#24414-rev & rem-JKM
2008 SD 20
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
MELISSA J. (BARTLETT) KAUTH, Plaintiff,
v.
LEE O. BARTLETT, Defendant and Appellant.
* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE FIFTH JUDICIAL CIRCUIT
SPINK COUNTY, SOUTH DAKOTA
* * * *
HONORABLE TONY PORTRA
Judge
* * * *
MELISSA J. (BARTLETT) KAUTH
Redfield, South Dakota Pro se plaintiff.
CARL J. KOCH
Mitchell, South Dakota Attorney for defendant
and appellant.
* * * *
CONSIDERED ON BRIEFS
ON AUGUST 27, 2007
REASSIGNED DECEMBER 20, 2007
OPINION FILED 03/12/08
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MEIERHENRY, Justice (on reassignment).
[¶1.] Lee O. Bartlett (Bartlett) petitioned to modify his child support
obligation after relocating and reducing his income. Even though the child support
referee found that Bartlett did not leave his employment for the purpose of reducing
his child support obligation, the referee’s report set child support based on the
imputed income from Bartlett’s prior job. The circuit court’s order adopted the
referee’s report. Bartlett appeals. We reverse and remand.
FACTS
[¶2.] When Bartlett and Melissa Kauth (Kauth) divorced on November 30,
2004, Bartlett’s monthly child support obligation for their two children was set at
$730.00 based on his gross annual income of $37,600.00 as a funeral home director
in Redfield, South Dakota. Bartlett remarried in June of 2006. His new wife lived
and worked in Harrisburg, South Dakota. She attempted to relocate and find
employment in Redfield but was unable to do so. Bartlett quit his job at the funeral
home in Redfield to move to Harrisburg, South Dakota. He obtained employment
as a pizza restaurant manager making a gross annual income of about $18,000.00.
[¶3.] In April of 2006, Bartlett petitioned for reduction of his child support
obligation because of his lower income. Bartlett requested a deviation under SDCL
25-7-6.10(2) based on his financial condition. Melissa Kauth did not specifically
request an upward deviation. At the hearing, Bartlett appeared by telephone, and
Kauth appeared in person. Neither party was represented by counsel. At the
beginning of the hearing, the referee questioned Bartlett about leaving his job as a
funeral home director for a less stressful career as follows:
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Referee: Why did that job [as funeral home director] end?
Bartlett: I decided on a different career.
Referee: So did you voluntarily quit?
Bartlett: Yes, I did.
Referee: Ordinarily, sir, if someone’s income decreases as a
result of their voluntary actions, in a child support proceeding
we treat them as though they still had that same income. Can
you tell me any reason, sir, why that should not be the case in
this proceeding?
Bartlett briefly explained that he was unable to find employment as a funeral home
director after relocating to Harrisburg, South Dakota. He also explained that his
job as a funeral home director was very stressful and that the job had a high
turnover rate. The referee denied Bartlett’s request to reduce the support and
imputed Bartlett’s prior gross monthly income of $3,133.00 for purposes of
calculating child support. Based upon the imputed income, the referee calculated
Bartlett’s child support obligation at $697.00, plus $85.00 per month for his pro rata
share of health insurance, increasing the total support obligation from the prior
order of $730.00 to $782.00 per month.
[¶4.] Bartlett retained counsel and objected in circuit court to the referee’s
report. The circuit court remanded the matter to the referee “for the sole and
limited purpose of conducting further hearing on the specific and limited issue of
whether Lee O. Bartlett voluntarily reduced his income for the intent and purpose
of manipulating (i.e. reducing) his child support obligation.”
[¶5.] On remand, Bartlett was represented by counsel and Kauth appeared
pro se. 1 Bartlett presented evidence that part of his decision to relocate and switch
1. Kauth did not submit a brief in this matter.
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jobs was because of the stress of the funeral business and the extended hours he
had to work. The referee noted that “[t]he mother did not request deviation based
on the father’s voluntary reduction of his income.” Nevertheless, the referee
determined that he had broad authority to raise deviations on his own and entered
only one finding of fact as follows:
[Bartlett] admits he voluntarily quit his job. There was no
evidence that he did so with the express intent of reducing his
income. The Referee would point out, however, that he did not
make any such finding in his original report either. . . .
The referee went on to conclude that “[w]hether [Bartlett’s] intent in quitting his job
was to reduce his child support obligation or not is irrelevant.”
[¶6.] Bartlett had requested a deviation based upon his financial condition
pursuant to SDCL 25-7-6.10(2). This deviation presumes a financial hardship if the
child support amount constitutes over fifty percent of the obligor’s net income.
Although the evidence showed that Bartlett’s child support amount exceeded fifty
percent of his actual net income, the referee made no finding on the deviation except
to conclude Bartlett had waived it. The referee again imputed Bartlett’s prior
income and recommended a monthly support amount of $782.00.
