NO. 90-387
IN THE SUPREME COURT OF THE STATE OF MONTANA
1991
IN RE THE MARRIAGE OF
STEPHEN JAMES CHIOVARO,
petitioner and Appellant, - 8 1991
-V- CLERK O r SUFREM E @ H ~ ~
OF M O N ~ A ~
SUSAN CORBY TILTON-cHIOVARO,
Respondent and Respondent.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable John M. McCarvel, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Barbara E. Bell; Bell & Marra; Great Falls, Montana
For Respondent:
Daniel L. Falcon; Matteucci, Falcon & Squires; Great
Falls, Montana
Submitted on briefs: December 7, 1990
Decided: February 8, 1991
Filed: A4
3
Clerk
Justice Fred J. Weber delivered the Opinion of the Court.
Petitioner, Stephen James Chiovaro, filed a motion to clarify
the dissolution agreement between Mr. Chiovaro and the respondent,
Susan Corby Tilton-Chiovaro, which had been executed on April 28,
1988. Mr. Chiovaro was seeking resolution of a dispute between the
parties regarding visitation and review of child support pursuant
to the Uniform District Court Child Support Guidelines. Following
a non-jury trial, the District Court for the Eighth Judicial
District, Cascade County, entered Findings of Fact, Conclusions of
Law, and Order which spells out more specific visitation
provisions, increases monthly child support payments due by Mr.
Chiovaro from $200 per month per child to $220 per month per child,
and awards attorney's fees to Mrs. Chiovaro in the amount of $671.
Mr. Chiovaro appeals. We affirm and remand to the District Court
for determination of attorney's fees and costs on appeal.
We restate the issues on appeal as follows.
1. Did the District Court improperly impute income to Mr.
Chiovaro for his track coaching fees?
2. Did the District Court improperly impute income to Mr.
Chiovaro for his health insurance benefits? If not, then did the
District Court improperly fail to deduct that portion of the health
insurance benefits that benefit the parties' three children?
3. Did the District Court improperly fail to deduct Mr.
Chiovarots mandatory retirement payments?
4. Did the District Court improperly deduct business expenses
from Mrs. Chiovarots income?
2
5. Did the District Court improperly award Mrs. Chiovaro
attorney's fees?
On May 4, 1988, a Final Decree was entered in the Eighth
Judicial District Court dissolving the marriage of Mr. and Mrs.
Chiovaro. The parties were awarded joint custody of their three
minor children, with Mrs. ~hiovaro having primary physical
residency. Mr. Chiovaro was to pay $200 per month per child for
child support in conformity with the Separation Agreement between
the parties.
On December 19, 1989, Mr. Chiovaro filed a Motion to Clarify
Dissolution Agreement. The parties came to an agreement as to the
visitation dispute prior to hearing. The court adopted that
agreement. Therefore the only issue before the court at hearing
was modification of the child support obligations. Following
discovery and hearing, the District Court increased Mr. Chiovaro's
child support obligations to $220 per month per child, for a total
of $660 per month. Mr. Chiovaro was also ordered to pay Mrs.
Chiovaro's costs and attorney's fees in the amount of $671.
Section 40-4-204, MCA, outlines the procedures to be used by
district courts in determining and modifying child support.
Subsection (3) provides:
(3) (a) Whenever a court issues or modifies an order
concerning child support, the court shall determine the
child support obligation by applying the standards in
this section and the uniform child support guidelines
adopted by the department of social and rehabilitation
services pursuant to 40-5-209, unless the court finds by
clear and convincing evidence that the application of the
standards and guidelines is unjust to the child or to any
of the parties or is inappropriate in that particular
case.
(b) If the court does not apply these standards and
guidelines to determine child support, it shall state its
reasons for finding that the application of such
standards and guidelines is unjust to the child or a
party or is inapppropriate in that particular case.
Section 40-4-204(3) (a),(b), MCA.
Pursuant to 8 40-5-209, MCA, the Department of Social and
~ehabilatationServices have now adopted child support guidelines
which became effective July 13, 1990. 46.30.1501 et seq., ARM.
The Court Order in this case is dated May 29, 1990 and therefore
the SRS guidelines are not at issue in this case.
In 1987 this Court adopted the Uniform District Court Rule on
Child Support Guidelines to be used by district courts in
determining child support obligations. The District Court in this
case applied the Uniform District Court Guidelines. The District
Court ~uidelinesprovide in part:
...Although these standards offer broad guidance to
persons involved in the establishment of child support
obligations, the standards do not explain how to apply
the standards to specific child support actions. . .
District Court Guidelines, Section I.
