Merritt v. Merritt

WINCHESTER, J.

1 1 The appellant, Michael L. Merritt, filed an application for an indirect contempt citation and a motion to reduce arrearage to judgment. The appellee, Jane A. Merritt, filed a motion to dismiss the contempt citation based on the payment of Social Security benefits to the child of the parties The Social Security payment made subsequent to the commencement of this action exceeded the amount of the arrearage. After finding that the payment purged the contempt, the trial court granted the appellee's motion to dismiss. The appellant filed a "motion to reconsider," which the trial court denied. The appellant filed an appeal that was subsequently assigned to the Court of Civil Appeals, Division III. That court reversed and remanded. The appellee filed a petition for *881certiorari, which this Court granted. We vacate the opinion of the Court of Civil Appeals and affirm the judgment of the trial court.

FACTS

T2 The record reveals that the parties were granted a divorcee on October 16, 1987. The trial court subsequently modified the custody provisions for the son of the parties on April 27, 1989, and on December 28, 1994. On the latter date, the court modified the decree by granting sole custody of the minor child to the appellant (the father). The trial court ordered, pursuant to the Oklahoma Child Support Guidelines, that the appellee (the mother) pay $120.00 per month.

«[ 3 In 1996, the court further modified the custody provisions by terminating the parental rights of the mother. The father asserts that the action to terminate parental rights was the result of the mother's failure to support their child for over a year. The mother's pleadings assert that the 1996 judgment was obtained by default. The father alleges in his application for an indirect contempt citation that the order for the payment of child support remained in full force and effect, The application alleges that the mother failed to make payments beginning in March 1996, and missed all but two months until he filed his application for contempt on January 31, 2000. He claimed that the mother was indebted to him in the amount of $5,400.00 for child support, plus interest on that amount. The father filed his application one day before the parties' son attained majority.

4 The trial court heard the mother's motion to dismiss on November 1, 2000. The court found that the mother had failed to pay the court-ordered child support as alleged by the father. The court further found that the mother had been legally disabled since May 1997, and that the Social Security Administration made a payment of $13,101.00 directly to the child of the parties on June 2, 2000, and had paid $355.00 per month directly to the child of the parties every month since that time. Those payments represented Social Security benefits payable to the child as a result of the mother's disability. The sums were in excess of the sum claimed as delinquent child support by the father in his application for an indirect contempt citation.

5 The court made these findings. Equity required the application of the equitable es-toppel doctrine to the father's claim for delinquent child support. The mother's disability, and the Social Security benefit payments of a lump sum and monthly payment made in excess of the delinquent child support supported this decision. The mother was not responsible for the payment of the lump sum directly to the adult child of the parties by the Social Security Administration. The journal entry of judgment stated that the father should seek reimbursement of the child support he sought in his motion from his adult son by having a constructive trust imposed on the benefits paid to the adult son to the extent of the unpaid child support while the child was a minor.1 The court granted the motion to dismiss the indirect contempt citation and also dismissed the father's motion to reduce arrearage to judgment.

T6 The Court of Civil Appeals, Division III, cited the 1998 supplement to 483 O.S8. § 187, which provides that when an installment of court-ordered child support becomes past due, it becomes a judgment by operation of law. The court concluded that it was inequitable to allow Social Security disability payments on behalf of the mother to the child to extinguish the father's in personam judgment for child support.

I. STANDARD OF REVIEW

¶ 7 The trial court stated that its judgment was based on equitable considerations. We have recently reaffirmed that child support proceedings are of equitable cognizance. Hedges v. Hedges, 2002 OK 92, ¶ 10, 66 P.3d 364, 370. In Thrash v. Thrash, 1991 OK 32, ¶ 9, 809 P.2d 665, 668, we noted that equitable defenses may be invoked to *882bar the recovery of delinquent child support payments. Those defenses include the equitable doctrines of waiver, estoppel and lach-es. Thrash, 1991 OK 32, ¶ 9, 809 P.2d at 668. When reviewing the decision of the trial court in an equity proceeding, this Court has long held that the judgment will not be disturbed unless the trial court abused its discretion or unless the court's finding was clearly contrary to the weight of the evidence. Creech v. Creech, 1956 OK 10, ¶ 9, 292 P.2d 376, 378; Tschauner v. Tschauner, 1952 OK 230, ¶¶ 22, 25, 245 P.2d 448, 451.