[¶7.] Bartlett once more objected to the referee’s recommendation because
the referee had deviated from the child support schedule based upon a deviation
neither party had requested and because the referee had automatically imputed
Bartlett’s prior income. The circuit court adopted the referee’s findings of fact and
conclusions of law as set forth in the referee’s reports from the original hearing and
the remand. Bartlett raises the following issues on appeal:
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ISSUES
1. Whether the circuit court erred in adopting the referee’s calculation
of child support using Bartlett’s imputed income.
2. Whether a child support referee has authority to raise a deviation
sua sponte.
STANDARD OF REVIEW
[¶8.] We review the decision to grant or deny child support under the abuse
of discretion standard. Miller v. Jacobsen, 2006 SD 33, ¶18, 714 NW2d 69, 76
(citing Midzak v. Midzak, 2005 SD 58, ¶17, 697 NW2d 733, 738 (additional citations
omitted)). When reviewing a child support referee’s findings of fact, we review for
clear error, while conclusions of law are reviewed de novo. Wagner v. Wagner, 2006
SD 31, ¶5, 712 NW2d 653, 656 (quoting Mathis v. Mathis, 2000 SD 59, ¶7, 609
NW2d 773, 774). Additionally, when the lower court adopts the child support
referee’s factual findings and legal conclusions, “we apply the clearly erroneous
standard of review to the findings and give no deference to conclusions of law.” Id.
Findings are not reversed for clear error “unless we are left with a definite and firm
conviction a mistake has been made.” Id.
[¶9.] Issues regarding statutory interpretation are questions of law
reviewed de novo. Rotenberger v. Burghduff, 2007 SD 7, ¶8, 727 NW2d 291, 294
(quoting State v. $1,010 in Am. Currency, 2006 SD 84, ¶8, 722 NW2d 92, 94).
“Statutes are to be construed to give effect to each statute [ ] so as to have them
exist in harmony. It is a fundamental rule of statutory construction that the
intention of the law is to be primarily ascertained from the language expressed in
the statute.” Huber v. Dep’t of Pub. Safety, 2006 SD 96, ¶14, 724 NW2d 175, 179
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(quoting $1,010 in Am. Currency, 2006 SD 84, ¶8, 722 NW2d at 94 (citing In re
Estate of Meland, 2006 SD 22, ¶6, 712 NW2d 1, 2) (additional citations omitted)).
DECISION
Child Support Calculated on Actual, Not Imputed Income
[¶10.] The referee and the circuit court misapplied and misinterpreted the
statutes and prior case law by automatically imputing Bartlett’s previous wages.
The referee and the circuit court applied a bright-line rule that if an obligor
voluntarily takes a job that pays less than his prior job, his higher income from the
prior job, must be imputed and used to calculate child support under the schedule.
Neither the statutes nor our prior opinions support such a bright-line rule.
[¶11.] The statutory scheme in SDCL Chapter 25-7 governs child support
calculations. The language of the statutes does not authorize automatically
imputing a higher income when someone voluntarily takes a lower paying job. The
only statute that even refers to imputed income is SDCL 25-7-6.4, which merely
creates a rebuttable presumption that a parent is capable of being employed at
minimum wage. 2 Since Bartlett’s income exceeded minimum wage this statute does
not apply.
[¶12.] In all other cases, such as Bartlett’s, the child support schedule uses
an obligor’s actual monthly net income as determined by SDCL 25-7-6.3 (income
2. SDCL 25-7-6.4 provides as follows:
Except in cases of physical or mental disability, it shall be presumed for the
purposes of determination of child support that a parent is capable of being
employed at the minimum wage and his child support obligation shall be
computed at a rate not less than full-time employment at the state minimum
(continued . . .)
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included in monthly gross income) and SDCL 25-7-6.7 (allowable deductions). A
proper application of the statutes in this case would require calculating Bartlett’s
monthly net income based on his actual earnings. The monthly net income of the
parties is then combined to determine the support obligation under the schedule set
forth in SDCL 25-7-6.2. Only after this schedule calculation has been performed
may a deviation, as set forth in SDCL 25-7-6.10, enter into the child support
obligation equation.
[¶13.] Thus, the statutes lay out a procedure wherein the initial step is to
determine the current net income of the parties and scheduled support amount.
Then, any requested deviations can be considered. We addressed the mandatory
nature of the procedure in Midzak v. Midzak, 2005 SD 58, 697 NW2d 733 and Gisi
v. Gisi, 2007 SD 39, 731 NW2d 223. In Midzak, the trial court failed to order child
support. We reversed and remanded pointing out that “[t]he trial court is required
to calculate the parents’ monthly net income . . . as codified at SDCL 25-7-6.3 and
25-7-6.7.” Midzak, 2005 SD 58, ¶30, 697 NW2d at 740. We noted that “[d]eviations
from the support obligation schedule at SDCL 25-7-6.2 are possible, but must be
raised by the parties in order to be considered by the trial court.” Id. ¶30, 697
NW2d at 741. However, in order to even reach the possibility of a deviation, the
referee must first compute the child support pursuant to SDCL 25-7-6.2 using the
parent’s current income. In Gisi, we said the child support schedule statutes
_________________________
(. . . continued)
wage. Evidence to rebut this presumption may be presented by either
parent.
