Daniel F. Hedges
Charleston, West Virginia
Counsel for Petitioners
Jeffrey K. Matherly
Assistant Attorney General
Charleston, West Virginia
Counsel for Respondents
JUSTICE WORKMAN Delivered the Opinion of the Court.
1. West Virginia Code § 48A-5-3(o) (Supp. 1991) makes it a
misdemeanor for a source of income to knowingly and willfully
conceal the fact that the source of income is paying income to an
obligor with the intent to avoid withholding from the obligor's
income of amounts payable as support.
2. "'Matured installments provided for in a decree, which
orders the payment of monthly sums for alimony or child support,
stand as "decretal judgments" against the party charged with the
payments.' Syl. Pt. 1, Goff v. Goff,  W. Va. , 356
S.E.2d 496 (1987)." Syl. Pt. 1, Hudson v. Peck, 183 W. Va. 300,
395 S.E.2d 544 (1990).
3. A source of income is liable to an obligee for any amount
of child support which the source of income fails to withhold from
the obligor's wages where the source of income knowingly and
willfully enters into an agreement to pay an obligor his wages in
cash in order to assist the obligor in evading child support
payments. To establish that a source of income is knowingly and
willfully engaged in such conduct, the obligee must produce clear,
cogent and convincing evidence that the source of income had
knowledge of the obligor's intent to evade child support payments
through receipt of cash wages.
4. Punitive damages are recoverable against an obligor and
the source of income where evidence demonstrates that the obligor
and the source of income knowingly and willfully engaged in a cash
wage agreement so that the obligor could evade paying child
5. An obligee of a child support order can institute
proceedings against obligors and sources of income to obtain
payment of child support where the Child Advocate Office fails or
refuses to bring such action.
6. The Child Advocate Office has the authority to institute
civil actions for compensatory and punitive damages against sources
of income for failing to withhold child support payments. The
existence of such authority in the Child Advocate Office in no way
limits the right of obligees to themselves institute civil actions
against sources of income where the Child Advocate Office fails or
refuses to bring action.
This case is before the Court upon an August 27, 1991, order
of the Circuit Court of Kanawha County which certified the
following question to this Court:
Is the employer of an obligor of child support
or alimony who enters into a cash payment
arrangement for the services of his employee
in order to assist the obligor in avoiding the
duty of payment of child support or alimony
liable for actual and punitive damages
resulting therefrom.See footnote 1
The lower court answered this question in the affirmative. Upon review of the arguments of the parties and all the matters of record submitted before the Court, we agree with the lower court's answer to the certified question.
This action involves two separate obligors who have attempted to evade their respective child support obligations by entering into cash employment arrangements with their employers. The stipulated factsSee footnote 2 reveal that on October 6, 1987, the obligor,
Timothy Belcher, and the petitioner, Darlene Belcher, were granted
a divorce in which Mr. Belcher was ordered to pay thirty dollars
per month child support. Mr. Belcher paid nothing in 1988, a total
of ninety dollars in 1989 and nothing in 1990.
Since the late fall of 1989, Mr. Belcher was employed by
Dennis Browning d/b/a Dude's Used Auto Sales, as a mechanic. Mr.
Belcher and his employer entered into an agreement whereby the
employer paid Mr. Belcher's wages in cash without making any
payroll deductions and without reporting the payment of these wages
or paying any payroll taxes to the appropriate state and federal
In January 1990, the petitioner filed a request for services with the respondent Child Advocate Office (hereinafter referred to as CAO) in the Lincoln County office. The petitioner's request provided the CAO with information and evidence regarding Mr. Belcher's employment status. From January 1990 through June 1990, the petitioner continually advised the CAO of the obligor's continued employment, the type of employment and the specific location of the employment. The CAO consistently denied the existence of the obligor's employment, refused to investigate the
petitioner's reports that the obligor was employed, refused to take
legal steps to recover the support payments due, and maintained
that there was absolutely no potential for collecting any child
Consequently, in July 1990, the petitioner filed a complaint
in the Circuit Court of Lincoln County, West Virginia, against the
obligor and his employer, seeking a declaration relative to
nonpayment of child support on the part of the obligor and the
unlawful employment remuneration arrangement between the obligor
and his employer. As a result of this complaint, a settlement
orderSee footnote 3 was entered on December 10, 1990, between the petitioner,
Mr. Belcher, and his employer. The CAO never took any action
against the employer.
On November 29, 1990, the petitioner, Melissa Arnold,
completed an application for CAO services and provided it to the
CAO office. In the application, the petitioner notified the CAO of
Roger Arnold's, the obligor's, employment. No action was taken by
the CAO concerning the petitioner's application.
