Incontro v. Jacobs

D on J. I ncontro, appellee , v.
lIane Jacobs , appellant.
761 N.W.2d 551
Filed February 27, 2009. 	No. S-07-991.
1. Modification of Decree: Child Support: Appeal and Error. Modification of
child support payments is entrusted to the trial court’s discretion, and although,
on appeal, the issue is reviewed de novo on the record, the decision of the trial
court will be affirmed absent an abuse of discretion.
2. Judges: Words and Phrases. A judicial abuse of discretion exists when a judge,
within the effective limits of authorized judicial power, elects to act or refrains
from acting, and the selected option results in a decision which is untenable and
unfairly deprives a litigant of a substantial right or a just result in matters submit-
ted for disposition through a judicial system.
3. Child Support. Child support orders are always subject to review and
modification.
4. Modification of Decree: Child Support: Proof. A party seeking to modify a
child support order must show a material change in circumstances which (1)
occurred subsequent to the entry of the original decree or previous modification
and (2) was not contemplated when the decree was entered.
5. Modification of Decree: Child Support. A decree awarding child support will
not be modified because of a change of circumstances which was in the contem-
plation of the parties at the time the original or preceding order was made, but
only those anticipated changes which were specifically noted on the record at the
time the previous order was entered will prevent modification.
6. ____: ____. A proceeding to modify a child support order is neither a retrial of
the original case nor a review of the original decree.
7. Courts: Appeal and Error. Upon reversing a decision of the Nebraska Court
of Appeals, the Nebraska Supreme Court may consider, as it deems appropriate,
some or all of the assignments of error the Court of Appeals did not reach.
8. Modification of Decree: Child Support: Proof. The party seeking the modifica-
tion has the burden to produce sufficient proof that a material change of circum-
stances has occurred that warrants a modification.
9. Modification of Decree: Child Support: Alimony: Good Cause. Material
change in circumstances in reference to modification of child support is analo-
gous to modification of alimony for good cause.
10. Modification of Decree: Child Support. Courts may consider various factors to
determine whether a material change of circumstances has occurred. Among the
factors to be considered are (1) changes in the financial position of the parent
obligated to pay support, (2) the needs of the children for whom support is paid,
(3) good or bad faith motive of the obligated parent in sustaining a reduction in
income, and (4) whether the change is temporary or permanent.
11. ____: ____. The paramount concern in child support cases, whether in the
original proceeding or subsequent modification, remains the best interests of
the child.
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Cite as 277 Neb. 275
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:51 AM CST

