NO. 8 2 - 4 9 3
IN THE SUPREME COURT OF T - E STATE OF JIONTAXA
II
1983
IN RE THE MARRIAGE OF
JEFFREY 0 . HUGIiES,
Petitioner and Respondent,
-vs-
PAPIELA AIJN ITUGHES ,
Respondent and Appellant.
Appeal from: District Court of the Thirteenth Judicial District,
In and for the County of Stillwater,
The Honorable William J. Speare, Judge presiding.
Counsel of Record:
For Appellant:
W. Corbin Howard, Billings, Montanq
For Respondent :
James J. Sinclair, Billings, Montana
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Submitted on Briefs: April 29, 1983
Decided: July 13, 1983
Filed:
JUL 1 3 1983
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Clerk
Mr. J u s t i c e John C. Sheehy delivered the Opinion of the
Court.
Pamela Ann Hughes (wife) appeals from an order
reducing t h e amount o f c h i l d s u p p o r t t o b e p a i d t o h e r by
J e f f r e y 0 . Hughes ( h u s b a n d ) e n t e r e d i n t h e D i s t r i c t C o u r t o f
t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , S t i l l w a t e r County.
The p a r t i e s w e r e d i v o r c e d on December 9 , 1 9 8 0 . Pursu-
ant to a Child Custody, Support and Property Settlement
Agreement, w i f e r e c e i v e d c u s t o d y of t h e two m i n o r c h i l d r e n
and husband agreed to make support payments of $350 p e r
month f o r e a c h c h i l d .
On May 2 4 , 1 9 8 2 , h u s b a n d p e t i t i o n e d t h e D i s t r i c t C o u r t
t o modify the o r i g i n a l decree t o reduce h i s child support
o b l i g a t i o n t o $200 p e r month f o r e a c h c h i l d . Husband s t a t e d
that the r e d u c t i o n was n e c e s s a r y b e c a u s e h e was p r e s e n t l y
unernployed and h a d n o income.
Shortly thereafter, wife served husband with inter-
rogatories. Husband r e f u s e d t o answer any i n t e r r o g a t o r i e s
w h i c h e s s e n t i a l l y a s k e d him t o r e v e a l t h e amount o f money h e
had p u t i n t o h i s new w i f e ' s bank a c c o u n t s and had t a k e n o u t
of t h o s e same a c c o u n t s f o r t h e y e a r s 1980, 1 9 8 1 and 1 9 8 2 .
Husband a l s o r e f u s e d t o a n s w e r s e v e r a l i n t e r r o g a t o r i e s which
d e a l t w i t h t h e i d e n t i t y o f h i s c u s t o m e r s and t h e amount o f
income he r e c e i v e d f r o m them, s t a t i n g t h a t t h i s i n f o r m a t i o n
was c o n f i d e n t i a l . Wife s u b s e q u e n t l y f i l e d a m o t i o n t o compel
discovery. The D i s t r i c t Court denied t h e motion, stating
t h a t husband's new w i f e ' s income c o u l d n o t be considered.
The District C o u r t would allow wife to examine husband's
income p r o d u c i n g a s s e t s , h o w e v e r , s i n c e h u s b a n d ' s income was
completely discoverable.
A t t h e t i m e of t h e p a r t i e s ' d i v o r c e , h u s b a n d was s e l f -
employed as a management consultant. His income before
taxes for 1980, the year of the divorce, was $ 4 7 , 6 8 6 . In
1981, husband's before-tax income was $ 4 4 , 0 5 2 .
On November 1, 1981, husband began working as a
g e n e r a l manager f o r C h r i s t i a n , S p r i n g , S i e l b a c h and Associ-
ates. Husband was g i v e n a n $ 8 , 0 0 0 c a s h a d v a n c e a n d was a l s o
p a i d a m o n t h l y s a l a r y o f $ 3 , 0 8 2 f o r November, December, and
January, when h e was a l s o a l l o w e d t o c o n c l u d e h i s b u s i n e s s
a c t i v i t i e s with other clients. From F e b r u a r y t o May, 1982,
h u s b a n d ' s m o n t h l y s a l a r y was i n c r e a s e d t o $ 4 , 3 3 3 . I n May o f
1 9 8 2 , h u s b a n d ' s employment w i t h C h r i s t i a n , Spring, Sielbach
and Associates was terminated. At this time, husband
indicated that i t would take from three t o s i x months to
rebuild his private consulting business. Husband's income
d e c r e a s e d i n J u n e 1982 t o $2,450. H i s income f o r J u l y a n d
August 1982 amounted t o $1,475 and $1,900 r e s p e c t i v e l y .
The h e a r i n g o n h u s b a n d ' s p e t i t i o n was h e l d on A u g u s t
30, 1982. At that t i m e wife testified that her average
annual income was b e t w e e n $ 8 , 0 0 0 and $10,000 and t h a t h e r
monthly expenses amounted to $1,200. She also testified
t h a t s h e n e e d e d t h e $350 p e r month p e r c h i l d s u p p o r t p a y m e n t
t o provide for the p a r t i e s ' children.
