In RE MARRIAGE OF CHEN v. Warner
695 N.W.2d 758, 280 Wis. 2d 344, 2005 WI 55 (2005)
Rule of Law:
A parent's voluntary decision to reduce or forgo income will not constitute "shirking" for child support purposes, thereby precluding the imputation of earning capacity, if the decision is reasonable under the totality of the circumstances, weighing the parent's right to choose, the child's needs (financial and non-financial), and the financial capacity of both parents.
Facts:
- Jane E. Chen (mother) and John J. Warner (father), both physicians, were married for 18 years and had three children born in 1991, 1993, and 1995.
- In 1999, Chen and Warner divorced; the judgment incorporated their agreement for joint custody, equal physical placement, and no child support, with each parent responsible for daily expenses while the children were in their care, and the father paying $400 per child per month into an education fund.
- At the time of the divorce, Chen earned $236,000 per year and Warner earned $256,452 per year, both employed full-time at the Marshfield Clinic.
- Both parents apparently agreed that, if feasible, it was in their children's best interests to have a parent at home full time.
- In May 2000, Chen voluntarily left her full-time position at the Marshfield Clinic after being unable to reduce her schedule to part-time.
- Prior to leaving her employment, Chen consulted a financial advisor who estimated she could expect an annual investment income of about $110,000 from her $1.1 million savings, which exceeded her estimated annual budget of $84,000.
- In 2001, the stock market declined, and Chen's investment income dropped substantially to $32,000, prompting her to look for employment.
- Chen was unable to find any part-time physician employment within commuting distance of her home, though she declined alternating-week work in distant communities, while Warner's income increased to $472,000 per year by 2002, with substantial assets and discretionary income.
Procedural Posture:
- In 2002, Jane E. Chen (mother) filed a motion in the Wood County Circuit Court (trial court) to amend the divorce judgment, seeking child support from John J. Warner (father), asserting a substantial change in circumstances.
- The circuit court granted Chen's motion, ordering Warner to pay $4,000 per month in child support and excusing his $1,200 per month obligation to the children's education fund. The circuit court rejected Warner's argument that Chen's actions constituted "shirking."
- John J. Warner (father) appealed the circuit court's order to the Wisconsin Court of Appeals (intermediate appellate court).
- The Wisconsin Court of Appeals affirmed the circuit court's order.
- The Supreme Court of Wisconsin granted review of the court of appeals' decision.
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Issue:
Is a parent's voluntary decision to forgo employment outside the home to become an at-home full-time child care provider reasonable, thereby precluding the imputation of earning capacity for child support purposes, when that decision was made in good faith and the other parent has a high ability to pay?
Opinions:
Majority - Shirley S. Abrahamson, C.J.
Yes, a parent's voluntary decision to forgo employment outside the home to become an at-home full-time child care provider is reasonable, precluding the imputation of earning capacity, when that decision was made in good faith, the decision benefits the children, the parent was unable to find suitable alternative employment, and the other parent has a high ability to pay without significant impact on their standard of living. The court affirmed the court of appeals' decision, concluding that the mother's decision was reasonable and did not constitute shirking. The court defined "shirking" as a voluntary employment decision to reduce or forgo income that is unreasonable under the circumstances, emphasizing that bad faith or improper motive is not required. The proper standard of appellate review for reasonableness in shirking cases is an independent determination, giving appropriate deference to the circuit court, especially when the legal question is intertwined with factual findings. Applying this standard, the court found Chen's initial decision to retire reasonable given her financial advisor's projections of sufficient investment income. Her subsequent decision to remain unemployed after the market decline was also deemed reasonable due to several factors: the parents' agreed-upon desirability of a full-time at-home parent for the children, the significant benefits the children received from her increased involvement, her inability to find suitable part-time employment within commuting distance, and the father's unusually high ability to pay the increased child support without significant impact on his finances. The court distinguished previous "shirking" cases where reduced income significantly harmed children's support or standard of living or involved risky ventures with no comparable income. It rejected public policy arguments about creating different standards for high-income families, emphasizing that "reasonableness under the circumstances" is a single, fact-dependent rule where financial status is a relevant factor, and noted statutory support for considering the value of at-home parental care.
Dissenting - Jon P. Wilcox, J.
No, a parent's voluntary decision to forgo employment is not reasonable if it prevents them from independently meeting their child support obligations, regardless of the other parent's ability to pay, and it is not primarily motivated by a desire to increase future earning capacity. Justice Wilcox dissented, arguing that a parent's income should not be a primary consideration in a shirking analysis. He contended that each parent has an independent obligation to financially support their children, and one parent's decision to forgo income should not be considered reasonable simply because the other parent has the financial capacity to compensate for it. The focus of the shirking analysis, in his view, should be on the reasonableness of the alleged shirker's decision in light of their own support obligation, not the other parent's ability to pay. He also asserted that a parent's subjective belief about what is in the children's best interest (e.g., providing at-home care) should not override their legal obligation for financial support. He noted that the mother's decision to forgo income was not a long-term prudent career move aimed at increasing future earning capacity, and her plan to return to work only after her support obligations ended was problematic. He concluded that the mother's decision to remain unemployed, while unable or unwilling to independently meet her financial obligations, and her attempt to force the father to finance her early retirement, was objectively unreasonable.
Dissenting - Louis B. Butler, Jr., J.
No, a parent's voluntary decision to forgo employment is unreasonable if it means they cannot meet their financial child support obligations, and the circuit court erred by not properly assessing the mother's continued unemployment in light of those obligations. Justice Butler dissented, agreeing with the appellate review standard but arguing that no deference was warranted because the circuit court misapplied the shirking analysis. He asserted that the correct shirking test requires assessing the reasonableness of a voluntary income reduction "in light of the person's support or maintenance obligations," with a specific focus on financial support, rather than a broad "reasonableness under the circumstances." He stated the mother bore the burden of proving her income reduction was reasonable commensurate with her financial child support obligations. While her initial retirement might have been reasonable, the analysis should have focused on her actions after her investment income declined. He criticized the mother's limited job search efforts and her apparent refusal to invade her substantial assets ($1.69 million estate) to support her children. He argued that the circuit court improperly prioritized the mother's homemaking services and the father's income over the mother's direct financial obligation and employability. He concluded that because the circuit court failed to apply the correct legal standard, the case should be remanded for proper consideration.
Analysis:
This case significantly clarifies the "shirking" doctrine in Wisconsin child support law, especially concerning high-income parents and those who opt for full-time at-home child care post-divorce. It establishes a multi-factor "reasonableness under the circumstances" test, moving beyond a purely financial assessment to incorporate non-economic benefits to the children and the other parent's ability to absorb increased support. This approach suggests a judicial recognition of the value of parental care, potentially broadening the circumstances under which a parent can reduce or cease external employment without being deemed to be shirking. However, the dissents highlight the tension between a parent's personal choices and their independent financial obligations, particularly when substantial assets are available. Future cases will need to carefully balance these factors, making outcomes highly fact-dependent and potentially leading to ongoing litigation over the precise weight given to each circumstance, especially the financial disparity between parents.
