Background
Shauanna Andrea Abbott and Steven Joseph Merker agreed in 2019 that Merker earned $13,000 per month from his solely owned real estate development company and would pay Abbott $600 per month in child support. In 2024, Merker sought a reduction, alleging that the pandemic, higher interest rates, and other conditions had harmed the business and left him unable to pay the existing amount.
After an evidentiary hearing, the district court found Merker’s monthly gross income was $71,944.93 and increased his monthly obligation to $1,581.83. The court referred to distributions connected with Merker’s line-of-credit draws, deposits into his business and personal accounts, and transfers between those accounts. It combined stated business and personal income figures and divided the result by what it described as nine months of available statements, but it did not clearly explain whether the distributions were included or how transfers were treated.
The Court’s Holding
The Colorado Court of Appeals reversed because the district court’s findings were not sufficiently specific to permit meaningful appellate review. The calculation contained unexplained discrepancies concerning the evidence used, the methodology applied, and the relevant time period, leaving the appellate court unable to determine whether the $71,944.93 monthly-income figure was supported by the record and consistent with Colorado law.
The appellate court identified several problems: the district court did not quantify the distributions, did not clarify whether account transfers were double counted, apparently made an arithmetic error, and described three bank statements as missing even though the record showed they had been admitted. It also treated February 2024 through April 2025 as an inconsistent number of months. On remand, the district court must reconsider Merker’s income, explain the supporting evidence, methodology, and calculation period, and avoid double counting; it may receive additional evidence if necessary.
Key Takeaways
- A child-support income determination must include findings detailed enough to reveal the evidence, methodology, and time period underlying the calculation.
- Unexplained arithmetic, inconsistent time periods, and uncertainty about transfers or possible double counting can prevent meaningful appellate review.
- The court did not decide whether the district court improperly treated gross receipts, loan proceeds, return of equity, internal transfers, or anticipated project income as income because the original calculation could not be reconstructed.
Why It Matters
The decision underscores the need for transparent, record-supported income calculations when a parent owns a business and moves money among business accounts, personal accounts, and credit facilities. The ruling is case-specific: it does not decide which disputed categories qualify as income, but requires the district court to make clear findings that allow the resulting support order to be reviewed.