NO. 92-241
IN THE SUPREMECOURT OF THE STATE OF MONTANA
1993
IN RE THE MARRIAGE OF
JOANN JOCELYN NIKOIAISEN,
Petitioner and Appellant,
and
ALAN KRIS NIKOLAISEN,
Respondent and Respondent.
APPEAL FROM: District Court of the Fifteenth Judicial District,
In and for the County of Sheridan,
The Honorable M. James Sorte, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Richard J. Carstensen, Attorney at Law,
Billings, Montana
For Respondent:
Laura Christoffersen, Gallagher, Archambeault,
& Knierim, Wolf Point, Montana
Filed:
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Appellant JoAnn Jocelyn Nikolaisen appeals from a judgment of
the Fifteenth Judicial District Court, Sheridan County, modifying
the divorce decree regarding child support and custody.
We affirm in part and reverse and remand.
JoAnn (Joey) presents to this Court three issues for our
consideration which we reduce and rephrase as follows:
1. Did the District Court abuse its discretion in modifying
child custody and visitation of the minor children?
2. Did the District Court err in allowing respondent to
incorporate the provisions of his Chapter 12 bankruptcy plan as
well as other "legitimate business expenses" when it calculated
child support?
3. Did the District Court err in failing to order respondent
to pay Joey's educational loans?
Alan and Joey Nikolaisen were married on August 4, 1972, in
Plentywood. Two children were born into the marriage. The parties
primarily resided in Plentywood until the original dissolution
decree was entered on June 8, 1987. Currently, Alan lives on his
farm near Plentywood and is an accountant and farmer/rancher. Joey
is a counselor and lives in Billings. Both parties have had
physical custody of the children over an extended period of time.
From 1985 to the entry of the decree, Alan had physical custody of
the children. Since 1987 to the present, Joey has had primary
physical custody of the children pursuant to a joint custody
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agreement signed by both parties. The original decree and custody
agreement does not provide for custody after 1988.
Both children have ailments which require medical attention.
The oldest child, Jessica, was 14 years old at the time of trial.
She suffers from a round back deformity known as kyphosis. If the
condition is left untreated it will result in back deformity and
poor posture, and in some cases back pain is also experienced.
Joshua was 11 years old at the time of trial. He was five feet
tall and weighed approximately 170 lbs. He has been diagnosed as
having a severe weight problem and may also have slightly high
blood pressure resulting from his excessive weight. Currently,
both children reside with Joey in Billings.
Both parents have had difficulty getting their children to
respond to medical treatment. Joey has not been able to get
Jessica to wear a back brace which would correct the curvature in
her spine, and has taken the position that she will not force her
to wear the brace.
Alan's efforts have been more successful. While Jessica is in
his care he has been able to get her to wear the brace. Alan has
had difficulty getting cooperation from Joey regarding medical
appointments to determine the future course of Jessica's condition.
On one occasion, Alan made an appointment with Jessica's orthopedic
doctor in Billings for spinal x-rays. Upon his arrival from
Plentywood, Alan found out that Joey had canceled the appointment
and had taken the children to Flathead Lake.
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Both parents also differ on how to best deal with Joshua's
weight problem. While in his father's care in the summer months,
Joshua, with Alan in attendance, participates in a weight program
with good results. During the summer of 1989, Joshua lost 20
pounds, and in the summer of 1990 lost approximately 15 pounds.
When Joshua returned to Joey's care, the program was discontinued.
At the beginning of 1990, Joshua was approximately 37 pounds
heavier than the summer before. Every summer that he has returned
to Plentywood, Joshua has regained the weight that had been lost,
plus he has put on some additional weight. During a medical visit,
Alan discovered that Joshua may have high blood pressure due to his
excessive weight. Alan asked Joey to have Joshua's blood pressure
rechecked in Billings, which Joey either failed to do or failed to
advise Alan that she did. Joey believes that exercise is the best
method of weight loss and purchased a membership at the YMCA which
Joshua has not used.