On O c t o b e r 6 , 1 9 8 2 , t h e D i s t r i c t C o u r t i s s u e d a n o r d e r
r e d u c i n g h u s b a n d ' s c h i l d s u p p o r t p a y m e n t s t o $200 p e r month
per child. From t h i s o r d e r , w i f e a p p e a l s a n d p r e s e n t s t h e
following i s s u e s f o r our review:
1. Did the District Court err in denying wife's
motion f o r an o r d e r compelling d i s c o v e r y ?
2. Did t h e D i s t r i c t C o u r t e r r i n m o d i f y i n g h u s b a n d ' s
child support obligation?
Wife first contends that husband should have been
compelled to answer the following and other related inter-
rogatories:
"INTERROGATORY NO. 25: State the location
and account number of each and every
checking account and savings account
maintained by you or any other person,
including your current wife, in which
income earned by you or as a result of
your activities has been placed for the
calendar years 1980, 1981, and 1982."
"INTERROGATORY NO. 9: If you were em-
ployed during the years 1980 and 1981,
state: (a) the name and address of
persons for whom you performed work in
exchange for compensation; (b) the date
you commenced performing work; (c) job
title or position; (d) description of
duties; (e) name and address of immediate
supervisor."
Husband based his refusal to answer Interrogatory Nos. 25
through on Duffey Duffey Mont .
P.2d 697, 38 St.Rep. 1105, wherein this Court held that a
husband's obligation to support his children may not be
increased simply because he has remarried and his new wife
is bringing additional income into his household. Husband
also refused to answer Interrogatory Nos. 9 and 10 because
of the confidential nature of the work he performs.
Wife asserts that the information she asked for in the
interrogatories is neither irrelevant nor privileged, and
therefore the District Court should have compelled discov-
ery. We agree. Rule 26(b)(l), M.R.Civ.P., states:
"Parties may obtain discovery regarding
any matter, - privileged, which is
not-
relevant to the subject matter involved
in the pending action, whether it relates
to the claim or defense . . . of any
other party . .. It is not ground for
objection that the information sought
will be inadmissible at the trial if the
information sought appears reasonably
calculated to lead to the discovery of
admissible evidence." (Emphasis added.)
The information wife sought in Interrogatory Nos. 25
through 29 was certainly relevant to the subject matter of
the pending action. In his petition for modification of
child support, husband claimed that he did not have the
ability to pay the current level of child support because he
was unemployed and had no income. To defend against this
claim, wife necessarily had to determine whether husband had
the income and assets available to pay the current level of
child support. Therefore, any income deposited by husband
into his current wife's bank accounts was discoverable.
Wife was attempting to discover the income of husband, not
that of husband 's current wife, and thus husband's reliance
on Duffey is unfounded.
Husband also refused to answer interrogatories
relating to his employment for the years 1980 and 1981,
asserting that the work he performed was confidential and
"requires a reputation for not divulging the name of the
client or the services performed." The legislature has
recognized the importance of protecting the confidentiality
of certain relations. See section 26-1-801 et seq., MCA.
The relationship between a management consultant and his
clients, however, is not considered privileged either by
statute or by the Montana Constitution. See Rule 501,
Mont.K.Evid. Therefore, husband cannot avoid answering the
interrogatories by claiming privilege.
Wife also asserts that the District Court erred in
reducing husband's child support obligation. When deter-
mining whether the child support obligation in this case
should be modified, the District Court is governed by
section 48-4-208(2)(b)(i), MCA, which states: "Whenever the
decree proposed for modiiication contains provisions relat-
ing to . . . support, modification . . . may only be made:
(i) upon a showing of changed circumstances so substantial
and continuing as to make the terms unconscionable." This
Court will reverse the District Court on this issue only if
the District Court's findings are clearly erroneous in light
of the evidence in the record. Rule 52(a), M.R.Civ.P.;
Reynolds v. Reynolds ( 1983), Mont. , 660 P.2d 90,
40 St.Rep. 321.
In this case, the District Court's findings are
clearly erroneous since no evidence was presented to prove
that husband's change in circumstances was continuing.
Indeed, the District Court recognized this at the hearing
for modification of support when it stated: "The one thing
that troubles me with it is I do think the law says you've
got to show a continuing -- The testimony isn't quite what I
thought I would hear -- substantial and continuing change in
circumstances. Now, I think that's the problem."
The evidence shows that immediately upon being
terminated from his employment, husband filed a petition to
modify his support payments because he was presently unem-
ployed and had no income. However, in June, the month after
he was terminated, his income amounted to $2,450. Although
husband's income was reduced to $1,475 in July, it increased
in August to $1,900. Husband also stated prior to his
termination that it would take from three to six months to
rebuild his consulting business. This evidence merely demon-
strates that husband suffered a reduction in his income for
a relatively short period of time. The reduction in
husband's income, however, was not proven to be "continuing
as to make the terms [of the original agreement] unconscion-
able. "
We therefore reverse the order of the District Court
and remand the cause with instructions to compel husband to
answer the interrogatories submitted by wife and to there-
after hold an evidentiary hearing to determine if husband's
circumstances have changed since the commencement of this
appeal.
/ Justice
We concur:
.
La-. - L4.U)h/