child from whatever source," and 2) the trial court erred in finding that there was a change in circumstances such as would warrant modification of child support. We agree with appellant's second point on appeal, and reverse and dismiss.

David Waddle, a certified public accountant in Texarkana, testified on behalf of appellee. Mr. Waddle testified that he prepared federal income tax returns for both parties in 1998 and that he prepared only Dr. Hurley's tax returns in 1999. Mr. Waddle stated that in comparing Dr. Hurley's income from 1998 to 1999, after appropriate adjustments had been made, he estimated that Dr. Hurley's income suffered a loss of approximately $20,000.00. He stated that this amount created a loss in appellee's income of more than $100.00 per month.

During her testimony, appellant stated that since the divorce, she has "scaled down" her expenses and moved into a less expensive home with the parties' minor child. Appellant testified that she sold her previously owned vehicle, a Lexus automobile, and that the home and vehicle she currently owns are debt-free. Appellant further stated that the cash assets she received from the divorce settlement have increased in value by more than half of one million dollars, and that she holds $2,642,197.00 in stocks and bonds. According to her affidavit of financial means, appellant stated that her monthly itemized bills totaled $7,319.23, and that out of the $11,050.00 in child support she receives from appellee, sheplaces one-half of that amount into a savings account to cover future college expenses for the parties' fifteen-year-old daughter. Appellant explained that her affidavit of financial means did not reflect unforeseen expenses, such as her recent replacement of a hot water heater that cost $450.00. She further testified that although the $138,000.00 IRA she received under the property settlement agreement has grown to $202,000.00, she is not able to liquidate the IRA, without penalties, until she reaches retirement age. Appellant acknowledged that appellee provides a vehicle for their two adult sons and a place for them to live while they are in college. She testified, however, that she pays her sons' telephone bill, gives each of them $250.00 per month, and pays for such things as "books, glasses, contacts, fraternity dues, groceries, and gas money." Appellant testified that although she had no reason to believe that appellee would not pay for their daughter's college expenses, appellee has declined to commit to paying for those expenses.

Appellee is employed at Texarkana Cardiology Associates and practices as a full-time cardiologist. He testified that he works fourteen to sixteen hours a day and that his work has not declined since the divorce. Appellee stated that his monthly salary does not vary substantially and that even though his monthly salary might decrease due to Medicare, it would "catch up a couple of months later." Appellee attributed the decrease in his salary from 1998 to 1999 to Medicare reimbursements, insurance company repayments, and the fact that he and three other physicians allowed a young physician to become a partner in their clinic in 1998. Appellee testified that the parties have two adult sons, one of whom is currently enrolled at UALR, and that he still contributes to their financial support. He statedthat in 1999, the expenses he incurred for his sons' living expenses and college tuition totaled $80,000.00. Appellee stated he has committed himself to finance his older son's continued education, which begins in August of 2001, and that he expects to do the "same things" for the parties' daughter, including paying her tuition and housing costs. However, on cross-examination, appellee stated, "With regard to my daughter Juliana, I am not prepared to commit to this court today that I will pay her tuition and college costs." Appellee testified that he expects to purchase a vehicle for his daughter since he purchased a vehicle for his two sons. He testified that according to his affidavit of financial means, his net income is $80,000.00 per month. Appellee further testified that after discharging all of his obligations, he has approximately $40,000.00 per month that "[he] can do whatever [he] want [sic] with." Despite his belief that his income would gradually decrease starting in the year 2001, appellee stated that he had no intentions of working less and that he hoped "to make the same amount of money." Appellee also testified that if he was ordered by the chancery court to do so, he could pay more child support than his present child support obligation.

In its June 22, 2000, order, the trial court made the following findings:

gross income in that it has been reduced by $100.00 per month.

3. That there has been no manipulation of income by Defendant, nor any

manipulation of expenses by Plaintiff.

income and expenditures.

5. That the maximum needs of the minor child, Juliana Hurley, do not

exceed the sum of $7,500.00 per month.

6. That the calculation of child support at 15% of the payor's net income

as reflected in Defendant's Exhibit #1 would result in a monthly child support

obligation of $14,969.38.

7. That to set child support in this amount, after consideration of all

factors, including the best interests of the child, would be unjust or

inappropriate.

8. That the Court should deviate from the family support chart after a

consideration of deviation factors, which include:

including income and assets of the Plaintiff as set forth in Defendant's

Exhibit "3."

sole responsibility of Defendant.

to the college age children of the parties.

9. The needs of the child should be shared equally by the parties.

10. The Defendant's child support obligation should decrease and the

reasonable support obligation of Defendant toward the said child is $3,750.00

per month.

