[7] For the appellant-petitioner there were briefs by Vance M. Waggoner and Denissen, Kranzush, Mahoney & Ewald, S.c., Green Bay, and oral argument by Mr. Waggoner.

[8] For the respondent there were briefs and oral argument by Michael J. Balskus, assistant district attorney.

[9] Chief Justice Heffernan.

[10] The opinion of the court was delivered by: Heffernan

[11] This is a review of an unpublished decision of the court of appeals, which affirmed the decision of the circuit court for Brown county, William J. Duffy, circuit Judge, that the Department of Health and Social Services was authorized by statute to promulgate a rule that takes the income of non-liable family members into consideration in determining the liable family member's ability to pay for social services rendered to a dependent from a prior marriage. In addition, we address whether sec. 766.55(2)(c)2 of the Marital Property Act prohibits consideration of the non-liable spouse's income in satisfying a pre-determination-date obligation of the other spouse. We affirm the decision of the court of appeals.

[12] The facts are not in dispute. A.L.W. is the adopted daughter of J.G.W., the petitioner, and his former wife, N.R.W. N.R.W. died in March 1984, and J.G.W. subsequently married his current wife, V.W., in January of 1985. V.W. is neither the biological nor adoptive parent of A.L.W. J.G.W. is the only person liable to the Department for services provided to A.L.W.

[13] On November 19, 1985, the Outagamie county circuit court found A.L.W. to be a Child in Need of Protection and Services. The court ordered that A.L.W. be placed outside of her home in a residential treatment center. The court also ordered that parental support be determined by the Outagamie Department of Social Services, retroactive to the date of placement.

[14] The Department issued four orders to J.G.W. requiring him to make monthly payments to the Department for services rendered to A.L.W. *fn1 J.G.W. appealed each order to the circuit court. At a hearing before Judge William J. Duffy it was established that the Department applied the uniform fee schedule, which combined the income of J.G.W. and of V.W., his wife, and considered that J.G.W.'s family has four dependents (J.G.W., V.W., A.L.W., and V.W.'s daughter) to determine his ability to pay. The circuit court held that the Department had statutory authority to consider non-liable family members' income in determining the liable person's ability to pay. J.G.W. disagreed and appealed the decision of the circuit court. The court of appeals affirmed the circuit court's decision in an unpublished decision and order dated August 23, 1988. J.G.W. petitioned this court for review of the court of appeals decision and, in addition, asked this court to consider the effect of sec. 766.55(2)(c)2 of the Marital Property Act upon this case. *fn2 We granted the petition for review.

[15] J.G.W. asserts two issues for review. He claims that Chapter 46 of the Wisconsin Statutes does not authorize the Department to consider the income of non-liable family members in determining how much he owes the Department for services rendered to A.L.W. In addition, J.G.W. asserts that the Marital Property Act prohibits the Department from considering his non-liable spouse's income in order to determine his liability for a pre-determination-date obligation.

[16] First we address J.G.W.'s argument that Wis. Admin. Code secs. HSS 1.03(11) and 1.01(2)(e) exceed statutorily conferred authority by imposing liability for the care of his adopted daughter on his spouse, who is not made liable under secs. 46.03(18) or 46.10, Stats. In In Matter of Guardianship of Klisurich, 98 Wis. 2d 274, 281, 296 N.W.2d 742 (1980), this court held that the legislative directive to establish fee schedules and guidelines regarding ability to pay was a lawful delegation of authority to the Department. In this case, we are only concerned with the Department's authority to act within the confines of the statute, not with the legislative authority to impose liability upon relatives for the support of other dependent relatives. In determining whether an administrative agency has exceeded its statutory authority in promulgating a rule, we must look to the enabling statute to determine whether there is express or implied authorization for the rule. Brown County v. H&SS Department, 103 Wis. 2d 37, 48, 307 N.W.2d 247 (1981).

[17] Chapter 46 of the Wisconsin Statutes imposes liability upon certain family members for social services rendered by the Department to other family members. The purpose of secs. 46.03(18) and 46.10, Stats., is to recoup the costs of providing social services and treatment by requiring liable family members to pay their fair share. In Matter of Guardianship of Klisurich, 98 Wis. 2d at 281. Section 46.03(18)(a) directs the Department to establish a uniform system of fees for services provided by the Department. *fn3 Pursuant to this delegation, the Department promulgated a schedule of fees which takes into consideration the total family income and the number of dependents to arrive at a maximum monthly fee which the liable person must pay.

[18] Under sec. 46.03(18)(b), Stats., J.G.W. is liable for services rendered to his adopted daughter because he is a parent under that section. *fn4 However, J.G.W.'s wife, V.W., is neither the biological, nor the adoptive, parent of A.L.W. and, therefore, is not a liable person under sec. 46.03(18). Nevertheless, sec. HSS 1.03(11) Wis. Adm. Code (1985) bills the liable family member on the basis of the family's ability to pay. *fn5 "Family" is defined in Section HSS 1.01(2)(e) Wis. Adm. Code (1985) as an adult, the adult's spouse, and any other persons who meet internal revenue service standards as their dependents. Under this scheme, the Department considers all family income, including non-liable family members' income, in determining the liable family member's ability to pay.

[19] The court of appeals held that sec. 46.03(18), Stats., provided authority for the Department to consider the family's financial resources, the number of dependents, and each family member's income in determining the responsible person's ability to pay. We conclude that both secs. 46.03(18) and 46.10(3) require that the Department consider the liable person's family resources in determining their ability to pay. Section 46.10(3) provides:

[20] After investigation of the liable persons' ability to pay, the department shall make collection from the person who in the opinion of the department under all of the circumstances is best able to pay, giving due regard to relationship and the present needs of the person or of the lawful dependents . . . .

