Utah Dept. of Social Services v. Adams
| Decision Date | 13 February 1991 |
| Docket Number | No. 890690-CA,890690-CA |
| Citation | 806 P.2d 1193 |
| Parties | UTAH DEPT. OF SOCIAL SERVICES and Karen Adams, Plaintiffs and Appellants, v. Howard H. ADAMS, Defendant and Appellee. |
| Court | Utah Court of Appeals |
Scott W. Holt (argued), Layton, for defendant and appellee.
Before GARFF, JACKSON and ORME, JJ.
The Department of Social Services appeals an order of the district court approving what the Department regards as an "in-kind" support agreement between defendant Howard Adams and his former wife, Karen Adams, 1 and awarding attorney fees against the Department. We affirm and award defendant attorney fees incurred on appeal.
The Adamses were divorced in 1979. They had two minor children from the marriage. The divorce decree ordered defendant to pay $100 per month per child in child support. In mid-1988, Mrs. Adams and her two children began living in a home owned by defendant, the undisputed fair rental value of which was $350 per month. Defendant and Mrs. Adams entered into a written agreement providing Mrs. Adams applied for Aid to Families with Dependent Children through the Utah Department of Social Services in March 1989. She qualified for and began to receive public assistance, whereupon the Department succeeded to her right to receive child support payments. See Utah Code Ann. § 62A-9-121 (1989). Among the comprehensive material in support of her application, she provided the Department with a copy of the parties' agreement. It is unclear whether the Department evaluated her eligibility for assistance with reference to her receiving $200 a month or $350 a month from defendant. In any event, the Department registered no objection to or concern with the arrangement at that time and the parties continued to honor it. Some months later, the Department determined it was not bound by the arrangement, since the divorce decree had not been formally modified. The Department began a series of maneuvers to collect "unpaid" child support from defendant for the months during which the rental agreement relieved him of the need to pay cash support.
that defendant was relieved from physically paying the $200 per month in child support, in exchange for which Mrs. Adams and the children could live in the home rent-free. Not only did this simplify the accounting procedure between the parties, it also effectively provided Mrs. Adams and the children a substantial bonus in the value of support provided by defendant. This agreement was filed with the clerk of the court which originally granted the divorce, although no formal modification of the divorce decree was sought or entered at that time.
Defendant claimed he had more than fulfilled his support obligations through provision of the home, rent-free. He unsuccessfully attempted to resolve the dispute with an investigator from the Department. Defendant, when confronted with further enforcement action, obtained an order to show cause directed against the Department. Upon recommendation of the domestic relations commissioner and after two hearings before the court, the district court ordered the Department to recognize the validity of the rental agreement and to cease its efforts to collect the "arrearage" from defendant. The court found the Department had acted in bad faith in attempting to collect child support already paid, and in threatening garnishment of income and tax refunds, and ordered the Department to pay defendant's attorney fees and costs.
The Department asserts that the power to modify a decree of divorce rests solely with the courts, Utah Code Ann. § 30-3-5 (1990); Karren v. State Dept. of Social Servs., 716 P.2d 810, 813 (Utah 1986), and that the agreement between defendant and Mrs. Adams is void as a usurpation of that power. The Department also claims the agreement is violative of Utah Code Ann. § 62A-11-307.2(1)(d) (1989), which bars public assistance recipients from entering into agreements which relieve or settle child support obligations without the written consent of the Office of Recovery Services. 2 The Department claims that the agreement was therefore without legal effect, at least as against the Department, until incorporated into a modified decree by the court in proceedings to which it was a party. We agree that the power to modify a divorce decree is vested solely in the courts. Starks v. State Dept. of Social Servs., 750 P.2d 199, 200 (Utah Ct.App.1988). We take no issue with the Department's prerogatives where individuals set about to compromise or reduce support amounts on their own. However, we reject the Department's claim that the Adamses ran afoul of these doctrines.
Section 62A-11-307.2(1)(d) provides: "The [public assistance recipient] may not enter into any agreement with an obligor that relieves him of any duty or responsibility of support or purports to settle past, present, or future obligations either as settlement or prepayment without the office's Nothing in the rental agreement suggested that defendant was settling or being relieved of any support obligation. Quite the contrary, defendant voluntarily accepted a support level above what he was required to pay. The rental agreement is most fairly viewed as, first, a simple device for easing the accounting between defendant and Mrs. Adams, who would otherwise be obliged to swap checks monthly, and second, a commendable, voluntary undertaking on defendant's part to provide more than the required support to his children for an indefinite period of time, i.e., for so long as they lived in the home he provided. No modification of substantive obligations under the divorce decree occurred. Defendant was relieved of no support obligations; no support arrearage or future obligation was compromised.
written consent." 3 In its order, the trial court stated that "the agreement was a reasonable agreement and not an attempt to defraud [the Department] or avoid child support, the rental value [of the home] being equal or greater than the child support Defendant was required to pay." We agree. 4
The Department's curious position, as conceded at oral argument, is essentially that an arrangement whereby defendant wrote a $200 check to Mrs. Adams (or the Department) in fulfillment of his child support obligation, and Mrs. Adams in turn wrote a check to defendant for $350 in rent, would be satisfactory to the Department. Of course, if the Department prevailed in its position, Mrs. Adams and the children, absent further concession by defendant, would have $150 per month less on which to live, or would be required to live in less expensive and presumably less comfortable accommodations. Vindication of the bureaucratic urges for uniformity and adherence to "the rules" is not an adequate basis on which to premise such economic absurdity. In an area of the law where the "best interests of the children" doctrine properly drives most decisions, see, e.g., Hogge v. Hogge, 649 P.2d 51, 54 (Utah 1982); DeBry v. DeBry, 27 Utah 2d 337, 496 P.2d 92, 93-94 (1972); Curtis v. Curtis, 789 P.2d 717, 719 (Utah Ct.App.1990), it is perplexing that the Department persists in attempting to upset a workable and working arrangement which benefitted all concerned. 5
ATTORNEY FEES
Attorney fees are awarded to the prevailing party where an action is filed, or a defense is raised, without merit and in bad faith. Utah Code Ann. § 78-27-56 (1990). The district court awarded defendant $476 in attorney fees, stating in its conclusions of law that the Department acted in "bad faith from the beginning to the end." The court supported its conclusion with findings of fact, including that The Department challenges the court's findings and conclusions to the effect that it acted in bad faith in pursuing collection efforts against defendant and in pursuing its defenses in the order to show cause proceeding initiated by defendant. While we accord no particular deference to a trial court's conclusions of law, Kelson v. Salt Lake County, 784 P.2d 1152, 1154 (Utah 1989), a challenge to findings of fact must show that the evidence, viewed in a light most favorable to the trial court, is legally insufficient to support the contested finding. E.g., Scharf v. BMG Corp., 700 P.2d 1068, 1070 (Utah 1985); Turnbaugh v. Anderson, 793 P.2d 939, 941 (Utah Ct.App.1990). The challenging party must marshal all the supporting evidence and demonstrate its insufficiency. Id.
the Department notified defendant it was proceeding against his tax refund after the court had unequivocally indicated its
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