In the Interest of N.A.W. and E.D.W. v. the State of Texas

In The

Court of Appeals

Ninth District of Texas at Beaumont

__________________

NO. 09-22-00354-CV
__________________

IN THE INTEREST OF N.A.W. AND E.D.W.

__________________________________________________________________

On Appeal from the County Court at Law No. 3
Montgomery County, Texas
Trial Cause No. 16-12-14117-CV
__________________________________________________________________

MEMORANDUM OPINION

This is an appeal from an Order in a Suit to Modify Parent-Child Relationship,

which reduced the child support paid by N.A.W. and E.D.W.’s father (Father) under

a Child Support Review Order. Mother appealed the trial court’s modification order

setting child support payments. In three issues, Mother argues that (1) the trial court

erred in modifying Father’s child support because Father failed to prove there had

been a material and substantial change in the circumstances since the rendition of

the prior order; (2) the trial court erred in calculating Father’s gross monthly

resources available for child support; and (3) the trial court erred in failing to find

that Father was purposely underemployed. We affirm.

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Background

On December 7, 2016, the Office of the Attorney General (OAG) filed its

Original Petition in Suit Affecting the Parent-Child Relationship. The OAG attached

acknowledgments of paternity executed by Father to prove his parentage of the two

children. The OAG requested that the trial court issue appropriate child support and

conservatorship orders.

On January 24, 2017, the trial court issued its Order in Suit Affecting the

Parent-Child Relationship. The trial court found that the net resources of Father were

$2,948.04 per month and that the percentage applied to Father’s net resources for

child support is 19.17%. Applying the child support guidelines, the trial court found

that Father owed $655.00 per month in current child support; however, the parties

agreed to deviate from the guideline and reduce child support of $655.00 to $555.00.

Two years later, on March 25, 2019, the OAG filed its Petition for

Confirmation of Non-Agreed Child Support Review Order. On May 28, 2019, the

trial court signed a Child Support Review Order finding Father $684.86 in child

support arrears. The trial court found Father’s monthly net resources were $2,140.22

and ordered Father to pay $482.00 per month in current child support.

On October 21, 2020, Mother filed a Petition to Modify Parent-Child

Relationship. In her petition, Mother requested that the trial court modify the January

24, 2017 order and the May 28, 2019 order. Mother alleged that the circumstances

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of the child, a conservator, or other party affected by the order to be modified had

materially and substantially changed since the date of rendition of the orders to be

modified and that the requested modification was in the children’s best interest.

Following a hearing on March 22, 2021, the trial court signed a Final Order in Suit

to Modify Parent-Child Relationship on April 8, 2021 (the “April 8, 2021 Order”),

increasing Father’s child support obligation to $1,435.72 per month.

On July 14, 2021, the OAG filed a Suit for Modification of Support Order and

Motion to Confirm Support Arrearage alleging Father owes a total child support

arrearage of $2,539.34 and that there has been a material and substantial change

since the rendition of the April 8, 2021 Order. Mother filed her Original Answer on

August 3, 2021, claiming there has not been a material and substantial change that

warrants a modification of child support in this case because Father’s child support

was recently modified by the April 8, 2021 Order and Father purposely quit his job

and underemployed himself to avoid paying child support. Father filed a general

denial followed by a Cross-Petition to Modify Parent-Child Relationship requesting

a retroactive decrease in Father’s child support obligation, alleging there has been a

material and substantial change since the date of the signing of the mediated

settlement agreement on which the April 8, 2021 Order is based, and the child

support payments previously ordered are not in “substantial compliance” with the

Texas Family Code.

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On July 18, 2022, the case was tried to the bench. The parties stipulated that

at the time of the April 8, 2021 Order, Father’s gross monthly income was $8,200

per month based on Father’s 2020 tax returns. The parties also agreed that there were

two children before the trial court and one not before the court.

