No. 90-064
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
IN RE THE MARRIAGE OF
SUZANNE GLARUM SULLIVAN,
Petitioner and Respondent,
and
CLIFFORD LEROY SULLIVAN,
Respondent and Appellant.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Mary Ann Sutton, Judge Pro Tempore
presiding.
COUNSEL OF RECORD:
For Appellant:
Marshall Murray, Murray, Kaufman, Vidal, Gordon &
Ogle, Kalispell, Montana
For Respondent:
Wendell B. Dunn, Whitefish, Montana
Submitted: April 26, 1 9 9 0
Decided: June 26, 1990
Filed:
Justice John C. Sheehy delivered the Opinion of the Court.
On August 16, 1988, Suzanne Glarum Sullivan (Suzanne) filed
an action in the Eleventh Judicial District Court, Flathead County,
to dissolve her marriage. On December 6, 1988, the District Court
ordered Clifford Leroy Sullivan (Clifford) to pay $600 per month
for the parties1 two minor children. Furthermore, the Court
ordered Clifford to provide health insurance for the two minor
children. In order to secure an early trial date, the parties
voluntarily elected to go to trial before a judge pro tempore,
without a jury, on July 13, 1989. On October 23, 1989, the court
entered its findings of fact, conclusions of law and orders,
dissolving the parties1 marriage. Now Clifford appeals the
District Court order. We affirm.
Clifford's issue on appeal can be summarized as follows:
Whether the District Court erred in determining Clifford's
annualized income for application of Child Support Guidelines,
maintenance, attorney fees and reimbursement of Suzanne's moving
expenses.
Clifford and Suzanne were married in Sioux City, Iowa, on July
11, 1964. The parties separated in the summer of 1986. On August
16, 1988, Suzanne filed a petition for dissolution with the
District Court. The couple has four children, Clifford, born
January 11, 1966, Melissa, born October 5, 1967, Patrick, born
March 3, 1971 and Molly, born October 24, 1975. At the time of the
trial, the three younger children were residing with Suzanne,
however, only Molly was under the age of 18 and thus the issue of
child support only concerns Molly.
As the District Court noted in its findings, Suzanne now works
as a bookkeeper. Before the dissolution, Suzanne's primary role
was that of a homemaker. In 1987, Suzanne did start a take-and
bake pizza business in Choteau, Montana. The pizza business,
however, proved unsuccessful and closed, producing a net loss.
Clifford has his own business, Sullivan Wholesale, which involves
the purchasing and resale of chemicals and chemically related
products. Clifford continued his chemical sales business up to and
through the time of trial.
In determining child support, the District Court looked to the
child support guidelines for guidance, and set forth the following
child support obligation:
WORK SHEET #1
FOR
DETERMINATION OF CHILD SUPPORT
MOTHER COMBINED FATHER
GROSS INCOME (annualized) $12,240.00 $42,000.00
a. earnings
b. imputed income
c. percent of asset value
d. other
DEDUCTIONS (annualized)
a. taxes
b. FICA
c. union dues
d. mandatory retirement
e. mandatory health ins.
f. child support
(pre-existing)
g. medical insurance 780.00
(paid on behalf of children)
h. other
i. TOTAL 1,200.00 2,780.00
NET AVAILABLE RESOURCES
(line le minus line 2i) 11,040.00 $39,220.00
COMBINED TOTAL NET INCOME $50,260.00
PERCENTAGE FROM TABLE 16.8%
EACH PARENT'S OBLIGATION
(line 3 x line 5) 1,854.72 $6,588.96
MONTHLY SUPPORT OBLIGATION
(line 6 divided
by 12 months) 154.56 $549.08
In addition to the child support, the District Court awarded
Suzanne $250 per month in maintenance for a period of two years,
moving expenses, and attorney fees.
Whether the District Court erred in determining Clifford's
annualized income for application of Child Support Guidelines,
maintenance, attorney fees and reimbursement of Suzanne's moving
expenses.