Alan's visitation rights which were originally agreed upon in
the custody agreement have gradually eroded with time and have been
frustrated by Joey. Alan has primary custody of the children
during part of the summer and on school holidays. Over the past
year, Jessica has increasingly refused to visit with her father.
Joey has stated that she would not force Jessica to visit with
Alan. On July 2, 1991, the District Court ordered Jessica to
spend two weeks with Alan in Plentywood over the Labor Day weekend.
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On one occasion, Joey enticed Joshua to cut short his visitation by
offering to buy him tickets to a concert in Billings.
Communication between the parents with regard to the welfare
of the children has broken down. Joey has failed to notify Alan of
the children's activities, even though he has attended such events
when advised of the time and date. In addition, Joey has
continually failed to advise Alan of the children's educational
progress and medical conditions.
Both parties have filed a motion for modification of custody
and support. Joey claims that the children want to live with her
and are now well accustomed to Billings. Alan counters that Joey
is failing to meet the medical and physical needs of the children,
does not encourage visitation, and in fact, impedes visitation.
The children were appointed a Guardian ad Litem for the litigation.
The District Court proceedings were stayed pending the outcome of
Alan's Chapter 12 bankruptcy action and the filing of a plan. A
hearing was held on November 19, 1991, to determine custody and
child support. Both the Guardian ad Litem and the family's
psychologist recommended that the children continue to reside with
Joey. Both children expressed their desire to live with Joey. On
March 6, 1992, the District Court issued its Findings of Fact and
Conclusions of Law and Order. Joey appeals the decision of the
District Court.
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I.
Did the District Court abuse its discretion in modifying child
custody and visitation of the minor children?
Joey declares that it was error for the District Court to
adopt verbatim Alan's proposed findings of fact and conclusions of
law. We discourage district courts from adopting verbatim findings
of fact and conclusions of law submitted by the prevailing party.
In re Marriage of Hurley (1986), 222 Mont. 287, 295-96, 721 P.2d
1279, 1285. Although a district court may adopt verbatim findings
of fact and conclusions of law, the practice does not constitute
error per se. When reviewing the adequacy of the findings of fact
and conclusions of law, we examine whether they are sufficiently
comprehensive and pertinent to provide a basis for a decision, and
whether they are supported by substantial evidence. Hurlev, 721
P.2d at 1285. With the exception of child support calculations, we
hold that the District Court's findings of fact and conclusions of
law meet the above test.
Joey argues that the court's custody and visitation order
should be stricken because it is based upon facts that were not
before the court and the issues should be resolved by the court as
necessary following the development of any facts that might occur
later.
Recently we have stated the following principles when
reviewing a district court's order modifying physical custody of a
child:
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Joint custody is presumed to be in the best interest of
the child, § 40-4-224(l), MCA, and is awarded to assure
frequent and continual contact of the minor child with
both parents. Physical custody should be arranged as
equally as practical between the parents to comply with
the express purpose of an award of joint custody, with
the child's best interest as the primary consideration.
Section 40-4-224(2), MCA.
Modification of physical custody within a joint
custody arrangement is proper when the change is in the
best interest of the child. A request to change the
physical custodian of the child requires an application
of § 40-4-224(2), MCA, which states in part:
"[J]oint custody" means an order awarding custody
of the minor child to both parents and providing
that the physical custody and residency of the
child shall be allotted between the parents in such
a way as to assure the child frequent and
continuing contact with both parents. The
allotment of time between the parents must be as
equal as possible: however,
(a) each case shall be determined according
to its own practicalities, with the best interest
of the child as the primary consideration . . . .
The District Court must consider the factors set
forth in § 40-4-212, MCA, when determining whether the
modification of physical custody is in the child's best
interest. The court is under no obligation to consider
the more stringent factors set forth in § 40-4-219, MCA,
when faced with an action for modification of physical
custody rather than an action for termination of joint
custody.
In re Marriage of Ulland (1992), 251 Mont. 160, 166-67, 823
P.2d 864, 868-69.
