Dahl v. Dahl

#24301-rev & rem-JKK

2007 SD 64

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

* * * *

LANA E. DAHL, Plaintiff and Appellant,

v.

WADE A. DAHL, Defendant and Appellee.

* * * *

APPEAL FROM THE CIRCUIT COURT OF
THE SIXTH JUDICIAL CIRCUIT
HUGHES COUNTY, SOUTH DAKOTA

* * * *

HONORABLE JAMES W. ANDERSON
Judge

* * * *

AL ARENDT Attorney for plaintiff
Pierre, South Dakota and appellant.

MARK A. MORENO of
Schmidt, Schroyer, Moreno,
Lee & Bachand, P.C. Attorneys for defendant
Pierre, South Dakota and appellee.

* * * *

CONSIDERED ON BRIEFS
ON APRIL 23, 2007

OPINION FILED 06/27/07
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KONENKAMP, Justice

[¶1.] In this child support action, a parent contends that the child support

referee and circuit court erred in denying her motion for modification. We reverse

and remand.

Background

[¶2.] Lana E. Dahl and Wade A. Dahl were married in 1983. They had two

children during the marriage: a son, born June 8, 1988, and a daughter, born

August 1, 1990. Lana sued Wade for divorce. In resolving their differences, the

parties entered into a Property Settlement Agreement (Agreement), dated July 26,

2004. Each was represented by counsel. A judgment and decree of divorce

incorporated the Agreement.

[¶3.] The Agreement divided the parties’ property and debts. Each agreed

not to seek spousal support from the other. Lana received primary physical custody

of their daughter, and Wade received primary physical custody of their son. They

would “share joint legal custody of their minor children.” In addressing child

support, the parties entered into an arrangement that would later give rise to the

present dispute: “In recognition of the parties’ mutual obligations for child support,

and their respective incomes, the parties shall not pay any child support owed by

one to the other.” The Agreement recited that each “does release absolutely and

forever all right and claim of alimony, support, medical payments, maintenance or

otherwise in consideration of the cash obligations and transfer of property as herein

above set forth.” They also agreed that each “shall not make application for

payment of alimony, medical payments or other periodic payments.”

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[¶4.] In May 2006, their son graduated from high school and in June turned

eighteen. Shortly afterwards, Lana petitioned for modification of the parties’ child

support obligations. She requested that Wade be ordered to pay support for their

daughter. The matter was heard by a child support referee, with both parties

appearing telephonically. Lana asserted that a change in circumstances existed

because their son turned eighteen and graduated from high school. She contended

that the Agreement only relieved each parent of their obligation to pay child

support to the other based on the parties’ “mutual obligation of support” for their

minor children. Because Wade no longer had a support obligation for their son,

Lana argued that there was no “mutual obligation of support.”

[¶5.] Wade responded that the issue of child support was settled with the

executed Agreement. When they agreed not to seek support from each other, they

were both fully aware that their son would turn eighteen three years before their

daughter. Moreover, according to Wade, he “gave up legitimate property and

support interests in exchange for [Lana’s] right to seek support in the future for

[their daughter], and . . . since [she] could financially support [their daughter],

[Lana] should be required to live up to her end of the Agreement.”

[¶6.] The Referee noted that the parties were represented by “competent

counsel” when they executed their Agreement. He found that the language of the

Agreement “does appear to take into account the argument and perception that the

parties were making a settlement that called for no support to be paid now or in the

future.” Further, he observed that the Agreement stated that the parties gave up

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the right to seek “payment of alimony, support, medical payments or otherwise,” in

consideration of the property transfers and cash obligations.

[¶7.] The Referee also took into consideration the policy reasons why child

support agreements are always subject to modification. He concluded, however,

that the policy concerns were not present here because Lana had sufficient income

to support their daughter and in light of the language of the parties’ Agreement.

Moreover, the Referee recognized that Lana was aware that their daughter would

be fifteen when their son turned eighteen and “could have easily” included language

in the Agreement that “it was her intent to come back and seek support for” their

daughter. Based on the language of the Agreement and the current financial

circumstances of the parties, the Referee denied Lana’s request for modification of

child support.

[¶8.] Lana filed an objection to the Referee’s report in circuit court. A

hearing was held, and the court upheld the Referee’s report and recommendation.

Lana now appeals to this Court, arguing that the circuit court erred when it (1)

failed to issue findings of fact and conclusions of law; and (2) affirmed the Referee’s

decision not to award child support.

Standard of Review

[¶9.] Findings of fact of a child support referee are reviewed under the

clearly erroneous standard of review. Mathis v. Mathis, 2000 SD 59, ¶7, 609 NW2d

773, 774 (quoting Hendricksen v. Harris, 1999 SD 130, ¶7, 600 NW2d 180, 181

(citing Permann v. Dept. of Labor, Unemployment Ins. Div., 411 NW2d 113, 116

(SD 1987); Janke v. Janke, 467 NW2d 494, 496-97 (SD 1991))). Questions of law,

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however, are reviewed de novo. Id. (citations omitted). “When the circuit court has

adopted a child support referee’s findings and conclusions, we apply the clearly

erroneous standard of review to the findings and give no deference to conclusions of

law.” In re Loomis, 1998 SD 113, ¶6, 587 NW2d 427, 429 (citing Wolff v. Weber,

1997 SD 52, ¶7, 563 NW2d 136, 138 (citing Whalen v. Whalen, 490 NW2d 276, 280

(SD 1992)); Janke, 467 NW2d at 497)).

Analysis and Decision

1. Findings of Fact and Conclusions of Law

[¶10.] Lana first contends that the circuit court was required to issue

findings of fact and conclusions of law in support of its decision to affirm the

Referee’s report and recommended order. According to Lana, because the Referee’s

report does not contain anything “denominated as findings or conclusions,” the

circuit court was required, under SDCL 15-6-52(a), to issue findings and

conclusions.

[¶11.] Although the Referee’s report does not contain sections entitled

“Findings of Fact” and “Conclusions of Law,” a review of the report reveals that the

Referee made factual findings and legal conclusions. The report discusses the

claims of the parties, the pertinent background information, the issues presented,

and the arguments made. Thereafter, the report states that the Referee considered

the terms of the Agreement, possible policy concerns, and the parties’

circumstances. Also, the report contains the Referee’s legal ruling based on the

findings. In sum, the report contains findings of fact and conclusions of law, even if

it did not entitle them so.

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[¶12.] Clearly, SDCL 25-7A-22 permits a court to “adopt” a referee’s report

after holding a hearing on and reviewing a party’s objection to the report. “The

findings of a referee, to the extent that the court adopts them, shall be considered as

the findings of the court.” SDCL 15-6-52(a). Circuit courts are not required to issue

separate findings of fact and conclusions of law after adopting a referee’s report.

Because the report here contains factual findings and legal conclusions, it was not

error for the court to adopt the Referee’s report and recommended order without

issuing separate findings and conclusions.

2. Mutual Agreement to Seek No Support

[¶13.] From Lana’s perspective, the Referee’s report, adopted by the court,

forecloses her from any future child support modifications. She argues that the

court had the authority to modify the Agreement and was required to establish

Wade’s obligation to pay support for their daughter. She also contests the rationale

used by the Referee in which he denied her request for modification because she

makes enough money to pay for her daughter’s support herself. She also challenges

the Referee’s conclusion that support is not warranted because Wade gave up

property and support interests in making the Agreement.

[¶14.] Wade did not dispute that the son’s change in status was a substantial

change in circumstances. * SDCL 25-7A-22(1). He contends, however, that Lana

* Because the petition to modify support was filed within three years of the
date of the support order, a showing of substantial change in circumstances
was required. SDCL 25-7A-22(1). Both the circuit court and the referee
agreed that there was a substantial change in circumstances here, which can,
but does not require a modification. See, e.g., Mathis, 2000 SD 59, ¶12, 609
(continued . . .)
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still had the burden of showing that a modification was called for under the

circumstances, a burden she did not meet. Wade relies on the language of the

parties’ Agreement. Its terms, Wade asserts, clearly express the parties’ intent that

each parent would not seek child support for the child in his or her primary care.

He believes there is no violation here of public policy by enforcing the terms of the

Agreement, as the Agreement is always subject to future modification if called for

under the circumstances.

[¶15.] In our analysis, we start with the proposition that parents have a

statutory duty to support their children. Vander Woude v. Vander Woude, 501

NW2d 361, 363 (SD 1993) (citing SDCL 25-5-18.1; SDCL 25-7-6.1); see also Kost v.

Kost, 515 NW2d 209, 214 (SD 1994). Circuit courts retain jurisdiction to modify a

divorce agreement as it relates to the “custody, care, and education of the children

of the marriage as may seem necessary or proper[.]” SDCL 25-4-45; Thomas v.

Hauge, 2002 SD 12, ¶¶9-10, 639 NW2d 520, 522-23 (per curiam); see also Jacobson

v. Jacobson, 2000 SD 60, ¶12, 611 NW2d 210, 213-14 (citing Jameson v. Jameson

(Jameson II), 306 NW2d 240, 242 (SD 1981); State ex rel. Larsgaard v. Larsgaard,

298 NW2d 381, 383 (SD 1980)).

[¶16.] While the original Agreement provided that neither parent would pay

support to the other, this Agreement was expressly premised on a “mutual

obligation of support.” Wade no longer has an obligation to support their son, a

__________________
(. . . continued)
NW2d at 776-77; contra McKittrick v. McKittrick, 2007 SD 44, ¶7, --- NW2d -
---.

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condition which, as Wade agreed, constitutes a substantial change in circumstances

under SDCL 25-7A-22(1). Wade acknowledges that he has a statutory obligation to

support his daughter. See SDCL 25-5-18.1; SDCL 25-7-6.1. Nonetheless, Wade

argues that he should not be required to pay support for their daughter because the

Agreement was intended to waive current and future child support, because he gave

up property interests in consideration for this understanding, because Lana earns

considerably more money than he does and thus she has an independent ability to

adequately support their daughter, and because the change in circumstances here is

insufficient to justify modifying child support.

[¶17.] It is immaterial that Wade claims to have given up property interests

in consideration for not having to pay support for his daughter. Courts having

considered this question conclude that parents cannot contract away obligations for

future child support. See Reimer v. Reimer, 502 NW2d 231, 233 (ND 1993)

(agreement relinquishing property rights in lieu of having to pay support was

invalid); Kelley v. Kelley, 449 SE2d 55, 56 (VA 1994) (agreement declared null and

void where husband relinquished all his interest in the marital home in return for

not having to pay child support). Furthermore, because both parents have an

obligation to support their children, Lana’s independent financial means will not

relieve Wade of his support obligations. By statute, child support is based on both

parent’s income levels and requires that both parents provide support within their

means. SDCL 25-7-6.1; see Billion v. Billion, 1996 SD 101, ¶41, 553 NW2d 226, 235.

[¶18.] As we stated in Thomas,

[T]he father may not by contract avoid his duty to support and
educate his minor children, and a wife cannot contract away the

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right of children to be supported by their father. An agreement
between the father and mother which attempts to relieve the
father of his obligation is, as between the father and children,
ineffective as a violation of public policy; and where the father
and mother are equally and jointly charged by statute for the
maintenance of their children, an agreement by the mother to
perform her statutory duty does not discharge the father’s
statutory obligation.

2002 SD 12, ¶8, 639 NW2d at 522 (citation omitted); Estes v. Albers, 504 NW2d

607, 609 (SD 1993); see also Knorr v. Knorr, 588 A2d 503, 505 (PA 1991) (parents’

“right to bargain for themselves is their own business”; however, “[t]hey cannot in

that process set a standard that will leave their children short”). Although a

stipulation may be valid and fair when executed, it may not be later when

circumstances change.

[¶19.] Wade argues, in the alternative, that if the support order is to be

modified, he requests an equitable offset for the value of the property interests and

support he gave up as part of the Agreement. He relies on several North Dakota

Supreme Court cases, which have held that “as a matter of equity, a divorcing

parent attempting to satisfy [their] child support obligation by foregoing a rightful

share of the marital property [are] entitled to offset the amount of marital property

given up against [their] child support obligation.” See Hewson v. Hewson, 708

NW2d 889, 893-94 (ND 2006) (citing Rueckert v. Rueckert, 499 NW2d 863, 870-71

(ND 1993)); Reimer, 502 NW2d at 233-34.

[¶20.] Even if we were to adopt North Dakota law on this point, a decision we

need not reach today, there is nothing sufficiently detailed in the language of the

Agreement that indicates Wade was fulfilling his future obligation to support his

daughter by giving up certain property and support interests. The provisions of the

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Agreement that Wade interprets to allow an equitable offset are not specific to him.

Rather, both Wade and Lana agreed that they released the other against any “claim

for alimony, support, medical payments, maintenance or otherwise in consideration

of the cash obligations and transfers of property as hereinabove set forth.” They

also agreed that each “shall not make application for payment of alimony, medical

payments, or other periodic payments.” Absent any specific financial details, this

language fails to confirm that Wade actually gave up some interest he would have

otherwise received in exchange for a release of his child support obligation.

[¶21.] Under the circumstances of this case, we conclude that excusing Wade

of his statutory obligation for child support is not in his daughter’s best interests.

The circuit court erred when it adopted the Referee’s report denying modification of

child support. We reverse and remand for reconsideration based on the child

support guidelines.

[¶22.] Reversed and remanded.

[¶23.] GILBERTSON, Chief Justice, and SABERS, ZINTER, and

MEIERHENRY, Justices, concur.

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