Kauth v. Bartlett
| Decision Date | 12 March 2008 |
| Docket Number | No. 24414.,24414. |
| Citation | 746 N.W.2d 747,2008 SD 20 |
| Parties | Melissa J. (Bartlett) KAUTH, Plaintiff, v. Lee O. BARTLETT, Defendant and Appellant. |
| Court | South Dakota Supreme Court |
Melissa J. (Bartlett) Kauth, Redfield, South Dakota, pro se.
Carl J. Koch, Mitchell, South Dakota, Attorney for defendant and appellant.
[¶ 1.] Lee O. Bartlett (Bartlett) petitioned to modify his child support obligation after relocating and reducing his income. Even though the child support referee found that Bartlett did not leave his employment for the purpose of reducing his child support obligation, the referee's report set child support based on the imputed income from Bartlett's prior job. The circuit court's order adopted the referee's report. Bartlett appeals. We reverse and remand.
[¶ 2.] When Bartlett and Melissa Kauth (Kauth) divorced on November 30, 2004, Bartlett's monthly child support obligation for their two children was set at $730.00 based on his gross annual income of $37,600.00 as a funeral home director in Redfield, South Dakota. Bartlett remarried in June of 2006. His new wife lived and worked in Harrisburg, South Dakota. She attempted to relocate and find employment in Redfield but was unable to do so. Bartlett quit his job at the funeral home in Redfield to move to Harrisburg, South Dakota. He obtained employment as a pizza restaurant manager making a gross annual income of about $18,000.00.
[¶ 3.] In April of 2006, Bartlett petitioned for reduction of his child support obligation because of his lower income. Bartlett requested a deviation under SDCL 25-7-6.10(2) based on his financial condition. Melissa Kauth did not specifically request an upward deviation. At the hearing, Bartlett appeared by telephone, and Kauth appeared in person. Neither party was represented by counsel. At the beginning of the hearing, the referee questioned Bartlett about leaving his job as a funeral home director for a less stressful career as follows:
Referee: Why did that job [as funeral home director] end?
Bartlett: I decided on a different career.
Referee: So did you voluntarily quit?
Bartlett: Yes, I did.
Referee: Ordinarily, sir, if someone's income decreases as a result of their voluntary actions, in a child support proceeding we treat them as though they still had that same income. Can you tell me any reason, sir, why that should not be the case in this proceeding?
Bartlett briefly explained that he was unable to find employment as a funeral home director after relocating to Harrisburg, South Dakota. He also explained that his job as a funeral home director was very stressful and that the job had a high turnover rate. The referee denied Bartlett's request to reduce the support and imputed Bartlett's prior gross monthly income of $3,133.00 for purposes of calculating child support. Based upon the imputed income, the referee calculated Bartlett's child support obligation at $697.00, plus $85.00 per month for his pro rata share of health insurance, increasing the total support obligation from the prior order of $730.00 to $782.00 per month.
[¶ 4.] Bartlett retained counsel and objected in circuit court to the referee's report. The circuit court remanded the matter to the referee "for the sole and limited purpose of conducting further hearing on the specific and limited issue of whether Lee O. Bartlett voluntarily reduced his income for the intent and purpose of manipulating (i.e. reducing) his child support obligation."
[¶ 5.] On remand, Bartlett was represented by counsel and Kauth appeared pro se.1 Bartlett presented evidence that part of his decision to relocate and switch jobs was because of the stress of the funeral business and the extended hours he had to work. The referee noted that "[t]he mother did not request deviation based on the father's voluntary reduction of his income." Nevertheless, the referee determined that he had broad authority to raise deviations on his own and entered only one finding of fact as follows:
[Bartlett] admits he voluntarily quit his job. There was no evidence that he did so with the express intent of reducing his income. The Referee would point out, however, that he did not make any such finding in his original report either....
The referee went on to conclude that "[w]hether [Bartlett's] intent in quitting his job was to reduce his child support obligation or not is irrelevant."
[¶ 6.] Bartlett had requested a deviation based upon his financial condition pursuant to SDCL 25-7-6.10(2). This deviation presumes a financial hardship if the child support amount constitutes over fifty percent of the obligor's net income. Although the evidence showed that Bartlett's child support amount exceeded fifty percent of his actual net income, the referee made no finding on the deviation except to conclude Bartlett had waived it. The referee again imputed Bartlett's prior income and recommended a monthly support amount of $782.00.
