Marriage of Durbin, In re
| Decision Date | 16 January 1992 |
| Docket Number | No. 90-578,90-578 |
| Citation | 251 Mont. 51,823 P.2d 243 |
| Parties | , 60 USLW 2495 In re the MARRIAGE OF Terri D. DURBIN, n/k/a Terri D. Ward, Petitioner and Appellant, and Edwin D. Durbin, Respondent and Respondent. |
| Court | Montana Supreme Court |
John R. Christensen argued, Christensen & Hubble, Stanford, for petitioner and appellant.
Michael G. Moses argued, Moses Law Firm, Billings, for respondent and respondent.
Peggy Probasco, Sp. Asst. Atty. Gen., Butte, for amicus.
Terri D. Durbin, now known as Terri D. Ward (Terri), appeals the November 1, 1990 findings of fact, conclusions of law, and order of the Tenth Judicial District Court of Fergus County, Montana, which denied her cross-petition for modification of child support, denied her attorney fees and costs, and granted Edwin Durbin (Ed) a tax exemption for their son, Aaron. We reverse and remand.
Terri presents the following issues:
1. Did the District Court err in failing to modify child support payments to reflect change of circumstances, the children's ages, the standard of living the parties' minor children would have enjoyed had the marriage not been dissolved, and Ed's ability to pay increased child support?
2. Should Terri be awarded attorney fees and costs incurred in responding to Ed's petition for modification, and further, should she be awarded attorney fees and costs of appeal?
3. Did the District Court improperly allow Ed to claim a tax deduction for Aaron while not ordering him to pay any child support?
Terri married Ed on December 27, 1975, in Lewistown, Montana. The couple had two children, Aaron born July 9, 1976, and Shelley, born November 3, 1979. On November 5, 1986, the couple divorced. The divorce decree 1) awarded the couple joint custody of the children, 2) awarded Terri primary physical custody of the children, 3) awarded Terri and Ed one tax deduction each for the children, and 4) required Ed to pay Terri monthly child support totaling $150 per child, except for two months in the summer, where he was to pay monthly child support totaling $75 per child.
On December 18, 1986, Ed lost his sight as a result of a work-related accident. Thereafter, Ed began to receive monthly Workers' Compensation benefits of $820. In June or July 1987, Ed received from his employer's Fireman's Fund disability insurance policy a lump sum payment of $5,000; he also began to receive monthly payments of $87 from this policy. In June 1987, Ed began to receive monthly Social Security benefits, which reduced the amount of monthly Workers' Compensation benefits he received. At this time, Ed's total monthly income, including Workers' Compensation benefits, Social Security benefits, and Fireman's Fund disability benefits was $1154.
In June 1987, Terri, on behalf of the children, began to receive monthly Social Security benefits totaling $174 per child. Ed ceased paying Terri child support at this time. Ed testified that he believed the Social Security benefits on behalf of the children served as a credit toward his child support obligation.
In December 1989, Terri received a degree in accounting from Eastern Montana College. In January 1990, she secured employment as a staff tax accountant in Portland, Oregon. She financed her schooling with student loans, totaling $11,539 as of June 1990. Terri's adjusted gross income was $11,759 in 1988 and $9,765 in 1989. In 1988 and 1989, Terri took tax deductions for both children on her income tax returns as she was able to prove to the Internal Revenue Service that she was providing over half of the children's financial support.
In May 1990, Ed received a lump sum settlement for his injuries totaling $373,557 after costs, expenses, and attorney fees. Additionally, as part of a structured settlement, Ed began receiving monthly payments of $3788 in July 1990, these payments guaranteed to continue for thirty years.
On May 21, 1990, Terri filed an action for an order to show cause in Oregon. On May 29, 1990, Ed petitioned the District Court for a modification of child support, custody, and visitation. On June 14, 1990, Terri responded to Ed's petition and cross-petitioned for past, current and future child support modification, attorney fees, and costs.
