In Re the Marriage of Conkey

NO. 94-429
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
Respondent and Appellant.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Larry W. Moran, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Todd R. Hillier, Schraudner & Hillier,
Bozeman, Montana
For Respondent:
Lynda S. Weaver, Morrow, Sedivy & Bennett,
Bozeman, Montana
Submitted on Briefs: December 22, 1994
Decided: March 7, 1995
Filed:
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Raymond Paunovich moved the Eighteenth Judicial District
court, Gallatin County, to modify his child support obligation.
The District Court denied his motion and awarded Melody Conkey,
formerly known as Melody Paunovich, attorney fees and costs.
Raymond appeals. We affirm and remand for determination of
attorney fees and costs.
We frame the issues on appeal as follows:
1. Did the District Court abuse its discretion by not
modifying Raymond's child support obligation?
2. Was the District Court's award of attorney fees and costs
to Melody supported by substantial evidence?
Melody and Raymond were married on October 4, 1976. Two
children were born of the marriage. Melody petitioned for
dissolution of the marriage on April 8, 1991. Following trial, the
District Court issued findings of fact and conclusions of law on
January 17, 1992, which Melody moved to amend. Melody asserted,
along with other issues that are not before this Court, that the
January 17 findings and conclusions did not provide for child
support. The District Court conducted a hearing on the motion on
January 29, and on February 5, the District Court entered an order
voiding its January 17 findings and conclusions. The court issued
revised findings and conclusions on February 20, and its final
decree on February 24.
The February 20 findings and conclusions required the parties
to file child support determination worksheets by April 1, 1992.
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On November 4, 1992, the District Court ordered Raymond to pay
Melody child support in the amount of $276.62 per month,
retroactive to April 1, 1992.
Raymond made child support payments until April 1993. On
June 30, 1993, he filed combined motions to modify child support,
clarify the final decree, and allow the transfer of property to
satisfy the judgment pertaining to the division of the marital
estate. In his supporting affidavit, Raymond stated
[t]hat substantial and continuing changes have occurred
in [his] financial and employment status since the court
order determining child support was issued . . . which
directly affect [his] ability to pay the amount of
support so ordered and/or to make any more payments on
the property distribution amount decreed by the court
back in February of 1992.
Melody filed a motion for contempt against Raymond on
September 2, 1993, on the grounds that he had failed to pay child
support and court-ordered monthly property distribution payments
since April 1993. The District Court issued an order to Raymond to
appear and show cause why he should not be held in contempt. On
October 21, 1993, the show cause hearing took place. Raymond's
attorney stated that Raymond had filed for bankruptcy, and the
court stated that it would reset the hearing at a later date.
The parties conducted extensive discovery, and the hearing on
Raymond's motion to modify child support was held on January 5,
1994. Following the hearing, both parties submitted proposed
findings and conclusions. On May 26, 1994, the District Court
issued findings and conclusions denying Raymond's motion to modify
child support and ordering him to pay all arrearages. The court
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further determined that Raymond should pay Melody's attorney fees
and costs, and stated that a hearing on the matter would be held at
a later date.
A hearing to determine attorney fees and costs was held on
June 20, 1994. The District Court received testimony concerning
Melody's attorney fees and costs. The court entered judgment on
June 20, 1994, awarding Melody $3805.66 for past-due child support
and interest, $229.90 for costs, and $2882.50 for attorney fees.
Notice of entry of judgment was filed on June 27. Raymond filed
notice of appeal on July 22.
Raymond and Melody each filed briefs in this Court. On
November 22, 1994, Raymond moved this Court to strike "any and all
references contained in Respondent's Answer Brief . . pertaining
to matters outside the record and which occurred subsequent to the
date of the trial (January 5, 1994) from which this appeal is
taken." Raymond specifically complains that Appendix G of Melody's
brief on appeal and references to the bankruptcy court proceedings
should be stricken. An examination of the record shows that the
documents and references which Raymond objects to are part of the
record on appeal. Therefore, his motion to strike is denied.
ISSUE 1
Did the District Court abuse its discretion by not modifying
Raymond's child support obligation?
Raymond argues that, because he filed bankruptcy, allegedly
has no assets, and allegedly is unemployed, the District Court
should have modified his child support obligation. Before a child
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support obligation can be modified, 5 40-4-208(2) (b), MCA, requires
the moving party to establish that there are changed circumstances
so substantial and continuing as to make the terms of the existing
child support agreement unconscionable. In re Marriage of Clyatt
(Mont. 1994), 882 P.2d 503, 505, 51 St. Rep. 997, 998; In re
Marriage of Craib & Rhodes (Mont. 19941, 880 P.2d 1379, 1384, 51
St. Rep. 937, 940.
