Culhane v. Michels, No. 21284

• Decision Date: 26 July 2000
• Docket Number: No. 21284, No. 21285.
• Citation: 615 N.W.2d 580,2000 SD 101
• Parties: Margaret CULHANE, Plaintiff and Appellant, v. Stephen W. MICHELS, Defendant and Appellee.
• Court: South Dakota Supreme Court

615 N.W.2d 580

2000 SD 101

Margaret CULHANE, Plaintiff and Appellant, v. Stephen W. MICHELS, Defendant and Appellee.

Nos. 21284, 21285.

Supreme Court of South Dakota.

Considered on Briefs May 30, 2000.

Decided July 26, 2000.

Gale E. Fisher, Sioux Falls, South Dakota, Attorneys for plaintiff and appellant.

Thomas J. Welk and Lisa Hansen Marso of Boyce, Murphy, McDowell & Greenfield, Sioux Falls, South Dakota, Attorneys for defendant and appellee.

KONENKAMP, Justice

[¶ 1.] The circuit court held that (1) alimony payments due before the effective date of SDCL 25-7-7.3 and 7.4 could be retroactively modified and that the alimony recipient had not met her burden of showing extraordinary circumstances justifying continuance of alimony after her remarriage. In addition, the court (2) denied reimbursement for medical expenses, but awarded (3) past due private school tuition, and (4) child support arrearages; and denied (5) paternity testing, and (6) disbursements. We affirm (1) in part and reverse in part; affirm (2), affirm (3), but remand for further findings, and affirm (4), (5) and (6).

Background

[¶ 2.] Margaret Culhane and Stephen W. Michels were married on May 27, 1978. The two met while attending the University of South Dakota in Vermillion. After their marriage, Michels continued his education and acquired an MBA degree. Two daughters were born during the marriage: the first on May 16, 1980, and the second on June 6, 1982. Culhane and Michels agreed in early 1986 to end their marriage.

[¶ 3.] In July 1986 they entered into a property settlement and child custody agreement. Attorney John Billings prepared the necessary documents. Billings was counsel for the Broadcaster Press, the publishing business where Michels worked as a general managing partner and Culhane performed payroll and various other office duties. Billings represented Michels. Culhane was not represented. Under the settlement, Culhane was given custody of the children, Michels was to pay $800 per month child support, the children's medical insurance and uncovered medical expenses were allocated between the parties, and Michels would pay Culhane $1,100 in monthly alimony for two years. In addition, the parties agreed that the children would attend St. Agnes School, a Catholic grade school in Vermillion, and that Michels would pay the tuition and fees. On July 22, 1986, the circuit court adopted the settlement agreement and entered a decree of divorce.

[¶ 4.] Eleven years later, in September 1997, Culhane sued on the divorce decree to recover delinquent alimony and child support, as well as unpaid medical expenses and tuition. Michels sought to abate retroactively his alimony obligation. Both sides moved for summary judgment. Following various legal proceedings, the court ultimately held that Culhane was entitled to a portion of the alimony payments together with interest. It also granted Culhane the tuition and child support arrearages requested, denied her claim for medical expenses, and denied Michels' request for paternity testing. Both sides were denied disbursements.

[¶ 5.] Culhane now appeals the court's decision that she cannot recover all unpaid alimony, medical expenses, and disbursements as the "prevailing party." Michels, by notice of review, appeals the award of interest, tuition, and child support, and the denial of his request for paternity testing. As the circuit court made its decision based on depositions and affidavits, with no live testimony, we review the case de novo unimpeded by any deference to the court's findings. Miller v. Weber, 1996 SD 47, ¶ 7, 546 N.W.2d 865, 867 (citing Muhlenkort v. Union County Land Trust, 530 N.W.2d 658, 660 (S.D. 1995)).

1. Alimony and Interest

[¶ 6.] In the divorce decree of July 22, 1986, Michels was directed to pay Culhane $1,100 alimony per month for twenty-four months. Michels made only one payment. Culhane remarried in August 1986. On the advice of his attorney, Michels claims, he stopped paying alimony. Culhane says that Michels contacted her several months later and asked if he could delay payments while he "got on his feet." She agreed to a temporary postponement. She also asserts that in November or December of 1986, attorney Billings invited her to his office and asked her to sign a form releasing Michels of his alimony obligation. She refused. Culhane says she called Michels in May of 1989 requesting some of the money he owed, but he declined. Michels did not file a motion to terminate his alimony obligation until September 1998.

