In a recent alimony case captioned Gillette v. Gillette, the Florida Court of Appeal refused to impute income to a small business owner who chose to continue working in his own business rather than working for a larger employer.
The parties in this marriage were married for twelve years. The Husband was an engineer at a technology company. In 2001, the Husband started a computer storage business. He operated the computer storage business on a part time basis, and continued to work at the technology company until 2004. In 2004, the Husband resigned from the technology company and started working full time at his own computer storage business.
The Wife did not object to this arrangement until the divorce was filed. After the divorce was filed, the Wife objected to Husband working in his own computer storage business. She argued that the Husband was voluntarily unemployed and presented testimony from a vocational expert that Husband could earn significantly more as an employee of a larger company.
The Florida statutes require courts to impute income to parties that are voluntarily unemployed. A trial court is required to engage in a two part analysis. First, the trial court must find that the party’s termination from employment was voluntary. Second, the court must decide that the party’s unemployment results from that party’s failure to use diligent efforts to find employment that pays a salary that is equal to or greater than the amount that was previously earned.
A party can be considered to be voluntarily unemployed if he or she leaves a higher paying position to become self-employed. Additionally, where a party is fired from a job due to misconduct, income may be imputed to the party. Neither of these circumstances occurred in this case.
In this case, the parties agreed to the Husband’s self-employment. The Court of Appeal refused to evaluate the wisdom of the parties’ decision to many years ago. Additionally, the Court of Appeal refused to evaluate the wisdom of permitting the husband to continue in his own business, which had yet to become profitable. The Court permitted the payor to start a small business and not be deemed to be underemployed. The Court stated that to decide otherwise, would strangle small businesses, because small businesses are often unprofitable at first and become successful down the road. The Court stated that payors are not required to stop working in their own businesses and seek employment at larger companies.
To speak with an alimony attorney in Jupiter , Florida, contact Matthew Lane & Associates, P.A. at (561) 363-3400.