State Ex Rel. Tegegne v. Andalo

#27196-rev & rem-SLZ
2015 S.D. 57
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
STATE OF SOUTH DAKOTA,
EX REL., FATIMA K. TEGEGNE Plaintiff and Appellee,
v.
TADESSE M. ANDALO, Defendant and Appellant.
****
APPEAL FROM THE CIRCUIT COURT OF
THE SECOND JUDICIAL CIRCUIT
MINNEHAHA COUNTY, SOUTH DAKOTA
****
THE HONORABLE SUSAN M. SABERS
Judge
****
RICHARD L. JOHNSON
Sioux Falls, South Dakota Attorney for plaintiff
and appellee.
STEVEN K. RABUCK of
Nichols & Rabuck, PC
Sioux Falls, South Dakota Attorneys for defendant
and appellant.
****
CONSIDERED ON BRIEFS
ON MAY 26, 2015
OPINION FILED 07/01/15
#27196
ZINTER, Justice
[¶1.] Fatima Tegegne (Mother) brought an action against Tadesse Andalo
(Father) to establish Father’s child support obligation and to determine arrearages.
With respect to arrearages, a child support referee recommended that Father
receive a credit for mortgage payments as well as for food, clothing, and school
supplies Father had purchased for the children while he was absent from the home.
The circuit court adopted the recommendation in part and rejected it in part. The
court gave Father no credit for mortgage payments and food, but it allowed a credit
for clothing and school supplies. Father appeals the denial of credit for the
mortgage payments and food. We reverse and remand to accept the referee’s
recommendation.
Facts and Procedural History
[¶2.] Mother and Father lived together, had two children, but never
married. During the course of the relationship, Father made a down payment on a
house, and Mother and Father each paid one-half of the mortgage payments. After
they separated, Mother obtained physical custody of the children. Father obtained
his own housing and has been absent from the familial home ever since. Father,
however, continued to pay one-half of the mortgage payments. When the house was
later sold, Mother and Father divided the proceeds equally.
[¶3.] Mother subsequently brought this action to establish Father’s child
support obligation and to determine arrearages. The circuit court approved the
child support referee’s recommendation for future support in the full amount
required by the child support guidelines. That award has not been appealed.
-1-
#27196
[¶4.] Father’s appeal arises out of the circuit court’s rejection of the referee’s
recommendation that Father receive a credit for the mortgage payments and food
he allegedly provided when he was absent from the home. 1 In the proceedings
below, Father requested that he receive a credit for the mortgage payments as well
as for food, clothing, school supplies, and other items he provided the children after
the parties’ separation. Father testified and introduced bank statements, sales
receipts, and other documentation to support his request. Mother, however,
objected to a credit for the mortgage payments and food. 2 She contended that
Father had no right to a credit for mortgage payments, and she disputed that food
was provided to the children. She did agree that Father provided the other items
for the children.
[¶5.] The referee determined that Father’s child support arrearages for the
time he was absent from the home would have been $26,130 if the calculation were
made under the child support guidelines. The referee, however, determined that
Father should be given the credits he requested because his expenditures
constituted “maintenance, education, and support” of the children within the
meaning of the statute governing child support arrearages. See SDCL 25-7-6.1.
1. This matter was considered by the referee on two occasions. On the first
occasion, the referee recommended a credit for a number of things, including
the mortgage payments and food. The circuit court remanded for
reconsideration. The referee conducted a new evidentiary hearing and
affirmed his prior recommendation.
2. Mother also contended that any credit for the mortgage should be reduced by
the amount Father received from the sale of the house. However, Mother and
Father divided the proceeds of the sale equally. Additionally, Mother has not
pursued this argument on appeal. Therefore, we decline to address the issue.
-2-
#27196
And because the credits were greater than the scheduled child support, the referee
recommended that Father owed no arrearages. In making his recommendation, the
referee specifically found Mother’s assertion that Father never purchased food for
the children was not credible.
[¶6.] The circuit court rejected the referee’s recommended credit for the
mortgage payments. The court noted that Father was “financially bound to make
those mortgage payments due to a separate, binding financial obligation to which he
and [Mother], as non-married persons, had voluntarily agreed.” The court further
noted that Father received benefits from the mortgage payments because they
increased his equity in the house, which increased the amount of his proceeds from
the sale of the house.
[¶7.] The circuit court also rejected the referee’s recommended credit for
food purchases. The court relied on Mother’s general denial that Father provided
food. The circuit court concluded that the referee clearly erred in finding that
Mother’s testimony was not credible. The court did, however, allow Father a credit
for the school supplies, clothing, and other items that Mother did not dispute were
provided.