Then, on January 24, 1991, the petitioner was granted a
divorce from the obligor. Pursuant to the order granting the
divorce, which was entered on February 11, 1991, the obligor was
required to pay $250 per month in child support. The stipulated
facts indicate that the obligor has failed to make any child
The facts further indicated that after Mr. Arnold's child
support obligation became clear, he told the petitioner that he
switched to a cash employment arrangement to defeat his duty to pay
child support. Since March 1991, the obligor has been employed by
George Stone d/b/a George Stone, Inc., under an arrangement whereby
the employer paid the obligor's wages in cash without making any
payroll deductions and without reporting the payment of the wages
or paying the appropriate payroll taxes to state and federal
authorities. The obligor works for this employer six days a week
on a full-time basis. Moreover, the petitioner observes the
obligor in his employment almost every day.
In March 1991, the petitioner provided the CAO in Lincoln County with information and evidence regarding the obligor's employment status. The petitioner again in April 1991 informed the CAO about the obligor's employment. The petitioner has still not received a single child support payment, nor has she received any information from the CAO regarding her case. Moreover, according to the petitioner, a review of the petitioner's CAO file by counsel on July 22, 1991, indicated not a single activity in the file relative to this petitioner or obligor since it was opened. Unlike the Terry case, no lawsuit has been filed by petitioner Arnold against the obligor and/or his employer.
The first issue is whether a source of incomeSee footnote 4 who knowingly
and willfully enters into an agreement with an obligor of child
support to pay the obligor his wages in cash so that the obligor
can conceal his employment and evade paying child support is liable
for actual and punitive damages resulting from the agreement with
the obligor. The petitioners maintain that the sources of income
are liable for actual and punitive damages because they are acting
in direct defiance of a court order and they are conspiring in
contravention of public policy, which is to deprive the
petitioners' children of the support necessary for their well-being. The respondent argues that there is no clear basis in the
law to support such a claim against a source of income, but that if
such a remedy existed, the respondent would avail itself of that
remedy in an effort to increase the collection of child support
It is clear that the statutory law of this state only provides for actions against employers or any other source of income who, upon receipt of notice of withholding from the CAO, fails to withhold income in accordance with the notice. See W. Va. Code §§ 48A-5-3(n), -3(f)(6) (Supp. 1991);See footnote 5 In situations such as these, the Code provides that the source of income is liable to the obligee "for any amount which the source of income fails to withhold from income due an obligor." W. Va. Code § 48A-5-3(n). Moreover, West Virginia Code § 48A-5-3(o) makes it a misdemeanor
for "[a] source of income . . . [to] knowingly and willfully
conceal[ ] the fact that the source of income is paying income to
an obligor, with the intent to avoid withholding from the obligor's
income of amounts payable as support. . . ."See footnote 6
The pertinent statutory provisions only envision actions
against sources of income who, after receiving notice from the CAO,
fail to withhold income pursuant to the notice. See W. Va. Code §§
48A-5-3(n), -3(f)(6). The provisions leave unaddressed the present
factual scenario before the Court involving the source of income
who knowingly and willfully conceals the obligor's employment,
thereby precluding the CAO from serving a notice so that
withholding from the obligor's wages can be obtained. It is,
however, inconceivable that a legal remedy does not exist against
an employer who engages in even more egregious conduct than that
governed by the statute.
Support for this legal right to bring action and recover
actual damages against a source of income in these situations
originates under the ordinary creditor remedy found in West
Virginia Code § 38-5A-3 (1979). This provision provides in
pertinent part that
[a] judgment creditor may apply to the court in which the judgment was recovered or a court having jurisdiction of the same, without notice to
the judgment debtor, for a suggestee executionSee footnote 7
against any money due or to become due within one
year after the issuance of such execution to the
judgment debtor as salary or wages arising out of
any private employment.
W. Va. Code § 38-5A-3.
Since we have previously held in syllabus point 1 of Hudson v.
Peck, 183 W. Va. 300, 395 S.E.2d 544 (1990) (quoting Syl. Pt. 1,
Goff v. Goff, 177 W. Va. 742, 356 S.E.2d 496 (1987)) that
"'[m]atured installments provided for in a decree, which orders the
payment of monthly sums for alimony or child support, stand as
"decretal judgments" against the party charged with the payments,'"
a wage suggestion could certainly be issued pursuant to West
Virginia Code § 38-5A-3 for collection from the suggestee source of
income the money owed the petitioners, judgment creditors, under
the decretal judgments.
Moreover, pursuant to West Virginia Code § 38-5A-5 (1972) the
suggestee source of income who "fail[s] or refuse[s] to pay over to
the officer serving the execution or to the judgment creditor the
required percentage of indebtedness . . . shall be liable to an
action therefor by the judgment creditor named in the execution
. . . ." See Turk v. McKinney, 132 W. Va. 460, 52 S.E.2d 388 (1949).
