Pursley v. Pursley, No. 2001-SC-0936-DG.

• Decision Date: 23 September 2004
• Docket Number: No. 2001-SC-0936-DG.
• Citation: 144 S.W.3d 820
• Parties: Sammye Sharen Walden PURSLEY, Appellant, v. William Hoyne PURSLEY, Appellee.
• Court: United States State Supreme Court — District of Kentucky

144 S.W.3d 820

Sammye Sharen Walden PURSLEY, Appellant, v. William Hoyne PURSLEY, Appellee.

No. 2001-SC-0936-DG.

Supreme Court of Kentucky.

September 23, 2004.

Appeal from the Circuit Court, Logan County.

David Lewis Williams, Burkesville, Counsel for Appellant.

B. Mark Mulloy, Louisville, Counsel for Appellee.

KELLER, Justice.

I. ISSUES

Under the parties' Settlement Agreement ("Agreement"), William Hoyne Pursley ("William Pursley") agreed to pay child support greatly in excess of the Kentucky Child Support Guidelines and of his children's reasonable needs. For that reason alone, the Court of Appeals held that the Agreement's child support provisions were unconscionable. Are child support provisions in a settlement agreement unconscionable solely because they require support greatly in excess of the Guidelines or the children's reasonable needs? Because we hold that parents may agree to provide child support beyond their legal obligations, we reverse the Court of Appeals and uphold the trial court's finding that the Agreement's child support provisions are not unconscionable and, thus, enforceable.

The trial court ruled that Sammye Sharen Walden Pursley ("Sharen Pursley") is not entitled to prejudgment interest on child support and maintenance arrearages owed by William Pursley. The Court of Appeals agreed, ruling that the trial court acted within its discretion in denying prejudgment interest. Was the allowance of interest on the arrearages within the discretion of the trial court? Because we hold that prejudgment interest on child support and maintenance payments accrues from the day each payment becomes due under the Agreement or under the trial court's temporary support and maintenance order-making the award of interest not discretionary-we reverse the Court of Appeals and remand to the trial court with directions to award interest on the arrearages.

II. BACKGROUND

In 1991, William Pursley filed a petition for dissolution of his marriage to Sharen Pursley. With the assistance of a lawyer, William and Sharen Pursley ("the Pursleys") negotiated an agreement settling the disposition of their property, maintenance, custody of their two children, support, and visitation. The trial court incorporated the Pursleys' Agreement into a decree of dissolution entered later that year. Under the Agreement, Sharen Pursley was awarded custody of the parties' children, and William Pursley agreed to pay "30% of all of his income from his salary and bonuses as evidenced by his federal income tax return ... as child support for the minor children of the parties." The payments for the children would continue until such time as they turned eighteen (18) or graduated from college or graduate school, whichever was latest. He also agreed to pay the cost of undergraduate and graduate educations for the children at any school that they may choose in the United States. Additionally he agreed to maintain the children's medical and health insurance and to pay any medical and dental expenses not paid by insurance. The Agreement also provided that William Pursley would pay 10% of his income as maintenance to Sharen Pursley for life, unless she remarried. The Agreement stated that the total of William Pursley's salary and bonus at that time was $135,000.00 and that child support would be "30% of the net proceeds."

William Pursley made some payments in accordance with the Agreement. In 1992, however, Sharen Pursley sought relief from the trial court for William Pursley's failure to pay child support and maintenance due under the Agreement. In 1993 and obviously in response to Sharen Pursley's efforts to enforce the payment of child support and maintenance, William Pursley challenged the validity of the Agreement on the grounds that the trial court did not have jurisdiction when it entered the decree because neither of the parties had lived in the Commonwealth for 180 days prior to its entry.¹ This issue was not resolved until 1996 when the trial court, having decided it had lacked jurisdiction to enter the decree in 1991,² voided the decree³ and entered a decree nunc pro tunc as of May 1992, reasoning that the jurisdiction requirement had been satisfied by that date.⁴

In the interim, William Pursley sporadically complied with his support obligations under the Agreement and Sharen Pursley continued to pursue enforcement proceedings. In 1995, the trial court entered a temporary maintenance and support order directing him to pay $1,600.00 per month (support of $1,200.00 and maintenance of $400.00). William Pursley also failed to fully comply with the temporary order. The trial court dismissed the case in 1998 for inactivity the previous year, but reinstated it at Sharen Pursley's request later in 1998.

