Marriage of Schnell, In re, 95-047

• Decision Date: 24 October 1995
• Docket Number: No. 95-047,95-047
• Citation: 905 P.2d 144,273 Mont. 466
• Parties: In re the MARRIAGE OF David L. SCHNELL, Petitioner and Appellant, and Twyla L. Schnell, Respondent and Respondent.
• Court: Montana Supreme Court

Page 144

905 P.2d 144

273 Mont. 466

In re the MARRIAGE OF David L. SCHNELL, Petitioner and Appellant and Twyla L. Schnell, Respondent and Respondent.

No. 95-047.

Supreme Court of Montana.

Submitted on Briefs July 27, 1995.

Decided Oct. 24, 1995.

Lynda S. Weaver, Morrow, Sedivy & Bennett, Bozeman, for Appellant.

Marcelle C. Quist and Kendra K. Anderson, Quist, Bowen & Anderson, Bozeman, for Respondent.

TRIEWEILER, Justice.

The appellant, David L. Schnell, filed a petition in the District Court for the Eighteenth Judicial District in Gallatin County for dissolution of his marriage to the respondent, Twyla L. Schnell. Following a hearing, the District Court entered its decree in which it provided for joint custody of the couple's only child, child support, and division of the marital estate. The District Court also ordered that David pay Twyla's attorney fees. David appeals from the District Court's decree. We affirm in part and reverse in part.

The issues on appeal are:

1. Did the District Court err when it failed to award child support based on the Child Support Guidelines, or to specify why it declined to do so?

2. Did the District Court err when it ordered that the tax deduction for the couple's daughter be shared without regard to her place of residence or the financial implications to the parties?

3. Did the District Court err when it based its division of the couple's property on an oral stipulation?

4. Did the District Court err when it awarded Twyla attorney fees?

STATEMENT OF FACTS

David and Twyla were married on June 25, 1978, in Columbia, Missouri. During the course of their marriage, they had one child, Deanna. Prior to the marriage, David had purchased land in Missouri upon which he and Twyla built a home during the marriage. Twyla and David also purchased a vacant lot in Missouri during the marriage.

David is employed as the maintenance director at the Mount Ellis Academy boarding school (MEA) in Bozeman where he earns $2503 per month. MEA allows a substantial reduction in Deanna's tuition, and provides health insurance, so long as David is entitled to a tax exemption for Deanna.

Twyla is employed as a full-time registered nurse and earns $2462.40 per month.

Pursuant to a stipulation made in open court at a hearing to consider temporary relief, the court awarded the Missouri home to Twyla, but ordered that she pay one-half its appraised value ($25,000) to David. The court awarded David and Twyla joint custody of Deanna, but appears to have assumed she would attend school in Montana while either living with her father or in the dormitory, and that she would spend summers with her mother, who remained in Missouri.

The tax deduction attributable to Deanna's dependency was awarded to Twyla in odd-numbered years, and to David in even-numbered years. The District Court ordered Twyla to pay as child support, all of Deanna's current school expenses, the expenses related to the care of Deanna's horse, and all of Deanna's personal expenses, including clothing, spending money, transportation, and piano lessons, until Deanna graduated from high school or reached the age of 18, whichever occurred later.

The District Court also awarded Twyla attorney fees.

ISSUE 1

Did the District Court err when it failed to award child support based on the Child Support Guidelines, or to specify why it declined to do so?

We review a district court's child support award to determine if, in making the award, the court abused its discretion. In re Marriage of Noel (1994), 265 Mont. 249, 252, 875 P.2d 358, 359 (citing In re Marriage of Weed (1992), 254 Mont. 162, 165, 836 P.2d 591, 593). The district court must employ its discretion realistically and must take into account the parties' actual situation. Marriage of Noel, 875 P.2d at 359 (citing In re Marriage of Gebhardt (1989), 240 Mont. 165, 172, 783 P.2d 400, 404).

David contends that the District Court erred because its award was not based on the Uniform Child Support Guidelines. Section 40-4-204(3)(a), MCA (1993), directs district courts to

determine the child support obligation by applying the standards in this section and the uniform child support guidelines ... unless the court finds by clear and convincing evidence that the application of the standards and guidelines is unjust to the child or to any of the parties or is inappropriate in that particular case.

Section 40-4-204(3)(b), MCA (1993), provides that:

If the court finds that the guideline amount is unjust or inappropriate in a particular case, it shall state its reasons for finding that the application of the standards and guidelines is unjust to the child or a party or is inappropriate in that particular case.

