No. 89-579
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
IN RE THE MARRIAGE
OF NANCY JEAN SMITH,
Petitioner and Appellant,
and
STANLEY NORMAN SMITH,
Respondent and Respondent.
APPEAL FROM: District Court of the Third Judicial District,
In and for the County of Powell,
The Honorable Ted L. Mizner, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Noel K. Larrivee, Larrivee Law Offices, Missoula,
Montana
For Respondent:
Douglas A. Buxbaum & Mark W. Mattioli, Poore, Roth
& Robinson, Butte, Montana
Submitted: March 16, 1990
Decided: May 10, 1990
Clerk
Justice John C. Sheehy delivered the Opinion of the Court.
Nancy Jean Smith, now Nancy Jean Ferguson (Ferguson), appeals
the findings of fact, conclusions of law and order of the Third
Judicial District, Powell County, determining modification of child
support. We affirm.
Ferguson raises the following issues on appeal:
1. Whether the District Court improperly excluded certain
portions of Smith's income in applying the Montana Child Support
Guidelines.
2. Whether the District Court failed to consider the standard
of living the parties1 child would have enjoyed had the marriage
not been dissolved.
3. Whether the District Court failed to determine one of the
requested items of relief pertaining to annual costs of living
increases in Fergusonlsmotion for modification.
4. Whether Ferguson should be awarded her attorney fees and
cost incurred in bringing her motion for modification of child
support.
5. Whether the request for modification of child support
should have been made retroactive to the date of filing the
original motion for modification of child support.
Ferguson and Stanley Norman Smith (Smith) were married at Deer
Lodge, Montana, on July 6, 1974. The couple had one child,
Jennifer, born September 19, 1980. The parties were divorced in
December of 1985. The divorce decree provided that Smith should
pay Ferguson $400 per month for the care and support of the minor
child, Jennifer. The decree also provided for a cost-of-living
adjustment, increasing the child support by a specified sum
periodically. As the District Court noted in its findings, Smith
has duly paid his child support obligation from the time of the
dissolution of the marriage up to the present.
In addition to child support, Ferguson received alimony,
$80,000 in equity in the family home in Deer Lodge, interest in a
condominium, and a contract from Smith requiring him to make escrow
payments in the amount of $4,025 per year from 1985 through 1990,
increasing to the sum of $9,209 per year for five years following
December of 1990. Ferguson remains in possession of these assets,
with the exception of the alimony, which payments have now ended.
On November 13, 1987, Ferguson petitioned the District Court
to modify the previous decree asserting that she had suffered a
substantial and continuing change in circumstances that caused the
previous order to be unconscionable. Later, Ferguson filed an
amended motion for modification, requesting the court to increase
the child support to reflect increases in the cost of living; that
the court make modification retroactive from the date of filing the
original motion, November 13, 1987; and, that Ferguson be awarded
her costs and attorney fees in bringing the motion.
At the time of the December 1985 dissolution, Ferguson had a
college degree with previous college teaching experience and a real
estate broker's license. She is currently employed as a financial
planner. Despite her current employment, Ferguson's income over
the last two years was $5,000 in 1987, and $1,919.60 in 1988.
Although Ferguson's earnings have been dismal, she testified that
she eventually expects to earn about $17,000 per year at her
current job.
Although Ferguson was aware of her obligations at the time of
the dissolution and she fully consented to the property division,
she testified that she did not appreciate how much it would cost
to raise Jennifer. Ferguson testified that her expenses had
substantially increased since 1985. She testified that she spent
approximately $120,000 over the last three years supporting herself
and Jennifer. She estimated her pre-tax expenses for raising
Jennifer at $18,000 per year.
Smith is currently practicing medicine in Alaska. Smith's
gross income at the time of the dissolution was approximately
$60,000 per year. Since the divorce, Smith has moved to Alaska and
his present gross income is approximately $11,110.30 per month.
The District Court found that Smith's income available for support
is $5,342 per month. The District Court arrived at this figure by
deducting the following expenses from Smith's gross income of $11,
110.30 per month.
