The Colorado Court of Appeals last week issued a new ruling on the interplay between imputation of income and voluntary unemployment which will make bringing contempt cases for non-support more complicated. (Note that this particular case involved voluntary underemployment, not voluntary unemployment, but the analysis is the same either way). In Sheehan,¹ the parties signed a separation agreement whereby the husband agreed to pay the wife $5300/mo in maintenance.

Over the next few years, there was a series of contempt motions filed by the wife for the husband’s non-payment (which were successful), as well as an unsuccessful attempt to modify maintenance by the husband based upon losing his job, and earning only half as much being self-employed (the court found the husband should be able to earn a comparable amount to his prior pay).

At issue in Sheehan is the Wife’s seventh contempt motion, alleging almost $65K in unpaid maintenance, as well as non-payment of the $18K equalization payment the husband still owed from the dissolution. She sought both remedial and punitive contempt sanctions. The trial court rejected the husband’s defense of inability to comply with the order, finding he was voluntarily underemployed, and therefore guilty of both remedial and punitive contempt and sentence him to incarceration. The findings were based upon a combination of his ability to purge the prior contempts, plus his history of voluntary unemployment.

Voluntary Unemployment Not Mean Ability to Pay

The husband appealed, and the court of appeals reversed the remedial contempt finding. “Present ability to comply” is a necessary finding in a remedial contempt case. Sheehan.² And not even a finding that the husband was acting in bad faith through his voluntary unemployment can support a finding of present ability to comply. Sheehan.³

Ability to Borrow Money Not Mean Ability to Pay

The fact that the husband was able to pay his prior arrears by borrowing money did not support a finding of ability to pay:

Voluntary Unemployment vs contempt ability to pay

But the fact that a contemnor might be able to borrow money to satisfy his duty to purge the contempt is irrelevant.11 The ability to purge the contempt must lie with the contemnor at the time of the hearing, not through some future transaction to obtain additional resources. It has often been said that requiring a finding of a present ability to comply ensures that “the contemnor holds in his hand the proverbial keys to the jailhouse door.” But a finding of a present ability to comply based on the ability to borrow the funds from someone else or to secure a better job places the jailhouse keys in someone else.
Sheehan.⁴

This contrasts to the Blaikie⁵ case discussed in our contempt article in the Colorado Family Law Guide, where the court found in the extreme circumstances there where the contemptor had always borrowed money to pay his expenses, his ability to tap into credit did mean he had the ability to pay the arrears.

Punitive Contempt Not Require Present Ability to Comply

The husband further argued that his inability to pay the maintenance arrears precluded a finding of punitive contempt, but the Court of Appeals rejected that argument:

“In this context, self-induced inability to comply is not a defense; indeed, it may well be the fulcrum on which the finding of willfulness pivots… In other words, a person’s voluntary act of becoming or remaining underemployed to set up a claim of poverty to avoid paying a support obligation may well constitute willful noncompliance with the support order.”
Sheehan,⁶

The court did remand the case back to the trial court for further findings on the issue of the Husband’s voluntary unemployment, as the trial court relied heavily on prior orders, telling the husband “you keep coming up with the money” rather than going through the analysis at the contempt hearing and making the appropriate findings. This was not sufficient to support a finding of voluntarily underemployment, and, therefore punitive contempt finding:

[The Magistrate] did not find that he was shirking his obligation. She did not find that he was unreasonably forgoing higher-paying employment. She did not reiterate that he was voluntarily underemployed.17 Thus, to the extent the magistrate’s determination of willfulness was based on a finding of voluntary underemployment, the magistrate’s order is perfunctory. It does not set forth the legal standards applied, nor tie any specific factual findings to those legal standards for contempt of court. The trial court found the husband in contempt, based upon finding that he “could be making” enough to pay maintenance.”
Sheehan,⁷

The takeaway? With evidence of shirking, or voluntary unemployment/underemployment, it may be easier to prove punitive contempt than remedial contempt.

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