[¶8.] Thus, the court ordered Father to pay $23,165.68, the scheduled
amount of arrearages less a credit for the school supplies, clothing, and other items
that Mother agreed Father had purchased for the children ($26,130 scheduled
support – $2,964.32 credits = $23,165.68). Father appeals the circuit court’s
disallowance of mortgage payments (a credit of $25,517.97). Father also appeals
-3-
#27196
the court’s conclusion that the referee clearly erred in finding that Father
purchased food for the children (a credit of $2,241.08).
Decision
[¶9.] We generally “review the decision to grant or deny child support under
the abuse of discretion standard.” Kauth v. Bartlett, 2008 S.D. 20, ¶ 8, 746 N.W.2d
747, 750. However, “[w]hen reviewing a child support referee’s findings of fact, we
review for clear error, while conclusions of law are reviewed de novo.” Id. “Findings
are not reversed for clear error ‘unless we are left with a definite and firm
conviction a mistake has been made.’” Id. (quoting Wagner v. Wagner, 2006 S.D. 31,
¶ 5, 712 N.W.2d 653, 656).
Mortgage Payments
[¶10.] SDCL 25-7-6.1 obligates parents, who are absent from the home, to pay
child support for their children. If they fail to furnish “maintenance, education, and
support” for their children, they are obligated to pay the minimum amount required
by the child support guidelines. SDCL 25-7-6.1. 3 Thus, the question is the extent
to which Father, when absent from the home, failed to furnish “maintenance,
3. SDCL 25-7-6.1 provides in relevant part:
The parents of a child are jointly and severally obligated for the
necessary maintenance, education, and support of the child in
accordance with their respective means. Until established by a
court order, the minimum child support obligation of a parent
who fails to furnish maintenance, education, and support for his
child, following a continued absence from the home, is the
obligor’s share of the amount shown in the support guidelines,
commencing on the first day of the absence.
-4-
#27196
education, and support” for his children. If he failed to do so, he is liable for the
amount called for under the child support guidelines. See id.
[¶11.] Mother argues that, in considering whether Father failed to maintain
and support his children, SDCL 25-7-6.1 does not allow consideration of money he
paid directly to the mortgagee. Mother points out that the mortgage payments
went to the bank, not to her. Mother also contends that a mortgage is a separate
legal obligation that should not be considered absent the parties’ agreement.
Mother points out that Father received benefits from his mortgage payments in the
form of tax benefits and accumulating equity. Thus, Mother argues that mortgage
payments may not be considered in making an arrearage determination under
SDCL 25-7-6.1. We disagree.
[¶12.] By making the mortgage payments, Father assisted in providing
housing for the children. We have considered the provision of housing as
maintenance and support for determining child support arrearages under SDCL 25-
7-6.1. See Huffaker v. Huffaker, 2012 S.D. 81, ¶ 28, 823 N.W.2d 787, 793-94 (stating
that by “providing housing for [the custodial parent] and the children, [Huffaker]
did not fail to furnish maintenance and support for his children”). We have also
considered housing as maintenance and support in the closely related area of
spousal support. See Wilson v. Wilson, 434 N.W.2d 742, 744 (S.D. 1989) (stating
that “support and maintenance” includes “the provision of food, clothing, habitation,
and other necessities” (emphasis added)). Other courts considering the mortgage-
payments issue have specifically held that such payments should be considered a
-5-
#27196
credit against child support arrearages even though the payments are made to the
mortgagee. 4
[¶13.] Mother, however, points out that the obligor in Huffaker provided
military housing at no cost. Huffaker, 2012 S.D. 81, ¶ 28, 823 N.W.2d at 793-94.
4. See Shaughnessy v. Shaughnessy, 1999 WL 692085 (Del. Fam. Ct. 1999)
(affording father credit in the amount of $7,571.42 against back child support
for mortgage payments made to the mother and/or the mortgage holder);
Lynch v. Lynch, 422 So. 2d 703, 706 (La. Ct. App. 1982) (reversing a circuit
court’s deletion of father’s credit for house payments); Lauria v. Lauria, 845
N.Y.S.2d 121, 122 (N.Y. App. Div. 2007) (holding that the court “erred in
failing to credit [father’s] child support account for the entire amount that he
paid for the [mother’s] mortgage”); Fogarty v. Fogarty, 725 N.Y.S.2d 673, 675
(N.Y. App. Div. 2001) (permitting father to offset accrued child support
arrearages by the amount of payments made on the marital residence); Crane
v. Crane, 694 N.Y.S.2d 763, 767 (N.Y. App. Div. 1999) (permitting father to
offset accrued child support arrearages in the amount of payments made on
the marital residence); Neumark v. Neumark, 468 N.Y.S.2d 43, 44 (N.Y. App.
