COLETTE C. JURY, Petitioner-Appellant,
VICTOR R. JURY, Respondent-Appellee.
FROM THE DISTRICT COURT OF BERNALILLO COUNTY Deborah Davis
Walker, District Judge
I. Friedman Santa Fe, NM Bishop Law P.C. Julie Bishop
Albuquerque, NM for Appellant.
Kiernan, P.C. Kerry Kiernan Albuquerque, NM for Appellee.
J. WECHSLER, JUDGE
This case arises from the district court's denial of
Petitioner Colette C. Jury's motion to modify the child
support decree (the 2010 decree) that resulted from the
dissolution of the marriage between Petitioner and Respondent
Victor R. Jury. After considering evidence of the
parties' updated financial information, the district
court ruled that the 2010 decree was not subject to
modification because neither party demonstrated material and
substantial changes in circumstances affecting the welfare of
Petitioner claims that the district court's ruling
resulted from its erroneous determination of the parties'
gross monthly incomes and, by extension, child support
obligations. Respondent argues that, even if the district
court miscalculated the parties' gross monthly incomes,
its determination that no material and substantial changes in
circumstances affecting the welfare of the children occurred
District courts have discretion to deviate from the child
support guidelines, NMSA 1978, § 40-4-11.1 (2008), as
provided in NMSA 1978, Section 40-4-11.2 (1989). However,
such discretion does not extend to the process of calculating
the parties' gross monthly incomes. Calculation of the
parties' gross monthly incomes must conform to the child
support guidelines or precedential appellate court
interpretation of the child support guidelines. Therefore, to
the extent that the district court improperly deviated from
the child support guidelines in calculating the parties'
gross monthly incomes, we reverse and remand for
We recognize, however, that recalculation alone does not
resolve the central issue raised on appeal. Petitioner asks
this Court to conclude that changes in income indicated by
the parties' updated financial information entitled her
to a modification of the 2010 decree as a matter of law.
Because the testimony and evidence offered at trial does not
support a modification at common law, we are unable to so
conclude. However, if recalculation of the parties' gross
monthly incomes results in a deviation upward of more than
twenty percent of the existing child support obligation,
Petitioner is entitled to "a presumption of material and
substantial changes in circumstances" as provided by
NMSA 1978, Section 40-4-11.4(A) (1991).
The district court's deviation from the child support
guidelines in calculating the parties' gross monthly
incomes potentially deprived Petitioner of a presumption of
material and substantial changes in circumstances to which
she was entitled as a matter of law. If, on remand, the
district court's recalculation of the parties' gross
monthly incomes results in a presumption of material and
substantial changes in circumstances under Section 40-4-11.4,
the district court shall reconsider whether Petitioner is
entitled to a modification of the 2010 decree in light of
Petitioner additionally argues that the district court lacked
evidence to support its prospective reduction of the amount
of child support awarded in the 2010 decree. Respondent
argues that the reduction was appropriate but agrees that the
district court's failure to articulate how it determined
the recalculated amount requires remand. Because Respondent
agrees that error occurred, we decline to provide additional
legal analysis. On remand, the district court shall determine
whether, and to what extent, the 2010 decree was subject to
modification given the changes in circumstances occurring on
or around June 1, 2015.
Because our reversal and remand undermines the district
court's rationale for awarding certain attorney fees,
such awards to Respondent in the amounts of $15, 000 and $750
are reversed. However, we affirm the district court's
award of attorney fees arising from post-judgment proceedings
in the amount of $1, 500 to Respondent.
The 2010 Decree
On September 11, 2006, Petitioner filed a petition to
dissolve her marriage to Respondent. The district court's
February 22, 2010 judgment and order finalized numerous
matters between the parties, including the child support
obligation. At the time of the 2010 decree, the parties had
two minor children of the marriage, ages thirteen (Son) and
nine (Daughter). Respondent derived the majority of his
income from his employment at, and shareholder interest in,
Summit Electric Co., Inc. (Summit Electric) and his
shareholder interest in Jury & Associates, LLC (Jury
& Associates). Petitioner did not work outside the home.
Substantial testimony and evidence related to the
parties' income and financial resources was offered at
trial. Exhibits 16 and 16A, which were filed as supplemental
exhibits to the appellate record on July 14, 2016, appear to
have featured prominently in the district court's 2010
determination. Exhibits 16 and 16A contained statements of
Respondent's gross income, cash received, income taxes
paid, and net income for the years 2001 through 2009.
Applying the financial information in these exhibits, the
district court concluded that Respondent had an "earning
capacity" of $750, 000 per year. In its ruling from the
bench, the district court explained that $750, 000 was not
Respondent's actual gross annual income, but instead
represented a conscious deviation downward. While discussing
specific evidence of Respondent's then-current year
earnings, the district court stated "I think, if
anything, the $750[, 000] is low."
After arriving at an annual income of $750, 000, the district
court subtracted $120, 000 paid by Respondent to Petitioner
in spousal support. It then divided the total amount by
twelve, resulting in a gross monthly income for Respondent of
The district court calculated Petitioner's income by
combining her spousal support award and $4, 000 per month of
imputed earning capacity. It then divided the total amount by
twelve, resulting in a gross monthly income for Petitioner of
Having calculated the parties' combined gross monthly
income to be $66, 500, the district court calculated the
percentage of combined gross monthly income. It credited
Respondent with seventy-nine percent of the parties'
combined gross monthly income and Petitioner with twenty-one
percent of the parties' combined gross monthly income.
