Nill v. Martin

• Decision Date: 27 October 1997
• Docket Number: No. 43S03-9611-CV-704,43S03-9611-CV-704
• Citation: 686 N.E.2d 116
• Parties: Mark Steven NILL, Appellant (Respondent Below), v. Karen (Nill) MARTIN, Appellee (Petitioner Below).
• Court: Indiana Supreme Court

Page 116

686 N.E.2d 116

Mark Steven NILL, Appellant (Respondent Below), v. Karen (Nill) MARTIN, Appellee (Petitioner Below).

No. 43S03-9611-CV-704.

Supreme Court of Indiana.

Oct. 27, 1997.

John O. Feighner, Fort Wayne, for Appellant.

Stephen P. Rothberg, Fort Wayne, for Appellee.

ON PETITION TO TRANSFER

SHEPARD, Chief Justice.

The Court of Appeals held in this case that divorced parents who agreed to child support payments different than those ordered in their decree of dissolution "substantially complied" with the decree. We hold that such agreements must be submitted for court approval before they can be given legal effect.

I. Facts

The marriage of appellant Mark Nill and appellee Karen (Nill) Martin ended in dissolution during October 1990. The trial court gave Karen Martin custody of the couple's three minor children, George, Bryan, and Daniel. It ordered Mark Nill to pay $2,100 per month for support of the three boys in what the Indiana Court of Appeals determined was an order in gross.

While visiting their father, all three boys were involved in a serious automobile accident on December 29, 1992. George and Bryan were injured severely enough to require medical treatment, and the youngest boy, Daniel, was killed.

In January 1993 Mark Nill made his usual $2,100 payment. Sometime in February 1993, Mark Nill talked to Karen Martin about reducing child support payments in the aftermath of Daniel's death. (R. at 152.) On his own initiative, he decreased the support payment to $1,500 for February 1993. (R. at 152-153, 205-06.) In March, Karen Martin's lawyer sent Mark Nill a letter agreeing to accept support of $1,677 per month. (R. at 152-153, 205-06.)

There is conflict in the record about when payment of the new support amount was to be effective. ¹ The new agreement was informal; it was not submitted for court action.

About a year later, on March 24, 1994, Karen Martin filed a petition to modify, later amended and supplemented. Karen Martin asked the court to order Mark Nill to contribute toward the college expenses of their eldest son Bryan, and to pay any child support arrearage. Mark Nill responded with his own petition for modification. He contended that Daniel's death was a change of circumstances which required a change in the support amount. He also sought a determination of responsibility for Bryan's college expenses.

The trial court issued a modified order which recognized that informal agreements modifying child support cannot alter the legal obligations of court decrees. It nevertheless found that "equity dictates that the court enforce and adopt this order" as though the court had previously approved it. (R. at 66.) It also disposed of other issues raised by the petitions of the parties.

Each side appealed. The Court of Appeals considered whether the trial court: 1) erred in giving legal effect to the parties' modification agreement, pertinent to computing Mark Nill's child support arrearage; 2) erred in ordering Mark Nill to pay both child support and college expenses; 3) erred in computing orthodontia expenses; and 4) erred in awarding Karen Martin attorney fees. Nill v. Martin, 666 N.E.2d 936, 937-38 (Ind.Ct.App.1996).

We grant transfer to consider the first issue: whether the trial court erred in finding that the original support order had been effectively modified by the couple's informal agreement. As to the remaining issues, we summarily affirm the Court of Appeals. Ind. Appellate Rule 11(B)(3).

II. Modification of Child Support

The Indiana Code provides that a court may modify a child support award, "only upon a showing of changed circumstances so substantial and continuing as to make the terms unreasonable." Ind.Code Ann. § 31-1-11.5-17(a)(1) (West Supp.1996). The Code explicitly limits retroactive modifications of delinquent support payments. Ind.Code Ann. 31-2-11-12(a) (West Supp.1996). These legislative policies concerning modification are described in our caselaw as follows:

It has long been the rule of this state that a noncustodial parent may not unilaterally reduce proportionately a support order in gross for several children but must make payments of support in the manner, amount and at times required by the support, at least until such order has been set aside.

In re Marriage of Baker, 550 N.E.2d 82, 87 (Ind.Ct.App.1990); Stitle v. Stitle, 245 Ind. 168, 182, 197 N.E.2d 174, 183 (1964).