[¶ 7.] Crucial to the question before us is the enactment of SDCL 25-7-7.3 and 7.4, effective July 1, 1987. SDCL 25-7-7.3 states:

Any past due support payments are not subject to modification by a court or administrative entity of this state, except those accruing in any period in which there is pending a petition for modification of the support obligation, but only from the date that notice of hearing of the petition has been given to the obligee, the obligor, and any other parties having an interest in such matter.

SDCL 25-7-7.4 provides:

Any payment or installment of support under an order for support, as defined by § 25-7A-1, whether entered by a court or an administrative entity of this state or of any other state or jurisdiction, which is unpaid after the date it is due, is a judgment by operation of law, with the full force, effect and attributes of a judgment of this state, including enforceability, and is entitled, as a judgment, to full faith and credit in this state.

[¶ 8.] In holding Michels responsible for the alimony payments due after the enactment of SDCL 25-7-7.3, the court ruled that remarriage will not automatically cancel alimony; instead, a party seeking modification must petition for a change. Because Michels did not petition for modification until 1998, the payments due after the enactment of the statute became vested and could not be retroactively terminated. However, the court differentiated the payments due before July 1, 1987, concluding that the statute did not apply to alimony accruing before its effective date. The court held that Michels could seek retroactive termination of alimony due before July 1, 1987, and that Culhane must establish extraordinary circumstances showing why alimony should continue after her remarriage. Because she failed to establish such circumstances, the court granted Michels an abatement of that part of the unpaid alimony. Culhane believes the court erred in refusing to give retroactive application to the statutes. [¶ 9.] Michels argues that at the time the alimony was owed, he did not have an obligation to petition for modification or termination. Referring to Marquardt v. Marquardt, 396 N.W.2d 753 (S.D.1986), he asserts that the law at the time their divorce decree was entered allowed him to simply stop alimony payments on Culhane's remarriage. In Marquardt, the former husband moved to terminate alimony when he learned of his ex-wife's remarriage. Id. at 754. He argued that it was error for the lower court to consider the remarriage as "simply one of the factors the Court must consider" when deciding whether to modify alimony. Id. We stated, "[i]n a proceeding for modification of alimony [the] burden of proving a change in circumstances sufficient to warrant modification is upon the party seeking modification." Id. (quoting Rousseau v. Gesinger, 330 N.W.2d 522, 525 (S.D.1983)) (alteration in original). The operative question was whether the husband had "met his burden in proving a change of circumstances." Id. In meeting this burden, proof that the former wife had remarried established "a prima facie case requiring the court to terminate the support payments unless there are extraordinary circumstances which justify continuance of the payments." Id. (citations omitted). This language hardly endorses the automatic termination hypothesis. Peterson v. Peterson, 434 N.W.2d 732, 734 (S.D. 1989).

[¶ 10.] Michels then cites Thomerson v. Thomerson, 387 N.W.2d 509 (S.D. 1986), to argue that alimony payments accruing before July 1, 1987 may be abated retroactively. In Thomerson, the couple's 1979 divorce decree awarded the wife $150 alimony per month. Id. at 511. She received her last alimony payment in 1981 after execution on a judgment for arrearages up to that point. She started a contempt proceeding in early 1985, seeking over $6,000 in unpaid alimony. The husband in turn sought retroactive modification of alimony and abatement of arrearages, as well as cancellation of future alimony payments. We acknowledged without elaborating that "an alimony order may be modified to retroactively abate all or part of alimony arrearages...." Id. at 514.

[¶ 11.] The enactment of SDCL 25-7-7.3 substantially changed the retroactive modification of support awards. In Vellinga v. Vellinga, 442 N.W.2d 472 (S.D.1989), the question was whether SDCL 25-7-7.3 should be given retroactive application. There, the husband and wife divorced in 1981, and the husband was required to pay fifteen percent of his earnings as child support. He made no payments in 1986 and few in 1987. In September 1987, on an order to show cause, the wife sought the past due amounts. After considering SDCL 2-14-21, which states that "[n]o part of the code of laws ... shall be construed as retroactive unless such intention plainly appears," we reasoned:

A narrow window is provided for modification of past due payments which accrue after notice of hearing is given to the obligee. Any other past due support payments are not subject to modification. The use of the term any, understood in its ordinary sense, clearly encompasses both past due support payments which accrued after the effective date of the statute and those which accrued prior to July 1, 1987.

Id. at 474 (emphasis added). Thus, we specifically held that the statute "is to be applied retroactively." Id.

[¶ 12.] The application of the statute to past-due alimony was examined...