12. Rules of the Supreme Court: Child Support. in general, child support pay-
ments should be set according to the Nebraska Child Support Guidelines.
13. ____: ____. if applicable, earning capacity may be considered in lieu of a
parent’s actual, present income and may include factors such as work history,
education, occupational skills, and job opportunities.
14. ____: ____. Earning capacity is not limited to wage-earning capacity, but includes
moneys available from all sources.
15. Modification of Decree: Child Support. Earning capacity is another factor used
to determine whether a material change in circumstances has occurred warrant-
ing modification.
16. Child Support. if it is shown that a reduction in the obligor parent’s income
is attributable to his or her personal wishes and not the result of unfavorable
or adverse conditions in the economy, his or her health, or other circumstances
affecting his or her earning capacity, then a reduction in child support is
not warranted.
Petition for further review from the Court of Appeals,
sIevers , Moore, and cassel, judges, on appeal thereto from
the District Court for Douglas County, G reGory M. schatz,
judge. judgment of Court of Appeals affirmed.
Karen A. bates-Crouch and Christen Carns, Senior Certified
Law 	Student, 	of 	bates-Crouch 	Law 	office, 	P.C., 	L.L.o.,
and Eric M. rees, of blinn, rees & Loveland, P.C., L.L.o.,
for appellant.
joseph S. Daly and Mary M. Schott, of Sodoro, Daly &
Sodoro, P.C., for appellee.
heavIcan, 	c.J., 	WrIGht, 	connolly, 	G errarD, 	stephan,
MccorMack , and MIller-lerMan, JJ.
MccorMack , J.
NATUrE oF CASE
Don j. incontro filed a second application to modify child
support after previously seeking a modification of child cus-
tody. The district court modified incontro’s child support obli-
gation, and the mother, Liane jacobs, appealed. The Nebraska
Court of Appeals reversed, concluding that incontro failed to
show there had been a material change of circumstances in his
income that was not contemplated at the time the first modi-
fication order was entered. We granted incontro’s petition for
further review.
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bACKGroUND
on September 17, 2004, the court entered a decree estab-
lishing the paternity and custody of two minor children. The
parents of the two minor children are incontro and jacobs. The
court granted custody to jacobs. incontro was granted reason-
able and liberal parenting time, and he was ordered to pay child
support in the amount of $804.82.
For purposes of determining child support, the district court
listed incontro’s gross monthly income as $3,145.92, which
represented a 57.82 percent contribution to the parties’ monthly
income. both parties were ordered to provide health insurance
for the children as available through their respective employers.
The court ordered incontro to pay “57.83%” of unreimbursed
medical and daycare expenses. The court also granted incontro
the right of first refusal to care for the children whenever
jacobs had to work. This right was later vacated by the court
at jacobs’ request.
The record does not reveal any information on how the
district court calculated incontro’s gross monthly income. The
record shows that incontro is 50 years old with a license
in cosmetology. incontro testified that he is a self-employed
cosmetologist at Hair Technology, inc. (Hair Tech), a beauty
salon. other evidence in the record reveals that incontro served
as a manager at Hair Tech at some point. in 2004, incontro and
Kelli renner were the sole owners of Hair Tech—owning 5,000
shares of stock each. in late 2004, incontro allegedly gave his
shares of stock to renner as a gift.
Shortly after the paternity decree was entered, incontro filed
an application to modify the paternity decree. The application
was not included in the appellate record. incontro testified that
he filed his first application for modification on November 22,
2004. His attorney explained that, at that time, incontro was
seeking custody of the children and, as part of that, sought
child support from jacobs. The court took judicial notice of
the application, which was in the court file. The court read into
the record that incontro’s application stated: “[i]t’s in the best
interest of the children that they be placed with [incontro].”
The court also noted that incontro asked for child support and
attorney fees.
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Cite as 277 Neb. 275

The court entered the first modification order on june 5,
2006, increasing incontro’s visitation rights and modifying
the delegation of daycare expenses and unreimbursed medical
expenses. With regard to medical expenses, the court ordered
jacobs to pay the first $480 of unreimbursed medical expenses
incurred on behalf of the children. After that, both parties
were to share responsibility for medical expenses in the same
percentage as they shared responsibility for child support.
The court entered a judgment against incontro for unpaid,
unreimbursed medical expenses and attorney fees and directed
that, except as modified, its original decree of paternity was
to remain in full force and effect. The modification order did
not address any issues regarding incontro’s obligation to pay
child support.
on March 23, 2007, incontro filed a second application to
modify the paternity decree. incontro alleged that there had
been a change in circumstances such that his income had been
substantially reduced by at least 10 percent. incontro alleged
that this change of circumstances was not contemplated at the
time of the entry of the paternity decree. He alleged that this
change in financial circumstances had lasted 3 or more months
and could reasonably be expected to last for an additional 6 or
more months.
The district court conducted a hearing on the second appli-
cation to modify. At the hearing, incontro testified that he and
renner were married on November 17, 2004. According to
incontro, renner “wouldn’t marry me to protect her company,
unless i signed that company over to her with an agreement
that we would both work together and earn money when i was
there.” on November 17, incontro signed a “Declaration of
Gift,” purportedly giving renner his 5,000 shares of Hair Tech
stock. renner and incontro eventually dissolved their marriage
on May 30, 2007.
incontro vaguely explained why his income decreased. He
testified that his income decreased as a result of losing his
clientele and financial hardships in his marriage. incontro
alleged that because he exercised his right of first refusal of
visitation at least four times a week until the right was vacated
by a court order, his clientele decreased. And because his
278 	277 NEbrASKA rEPorTS

