Opinion
No. C0-00-567.
Filed October 10, 2000.
Appeal from the District Court, Scott County, File No. 8709043.
Anne Heimkes Tuttle, Jaspers, Moriarty Walburg, P.A., (for respondent)
Peter J. Horejsi, McCloud Boedigheimer, P.A., (for appellant)
Considered and decided by Randall, Presiding Judge, Harten, Judge, and Halbrooks, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
UNPUBLISHED OPINION
Appellant challenges part of an order awarding child-support arrears. We reverse.
FACTS
In 1988, appellant James Joseph Vig and respondent Lolita Ta-Ala Vig divorced. The district court awarded custody of J.A.V., their then two-year-old son, to respondent and ordered appellant to pay child support. Appellant is a member of the Mdewakanton Sioux Tribe at Prior Lake, Minnesota. About the time of the dissolution, Indian gaming was becoming a factor, and none of the parties had any accurate projections of possible per capita income. Thus, in a reasonable attempt to project appellant's rapidly changing income, the court ordered the following commonsense solution:
[E]ach year on January 1, [appellant] must provide [respondent] with proof of his income from his employment and the Indian per capita account. Child support will be adjusted annually to reflect guideline child support at a rate of twenty-five percent (25%).
Minn. Stat. § 518.551, subd. 5(a) (1988), required obligors with one child and a monthly net income between $1,001 and $4,000 to pay 25% of their net income in child support. This statute also provided:
Guidelines for support for an obligor with a monthly income of $4,001 or more shall be the same dollar amounts as provided for in the guidelines for an obligor with a monthly income of $4,000.
Id. This "capped" appellant's child-support obligation at $1,000 per month (25% of $4,000), subject to biennial cost-of-living adjustments. See Minn. Stat. § 518.641 (1988) (providing for biennial cost-of-living adjustments).
Scott County (the county) took over child-support collection on behalf of respondent. The county sent appellant a letter, providing:
Pursuant to the Scott County Divorce Order dated October 27, 1988, you are obligated to provide [respondent] with proof of your income every year on January 1st. Since we have taken the child support collection on this case you can provide us with the income verification.
Thereafter, appellant sent his income information to the county, not to respondent. The county raised appellant's obligation to the guidelines' cap in 1991 and made biennial cost-of-living adjustments beginning in 1994. Scott County's records show that appellant has remained current in his child-support obligation.
A 1993 amendment to the child-support guidelines increased the maximum monthly net income to which the guidelines applied and provided for periodic future adjustments of that "cap" amount. 1993 Minn. Laws ch. 340, § 33. The legislature directed that this amendment be applied to "child support * * * orders entered or modified on or after [August 1, 1993]." 1993 Minn. Laws ch. 340, § 61 (emphasis added). The county did not increase appellant's obligation to comport with the amended statutes, and his obligation remained at the maximum amount allowed by the unamended statutes.
From approximately 1993 through 1997, appellant's Mdewakanton Sioux (Mystic Lake) per capita income easily exceeded $400,000 per year. In 1998, the record shows his gross per capita income was $943,000.
The financial records of appellant in the court file show $943,000 "per capita" income for 1998; do not show any extraordinary business losses, and in all respects appellant's financial picture is that of an obligor who is equipped to "keep the wolf from the door." The amount at issue in this case, including the claimed arrearages, is but a few thousand, a tiny percentage of appellant's admitted income. It would seem that some realistic lawyering by the attorneys for both parties could have settled this matter prior to lengthy and protracted litigation and an appeal.
In November 1999, respondent, without citation to the 1993 amendments to the child-support guidelines, moved the district court for an "upward deviation" in appellant's support obligation and "all child support arrearages as determined by the Court." The district court's resulting order (a) set appellant's prospective support obligation at the guidelines "cap" amount; (b) directed that appellant's prospective support obligation be increased with future increases in the "cap" amount for the guidelines; and (c) set appellant's arrears at $18,217. The district court apparently calculated appellant's arrears as the difference between what appellant had paid and what he would have paid if his support obligation had been increased each time the supreme court adjusted the "cap" amount on the guidelines:
[T]he [1988] order called for an adjustment to be done each year according to the child support guidelines, [so] the adjustment should have been done based on what the guidelines called for at the time the adjustment was done.
This appeal followed.
DECISION
I. Retroactive Application of Statute
A reviewing court is not bound by and need not give deference to a district court's decision on a purely legal issue. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984). Appellant challenges the award of child-support arrears, arguing that the cap in effect when the original order was issued in 1988 should have remained in effect regardless of legislative changes and that the district court violated Minn. Stat. § 645.21 (1998) by retroactively applying the 1993 cap increase to the 1988 order.