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require the trial court to calculate the monthly net income of the obligor first, based
upon the obligor’s current income, and only after this calculation is made, may the
deviations in SDCL 25-7-6.10 be applied. 2007 SD 39, ¶¶7-8, 11, 731 NW2d at 226-
27.
[¶14.] The father in Gisi, asked for a downward deviation because he was
incarcerated and had no income. The mother had not argued for an upward
deviation. The referee and the court miscalculated the father’s obligation by using
an imputed gross minimum wage rather than a monthly net income. We
determined that a proper calculation under the schedule set the father’s obligation
at $100.00 rather than the $190.00 ordered by the court. Neither the referee nor
the court entered findings supporting a deviation. We found it was error for the
referee to “merely impute” the father’s prior income.
[¶15.] Here, the referee and the circuit court failed to follow the procedures
mandated by statute and articulated by this Court in Gisi. See 2007 SD 39, ¶7, 731
NW2d at 226. In this case, like in Gisi, the referee and the circuit court incorrectly
considered a deviation without first calculating support. Clearly, this backwards
application of the statutory deviation scheme is not contemplated by the statutes.
[¶16.] However, it is apparent from the record that the referee did not
consider the higher imputed income as a deviation. In the first recommendation,
the referee entered findings that Bartlett had waived his request for a deviation and
Kauth had not requested a deviation. On remand from the circuit court, the referee
again did not consider the imputed higher income as a deviation. Nevertheless, the
referee alternatively found that if imputing the higher income was considered a
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deviation, then the referee had authority to raise the deviation sua sponte to
sustain his recommended support amount. The referee, however, failed to enter
specific findings based upon the deviation factors in SDCL 25-7-6.10 and failed to
consider the deviation factor raised by Bartlett. The referee’s one finding was that
“Bartlett admitt[ed] he voluntarily quit his job,” but did not quit “with the express
intent of reducing his income.” 3
Referee Cannot Raise Deviations Sua Sponte
[¶17.] Bartlett argues that the referee erred when he alternatively considered
the deviation without either party raising the issue. The statute, SDCL 25-7-6.10,
allows for a deviation as follows:
Deviation from the schedule in § 25-7-6.2 shall be
considered if raised by either party and made only upon the
entry of specific findings based upon any of the following factors:
(1) The income of a subsequent spouse or contribution of a
third party to the income or expenses of that parent but only if
the application of the schedule works a financial hardship on
either parent;
(2) Any financial condition of either parent which would
make application of the schedule inequitable. If the total
amount of the child support obligation, including any
adjustments for health insurance and child care costs, exceeds
fifty percent of the obligor’s monthly net income, it shall be
presumed that the amount of the obligation imposes a financial
hardship on the obligor. This presumption may be rebutted
based upon other factors set forth in this section;
(3) Any necessary education or health care special needs of
the child;
(4) The effect of agreements between the parents regarding
extra forms of support for the direct benefit of the child;
(5) The obligation of either parent to provide for subsequent
natural children, adopted children, or stepchildren. However,
3. Even if a referee had inherent power to raise a deviation sua sponte, here the
referee’s one finding in support of the deviation was insufficient to support
the amount of the deviation.
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an existing support order may not be modified solely for this
reason; or
(6) The voluntary act of either parent which reduces that
parent’s income.
Pointing to the statutory language, “if raised by either party,” Bartlett claims that a
deviation from the child support schedule cannot be considered unless a party raises
the issue.
[¶18.] We agree with Bartlett that the referee may not raise a deviation sua
sponte. The statute directs that “[d]eviation from the schedule in § 25-7-6.2 shall be
considered if raised by either party.” SDCL 25-7-6.10. The statute contemplates
that the parties would raise deviations. There is no authority to support the
premise that a child support referee has inherent authority to raise a deviation on
his own. Gleaning such authority from SDCL 25-7-6.2 is dubious. The language of
the statute neither authorizes nor prohibits a referee or court from considering a
deviation sua sponte. The plain and simple statutory meaning merely requires the
referee and/or the court to consider and enter specific findings if a party raises a
deviation request.
[¶19.] The referee relied upon the broad equitable standard of “best interest
of child” as giving him inherent authority to raise deviations sua sponte. The
referee referred to this as “an affirmative duty to protect children even against the
wishes or arrangements of parents.” The referee’s reliance on this standard is
misplaced. The “best interest of the child” standard is not a standard articulated in
the child support statutes. SDCL ch 25-7. The guiding standard for child support is
the child’s “standard of living” pre-divorce and the child’s actual needs. SDCL 25-7-
6.2; Laird v. Laird, 2002 SD 99, ¶30, 650 NW2d 296, 301. The court’s broad
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equitable power to set child support has long been replaced by the mandatory child
support statutes, the goal of which is to establish uniformity. Report of the South
Dakota Commission on Child Support 13 (Dec. 1985) (“The lack of uniform support
guidelines in the State has led to substantial variations in the amount of support
ordered to families in similar situations. The support obligation ordered oftentimes
varies depending on the method used in determining what the support obligation
should be.”).