Div. 1983) (holding that the lower court failed to account for payments made
in connection with the marital home, including mortgage payments); In re
Marriage of Stearns, 623 N.E.2d 711, 718 (Ohio Ct. App. 1993) (finding no
error in permitting a deviation from the child support guidelines for the
payment of the mortgage, taxes, insurance, and maintenance for the former
marital residence); Bradley v. Bradley, 564 A.2d 504, 507 (Pa. Super. Ct.
1989) (holding that it was within the court’s discretion to credit father’s
arrearages for one-half of the mortgage payments that he made); Knudson v.
Utah State Dep’t of Soc. Servs., 660 P.2d 258, 262 (Utah 1983) (holding that
the Department was not entitled to reimbursement for support payments
when the father’s housing payments during the pendency of the divorcee
exceeded what was due even though it augmented the father’s own equity).
Cf. Farmer v. Farmer, 249 S.E.2d 106, 109 (Ga. 1978) (allowing father to
receive credit for mortgage payments based on the agreement of the parties);
Payson v. Payson, 442 N.E.2d 1123, 1129 (Ind. Ct. App. 1982) (allowing
father to receive credit for rent payments made after the support decree
based on the agreement of the parties); Hodge v. Hodge, 338 So. 2d 161, 162
(La. Ct. App. 1976) (allowing the father to make mortgage payments to
mortgage holder in partial satisfaction of child support based upon an
agreement of the parties). Contra Abercrombie v. Abercrombie, 434 So. 2d
1139, 1142 (La. Ct. App. 1983), writ denied, 440 So. 2d 760 (La. 1983)
(holding that mortgage payments should not be regarded as child support
because it was a contractual legal obligation that built father’s equity).
-6-
#27196
Mother also points out that the obligor paid an additional $1,000 per month to the
obligee. Id. Because the children in Huffaker were supported by cash payments
and free housing, Mother contends that Huffaker is distinguishable. But neither of
these facts detracts from the central point that the provision of housing constitutes
maintenance and support, which is what is required to be considered in determining
arrearages under SDCL 25-7-6.1.
[¶14.] Moreover, Mother’s position is inconsistent with the meaning of
“maintenance” and “support” in SDCL 25-7-6.1. Clearly, housing is necessary to
maintain and support children. See Huffaker, 2012 S.D. 81, ¶ 28, 823 N.W.2d at
793-94. And there is nothing in SDCL 25-7-6.1 or our cases suggesting that, when
there is no order specifying the manner of making support, an obligor’s support may
only be made by cash payments to the obligee. 5 Indeed, the circuit court gave
Father credit for the clothing, school supplies, and other items he provided. We
finally see no significance in the fact that Father had a contractual obligation to pay
5. We have recognized, in a variety of contexts, that support obligations not paid
in conformance with existing support orders are improper. See Vander
Woude v. Vander Woude, 501 N.W.2d 361, 364 (S.D. 1993) (noting that “this
[C]ourt does not look favorably upon agreements to modify child support that
have not received the court’s approval”); Houser v. Houser, 535 N.W.2d 882,
884-85 (S.D. 1995) (disapproving a modification under which father did not
make payments to the clerk of courts, even though mother had informally
agreed to the modification of the order); Agee v. Agee, 1996 S.D. 85, ¶ 21, 551
N.W.2d 804, 806-07 (rejecting a claim for abatement due to a change in time
of actual custody, noting that the obligor was required to request the circuit
court for the modification). Today’s case does not involve payments made in a
manner different than that required under an existing child support order or
divorce decree. This case should not be interpreted to permit credits for
maintenance or support that is not provided in conformance with existing
support orders. Obligors must obtain court-approved modifications before
deviating from the terms of existing support orders and decrees.
-7-
#27196
the mortgage. Housing is necessary to support children, and it makes no difference
whether the housing is provided in an owned home or through mortgages, leases, or
other contractual arrangements.