The matter finally proceeded to trial in the summer of 1999, and the trial court found that the Agreement was not unconscionable and, therefore, enforceable. In later proceedings, the trial court found that William Pursley was in arrears in his child support and maintenance payments in the amount of $348,535.86 (a calculation based on his net income from his tax returns), but that the arrearages would bear postjudgment interest only.

Although the Court of Appeals agreed with the trial court that the arrearages should only bear postjudgment interest, it found that the child support provisions of the Agreement were unconscionable. We disagree. We uphold the trial court's finding that the Agreement is conscionable, but we also hold that the award of interest was not within the trial court's discretion. Accordingly, we reverse the Court of Appeals.

III. ANALYSIS

A. Separation Agreement

In 1991, when the trial court first entered the decree dissolving the parties' marriage, William Pursley did not contest the conscionability of the Agreement and the trial court made a perfunctory finding that the Agreement was "not unconscionable." But the trial court set aside this finding when it later voided the 1991 decree. When William Pursley contested the conscionability of the Agreement, the trial court, after considering depositions and other evidence, including the testimony of the lawyer who prepared the Agreement, made extensive findings of fact and concluded that the Agreement was "not unconscionable." The trial court's findings show that it was familiar with the parties' economic circumstances, and in support of its conclusion, the trial court noted (1) that William Pursley is "an educated and sophisticated businessman who had the strong desire to meet his moral and legal obligations to his wife and children"; (2) that the lawyer assisting the Pursleys "explained to [William Pursley] that ... child support ... [was] beyond what would be required by law"; (3) that the Agreement was the result of negotiations that "spanned some three weeks during which [William Pursley] insisted on deletion of some proposed provisions"; (4) that his decision was not the result of fraud, coercion, or overreaching; and (5) that the terms of the Agreement are not "manifestly unfair and unreasonable." The trial court ruled that William Pursley had the burden "to show that [the Agreement] was unconscionable," and "[a]bsent such proof the [A]greement must be upheld." The trial court found that William Pursley's proof was insufficient to support a finding that the Agreement was manifestly unreasonable and unfair and, therefore, unconscionable.

Relying on Downing v. Downing,⁵ the Court of Appeals held that "any decision to set child support above the guidelines must be based primarily on the child's needs, as set out in specific supporting findings" by the trial court. It then "[found] that the amount and duration of child support under the agreement so greatly exceed[ed] the children's reasonable needs⁶ as to render the terms unconscionable[,]" and remanded the case "to the trial court with instructions to set child support anew based upon [Kentucky Child Support Guidelines]."⁷ We disagree both with the Court of Appeals's holding and with its finding of unconscionability.

The Agreement's child support provisions are not unconscionable just because the child support exceeds either the Guidelines or the children's reasonable needs. The Guidelines, themselves, allow parents to agree to child support in excess of the Guidelines.⁸ Additionally, we hold that a parent has a right to do more for his or her children than the law requires.⁹ And, even though a trial court is not independently empowered to award child support in excess of the Guidelines or a child's reasonable needs, it may do so when the parent knowingly agrees thereto.¹⁰ Here, William Pursley knew that his child support obligation under the Agreement was in excess of his legal obligation; thus, he knowingly agreed to child support beyond his children's needs and the Guidelines.

Like the Court of Appeals, William Pursley relies on Downing v. Downing¹¹ in support of his argument that the child support amount is beyond the children's needs and thus unreasonable. But he overlooks an important difference between the present case and Downing. Here, the parties set the amount of child support by agreement, and the trial court approved the Pursleys' Agreement only after finding that William Pursley knew the child support exceeded his legal obligation. In Downing, the court independently set child support. Essentially, Downing imposes limitations on the trial court when setting child support in cases where the parties' gross income exceeds the child support guidelines and the parties have not agreed to child support. Downing does not similarly restrict the parties when agreeing to child support. There is no public policy in this jurisdiction which prevents parents from being as generous to their children as they wish,¹² and when parents are determining child support, as opposed to the court, parents may agree to child support obligations that exceed their legal obligations. In recognition of this aspect of...