[¶20.] Prior to enactment of mandatory child support schedules, the courts
were guided by “the [child’s] necessary maintenance, education and support” and
the parent’s “respective means.” SDCL 25-7-7 (1982), amended by 1986 SD Sess.
Laws ch 218, section 11, repealed by 1989 SD Sess. Laws ch 220, section 19. The
1982 statute made “the parents of a child jointly and severally obligated to provide
the necessary maintenance, education, and support of the child in accordance with
their respective means.” Saint-Pierre v. Saint-Pierre, 357 NW2d 250, 259 (SD
1984). In interpreting the 1982 statute, this Court applied several factors and set
two explicit standards courts were to apply in determining child support. We
stated, “The amount of child support depends upon the reasonable needs of the
child, i.e., the reasonable expenditures suitable to the child’s circumstances at the
time of the divorce and the payor’s financial situation.” Gross v. Gross, 355 NW2d
4, 7 (SD 1984) (citations omitted). We instructed the lower courts to determine (1)
an amount which would support the child’s circumstances and situation in life; and
(2) obligor’s ability to pay. Id. Thus, even before the mandatory schedules were
enacted “the best interest of the child” was not the standard for child support
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determinations. See SDC 183 (1929) (requiring “support and education suitable to
his circumstances”); see also SDCL 25-7-7 (1982) (requiring support “in accordance
to their respective means”), amended by 1986 SD Sess. Laws ch 218, section 11,
repealed by 1989 SD Sess. Laws ch 220, section 19.
[¶21.] Since 1986, the legislature has established mandatory child support
guidelines. 1986 SD Sess. Laws ch 218, section 11. In interpreting the 1986 version
of the law, we determined that the statutes required courts to impose the guidelines
and consider the deviation factors in every case. We said in Bruning v. Jefferies,
“The question becomes whether Secretary (and hearing examiner) must consider
these [deviation] factors in every case he hears. We conclude, from a reading of this
statute in its entirety, that the legislature intended that these [deviation] factors be
considered in each proceeding.” 422 NW2d 579, 580 (SD 1988). Because the
hearing examiner “chose not to consider any of the deviations” we reversed. Id.
Even though the legislature later amended the statutes only to require
consideration of the deviation factors raised by the parties, 1989 SD Sess. Laws ch
220, section 10, it still required uniform application of the guidelines. 1989 SD
Sess. Laws ch 220, section 2. The 1986 statutory scheme and all subsequent
amendments to the child support guidelines demonstrate a clear legislative intent
to make the statutory procedures mandatory. 4
4. Although the legislature repealed SDCL 25-7-7 in 1989, SDCL 25-7-7 (1986),
repealed by 1989 SD Sess. Laws ch 220, section 19, the mandated child
support guidelines continued with a newly adopted child support schedule,
codified under SDCL 25-7-6.2. In the repealed language of SDCL 25-7-7 the
legislature clearly provided that “[t]hese guidelines shall be used in setting
child support.” SDCL 25-7-7 (1986) (emphasis added), repealed by 1989 SD
(continued . . .)
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Parties’ Responsibility to Request Deviations
[¶22.] As part of the statutory scheme, child support hearings under SDCL
25-7A-22 give parents an opportunity to request a change in child support without a
formal circuit court proceeding. Even though the referee hearing may be less
formal and the parties usually appear pro se, the referee must conduct the
proceeding in a fair and impartial manner. Additionally, when referees or courts
interject issues not raised by either party, they run the risk of losing their
neutrality and becoming advocates for a party, if not in fact, then in appearance.
The referee as an arm of the court cannot be an advocate for either party. See
SDCL 25-7A-6 (a referee “is a member in good standing of the State Bar Association
and is appointed by the court, pursuant to statute”). A referee or court that raises
an issue sua sponte may compromise its position as a fair and impartial
adjudicator. 5
[¶23.] Whether to request a deviation with supporting evidence is the
responsibility and decision of each party. SDCL 25-7-6.10. In Bartlett’s original
petition for modification of child support Bartlett requested a deviation from the
support schedule because of his financial condition pursuant to SDCL 25-7-6.10(2).
_________________________
(. . . continued)
Sess. Laws ch 220, section 19. The mandated child support guidelines
continued with a new child support schedule codified under SDCL 25-7-6.2
(1989). The current version of SDCL 25-7-6.2 states: “The child support
obligation shall be established in accordance with the following schedule. . . .”
(Emphasis added).
5. A better approach for a referee is one we have seen in other cases where the
referee goes through each statutory deviation on the record and canvasses
the pro se litigants as to whether they wish to raise any of them.
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Kauth, on the other hand, did not initially request a deviation. However, during the
referee hearing upon remand, Kauth, appearing pro se, argued for a deviation.
While she did not specifically say “deviation,” she did argue for one as follows:
[T]he law states that if you voluntarily quit your job, whether
it’s to reduce, purposely reduce child support or not, that you’re
still responsible for the prior initial setup of child support. . . . I
know that it’s tough to make things meet now that he doesn’t
pay the child support when he use[d] to. I pay my rent a month
late because I only make $15,000 a year, so it doesn’t spread
very well. It’s very thin.
