Appeal from the District Court of Emmons County, South Central Judicial District, the Honorable Robert O. Wefald, Judge.
The opinion of the court was delivered by: Sandstrom, Justice.
[¶1] Michel Gunia appeals from an amended judgment reducing his child support obligation from $980 per month for three minor children to $836 per month for two minor children. He claims the district court misapplied the law by failing to make findings about his present income. We conclude the district court did not clearly err in finding Michel Gunia failed to show a material change in circumstances and the court did not err in determining his current child support obligation. We affirm the amended judgment.
[¶2] In November 2006, Michel and Terri Gunia were divorced under a settlement agreement and judgment in which Terri Gunia was awarded custody of the parties' three minor children and Michel Gunia agreed to pay her $980 per month in child support for the three children:
until the recipient child has (i) attained the age of 19 years, if in regular high school attendance after age 18, (ii) has attained age 18 and has graduated from high school, or (iii) is earlier emancipated, whichever occurs first. Upon termination of the support obligation for each child, the support amount payable thereafter for subsequent children shall be reduced by the proportion provided for in the then current child support guidelines, recognizing that the obligors' responsibility per child may increase. The support obligation of [Michel Gunia] for subsequent children shall continue until terminated under the conditions set forth above.
The parties' stipulation and the judgment stated Michel Gunia's child support obligation was "based on income and financial records which show that the amount conforms and is in excess of the requirements" of the child support guidelines, but the stipulation and judgment did not include a statement or findings about his income and financial circumstances. See N.D. Admin. Code §§ 75-02-04.1-02(10) ("Each child support order must include a statement of the net income of the obligor used to determine the child support obligation, and how that net income was determined") and 75-02-04.1-12 (in uncontested proceedings, credible evidence describing obligor's income and financial circumstances must be presented to demonstrate agreed-upon child support meets guideline requirements). At the time of the divorce, however, Michel Gunia owned a crop spraying business, and Terri Gunia was a bookkeeper for the business.
[¶3] In September 2007, Michel Gunia moved to reduce his child support obligation after the oldest child turned 18 and was no longer in high school. At an evidentiary hearing on the motion, Michel Gunia presented evidence that he elected to operate his crop spraying business as a Subchapter S corporation in July 2007, and in August 2007, he started paying himself $2,000 per month in gross income and $1,617 per month in net income from the business. Michel Gunia's accountant, Russell Schick, testified that he advised Michel Gunia to continue drawing $1,617 per month in net income in 2008 to build equity in the business. In response to questions from the court about the characteristics of a Subchapter S corporation, the following colloquy occurred:
THE COURT: [T]ell me about a Sub Chapter S Corporation. Just hypothetical, let's assume I pay myself $5,000.00 a month gross, ok? And so at the end of the year, although I paid myself $60,000.00, I actually have $100,000.00, you know, it would be $100,000.00, what happens to that last $40,000.00?
MR. SCHICK: That gets taxed, flows to his personal tax return and gets taxed.
THE COURT: Sure, I mean, it's basically treated like an individual, so it doesn't matter what you get from month to month, it's what you get and how much is left at the end of the year, isn't it?
THE COURT: Cause then you add that to what you got to come up with the total, right?
THE COURT: Do you have any estimate as to what's going to happen in this case over six months of experience? I mean, that $2,000.00, is that going to be just cutting it right on the narrow ...