clientele decreased, his income decreased. He testified that
since March 2005, he has tried to rebuild his clientele, but he
provided no explanation as to why he has been unable to bring
it back to its previous level.
incontro further testified that because of financial difficulties
during his marriage with renner, renner started separating all
of their finances. As a result, incontro testified that the only
income he received was the income he earned from working
at the salon. The only explanation incontro gave regarding the
financial difficulties he suffered was that he could not pay his
child support obligation. The record reveals that incontro is
behind on his child support payments.
incontro’s income tax returns show that his gross income
was $24,777.60 in 2004, $15,827.50 in 2005, and $9,376 in
2006. incontro testified that for the first half of the year in
2007, his income was approximately $9,000. in 2005 and 2006,
incontro filed a joint tax return with renner. in 2006, incontro
and renner’s adjusted gross income was $78,579, and in 2005,
their adjusted gross income was $82,745.
incontro admitted that he had ample opportunity to request
a change in child support before the june 2006 modification
order was entered. He testified that from june 2006 to August
2007, nothing about his financial situation had changed.
As part of incontro and renner’s dissolution decree, incontro
received certain benefits. The decree provides:
(a) . . . incontro may remain at the property located at
3873 Gold Street Apt. 1 for 36 months beginning the date
of final divorce and expiring in 36 months, free of rent in
exchange that he provide all maintenance work, and man-
age all three apartments.
(b) . . . incontro is allowed to retain employment at
Hair Tech . . . receive free supplies, free cell phone ser-
vices, and to include the 36 months free rent provided he
does all the maintenance and repairs at Hair Tech.
items a and b are in exchange for [incontro’s] agree-
ment to honor [t]he Declaration of Gift that was dated
November of 2004.
incontro testified that he did not know how much any of these
benefits were worth.
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Cite as 277 Neb. 275

on August 16, 2007, the court entered a second modification
order. The court concluded that since the entry of the September
17, 2004, paternity decree, there had been an unanticipated and
uncontemplated change in circumstances such that incontro’s
income had been reduced—resulting in a variation by 10 per-
cent or more downward of his current child support obligation.
Thus, the court reduced incontro’s child support obligation to
$479.62. The district court also reduced incontro’s percent of
unreimbursed medical expenses to 44.41 percent.
The Court of Appeals reversed the district court’s second
modification order, concluding that incontro failed to show
a material change in circumstances subsequent to the first
modification order, which was not contemplated when the first
modification order was entered.1 We granted incontro’s petition
for further review.
ASSiGNMENTS oF Error
incontro argues that the Court of Appeals erred (1) in apply-
ing principles of res judicata, (2) by determining that the dis-
trict court erred in finding that there was a material change of
circumstances since entering the decree, and (3) by finding that
an application to change custody bars a later application to
modify child support.
STANDArD oF rEViEW
[1,2] Modification of child support payments is entrusted to
the trial court’s discretion, and although, on appeal, the issue is
reviewed de novo on the record, the decision of the trial court
will be affirmed absent an abuse of discretion.2 A judicial abuse
of discretion exists when a judge, within the effective limits
of authorized judicial power, elects to act or refrains from
acting, and the selected option results in a decision which is
untenable and unfairly deprives a litigant of a substantial right
or a just result in matters submitted for disposition through a
judicial system.3
1 Incontro v. Jacobs, No. A-07-991, 2008 WL 2231060 (Neb. App. May 27,
2008) (selected for posting to court Web site).
2 Gallner v. Hoffman, 264 Neb. 995, 653 N.W.2d 838 (2002).
3 Id.
280 	277 NEbrASKA rEPorTS

