When the boss says “resign or I’ll fire you,” and you resign, is that a good faith reduction in income? Can you use your change in income to reduce your child support and alimony? A recent Supreme Court of Oklahoma opinion orders such a modification.
The parents in Garcia v. Garcia divorced in 2008. The decree ordered father to pay child support to mother, and to pay support alimony to the ex-wife for 6 years. At the time of the divorce, father was a school principal.
Father moved to reduce his child support and alimony obligations after he lost his job. The father testified his superintendent told him to resign or be fired. Figuring it would be easier to find another job in education if he quit rather than being fired, father chose to quit. His resignation letter did not say he was resigning under threat of being fired. Since leaving his job, father testified he’d made 53 job applications and sent 35 resumes, resulting in one interview.
Father asked the court to base his modified support obligations on earnings at minimum wage. Mother argued that father either resigned his job voluntarily or committed acts that led to his dismissal. Since father caused the actions that changed his circumstances, he should not be relieved of his support obligations. The trial court and the Oklahoma Court of Civil Appeals agreed with mother. Both courts reasoned that Father’s job loss was due to his own misconduct, therefore his resignation was voluntarily self-induced. The lower courts relied on earlier case-law holding that voluntary underemployment or unemployment does not justify a reduction in support.
The Supreme Court of Oklahoma tweaked the test a bit after reviewing cases from Oklahoma and other states. Rather than voluntary or involuntary reduction, the test now is whether, based on all the circumstances, a reduction in income is done in bad faith to avoid a support obligation. “A court must look to the particular circumstances involved and it is critical to determine whether the reduction in income was in good faith or bad faith.” In the Garcia case, the court ultimately determined that father’s decision to resign and not face termination was coerced, and was not done in bad faith to avoid his support obligations.