An award based on the Guidelines bears a presumption that it is reasonable and adequate. However, the Guidelines require that courts consider the merits and circumstances of each case. Moreover, the Guidelines provide that either party may rebut the presumption that they should be followed by presenting evidence that an award based on the Guidelines would not meet the child's needs. Rule 46.30.1507(1), ARM. Additionally, before a district court may deviate from the Guidelines, it must make specific written findings which demonstrate its reason for deviation from the Guidelines. Rule 46.30.1507(3), ARM.

David contends that the District Court's decree contravenes two of our recent decisions: In re Marriage of Brandon (Mont.1995), 894 P.2d 951, 52 St. Rep. 381, and In re Marriage of Griffin (1993), 260 Mont. 124, 860 P.2d 78. In both cases, we held that district courts must apply the Guidelines when they award child support. As we stated in those cases, district courts must provide clear and convincing reasons pursuant to § 40-4-204(3)(a), MCA, to justify a deviation from the Guidelines. Marriage of Brandon (1995), 894 P.2d at 953; Marriage of Griffin, 860 P.2d at 88.

David also contends that the District Court's order gives Twyla unfettered discretion to determine how much child support she will pay. David relies on In re Adoption of K.L.J.K. (1986), 224 Mont. 418, 421, 730 P.2d 1135, 1137, a case in which we held that "in-kind" child support payments did not satisfy that parent's obligation to his child. See also In re Marriage of Burns (1982), 198 Mont. 365, 646 P.2d 530; In re Adoption of S.L.R. (1982), 196 Mont. 411, 640 P.2d 886. David asserts that the District Court's child support order sanctions the type of "in-kind" payments we have previously prohibited.

Twyla contends that the Guidelines are merely advisory in nature and not binding on district courts. Twyla relies on In re Marriage of Ensign (1987), 227 Mont. 357, 361, 739 P.2d 479, 482, in support of this argument. In that case, we held that the child support formula set out in In re Marriage of Carlson (1984), 214 Mont. 209, 693 P.2d 496, does not bind district courts, but instead, provides suggestions for the district courts to follow. The Guidelines were established in 1987 and made binding upon courts in 1989 when the Legislature amended § 40-4-204, MCA. Therefore, to the extent Marriage of Carlson established a procedure that differs from the current regulatory framework, and to the extent we may have suggested in Marriage of Ensign that the Guidelines are suggestive and not binding, those decisions no longer apply.

We conclude that the District Court abused its discretion when it determined child support because it did not consider the Guidelines. Nowhere in its order did the court cite the Guidelines or § 40-4-204, MCA. Nowhere in its order did the District Court state its reasons for not applying the Guidelines, as § 40-4-204, MCA, and Marriage of Brandon require. Nowhere in its order did the District Court state why a deviation from the Guidelines served Deanna's best interests. Twyla's assertion that the Guidelines are suggestive and not binding ignores the clear statutory and regulatory requirements of § 40-4-204(3), MCA, and Rule 46.30.1507(3), ARM. Moreover, there is no way for us to actually evaluate the amount of the District Court's child support award and compare it to the dollar amount that the Guidelines require. We conclude, therefore, that the District Court abused its discretion when it awarded child support in this case.

ISSUE 2

Did the District Court err when it ordered that the tax deduction for the couple's daughter be shared without regard to her place of residence or the financial implications to the parties?

We review a district court's award of a tax exemption to determine whether the court abused its discretion. In re Marriage of Milesnick (1988), 235 Mont. 88, 91, 765 P.2d 751, 753.

David contends that he was entitled to the tax exemption in this case because, as an employee of MEA, certain benefits, which include Deanna's health insurance and a reduction in tuition, depend on his right to claim the exemption. He claims that the reduction in tuition alone is worth $1509.25, but that Twyla would realize a tax savings of only $367.50 by having the tax exemption. In other words, David claims that the benefits Deanna would receive if he were awarded the tax exemption far outweigh the benefits Twyla would receive from the current alternating award.

Twyla claims that she has no objection to David's receipt of the tax exemption as long as David is employed by, and Deanna remains in school at MEA.

In In re Marriage of Simms (1994), 264 Mont. 317, 326, 871 P.2d 899, 904, we held that district courts should enforce parties' in-court stipulations and agreements to the extent possible and consistent with the court's primary duty to apply the appropriate statutory criteria.

Based on the reasoning set forth in that decision, and the parties' apparent agreement regarding the best use of the tax exemption for...