Williams v. Budke

No. 14811
IN THE SUPREME COURT OF THE STATE OF MONTANA
1979
CARLEE BUDKE WILLIAMS,
Plaintiff and Appellant,
-vs-
ROBERT BUDKE ,
Defendant and Respondent.
Appeal from: District Court of the Fourth Judicial District,
Honorable James B. Wheelis, Judge presiding.
Counsel of Record:
For Appellant:
Williams Law Firm, Missoula, Montana
Richard Ranney argued, Missoula, Montana
For Respondent:
Garlington, Lohn and Robinson, Missoula, Montana
Larry E. Riley argued, Missoula, Montana
Submitted: September 18, 1979
Decided : &I c
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Filed: -c
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Mr. Justice John C. Sheehy delivered the Opinion of the Court.
Carlee Budke Williams appeals from an order denying her
motion to show cause why Robert Budke should not be adjudged
guilty of contempt for failure to pay child support in
accordance with a marriage dissolution decree and from a
modification of th2 dissolution decree. The order was
entered by the District Court, Fourth Judicial District,
Ravalli County.
Budke and Williams were formerly husband and wife.
Their marriage was dissolved in May 1973. Under the dissolution
decree, the wife was given custody of the parties' three
minor children. Husband was to pay $50 per month in maintenance
and $300 per month in child support. Husband was also to
provide adequate medical and hospital insurance for the
minor children and to pay their necessary dental bills.
Husband made child support payments through July 7,
1975, at which time he was $1,050 in arrears. After July
1975, the husband stopped paying child support to the Clerk
of the Court although he did give cash and other personalty
worth $970 directly to the minor children.
In April 1975, the husband became seriously ill. He
lost 45 pounds in four months, was hospitalized in August,
had open-heart surgery that same month and was rehospitalized
in December. Upon the advice of his doctors, husband, an
accountant, worked only two or three hours a day from August
1975 until the income tax season began in December 1975. He
worked fulltine during that season before returning to his
two or three hours per day schedule.
Husband's income in 1977 was $13,636. His income
increased in 1978, and husband expects his income will
continue to increase in the years to follow.
As of November 30, 1978, husband owed $14,872.55 in medical
bills. He owns no real property, has no savings account and
cannot get medical or life insurance because of his health.
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Wife's maintenance payments were terminated in June
1975 when she remarried. She separated from her second
husband in August 1976 and has received no financial assistance
from him. Wife presently works for a flooring company where
her net income is about $650 per month. Wife and the
three minor children live with and receive financial assistance
from the wife's mother.
At the show cause hearing, husband moved for a modification
of his child support obligation. The District Court found
husband financially unable to pay $300 per month child
support. The District Court modified husband's future child
monthly support obligations to a total of $150, until January
1, 1980, when the total increases to $225, and increases to
$300 on January 1, 1981.
The District Court also found husband delinquent in
accrued child support payments in the principal amount of
$9,080 as of December 20, 1978. Husband was given credit
for $3,600 received by the wife upon a prior execution on
husband's property and $970 for payments made directly to
the minor children.
In addition, the District Court established a deferred
payment schedule for husband's delinquent child support
obligations. Effective November 18, 1982, husband is to pay
$150 per month to be credited toward the delinquent child
support. Starting in October 1984, such payments are to be
increased to $300 per month, and if the delinquent child
support is not paid in full by February 1987, husband's monthly
payments are to be increased to $500 per month. The Court
also ordered that husband does not have to pay any interest
on the delinquent child support.
Wife raises three issues upon this appeal:
1. Was it error to grant husband credit for $970 spent
directly on behalf of the minor children?
2. Was it error not to hold the delinquent child support
payable immediately and subject to enforcement by execution?
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3. Was it error not to award interest on the delinquent
child support?
As to the first assignment of error, we hold it was
improper to grant husband credit for $970 spent directly on
behalf of the minor children.
Two Montana decisions have addressed the issue of
whether a parent upon whom a child support obligation rests
should be granted credit for voluntary expenditures made in
a manner other than that specified in the support order or
dissolution decree. Haaby v. Haaby (1974), 165 Mont. 475,
529 P.2d 1387; Weber v. Weber (1978), Mont . , 576
P.2d 1102, 35 St.Rep. 309. However, after examining the case
law of this and other jurisdictions we have found the basic
question addressed by the courts is whether there has been
substantial compliance, in whole or in part, with the child
support order. Was the spirit and purpose of the support
order accomplished without violating any other provision of
the dissolution decree? We believe this is the correct
approach to the issue.
Under the facts before us, we find that husband has not
substantially complied with the child support order. The
manner in which child support is to be used is left to the
discretion of the custodial parent, wife here. Young V.
Williams (Alaska 1978), 583 P.2d 201, 203. By granting husband
credit for the $970 spent directly on behalf of the minor
children, we would be allowing husband to substitute his own
judgment for that of the wife as to how child support monies
are to be spent.