In Turk, this Court specifically stated that "[u]pon being properly served with a valid suggestee execution, it is an employer's duty to the judgment creditor to adhere strictly to the demands of such suggestee execution, and no deviation therefrom can be tolerated." Id. at 467-68, 52 S.E.2d 392. Further, we placed the burden upon the judgment creditor to prove damages against a suggestee resulting from the failure or refusal to comply with the suggestee execution. Id. at 460, 52 S.E.2d at 389, Syl. Pt. 2.
Therefore, the notice provisions of West Virginia Code §§ 48A-5-3(n), -3(f)(6) cannot be deemed to have taken away the ordinary
creditor remedies found in West Virginia Code §§ 38-5A-3, -5, where
the source of income conspires with the obligor to conceal the
obligor's employment thereby precluding withholding pursuant to
West Virginia Code §§ 48A-5-3(n), -3(f)(6). Under these
circumstances, it logically follows that a source of income is
liable to an obligee for any amount of child support which the
source of income fails to withhold from the obligor's wages where
the source of income knowingly and willfully enters into an
agreement to pay an obligor his wages in cash in order to assist
the obligor in evading child support payments. To establish that
a source of income is knowingly and willfully engaged in such
conduct, the obligee must produce clear, cogent and convincing
evidence that the source of income had knowledge of the obligor's
intent to evade child support payments through receipt of cash
Additionally, when a source of income and an obligor engage in such willful, wanton and egregious conduct, punitive damages may also be recoverable. Not only have both the source of income and the obligor acted to contravene the substantial public policy which favors the payment and collection of child support,See footnote 8 but they have also perpetrated an intentional wrong upon the obligee and the CAO. In Addair v. Huffman, 156 W. Va. 592, 599, 195 S.E.2d 739, 743 (1973) (citing George v. Norfolk & W. Ry. Co., 80 W. Va. 317, 92 S.E. 430 (1917)) we held that "where there is an intentional wrong, or where there are circumstances which warrant an inference of malice, willfulness, or wanton disregard of the rights of others, punitive damages may be awarded."
Consequently, punitive damages are recoverable against an obligor and the source of income where evidence demonstrates that the obligor and the source of income knowingly and willfully engaged in a cash wage agreement so that the obligor could evade paying child support. The punitive damages "must bear a reasonable relationship to the potential of harm caused by the . . . [obligor's and source of income's] actions" and cannot be awarded without a finding of compensatory damages. Syl. Pt. 1, in part, Garnes v. Fleming Landfill, Inc., 186 W. Va. 656, 413 S.E.2d 897
(1991). Moreover, the award of any punitive damages in these cases
should be in accordance with all the other guidelines set forth in
the Garnes decision.
The next issue before this Court is who has the authority to initiate both wage withholding actions against the obligor and civil actions against sources of income for failing to withhold child support payments.See footnote 9 The petitioners maintain that the CAO has "a statutory monopoly on the initiation of wage withholding procedures" and thus, an obligee must go to the CAO for wage withholding. Therefore, the petitioners further maintain that the CAO is vested with the legal duty to take all appropriate action, including the initiation of civil suits against employers, to
ensure that support payments are obtained when obligors are
receiving cash wages to avoid child support payments. See W. Va.
Code § § 48A-2-2 (Supp. 1991) and 48A-5-3. Finally, in oral
argument the petitioners asserted that while the CAO should have
the responsibility to bring these actions, it should not be to the
exclusion of obligees. While the respondent does not deny their
obligation to pursue wage withholdings, as to civil actions for
damages, they assert only that if there existed a clear legal right
for such actions against sources of income, the CAO would pursue
them in an effort to increase the collection of child support
payments and to deter sources of income from entering into these
types of cash arrangement.
West Virginia Code § 48A-5-3(a) provides in part that "[t]he
withholding from an obligor's income of amounts payable as spousal
or child support shall be enforced by the children's advocate
. . . ." Obviously, the statute imposes a mandatory duty on the CAO to enforce this provision. However, nothing in this provision limits the right of obligees to themselves institute actions involving wage withholdings against obligors and sources of income to the CAO. Quite clearly, an obligee of a child support order can institute proceedings against obligors and sources of income to obtain payment of child support where the CAO fails or refuses to bring such action.
This ruling in no way lessens the legal duties and
responsibilities of the CAO. As previously mentioned, the CAO has
an affirmative duty to collect child support payments. W. Va. Code
§ 48A-5-3; see Roush v. Roush, 767 F. Supp. 1344, 1347 (S.D. W.
Va.), aff'd, 952 F.2d 396 (4th Cir. 1991), cert. denied, 112 S. Ct.
1948 (1992) (Legislature vested CAO with complete responsibility
for collecting child support).
