97-242
No. 97-242
IN THE SUPREME COURT OF THE STATE OF MONTANA
1997
RICHARD K. EMERY,
Petitioner and Respondent,
v.
STATE OF MONTANA, DEPARTMENT OF
PUBLIC HEALTH AND HUMAN SERVICES,
CHILD SUPPORT ENFORCEMENT DIVISION,
Respondent and Appellant.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable John W. Larson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
John M. McRae, Special Assistant Attorney General, Department
of Public Health and Human Services, Child Support Enforcement
Division, Missoula, Montana
For Respondent:
Richard A. Reep; Reep, Spoon & Gordon, Missoula, Montana
Submitted on Briefs: September 11, 1997
Decided: December 23, 1997
Filed:
__________________________________________
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-242%20Opinion.htm (1 of 9)4/17/2007 4:24:21 PM
97-242
Clerk
Justice Karla M. Gray delivered the Opinion of the Court.
Richard K. Emery (Emery) petitioned the Fourth Judicial District Court, Missoula
County, for judicial review of an administrative decision and order entered by the
State
of Montana, Department of Public Health and Human Services, Child Support
Enforcement Division (CSED), authorizing CSED to proceed with an income withholding
action against Emery. The District Court entered an opinion and order denying in
part
and granting in part Emery's petition. Emery subsequently moved the court to alter
or
amend its opinion and order on judicial review. The District Court granted Emery's
motion and, thereby, dismissed CSED's income withholding action against Emery.
CSED appeals from the judgment entered by the District Court on its order granting
Emery's motion to alter or amend its order on judicial review. We reverse and
remand.
The issue on appeal is whether the District Court abused its discretion in
granting
Emery's motion to alter or amend and dismissing CSED's income withholding action
against Emery.
BACKGROUND
Emery's marriage to Deborah Keep (Keep) was dissolved in 1987. Pursuant to the
dissolution decree, Keep was awarded residential custody of their three children and
Emery was ordered to pay $375 per month to Keep for child support. Subsequent to
the
entry of the dissolution decree, Keep received public assistance under the Aid to
Families
with Dependent Children (AFDC) program for eleven months between December of 1987
and May of 1990. When she applied for AFDC benefits, Keep assigned her right to
receive current and future child support payments during the period in which she
received
AFDC benefits, as well as her right to enforce child support obligations owed to
her, to
CSED.
Emery did not pay the full amount of child support ordered in the dissolution
decree and a child support debt accrued. In an effort to collect the past-due child
support, CSED notified Emery on October 21, 1991, that the past-due amount would be
referred to the Internal Revenue Service (IRS) for collection through interception
of any
federal tax refund to which Emery might be entitled for that year. This tax
intercept
notice also informed Emery that, if he disputed the amount determined by CSED to be
past due, he could request an administrative review of that determination. Emery
timely
requested administrative review, but no hearing was ever held on the matter; nor did
the
IRS intercept any federal tax refund to which Emery may have been entitled for 1991.
CSED sent a second federal tax intercept notice to Emery on September 17, 1992.
There
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-242%20Opinion.htm (2 of 9)4/17/2007 4:24:21 PM
97-242
is no indication in the record that Emery ever directly responded to that notice or
requested an administrative review of the past-due amount claimed therein. The IRS
did
not intercept any federal tax refund to which Emery might have been entitled in 1992.
Meanwhile, in June of 1992, Emery and Keep entered into a stipulation modifying
the child custody provisions in the 1987 dissolution decree. Pursuant to the
stipulation,
Emery became the primary residential custodian of the two younger children and Keep
retained residential custody of the older child. The stipulation also provided
that, as long
as the stipulated custody arrangement remained in effect, neither party would be
required
to pay child support to the other and all child support arrearages existing at the
time of
the stipulation would be waived. The District Court adopted the stipulation by order
dated June 22, 1992. Although CSED had informal notice of the proceedings resulting
in the District Court's adoption of the stipulation, it was never served with
written notice
and did not appear in the action or consent, in writing or otherwise, to the
stipulation.
In December of 1995, CSED again initiated an attempt to collect the past-due
child
support it claimed against Emery, in the amount of $3,025. It served him with a
Notice
of Intent to Withhold (NOI) stating that CSED intended to order Emery's employer to
withhold money from Emery's monthly wages to satisfy the amount due. Emery timely
requested a hearing to contest the NOI, asserting that the child support arrearages
had
been waived under the 1992 stipulation, and a hearing was held on February 14, 1996,
before a CSED administrative law judge (ALJ). The ALJ subsequently entered a
decision
and order in which it determined that Emery owed a child support debt in the amount
of
$3,025; that the stipulation and order entered in June of 1992, which purported to
waive
all child support arrearages, was void with respect to CSED because CSED did not
participate; that CSED could enforce the child support obligation set in the
original 1987
dissolution decree for the months in which Keep received AFDC benefits; and that CSED
could proceed with the income withholding action.
Emery petitioned the District Court for judicial review of the ALJ's decision
and
order. The District Court denied Emery's petition for judicial review in part,
concluding
that the ALJ correctly determined that the 1992 stipulation and order "waiving" child
support arrearages was void as to CSED's claim for past-due child support accrued
during
the periods Keep received AFDC benefits. The court also granted Emery's petition for
judicial review in part, by remanding the case to CSED with instructions to
redetermine
the past-due amount owed by Emery.
Emery timely moved to alter or amend the District Court's opinion and order on
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-242%20Opinion.htm (3 of 9)4/17/2007 4:24:21 PM
97-242
judicial review, asserting two bases on which the court should dismiss CSED's income
withholding action. The District Court granted Emery's motion to alter or amend and
dismissed CSED's income withholding action on the basis that the delay between
Emery's
1991 request for administrative review and the February 14, 1996, hearing before the
ALJ violated his rights to due process of law and the administration of justice
without
delay under the Montana Constitution. CSED appeals.
STANDARD OF REVIEW
We review a district court's ruling on a motion to alter or amend to determine
whether the court abused its discretion. See Estate of Nielsen v. Pardis (1994), 265
Mont. 470, 478, 878 P.2d 234, 238 (citations omitted). Here, the basis for the
District
Court's grant of Emery's motion to alter or amend was its conclusion that CSED had
violated Emery's rights to due process of law and the administration of justice
without
delay. We review this underlying conclusion of law to determine whether the court's
interpretation of the law is correct. Connell v. State, Dept. of Social Services
(1997),
280 Mont. 491, 494, 930 P.2d 88, 90.
DISCUSSION
Did the District Court abuse its discretion in granting Emery's motion to
alter or amend and dismissing CSED's income withholding action against
Emery?
Emery's motion to alter or amend the District Court's opinion and order on
judicial review was based, in part, on our decision in Connell, which he asserts is
analogous to the facts in this case and compels a conclusion that CSED's income
withholding action should be dismissed. The District Court agreed with Emery's
interpretation of Connell and determined that the delay of over four years between
Emery's initial request for administrative review of the 1991 federal tax intercept
notice
and the February 14, 1996, hearing on the NOI violated his rights to the
administration
of justice without delay and due process of law as guaranteed by Article II,
Sections 16
and 17 of Montana's Constitution. CSED argues that Connell is distinguishable from
the
present case and, as a result, that the District Court erred in relying on Connell as
authority for dismissing its income withholding action against Emery. We agree.
In Connell, CSED initiated an income withholding action against Connell for
past-
due child support by serving him with an NOI in February of 1990. Additionally, in
June of 1990, the State Auditor's office served Connell with notice that his 1990
state tax
refund would be offset against the amount he owed to CSED. An administrative hearing
was held on both the NOI and the state tax refund offset on February 15, 1991; at the
conclusion of the hearing, a schedule for the submission of proposed findings of
fact and
conclusions of law was established. Connell, 930 P.2d at 90. Although Connell
timely
submitted his proposed findings of fact and conclusions of law, CSED failed to do so,
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-242%20Opinion.htm (4 of 9)4/17/2007 4:24:21 PM
97-242
either timely or at all. Nor did the hearings officer enter a final decision.
Connell, 930
P.2d at 90.
Almost four years after the hearing in February of 1991, a new hearings officer
took over the case and ordered the parties to appear via a telephone conference to
present
arguments and motions regarding the preparation of findings of fact, conclusions of
law
and an order in the matter. Connell, 930 P.2d at 90. Connell moved for a default
judgment against CSED or, in the alternative, to dismiss the case; the hearings
officer
denied Connell's motions on July 28, 1995, and ordered a rehearing of the matter.
Connell petitioned for judicial review, the district court affirmed the order
setting a
rehearing and Connell appealed. Connell, 930 P.2d at 90.
We reversed the district court on appeal. We reiterated the long-established
principle that due process requires providing a person the opportunity to be heard
at a
meaningful time and in a manner which comports with principles of fair play, adding
that
administrative proceedings must also be conducted in accordance with fundamental
principles of fair play. Connell, 930 P.2d at 91 (citations omitted). We further
determined that Montana's constitutional guarantee of justice without delay was
implicated
when extraordinary delays occurred in legal proceedings. Connell, 930 P.2d at 91.
Under the facts before us, we concluded that "failure on the part of CSED's hearings
office to render a decision after a lapse of 44 months constitutes undue delay under
Montana Constitution Article II, Section 16, and violates the due process guarantees
under Montana Constitution Article II, Section 17." Connell, 930 P.2d at 92-93.
In this case, CSED served its NOI regarding the income withholding action on
Emery in December of 1995. Emery requested a hearing and the hearing was held on
February 14, 1996. The ALJ's decision and order was entered on July 1, 1996, less
than
five months later. The delay between the hearing and the resulting decision in this
case
was minimal and did not begin to approach the magnitude of the 44-month delay in
Connell. Thus, Connell is distinguishable from the present case on the facts and,
as a
result, it is not authority for a determination that CSED violated Emery's
constitutional
rights to due process and the administration of justice without delay in the period
following the hearing on the NOI.
The District Court, however, perceived the delay in this case as that occurring
between the time Emery first requested a hearing on the 1991 federal tax intercept
notice
and the 1996 hearing on the 1995 NOI. It determined that our constitutional
analysis in
Connell applies to such delays between the request for, and grant of, an
administrative
hearing and concluded that the delay here was impermissible and unconstitutional
under
Connell. CSED asserts that the District Court erred in treating CSED's child support
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-242%20Opinion.htm (5 of 9)4/17/2007 4:24:21 PM
97-242
collection efforts as one long administrative action initiated with the 1991 federal
tax
intercept notice and in implicitly concluding that Emery's right to a hearing on that
federal tax intercept notice continued without abeyance until a hearing was
eventually
granted. CSED argues that the District Court's application of Connell based on these
erroneous conclusions was incorrect.
Child support which is due under a dissolution decree and which is unpaid
becomes a judgment debt similar to any other money judgment. In re Marriage of Sabo
(1986), 224 Mont. 252, 254, 730 P.2d 1112, 1113 (citations omitted); In re Marriage
of
Brown (1994), 263 Mont. 184, 188-89, 867 P.2d 381, 383-84. Thus, Emery's failure
to pay the full amount of child support ordered in the 1987 dissolution decree
during the
intermittent months Keep received AFDC benefits between December of 1987 and May
of 1990 resulted in a judgment debt against him. Furthermore, when Keep applied for
AFDC benefits, she assigned her right to enforce that judgment debt against Emery to
CSED. Pursuant to statute, CSED had ten years from the date Emery's child support
payments became past due in which to initiate collection proceedings against him on
the
resulting judgment debt. Section 27-2-201(3), MCA; In re Marriage of (Crittendon)
Hooper (1991), 247 Mont. 322, 327, 806 P.2d 541, 544.
CSED is authorized to collect past-due child support amounts through various
administrative remedies. For example, õ 40-5-412, MCA, authorizes CSED to collect
child support arrearages through income withholding, a remedy which CSED initiated in
this case via its NOI in December of 1995. Other administrative remedies include
license
suspension under õ 40-5-703, MCA, state debt offsets under õ 17-4-105, MCA, and
warrants for distraint under õ 40-5-247, MCA. CSED also is authorized, by 42 U.S.C.
õ 664, to collect past-due child support via federal tax refund intercepts such as it
initiated against Emery in 1991. Each of these administrative remedies is a separate
collection remedy, with separate statutory procedural requirements, which CSED may
pursue individually or simultaneously at any time within the ten-year statute of
limitations
period. CSED's election to pursue one remedy does not preclude pursuit of other
remedies at the same, or a later, time. See, e.g., õõ 40-5-404(1) and 40-5-247(9),
MCA.
Thus, contrary to the District Court's perception, CSED's attempts to collect child
support arrearages are not one continuous collection action, but rather a series of
independent and, occasionally, cumulative actions.
Article II, Section 17 of the Montana Constitution provides that "[n]o person
shall
be deprived of life, liberty, or property without due process of law." Procedural
due
process concerns, and the concomitant right to notice and a hearing, do not arise
unless
there is an actual or threatened deprivation of a person's life, liberty or
property. See,
e.g., State ex rel. Dept. of Health v. Reese (1993), 260 Mont. 24, 27, 858 P.2d 357,
359. When CSED initiates a collection action there is a threatened deprivation of a
child
support debtor's property, usually the debtor's money, and the right to a due process
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-242%20Opinion.htm (6 of 9)4/17/2007 4:24:21 PM
97-242
hearing arises. The statutes authorizing CSED's various administrative collection
actions
recognize this due process right by providing corresponding rights to notice of the
proposed action and the opportunity to request and receive a hearing. See, e.g., õ
40-5-
413, MCA (notice of intent to withhold income); õ 40-5-414, MCA (hearing on proposed
income withholding action); õ 40-5-702, MCA (notice of intent to suspend license for
nonpayment of child support); õ 40-5-703, MCA (hearing on action to suspend
license).
While each individual hearing may include a review of whether the amount of child
support CSED has determined to be past due is correct, the hearing itself is
specifically
tied to the particular administrative remedy initiated by CSED.
As discussed above, there was little delay involved in the proceedings and
decision
regarding CSED's NOI in December of 1995. The administrative remedy and
corresponding right to a hearing at issue here is the 1991 federal tax refund
intercept
action. Upon receiving CSED's notice of the federal tax intercept action Emery
timely
requested a hearing, asserting that he did not owe the amount determined by CSED to
be
past due. A hearing was scheduled, but later was continued indefinitely. In the
interim,
the IRS did not intercept any federal tax refund money to which Emery was entitled in
1991 and, when no tax refund money was intercepted by the IRS, CSED discontinued
action on the 1991 federal tax intercept collection attempt. Nevertheless, in
October and
November of 1993, Emery repeated his request for a hearing on the amount of past-due
child support claimed by CSED; CSED did not grant his request. Eventually, in his
motion to alter or amend the District Court's opinion and order on judicial review,
Emery
contended that CSED's failure to grant his request for a hearing on the 1991 federal
tax
intercept collection attempt violated his right to due process.
As stated above, the initiation of a CSED administrative collection remedy
raises
the threat of a deprivation of property which, in turn, raises procedural due process
concerns. However, when that particular administrative collection remedy is
discontinued, the threat of a property deprivation is withdrawn and the necessity
for a due
process hearing evaporates. Thus, when the IRS did not intercept any federal tax
refund
monies to which Emery was entitled in 1991 and CSED discontinued action on that
collection effort, the threatened deprivation of Emery's property no longer existed.
Concomitantly, the requirement of a due process hearing on the 1991 federal tax
intercept
notice also no longer existed. Emery's requests for a hearing in the fall of 1993
were not
sufficient to require a hearing because the requests were not attached to any
specific
action or proposed action by CSED which threatened to deprive Emery of his property.
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-242%20Opinion.htm (7 of 9)4/17/2007 4:24:21 PM
97-242
Moreover, State agencies may act only as authorized by the statutes enacted by
the
legislature. See Bick v. State, Dept. of Justice (1986), 224 Mont. 455, 457, 730
P.2d
418, 420. We know of no statute, or administrative rule promulgated thereunder,
which
authorizes CSED to grant a hearing to a child support debtor absent a proposed or
pending administrative collection action by CSED, and the due process provision of
the
Montana Constitution, in itself, does not require CSED to grant Emery a hearing
absent
a threatened or actual deprivation of his life, liberty or property. See Art. II,
Sec. 17,
Mont. Const. There simply is no right to a hearing unless and until there is an
agency
action pending on which a hearing could be held.
Neither is the constitutional guarantee of administration of justice without
delay,
as provided in Article II, Section 16 of the Montana Constitution, implicated in
this case.
In Connell, Article II, Section 16 of the Montana Constitution was addressed, in
conjunction with the Article II, Section 17 due process of law provision, as being a
constitutional guarantee of "prompt disposition of administrative actions . . . ."
Connell,
930 P.2d at 91. However, each administrative action initiated by CSED against Emery
was disposed of promptly. Both the 1991 and 1992 federal tax intercept actions were
discontinued after the IRS did not intercept any refund money to which Emery was
entitled in those years. The NOI served on Emery in December of 1995 was disposed
of at the administrative level less than eight months later when the ALJ's decision
and
order was entered on July 1, 1996. Thus, in each of these administrative actions
against
Emery, the Article II, Section 16 requirement of "prompt disposition" was met by
CSED.
Finally, we agree with CSED's assertion that there is no requirement in Article
II,
Section 16 of the Montana Constitution that a judgment creditor--in this case, CSED--
must "speedily and without delay" apply for any particular remedy within any
particular
time. As discussed above, the period within which CSED may initiate collection
actions
against a child support debtor is ten years from the date the child support
obligation
becomes past due. Section 27-2-201(3), MCA; Marriage of Hooper, 806 P.2d at 544.
CSED may initiate one, or several, collection actions at any point within that ten-
year
period. Once such a collection action is initiated, Article II, Section 16 requires
that it
be resolved without undue delay--that is, "disposed of promptly"--but there is no
requirement in this constitutional provision that CSED take steps to begin a
collection
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-242%20Opinion.htm (8 of 9)4/17/2007 4:24:21 PM
97-242
action at any particular time after the child support debt accrues. The practical
effect of
a determination that Article II, Section 16 of Montana's Constitution requires CSED
to
initiate attempts to collect child support debts promptly, without undue delay and
prior
to the expiration of the ten-year statute of limitations would be to eliminate that
limitations period.
We conclude that the District Court erred in determining that CSED violated
Emery's constitutional rights to due process of law and the administration of justice
without delay by not granting his request for an administrative hearing in the period
between the termination of the 1991 federal tax refund intercept action and service
of the
1995 NOI. We hold, therefore, that the District Court abused its discretion in
granting
Emery's motion to alter or amend and in dismissing CSED's income withholding action
against Emery.
Reversed and remanded with instructions that the District Court reinstate its
original opinion and order on judicial review.
/S/ KARLA M. GRAY
We concur:
/S/ J. A. TURNAGE
/S/ JAMES C. NELSON
/S/ WILLIAM E. HUNT, SR.
/S/ W. WILLIAM LEAPHART
/S/ JIM REGNIER
/S/ TERRY N. TRIEWEILER
file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-242%20Opinion.htm (9 of 9)4/17/2007 4:24:21 PM