Minn. Stat. § 645.21 provides that "[n]o law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature." Here, the 1988 order provided, "Child support will be adjusted annually to reflect guideline child support at a rate of twenty-five percent (25%)." Based on its interpretation of this order, the district court awarded arrears from 1993 through 1998. The district court indicated it was not retroactively applying the 1993 child-support cap increase to the 1988 order; it was simply trying to enforce the original order. Minn. Stat. § 645.21 would prohibit the application of the 1993 amendments to support payments made in 1988 through 1992, but that is not what happened here. The court applied the 1993 amendment only to appellant's 1993 and subsequent obligations.
Appellant argues that the district court's order that child support "be adjusted annually to reflect guideline child support at a rate of twenty-five percent (25%)," should be interpreted to mean that any adjustment must be based on the 1988 guidelines, not on the guidelines in effect at the time of the adjustment. While the order is ambiguous, the more reasonable interpretation is that child-support payments were to be adjusted annually to reflect the guidelines in effect that year. The court used the language "each year on January 1" to denote appellant's annual obligation to provide proof of his income and "adjusted annually" to describe when the support payments were to be adjusted. Analogously, the court intended that adjustments be made in accord with the statute in effect on January 1 of that year.
Appellant also contends that retroactive adjustment is prohibited by the effective date to the 1993 amendment. On that issue, we agree with appellant. The 1993 amendment to the child-support guidelines only applied to support orders "entered or modified on or after [August 1, 1993]." 1993 Minn. Laws ch. 340, § 61. Minn. Stat. § 518.64, subd. 2 (1998), requires that requests for modifications be made by motion. Respondent did not move to modify appellant's obligation until 1999. Therefore, the district court award of arrears was in error unless respondent met one of the statutory exceptions for the retroactive modification of child support.
II. Retroactive Modification of Child Support
A district court may order retroactive modification of child support only back to the date the motion for modification was served on the responding party. Minn. Stat. § 518.64, subd. 2(d).
We recognize that appellant does not challenge the modification from the date the motion was served in 1999 forward. Accordingly, we do not disturb that portion of the district court's decision.
However, modification may be applied to an earlier period if the court makes express findings that * * * the party seeking modification was precluded from serving a motion by reason of * * * a material misrepresentation of another party, or fraud upon the court and that the party seeking modification, when no longer precluded, promptly served a motion[.]
Id., subd. 2(d)(1). Respondent argues that appellant's failure to report his income status to her as required by the 1988 order constituted a material misrepresentation that precluded her from moving for modification.
The district court found
[t]hat [appellant] was acting in good faith, and in reliance on the Scott County Child Support Office letter, when he supplied the Scott County Child Support Office with his income information. However, he was required to supply this information to [respondent] and his failure to do so left her unable to accurately assess whether the adjustments made by the child support office were accurate.
An obligor's failure to timely comply with a court-ordered disclosure of income data is a material misrepresentation of the obligor's financial circumstances, which can justify retroactive modification of child support. Gully v. Gully, 599 N.W.2d 814, 821-22 (Minn. 1999) (concluding obligor's failure to comply with district court's order to disclose financial information was material misrepresentation). Gully recognized the judiciary's unique role in child-support cases; that is, "to see that children benefit from the income of their parents." Id. at 823 (citation omitted).
When one party fails to disclose financial information he or she has specifically been ordered by the court to provide, financial information that would form the basis for a modification of his or her child support obligation, he or she prevents the court [and] the other parent * * * from making sure that his or her child * * * benefit[s] from his or her income. Without this financial information, a motion for modification of child support would be unreasonable in that such a motion would be purely speculative.
Id. But this case is not a Gully case. Here, the county sent appellant a letter informing him that it had taken over the child-support collection and that he was to send the proof of his income to the county. There is no way that appellant can be faulted or that it can be inferred that he was withholding financial information when he received a directory letter from Scott County and immediately and fully complied with it. Jolen Annen, a child-support officer for the county, stated in an affidavit that appellant "is current in his child support obligation" and that there was no indication that "Lolita Vig, or anyone representing her, have recently requested information or sought to determine if child support arrearage is owed in this file."
We specifically reject any inference of bad faith or unreasonableness on the part of appellant. Appellant's attorney argues that "he should have" sent separate copies of his financial information to respondent. We agree that in theory there was nothing to keep appellant from doing that. But no bad faith or material misrepresentation can be inferred from his following the written instructions from Scott County. It is just as easy for respondent to contact Scott County to review what appellant sent them as it would be for appellant to send out duplicate information.
We also note Minn. Stat. § 518.64, subd. 2(d)(1), provides that retroactive modification is appropriate only when "the party seeking modification was precluded from serving a motion" at an earlier time. Nothing precluded respondent from bringing a motion for modification before 1999. After the 1993 amendment, respondent reasonably could have contacted appellant or the county and requested a copy of appellant's income.
This record contains no support for a claim of material misrepresentation or withholding of financial information. Accordingly, the award of arrears pre-dating the service of respondent's motion to modify was error.