1998 -NMCA- 100, Rochester v. Rochester

• Citation: 1998 NMCA 100,125 N.M. 369,961 P.2d 794
• Decision Date: 11 June 1998
• Docket Number: No. 18437,18437
• Parties: , 1998 -NMCA- 100 Louis Paul ROCHESTER, Petitioner-Appellant, v. June Elizabeth ROCHESTER, Respondent-Appellee.
• Court: Court of Appeals of New Mexico

Page 794

961 P.2d 794

125 N.M. 369, 1998 -NMCA- 100

Louis Paul ROCHESTER, Petitioner-Appellant, v. June Elizabeth ROCHESTER, Respondent-Appellee.

No. 18437.

Court of Appeals of New Mexico.

June 11, 1998.

Lloyd O. Bates, Jr., Bates Law Firm, Las Cruces, for Appellant.

Jon A. Feder, Atkinson & Kelsey, P.A., Albuquerque, for Appellee.

OPINION

HARTZ, Chief Judge.

¶1 Lump-sum child support to cover future child support obligations is unusual, if not rare, in New Mexico. This appeal illustrates why that should remain the case. We affirm the district court's ruling that Louis Paul Rochester (Father) is not entitled to any credit from June Elizabeth Rochester (Mother) for prepaid lump-sum child support despite the transfer of custody of their child (Child) from Mother to Father.

BACKGROUND

¶2 Father and Mother were divorced in Texas in 1987. They had one child, a girl born on October 1, 1986. The divorce decree named Mother the managing conservator of the Child and Father the possessory conservator, absent a contrary agreement of the parents. Father was to enjoy visitation on alternate weekends and holidays.

¶3 The decree states that the parents reached an agreement regarding child support and the division of their marital estate. In lieu of periodic child support the decree provided that Father would execute a promissory note to Mother in the amount of $2.5 million, of which almost half had been paid at the time of the decree. The note was payable on demand or, in the absence of a demand, in monthly installments of $50,000.

¶4 In 1994 Mother filed suit in Dona Ana County District Court (the 1994 Lawsuit), claiming that Father had not fully paid the $2.5 million promissory note. She also sought indemnification for taxes she had paid arising from their 1985 income tax return. Father counterclaimed for a declaratory judgment that he had paid the note in full in January 1988. After a trial in June 1995, the district court entered judgment on October 20, 1995 that Father had paid the promissory note in full by January 1988 but that Mother was entitled to be indemnified for her tax payment.

¶5 In the meantime, Father had initiated proceedings in Dona Ana County District Court relating to custody of the Child (the Custody Lawsuit). On August 2, 1995 the district court entered a temporary order granting Father sole legal custody of the Child and allowing Mother visitation every Thursday night, alternate weekends and holidays, and various periods during summer vacation. The district court made the temporary order permanent in a final order dated November 14, 1995.

¶6 The present appeal arises out of a motion filed by Father in the Custody Lawsuit on March 20, 1996. The motion sought credit for past and future child support that had been paid in advance. The gist of Father's claim was that the $2.5 million in lump-sum child support was the equivalent of $12,195 per month for the seventeen years and one month of the Child's minority after dissolution of the marriage. He sought a credit of more than $100,000 from Mother for the amount of child support that would cover the period during which he had custody of the Child preceding the filing of his motion, and a credit of $12,195 per month for the future. He contended that the credit would offset the approximately $113,000 that he was required to indemnify Mother for her tax payment (as required by the judgment in the 1994 Lawsuit).

¶7 Mother responded on the merits. She also moved to dismiss Father's motion on two grounds. The first ground was that the district court had no jurisdiction to modify retroactively an accrued child support obligation. The second was that Father's motion was barred by issue preclusion arising from the judgment in the 1994 Lawsuit; she contended that the relief sought by Father should have been requested in that litigation as a defense to enforcement of the Texas decree. (The motion to dismiss also contended that Father had failed to join an indispensable party, an issue we need not elaborate on.)

¶8 Prior to the hearing on the motions of the parties, a discovery dispute arose regarding Mother's request for information on Father's financial condition. Mother abandoned her discovery request, however, when Father represented that he was not seeking a monetary judgment or child support from Mother.

¶9 At the hearing on the motions neither party offered any testimony. They relied on the terms of the Texas divorce decree, the decision in the 1994 Lawsuit, and the prior custody determination in this case. The district court granted Mother's motion to dismiss Father's motion for credit. Its order of March 26, 1997 stated in pertinent part:

1. [Father] is not seeking a modification of child support due to changed circumstances.