Father and Mother testified at the hearing. Father explained his employment

status changed because at the time of the April 8, 2021 Order he was employed with

Magnum Electric but he is no longer employed there because the job he was working

on for Magnum was coming to an end, because of COVID, other projects are not

“kicking off.” Father testified Magnum could no longer guarantee his hours would

return back to normal and that he “was out of work, basically.” According to Father,

he did not know at the time of the March 2021 hearing that his employer would

reduce his guaranteed hours to zero. Father testified this resulted in a financial

hardship on his family of five, and he had to defer a mortgage payment and two car

payments. He testified Magnum wanted him to “file unemployment and wait for the

job to return to normal[,]” but he decided not to do so because he had “other options,”

which were to find a job or start his own company.

Father was out of work for two to three weeks when he decided to start his

own business after the State issued him his electrical contractor’s license. He

currently has a license as a master electrician. At the time of the hearing, Father had

been in business for approximately one year and three months and had one

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employee. He admitted that the slowdown at Magnum and the possibility of starting

his own business was discussed at the March 2021 hearing, but he added that his job

at Magnum had not yet ended at that time.

Father testified his gross income from his business fluctuates each month. At

the time of the hearing, his business was slowing down but he estimated he makes

about $5,000 to $7,000 a month in gross income. He testified after he pays his

expenses and one employee, he pays himself roughly about $800 a week before

taxes. He asked the trial court to base his child support payments off his current

income because he no longer makes the same amount of money he made when

working for Magnum.

On cross-examination, Father admitted that the month prior to the hearing,

Brightside “could have been about [averaging] – maybe 15,000 for the business.”

Father testified Brightside had two employees at the beginning of the year, but one

quit about two or three months before the trial. He pays the current employee $17 an

hour, with overtime, and the former employee was paid $25 an hour, with overtime.

He also testified he has not tried to obtain employment that pays similar to what he

earned at Magnum.

Father testified he formed his limited liability company, called Brightside

Electric, LLC, around August 2019, but he did not start taking work until after the

April 8, 2021 Order because he had to wait to obtain his contractor’s license through

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the State. At the time he formed the limited liability company, he was making over

$100,000 with Magnum so he did not want to start working on his own at that time.

After leaving Magnum, Father advertised on Yelp and it took him about a

month or two to get customers for Brightside. In the meantime, Father paid his bills

with the little bit of money he saved from working at Magnum and with the help of

his wife. According to Father, Brightside’s work initially increased significantly, but

more recently, business was slowing down.

Brightside has three Dodge Ram trucks which he purchased for $2,700,

$5,500, and $9,000. The first truck was purchased with his own money, but the other

trucks were purchased with money from the business. At the time of trial, his main

business checking account had a balance of $4,000 and his other account had a

balance of $62. Aside from payroll, Brightside’s business expenses include tools,

fuel, materials, insurance, and advertising. Father estimated he spends between

$1,400 and $1,600 a month in fuel but agreed that his schedule of revenue and

expenses shows a yearly fuel expense of $5,713.85. He testified he spends between

$6,000 to $7,000 a month on materials and that he spends between $1,000 and

$1,500 a year on insurance for his business and the vehicles.

When Father left Magnum, he did not have any return in his 401(k). He had

some vacation that was cashed out as well as a couple of different paychecks for

holiday pay, but Father didn’t know how much vacation pay he cashed out. He has

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not yet paid quarterly taxes for his business, as he is awaiting approval from the IRS

to file taxes for his business as an S Corp. Since starting his business, he has not filed

a business tax return.

Father testified he had several tools and other assets that are part of his

business, but he could not testify as to their approximate value. He testified he used

to employ and pay several contract laborers, but no longer has that expense because

he does not have enough work for them. He also agreed Brightside no longer has the

same expenses for advertising, meals and entertainment as when he first started the

business and that his expenses for materials was less than before because work had

slowed down.