The second issue relates to the deferred payment schedule
for husband's delinquent child support payments as ordered by the
District Court.
We appreciate the effort of the District Court to take
cognizance of the financial condition of husband in establishing
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the deferred schedule. However, the result, as the court
ordered it, is to modify the judgment previously entered in
the District Court as to the accrued child support payments.
This action of the District Court is oppugnant to a controlling
statute. Section 40-4-208(1), MCA states:
". . . a decree may be modified by a court as
to maintenance or support only as to installments
accruing subsequent to the motion for modification."
There can be no doubt that the District Court modified the
judgment for accrued child support payments, and modified it
retroactively.
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". . 'modification' has been defined as 'A change;
an alteration which introduces new elements into
the details, or cancels some of them, but leaves the
general purpose and effect of the subject matter intact
. . .'" Webb v. Finger Contract Supply Company (Tex.
1969), 447 S.W. 906, 908.
The Webb holding foregoing related to modification by
subordination of security as against a guarantor, but what the
court said in Webb has pertinence here:
". ..
It has been said that 'The power to modify
anything does not imply a power to substitute
a thing entirely different, and it does not
.
defer the power to destroy'. . " (Citing
cases.) 447 S.W.2d at 908.
In Dahl v. Dahl (1978), Mont . , 577 P.2d 1230,
1232, 35 St.Rep. 536, we pointed to the same statute (formerly
section 48-330 (1), R.C.M. 1947) to the effect that a divorce
decree cannot be modified to cancel past due and unpaid child
support.
In Porter v. Porter (1970), 155 Mont. 451, 473 P.2d 538,
this Court agreed with a general rule that the power to modify
decrees allowing alimony has no retrospective effect, and such
power extends only to future installments and not to alimony
already accrued. The Court took the same position in Kelly
v. Kelly (1945), 117 Mont. 239, 157 P.2d 780.
In Scarlett v. Scarlett (Calif. 19571, 311 P.2d 188,
the California Court faced nearly the same situation as
here. The trial court had ordered the husband to pay the
accrued arrearages at the rate of $10 per month, and reduced
the child support which had been granted in the decree. The
Supreme Court reversed, saying:
'I. . . it is well established that while under
proper circumstances the Court has the power
to modify a decree as to payments to be made
prospectively, but it cannot give its order of
modification a retroactive effect so as to
modify the amount which has theretofore accrued.
(Citing cases.). . ." 311 P.2d at 189-190.
In Wade v. Wade (Okla. 1977), 570 P.2d 337, 339, where the
lower court has provided for installment payments of arrearages,
the Oklahoma Court said:
"The order giving a judgment for $985.00 for delinquent
support and providing for its payment in installments
is likewise error. Generally there could be no
judgment payable in installments with certain notable
exceptions such as child support and alimony payments
in a divorce decree. A judgment for support arrearages
--- under that exception. Delinquent support
does not fall
payments must be computed and judgment entered for
that amount. Providing the manner in which the judgment
is to be collected amounts to an impermissible retroactive
modification of the decree (citing cases). In addition
such an order limits Carolyn's right to pursue statutory
provisional remedies to collect a judgment. These remedies
are inherent in the judgment itself." (Emphasis added;
footnotes 9mitted.j
In Talbot v. Talbot (Colo. 1964), 394 P.2d 607, the Colorado
Court said:
.
". . in Colorado each installment of child support
maturing under a decree which has not been modified
becomes a judgment debt similar to any other judgment
for money and retroactive modifications thereof cannot
be effected (citing cases). . ." 394 P.2d at 610.
The foregoing cases reflect what amounts to almost universal
law. Its rule applies in Montana under our case law and the
statute cited, section 40-4-208(1), MCA.
The wife correctly contends that the order of the District
Court deferring payments took away her right to levy execution
for the accrued payments if property could be found in the
possession of the husband which could be applied to the
arrearages. Our holding here keeps in force the rights that
every holder of a judgment for support in a dissolution of
marriage has:
". .. There are various means of enforcing orders
directing the payment of support money in actions
for divorce. The most common are: (a) By requiring
the husband to give security for the enforcement of
the payments ordered (citing a statute and a case);
(b) by contempt proceedings (citing cases) ; (c) by
execution, as in the case of other money judgments
(citing the authority) and (d) by invoking the
police power of the state to punish the parent for
wilfully failing, refusing or neglecting to support
his child (citing authority)." State v. District
Court (1948), 122 Mont. 61, 72, 198 P.2d 761, 767.
Moreover, our holding here does not mean that a District
Court is entirely without power to arrange a deferred schedule
for arrearages and support payments. In this case, the
husband was brought before the District Court on a motion
that he be held in contempt for failing to make the back
payments. The Court determined that he was without the
resources to make the back payments and therefore was not
guilty of contempt. State v. District Court of Third Judicial
Dist. (1938), 107 Mont. 185, 81 P.2d 692. The Court also
determined in this case that the husband would in the future
be able to make payments on those arrearages beginning on
November 18, 1982. The District Court always has jurisdiction
in contempt proceedings for the purpose of enforcing a support
money decree, to find the defaulting party in contempt, and
to stay the execution of punishment for the contempt upon
the proviso that the defaulting party purge himself by
making payments in accordance with a schedule established by
the District Court. We so stated in State v. District
Court, supra, 122 Mont. at 74, 75, 198 P.2d at 768.