[¶ 7.] Bartlett once more objected to the referee's recommendation because the referee had deviated from the child support schedule based upon a deviation neither party had requested and because the referee had automatically imputed Bartlett's prior income. The circuit court adopted the referee's findings of fact and conclusions of law as set forth in the referee's reports from the original hearing and the remand. Bartlett raises the following issues on appeal:
ISSUES
1. Whether the circuit court erred in adopting the referee's calculation of child support using Bartlett's imputed income.
2. Whether a child support referee has authority to raise a deviation sua sponte.
[¶ 8.] We review the decision to grant or deny child support under the abuse of discretion standard. Miller v. Jacobsen, 2006 SD 33, ¶ 8, 714 N.W.2d 69, 76 (). When reviewing a child support referee's findings of fact, we review for clear error, while conclusions of law are reviewed de novo. Wagner v. Wagner, 2006 SD 31, ¶ 5, 712 N.W.2d 653, 656 (quoting Mathis v. Mathis, 2000 SD 59, ¶ 7, 609 N.W.2d 773, 774). Additionally, when the lower court adopts the child support referee's factual findings and legal conclusions, "we apply the clearly erroneous standard of review to the findings and give no deference to conclusions of law." Id. Findings are not reversed for clear error "unless we are left with a definite and firm conviction a mistake has been made." Id.
[¶ 9.] Issues regarding statutory interpretation are questions of law reviewed de novo. Rotenberger v. Burghduff, 2007 SD 7, ¶ 8, 727 N.W.2d 291, 294 (quoting State v. $1,010 in Am. Currency, 2006 SD 84, ¶ 8, 722 N.W.2d 92, 94). Huber v. Dep't of Pub. Safety, 2006 SD 96, ¶ 14, 724 N.W.2d 175, 179 ().
[¶ 10.] The referee and the circuit court misapplied and misinterpreted the statutes and prior case law by automatically imputing Bartlett's previous wages. The referee and the circuit court applied a bright-line rule that if an obligor voluntarily takes a job that pays less than his prior job, his higher income from the prior job, must be imputed and used to calculate child support under the schedule. Neither the statutes nor our prior opinions support such a bright-line rule.
[¶ 11.] The statutory scheme in SDCL Chapter 25-7 governs child support calculations. The language of the statutes does not authorize automatically imputing a higher income when someone voluntarily takes a lower paying job. The only statute that even refers to imputed income is SDCL 25-7-6.4, which merely creates a rebuttable presumption that a parent is capable of being employed at minimum wage.2 Since Bartlett's income exceeded minimum wage this statute does not apply.
[¶ 12.] In all other cases, such as Bartlett's, the child support schedule uses an obligor's actual monthly net income as determined by SDCL 25-7-6.3 () and SDCL 25-7-6.7 (allowable deductions). A proper application of the statutes in this case would require calculating Bartlett's monthly net income based on his actual earnings. The monthly net income of the parties is then combined to determine the support obligation under the schedule set forth in SDCL 25-7-6.2. Only after this schedule calculation has been performed may a deviation, as set forth in SDCL 25-7-6.10, enter into the child support obligation equation.
[¶ 13.] Thus, the statutes lay out a procedure wherein the initial step is to determine the current net income of the parties and scheduled support amount. Then, any requested deviations can be considered. We addressed the mandatory nature of the procedure in Midzak v. Midzak, 2005 SD 58, 697 N.W.2d 733 and Gisi v. Gisi, 2007 SD 39, 731 N.W.2d 223. In Midzak, the trial court failed to order child support. We reversed and remanded pointing out that "[t]he trial court is required to calculate the parents' monthly net income . . . as codified at SDCL 25-7-6.3 and 25-7-6.7." Midzak, 2005 SD 58, ¶ 30, 697 N.W.2d at 740. We noted that "[d]eviations from the support obligation schedule at SDCL 25-7-6.2 are possible, but must be raised by the parties in order to be considered by the trial court." Id. ¶ 30, 697 N.W.2d at 741. However, in order to even reach the possibility of a deviation, the referee must first compute the child support pursuant to SDCL...
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