This statement constitutes an effective request for deviation. Additionally, the
parties clearly litigated the issue in the various hearings during the course of the
proceedings. Thus, the statutory requirement of being “raised by either party” was
met. The referee was presented with the father’s request to reduce his child
support and the mother’s request that it remain the same because the father
voluntarily reduced his income. Nevertheless, the referee failed to consider the
deviations as contemplated by the statutes and failed to enter sufficient findings as
to the deviations.
Conclusion
[¶24.] We hold that the circuit court erred in adopting the referee’s report
because the referee incorrectly applied the child support statutes by initially using
the imputed prior income of Bartlett to calculate support and by not considering the
deviation factors properly. We reverse and remand.
[¶25.] GILBERTSON, Chief Justice and KONENKAMP and ZINTER,
Justices, concur.
[¶26.] SABERS, Justice, concurs in result in part and dissents in part.
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SABERS, Justice (concurring in result in part and dissenting in part).
[¶27.] I agree with the majority opinion’s determination that the parties
raised the issue of deviation and therefore, the referee could consider a deviation.
However, I disagree that the statute itself limits consideration of a deviation only to
instances where a party raises the issue of a deviation. Admittedly, some of our
prior case law suggested a deviation can only be considered if a party raises it. See
Wagner, 2006 SD 31, ¶9, 712 NW2d at 657 (noting the statute “only allows a referee
to address deviations when one has been ‘raised’ by a party and only upon the entry
of specific findings following the hearing”); Midzak, 2005 SD 58, ¶31, 697 NW2d at
741 (noting neither party raised the issue of deviation, nor did the court enter
specific findings on any of the statutory factors in SDCL 25-7-6.10). However, these
cases only consider the issue in dicta and it has not been thoroughly analyzed. In
the prior cases, the trial courts did not make the requisite findings of fact in order to
deviate from the schedule. It is difficult to determine from the prior cases whether
the failure to make specific findings was the determinative reason to deny a
deviation. Regardless of the prior cases, this issue has not been squarely raised
until now.
[¶28.] In determining the legislative intent of a statute, “[w]e give words
their plain meaning and effect, and read statutes as a whole, as well as enactments
relating to the same subject.” Rotenberger v. Burghduff, 2007 SD 7, ¶8, 727 NW2d
291, 294 (Rotenberger I) (quoting Chapman v. Chapman, 2006 SD 36, ¶11, 713
NW2d 572, 576). The courts must confine themselves to the language the
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legislature used and cannot insert words into the statute that the legislature did
not place there. Gloe v. Iowa Mut. Ins. Co., 2005 SD 29, ¶36, 694 NW2d 238, 250.
[¶29.] While Bartlett reads the statute that the court may only consider a
deviation when a party raises the issue, the statute does not say only. The statute
says the court shall consider the deviation when the party raises the issue, but does
not otherwise direct a court when it can or cannot hear an issue concerning
deviation. Considering our long history of safeguarding the best interest of the
child, it would be inconsistent to say a court cannot consider a deviation when a
litigant, especially one appearing pro se, does not raise the issue during the hearing.
See Dahl v. Dahl, 2007 SD 64, ¶21, 736 NW2d 803, 808 (striking down a mutual
agreement to seek no child support and noting such an agreement was not in the
child’s best interest); Thomas v. Hauge, 2002 SD 12, ¶8, 639 NW2d 520, 521-22
(requiring noncustodial parent to pay child support on public policy grounds that
require the protection of children despite an agreement between parents that
waived child support in conformity with SDCL 25-7A-17); Estes v. Albers, 504
NW2d 607, 609 (SD 1993) (noting a support agreement that is detrimental to the
best interest of the child violates public policy and is void); Vander Woude v. Vander
Woude, 501 NW2d 361, 363 (SD 1993) (noting the parental obligation to support
one’s children is statutory and a matter of public policy); Stach v. Stach, 369 NW2d
132, 136 (SD 1985) (noting it is in the best interest of the child to be supported).
Therefore, while a court “shall consider a deviation if a party raises the issue,” a
court may also consider a deviation sua sponte when it is in the best interest of the
child, and the court makes specific findings regarding any of the factors in SDCL
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27-5-6.10. 6 See Brandriet v. Larsen, 442 NW2d 455, 462 (SD 1989) (noting that a
“motion seeking amendment of the child support provision in the decree opened for
examination all aspects of child support”) (citing Brunick v. Brunick, 405 NW2d 633
(SD 1980)) (emphasis added); see also State ex rel. Struck v. Struck, 526 NW2d 500,
502 (SD 1995) (same); Grunewaldt v. Bisson, 494 NW2d 193, 195 (SD 1992) (same).
