Macy v. Macy

• Decision Date: 25 February 1986
• Docket Number: 85-59,Nos. 85-58,s. 85-58
• Parties: Vicky L. MACY, Appellant (Defendant), v. Douglas K. MACY, Appellee (Plaintiff). Douglas K. MACY, Appellant (Plaintiff), v. Vicky L. MACY, Appellee (Defendant).
• Court: Wyoming Supreme Court

Page 774

714 P.2d 774

Vicky L. MACY, Appellant (Defendant), v. Douglas K. MACY, Appellee (Plaintiff).

Douglas K. MACY, Appellant (Plaintiff), v. Vicky L. MACY, Appellee (Defendant).

Nos. 85-58, 85-59.

Supreme Court of Wyoming.

Feb. 25, 1986.

Rex O. Arney of Redle, Yonkee & Arney, Sheridan, for appellant in case No. 85-58 and appellee in case No. 85-59.

Robert W. Connor, Jr., Sheridan, for appellee in case No. 85-58 and appellant in case No. 85-59.

Before THOMAS, C.J., and ROONEY, ^* BROWN and CARDINE, JJ., and RAPER, J., Retired.

RAPER, Justice, Retired.

These are companion appeals. Both arise out of proceedings and a petition for modification of a decree of divorce entered on June 24, 1983, in which proceedings Douglas K. Macy (plaintiff) was the plaintiff and Vicky L. Macy (defendant) was the defendant. Following a hearing on November 28, 1984, on December 24, 1984, an amended order modifying the decree of divorce was entered. Both parties appeal from that order. Defendant is the appellant in Case No. 85-58. Plaintiff is the appellant in Case No. 85-59.

Defendant, in Case No. 85-58, states the questions to be:

1. "Did the lower court improperly give Plaintiff judgment against Defendant for payments of debts which had been discharged in Defendant's bankruptcy?"

2. "Did the lower court err in not awarding Defendant her attorney fees and court costs which she incurred as a result of initiating an action as a result of Plaintiff's failure to make his child support payments?"

Plaintiff, in Case No. 85-59, states the issue to be:

"Whether The District Court Abused Its Discretion In Denying The Appellant's [plaintiff's] Motion For Modification Of The Divorce Decree."

We will reverse the district court's amended order which gave judgment to plaintiff for debts he was and will be required to pay as a result of defendant's discharge from such debts in bankruptcy and remand for a further hearing and reconsideration by the district court on all other issues.

The 1983 decree of divorce, with respect to child support, provided that:

"6. The Plaintiff shall pay Two Hundred Fifty Dollars ($250.00) per month per child as child support, commencing July 1, 1983 and continuing until each child reaches the age of nineteen, becomes self-supporting or married, whichever shall occur first.

"The child support payments of $250.00 per month per child shall be increased [or decreased] each year, if the total year's earnings of the Plaintiff increase [or decrease] based upon the immediate previous year's total earnings, effective [May] 1, upon the ratio of $250.00 to $20,000.00. [The Plaintiff shall provide a copy of his income tax return to the Defendant by April 15 of each year.]

"All child support payments shall be made through the Clerk of District Court of Sheridan County, Wyoming. The Defendant shall keep the Clerk of District Court informed of her address at all times." (Bracketed material added in original and initialed by plaintiff.)

In applying that escalation clause of the 1984 amended order of modification, the trial judge held that, based on the formula of $250 to $20,000 and that a "total year's earnings" meant earned income each year, effective May 1, 1984, the child support payments should be increased to $293.14 per month per child or $586.28 for both children. The court, in order to arrive at such figure, found from the evidence that in 1983 plaintiff's "total wages, salary, tips, etc." came to $29,367 less moving expenses from Wyoming to Texas of $5,916, making his "earned income" for such year the sum of $23,451. In percent, $250 to $20,000 is .0125 (.0125 X $23,451 = $293.1375). Plaintiff, by the divorce decree, was also to maintain health insurance for the children and to pay for any medical, dental, optometric, orthodontic and prescription drug expenses not covered by the insurance.

By further provisions of the 1983 divorce decree, defendant received a 1981 Ford Econoline Van subject to the indebtedness against it which she was to assume and pay, the family home subject to the mortgage against it which she was to assume and pay, and a business known as Macy's Floral, also subject to its indebtedness which she was to assume and pay. The decree further provided that plaintiff was to be held harmless from all such indebtedness. Defendant was also required to pay some $13,648.64 in other itemized debts. It is noted that about $4,000 of that indebtedness was for medical, hospital and dental expenses of which part was to be paid from health insurance.