In its order, the District Court ordered Joey to take whatever
action she believes is necessary to reduce Joshua's weight.
Joshua's placement was on a temporary basis contingent upon his
demonstrating a substantial decrease in his weight by the summer
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vacation in 1992. If Joey cannot get Joshua to lose the weight,
then Alan may petition the court for a change of custody.
In his medical report, Dr. Peter Teal, an orthopedist,
concluded that Jessica would derive very little benefit from
wearing a back brace because its effectiveness diminishes once a
female child reaches full growth at age 15 or 16. In its findings,
the District Court ordered the parents to make an appointment with
another doctor specializing in kyphosis and obtain a second
opinion. If the opinion is that Jessica needs to wear a brace,
then Joey would be given one month to demonstrate that she can get
Jessica to wear the brace. If Joey cannot obtain Jessica's
compliance, physical custody of Jessica shall be transferred to
Alan. No second medical opinion was submitted into evidence for
this appeal.
The court was confronted with balancing the children's wishes
against what would be in their best interests, as well as ensuring
that the children have a continuing relationship with their father.
The court found that the children had familial and educational ties
in both Billings and Plentywood. The record demonstrates that the
court considered at length the children's health and welfare. The
court recognized that the children did not wish to move from
Billings to Plentywood. The court tailored its order so that the
children could remain in Billings so long as Joey is properly
attending to the children's medical problems. Both of the
children's medical conditions are treatable, and the order offers
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an incentive to Joey to ensure the children receive proper
treatment.
With regard to the visitation, the court ordered a more
detailed arrangement than the existing custody agreement. Again
the court balanced the wishes of the children, specifically
Jessica, against Alan's right to see his children and foster a
meaningful relationship with them. The record demonstrates that
Joey, on several occasions, has actively undermined Alan% right to
see the children. Although she stated at trial that she encourages
the children to visit their father, the pattern of her actions
have, in reality, discouraged the children from visiting him. The
court ordered that the parties should restrict the children's
nonschool activities if the refuse to visit the noncustodial parent
and ordered Alan and Joey to attend counseling sessions. This
portion of the order is an attempt by the court to reduce the
friction between the parties and have both parents actively
encourage the children to have a relationship with the other
parent. In addition, the District Court ordered Alan and Jessica
to attend counseling sessions in an effort to facilitate more
communication between the two so that Jessica will want to spend
more time with her father. We hold that the District Court did not
abuse its discretion in modifying custody and visitation.
II.
Did the District Court err in allowing respondent to
incorporate the provisions of his Chapter 12 bankruptcy plan as
9
well as other "legitimate business expenses" when it calculated
child support?
In its child support calculation, the District Court found
that Alan had $102,000 in gross income while Joey had approximately
$25,000 in gross income. The District Court deducted from Alan's
gross income expenditures for replacement cows, office equipment,
and a stock waterer. The court also deducted approximately $38,465
as a result of payments being made under Alan's Chapter 12
bankruptcy, as well as an additional $38,203 in various farm
expenses. The court deducted the necessary tax payments from
Alan's net income after business deductions. The court found that
Alan's net income available for child support amounted to
approximately $10,500, while finding that Joey had net income of
$25,000 available for child support. The court did not deduct
taxes from Joey's gross income, even though there was evidence
offered regarding her tax liability. The court ordered Alan to pay
$300 a month in child support for the entire year while Joey was
responsible for approximately $600 a month. The court ordered Joey
to pay three months of child support to Alan when the children are
required to reside with Alan during the summer which could be
deducted from Alan's overall obligation.
Joey argues that the District Court improperly used several
business deductions from Alan's farm/ranch operation to reduce
Alan's child support obligation. Specifically, she maintains that
the court should not have applied Alan's Chapter 12 bankruptcy plan
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payments to determine the amount of his child support obligation
because it includes payments of his home mortgage. In essence,
Joey is arguing that with the exception of excluding state,
federal, and social security taxes, none of the deductions awarded
to Alan are proper under the guidelines.