[¶30.] Contrary to the majority opinion’s assertions, see supra ¶19, the
standard of best interest of the child has been used in conjunction with support
obligations. See Dahl, 2007 SD 64, ¶21, 736 NW2d at 808 (striking down a mutual
agreement to seek no child support and noting such an agreement was not in the
6. Moreover, the referee gave an example of what would result from adoption of
the position urged by father in this case:
Example #1: This Referee hears several modification petitions every year in
which a father has committed a crime, becomes incarcerated, loses his job as
a result and has zero income, or virtually none. He then petitions for
reduction of his child support obligation, and points out to the Referee that he
has no income. Usually the mothers do not appear at such hearings, because
they are receiving no child support anyway and have no immediate prospect
of doing so. The Referee’s practice has invariably been to impute to the
father the income he lost as a result of his incarceration, usually with the
result there is no change in circumstances. The Referee then recommends
dismissal of such petitions on the ground that the father’s lack of income was
the result of his voluntary act, even though that act was not accompanied by
an intent to reduce his child support, and even though the mother did not
request deviation. Frequently these incarcerated fathers object to the
Referee’s recommendation. In dozens of such objections over the years, no
circuit court has overturned such a recommendation, even though no one
requested deviation from the support schedule. If the rule in South Dakota
were that deviation could not be considered in the absence of a request by a
party, hundreds of South Dakota children and mothers every year would see
their support reduced to zero because the obligor committed a crime. Many of
these obligations, if unmodified, will at least continue to accrue as arrearages
and eventually be paid, even if not paid today.
(Emphasis added).
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child’s best interest); Estes, 504 NW2d at 609 (noting a support agreement that is
detrimental to the best interest of the child violates public policy and is void); Stach,
369 NW2d at 136 (noting it is in the best interest of the child to be supported). I
agree with the majority opinion that the referee should not become an advocate for
one party and with the remedy of canvassing the parties regarding deviations;
however, the most important thing is that the referee gets it right. In other words,
the referee must look out for the best interests of the child and ensure that the
child’s needs are supported, especially when the parties are pro se and may not
understand the deviations offered or available. Therefore, even though it is
unnecessary to reach the issue in the current case since the parties raised the issue
of deviations, the referee would have the power to consider a deviation, despite the
absence of a request by one of the parties.
[¶31.] Bartlett’s second claim, one which the majority opinion largely changes
to a different issue, is that the referee and circuit court erred when they deviated
from the child support schedules. He argues that he cannot be held to his higher
income when he did not quit his job in order to reduce his child support obligation,
but quit in order to have a better quality of life. The referee found Bartlett
voluntarily quit his former, higher paying job and took lower paying employment,
but that he did not do so in order to reduce his child support. Even so, the referee
determined the higher income should be used because quitting his job was a
voluntary act. The referee interpreted the statute to mean that the act need not be
for the purpose of reducing child support; it need only be undertaken voluntarily.
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[¶32.] Instead of addressing solely the issue of whether a referee can deviate
from the schedule when a reduction in income results from a voluntary change in
employment, and not for the purpose of reducing child support obligation, the
majority opinion addresses the procedure of arriving at the obligation when a
referee deviates from the schedule. The majority opinion reaches this issue despite
it never being raised by Bartlett. In fact, Bartlett declares that “imputation of
income is a deviation.” Furthermore, he expressly says a referee can implement a
deviation by imputing former income and comparing it to the lower obligation and
comments that “[p]robably no one is too concerned over whether the deviation value
is itemized as . . . described.” He does not argue that the referee does not have the
power to assign the former higher income when deciding to deviate. Nor does he
argue that a referee must follow the procedure outlined by the majority opinion. He
simply argues that the deviation was not raised by either party.
[¶33.] Nonetheless, the majority opinion concludes that the referee erred
when it imputed the higher, former income. The majority opinion does not conclude
that the deviation was in error because the voluntary act that lowered Bartlett’s
income was not done to manipulate child support, as advocated by Bartlett.
Instead, the majority opinion concludes the procedure was incorrectly followed and
the referee’s decision must be reversed because the lower income was not used to
calculate child support first and then a deviation taken subsequent to the initial
lower child support obligation.
[¶34.] The majority opinion argues that the “proper application of the
statutes in this case would require calculating Bartlett’s monthly net income based
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on his actual earnings” and “[o]nly after this schedule calculation has been
performed may a deviation, as set forth in SDCL 25-7-6.10, enter into the child
support obligation equation.” Supra ¶12. Therefore, the majority opinion claims
that the referee “incorrectly applied the child support statutes by initially using the
imputed prior income of Bartlett to calculate support[.]” Supra ¶24. However, this
argument is contrary to our prior case law. See Woehl v. Woehl, 2002 SD 6, ¶15,
639 NW2d 188, 192 (no abuse of discretion in deviating from the child support
schedule by using [obligor’s] former income to calculate [the obligor’s] current child
support obligation).
[¶35.] In support of its argument, the majority opinion cites Midzak, 2005 SD
58, 697 NW2d 733, and Gisi, 2007 SD 39, 731 NW2d 223. It claims these cases
stand for the proposition that a circuit court is required to calculate the current
child support obligation from the current net monthly income and then deviate from
the result. These cases do not support this proposition.