The District Court determined Clifford's annualized gross
income for application to the Guidelines to be $42,000. Clifford
contends the District Court grossly overestimated his annual
income. According to Clifford, his annual income for the years
1988 and 1989, was approximately $12,000. Clifford arrived at this
figure by deducting his business expenses from his gross income,
specifically, expenses for freight, utilities, supplies and auto
and travel expenses. These business expenses were gleaned from a
combination of the parties 1988 tax returns and his 1988 and 1989
income summaries introduced at trial.
The District Court disagreed with Clifford, choosing to
disregard the tax returns and income summaries, and not to include
the above-mentioned expenses as deductions. It is here that
Clifford takes issue.
Under the Montana Child Support Guidelines (1987) 227 Mont.
1, the primary focus for determining available income for paying
child support is based on a parent's disposable income rather than
taxable income. "It is the disposable income of the parent, and
not their income tax returns alone, which must be considered by the
court. In Re the Marriage of Stewart (Mont. 1990), 47 St.Rep.
1116, 1118; In Re the Marriage of Gray (Mont. 1990), 47 St.Rep.
552, 555, 788 P.2d 909, 912; In Re the Marriage of Mitchell (1987),
229 Mont. 242, 246-47, 746 P.2d 598, 602. As a result, the
Guidelines dictate allowing only a minimum of exclusions from the
parent's gross income. Guidelines, 227 Mont. at 7. Included
within this list of exclusions under the Guidelines are deductions
for legitimate business expenses. Guidelines, 227 Mont. at 7.
Clifford urges this Court to find his expenses are legitimate
business expenses under the Guidelines.
Recently, in In Re the Marriage of Smith (Mont. 1990), 47
St.Rep. 925, we affirmed the District Court's finding that dues and
publications, auto expenses, attorney fees, accounting fees, and
deductions for business investments, were legitimate business
expenses, and thus deductible from income to calculate a husband's
child support obligation under the Guidelines. In Smith, the
wife's own expert witness, an experienced family law attorney,
testified that the husband's expenses were legitimate business
expenses under the Guidelines. The wife presented no evidence that
these expenses were not deductible under the Guidelines, and the
District Court, relying on the expert testimony, considered them
as legitimate business expenses.
A spouse who gains a livelihood from the operation of a
business is entitled to utilize the deductions allowed by law to
determine his income for purposes of fixing his state and federal
income tax liability. In marriage dissolution cases, the court is
not bound by those deductions in determining cash flow of such a
spouse to fix a proper amount of child support and, if necessary,
maintenance. Stewart, 47 St.Rep at 118. In this case the trial
judge got little help from either party, especially Clifford, in
reaching a prior estimate of Clifford's disposable income. The
court noted this difficulty in its findings:
38. This suit involved the usual difficulties
encountered where one or both of the parties are self-
employed. This was compounded by the wildly divergent
approaches to the financial issues taken by counsel in
their post-trial proposals for judgment. Petitioner's
proposal overinflated the value of the marital estate
through a method so complex as to be nearly
unintelligible. Her child support calculations were
quite simply unprecedented in this counsel's experience.
In contrast, Respondent's proposal was so undervalued and
simplistic as to border on the ridiculous.
This trier-of-fact had no crystal ball to illuminate the
true story of the parties1 financial course in the months
preceding and following their separation in 1987. It
was clear that Respondent had control of in excess of
$15,000.00 from the money market account and a bank loan.
It was clear that the marriage was in financial trouble
at that time with past due mortgage and other
obligations. It is clear funds were used to start both
parties1 businesses, to pay Melissa's college tuition,
and for necessaries of life. Respondent did not
substantiate where every dime of money that passed
through his hands during this time went. However,
Petitioner did not, and could not from her position rebut
Respondent's testimony by a preponderance of the
evidence.
In weighing the credibility of the parties1 testimony and
the relative weight of the evidence presented, it is
surmised that Respondent had access to and did expend
substantially more funds for his personal and business
use than was allotted to petitioner during this period.
The source of the $5,000.00 C.D. Respondent holds as
collateral for his business revolving credit line was not
brought to light. No credible explanation was offered
for Respondent's ability to generate the sum of $1,000.00
per month to support his wife and children following the
separation and prior to receiving Petitioner's motion for
temporary orders on support in October of 1988. At that
time Petitioner engaged her attorney, preparatory to the
November hearing date, he failed to pay any support that
month and she obtained a court order allowing him to pay
$300.00 per month. Respondent now proposes to pay
$119.00 per month support for the minor child.