Father admitted that even though his work has slowed down, he has not done

anything to try and find another job. He also admitted that his intention was to

continue working his business under Brightside, even if he was not making enough.

After leaving Magnum, he did not find out how much his unemployment would be

and does not know whether it would have been more than the approximately $3,400

a month he earns now. Father clarified he started paying himself $1,000 a week when

he started his business but his CPA told him that if he paid himself more than $800

a week, his “business would probably fail depending on how much money is coming

in.” Father testified he is paid a weekly salary of $800, and he also takes a $200

weekly draw. His employee currently works thirty to forty-five hours a week and is

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paid an average of $2,000 a month. The trial court admitted Father’s February 23,

2022 financial information statement which shows Father’s monthly gross earnings

from his primary employment are $3,466.67.1 Although he is capable of paying

himself at least $1,000 a week, he reduced that amount based on the advice of his

CPA for tax purposes.

Mother testified that she maintains the health and dental insurance for the

children through her husband’s employment with the U.S. military. She believes

Father is underemployed because it “seems odd that since the last hearing, he

automatically wants to start his own business. And he’s still living the same lifestyle

that he was living before.” She believes Father’s business slows down when the issue

of child support modification is brought up.

On August 3, 2022, the trial court signed an Order in Suit for Modification of

Support Order and to Confirm Support Arrearage. In the order, the trial court finds

that there has been a material and substantial change in circumstances since the

rendition of the April 8, 2021 Order and that Father’s monthly net resources are

$3,733.09. The order sets Father’s child support at $839.95 each month.

After the order was signed, Mother requested findings of fact and conclusions

of law. She also filed a motion for new trial, which asked for a new trial for the

following reasons: (1) Father did not meet his burden to prove a material and

1This amount was based on the results from a self-employment calculator.

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substantial change in the circumstances since the rendition of the April 8, 2021 Order

to warrant any modification of his child support obligation, (2) the amount of child

support ordered by the trial court is erroneous because the evidence showed Father

was purposely underemployed, and (3) the trial court erred by not allowing Mother

to develop testimony during the trial concerning the children’s best interest as it

relates to a reduction in child support.

After a hearing, the trial court denied Mother’s motion for new trial. The trial

court also issued findings of fact and conclusions of law in which it finds Father’s

current net resources are $3,733.09 per month, the percentage to be applied to net

resources is 22.50%, and the current child support to be paid by Father based on

Texas child support guidelines is reduced to $839.95 per month. The trial court’s

findings also include that there has been a material and substantial change in the

circumstances since the rendition of the April 8, 2021 Order and modification of the

child support order is in the best interest of the children. The trial court did not find

that Father is purposely unemployed or underemployed.

Standard of Review

Trial courts have broad discretion on a motion seeking to modify a previous

child support order once a party seeking the modification establishes a material and

substantial change in circumstances since the trial court rendered the prior order. See

Tex. Fam. Code Ann. § 156.401(a) (permitting a trial court to modify a child support

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order); Royer v. Royer, 98 S.W.3d 284, 285-86 (Tex. App.—Beaumont 2003, no

pet.). We will not disturb a trial court’s order of child support unless the complaining

party shows a clear abuse of discretion. See Iliff v. Iliff, 339 S.W.3d 74, 78 (Tex.

2011); Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990).

Under the abuse of discretion standard that we apply to child support orders,

legal and factual insufficiency are not independent grounds of error, rather they are

relevant factors in assessing whether the trial court abused its discretion. See Farish

v. Farish, 921 S.W.2d 538, 542 (Tex. App.—Beaumont 1996, no writ); see also In

re J.A.J., 283 S.W.3d 495, 497 (Tex. App.—Beaumont 2009, no pet.) (citation

omitted). A trial court does not abuse its discretion if the record contains some

evidence of a substantive and probative character to support its decision. Trumbull

v. Trumbull, 397 S.W.3d 317, 319-20 (Tex. App.—Houston [14th Dist.] 2013, no

pet.); see also Farish, 921 S.W.2d at 541. In a case tried to the bench, the trial court

acts as the factfinder, determines which witnesses are credible, decides what weight

to give the testimony, and is free to resolve any inconsistencies in the testimony. See