[¶36.] In Midzak, the circuit court gave custody of the couple’s minor child to
the father, but did not order any child support. 2005 SD 58, ¶11, 697 NW2d at 737.
In reversing this decision, this Court stated that the parents’ combined monthly net
incomes shall be used to determine the obligation. Nevertheless, the later sentence
in that paragraph explains that deviations from the support obligation schedule are
possible, but must be raised by the parties in order to be considered. Id. ¶30. No
party raised a deviation, and the circuit court did not make findings regarding a
deviation. Id. ¶31. Therefore, we reversed the circuit court’s failure to order child
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support. Id. ¶32. We did not explain or require the current combined monthly net
income to be used prior to deviating from the child support schedule.
[¶37.] The majority opinion, citing Gisi, claims that we “require the trial
court to calculate the monthly net income of the obligor first . . .” Supra ¶13 (citing
Gisi, 2007 SD 39, ¶8, 731 NW2d at 226) (emphasis added). It goes on to state that
“[o]nly after this calculation is made . . . may the deviations . . . be applied.” Id.
(citing Gisi, 2007 SD 39, ¶11, 731 NW2d at 227) (emphasis added). However,
paragraph eight of Gisi requires a circuit court to use the monthly net income rather
than monthly gross income. See 2007 SD 39, ¶8, 731 NW2d at 226. Furthermore,
paragraph eleven explains a deviation is possible in certain circumstances, but not
in Gisi because Lynette did not argue for a deviation exceeding the schedule and
neither the referee nor the circuit court entered findings of fact supporting such
deviation. Id. ¶11. No language in Gisi requires a circuit court to use the current
monthly combined net income first and then apply the deviation.
[¶38.] In contrast, we have case precedent that supports a referee or circuit
court’s decision to apply a deviation by imputing the former higher income when a
parent has committed a voluntary act that reduces their income. In Woehl, 2002 SD
6, 639 NW2d 188, we did not require the circuit court or referee to first determine
the child support obligation based on the current monthly income and then consider
the deviation. Instead, we explained that because of his voluntary act that reduced
his income, “there was no abuse of discretion in deviating from the child support
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schedule by using his former income to calculate his current child support
obligation.” Id. ¶15, 639 NW2d at 192 (emphasis added). 7
[¶39.] There is no support in the statute for the majority opinion’s
interpretation. It claims the statute requires the computation of child support
based upon the current net monthly income and then a deviation from the result.
However, the statute requires that “[t]he child support obligation shall be
established in accordance with the following schedule subject to such revisions or
deviations as may be permitted pursuant to 25-7-6.1 to 25-7-6.18[.]” SDCL 25-7-6.2
(emphasis added). The statute continues to explain that “[e]xcept as provided in
this chapter, the combined monthly net incomes of both parents shall be used in
determining the obligation. . . .” Id. (emphasis added). The statute does not direct
the circuit court to set the obligation and then deviate.
[¶40.] In any event, it seems that the majority opinion is preferring form over
substance. In practice, the result will be the same. If a circuit court determines a
deviation is warranted because of a party’s voluntary act that lowered their income,
the circuit court will most inevitably look at the prior income from which the income
was lowered. It seems counterintuitive to set the obligation using current, monthly
combined net income and then essentially “pick” a higher or lower obligation. There
needs to be an objective basis for assigning an obligation. Imputing former, higher
7. Like Bartlett, the father’s child support obligation in Gisi exceeds fifty
percent of his monthly net income. Under SDCL 25-7-6.10(2), there is a
presumption that the obligation imposes a financial hardship on the obligor,
but the referee or circuit court can consider the voluntary act that reduced
the income. See Gisi, 2007 SD 39, ¶18, 731 NW2d at 229; see also Woehl,
2002 SD 6, ¶¶14-15, 639 NW2d at 191-92.
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income to a party whose voluntarily act reduces their income provides a basis for
assigning the obligation. For example, under the rationale of the majority opinion,
the referee would be justified in first determining the obligation from the current
income, next determining the obligation from the former, higher income and finally
assigning the higher obligation based on the former income due to its finding that a
deviation is warranted. The result is the same and the procedure is not only not
mandatory, but unwarranted.
[¶41.] Finally, Bartlett claims that Nauman v. Nauman, 320 NW2d 519 (SD
1982), requires the voluntary action be for the purpose of reducing his child
support. 8 Bartlett is correct that the case explains that one cannot voluntarily
reduce one’s income “in order to avoid alimony and support payments.” However,
Nauman does not declare that the lower income should be used to determine child
support if the voluntary reduction of income is for a purpose other than reducing
child support. The case was simply explaining that Nauman could not lower his
income to reduce his child support.
[¶42.] Our statutes and our case law are contrary to Bartlett’s argument. “It
is a fundamental rule of statutory construction that the intention of the law is to be
primarily ascertained from the language expressed in the statute.” Huber v. Dep’t
of Pub. Safety, 2006 SD 96, ¶14, 724 NW2d 175, 179 (additional citations omitted).