ANALYSiS
[3-6] Child support orders are always subject to review
and modification.4 A party seeking to modify a child support
order must show a material change in circumstances which
(1) occurred subsequent to the entry of the original decree or
previous modification and (2) was not contemplated when the
decree was entered.5 A decree awarding child support will not
be modified because of a change of circumstances which was
in the contemplation of the parties at the time the original or
preceding order was made, but only those anticipated changes
which were specifically noted on the record at the time the pre-
vious order was entered will prevent modification.6 A proceed-
ing to modify a child support order is neither a retrial of the
original case nor a review of the original decree.7
We recognize that incontro’s income had changed by the
time he sought custody and child support prior to the entry
of the first modification order. However, the Court of Appeals
erred in concluding that for this reason alone, incontro was
subsequently barred from seeking a modification of his child
support obligations. Clearly, the changes that incontro relies
on in seeking a modification of his child support obligation
were not part of the first modification proceedings. The first
modification order does not make any mention of child sup-
port. From our review of the record, we conclude the facts
incontro alleged in his second application to modify child sup-
port based on a reduction in his income were not on the record
at the time either the original decree or previous modification
was entered. instead, these facts were introduced to the court
at the hearing in August 2007. Further, the june 2006 modi-
fication did not address the issue of modifying child support
for a change in circumstances based on incontro’s income. As
the court noted, the first application for modification asked
for child support; however, such a request was obviously
4 Reinsch v. Reinsch, 259 Neb. 564, 611 N.W.2d 86 (2000).
5 See, Wilkins v. Wilkins, 269 Neb. 937, 697 N.W.2d 280 (2005); Rhoades v.
Rhoades, 258 Neb. 721, 605 N.W.2d 454 (2000).
6 See Wagner v. Wagner, 224 Neb. 155, 396 N.W.2d 282 (1986).
7 See id.
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Cite as 277 Neb. 275

contingent upon the court’s granting incontro custody of
the children. The court’s first modification order ultimately
addressed only visitation, daycare expenses, and unreimbursed
medical expenses. it did not, in any way, reevaluate the child
support award.
At this time, incontro is paying child support based upon
his yearly income as it was in 2004, and the focus should be
on whether the present circumstances are substantially and
materially different than they were when the court established
incontro’s child support obligation. As such, the Court of
Appeals incorrectly used the june 2006 modification order
to determine whether a material change of circumstances had
occurred.
[7] Upon reversing a decision of the Court of Appeals, we
may consider, as we deem appropriate, some or all of the
assignments of error the Court of Appeals did not reach.8 Thus,
we consider whether the district court abused its discretion
in finding that there was a material change in circumstances
warranting a reduction in incontro’s child support payments.
According to jacobs, incontro intended to deliberately reduce
his income before calculating child support and voluntarily
reduced his income by giving away his shares of Hair Tech to
renner as a gift.
[8,9] The party seeking the modification has the burden
to produce sufficient proof that a material change of circum-
stances has occurred that warrants a modification.9 We have
said, “‘“Material change in circumstances”’ in reference to
modification of child support is analogous to modification of
alimony for ‘“good cause.”’. . .”10
[10,11] Courts may consider various factors to determine
whether a material change in circumstances has occurred.11
Among the factors to be considered in determining whether a
material change of circumstances has occurred are changes in the
8 Wagner v. Wagner, 275 Neb. 693, 749 N.W.2d 137 (2008).
9 See Morrill County v. Darsaklis, 7 Neb. App. 489, 584 N.W.2d 36
(1998).
10 Schulze v. Schulze, 238 Neb. 81, 85, 469 N.W.2d 139, 142 (1991).
11 Id.
282 	277 NEbrASKA rEPorTS