Iliff, 339 S.W.3d at 83 (citation omitted); In re N.P.H., No. 09-15-00010-CV, 2016

WL 5234599, at *3 (Tex. App.—Beaumont Sept. 22, 2016, no pet.) (mem. op.) (“In

a bench trial, the trial court acts as both the factfinder and the sole judge of the

credibility of witnesses.”).

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Findings of fact entered in a case tried to the court are of the same force and

dignity as a jury’s answers to jury questions. The trial court’s findings are reviewable

for legal and factual sufficiency of the evidence to support them by the same

standards that are applied in reviewing the legal or factual sufficiency of evidence

supporting a jury’s answers to jury questions. Anderson v. City of Seven Points, 806

S.W.2d 791, 794 (Tex. 1991). We consider only the evidence most favorable to the

judgment and will uphold the judgment on any legal theory that finds support in the

evidence. See Worford, 801 S.W.2d at 109; In re J.A.J., 283 S.W.3d at 497-98

(noting we view evidence in the light most favorable to the trial court’s decision and

indulge every legal presumption in favor of the judgment).

Analysis

We begin with Mother’s first issue, in which she contends the trial court

abused its discretion by finding there had been a material and substantial change in

circumstances since the entry of the prior April 8, 2021 Order.

The trial court has discretion to modify the support order “only if the

circumstances of the child or a person affected by the order have materially and

substantially changed since … the date of the order’s rendition[.]” Tex. Fam. Code

Ann. § 156.401(a)(1). The movant on a motion to modify has the burden to show the

requisite material and substantial change in circumstances since the rendition of the

previous order. Farish, 921 S.W.2d at 541. “In determining whether there has been

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a material and substantial change in circumstances, it is well settled that the trial

court must compare the financial circumstances of the children and the affected

parties at the time the existing support order was entered with their circumstances at

the time the modification is sought.” Royer, 98 S.W.3d at 285-86.

“In deciding whether a material and substantial change of circumstances has

occurred, a trial court is not confined to rigid or definite guidelines.” In re A.L.E.,

279 S.W.3d 424, 428 (Tex. App.—Houston [14th Dist.] 2009, no pet.). The trial

court’s determination “is fact-specific and must be made according to the

circumstances as they arise.” Id. “[T]he law does not prescribe any particular method

for a showing of changed circumstances, which may be established by circumstantial

evidence.” Id. at 429. “[A] change in circumstance may be so anticipated and

factored into the original decree that the eventuality of the change does not constitute

a material or substantial change of circumstances.” Wiese v. AlBakry, No. 03-14-

00799-CV, 2016 WL 3136874, at *4 (Tex. App.—Austin June 1, 2016, no pet.)

(mem. op.); see also Smith v. Karanja, 546 S.W.3d 734, 740 (Tex. App.—Houston

[1st Dist.] 2018, no pet.).

Mother argues Father did not prove a material and substantial change in

circumstances because “[Father] knew at the time of the prior trial that work at

Magnum Electric was slowing down and that he might lose hours or not have further

projects to work on. The Court likewise knew all of this information when it entered

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the April 8, 2021 Order finding that [Father] could reasonably continue to earn

$8,200 per month just as he had in the past as a licensed electrician.” The record

demonstrates that at the time of the March 2021 hearing, Father was employed at

Magnum Electric, and although he had formed his own limited liability company in

2019, he was not planning to start operating his own business yet because he was

making over $100,000 per year. Father testified that at the time of the March 2021

hearing he understood his hours were going to be reduced when the project he was

working on ended, but he did not know the extent to which they would be reduced.