After the divorce, defendant operated the floral business but discovered that the cash flow was not as anticipated, and the business debts were far more than as represented by plaintiff and more than she expected. The business was subject to a security agreement. It was necessary that the creditor bank take its security, which included the van set over to defendant but used in the business, and liquidate the same. Defendant was unable to meet the mortgage payments on the family home and, under threat of foreclosure, turned it over to the creditor bank. Plaintiff is signatory to the bank indebtedness which on July 11, 1984, was $125,623.32 plus interest and expenses. The home at best will probably not bring over $110,000. Plaintiff is responsible for the deficiency.

Acting upon the advice of bank official(s), defendant, in April 1984, filed a petition commencing bankruptcy proceedings under Title 11, United States Code. Plaintiff was named as a creditor in the proceedings. The bankruptcy petition named the creditor bank, but the bank obtained a release of its security. Defendant would be discharged as to any deficiency. On September 12, 1984, defendant, as the petitioning debtor, was released from all dischargeable debts. The order of the bankruptcy judge specifically provided:

"3. All creditors whose debts are discharged by this order and all creditors whose judgments are declared null and void by paragraph 2 above are enjoined from commencing, continuing or employing any action, process or act to collect, recover or offset any such debt as a personal liability of the debtor, or from property of the debtor, whether or not discharge of such debt is waived." ¹

The amended order of the trial judge contained the following findings and judgment for plaintiff against defendant:

"XI.

"That pursuant to the decree of divorce defendant was made responsible for paying all indebtedness associated with Macy's Floral as well as certain debts itemized in the decree of divorce; that the defendant filed for bankruptcy and was discharged in bankruptcy resulting in a discharge of all the debts for which she was originally made responsible under the terms of the decree of divorce, and that the plaintiff may have been required to pay certain of those debts and may be required to pay certain of those debts in the future.

"XII.

"That the plaintiff should have judgment against the defendant for any sums he was legally required previously to pay or may hereafter be legally required to pay on those debts which were the defendant's obligation under the decree of divorce.

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"IT IS FURTHER ORDERED that plaintiff shall have judgment against defendant for payments actually made by him and for which he was legally required to pay or may be required to pay in the future to creditors of defendant which are set forth in the decree of divorce or referred to therein and which were discharged in Defendant's bankruptcy."

By the same order, the trial judge gave judgment to defendant in a sum certain for unpaid child support:

"IT IS FURTHER ORDERED that defendant shall have judgment against plaintiff for child support arrearages totaling $3,153.31 for child support owing by plaintiff to defendant through November, 1984."

Most of the child support arrearages arose as a result of plaintiff being called upon by VISA and MasterCard to pay debts which by the 1983 decree of divorce defendant was required to pay but from which she has now been discharged in bankruptcy. Plaintiff deducted such payments from child support he was required to pay to defendant by virtue of the same decree. It will be recalled that defendant was discharged in bankruptcy from any debt she owed plaintiff. Plaintiff was a creditor as to other amounts he deducted, including air fare of $508.46 he had to pay for return of the children from a visitation but which defendant was to pay under the custody and child support terms of the divorce decree.

I

The foregoing sequence of events gives rise to defendant's first issue: Was the bankruptcy release of defendant from debts she was to pay under the divorce decree properly chargeable back to her by the subsequent judgment for plaintiff against defendant?

Before going further, it should be mentioned that child support is for the benefit of the children as plaintiff's obligation to contribute to the upbringing of his children. A support payment is the children's money administered in trust by defendant for their benefit. When plaintiff withholds support for the children, he is depriving them. We do not have an alimony question where, under some situations not present here, the former husband could possibly withhold alimony payments from a former wife where he has been required by some creditor to pay a debt, the obligation of which was the former wife's under the divorce decree. We do not decide such an issue of alimony but set it out only to illustrate a difference between child support and alimony. Plaintiff and the trial judge seem to have lost sight of the real purpose of child support. As an observation on reality, however, there are no doubt cases where a mother uses child support for her own benefit to the disadvantage of the children, and, having that in mind, a trial judge sometimes looks with skepticism at some claims for child support and becomes wary. The trial judge may have detected something like that here, but it certainly does not appear in the...