Jordet v. Jordet

• Decision Date: 05 November 2012
• Docket Number: No. 20120185.,20120185.
• Citation: 823 N.W.2d 512,2012 N.D. 231
• Parties: Bradley Dean JORDET, Plaintiff and Appellant, and Jonathan T. Garaas, Interested Party and Appellant, v. Tracy Lyndal JORDET, Defendant and Appellee.
• Court: North Dakota Supreme Court

823 N.W.2d 512

2012 ND 231

Bradley Dean JORDET, Plaintiff and Appellant,andJonathan T. Garaas, Interested Party and Appellant,

v.Tracy Lyndal JORDET, Defendant and Appellee.

No. 20120185.

Supreme Court of North Dakota.

Nov. 5, 2012.

Jonathan T. Garaas, DeMores Office Park, Fargo, N.D., for plaintiff, interested party, and appellants.

Tressie C. Brazil, Fargo, N.D., for defendant and appellee.

GERALD W. VANDE WALLE, Chief Justice.

[¶ 1]Bradley Dean Jordet and his attorney, Jonathan T. Garaas, appealed from orders denying Bradley Jordet's motion to allow him to setoff his spousal support arrearages against Tracy Lyndal Jordet's child support arrearages, and holding Garaas in contempt and fining him $1,000 for intentional disobedience of the district court's earlier order.We conclude the court did not abuse its discretion in denying the motion for a setoff, but did abuse its discretion in holding Garaas in contempt.We affirm in part and reverse in part.

I

[¶ 2] Bradley and Tracy Jordet were divorced in 2010.Bradley Jordet was awarded primary residential responsibility for the couple's two children and Tracy Jordet was ordered to pay child support of $864 per month, which was later reduced to $590 per month upon the oldest child's emancipation.Bradley Jordet was ordered to pay Tracy Jordet rehabilitative spousal support of $2,000 per month for 36 months, then reduced to $1,500 per month until she reaches age 65, dies, or remarries.Both parties fell into arrears on their respective financial obligations to each other.

[¶ 3] In December 2011, Bradley Jordet moved for entry of a money judgment under N.D.C.C. § 14–08.1–05 against Tracy Jordet for $9,071.78 in past due child support.He simultaneously moved for a setoff of $7,715.49 he owed Tracy Jordet for past due spousal support against her child support arrearages.Tracy Jordet responded in January 2012 by obtaining a money judgment against Bradley Jordet for $7,715.49 for spousal support arrearages and opposed his motion for a setoff.The district court adopted the order of the judicial referee denying Bradley Jordet's motion, reasoning:

The Court concludes that the relief Bradley requests would be contrary to the provisions of N.D. Cent. Code 14–09–09.33.Also persuasive is Corbett v. Corbett,2002 ND 103, 646 N.W.2d 677, wherein the Court stated that it was inappropriate to offset the child support obligation with a spousal support obligation.

[¶ 4] On February 16, 2012, Bradley Jordet obtained an execution of judgment from the district court against Tracy Jordet directing the Cass County Sheriff to satisfy the $9,071.78 judgment for unpaid child support “out of the personal property of the judgment debtor within your County.”On February 17 and 21, 2012, the sheriff levied on two of Tracy Jordet's bank accounts and obtained $450.99 and $339.70, respectively.On March 26, 2012, Bradley Jordet, accompanied by Garaas and a Cass County deputy sheriff, went to the office of Tracy Jordet's attorney.Bradley Jordet handed a personal check, made payable to Tracy Jordet's attorney for $7,825.89 and marked “Back Spousal Support,” to an office assistant.According to Tracy Jordet's attorney, the sheriff, at Garaas's direction, then delivered a notice of levy to the office assistant and took possession of the check.The notice of levy stated that claims for exemptions from process must be made within 10 days.Tracy Jordet did not claim any exemptions.

[¶ 5] On March 26, 2012, Tracy Jordet filed an objection to the notice of levy and sought an emergency hearing.Tracy Jordet requested that Garaas be held in contempt “for attempting to circumvent”the district court's earlier order denying Bradley Jordet's motion to allow a setoff and sought an award of attorney fees for having to respond to the notice of levy.Garaas denied attempting to circumvent the court's order.Following a March 30, 2012, hearing, the court ruled:

1.Attorney Jonathan T. Garaas is hereby held in Contempt of Court pursuant to NDCC § ... 27–10–01.1(1)(c) for intentional disobedience of a Court Order.Jonathan T. Garaas is ordered to pay a $1,000 fine to the District Court for being held in Contempt of Court.

2.Attorney Jonathan T. Garaas may purge the contempt by turning over the $7,825.89 check made payable to [Tracy Jordet's attorney] dated March 26, 2012 which was levied upon on March 26, 2012.

[¶ 6] The Cass County deputy sheriff subsequently submitted an execution return showing, after payment of fees, he had collected $8,290.30, and a partial satisfaction of Bradley Jordet's child support judgment against Tracy Jordet in that amount was filed with the district court.