financial position of the parent obligated to pay support, the
needs of the children for whom support is paid, good or bad
faith motive of the obligated parent in sustaining a reduction in
income, and whether the change is temporary or permanent.12
but, the paramount concern in child support cases, whether in
the original proceeding or subsequent modification, remains
the best interests of the child.13
[12-16] 	in 	general, 	child 	support 	payments 	should 	be
set according to the Nebraska Child Support Guidelines.14
According to the guidelines, “if applicable, earning capacity
may be considered in lieu of a parent’s actual, present income
and may include factors such as work history, education, occu-
pational skills, and job opportunities. Earning capacity is not
limited to wage-earning capacity, but includes moneys avail-
able from all sources.”15 As such, in determining the amount
of child support a parent is obligated to pay, parental earning
capacity is a considered factor.16 it is invariably concluded that
a reduction in child support is not warranted when an obligor
parent’s financial position diminishes due to his or her own
voluntary wastage or dissipation of his or her talents and assets
and a reduction in child support would seriously impair the
needs of the children.17
in Schulze v. Schulze,18 we reversed the order of the trial
court, which reduced the amount of the noncustodial father’s
child support obligation. At the entry of the marital dissolution
decree, the father was in a partnership that owned a paint-
ing business. Subsequently, the father dissolved his painting
12 Rhoades v. Rhoades, supra note 5; Swenson v. Swenson, 254 Neb. 242, 575
N.W.2d 612 (1998).
13 See Wagner v. Wagner, supra note 6.
14 Claborn v. Claborn, 267 Neb. 201, 673 N.W.2d 533 (2004).
15 Neb. Ct. r. § 4-204.
16 See, Neb. rev. Stat. § 42-364(4) (reissue 2008); Schulze v. Schulze, supra
note 10.
17 Sabatka v. Sabatka, 245 Neb. 109, 511 N.W.2d 107 (1994); Schulze v.
Schulze, supra note 10; Grahovac v. Grahovac, 12 Neb. App. 585, 680
N.W.2d 616 (2004).
18 Schulze v. Schulze, supra note 10.
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Cite as 277 Neb. 275

business because he desired to become a nursing assistant.
The father alleged that his job change from a painter to a
nurse’s aide decreased his adjusted gross income from $37,522
annually to $7,400 annually. We concluded that the father’s
earning capacity had not altered and diminished after the
initial decree.19 We stated that “the reduction in [the father’s]
income is attributable to his personal wishes and not the result
of unfavorable or adverse conditions in the economy, [his]
health, or other circumstances affecting [his] earning capac-
ity.”20 Thus, we concluded that there was no material change
of circumstances warranting a modification of the child sup-
port payments.21
our de novo review of the record reveals that similarly in
this case, incontro did not meet his burden to show that a
material change in circumstances has occurred which warrants
a reduction in his child support obligation. incontro testified
that his income started to decrease when the original custody
decree was entered because he exercised his right of first refusal
“every day [he] possibly could, which was four days,” and that
this caused him to lose clientele. However, incontro’s right of
first refusal was terminated by the court in March 2005. When
asked to explain why his income has decreased, incontro could
only explain as follows:
i had a lot of money problems in my marriage, so things
had started being separated by . . . renner. So the money
that i was actually earning was the money that i made
behind the chair, so i was more going on my own because
of disputes and arguments within my marriage.
Further, the record reveals that incontro gave renner his
50-percent share of stock in Hair Tech for no valuable con-
sideration. However, in renner and incontro’s dissolution of
marriage decree, the court ordered that incontro receive certain
benefits in exchange for incontro’s honoring the “Declaration
of Gift” dated November 17, 2004. While incontro failed to
19 Id.
20 Id. at 86, 469 N.W.2d at 142.
21 Id.
284 	277 NEbrASKA rEPorTS

produce documentation that would reflect the precise amounts,
it is clear that his income decreased after he voluntarily gave to
renner his shares in Hair Tech.
From these facts, we conclude that incontro has not shown
how his income has reduced through no fault of his own.
rather, the record indicates that incontro’s income decreased
due to his own personal wishes, and not as a result of unfavor-
able or adverse conditions in the economy, his health, or other
circumstances that would affect incontro’s earning capacity.
While the amount of incontro’s income has changed from the
entry of the original child support order, he has failed to prove
a change in his earning capacity. And, as far as the record
reflects, the needs of the children remain the same as they
existed when the district court entered the original paternity
decree. For these reasons, the district court abused its discre-
tion when it modified incontro’s child support payments based
upon incontro’s change in income.
CoNCLUSioN
We conclude that the Court of Appeals erred in concluding
that the district court could not consider incontro’s application
to modify the support award because the circumstances alleg-
edly justifying the modification were present at the time of a
prior modification that did not consider child support. However,
we affirm the Court of Appeals’ reversal of the district court’s
second modification for a different reason. We find that the
district court erred in concluding that incontro had proved there
was a material change in circumstances warranting a reduction
in his child support obligation.
affIrMeD.
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Cite as 277 Neb. 275