[¶15.] In this case, Father paid one-half the cost of the house by making one-
half of the monthly mortgage payments. Further, Mother and the children received
the benefit of the payments. Mother and the children chose to continue occupying
the house after the parties separated. Therefore, Father’s mortgage payments must
be considered maintenance and support of the children in determining arrearages
under SDCL 25-7-6.1.
[¶16.] Mother’s reliance on Hirzel v. Ooten, 2010 Ohio 2206, 2010 WL
1987519 (Ohio Ct. App., May 12, 2010), is misplaced. Hirzel involved a proceeding
to determine ongoing support. The trial court ordered that, in lieu of ongoing child
support required under the guidelines, the obligor was to directly pay mortgage
payments and lawn care services without providing any cash to the obligee. Id.
¶ 20. The court also awarded obligor sole ownership of the residence, including
possession of that residence when the child turned eighteen or graduated from high
school. Id. The Ohio Court of Appeals noted that under this order, the custodial
parent was deprived of “discretion . . . in how to allocate the child support for the
minor child.” Id. ¶ 21. The appeals court also noted that the child’s need for
clothing and food clearly outweighed the need for lawn care services. Id. ¶ 22. The
appeals court concluded that the trial court abused its discretion in allowing these
“deviations” from the child support guidelines in a proceeding to determine ongoing
support. Id. In today’s case, Mother was awarded the full amount of ongoing child
-8-
#27196
support required under the guidelines, and we are not considering deviations from
those guidelines. Therefore, Mother retained the discretion to allocate support
among various necessities of the children. Furthermore, the children in this case
were not placed in the position of being deprived of clothing and food at the expense
of lawn care. Hirzel is not helpful in cases like this involving a determination of a
parent’s maintenance and support provided before any order of support had been
entered.
Food
[¶17.] Mother and Father presented conflicting evidence on the question
whether Father provided food for the children. After listening to the testimony of
both parties, the referee examined Father’s receipts and found that Mother’s
assertions were not credible. The referee noted that the receipts were evidence that
Father purchased food; and Mother did not offer any evidence, other than a general
denial, contradicting Father’s claim that the food was purchased for the children.
The circuit court reversed, concluding that the referee clearly erred in adopting
Father’s assertion that he had provided food for the children. Father argues that
the circuit court erred in overturning the referee’s credibility finding.
[¶18.] “A circuit court may not overturn a referee’s findings unless the record
reflects that, based upon its own review of all the evidence, the court is left with a
definite and firm conviction that a mistake has been made.” Tovsland v. Reub, 2004
S.D. 93, ¶ 12, 686 N.W.2d 392, 397 (quoting Janke v. Janke, 467 N.W.2d 494, 497
(S.D. 1991)). In this case, the circuit court accepted Mother’s general assertion that
Father “never provide[d] . . . food or groceries from Wal Mart for the children[.]” We
-9-
#27196
note, however, that Mother also testified that “when [Father] would go out with the
kids, they always . . . [brought] . . . some kind of food[.]” Mother also conceded that
the children would bring back stuff, but she did not know what the children brought
back. Mother also testified that she did not go with Father when he had the
children so “she ha[d] no way to know where he [took] them.” On the other hand,
Father—who had first-hand knowledge of his purchases—testified that he “spen[t
$2,241.08] for food for the children.” Father explained that he would “go with
[their] daughter over to Wal Mart. She picked up what she liked . . . and [he
brought the food] back to [the children’s] home.” Father provided receipts to
support his testimony.
[¶19.] Considering the factual basis underlying the testimony of each party, a
resolution of this credibility dispute was a matter for the referee as the fact finder.
“[A]s we have often noted, ‘the fact finder . . . ha[s] the advantage of hearing
testimony of witnesses and [can] directly judge their credibility. As a reviewing
court, neither the circuit court nor this Court should attempt to assume such a
role.’” Orth v. Stoebner & Permann Constr., Inc., 2006 S.D. 99, ¶ 77, 724 N.W.2d
586, 602 (second alteration in original) (quoting Hendricksen v. Harris, 1999 S.D.
130, ¶ 7, 600 N.W.2d 180, 181).
[¶20.] Here, the circuit court was not in a better position than the referee to
determine the credibility of Mother and Father. After considering the evidence
introduced at the evidentiary hearing, we are not left with a definite and firm
conviction that the referee clearly erred in making his credibility finding. The
circuit court erred in concluding otherwise.
-10-
#27196
[¶21.] Reversed and remanded to adopt the recommendation of the referee.
[¶22.] GILBERTSON, Chief Justice, and SEVERSON, WILBUR, and KERN,
Justices, concur.
-11-