II

[¶ 7]Bradley Jordet argues the district court erred in denying his motion for an equitable offset of the parties' mutual obligations.

[¶ 8]We discussed the doctrine of offset, also referred to as setoff, in Dakota Partners, L.L.P. v. Glopak, Inc.,2001 ND 168, ¶ 21, 634 N.W.2d 520:

“Offset” is defined as “something (such as an amount or claim) that balances or compensates for something else.”Black's Law Dictionary 1115 (7th ed. 1999).“Offset” is synonymous with “setoff.”Id.; A Dictionary of Modern Legal Usage 616 (2d ed. 1995);67 C.J.S.Offset(1978).“Setoff” is defined as “a defendant's counterdemand against the plaintiff, arising out of a transaction independent of the plaintiff's claim” or “a debtor's right to reduce the amount of a debt by any sum the creditor owes the debtor; the counterbalancing sum owed by the creditor.”Black'sat 1376;see alsoModern Legal Usageat 797.The doctrine of setoff is “an equitable doctrine requiring that the demands of mutually indebted parties be set off against each other and that only the balance be recovered.”20 Am. Jur. 2dCounterclaim, Recoupment, Etc. § 6(1995).See also80 C.J.S. Set-off & Counterclaim, § 3(2000)(setoff “allows parties that owe mutual debts to each other to assert amounts owed, subtract one from the other, and pay only the balance”).In a bankruptcy proceeding, setoff allows “entities that owe each other money to apply their mutual debts against each other, thereby avoiding ‘the absurdity of making A pay B when B owes A.’ ”In re Alvstad,223 B.R. 733, 740(Bankr.N.D.[Bankr.D.N.D.]1998)(internal citations omitted).SeealsoN.D.C.C.§ 28–20–33(“Mutual final judgments may be set off pro tanto, the one against the other, by the court, upon proper application and notice.”). “Setoff requires mutuality of the parties, such that ‘debts and credits are mutual when they are due to and from same person in same capacity.’ ”Collection Ctr., Inc. v. Bydal,2011 ND 63, ¶ 44, 795 N.W.2d 667(internal citation omitted).The equitable remedy of setoff “will be exercised to promote substantial justice and rests largely in the sound discretion of the court.”Marmarth Sch. Dist. No. 12 v. Hall,65 N.D. 509, 516, 260 N.W. 411, 414(1935).We“will not reverse a decision founded upon equitable principles absent an abuse of discretion based upon arbitrary, unreasonable, or unconscionable acts.”Moch v. Moch,1998 ND 95, ¶ 9, 578 N.W.2d 129.

[¶ 9]The district court ruled that allowing Bradley Jordet's proposed offset would be “contrary” to N.D.C.C. § 14–09–09.33 and this Court's decision in Corbett v. Corbett,2002 ND 103, 646 N.W.2d 677.Section 14–09–09.33 provides:

1.Notwithstanding section 14–09–09.31, a court may order that a specific amount of past-due child support owed by an obligor to an obligee be offset by an equal amount of past-due child support owed to the obligor by the obligee.An order for an offset is permitted under this subsection only if:

a. The proposed offset is limited to past-due child support and does not apply to child support owed in the current month or owed in any future month;

b. The proposed offset does not include any past-due child support that has been assigned;

c. Neither party whose past-due child support obligation will be reduced or eliminated by the proposed offset owes past-due child support to another obligee; and

d. The opportunity to offset past-due child support under this section has not been used by either party as an incentive to avoid paying child support in the month in which it is due.

2.The order must include a specific finding that the proposed offset serves the best interests of the children to whom the obligor and obligee owe a duty of support.

3.The child support agency may issue an order offsetting past-due child support if neither party objects after being notified of the proposed offset.

4.Past-due child support owed by an obligor to an obligee may not be offset by past-due child support owed to the obligor by the obligee except as permitted in this section.

5.Notwithstanding anything to the contrary in section 14–09–09.24 or 14–09–09.30, an obligor's child support obligation for the current month or for a future month may not be offset by past-due child support or other debts owed to the obligor by an obligee unless the court orders the offset as a method of satisfying an overpayment of child support that results from the establishment or reduction of a child support obligation.

6.An offset of child support under this section is considered a payment of child support by both the obligor and the obligee.A copy of the order for an offset must be provided to the state disbursement unit.

7.As used in this section, “child support” does not include spousal support.SeealsoN.D. Admin. Code§§ 75–02–04.1–03 and 75–02–04.1–08.2.This statute“generally prohibits an offset of current or future child support against past-due [child] support.”Walberg v. Walberg,2008 ND 92, ¶ 15, 748 N.W.2d 702.

[¶ 10]Section 14–09–09.33, N.D.C.C., does not apply to the situation in this case.By its very terms, N.D.C.C. § 14–09–09.33(1) applies to circumstances where “a specific amount of past-due child support owed by an obligor to an obligee” is sought to “be offset by an equal amount of past-due child support...