Office meals $ 85.00
Income Taxes 2,667.00
FICA 281.63
Dues/Publications 97.21
Continuing Medical Education 153.50
Business Travel 102.50
(except business travel
associated with the
divorce proceedings themselves)
Blue Cross Medical Insurance Premium 202.00
Auto Expense 428.45
Professional Attorney Fees 96.00
Professional Accounting Fees 259.08
Century Apartment Contribution for
Custodial Parent 166.69
Business Losses: Cobblestone Apartments 718.26
Nancy Jean Smith Escrow Payment 335.00
Medical Expenses prorated one-half 22.85
TOTAL $ 5,615.67
At the hearing, Ferguson offered Ms. Carol Mitchell, an
experienced divorce attorney, as an expert witness concerning the
application of the Child Support Guidelines. While cross-examined
by Smith's counsel, Ms. Mitchell testified that the above listed
deductions.were legitimate deductions from Smith's monthly income
as a means of applying the Child Support Guidelines. The District
Court also deducted Smith's disability insurance premium.
The District Court utilized the Child Support Guidelines, and
determined Smith's child support obligation as follows:
Undisputed Deductions From Income $ 5,615.67
Disability Insurance Premium 152.36
TOTAL DEDUCTIONS $ 5,768.03
Monthly Income
Less Deductions
Income for Support 5,342.30
x .I36
Respondentls Child Support Obligation $ 726.55
Furthermore, the District Court declined to apply the increase
in child support back to the original motion. The District Court
explained that "the motion was filed nearly two years ago and has
been mutually continued by the parties for most of that time.'' The
court further found that I1Respondent has always paid the support
that was ordered by the court and it would place a substantial
unfair burden on the Respondent to pay retroactive child support
at this time." The District Court also denied Fergusonls request
for costs and attorney fees.
In reviewing orders of the District Court we presume the
judgment of the District Court is correct. In Re the Marriage of
Reynolds (1983), 203 Mont. 97, 102, 660 P.2d 90, 93. We will
reverse the District Court only when there is a clear abuse of
discretion.
This Court has adopted the Uniform District Court Rule on
Child Support Guidelines (1987), 227 Mont. 1, 44 St.Rep. 828
(Guidelines). The Guidelines are a suggested procedure for the
determination of child support. Although the Guidelines are not
expressly binding, when used by the District Court, all findings
are reviewable. As previously stated, absent a clear showing of
abuse of discretion, the District Court's findings will be upheld.
In the Marriage of Gray (Mont. 1990), 47 St.Rep. 552, 554; In Re
the Marriage of Mitchell (1987), 229 Mont. 242, 245, 746 P.2d 598,
600; In Re the Marriage of Ensign (1987), 227 Mont. 357, 361, 739
P.2d 479, 482; In Re the Marriage of Ryan (1986), 222 Mont. 188,
191, 720 P.2d 691, 693. We find the District Court did not abuse
its discretion.
Whether the District Court improperly excluded certain
portions of smith's income in applying the Montana Child Support
Guidelines.
The District Court properly found Smith's total monthly income
to be $11,110.33 per month. The District Court then listed in its
findings of fact the monthly expenses noted above which Smith
claims are legitimate deductions under the Guidelines from his
monthly income. The District Court found that '.
I . . these items
are not substantially in dispute between the parties as legitimate
deductions from income to calculate child support under the
guidelines." However, Ferguson disagrees with the District Court,
and argues the finding is clearly erroneous. To determine whether
the ~istrictCourt abused its discretion, we naturally look to the
Guidelines for guidance. Part 5 of the Guidelines expressly
provides the following:
The implementation of the policy of keeping primary focus
on the needs of the child(ren) requires that from each
obligor parent's income only a minimum of exclusions be
allowed. Therefore, from gross income only the following
are subtracted as deductions: federal and state income
taxes; FICA; union dues, retirement contribution,;
uniforms, etc., which are required as a condition of
employment and are not reimbursed by the employer;
legitimate business expenses; and health insurance if the
benefits are maintained for the obligor parent's
dependents, including the child(ren) of the action at
hand.
Ferguson is not disputing the deductions for income taxes and
FICA contribution, as those are expressly included within part 5
of the Guidelines. However, she contends the District Court's
deductions for dues and publications; auto expenses; attorney fees;
accounting fees; and deductions for business investments, are not
listed as allowable deductions under the Guidelines. Ferguson is
correct, the Guidelines do not specifically set forth the deduction
adopted by the District Court. However, the Guidelines do permit
deductions for ''legitimate business expenses. We find Smith s
deductions fall under the category of ''legitimate business
deductions." Thus, we find the lower court properly exercised its
discretion in finding Smith's expenses as proper deductions. This
is supported by the testimony of Fergusonls own expert witness, Ms.
Mitchell. Ms. Mitchell testified that the expenses adopted by the
District Court were legitimate deductions from Smith's monthly
income under the Guidelines. Ferguson offered no testimony
contrary to the testimony of her own expert. The District Court
cannot be faulted for accepting the only testimony offered on the
deductions. It has long been the rule of this Court that on appeal
we will not put a District Court in error for a ruling or procedure
in which the appellant acquiesced, participated, or to which
appellant made no objection. In Re the Marriage of Green (1978),
176 Mont. 532, 536, 579 P.2d 1235, 1237; Dieruf v. Gollaher (1971),
156 Mont. 440, 447, 481 P.2d 322, 326; Johnson v. Green (1969), 153
Mont. 251, 255, 456 P.2d 290, 293; Harris v. Lloyd (1891), 11 Mont.
390, 28 P. 736. Thus, the District Court's decision was far from
7
arbitrary; rather, the court's decision was clearly within the
bounds of reason given the evidence presented.
The only additional deduction by the court, and not concurred
in by Ms. Mitchell, was a $152.36 per month deduction for Smith's
disability insurance premium. The District Court explained the
following reason for Smith purchasing the disability insurance,
"The investment in a disability insurance policy is maintained by
the respondent in order to enable him to meet his obligations,
including the obligation to Jennifer, in the event of his
disability." While disability insurance premiums are not specified
as a deduction under the Guidelines, we adopt the District Court's
finding and rationale for including Smith's disability insurance
premium as a deduction:
The Court concludes that the Respondent, . .
. , should
be encouraged, as a matter of public policy, to carry
disability insurance. To refuse such a deduction would
constitute an impediment to the provision of such
coverage and would run counter to the overall policy of
law in terms of child support. Consequently, the Court
concludes that the disability insurance premium is a
legitimate expense deduction under the Guidelines, and
is at least partially for the benefit of the minor child.
Whether the District Court failed to consider the standard of
living the parties1 minor child would have enjoyed had the marriage
not been dissolved.
In determining child support 5 40-4-204 (2)(c), MCA, expressly
directs the District Court to consider the "standard of living the
child would have enjoyed had the marriage not been d i s ~ o l v e d . ~ ~
In
Re the Marriage of Grenfell (1979), 182 Mont. 229, 232, 596 P.2d
205, 207. Ferguson argues the District Court, in its findings of
fact and conclusions of law, failed to consider the ''standard of
living of the child1'in determining the amount of the child support
modification and, just as in In Re the Marriage of Anderson (1988),
230 Mont. 89, 93, 748 P.2d 469, 471, such lack of findings should
serve as a grounds for reversal. The record reveals the District
Court heard extensive testimony and received numerous exhibits
concerning the income of the parties, the expenses of Jennifer, and
the standard of living of all the parties before and after the
dissolution. Contrary to Ferguson's assertions, the District Court
did consider 'Ithe standard of living of the child1'when the court
increased Smith's child support payments from $400 per month to
$726.55 per month. We find no abuse of discretion by the District
Court in determining the child support award.
I11
Whether the District Court failed to determine one of the
requested items of relief pertaining to annual cost of living
increases in Ferguson's Motion for Modification.
On January 25, 1989, Ferguson filed an Amended Motion for
Modification of Child Support, requesting among other things, that
'I. . . (the amount of) child support be increased annually to
reflect the increase in the cost of living, by the amount of $50.00
per month each year, commencing twelve (12) months after the date
of m~dification.~' A review of the District Court's findings of
fact and conclusions of law reveal the court failed to make any
findings or conclusions as to Ferguson's cost of living request.
This oversight, according to Ferguson, is an abuse of the lower
court's discretion.
The record discloses the District Court did not, in fact,
ignore Fergusonls request. Ferguson submitted extensive findings
of fact and conclusions in which her request for a cost of living
increase was clearly before the court and denied. It is clear from
the District Court's findings and conclusion that the court sifted
through the proposed findings of both parties and rejected various
findings and conclusions. The court's denial of the cost of living
increase would not, within the meaning of this Court's test of
abuse of discretion, result in any substantial injustice to
Ferguson who will receive $726.55 per month in child support.
Finally, the Court's denial of a cost of living increase is
supported by Ferguson's potential earning capacity, her substantial
equity in the Deer Lodge home, and the $9,209 she will receive in
each of the next five years. Thus, the District Court acted
properly in not awarding a cost of living increase to Ferguson.
Whether Ferguson should be awarded her attorney fees and costs
incurred in bringing her motion for modification of child support.
The awarding of attorney fees are governed by § 40-4-110, MCA,
which states:
The Court from time to time, after considerins the
financial resources of both parties, may order a party
to pay a reasonable amount for the cost to the other
party of maintaining or defending any proceeding under
chapters 1 and 4 of this title and for attorney's fees,
including sums for legal services rendered and costs
incurred prior to the commencement of the proceeding or
after entry of judgment . . . (Emphasis added.)
This Court has stated that the awarding of attorney fees is
clearly permissive under this statute. In Re the Marriage of
~allinger (1986), 221 Mont. 463, 471, 719 P.2d 777, 782-83; In Re
the Marriage of Obergfell (1985), 218 Mont. 83, 88, 708 P.2d 561,
564. The appropriate standard for reviewing a district court
decision not to award attorney fees under 9 40-4-110, MCA, is
whether the Court abused its discretion in refusing to award such
fees. Anderson, 748 P.2d at 472; In Re the Marriage of J.J.C.
(1987), 227 Mont. 264, 270, 739 P.2d 465, 469; In Re the Marriage
of Nalivka (1986), 222 Mont.84, 91, 720 P.2d 683, 688; Gallinser,
719 P.2d at 782-83. Ferguson argues that the District Court abused
its discretion because the court failed to state reasons for the
denial. In the past, this lack of specifics would have constituted
remandable error. However, this Court, in Gallinser, 719 P.2d at
782-83, specifically overruled that requirement, adopting instead
the Ifabuse of discretion1I standard for reviewing the District
Courtls award of attorney fees.
In this case, the record indicates the District Court was
cognizant of the financial resources and financial burdens of both
parties as required by 9 40-4-110, MCA, and, although Ferguson was
not in as strong a financial position as Smith, the record
indicates she still has sufficient financial resources to be
responsible for her own attorney fees. Thus, we find no abuse of
discretion by the District Court in ordering the parties to pay
their own attorney fees and costs.
v
11
Whether the request for modification of child support should
have been made retroactive to the date of filing the original
motion for modification of child support.
Ferguson complains that the District Court erred by failing
to make the child support retroactive to the date of the original
motion for modification. A review of the record reveals this
matter was properly brought before the District Court for
modification on November 13, 1987. The request for modification
was continued for hearing for more than 15 months. After 14 months
had elapsed, Ferguson filed an amended motion for modification
requesting, among other things, that the modification be made
retroactive from the date of filing of the original motion.
Ferguson argues that Smith is responsible for this delay, and
therefore the District Court should have ordered him to pay
retroactive child support. We disagree with Ferguson, and instead
adopt the District Court's findings. After reviewing the record,
the District Court properly concluded that "the case had been
continued on mutual agreement of the parties for over two years."
Furthermore, the court correctly noted that ItRespondenthas always
paid the support that was ordered by the court and it would place
a substantial unfair burden on the Respondent to pay retroactive
child support at this time." We see no abuse of discretion in the
District Court's denial of Fergusontsrequest for retroactive child
support.
Accordingly, we affirm the District Court.
Justice
We Concur: