No. 91-389
IN THE SUPREME COURT OF THE STATE OF MONTANA
1993
IN RE THE MARRIAGE OF
GORDON R. SULLIVAN,
Petitioner and Appellant,
and
ANNETTE M. SULLIVAN,
Respondent and Respondent.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable Thomas M. McKittrick, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Antonia P. Marra; Bell & Marra, Great Falls, Montana
For Respondent:
Robert F. James and William 0 Bronson; James, Gray
.
& McCafferty, Great Falls, Montana
Submitted on Briefs: December 22, 1992
Decided: June 1 0 , 1 9 9 3
Filed:
Justice John Conway Harrison delivered the Opinion of the Court.
This is an appeal from the Eighth Judicial District, Cascade
County, the Honorable Thomas M. McKittrick presiding. Appellant
Gordon Sullivan (Gordon) appeals from an order holding him in
contempt, determining child support, allocating tax exemptions and
medical costs, and refusing to modify child support retroactively.
He also appeals from an order awarding attorney's fees to
respondent Annette Sullivan (Annette). We affirm in part, reverse
in part, and remand for further proceedings.
Gordon raises the following issues on appeal:
1. Did the District Court err in determining the amount of
child support?
2. Did the District Court err in allocating the tax
exemptions and medical costs?
3. Did the District Court err in refusing to modify child
support retroactive to the time Gordon filed his first motion for
modification?
4. Did the District Court err in holding Gordon in contempt
and awarding Annette her attorney's fees and costs?
Gordon and Annette were married on July 18, 1970. They
dissolved their marriage under the terms of a Decree of Dissolution
entered by the District Court on September 19, 1985. Three
children--Riley, Amanda, and Ryan, all minors at the time of the
dissolution--were born of the marriage. The decree incorporated
the provisions of a Property Settlement Agreement dated September
17, 1985 (the 1985 agreement) . The agreement provided that: 1) the
2
parties would have joint custody of the children with Annette given
exclusive discretion to determine the primary residence; 2) Gordon
would pay Annette child support of $150 per child per month through
the clerk of the district court; 3) child support would increase to
$175 a month per child in one year, and $200 a month per child two
years from the date of the agreement; 4) Gordon could claim Amanda
and Ryan for income tax exemptions if his child support and
maintenance obligations were current; 5) Gordon would provide
medical and dental insurance and be responsible for the deductibles
for the children during their minority, while both parties would be
responsible for expenses not covered by insurance; and 6) the
successful party would be awarded reasonable attorney's fees in any
action commenced to enforce, modify, or interpret any provision of
the agreement.
At the time of the dissolution Gordon worked as the Director
of Marketing and Special Projects at Columbus Hospital, earning
approximately $36,000 a year from all sources. Annette worked as
a secretary earning approximately $10,000 a year from all sources.
In 1985 or 1986, Gordon suffered a work-related back injury
which he exacerbated a few years later. He received $568 bi-weekly
workers' compensation benefits through December 1989, at which time
he received a $14,900 lump sum impairment award. The hospital
eliminated Gordon's position on April 4, 1988, before he could
return to work.
In August 1988, Annette moved for an order requiring Gordon to
show cause why he should not be held in contempt for failing to pay
over $3,000 in past due child support payments, letting the health
insurance coverage lapse, failing to pay maintenance, and failing
to pay necessary dental bills for his children. Gordon responded
to that motion with a counter-motion, based on his reduced income,
asking the court to reduce the amount of child support and require
Annette to obtain insurance.
On December 19, 1989, the parties finally entered into a
stipulation (the 1989 stipulation) regarding enforcement of the
1985 agreement. The District Court entered an order 1) requiring
the parties to abide by the stipulation; 2) modifying the 1985
agreement where inconsistent with the stipulation; 3) entering
judgment against Gordon pursuant to the stipulation; and 4)
modifying child support to $200 a month for each of two children,
eliminating child support for Riley who was living with Gordon at
that time.
