The Colorado Court of Appeals recently issued a new contempt decision which somewhat wraps up the law already set forth in prior cases, but also includes a new twist – ability to pay means taking into consideration that the payor has assets he could sell to generate revenue.
In Evans,1In re: Marriage of Evans (Colo.App. 2021) (Unpublished Decision). the trial court had previously granted the wife’s motion to modify child support, ordering the husband to pay $24,000/mo in child support (including arrears), plus $63K in attorney’s fees. The figures were based upon the court’s findings that the husband’s income was almost $400,000/mo, and he owned a business worth not less than $2.6m.
The wife subsequently filed for remedial contempt, alleging that the husband had failed to pay child support and attorney’s fees. The trial court found the husband in remedial contempt, ordering him jailed unless he paid within 30 days a total of $573K in child support arrears plus $63K in attorney’s fees. The husband appealed.
Order is Binding Even While Motion for Review Pending
At the time of the contempt motion, the husband had a pending request for the district court to review the magistrate court decision pursuant to Col. R. Mag. 7. He first argued that the child support modification order was not final until that request for review was ruled on, and he had the opportunity to appeal the district court ruling, if necessary.
The court was not impressed, quickly rejecting that argument and holding that an order is still effective, and therefore legally binding and enforceable even while the review was pending per Col. R. Mag. 5.
Court Must Find Ability to Pay
The court next addressed the findings necessary for a remedial contempt, and there are two ability to pay findings required:
- At the time of the act, the contemnor had the ability to comply, AND
- The contemnor has the present ability to comply.
This means, for example, that if a child support obligor had sufficient funds at the time the support was due, but by the time of the contempt hearing he had lost all his money and had no ability to comply, the court could not find him in remedial contempt. Note that the contemnor has the burden of proof:
“The contemnor bears the burden to prove the inability to comply with an order and to purge the contempt.”Evans.2In re: Marriage of Evans, ¶ 18 (Colo.App. 2021) (Unpublished Decision).
The wife put on evidence of the husband’s ability to comply with the order, including the purchase of a $1.9m house just before the child support order was entered, with a monthly mortgage of almost $8K, as well as $1.7m in his bank account, and the fact that he used his business account like a “piggy bank” to pay for luxury items and foreign travel.
The husband and his expert, by contrast, testified that he had no liquid funds, and had to sell equipment to pay business expenses – testimony the trial court found not credible.
Ability to Pay Includes Selling Assets
The trial court found that the husband had assets he could sell to pay the arrears, including a boat, a business, and working capital in his bank account. The Court of Appeals approved the notion that a person with assets which can be sold has the ability to comply:
“We are not persuaded otherwise by husband’s argument that the court improperly considered purchases that predated the February 11, 2018, order. True, a past or future ability to comply are not sufficient grounds for a remedial contempt order. But the court may find that a party has the present ability to comply by relying on evidence of a party’s income and property ownership, evidence of a party’s expenditures, and evidence of retention of assets such as real estate or cars that could be liquidated to generate funds. So the court could reasonably conclude that husband’s ownership and maintenance of assets he purchased before the February 11, 2018, order demonstrated a present ability to comply with the order.”Evans.3In re: Marriage of Evans, ¶ 24 (Colo.App. 2021) (Unpublished Decision) (Cleaned Up) (Emphasis added).
Must Pay Whatever One Can Afford
At Graham.Law, we advise clients that even if they cannot afford to pay everything ordered, they have the obligation to at least pay what they can afford. A person who makes a good faith effort to pay what he can will do better at a contempt hearing than one who simply disregards the entire obligation.
The Evans Court agrees with this:
“Insofar as husband suggests that he could not be held in contempt unless he had the present ability to pay the entire $23,875 per month, he is mistaken. Even if he could not pay $23,875 per month, he knowingly violated the magistrate’s order if he failed to pay any lesser amount that he had the present ability to pay, and he may be held in contempt for doing so.”Evans.4In re: Marriage of Evans, ¶ 28 (Colo.App. 2021) (Unpublished Decision) (Cleaned Up).
Contempt Cannot Exceed the Charging Document
When a contempt action is brought for failure to pay support, it’s not uncommon for the contemnor to continue to miss payments even while the contempt is proceeding. Unfortunately for the payee, those additional missed payments cannot simply be added to the existing contempt – a new contempt motion and hearing are required.
When a contempt action is brought for failure to pay support, it’s not uncommon for the contemnor to continue to miss payments even while the contempt is proceeding. Unfortunately for the payee, those additional missed payments cannot simply be added to the existing contempt – a new contempt motion and hearing are required:
“Husband contends that the contempt finding went beyond the language of the charging document. Specifically, he argues that the district court erred by finding him contempt for not complying with the February 11, 2018, order in 2019. We agree because an accused cannot be convicted of contempt other than that set forth in the charging document.”Evans.5In re: Marriage of Evans, ¶ 29 (Colo.App. 2021) (Unpublished Decision) (Cleaned Up).
So some relief for the husband, but probably only temporary reduction in the amount he must pay to avoid jail. He still owes all of the additional missed months of payment, and the wife can simply file a new contempt against him for those missing months. And since it sounds like the husband did not impress the trial judge much, there is probably little reason to believe the next contempt hearing would turn out any different than the original one.
Remand for More Specific Findings
Other than on the issue of the additional months of support missed after the contempt was filed), the Court of Appeals did not accept the husband’s arguments. However, the court did find that the trial court order was “not entirely clear”, and the magistrate needed to make more specific findings on his ability to comply, so remanded the issue for additional findings on exactly how much the husband had the ability to pay.
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