He explained that he was supposed to start another project when the project he was

working on ended, but that project was held up due to COVID, after which Magnum

could not guarantee him any hours. Father testified these circumstances caused a

financial hardship resulting in his having to defer mortgage and car payments.

Although a reduction in hours may have been contemplated when the trial

court found in the April 8, 2021 Order that Father’s gross income was $8,200 per

month, there is no indication the court contemplated the complete elimination of

Father’s guaranteed hours at Magnum, nor the ensuing financial hardship. Similarly,

although the trial court may have anticipated Father would at some point start his

own business, there is no indication it could have known what Father’s income

would actually be from such a venture.

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The trial court heard the conflicting testimony about whether Father’s

circumstances materially and substantially changed after the April 8, 2021 Order and

entered its findings after resolving these conflicts. The trial court was in the best

position to resolve the conflicting evidence because it was able to observe the

demeanor and personalities of the witnesses. Echols v. Olivarez, 85 S.W.3d 475, 477

(Tex. App.—Austin 2002, no pet.). We are charged with reviewing the evidence in

the light most favorable to the trial court’s judgment. In that light, we find that the

evidence is legally sufficient to support the trial court’s finding that there has been a

material and substantial change in circumstances. See id. Because the record

contains evidence to support the trial court’s decision, we conclude the trial court

did not abuse its discretion in finding a material and substantial change in

circumstances. Trumbull, 397 S.W.3d at 319-20. We overrule Mother’s first issue.

In her second issue, Mother complains that the trial court erred in calculating

Father’s gross monthly resources available for child support. We note that a trial

court has broad discretion to set child support within the parameters established by

the child support guidelines set forth in the Family Code. Rodriguez v. Rodriguez,

860 S.W.2d 414, 415 (Tex. 1993). Some of the factors a court may consider in

assessing payments include the need of the child, the ability of the parents to

contribute to the child’s support, any financial resources available for support, and

the amount of possession and access to the child. Tex. Fam. Code Ann. § 154.123(b).

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We will not overturn a trial court’s decision in this regard unless there is a clear

abuse of discretion. Rodriguez, 860 S.W.2d at 415.

In calculating the net resources for purposes of child-support liability, the trial

court may look to all wage and salary income, self-employment income, and other

income being received. Tex. Fam. Code Ann. § 154.062(b). “Income from self-

employment, whether positive or negative, includes benefits allocated to an

individual from a business or undertaking in the form of a proprietorship,

partnership, joint venture, close corporation, agency, or independent contractor, less

ordinary and necessary expenses required to produce that income.” Id. § 154.065(a).

“In its discretion, the court may exclude from self-employment income amounts

allowable under federal income tax law as depreciation, tax credits, or any other

business expenses shown by the evidence to be inappropriate in making the

determination of income available for the purpose of calculating child support.” Id.

§ 154.065(b).

An obligor is required to furnish information sufficient to accurately identify

his net resources and ability to pay child support. Id. § 154.063; In re N.T., 335

S.W.3d 660, 666 (Tex. App.—El Paso 2011, no pet.). A trial court is not required to

accept the obligor’s evidence of income and net resources as true. In re N.T., 335

S.W.3d at 666. The trial court may properly determine that the obligor has higher

15
net resources than alleged based on testimony by the obligee and other evidence in

the record. Id.

Here, although the record shows Father did not file any tax returns, he did

produce Brightside’s bank statements, a personal financial information statement,

and Brightside’s financial statement which shows ordinary and necessary expenses

required to produce business income. Father also provided a monthly child support

calculation from the OAG’s child support calculator based on a monthly gross

income of $4,800. Although Father testified Brightside grosses $5,000 to $7,000 a

month, the financial statement prepared by his accountant shows gross revenues of

about $16,000 per month, along with total expenses of about $12,500 per month.