The District Court conducted a hearing on this matter on June 26 and 27, 1990. At the hearing, testimony revealed that Terri's approximate gross income for 1990 would be $26,411 and Ed's 1990 approximate gross income, including Social Security benefits, Fireman's Fund disability insurance benefits, Workers' Compensation benefits, the structured settlement, and the interest on the lump sum settlement would be between $87,000 and $145,000, depending upon Ed's investment return. Testimony also revealed that Ed would continue to have this gross annual income for the remainder of his life, approximately sixty percent of this income being tax-free. At the time of the hearing, the Social Security monthly benefits on behalf of the children increased to $198 per child.
On November 1, 1990, the District Court 1) denied Ed's petition for modification of child support, custody, and visitation, 2) denied Terri's cross-petition for modification of past, current, and future child support, 3) denied Terri attorney fees and costs, and 4) granted Terri two tax deductions for the children in 1990 and granted Ed a tax exemption for their son, Aaron, beginning in 1991. From this judgment, Terri appeals.
Our standard of review for findings of fact in child support modification cases is whether the District Court clearly abused its discretion. In Re The Marriage of Hall (1987), 228 Mont. 36, 39, 740 P.2d 684, 686. Our standard of review for conclusions of law of a trial court is whether the District Court correctly interpreted the law. Steer, Inc. v. Dep't of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601, 603.
Did the District Court err in failing to modify child support payments to reflect change of circumstances, the children's ages, the standard of living the parties' minor children would have enjoyed had the marriage not been dissolved, and Ed's ability to pay increased child support?
Terri presents two arguments under this issue: 1) that the Social Security benefits on behalf of the children do not serve as a credit toward Ed's past, present, and future child support payments under the dissolution decree, and 2) that personal injury settlements, payment for future loss of income, Workers' Compensation benefits, Fireman's Fund disability insurance benefits, and Ed's Social Security benefits (collectively referred to as Ed's personal injury awards) should be considered income when determining a child support modification. Both arguments will be discussed separately below.
The District Court in Conclusions 6 and 7 of its November 1, 1990 findings of fact, conclusions of law and order held:
6. That Respondent, Ed Durbin, has paid in full all child support he was obligated to pay through June, 1987, at which time the social security benefits commenced, said benefits being specifically for child support payments from Respondent as the result of his total disability resulting from his injury.
7. That the amounts of those social security payments have been in excess of the amounts due under the Property Division and Custody Agreement of the parties and also exceed the Montana Child Support Guidelines for child support. The Court therefore concludes that the Petitioner is entitled to the child support payments of the social security benefits therefor, paid by the Social Security Administration. Petitioner is not entitled to child support payments from the Respondent in excess of the social security payments therefor until the amounts determined under the Montana Guidelines exceed the social security payments, and then only the excess over such payments.
(Emphasis added.)
Terri argues that the District Court erred when it concluded that the Social Security benefits she receives on behalf of the children 1) are a credit toward Ed's child support obligation from June 1990, and 2) relieve Ed of paying any back, current and future child support under the dissolution decree.
This Court has addressed the issue of whether Social Security benefits on behalf of a child serve as a credit toward a parent's child support obligation on two different occasions. In Tefft v. Tefft (1981), 192 Mont. 456, 457-59, 628 P.2d 1094, 1095, a district court on March 25, 1980, amended a February 27, 1980 dissolution decree by allowing a father to credit the $200 monthly Social Security benefits, received on behalf of his child due to the child's learning disability, toward his $250 child support obligation. The district court, in amending the dissolution decree, considered these Social Security benefits as financial resources of the child under what is now § 40-4-204(2)(a), MCA. Tefft, 192 Mont. at 462-63, 628 P.2d at 1098. This Court affirmed when it found no abuse of discretion on the part of the district court. Tefft, 192 Mont. at 463, 628 P.2d at 1098.
In the case of In Re the Marriage of Gallant (1990), 241 Mont. 363, 364-65, 786 P.2d 1193, 1195, an action for past due child support, this Court held that Social Security benefits to a child due to the father's disability did not absolve the father's child support obligation under the dissolution decree. In Gallant, father was disabled at the time of the dissolution. The district court recognized father's disability and allowed him to forego child support until he received disability benefits. Father began to receive Workers' Compensation benefits one year later in 1981. Father, however, did not comply with child support under the dissolution decree. In 1985, father began to receive Social Security benefits for his disability; additionally the children began to receive monthly Social Security...
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