In view of the equities involved and the failure by both
parties to carry their burdens of proof to support their
own contentions, the best that can be stated is that the
truth lies somewhere between the parties1 positions and
has yet to see light of day. The valuation of the
marital estate, the distribution thereof, the
reimbursements and credits to Petitioner, the award of
limited maintenance and attorney fees and amount of child
support are fair and equitable under the circumstances
presented.
The District Court properly weighed the evidence by both
parties, and chose not to adopt the deductions set forth in
Clifford's tax returns and income summaries. We find the District
Court did not abuse its discretion in denying Clifford's
deductions.
Next, Clifford contends the District Court failed to specify
how it established child support, maintenance, attorney fees and
moving expenses. Regarding child support, the District Court's
findings specifically state that the Guidelines were applied to
Clifford's income based on averages of past years1 tax returns
and projections for 1989. Furthermore, the court properly attached
a worksheet to the findings to demonstrate exactly how it arrived
at the child support figures. We find no abuse of discretion by
the District Court in determining the child support award.
The appropriate standard of review for an award of maintenance
is established by 5 40-4-203, MCA. In Re the Marriage of Ernst
(Mont. 1990), 47 St.Rep. 1034, 1035; In Re the Marriage of Barnard
(Mont. 1990), 785 P.2d 1387, 1341, 47 St.Rep. 152, 156; In Re the
Marriage of Lundvall (Mont. 1990), 786 P.2d 10, 12, 47 St.Rep. 173,
175. An award of maintenance is premised upon a finding by the
court that the individual seeking maintenance I1lacks sufficient
property to provide for his reasonable needs; and is unable to
support himself through appropriate empl~yrnent.'~ Section 40-4-
203 (1)(a)(b), MCA. The District Court in the present case made
such a finding. Next, the District Court must then consider all
relevant facts in determining an appropriate award of maintenance.
Section 40-4-203 (2), MCA. Section 40-4-203 (2), MCA, sets forth the
following factors for the court to consider:
(a) the financial resources of the party seeking
maintenance, including marital property apportioned to
him, and his ability to meet his needs independently,
including the extent to which a provision for support of
a child living with the party includes a sum for that
party as custodian;
(b) the time necessary to acquire sufficient education
or training to enable the party seeking maintenance to
find appropriate employment;
(c) the standard of living established during the
marriage ;
the duration of the marriage;
(e) the age and the physical and emotional condition of
the spouse seeking maintenance; and
(f) the ability of the spouse from whom maintenance is
sought to meet his needs while meeting those of the
spouse seeking maintenance.
Section 40-4-203 (2) (a)-(f) , MCA.
A specific finding by the District Court as to each of these
relevant facts is not required as long as the court considered
proper information in addressing these facts and based its decision
upon substantial credible evidence. In Re the Marriage of Cole
(1988), 234 Mont. 352, 359, 763 P.2d 39, 43. These relevant facts
are to be considered by the court as a whole in the determination
of the final maintenance award. Ernst, 47 St.Rep. at 1037.
There is substantial credible evidence to support the District
Court's monthly maintenance award of $250 to Suzanne. The parties
resided together for 23 years, during which time Suzanne was a
part-time bookkeeper for her husband, occasionally held part-time
outside employment, but was predominantly a full-time housewife.
Her only steady employment, as an owner of a pizza business, proved
unsuccessful. The District Court found that the maintenance
provided Suzanne with the opportunity to obtain job training and
employment sufficient enough to support her household. Her current
job is insufficient to meet her monthly expenses.
The District Court, in its findings, also specifically
recognized the fact that Clifford had demonstrated in the past an
ability to provide Suzanne $1,000 per month which he did from
August, 1987, through May, 1988. The current child support award
and maintenance obligation are less than the $1,000 provided by
Clifford. The evidence presented at trial clearly reveals Clifford
is capable of paying the $250 per month child support.
The District Court, in awarding maintenance to Suzanne, made
numerous findings relating to the parties' work history, skills,
both past and present standards of living and the parties present
employment. In light of the facts of this case, the District
Court's award of maintenance to Suzanne is supported by
substantial, credible evidence.