In reviewing the district court's findings in child support
modification cases, a presumption exists in favor of the district
court's decision, and we will overturn the decision only if the
district court abused its discretion. Craib & Rhodes, 880 P.Zd at
1384; In re Marriage of Platt (Mont. 1994), 881 P.2d 634, 635, 51
St. Rep. 926, 927; Clyatt, 882 P.2d at 505; In re Marriage of Long
(Mont. 1994), 885 P.2d 533, 534, 51 St. Rep. 1252, 1253.
In this case, the District Court found that:
The evidence is insufficient to establish changed
circumstances warranting modification of child support as
[Raymond] has requested. [Raymond] testified that his
circumstances are essentially the same as at the time of
dissolution, i.e., his work situation varies in that
there are times when he is under contract earning a
substantial income, and there are times when he is not
earning income because he is soliciting new proposals for
production. This Court determined in the dissolution
action that Mr. Paunovich is capable of earning
substantial income and he remains capable of earn,ing
substantial income at the present time.
During the January 5, 1994, hearing, Raymond testified that he
stopped making child support payments after April 1993 because he
had sold the parties' house, was unemployed, and had "a lot of
debts" to pay. After selling the house, he paid off a $24,000 note
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held by the Stock Grower's State Bank and over $21,000 in credit
card bills. He testified that he chose to pay off these debts and
not his debts to Melody, and that after doing so, he "didn't have
any future work available or lined up" from which to make child
support payments. Additionally, he stated that he incurred monthly
expenses of about $6768.46
Raymond testified that he was unemployed from October 1991
until February 1992. In February 1992, he entered into a contract
with Busch Productions to make a film about bears. The contract
provided that "Ray Paunovich, d/b/a The Natural Image Films" would
receive $6500 per month. Raymond stated that Busch Productions did
in fact pay him and his film company $6500 a month.
Raymond testified on cross-examination that he never contacted
the court to amend his child support guideline worksheets, which
were submitted in 1991 when he was unemployed, to reflect his
employment with Busch Productions in 1992. The following exchange
took place during the hearing:
[BY MELODY'S ATTORNEY]
Q. And at no time after [February 19921 until today have
YOU informed the Court that you had obtained that
contract; isn't that correct?
A. That's correct.
Q. And in fact, you filed several affidavits with this
Court, the first of which was filed on behalf of yourself
on November 2, 1992 . . . do you recall that?
A. Correct.
Q. And in your affidavit, you stated that "The evidence
does not indicate that I earn $54,000 per year; rather
the evidence indicates that I earn $18,000 per year." Do
you recallstatingthat andsigningthat in your affidavit?
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A. Correct.
. . . .
Q. And you did not at that time disclose to the Court
you had current income at a much higher level, did you?
A. Was I supposed to?
Q. I'm asking the question. Did you disclose it?
A. I did not.
Raymond testified that his actual income during 1992 was about
$31,000, consisting of $18,150 in wages and an additional amount of
$13,000. He claimed that his contract with Busch Productions ended
in late fall 1992 and that in January 1993 he sold his equipment to
Busch Productions for $28,000. Melody disputed both of these
claims.
Both attorneys questioned Raymond regarding his contract with
Busch Productions. In response to his attorney's question whether
he was earning any money in 1993, Raymond stated, "I have been
unemployed all year." On cross-examination, however, he testified
that, in conjunction with Busch Productions, he continued to work
on the project and attempted to develop alternative sources of
financing for the film. Melody's attorney introduced evidence
which showed that from May to August 1993, Raymond processed and/or
workprinted approximately 7600 feet of film on behalf of Busch
Productions. Raymond testified that he obtained the film from
Busch Productions and that he used the camera equipment and editing
table which he allegedly sold to Busch Productions. According to
Raymond, Busch Productions did not "want to spend any more money or
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put up any more of the budget to finish the project," however, "if
there were certain expenses that were attributable to this, [Busch
Productions] would reimburse me for those costs and we would work
together on trying to get the financing."