The district court then determined the basic child support
obligation to be $10, 707. Although the child support
guidelines in effect in February 2010 did not allow for basic
calculation of a combined gross monthly income of $66, 500,
the district court elected to apply the historical formula to
determine the basic child support amount.
The district court also calculated the total child support
obligation, the retained portion based upon custody, and the
parties' individual child support obligations. The
custodial calculation was based upon the children residing
with Petitioner fifty-five percent of each month and residing
with Respondent forty-five percent of each month. The
district court calculated Petitioner's monthly obligation
to be $1, 518 and Respondent's monthly obligation to be
$6, 978. It reconciled these obligations to result in $5, 460
owed by Respondent to Petitioner each month. It reduced this
amount by twenty-one percent of additional expenses,
including the cost of the children's health care
insurance and private school tuition. After these reductions,
Respondent's total monthly child support obligation was
$4, 872. In accordance with Section 40-4-11.4(B), the
district court ordered that the parties exchange updated
financial information each year. The merits of the 2010
decree are not on appeal or subject to reconsideration by
The 2014 Denial of the Parties' Motions to Modify
the 2010 Decree
Respondent provided updated financial information to
Petitioner on November 14, 2011. On December 6, 2011,
Petitioner filed a motion to modify the 2010 decree based
upon a "deviation upward of greater than twenty percent
of the existing child support obligation[.]" Respondent
filed a motion in opposition on April 16, 2013, as well as
his own motion to modify the 2010 decree on January 7, 2014.
He based his motion to modify the 2010 decree upon
allegations of substantial changes in circumstances to the
custodial time sharing and changes in the parties'
On January 30, 2012, the district court appointed James W.
Francis, CPA, as a Rule 11-706 NMRA expert in the case. He
prepared a report that (1) analyzed the parties' 2011
gross incomes and (2) updated Exhibit 16A from the November
2009 trial with Respondent's financial information from
2009 through 2011.
The trial was conducted between April 30, 2014 and May 2,
2014. Francis testified as to his conclusions about the
district court's previous determination of
Respondent's gross income, stating,
[In 2009] the judge . . . took an average of the prior eight
or nine years [of] after-tax cash income, averaged those out,
and it came up to about $750, 000. . . . The court then . . .
subtracted from that $750, 000, $120, 000, which was the
spousal support that [Respondent] was paying, $10, 000 a
month. That left a balance of $630, 000, which the court
divided by twelve, and said that [Respondent's] monthly
income for child support purposes was $52, 500. So, if the
court were to follow the exact same model . . .
[Respondent's] income for 2011, using the deviations that
I described, would be $2, 785, 363. But that's just for
Francis additionally testified that Respondent's 2011
gross income was comprised of salary from Summit Electric and
pass-through earnings proportionate to his ownership shares
in Summit Electric and Jury & Associates. On direct
examination, counsel for Petitioner implied that the 2010
decree resulted from an improper application of the child
support guidelines because the district court deducted income
taxes paid from Respondent's gross income. Francis
replied that pass-through income from certain corporate
entities is, sometimes, subtracted from gross income by
courts as cash not received by the party. On
cross-examination, Francis agreed with counsel for Respondent
that S-corporations frequently pass through profits to
shareholders for the purpose of paying income taxes.
The parties testified as to the welfare of their children,
essentially agreeing that the children lack for nothing and
are well provided for by both parents. The parties also
agreed that Son, of his own volition, currently resided with
Respondent full-time, but disputed the date on which this
transition occurred. Based upon motions filed during 2012,
the district court ruled that Son ceased residing with
Petitioner in late 2011.
The district court denied both parties' motions to modify
the 2010 decree. As rationale for its denial, the district
court offered the following statements:
I did the best job I could [in 2009]. And I think it's
very interesting to note that, according to the report that
you both stipulated into evidence and you both essentially
agreed with, number-wise, that [Respondent's] income
after deduction for the tax payment was $711, 562 [in 2009],
and I put his income at $750, 000. I think, all things
considered, that was pretty close. I estimated that
[Petitioner's] earning capacity, in addition to her
spousal support, was about $4, 000, based on the testimony
that I heard and I think it's still at that point.
. . . .
And I said at the time, I don't want to see you back in a
year, or two years. I knew that [Respondent] . . . by all
accounts, he's a very capable businessman. He runs a very
successful company. The income fluctuates up and down,
through the last eleven years. There is a huge variation from
year to year. So I was well aware at the time that I could
pick a number and then the next year the numbers would be
twice that much.
Now, under the statute, and there was a quote from
Spingola [v. Spingola, 1978-NMSC-045, 91
N.M. 737, 580 P.2d 958');">580 P.2d 958, ] the court can only modify child
support if there is a material and substantial change in
circumstances which would, since the last order was entered,
which would warrant the modification of the child support.
. . . .
I picked what I thought was a reasonable number [in 2009]. If
[Petitioner] didn't like that number, she should have
appealed at the time. I can't ...