Our standard of review of the district court's findings
relating to child support is that a presumption exists in favor of
the district court and we will overturn the court's findings only
if it has abused its discretion. In re Marriage of Sacry (Mont.
1992), 833 P.2d 1035, 49 St. Rep. 452.
Rule 5 of the Guidelines for determining Child Support
implements a policy of keeping the primary focus on the needs of
the children by requiring from each obligor's income only a minimum
of exclusions to be allowed. Rule 5, Guidelines for Determining
Child Support (1991). The following deductions subtracted from
gross income are the only ones allowed under the Guidelines for the
determination of net income:
[Flederal and state income taxes: FICA: union dues,
retirement contributions, uniforms, etc., which are
required as a condition of employment and are not
reimbursed by the employer; lesitimate business exoenses:
and health insurance if the benefits are maintained for
the obligor parent's dependents, including the child(ren)
of the action at hand. [Emphasis added.]
Rule 5, Guidelines.
The Social & Rehabilitative Services Department is responsible
for the adoption of child support guidelines. Section 40-4-209(5),
MCA. They have defined "net income" as meaning:
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[G]ross income, including imputed income and income
attributed to assets, less any deductions for state or
federal taxes, social security, and other similar
deductions required by law or court order. Unreimbursed
expenses incurred as a condition of employment such as
union dues, retirement contributions, uniforms and other
occupational or business exvenses should also be
deducted. [Emphasis added.]
46.30.1516, ARM.
We have stated that when determining income under the
Guidelines, the court should examine the disposable income of the
parent and not rely solely on the parent's tax returns. In re
Marriage of Gray (1990), 242 Mont. 69, 73, 788 P.2d 909, 912. The
extent of Alan's farm/ranch business is complex. Alan testified at
considerable length regarding the income that he receives from his
farm/ranch operation and his accounting position. The evidence
shows that Alan's expenses were both business and personal in
nature.
The court considered, and the record demonstrates, that Alan's
tax returns did not provide an accurate picture of his ability to
pay child support for the last two years. Alan was not in
bankruptcy during the years his tax returns were filed. In one
year, he had taken as income two years' worth of calf crops, and in
another year he received ASCS disaster payments which would not be
payable in a normal crop year. Moreover, during those tax years,
he testified he had trouble getting the ASCS deficiency payments.
Due to the lack of those payments, as well as a general decline in
the farm economy, he became delinquent in his debt obligations and
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thus the returns did not accurately reflect his debt service
requirements. Furthermore, Alan testified that he had added in 75
percent of the total farm estate taxes paid as a personal expense
since his personnel residence was on the farm property. He added
in between one-third to three-quarters of his vehicle's value, and
telephone and travel expenses because they were considered personal
in nature. The Bankruptcy Court ordered Alan to pay $39,465 to the
bankruptcy trustee for each year.
The deduction of the bankruptcy payments is in error. The
court allowed the husband to deduct his mortgage payments on the
farm before arriving at what was available for support. These
mortgage payments were part of the bills that were ordered paid by
the bankruptcy court. However, the principal which is applied to
the mortgage each year actually increases the husband's net equity.
This is especially true when the husband's income of $45,000 per
year as an accountant appears to be used to subsidize his farming
operations. Such payments should not be allowed to be subtracted
as deductions under the guidelines. Interest on the mortgage,
however, would be a legitimate business expense. There also
appears to be farm equipment purchased that should have been
capitalized and not deducted in full. The District Court has not
followed the guidelines for determining child support. We reverse
and remand for a full reconsideration and recalculation of all
factors relating to child support.
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III.
Did the District Court err in failing to order respondent to
pay Joey's educational loans?
Joey asserts that the Dissolution Decree provided that Alan
agreed to pay Joey's educational loans and that this Court should
order him to pay the loans. The record demonstrates that no
evidence regarding the educational loans was presented at trial.
We decline to review the matter on appeal.
We affirm in part and reverse and remand for a full
reconsideration and recalculation of all factors relating to child
support.
0 0
&A
Justice
We concur : .I"
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