Melody's attorney also introduced into evidence Raymond's bank
account statements from 1993 which showed deposits as follows:
First Western Federal Total
Month Citizens Acct. l/Acct. 2 Deposits
January $5094 $ 3700 $ 0 $ 8794
February 6231 2720 85 9036
March 6000 6940 85 13,025
April 7050 62,456 170 69,676
May 2000 7834 10,000 19,834
June 3500 3744 85 7329
July 0 2769 85 2854
August 827 3900 4727
TOTAL $30,702 $94,063 $135;275
Only $62,000 of Raymond's total deposits was attributable to the
sale of the parties' house.
Melody's attorney also questioned Raymond regarding the
alleged sale of his equipment to Busch Productions. According to
Raymond, Busch Productions "took possession of [the equipment] when
they bought it.~' However, when Melody's attorney asked during the
hearing whether Busch Productions currently had physical possession
of the equipment, Raymond stated that he still had physical
possession of some it. Raymond also testified that during 1993, he
used the equipment for filming and editing. When asked whether he
got a release of his financing statement from the Stock Grower's
State Bank, to whom the equipment had been pledged as collateral on
a note, Raymond stated that he could not recall, and then he stated
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that he did not communicate with Stock Grower's at all regarding
the sale of the equipment. Melody's attorney asked Raymond whether
a bill of sale or acknowledgment of receipt was ever executed by a
representative of Busch Productions. Raymond stated that he could
not recall.
Melody's attorney asked Raymond if he anticipated eventually
getting his money back and making a profit on the bear film
project. Raymond answered:
A. I will not get my money back, but I hope that we
will get the financing so I can at least get employed
again. That's part of being an independent producer, is
you have to risk a lot of capital to get income.
Q. You anticipate getting that back?
A. I always anticipate that. M Y whole life is
anticipation. Nothing that is being an independent
producer is guaranteed. Everything that you do is done
on anticipation. You hope somebody likes your concept
and idea and will finance it.
Q. That was true in 1992; isn't that true?
A. This has been true ever since I have been working.
Q. It hasn't changed a bit since you testified in trial
in 1992?
A. What hasn't changed?
Q. The fact that there are highs and lows in your
industry and sometimes you have highs and sometimes you
have zero.
A. That's correct.
Based on the foregoing testimony and evidence, it is clear
that Raymond failed to demonstrate a change in circumstances so
substantial and continuing to make the terms of the existing child
support agreement unconscionable. We determine that the District
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Court did not abuse its discretion by refusing to modify Raymond's
child support obligation.
ISSUE 2
Was the District Court's award of attorney fees and costs to
Melody supported by substantial evidence?
Section 40-4-110, MCA, provides district courts with the
discretion to award attorney fees and costs in certain domestic
relation matters. In re Marriage of Malquist (Mont. 1994), 880
P.2d 1357, 1361, 51 St. Rep. 914, 917. That statute provides:
The court from time to time, after considering the
financial resources of both parties, may order a party to
pay a reasonable amount for the cost to the other party
of maintaining or defending any proceeding under chapters
1 and 4 of this title and for attorney's fees, including
sums for legal services rendered and costs incurred prior
to the commencement of the proceeding or after entry of
judgment. The court may order that the amount be paid
directly to the attorney, who may enforce the order in
his name.
Section 40-4-110, MCA.
In Maluuist, we held that
before a court awards attorney fees under the statute,
the petitioning party must make a showing of necessity.
In addition, the award must be reasonable and must be
based on competent evidence. To make a showing of
reasonableness a hearing must be held allowing for oral
testimony, the introduction of exhibits, and the
opportunity to cross-examine. If the award of attorney
fees is supported by substantial evidence, we will not
reverse the award upon appeal.
Malauist, 880 P.2d at 1362 (citations omitted).
In the instant case, Melody's attorney filed affidavits of
attorney fees on June 2, 1994, and June 15, 1994, and a hearing was
held on June 20, 1994. Counsel for both parties were present at
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the hearing. Melody's attorney moved for entry of judgment for
back child support and attorney fees. The record shows that
Raymond's attorney stated that he had no objection to the motion.
The District Court, therefore, entered judgment.
The requirements set forth in Malouist clearly were met in
this case. The record contains substantial evidence supporting the
District Court's award of attorney fees to Melody.
Melody further requests that this Court award her attorney
fees and costs for defending this appeal. Section 40-4-110, MCA,
allows the recovery of attorney fees incurred after entry of
judgment by the district court, including attorney fees incurred in
defending an appeal. We, therefore, award the respondent her
attorney fees and costs on appeal and remand to the District Court
for determination of the amount to be awarded.
Affirmed and remanded.
We concur: