No. 8 6 - 1 6 8
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
IN RE THE MARRIAGE OF
STEPHANIE H. SARO,
Petitioner and Respondent,
and
THOMAS I. SABO,
Respondent and Appellant.
APPEAL FROM: District Court of the Second Judicial District,
In and for the County of Silver BOW,
The Honorable Arnold Olsen, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Henningsen & Purcell; Mark A. Vucurovich, Butte,
Montana
For Respondent:
J. David Penwell, Bozeman, Montana
Submitted on Briefs: Aug. 1 4 , 1 9 8 6
Decided: December 11, 1986
Filed:
Mr. Chief Justice J . A. Turnage delivered the Opinion of the
Court.
Thomas Sabo appeals from a December 31, 1985, judgment
of the Second Judicial District Court, Silver Row County.
The judgment ordered Thomas to pay Stephanie $7,750 in past
child support, pay her $3,904.85 from the sale of marital
property, and pay her $2,201.23 in attorney fees plus 10
percent accruing interest.
We reverse in part and affirm in part.
Thomas Sabo raises two issues for our review:
1. Is a non-custodial father, who assumes permanent
custody and support of the children with the consent of the
custodial mother, relieved of the obligation to pay child
support accruing after and during the consensual assumption
of custody?
2. Did substantial evidence support the court's find-
ing that Stepha.nie was a partner with Thomas in SAC0
Investments?
After sixteen years of marriage, the Sabos were di-
vorced on November 15, 1976, in Silver Bow County. At the
time, Thomas was an attorney and Stephanie was a real estate
agent. The divorce decree incorporated a settlement agreement
in which Thomas agreed to pay Stephanie $125 per month per
child, in support for their three minor children. Thomas'
support obligation for his son, Mark, ended in September
1979, when Mark turned eighteen.
Through February 1981, Thomas paid Stephanie $8,375 in
child support. In March 1981, St.ephanie filed a Uniform
Reciprocal Enforcement of Support Act (URESA) claim against
Thomas while she was living in Texas. Thomas paid $1,000 on
the claim but paid no child support after that date.
In the summer of 1981, both the youngest daughter,
Erin, and the youngest son, Matthew, began living permanently
with Thomas in Rozeman. Thomas never brought any action to
modify the children's support payments to reflect the change
in circumstances. While the children lived with Thomas,
Stephanie had weekly dinners with them but made no claim for
child support. Matthew turned eighteen in April 1982.
Stephanie brought the present action on January 25, 1985,
less than one month before Erin turned eighteen.
Issue No. 1
Is a non-custodial father, who assumes permanent custo-
dy and support of the children with the consent of the custo-
dial mother, relieved of the obligation to pay child support
accruing after and during the consensual assumption of
custody?
Generally, when child support becomes due under a
dissolution decree, the support becomes a judgment debt
similar to any other judgment for money. Section 40-4-208,
MCA. In Re Marriage of Carlson (Mont. 1984), 693 P.2d 4Q6,
499, 41 St.Rep. 2419. Under this statute, the court may
modify a child support award, but only upon a showing of
changed circumstances or written consent of the parties. The
statute allows only prospective, not retroactive, modifica.-
tion of child support. Section 40-4-208(1), MCA, provides:
"[A] decree may be modified by a court as to maintenance or
support only as to installments accruing subsequent to the
motion for modification." Previously, we held that the
statute barred modification of child support in arrears. "A
divorce decree cannot be modified to cancel past due and
unpaid child support." Dahl v. Dahl (1978), 176 Mont. 307,
310, 577 P.2d 1230, 1232. Foll-owing the equitable principles
expressed in three recent cases, we overrule Dahl and its
progeny.
In State of Washington ex rel. Blakeslee v. Horton
(Mont. 1986), 722 P.2d 1148, 43 St.Rep. 1321, we applied
equitable principles to bar collection of past due and unpaid
child support installments. Blakeslee noted the totality of
the circumstances surrounding the parents' relationship with
the children, and. the oral support agreement which had gov-
erned their relationship for fourteen years. Citinq the
Blakeslee district court, we stated:
The law is clear that the arrearage in
child support payment cannot be modified
by the court upon any retroactive
basis. .. These legal principles,
however valid they may-be as a general
rule, are rendered impotent when the
.
.
parties mutually agree that they be
ignored and also carry out such agree-
ment in actual fact.
---
of t h ----
-. .Equity cannot
allow the mother to participate in
nullification - - e y u r ~ o s eof the law
in fact and, ---- tlme, allow her
at the same
to claim - benefit - - - theory,
the of it in
simply because there - - meter runninq
is a
which can total a dollar - -in child
loss
support. [~rn~hasis added. I
Blakeslee, 722 P.2d at 1050-1051.
Thomas Sabo accepted the children into his home and
raised the children without any support from Stephanie, even
though she was employed as a real estate agent after her
return to Rozeman. Stephanie never asserted that her current
request was founded upon any actual need of her children.
Furthermore, she never suggested any implied need which had
not been satisfied over the years, or which had now arisen
and could possibly serve to validate her action at this
belated point. See Blakeslee, 722 P.2d at 1151.
Although Thomas took no action to change the terms of
the divorce decree, he accepted sole responsibility for the
children's health, welfare and support. During the period of
Thomas' care, Stephanie's major contribution was sharing her
Mexican vacation with Erin. Such inequity ca.nnot validate
her claim. "Although legally the mother may have been cor-
rect in her claim for child support, equity demands that the
claim must fail. This Court has long adhered to such princi-
ples of equity." Blakeslee, 722 P.2d at 1151.
The Sabo children voluntarily moved in with Thomas.
During the entire period the children lived with Thomas,
Stephanie neither pursued support payments in arrears nor
objected to the shift in custody. By her assent and conduct,
Stephanie consented to the arrangement. As we recently held,
"[Tlhe equitable principle arises when the mother has ex-
pressly or impliedly consented to an arrangement other than
the payment of the judgment." In Re Marriage of Cook (Mont.
1986), 725 P.2d 562, 566, 43 St.Rep. 1732, 1737. This prin-
ciple acknowledges that the real beneficiaries of the judg-
ment are the children, not the person named in the judgment.
Tn Cook, the mother was awarded custody and child support for
the children. A few years after the divorce, the children
began living permanently with the father. Upon his petition,
the father was granted custody of the children several years
later.
On the issue of child support in arrears, we agreed
with the Cook district court that the parents had entered
into a binding oral. agreement modifying support and visita-
tion. The father relied on the agreement to his financial
detriment. We concluded that the mother was estopped from
enforcing the support provisions of the decree after the date
they entered into the oral agreement. "Furthermore, the
changes in the children's residences represented changed
circumstances so substantial and continuing as to make en-
forcement of [the father's] original and modified support
obligation unconscionable." Cook, 725 P.2d at 566.
Never, during the entire period that the Sabo children
were being raised by Thomas, did Stephanie offer any finan-
cial assistance to Thomas. In Cook, we noted that circum-
stances may not allow the mother to collect child support in
arrears, "where the husband has made expenditures which
constitute substantial compliance with the spirit and intent
of the decree." Cook, 725 P.2d at 566. Thomas has met both
the spirit and the purpose of child support obligations.
Thomas did not abrogate his duties and obligations under the
decree of dissolution. On the contrary, he assumed the
duties of the custodial parent by default, after Stephanie
relinquished them.
Stephanie consented to the change in custody and sup-
port. The question now becomes whether consensual modifica-
tion of child support is enforceable in Montana and the
extent of any such enforcement.
Upon compelling evidence, the doctrine of equitable
estoppel may override the provisions of $ 40-4-208, MCA.
This principle was best articulated in In Re the Marriage of
Jensen (Mont. 1986) , - P.2d. - I ,
- 43 St.Rep. 1891,
1984-1895.
We therefore hold that in Montana a
decree for support may be modified on
equitable grounds by a court where there
is clear and compelling evidence of the
terms of an oral agreement or modifica-
tion. We further hold such modification
may be applied only to maintenance and
support payments to be made subsequent
to the oral agreement for modification.
These conclusions "are consistent with both Blakeslee an.d
Cook where we enforced oral agreements pertaining to install-
ments of support subsequently accruing. " Jensen, 43 St.Rep.
Under the equitable principles of Blakeslee, Cook and
Jensen, we hold that Thomas substantially complied with the
decree obligations. By her assent and conduct, Stephanie
consented to the shift in custody and support. We cannot
equitably allow Stephanie to reap a windfall of support
payments, if she never made the support expenditures. 'I A
party to an agreement which has been performed for some
length of time is estopped to deny its validity." Jensen, 43
St.Rep. at 1895. Thomas is therefore relived of the obliga-
tion to pay any child support accruing after and during his
consensual assumption of custody.
On Issue No. 1, we reverse.
Issue No. 2
Did substantial evidence support the court's finding
that Stephanie was a partner with Thomas in SACO Investments?
Thomas engaged in business activities with a realtor,
Gene Cook, in SACO Investments. SACO's primary purpose was
investment in real estate. During the marriage, SACO bought
some parcels known as the Hoff Property. In the settlement
agreement, Thomas' share of the parcels was identified as the
jointly-held property of Thomas and Stephanie.
After the divorce, SACO sold the one remaining parcel
of the Hoff Property for $14,000. However, Thomas did not
tell Stephanie about the sale or give her any money from the
sale. Stephanie later learned of the sale from Cook. Thomas
contended that Stephanie was not a SACO partner and, there-
fore, not entitled to any proceeds. However, the District
Court found that she was a partner and entitled to one-half
of Thomas's share. Therefore, the court awarded her
one-fourth of the total proceeds plus interest, or $3,904.85.
The court's finding was well supported. Various SACO
deeds identify Stephanie as a partner. The deed-s were
prepared by Thomas as attorney for the partnership. Further-
more, in his original response to Stephanie's divorce filing,
Thomas signed a sworn statement that the only assets he hel-d,
personally and apart from the marital estate, were his car
and law practice. In addition, Thomas signed the property
settlement agreement, listing S A C 0 properties as " joj-ntly
held properties. I'
These documents, signed by Thomas, are substantial
evidence that Stephanie was entitled to participate in the
partnership property. We will not set aside the findings of
the District Court unless there is a clear abuse of discre-
tion. In R e the Marriage of Perry (Mont. 1 9 8 5 ) , 704 P.2d 41,
.
43, 42 St.F.ep. 1101, 1104. No such abuse existed in this
case.
On Issue No. 2, we affirm.
We concur:
Justices