2. Any defense equitable or otherwise to the judgment in [the 1994 Lawsuit] should have been raised in those proceedings.

3. Res judicata bars [Father] from seeking the equitable relief sought from the Court in this matter.

4. [Mother's] Motion to Dismiss is well taken and should be granted.

5. [Father's] Motion for credit should be denied.

The court then entered an amended order on April 16, 1997, stating:

1. That the Motion to Set Aside the order entered March 26, 1997, is well taken and should be granted.

2. That the Motion to Dismiss should be granted.

3. That [Father] is not seeking a modification of child support due to changed circumstances.

4. That [Father's] motion for credit should be denied.

The difference in the orders is that the amended order does not rely on issue or claim preclusion. The court apparently decided not to rely on those grounds because at the time of the trial of the 1994 Lawsuit. Father had not been awarded custody of the Child, so he would have had no ground for claiming a credit. On appeal Mother does not rely on issue or claim preclusion.

DISCUSSION

¶10 Perhaps the greatest challenge in this case is determining how best to characterize Father's claim. Although the district court's order recites that Father "is not seeking a modification of child support due to changed circumstances," this is correct only in a limited sense. Father is not seeking the typical modification of child support--a reduction in future required periodic payments by him or the initiation of periodic payments to him by Mother. But he is trying to change the effect of a child support order.

¶11 Father claims a credit for what he considers to be an excess prepayment of child support. The essence of his argument is that a changed circumstance--the transfer of custody of the Child to Father--justifies relief from the Texas decree, which assumed that Mother would have custody. As a result of that changed circumstance, Father seeks reimbursement for a portion of the lump-sum payment. The reimbursement would not be in cash but in the form of an offset to sums that Father would otherwise owe Mother, such as the judgment for unpaid taxes. As Father states in his brief in chief:

[E]ven if [Father] cannot get back the approximate $1,600,000.00 in prepaid child support not owed, he should be allowed to offset that obligation against the claims of [Mother]. [Mother] paid a community tax debt which was assigned to [Father] in the divorce. She is seeking to recover that approximately $120,000.00 from [Father]. It would be inequitable to allow [Mother] to continue a claim for money from [Father] for taxes and at the same time evade or not be obligated to refund or pay back approximately $1,600,000.00 of prepaid support.

The foundation of Father's claim appears in the first sentence of the above-quoted passage. He refers to prepaid child support that was "not owed." That assertion is contrary to the Texas divorce decree, which unequivocally states that the total $2.5 million in child support is owed. Thus, Father's claim for credit requires modification of the Texas decree. In what circumstances is such modification permissible?

¶12 Often courts maintain continuing jurisdiction over orders in divorce cases. Sometimes that continuing jurisdiction is set forth explicitly in the court's order or decree. Here, however, the Texas decree is absolute in form. It requires Father to pay child support in accordance with a demand promissory note. The decree contains no provision permitting modification of the award in the event of any contingency, such as a change in custody of the Child, a change in the financial condition of either parent, or the Child's disability or even death.

¶13 To be sure, even when the court's order in a divorce case does not explicitly provide for continuing jurisdiction, certain types of continuing jurisdiction are provided as a matter of law. For example, district courts in New Mexico have statutory authority to make prospective modifications of child support awards arising from changed circumstances, regardless of whether the original award of child support expressly reserves such authority. See NMSA 1978, § 40-4-7(G) (1997); § 40-4-11.4 (1991); Spingola v. Spingola, 91 N.M. 737, 741, 580 P.2d 958, 962 (1978) (stipulated judgment to make child support or alimony nonmodifiable is against public policy); cf. Deeds v. Deeds, 115 N.M. 192, 848 P.2d 1119 (Ct.App.1993) (court can extend alimony beyond date of termination set in prior order). Consequently, now that Father has custody of the Child, perhaps Mother should begin making child support payments to Father. Both parties assume that the New Mexico district court would have authority to make such an award, despite the Texas lump-sum decree. We need not decide whether we agree with the parties on that point, however, because in district court Father expressly disavowed any claim for such prospective modification of child support. (As a result. Mother abandoned her efforts to obtain discovery regarding Father's financial condition.)

¶14 What Father seeks here is not a change in an award of future child support, but relief from a vested, accrued...