Clifford claims the District Court erred in granting Suzanne
her attorney fees. The awarding of attorney fees is governed by
5 40-4-110, MCA, which states:
The court from time to time, after considering the
financial resources of both parties, may order a party
to pay reasonable amount for the cost to the other party
of maintaining or defending and proceeding under chapters
1 and 4 of this title and for attorney's fees, including
sums for legal services rendered and costs incurred prior
to the commencement of the proceeding or after entry of
judgment . . .
This Court has stated that the awarding of attorney fees is
clearly permissive under this statute. In Re the Marriage of Smith
(Mont. 1990), 47 St.Rep. 935, 931; In Re the Marriage of Gallinger
(1986), 221 Mont. 463, 471, 719 P.2d 777, 782; In Re the Marriage
of Obergfell (1985), 218 Mont. 83, 88, 708 P.2d 461, 564. The
appropriate standard for reviewing a district court decision
awarding attorney fees under 3 40-4-110, MCA, is whether the court
abused its discretion in awarding such fees. In Re the Marriage
of Manus (1987), 225 Mont. 457, 465, 733 P.2d 1275, 1279; In Re the
Marriage of Johnston (1986), 223 Mont. 383, 388, 726 P.2d 322, 326.
Clifford, relying on Barnard, 785 P.2d at 1391, argues the District
Court's award of attorney fees to Suzanne were not based on
necessity, unreasonable, and not supported by competent evidence
at trial. We disagree with Clifford, and find that the court's
Finding No. 34 supports an award of attorney fees:
Petitioner has incurred substantial debt as a direct
result of the dissolution proceedings and one of those
debts is attorneys' fees in this matter. Respondent has
indicated owing two debts, both of which are covered and
secured by collateral sufficient to satisfy the
indebtedness. Petitioner's financial resources are
insufficient to allow her to pay her attorneys and she
should be allowed to recover a reasonable amount for
payment of this indebtedness from the Respondent pursuant
to Section 40-4-110, MCA.
The record indicates the District Court was aware of the
financial resources and financial burdens of both parties as
required by § 40-4-110, MCA, and from this record the court
properly awarded Suzanne her attorney fees. Thus, we find no abuse
of discretion by the ~istrictCourt's award of attorney fees.
Finally, Clifford argues the District Court erred is granting
Suzanne's moving expenses. The District Court stated the following
in Finding No. 32:
During the separation the parties had initially aqreed
that one of them would have to leave Choteau, Montana.
Petitioner felt compelled to move and incurred expenses
of $1,038.56 to do so. She is entitled to recover one-
half of these expenses from Respondent, or $519.28.
(Emphasis added.)
We agree with the District Court, and find it reasonable to
allow Suzanne to recover a portion of her agreed upon expenses.
The District Court's decision is sound and substantial credible
evidence exists to support it.
Accordingly, we affirm the District Court.
We Concur: A
Chief Justice
t
are to be considered by the court as a whole in the determination
of the final maintenance award. Ernst, 47 St.Rep. at 1037.
There is substantial credible evidence to support the District
Court's monthly maintenance award of $250 to Suzanne. The parties
resided together for 23 years, during which time Suzanne was a
part-time bookkeeper for her husband, occasionally held part-time
outside employment, but was predominantly a full-time housewife.
Her only steady employment, as an owner of a pizza business, proved
unsuccessful. The District Court found that the maintenance
provided Suzanne with the opportunity to obtain job training and
employment sufficient enough to support her household. Her current
job is insufficient to meet her monthly expenses.
The District Court, in its findings, also specifically
recognized the fact that Clifford had demonstrated in the past an
ability to provide Suzanne $1,000 per month which he did from
August, 1987, through May, 1988. The current child support award
and maintenance obligation are.less than the $1,000 provided by
Clifford. The evidence presented at trial clearly reveals Clifford
is capable of paying the $250 per mont
%--
--'
The District Court, in awarding maintenance to Suzanne, made
numerous findings relating to the parties1 work history, skills,
both past and present standards of living and the parties present
employment. In light of the facts of this case, the District
Court's award of maintenance to Suzanne is supported by
substantial, credible evidence.