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Law School Case Brief

Sullivan v. O'Connor - 2006-Ohio-3206, 167 Ohio App. 3d 458, 855 N.E.2d 554


In determining whether retained earnings should be considered income for the purposes of determining child support, control and intent are two key factors in the retained earnings analysis. The dispositive issue is not so much the presence of retained corporate earnings but the degree of control that an obligor exercises over the decision to distribute those earnings and whether the corporate entity is used as a device to shelter the income from the child support calculation.


In a child support dispute, both parents sought review of a trial court order that imposed a higher child support obligation on O’Connor, the father of the parties' child. Over the years, upon establishing paternity and by the parties' agreement, O'Connor consistently paid a monthly child support amount to Sullivan, the child’s mother.  On Sullivan's request, the county child support enforcement agency calculated that O’Connor’s obligation was a lower monthly figure. Sullivan appealed that determination in the trial court, which ordered O’Connor to pay a much higher amount together with arrears. Thereafter, the trial court granted the mother's request for clarification, but it denied her request for reconsideration and for a new trial.



Are the retained earnings of a parent considered part of the parent's income for purposes of determining child support?




The court affirmed the judgment of the trial court. Although the father chose not to receive certain funds from corporate entities, the retained earnings were properly imputed to him for purposes of calculating his gross income under Ohio Rev. Code Ann. § 3119.01(B)(7) for child support, as he had control over the funds. Depreciation expenses were properly included in disposable income.

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