Father testified Brightside’s receipts slowed in the months leading up to trial,

accompanied by a decrease in some of the expenses. In contrast, Mother testified she

believes that Father is still living the same lifestyle he was living before and that his

business slows down only when the issue of child support modification is brought

up. Father testified he pays himself $1,000 per week including $800 salary and $200

draw, but he agreed the amount was based on his accountant’s advice and does not

necessarily reflect what he actually earns. The financial statement prepared by the

accountant indicates Brightside has a net income, after all expenses, of about $3,500

per month. After considering the evidence in its entirety, we conclude the trial court

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did not abuse its discretion in finding Father has net resources of $3,733.10 per

month. We overrule Mother’s second issue.

In Mother’s third issue, she complains that the trial court erred in failing to

find that Father was purposely underemployed. Section 154.066 of the Texas Family

Code provides, in relevant part, that “[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 potential obligor.” Tex. Fam. Code Ann. § 154.066(a).

“A parent who is qualified to obtain gainful employment cannot evade his or her

child support obligation by voluntarily remaining unemployed or underemployed.”

Iliff, 339 S.W.3d at 81. The court must, at the same time, consider a “parent’s right

to pursue his or her own happiness with a parent’s duty to support and provide for

his or her child.” Id. at 82. (citations omitted). “The court must engage in a case-by-

case determination to decide whether child support should be set based on earning

potential as opposed to actual earnings.” Id. “Once the obligor has offered proof of

his or her current wages, the obligee bears the burden of demonstrating that the

obligor is intentionally unemployed or underemployed.” Id. “In order to find a parent

intentionally unemployed or underemployed, the evidence must show that the parent

reduced his income for the purpose of decreasing his child support payments. The

requisite intent may be inferred from such circumstances as the parent’s education,

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economic adversities, business reversals, business background, and earning

potential.” In re K.N.C., 276 S.W.3d 624, 627 (Tex. App.—Dallas 2008, no pet.)

(citation omitted); see Iliff, 339 S.W.3d at 82-83. We review a trial court’s

determination of purposeful underemployment under an abuse-of-discretion

standard. Iliff, 339 S.W.3d at 81-82.

Here, although Father at one time earned $8,200 per month, he testified

Magnum reduced his hours and encouraged him to file for unemployment and wait

for work to return, at which time he decided to start his own business. Mother asserts

on appeal that Father could have made more money from unemployment, but there

is no evidence in the record to support this assertion. Father testified he did not file

for unemployment because he began taking work for his new business within a

month or two after leaving Magnum and receiving his contractor’s license as a

master electrician from the State.

Although Father admitted that he did not seek other employment when

Brightside’s work slowed down and that he intended to continue working through

Brightside even if he was not making enough, the trial court was not required to find

he was intentionally underemployed or unemployed. Brightside’s gross revenues

averaged as high as $23,000 per month during the first few months of 2021, and

although business slowed down over the next few months according to Father’s

testimony, there is no evidence this downturn was due to Father’s intentional

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underemployment. The record reveals Father’s previous employer, Magnum, also

encountered a downturn during which work slowed to the extent Father was no

longer guaranteed any hours and was encouraged to file for unemployment. The trial

court could have interpreted Father’s testimony about starting and continuing his

own business as a commitment to pursuing what he considers best for himself and

his family over the long term, despite temporary economic downturns. See Iliff, 339

S.W.3d at 82 (“the judge as fact finder has latitude to consider the testimony and

evidence to make the necessary determinations”).

After reviewing the evidence in its entirety, we conclude the trial court did not

abuse its discretion in refusing to find Father was intentionally underemployed. We

overrule Mother’s third issue.

Conclusion

Having overruled all of Mother’s issues, we affirm the trial court’s Order in a

Suit to Modify Parent-Child Relationship.

AFFIRMED.

KENT CHAMBERS
Justice

Submitted on April 24, 2024
Opinion Delivered December 19, 2024

Before Golemon, C.J., Wright and Chambers, JJ.

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