8. Bartlett emphasizes he quit his job in Huron near his children because
working at the funeral home was highly stressful and he was “burn[ed] out.”
However, the referee, who heard his testimony, found the “true motivation
appears to be his decision to remarry, to a woman who lives in the
Harrisburg area.”
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The statute provides that a “deviation from the schedule . . . shall be . . . made only
upon the entry of specific findings based upon . . . [t]he voluntary act of either
parent which reduces that parent’s income.” SDCL 25-7-6.10. The statute provides
the act must be voluntary but does not require it to be for the purpose of reducing
child support.
[¶43.] Furthermore, our case law does not require the act be for the purpose
of reducing child support. 9 In Kost v. Kost, we imputed minimum wage income to
the mother when she voluntarily reduced her income to return to school. 515 NW2d
209, 214-15 (SD 1994). 10 In doing so, this Court explained that the duty of a parent
to support his or her child is paramount and the child’s interest is the primary
consideration. Id. at 214. We noted that “the first obligation of any parent is to
9. Iowa has refused to modify a support obligation when the reduction of income
is voluntary and self-inflicted. See In re Marriage of Walters, 575 NW2d 739,
741-42 (Iowa 1998) (citing generally In re Marriage of Dawson, 467 NW2d
271, 275-76 (Iowa 1991) (refusing to reduce child support obligation for
obligor who quit job to finish education and take a job with lower pay); In re
Marriage of Vetternack, 334 NW2d 761, 763 (Iowa 1983) (court unwilling to
modify obligation for obligor who committed felony and was incarcerated but
who had equity in home from which obligation could be satisfied); Ellis v.
Ellis, 262 NW2d 265, 267-68 (Iowa 1978) (finding obligor’s voluntary
retirement at time when he still had substantial earning capacity to be
voluntary and self-inflicted); Reed v. Reed,152 NW2d 190, 191 (Iowa 1967)
(refusing to modify support obligation when obligor voluntarily quit job to
return to school); In re Marriage of Bales, 439 NW2d 228, 230 (IowaCtApp
1989) (declining to modify obligation when obligor quit job paying $15,000 per
year to take job paying $5,900 per year).
10. While this imputation of minimum wage was done in Kost under SDCL 25-7-
6.4, citing SDCL 25-7-6.10, we noted that the lower court could have deviated
by virtue of Karen’s voluntary act which reduced her income. Id. at 215. Her
former income before going back to school would have been minimum wage
because she was not working during the marriage or prior to going back to
school. Id. at 211.
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provide child support, assuming he is physically and mentally capable. To hold
otherwise would be to open the floodgates and allow parents who have child support
obligations to circumvent these obligations under the guise of returning to school to
enhance employment.” Id. at 215.
[¶44.] I agree with the conclusion that imputation of former, higher income is
not automatic if the obligor commits a voluntary act which reduces his or her
income. Indeed, the real problem in this case is it appears that the referee
incorrectly assumed that it had no choice but to impute Bartlett’s higher income
once it determined there was a voluntary act that allowed for a deviation under
SDCL 25-7-6.10. 11 The statute requires the deviation to be considered, but does not
mandate deviation. See SDCL 25-7-6.10 (“Deviation from the schedule in § 25-7-6.2
shall be considered . . .”) (emphasis added). Where I part ways with the majority
opinion on this issue is that a child support referee may, in its discretion, impute
the former, higher income to the obligor under SDCL 25-7-6.10(6). Absent an abuse
of discretion, the decision whether or not to impute the former, higher income as a
deviation would stand.
11. The majority opinion also suggests the referee’s findings were inadequate to
support the imposed deviation. However, in the referee report upon remand,
the conclusions of law also note that “Melissa . . . due to Lee’s unilateral
reduction of his support payments . . . is already in arrears in her rent
payment.” I would submit that this supports the referee’s implementation of
a deviation.
Moreover, the majority opinion suggests that the referee simply imputed the
higher income and did not consider the imputed higher income as a deviation.
I agree the initial referee report does not use the word deviation and
specifically finds that Bartlett waived his requested deviation. However, in
(continued . . .)
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[¶45.] Because Bartlett’s actions were voluntary and the reduction of income
was self-imposed, the court did not err when it recognized it could deviate from the
child support schedule and impute Bartlett’s former, higher salary to determine his
support obligation. However, the language in the referee’s report indicates it
considered the imputation of the former, higher income mandatory. On the
contrary, the referee or circuit court has discretion to deviate if the income is
lowered by a voluntary act, but the imputation of the higher income is not
mandatory. Therefore, I agree in result since the case should be remanded in order
for the referee to consider the discretionary deviations. I dissent because the
referee need not follow the procedure outlined by the majority opinion. As long as
the deviation is supported, the procedure should not matter.
_________________________
(. . . continued)
the report of referee upon remand, the issue of deviation and the power to
raise it sua sponte was addressed as a specific issue.
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Kauth v. Bartlett
Court: South Dakota Supreme Court
Date filed: 2008-03-12
Citations: 2008 SD 20, 746 N.W.2d 747
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