The guideline is designed for proper application to a
broad range of cases and therefore is intended only to
create a rebuttable presumption of the reasonableness of
the child support obligations. As is true with any
system, the application of this guide may not produce a
child support payment that is fair or adequate in every
instance. In applying the guide as a baseline from which
to proceed, the parties or the court may make adjustments
either upward or downward to reflect a particular
inconsistent circumstance. The burden of showing why
such deviation from the guide should be made, will be on
its proponent. Any departure from the guide should be
accompanied by a written statement which gives the
reasons for deviation from the guide's direct
application. District Court Guidelines, Section 11.
District Court Child Support Guidelines, 227 Mont. 1, 4-5
(1987).
In comparing the statute and the Guidelines, it is obvious
that discretion rests in the district courts as to the proper
application ofthe Guidelines. Absent a clear abuse of discretion,
the district court will not be overruled. A presumption exists in
favor of the judgment, and the lower court will be reversed only
if appellant demonstrates that there was a clear abuse of
discretion. Graveley v. Graveley, (Mont. 1990), 796 P.2d 585, 586-
87. District courts are vested with discretion under the broad
standards of 9 40-4-204, MCA, which requires scrutiny of all
deductions and exemptions claimed by either party. Marriage of
Mitchell, (1987), 229 Mont. 242, 247, 746 P.2d 598, 602.
Did the District Court improperly impute income to Mr.
Chiovaro for his track coaching fees?
The District Court imputed $1186 in income to Mr. Chiovaro for
track coaching fees. Mr. Chiovaro asserts that it was improper for
the District Court to impute this amount and contends that this
figure was added into his gross income twice. The District Court
made the following findings of fact:
1. The Court finds that the Petitioner failed to include
all of his income in his proposed Supreme Court
Guidelines, Petitioner's Exhibits 1 through 4. The
Petitioner will have an increase in income for 1990.
3. The Court further finds that the Petitioner's
proposed child support calculations did not include any
sum for daycare costs. Petitioner's proposed child
support figures ranged from $475 to $530.13 per month for
all three children. The Court finds the Petitioner has
been previously paying $200 per child, per month, as
child support pursuant to the Decree entered in this
matter and that he has received an increase in income
since the time the Decree was entered of between $3,000
and $4,000 per year.
5. ... The Court finds that the Petitioner, although
he has had a substantial increase in income over the past
two years, has chosen to refrain from coaching duties
this year which are options that are open to him. ..
In light of Mr. Chiovarofs confusing and conflicting
testimony, Mr. Chiovaro has not proved that the ~istrict Court
abused its discretion in determining Mr. Chiovaro's gross income.
Mr. Chiovaro made the argument that he should not have to have the
track coach fees added into his income at all because he is trying
to get out of his contractual track coaching obligation with his
employer. The District Court was correct in concluding that it is
in the court's discretionary power to impute the track coach income
to Mr. Chiovaro since it is available to him. District Court Child
Support Guidelines, Section 111, Part 2, 227 Mont. at 5-6. We hold
that the District Court did not abuse its discretion in imputing
income to Mr. Chiovaro for track coach fees.
I1
Did the District Court improperly impute income to Mr.
Chiovaro for his health insurance benefits? If not, then did the
District Court improperly fail to deduct that portion of the health
insurance benefits that benefit the partiesf three children?
Mr. Chiovaro receives health and dental insurance as a job
benefit. Mr. Chiovaro does not have to pay extra for this benefit.
The ~istrictCourt valued the health and dental insurance at $100
per month for an annual value of $1200, and included this value as
part of Mr. Chiovaro's income. Mr. Chiovaro contends this was
error because the benefit does not add to his disposable income and
6
because there was no expert testimony that established the value
of the insurance benefit.
The District Court Guidelines provide that "all income, from
whatever sources, including business expense account payments for
meals and automobiles to the extent that they provide the parent
with something he or she would otherwise have to provide, will
constitute gross income. Also to be included are such income as
pensions, dividends, interest, trust income, proceeds from
contracts, and so forth.l1 Uniform District Court Child Support
Guidelines, Section 111, Part 1, 227 Mont. at 5. Under both the
Final Decree of Dissolution and 5 40-4-204, MCA, Mr. Chiovaro is
to provide health insurance for the parties1 three children. Since
this is a benefit which Mr. Chiovaro would otherwise have to
provide, it constitutes gross income under the Guidelines, and the
court did not err in including the insurance value in his gross
income.
Mr. Chiovaro argues that the value of $1200 is unsubstantiated
by an expertlstestimony. The only testimony presented as to the
value of the insurance benefit came from Mrs. Chiovaro when she
testified that $1200 is substantially below what it costs to buy
insurance. A lay person may give opinion testimony which is
rationally based on the perception of the witness and helpful to
a determination of a fact in issue. Rule 701, M.R.Evid. Mr.
Chiovaro did not object at trial to the inclusion in income of the
imputed value of the insurance benefit and presented no evidence
that the court's value of $1200 is unreasonable. Therefore the
court did not abuse its discretion when it held that $1200 was a
reasonable value.