Moreover, West Virginia Code § 48A-2-2(a) states that the
primary function of the CAO is to "protect[ ] and promote[ ] the
best interests of children. . . ." It is in the best interests of
the children involved in these cases for the CAO to actively
investigate these situations and then institute all necessary legal
proceedings against the source of income. Not only is the CAO more
familiar with the process, but in many cases obligees are not able
to afford to pursue collection of child support. Consequently, the
CAO has the authority to institute civil actions for compensatory
and punitive damages against sources of income for failing to
withhold child support payments. The existence of such authority
in the CAO in no way limits the right of obligees to themselves
institute civil action against sources of income where the CAO
fails or refuses to bring action.
Further, the active investigation of these cases obviously must mean more than the CAO making a phone call to the employer. When an obligee presents the CAO with the type of information which
was presented to the CAO in Lincoln County, the CAO has a duty to
verify the accuracy of this information by a more aggressive means
of investigation than just a phone call and blanket acceptance of
the employer's story. In most cases, an employer is not going to
admit over the phone to a state agency that he is paying an
employee cash wages in order to aid the employee in circumventing
payment to that state agency.
Having answered the certified question, this case is dismissed
from the docket of this Court.
Footnote: 1While the certified question addresses only the issue of employee liability, the petitioners' prayer for relief specifically asks the Court to give the Child Advocate Office the authority to institute the civil actions for damages against the sources of income. Thus, since this issue is tangentially related to the certified question, we resolve it in Section II of this opinion. See infra at pp. 10-13.
Footnote: 2The recitation of facts in this case is taken from the August 27, 1991, order certifying the above-mentioned question to this
Court. While the respondent indicates that many of the factual statements made by the petitioners are not supported by the record, no specific disputed facts were brought to this Court's attention. Suffice it to say that we do agree that the record currently before the Court is sparse and further development of the facts is necessary by the lower court.
Footnote: 3The December 10, 1990, settlement order provided for the following: 1) a decretal judgment against the defendant Timothy Belcher in the amount of $1,189.95 for accrued child support plus interest; an agreement by the defendants, including Dennis Browning d/b/a Dude's Used Auto Sales, to automatic wage withholding in the amount of $50 per month until the decretal judgment was satisfied; and 3) an agreement that the defendant Dennis Browning
shall be liable fore [sic] arrearage only during the period of time the defendant, Belcher, performed services for him (beginning December, 1989) and only in the event that the arrearages are not paid by the time of the termination of their relationship in which event the plaintiff may reinstate this action for a determination of liability, if any.
Footnote: 4West Virginia Code § 48A-1-3(19) (Supp. 1991) defines source of income as "an employer or successor employer or any other person who owes or will owe income to an obligor."
Footnote: 5Pursuant to West Virginia Code § 48A-5-3(n):
A source of income is liable to an
obligee, including the state of West Virginia
or the department of health and human
resources where appropriate, for any amount
which the source of income fails to withhold
from income due an obligor following receipt
by such source of income of proper notice
under subsection (f) of this section:
Provided, That a source of income shall not be
required to vary the normal pay and
disbursement cycles in order to comply with
the provisions of this section.
West Virginia Code § 48A-5-3(n) was previously West Virginia Code § 48A-5-3(o) (1986). While the subsection letters changed, the pertinent statutory provisions are substantially the same. We note the change in the subsection letter only because West Virginia Code § 48A-5-3(o) (1986) technically governs the Belcher case since the initial application was filed with the CAO in January 1990.
Footnote: 6This particular statutory provision was not enacted until 1991.
Footnote: 7Suggestee execution is "an execution differing from an ordinary execution upon a judgment only in that it is directed against money due or to become due to the judgment debtor from the suggestee as therein set out." W. Va. Code 38-5A-1(2) (1939).
Footnote: 8See West Virginia Code § 48A-1-2 (1986) which provides that the reason the Family Obligations Enforcement Act, West Virginia Code §§ 48A-1-1 to -4 (1986 & Supp 1991), was enacted was to "encourage and require a child's parents to meet the obligation of providing that child with adequate food, shelter, clothing, education, and health and child care."
Footnote: 9Technically, these are tangential issues since they were not the subject of the certified question, but they were discussed by petitioners both in their brief and in oral argument. The respondent's brief joins in the legal arguments of petitioners as to the certified question, but is extremely unhelpful in that the CAO makes no real effort to brief or argue any of these issues. It is extremely disconcerting to this Court to have such a significant matter tossed into our lap without any discernible effort on the part of either of the parties to elucidate these issues in any depth.
Furthermore, the writer of this opinion at the conclusion of oral argument requested both sides to submit supplementary briefs (both on the main issues raised in the petition and on the law in other jurisdictions relating thereto) since the briefs were patently inadequate for the importance of the issues raised. Neither side submitted any additional material, nor had the courtesy to indicate they had unearthed no further information or argument they desired to impart. When this Court is asked to develop and enunciate new law in any arena, the lawyers should at least do their part!