In the 1989 stipulation, the parties agreed:
1. Gordon owed Annette $3,600 in past due maintenance but was
to have a credit of $2,992.98 as an offset against that amount;
2. Gordon owed Annette $4,920 in past due child support that
was to be offset by $1,500 for the amount Annette owed Gordon
because Riley lived with Gordon for ten months in 1989;
3. Gordon owed Annette $1,300 in attorney's fees she incurred
in bringing her motion to enforce the dissolution decree.
Gordon further stipulated that any child support or
maintenance arrearages, or any obligations agreed to under the
stipulation would become an attachment on any lump sum payment he
received for his workers1 compensation claim. Gordon received a
$50,000 lump sum settlement of his claim in November 1990.
On November 13, 1990, Gordon renewed his original motion to
modify child support, which he had made in 1988, and asked that the
modification be retroactive to his first motion. He also asked
that he be allowed to claim as tax exemptions the two children who
were then living with him.
Annette responded by asking the court to hold Gordon in
contempt for failing to comply with the court order enforcing the
1989 stipulation. She also asked the court to determine the new
amount of child support effective October 23, 1990--the date the
parties entered into a stipulation modifying residential custody
and allowing for re-examination and reduction of child support.
After a hearing on the renewed motion to modify child support,
the court entered its findings of fact, conclusions of law and
order on February 28, 1991:
1. Holding Gordon in contempt for failing to pay from his
lump sum workers' compensation settlement, all sums due and owing;
2. Holding Gordon responsible for Annette's attorney's fees;
3. Setting Gordon's child support obligation at $72 per month
for the one child still living with Annette;
4. Ordering Gordon to pay Annette $9,324.13 and to
immediately release to Annette as partial payment the $6,520 held
in escrow by the clerk of the district court;
5. Requiring Annette's attorney to submit an affidavit of
attorney's fees;
6. Allowing Annette tax exemptions for Amanda and Ryan and
allowing Gordon an exemption for Riley for the year 1990.
Gordon moved to alter or amend this judgment. The court
denied this motion except for a correction to give Gordon credit
for $1,000 Annette had previously received.
The court held a hearing on attorney's fees on March 25, 1991,
after which it ordered Gordon to pay Annette $3,357.25 as her
reasonable attorney's fees.
Gordon appeals from the order dated February 28, 1991, from
the order awarding attorney's fees, and from an order denying his
motion to alter or amend the judgment.
I
Did the District err in determining the amount of child
support?
At the hearing on Gordon's renewed motion, Annette presented
testimony from John Koch, a staff attorney for the Montana
Department of Social and Rehabilitation Services, Child Support
Enforcement Division. Mr. Koch explained how he determined on
Worksheet #2 that Gordon owed Annette $72 per month in child
support. He based his calculation on a gross income of $32,450 for
Gordon. This was a two-year average of the $14,900 Gordon received
in 1989 and the $50,000 he received in 1990. Gordon assigns error
to the court's use of these figures to determine gross income
because they are, according to Gordon, a replacement of a stream of
income. He argues the $50,000 is meant to be a replacement of
income at a rate of $149.50 per week over nine and one-half years
under 5 39-71-701, MCA.
Workers' compensation benefits are one of the factors to be
considered in determining child support under 5 40-4-204(2), MCA.
See In re Marriage of Durbin (1991), 251 Mont. 51, 823 P.2d 243.
They are also specifically included as an item of gross income
under the regulations promulgated by the Department of Social and
Rehabilitation Services. 46.30.1508(1)(a), ARM.
Mr. Koch testified that there was no specific rule on how a
lump sum award of workers' compensation benefits should be treated.
Mr. Koch agreed that it would be reasonable to spread the benefits
over the nine and one-half years they were intended to replace, but
said that "[wle essentially want to leave that up to a trier of
fact to determine." In its findings of fact the District Court
found that: 1) Gordon had received $598 bi-weekly payments for most
of 1989; 2) Gordon received a $14,900 lump sum (impairment award)
in 1989: 3) Gordon received a $50,000 lump sum settlement of his
workers' compensation claim in 1990; 4) after receiving the
settlement in 1990 he bought ski equipment for each of his
children, himself, and his current wife, and he bought ski passes
for each of these people except for Ryan, who was living with
Annette; 5) Gordon purchased two vehicles in late 1990; 6) Gordon
spent over $26,000 of his settlement between November 1990 and
January 21, 1991; 7) Gordon presented no authority supporting his
claim that the Child Support Guidelines provide for spreading the
income over nine and one-half years.