Our law regards custodial parents who receive child support funds as trustees who hold the funds for the use and benefit of the child. Corbridge v. Corbridge, 230 Ind. 201, 102 N.E.2d 764 (1952). The custodial parent, as a constructive trustee, may not contract away the benefits of the trust. Grace v. Quigg, 150 Ind.App. 371, 379, 276 N.E.2d 594 (1971).

A corollary to this rule provides that once funds have accrued to a child's benefit under a court order, the court may not annul them in a subsequent proceeding. Zirkle v. Zirkle, 202 Ind. 129, 172 N.E. 192 (1930). This is true even with respect to the death of a child who is one of several children who are the beneficiaries of an order in gross. Kaplon v. Harris, 567 N.E.2d 1130 (Ind.1991).

In this case, the Court of Appeals correctly noted the foregoing rules. Nill, 666 N.E.2d 936, 938. It nevertheless affirmed the trial court's retroactive modification of support. Nill, 666 N.E.2d at 939. It cited three narrow situations in which credit for accrued support obligations has been allowed: 1) when support payments have been made by the obligated party even though the payments are technically non-conforming; 2) when the parties have agreed to and carried out an alternative method of payment which substantially complies with the spirit of the decree; and 3) when the obligated parent takes the child into his or her home, assumes custody, provides necessities, and exercises parental control for such a period of time that a permanent change of custody is demonstrated. ² The Court of Appeals held that Nill had substantially complied by paying through an agreed alternative method.

This holding confuses the method of payment with the amount of payment. It is true that credit has been allowed for payments that do not technically conform to the original support decree. For example, where the obligated parent makes payments directly to the custodial parent rather than through the clerk of the court, we have recognized these payments when there was sufficient proof to convince a trier of fact that the required payments were actually made. O'Neil v. O'Neil, 535 N.E.2d 523 (Ind.1989). We have also recognized "substantial compliance" where the parties agree to an alternative method of payment that comports with the spirit of the original decree. O'Neil, 535 N.E.2d at 524 (citing Payson v. Payson, 442 N.E.2d 1123, 1129 (Ind.Ct.App.1982)). In Payson, for example, the non-custodial father typically paid through the clerk but gave cash directly to the mother, by her agreement, during weeks when he missed the payments at the clerk's office. Id. at 1127, 1130.

By contrast, the informal arrangement between Mark Nill and Karen Martin reduced the actual amount of support below that ordered in the divorce decree. The new informal agreement thus did not "substantially comply with the spirit of the original support decree." O'Neil, 535 N.E.2d at 524.

The legislative and judicial policies against informal modification may work an occasional inequity, but the relatively bright-line rules are hardly without their benefits. If parties could effect legal modifications of child support through informal means, disputes over amounts and methods and effective dates would certainly multiply. Disagreements over such issues have led to expensive litigation in this case through three levels of courts. A bright-line rule limiting informal arrangements and effecting modifications only after the date a petition for modification is filed short-circuits many disputes. The time and money spent litigating informal agreements that later go awry could be well spent for the support of children. Compared to the cost of litigation such as that before us now, submitting for court approval an agreed order modifying is among the simplest of legal tasks. It is certainly within the capabilities of diligent laymen.

Judge Shields outlined the rationale for decisions which promote consistency and predictability in the law of child support in Whitman v. Whitman, 405 N.E.2d 608 (Ind.Ct.App.1980). In declining to give credit for non-conforming payments, she wrote:

One purpose of a rule of law is to provide, with a reasonable degree of certainty, a rule to which an individual can conform his conduct ... While we do not condemn or look askance at equity, nevertheless, in this particular area we feel predictability and certainty has superior merit. The obligated parent knows payment as ordered is required and any deviation can result in court censure. The parent receiving the support can reasonably plan and depend on the ordered support in fulfilling the awesome responsibility of providing day-to-day care and support for the child in his or her custody. Both parties know that if circumstances change, or any question arises concerning the use of support funds, or the necessity of the payment that the available remedy is through judicial review, as soon as possible.

Whitman, 405 at 613.

III. Conclusion

We remand this matter for a computation of the support owed by Mark Nill giving effect to the court's modification only from the date of the petition for modification. The trial court is otherwise affirmed.

DICKSON, SULLIVAN and SELBY, JJ., concur.

BOEHM, J., dissents with separate opinion.

BOEHM, Justice, dissenting.

I respectfully dissent. In this case it is clear that both the custodial parent and the non-custodial parent agreed that it was appropriate to reduce the overall support level as a result of the death of one of the three children. Death of a child, like emancipation, is...