Mr. Chiovaro argues that if the value of the insurance policy
is included in his income, then he is allowed a deduction for that
portion of the insurance that benefits the parties' three children.
Child Support Guidelines, Section 111, Part 5, 227 Mont. at 7. It
is true that under the Guidelines a deduction may be allowed for
that portion of the insurance that benefits the children. However,
the Guidelines are to be applied by the District Court in the use
of its discretion. Gravelev, 796 P.2d at 586. If health insurance
on behalf of the child is carried by a parent, the parent's
cost of the child's share of the premium is allowed as a deduction
from gross income. Child Support Guidelines, Section 111, Part 10,
227 Mont. at 9-10. The insurance is provided by Mr. Chiovaro's
employer without cost to Mr. Chiovaro. It is reasonable that if
a value is assigned to the insurance benefit and added to income,
then a value can be assigned to the children's share of the premium
and allowed as a deduction. However, Mr. Chiovaro did not object
at trial to the failure of the court to deduct the value of the
children's share of the benefit and presented no evidence as to the
value of the children's share. Therefore the court did not abuse
its discretion when it did not deduct a portion of the $1200 for
the value of the children's share. We affirm the District Court
on the issue of health insurance.
I11
Did the District Court improperly fail to deduct Mr.
Chiovarows mandatory retirement payments?
The Child Support Guidelines, Section 111, Part 5, 227 Mont.
at 7, allows the deduction from income of mandatory retirement
contributions. Again we point out that the Guidelines are to be
applied by the District Court in the use of its discretion.
Graveley, 796 P. 2d at 586. Although under the Guidelines the Court
could have deducted the $1868 that went into Mr. Chiovarows
mandatory retirement plan, we cannot say that the court abused its
discretion in not deducting this amount from Mr. Chiovarotsincome.
The court found that Mr. Chiovaro failed to provide income tax
returns in a timely manner as ordered by the court prior to the
hearing. It was not an abuse of discretion not to deduct Mr.
Chiovarows retirement payments. We affirm on the issue of
mandatory retirement payments.
IV
Did the District Court improperly deduct business expenses
from Mrs. Chiovarows income?
Mrs. Chiovaro works part-time out of her home as a farm
advocate. The District Court allowed a deduction of $5781 for
business expenses relating to this business. Mr. Chiovaro contests
$706 of this amount which represents depreciation on Mrs.
Chiovarowsbusiness. This Court has held that depreciation is for
tax purposes and not for the purposes of determining child support.
In Re the Marriage of Stewart (Mont. 1990), 793 P.2d 813; In Re the
Marriage of Mitchell (1987), 229 Mont. 242, 746 P.2d 598. Even
though the court should not have deducted the $706 depreciation
from Mrs. Chiovaro's income, it is harmless error in this case.
Recalculating Mrs. Chiovaro's income does not change Mr. Chiovarots
child support obligation.
Mr. Chiovaro also challenges deductions for telephone,
transportation, and other costs which Mr. Chiovaro points out that
Mrs. ~hiovaroneeds to provide for general living purposes. It is
within the court's discretion to determine whether business expense
deductions are reasonable for purposes of calculating child
support. We affirm the District Court on the issue of Mrs.
Chiovaro's business deductions.
v
Did the District Court improperly award Mrs. Chiovaro
attorney's fees?
Section 40-4-110, MCA, provides that the court, after
consideration of the financial resources of both parties, may award
reasonable costs and attorney's fees. The Dissolution Agreement
between the parties provides that the successful party shall be
entitled to reasonable costs and attorney's fees from the losing
party for enforcement or defense of any of the provisions of the
agreement.
Mr. Chiovaro argues that attorney's fees are inappropriate in
this case because the Dissolution Agreement anticipates annual
recalculation of child support and that the parties could not have
reasonably intended the awarding of attorney's fees in the annual
recalculation proceedings. This proceeding was brought by Mr.
Chiovaro and included disagreement over visitation and not just
annual recalculation of child support. In addition, the court made
a finding that Mr. Chiovaro had failed to provide documents during
discovery in a reasonable and timely fashion which added to Mrs.
Chiovaro's legal costs. Under these facts the court had the
discretion to award attorney's fees under the Dissolution Agreement
and under 5 40-4-110, MCA. We affirm the District Court on the
issue of attorney's fees.
Mrs. ~hiovarohas asked this Court to award attorney's fees
and costs of appeal under the Dissolution Agreement and 5 40-4-
110, MCA. We determine that an award to Mrs. Chiovaro for
attorney's fees and costs of appeal is appropriate and remand to
the District Court for determination of the amount.
Affirmed and remanded for determination of attorney's fees and
costs of appeal.
We Concur: /
t st ice
- /
Chief Justice