However, the deferral schedule adopted by the District
Court here, without reference to contempt, constituted a
modification of a judgment for accrued payments. This
cannot be done.
The remaining issue raised by the wife is that the
District Court was incorrect in providing that the deferred
payments on the accrued amounts due her under the judgment
should not bear interest.
The statute respecting interest on judgments that was
in effect at the time of the original decree (May 18, 1973)
but not on the date of the modification of the decree (March 2,
1979), was section 47-128, R.C.M. 1947. That statute provided:
". .. Interest is payable on judgments recovered in
the courts of this State at the rate of six per cent
per annum, and no greater rate, but such interest
must not be compounded in any manner or form."
Section 47-128, was amended in 1979, and recodified as
section 25-9-205, MCA, and now provides in pertinent part:
.
". . interest is payable on judgments
recovered in the courts of this state at the
rate of 10% per annum and no greater rate. Such
interest must not be compounded in any manner
or form. "
Husband does not agree that the foregoing statutory
provisions apply to decrees for maintenance and support monies
payable in installments in marital dissolution cases. Instead,
he contends that section 25-9-204, MCA, is controlling:
"The clerk must include in the judgment entered
up by him any interest on the verdict or
decision of the court, from the time it was
rendered or made."
Husband contends that the first of the above quoted
statutes only states the rate of interest to be charged when
the.Court imposes interest, and the clerk may only charge
interest under section 25-9-204, MCA, in the absence of
specific directives from the Court.
The contention is novel. If we were to agree, it would
jeopardize the right of any judgment creditor to collect interest
on his judgment, in every case where a money judgment is obtained,
and not only in marital dissolution actions. However, the
rule contended for by the husband is not the true rule. While
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Montana has never held directly in a divorce action that
interest is collectible on an overdue support or money payment,
we said so indirectly with respect to a property settlement
payment that was overdue in Rodgers v. Rodgers (1976), 169 Mont.
403, 548 P.2d 141.
In Howard v. Howard (Cal.App. 1956), 298 P.2d 48, it was
held that where the judgment was silent as to interest, the
allowance of interest on a money judgment for an attorney fee
was automatically established by law. In Harden v. Harden (Okla.
1942), 130 P.2d 311, it was held that a judgment for alimony is
as much a "debt" as any other judgment for money, and without
a specific provision for interest in the judgment, a past due
installment draws interest at the legal rate.
We hold therefore that when the marital dissolution decree
is silent as to interest, such interest is automatically
collectible by the judgment creditor spouse on past due
payments for support money or maintenance, the same as any
other money judgment under section 25-9-205, MCA.
This is not to say that the Court may not, in its original
decree, provide that interest shall not be payable as to a part
of its award. Circumstances may exist when it would be inequitable
to award interest, particularly in cases involving property
settlement agreements, where the property division to one of
the spouses requires installment payments. Thus, as appellant
points out, in In Re Marriage of Brown (1978), - Mon t . , 587
P.2d 361, 35 St.Rep. 1733, we suggested to the ~istrictCourt,
in remanding a decision to the District Court, that the wife's
payments could be made in installments without interest. Such
a provision may often be necessary where the spouse having to
make the payments under the dissolution decree is possessed of
nonliquid assets, and the reason for the installment payments
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arises from the character of the property, rather than the
availability of monies. See for example, Griffin and Griffin
(0re.App. 1978), 579 P.2d 885; Martin v. Martin (Okla. 1960),
out
350 P.2d 270. We poindhowever, that in the State of Washington
it was held in Ovens v. Ovens (1962), 376 P.2d 839, where in
lieu of $6,500 property award in a divorce action a divorced
wife received a lien in such sum on the husband's realty, it
was held to be an abuse of discretion to allow husband to have
the use of the wife's award without interest, in the absence
of a sound reason stated by the trial court.
A further reason exists for upholding the right of the
wife to receive interest on the past due installments in this
case. Since the original decree was silent as to interest,
she is entitled to receive interest on the past due installments.
The action of the District Court providing for no interest
in a subsequent order is in effect a modification of the first
judgment, which again is impermissible under section 40-4-208(1),
MCA .
The wife does not appeal from the modification by the
District Court of the prospective payments for child support.
On that point, the District Court order is correct.
The cause is reversed and remanded with instructions to
the District Court to redetermine the past due amounts owing to
the wife under this Opinion and for such other orders as are
necessary to bring its decision of March 2, 1979 into conformance
with this Opinion. Costs to wife. We leave it,to the District
Court to determine whether further attorney fees should be awarded
to the wife.
Justice
We Concur:
Chief Justice