Based on the foregoing findings, the District Court concluded
that the worksheet prepared by Mr. Koch was a "reasonable method
for determining the child support due and owing under this fact
situati~n.~~
Specifically the court relied on the fact that Gordon
had not treated the lump sum as if it would last for nine and one-
half years and that it would be spent by June 1991.
A presumption exists in favor of the district court's
determination of child support, and that determination will only be
overturned where the court abused its discretion. In re Marriage
of Sacry (1992), 253 Mont. 378, 382, 833 P.2d 1035, 1038.
Here, the District Court properly found that Gordon would have
spent the entire $50,000 lump settlement by June of 1991. However,
it did not find, nor was there any evidence to suggest, that Gordon
would receive further workers' compensation benefits. Therefore,
there was no basis for presuming that Gordon's income would be
$32,450 after 1990. Although we sympathize with the District Court
in its dilemma, we conclude that it abused its discretion in
attributing that amount of income to Gordon after 1990.
In the 1989 stipulation, the parties agreed on the amount of
support Gordon owed as of December of that year. We will not
disturb the amounts agreed to in that stipulation. (See our
discussion of Issue 111.) For 1990, we believe that the child
support in this case should be determined based on the income
Gordon actually received that year. Therefore, the $50,000 lump
sum settlement should be used to determine his obligation for 1990.
A second calculation will then be necessary to determine the amount
of child support due beginning in 1991.
Under the unique facts of this case, we believe this method
accurately reflects the manner in which Gordon treated his income
and at the same time reflects the fact that Gordon will apparently
not receive future workers' compensation benefits. We therefore
remand for a redetermination of child support.
I1
Did the District Court err in determining the allocation of
tax exemptions and medical costs?
We will first address the allocation of tax exemptions. The
dissolution decree and the 1985 agreement provided that Annette
would be entitled to claim Riley for the taxable year 1985 and any
other year thereafter and that Gordon would be entitled to claim
Amanda and Ryan for 1985 and thereafter provided that he was
current on his child support obligation. At that time Annette was
the primary residential custodian of all three children. In
December 1989, the parties agreed and the court entered an order
recognizing Gordon as the primary residential custodian of Riley.
On October 23, 1990, the parties stipulated that Gordon would be
the residential custodian of Amanda as she had been living with him
since August of that year.
The order of February 28, 1991, allowed Annette to claim tax
exemptions for Ryan and Amanda for 1990 and allowed Gordon to claim
Riley as an exemption. Amanda had lived with Annette until August
of 1990. This order does not comport with the tax exemption
arrangement in the 1985 agreement, rather it comports with the tax
code. See I.R.C. §§ 151, 152. The court then ordered that future
tax exemptions would be determined by the tax code and by the 1985
agreement. Gordon takes issue with this order because he claims
the tax regulations and the 1985 agreement are in conflict with
each other and with the current custody arrangement. It appears
that the tax exemption provision of the agreement no longer applies
as the parties have stipulated to a change in custody and they do
not challenge the 1990 arrangement, which is in line with the tax
code. This appears to leave the parties to follow only the tax
regulations in the future, and does not warrant a remand on this
issue.
Gordon also claims error because the court awarded a combined
principal and interest payment of $373.16 to Annette based on a
principal of $336.47 which he claims he does not owe. Gordon's
claim arises only because he has not looked closely at the
pertinent exhibit. That exhibit clearly identifies the payment as
one for "medical + premium." This combines two amounts stipulated
in the 1989 stipulation. Gordon claims there is no figure of
$336.47 contained in that agreement. True. But the amount is the
sum of an $80 insurance premium and $256.47 in medical bills. We
hold there was no error.
I11
Did the District Court err in failing to make the modification
of child support retroactive to the time Gordon filed his first
motion for modification?
Gordon claims the District Court should have made the
modification retroactive to his October 20, 1988, counter-motion to
modify child support. The 1989 stipulation governs here. In the
stipulation, Gordon agreed to the amount he owed in past due child
support. He also agreed to the entry of an order based on that
stipulation. Annette gave up any other claims which were past due
and owing, other than those included in the stipulation. Gordon
now argues that the court should reopen that order and modify what
the parties agreed. However, the District Court was bound by the
terms of the stipulation as they were not contrary to law, court
rule, or public policy. School Dist. No. 4 v. Colburg (1976), 169
Mont. 368, 372, 547 P.2d 84, 86-87. See also Morris v. McCarthy
(1972), 159 Mont. 236, 497 P.2d 102 (district court properly
dismissed complaint where plaintiff had stipulated in a prior
action that he would be bound in a later action by the property
damage award in the first action).
The District Court did not err in refusing to make the
modification retroactive, especially where Annette gave up some
claims in order to reach the stipulation.
IV
Did the District Court err in holding Gordon in contempt and
awarding attorney's fees and costs?
In the 1989 stipulation, Gordon agreed that the arrearages and
other obligations would become an attachment on any lump sum
payment he received from his workers' compensation claim. When
Gordon received that settlement in November 1990, rather than
directly giving Annette the money he agreed he owed her, he placed
$7,520--the amount of principal he determined he owed Annette--in
escrow with the clerk of the district court pending the outcome of
the hearing on his renewed motion. He dissipated most of the
remaining money. The District Court held Gordon in contempt for
failing to pay Annette the agreed sum in a timely fashion.
Generally, contempt orders are final, conclusive, and not
appealable except by writ of certiorari. Section 3-1-523, MCA.
However, an exception is made for dissolution proceedings, although
we must limit our standard of review to whether the district court
acted within its jurisdiction and whether the evidence supports the
findings. In re Marriage of Sessions (1988), 231 Mont. 437, 441,
753 P.2d 1306, 1308. Here, the stipulation provided that Annette
was to have an attachment against Gordon's workers' compensation
settlement in an agreed amount. When Gordon received that
settlement, he failed to release the money he agreed he owed to
Annette in a timely fashion. Therefore, the evidence supports the
court's finding.
Lastly, Gordon argues that the District Court erred by
awarding Annette her attorney 's fees and costs. In its findings in
its Order Awarding Attorney's Fees, the District Court found that:
1) Annette was seeking attorney's fees to pay for expenses incurred
to enforce a previous court order for child support; 2) she had
negotiated a lien on Gordon's workers' compensation settlement that
was not honored by Gordon's attorneys; 3) she had to take
extraordinary measures to discover his income; 4) he did not timely
release funds that he knew were owing for past due child support;
5) Gordon had over $80,000 income for a two-year period that was
not subject to state or federal deductions; 6) Gordon's actions
unreasonably increased Annette's attorney's fees; and 7) the amount
submitted by Annette was a reasonable amount for attorney's fees.
The property settlement agreement provided for an award of
attorney's fees to the prevailing party. Section 40-4-110, MCA,
also provides authority for awarding attorney's fees. Under the
statute, an award of attorney's fees is discretionary and will not
be disturbed absent an abuse of that discretion. In re Marriage of
Swanson (1986), 220 Mont. 490, 496, 716 P.2d 219, 223. We look to
whether substantial credible evidence supports the findings. In re
Marriage of Hall (1990), 244 Mont. 428, 436, 798 p.2d 117, 122.
Substantial evidence supports the District Court's findings. It
did not abuse its discretion by awarding Annette her reasonable
attorney's fees.
Affirmed in part, reversed in part, and remanded for further
proceedings in conformity with our holding.
We 'concur: A
June 10, 1993
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:
Antonia P. Marra
BELL & MARRA
9 Third St. N., Suite 201
Great Falls, MT 59401
Robert F. James & William 0. Bronson
James, Gray & McCafferiy
P.O. Box 2885
Great Falls, MT 59403
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA
BE
Depu