IL - EQUITABLE JURISDICTION

T8 The trial court based its decision on principles of equity. In 1987, the legislature enacted a new law, codified in the Oklahoma Statutes as § 1291 of Title 12, now 48 O.S. 2001, § 137. Section 187(A) provides that "Any payment or installment of child support ordered pursuant to any order, judgment, or decree of the district court or administrative order of the Department of Human Services is, on and after the date it becomes past due, a judgment by operation of law." Except for the rearranging of some commas, the sentence is identical to that which was originally enacted. The Court of Civil Appeals has construed this statute as eliminating equitable defenses to excuse noncompliance with a support order. Aguero v. Aguero, 1999 OK CIV APP 38, ¶ 10, 976 P.2d 1088, 1090. Cowan v. Cowan, 2001 OK CIV APP 14, ¶ 10, 19 P.3d 8322, 825-826, relied on Aguero to reach the same result.

T9 In his Response of Michael L. Merritt to Motion to Dismiss Contempt Citation, the appellant argues that he has a series of judgments for unpaid child -support as a result of the appellee's failure to make her required child support payments. Appellant cites 48 0.98.2001, § 187, which uses the term "judgment by operation of law." The term "judgment by operation of law" appears to be incorporated into Oklahoma's statutes as a result of a requirement by Congress.2

¶ 10 A money judgment is discharged by actual payment in full to a person authorized to receive it. Hart v. Jett Enterprises, Inc., 1985 OK 24, ¶ 6, 744 P.2d 561, 562. Due process requires that an obligor be allowed a hearing for any legally-cognizable defense to an assertion of arrearage. The Supreme Court of Alaska recognized this in State v. Maxwell, 6 P.3d 733 (Alaska 2000). That court observed that an alleged obligor be allowed an opportunity for a fair and impartial hearing before finalizing and implementing a continuing child support order that would become a series of enforceable judgments. Maxwell, 6 P.3d at 737.

T 11 North Dakota likewise recognized this right to a hearing in Ruscheinsky v. Ulrich, 2000 ND 133, ¶ 10, 612 N.W.2d 283, 286. There the court noted that simply because obligor's arrearages constituted judgments by operation of law did not necessarily mean that North Dakota's Social Services could collect on the judgments. Pursuant to North Dakota statutes, the claims were subject to a statute of limitations or cancellation by N.D.C.C. § 28-20-85.

112 Like support alimony, child support becomes vested at the time each payment becomes due. Nantz v. Nantz, 1988 OK 9, ¶ 10, 749 P.2d 1137, 1140. "[Aln action which seeks to recover unpaid installments for child support is an action for a debt created by law and evidenced of record, and is maintainable in the court which directed payment, or any other court of competent jurisdiction...." Turk v. Coryell, 1966 OK 194, ¶ 10, 419 P.2d 555, 558.

*883¶ 13 Even though the arrearages are judgments by operation of law, they are nevertheless subject to equitable defenses. We have already stated that Oklahoma recognizes equitable defenses. Hedges, 2002 OK 92, ¶ 10, 66 P.3d at 370. "[Thhe equitable jurisdiction of a district court is not dependent upon specific statutory authorization." Marley v. Cannon, 1980 OK 147, ¶ 8, 618 P.2d 401, 404. "The purpose of a court sitting in equity is to promote and achieve justice with some degree of flexibility." Garett v. Arrowhead Improvement Ass'n, 826 P.2d 850, 855 (Colo.1992). Therefore, the trial court's exercise of equitable jurisdiction requires an inquiry into the particular circumstances of the case. Garreff, 826 P.2d at 855. There is a legal maxim that equity must follow the law; it will not allow legal limitations to be abridged unless there are equitable considerations of a compelling nature. Hedges, 2002 OK 92, ¶ 8, 66 P.3d 364, 370. Equity will follow both the letter and the spirit of the law.

114 Pursuant to the standard of review, we must examine the record to determine if the trial court abused its discretion or if its findings were clearly contrary to the weight of evidence. In concluding that equitable estoppel applied, the trial court specifically considered the mother's disability, the fact that Social Security paid an amount in excess of the arrearage, and that the mother was not responsible for Social Security's decision to pay the adult son.

¶ 15Equitable estoppel is em ployed to prevent one party from taking a legal position inconsistent with an earlier action that places the other party at a disadvantage. First State Bank v. Diamond Plastics Corp., 1995 OK 21, ¶ 39, 891 P.2d 1262, 1272. Equitable estoppel holds a person to a representation made, or a position assumed, where otherwise inequitable consequences would result to another, who has in good faith, relied upon that representation or position. Oxley v. General Atlantic Resources, Inc., 1997 OK 46, ¶ 20, 936 P.2d 943, 947. In the case at bar, the representation or position assumed must be the amount of time the father delayed before filing for his application for an indirect contempt citation and motion to reduce arrearage to judgment.

¶ 16 Both estoppel and the equitable defense of laches share the elements of delay and resulting prejudice to the other party,. In Hedges, cited above, this Court found that a ten-year delay was not sufficient to support a laches defense where the only prejudice that could be shown was the fact that the party owing the arrearage must now pay the accrued interest along with the ar-rearage. Hedges, 2002 OK 92, ¶ 11, 66 P.3d at 370. In the case at bar, the mother is alleged to have failed to pay child support for three years and nine months. Concerning resulting prejudice from a delay in enforcement, the mother could claim to be prejudiced by the fact that the father's delay resulted in the Social Security Administration's paying the parties' adult child instead of paying the father. But she cannot claim that her failure to pay child support was in good faith. Also, there is no evidence that the father has taken now a legal position inconsistent with his earlier action. The evidence is insufficient to support the conclusion of the trial court that equitable estoppel applies.

117 But to affirm the decision of the trial court, it is not necessary for this Court to agree with the reason for the decision. "It is a settled rule of appellate review in this jurisdiction that a judgment, if correct, must stand, regardless of the correctness of the reasons, theory or conclusions upon which it was based." McDaniel v. McCauley, 1962 OK 72, ¶ 10, 371 P.2d 486, 489, quoting Duncan v. Golden, 1957 OK 194, ¶ 6, 316 P.2d 1116, 1118.

118 The judgment of the trial court is based on an assumption that Social Security disability benefits may be eredited for court-ordered support of a minor child. That assumption is correct. The foundation for crediting disability benefits for a minor child as child support payments was laid in Nibs v. Nibs, 1981 OK 25, 625 P.2d 1256. The Court found that the trial court in Nibs was within its discretion to credit Social Security payments against a child support obligation, although the Court held that the evi*884dence in Nibs weighed against such a credit. Nibs, 1981 OK 25, ¶ 10, 625 P.2d at 1257. The entire Nibs court agreed that credit for Social Security disability benefits toward a child support order should be allowed. Nibs, 1981 OK 25, T1, 625 P.2d at 1258 (dissent). "Social Security benefits are not gratuitous, but are earned, and they constitute, in effect, insurance payments substituting for lost earning power. [Citations omitted.] It is therefore equitable to substitute Social Security disability benefits for child support for the period during which such benefits are paid." Nibs, 1981 OK 25, ¶ 1, 625 P.2d at 1258 (dissent).

¶ 19 In the case before us, Social Security benefits have been paid for child support. The amount paid was in excess of that owed as an arrearage. The mother is entitled to credit for that payment. The trial court found that the mother was not responsible for the lump sum payment directly to the adult child of the parties. In balancing the equities, we will not require a disabled party on Social Security to pay a second time. McNeal v. Robinson, 1981 OK 43, ¶ 13, 628 P.2d 358, 360. We do not find an abuse of discretion in the decision of the trial court.

III. ATTORNEY FEES

¶ 20 The trial court granted the mother's motion for attorney fees, and awarded the mother $1,175.00. The father appeals from that award. Thielenhaus v. Thielenhaus, 1995 OK 5, 890 P.2d 925, 934-935, reiterated the rule, established by 43 O.S.2001, § 110(C), that either spouse may be required to pay the reasonable expenses of the other in the prosecution or defense of the action. The trial court must take into account what is just and equitable considering the respective parties and the means and property of each. Attorney fees are granted only to that litigant who qualifies for the benefit through the process of a judicial balancing of the equities. The court's decision will not be disturbed on appeal in the absence of an abuse of discretion. Hester v. Hester, 1983 OK 50, ¶ 7, 663 P.2d 727, 729. We do not find an abuse of discretion in the trial court's decigion.

CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; JUDGMENT OF THE TRIAL COURT AFFIRMED.

WATT, C.J., LAVENDER, KAUGER, SUMMERS, WINCHESTER, JJ., concur. HARGRAVE, J., concurs in result. OPALA, V.C.J., HODGES (who joins OPALA), BOUDREAU, JJ., concur in part; dissent in part.

. We express no opinion on this obiter dictum of the trial court. Although the parties have argued whether or not such a trust may be imposed, this issue is not properly before this Court and does not affect the reasoning in this opinion.

. 42 U.S.C. § 654(20)(A) provides that "... to the extent required by section 666 of this title, that the State (A) shall have in effect all of the laws to improve child support enforcement effectiveness which are referred to in that section...." Section 666(a) provides that "... each State must have in effect laws requiring the use of the following procedures, consistent with this section and with regulations of the Secretary. ..." Section 666(a)(9)(A) provides: "Procedures which require that any payment or install ment of support under any child support order, whether ordered through the State judicial system or through the expedited processes required by paragraph (2), is (on and after the date it is due)-

(A) a judgment by operation of law, with the full force, effect, and attributes of a judgment of the State, including the ability to be enforced...."