Appellant argues in her first point that in deviating from the guidelines for setting appellee's child support obligation, as established by the per curiam order of the supreme court, the trial court erred in considering her income as "other income or assets available to support the child from whatever source." However, before this issue may be addressed, we must first determine whether a change in circumstance has been shown to warrant anadjustment of child support.

A change in circumstances is required before a child support obligation can be modified. Woodson v. Johnson, 63 Ark. App. 192, 975 S.W.2d 880 (1998). A chancellor's decision regarding whether there are sufficient changed circumstances to warrant a modification in child support is a factual finding, and that determination will not be reversed unless it is clearly erroneous. Id. In making this decision, the chancellor must consider the needs of one party as compared to the ability of the other to pay. Irvin v. Irvin, 47 Ark. App. 48, 883 S.W.2d 862 (1994). The assumption is that the chancellor fixed the proper amount of child support in the original decree. Id. The party seeking modification has the burden of showing a change in circumstances. Hunt v. Hunt, 40 Ark. App. 166-C, 842 S.W.2d 470 (1992).

Arkansas Code Annotated section 9-14-107 (Repl. 1998) provides that a change in the child-support payor's gross income in an amount equal to at least twenty percent, or more than $100 per month, constitutes such a material change of circumstances sufficient to petition the court for review and modification pursuant to the family support chart. Payton v. Wright, 63 Ark. App. 33, 972 S.W.2d 953 (1998). The chancery court should also consider the following factors in determining whether there has been a change in circumstances warranting adjustment in support: remarriage of the parties, a minor reaching majority, change in the income and financial condition of the parties, relocation, change in custody, debts of the parties, financial conditions of the parties and families, ability to meet current and future obligations, and the child-support chart. Ross v. Ross, 29 Ark. App. 64,776 S.W.2d 834 (1989).

As a preliminary matter, the appellant has failed to abstract the parties' divorce decree. However, through appellant's testimony that he has paid "child support of $11,050.00 a month since ordered to do so by the Court," we may presume that the divorce decree established the initial child support obligation which the appellee seeks to have reduced. Appellee's federal income tax return for 1998, which was the same year the parties divorced, reflects that appellee's taxable income was $1,785,562.00 less taxes of $672,116.00. Thus, at the time of the divorce, the parties agreed that appellee would pay child support in the amount of $11,050.00 in light of appellee's after-tax income of $1,113,446.00. While appellant's abstract is not exemplary, it is adequate. See Massongill v. County of Scott, 337 Ark. 281, 991 S.W.2d 105 (1999).

Appellant argues on appeal that there is no material change of circumstances established by the evidence in this case, and that the chancellor erred in relying on Ark. Code Ann. § 9-14-107, in finding that a change of circumstances had occurred. Appellant asserts that appellee has an additional $40,000.00 per month after payment of all of his monthly expenses and that appellee admitted that he is capable of paying more child support if ordered by the chancery court.

From our review of the record, the chancery court properly found in its June 22, 2000, order that "the calculation of child support at 15% of the [appellee's] net income as reflected in Defendant's [Appellee's] Exhibit #1 would result in a monthly child support obligation of $14,969.38." Thus, in accordance with the child-support guidelines, appellee's childsupport obligation on his lesser income (resulting from the reduction of his gross income by $100.00 per month) is greater than the child support award at the time of the divorce decree when appellee's income was presumably greater. In other words, at the time of divorce, the parties agreed and the chancery court entered an order establishing a child support award ($11,050.00), which was less than the amount in child support that appellee would pay on his taxable income of $1.7 million in accordance with the family support chart. The trial court does not announce and we cannot determine if the parties and the trial court anticipated a decrease in appellee's income when child support was initially established. The evidence shows that appellee's taxable income at the time of divorce was $1.7 million and that his income did not greatly vary in the following year. The chancellor found that a change of circumstances had occurred based upon an increase in appellant's cash holdings and a decrease of appellee's income by $100.00 per month. However, under Ark. Code Ann. § 9-14-107(a), the specified change in the payor's income does not necessarily support the determination but merely constitutes a material change of circumstances sufficient to allow the petition to the court for its review and adjustment of child support. Heflin v. Bell, 52 Ark. App. 201, 916 S.W.2d 769 (1996). In view of the financial conditions of the parties, including the fact that appellee's income has not changed materially and appellee's testimony that he can pay more child support if ordered to do so by the court, appellee has not presented evidence sufficient to support a determination of such a change of circumstances as to entitle appellee to a reduction in child support.

Hart and Baker, JJ., agree.