[21] Section 46.03(18)(c), Stats., provides in part:

[22] The department shall make collections from the person who in the opinion of the department is best able to pay, giving due regard to the present needs of the person or of his or her lawful dependents. The department may bring action in the name of the department to enforce the liability established under par. (b).

[23] By directing the Department to give due regard to relationship and the present needs of the lawful dependents, both secs. 46.10(3) and 46.03(18) authorize the Department to consider non-liable family members' income in determining a liable family member's ability to pay.

[24] We find the case of Ponath v. Hedrick, 22 Wis. 2d 382, 389, 126 N.W.2d 28 (1964), instructive. In Ponath, this court interpreted a statute which, much like secs. 46.03(18) and 46.10, Stats., imposed liability upon relatives for the cost of supporting dependent family members according to their ability to pay. In determining Mrs. Hedrick's ability to pay for the support of her aged mother, the court stated that it could properly consider her husband's income and economic position. *fn6

[25] If the wife has an income that can be considered, then the trial court, under sec. 52.01, Stats., is free to consider her husband's economic position both in terms of his worth and his income. This is because the court should consider these factors in determining the extent to which the husband has sufficient income or other economic position in order for him to assume responsibility for his wife's basic needs, thus freeing her income for possible consideration as an ability to pay on her part for a portion or all of the support furnished to a dependent relative under the statute.

[26] But since, in the case at bar, Mrs. Hedrick had no income that could be legally considered in charging her with a duty to support her mother, there was no basis for the trial court to consider her husband's economic position or income.

[27] 22 Wis. 2d at 390.

[28] Although the court was interpreting another statute, the principles are the same. When the legislature instructs an agency or a court to consider an individual's ability to pay, giving due regard to that person's lawful dependents, it is appropriate to consider the income of each family member.

[29] The family income concept promulgated pursuant to secs. HSS 1.01(2)(e) and 1.03(11), Wis. Adm. Code (1985) follows the legislature's directive to determine the liable person's ability to pay by considering both the needs and the resources of each family member. J.G.W. suggests that the legislature only contemplated consideration of his family's needs and not their contributions to the family. This is an unreasonable interpretation of the legislature's directive to determine the liable person's ability to pay. As this court noted in the Ponath case, if a family member is contributing to the support of the liable family member, that allows a greater proportion of the liable person's income to be used for the support of the dependent relative. That is, their ability to pay increases. If the Department were to look only at how much the liable person's family costs him or her without considering how much the family contributes to that person's support, the Department would not be following the legislative mandate to determine the person's ability to pay.

[30] Furthermore, we disagree with petitioner that HSS secs. 1.01(2)(e) and 1.03(11) of the Wisconsin Administrative Code impose liability on J.G.W.'s non-liable spouse. Considering the family's resources does not mean that the individual's liability is shifted to the non-liable family members. It is his ability to pay that is determined on the basis of his family's income. It is only J.G.W.'s income which may be used to satisfy his obligation to the Department. HSS sec. 1.03(14)(a), Wis. Adm. Code (1985), limits J.G.W.'s liability to the sum of his unearned income and one-half of his earned income. *fn7 In addition, if the calculated amount due would create a hardship on the family, a lower payment may be authorized. See sec. HSS 1.03(14)(b), Wis. Adm. Code. These safeguards insure that a responsible person's liability is limited to that individual's income. Therefore, we conclude that HSS secs. 1.01(2)(e) and 1.03(11) (1985), which utilize the family income concept in order to determine a liable person's ability to pay for services rendered to a dependent relative are authorized by the legislature in secs. 46.10 and 46.03(18), Stats.

[31] J.G.W. also argues that sec. 766.55(2)(c)2 of the Marital Property Act prohibits the Department from satisfying his obligations which arose prior to January 1, 1986, with his non-liable spouse's income. *fn8 Sections 766.55(2)(c)1 and 2, Stats., prohibit the use of a new spouse's income to satisfy an obligation incurred by the other spouse either prior to the couple's marriage or prior to enactment of the Marital Property Act. Petitioner asserts that this obligation arose prior to January 1, 1986 (effective date of the Marital Property Act), and therefore, sec. 766.55(2)(c)2 applies. Section 766.55(2)(c) provides in part:

[32] (2) After the determination date all of the following apply:

[33] (c) 1. . . . .

[34] 2. An obligation incurred by a spouse before, on or after January 1, 1986, that is attributable to an obligation arising before January 1, 1986, or to an act or omission occurring before January 1, 1986, may be satisfied only from property of that spouse that is not marital property and from that part of marital property which would have been the property of that spouse but for the enactment of this chapter.

[35] Under sec. 766.55(2)(c)2, Stats., petitioner correctly states that only his individual salary, his social security checks, and his interest income may be used to satisfy his obligation to the Department because it is a pre-Act obligation. Petitioner then claims sec. 766.55(2)(c)2 prohibits the Department from considering any of his wife's earned or unearned income in determining his liability to the Department. Petitioner argues that, by considering his non-liable spouse's income in determining his ability to pay, the Department is in effect using her income to "satisfy" his pre-Act obligation in violation of sec. 766.55(2)(c)2. We disagree.

[36] Whether or not the legislature's use of the word, "satisfy," in sec. 766.55(2)(c)2, Stats., was intended to prohibit the Department from considering the resources of a non-liable spouse in determining a liable person's ability to pay for a dependent relative's care is ambiguous. When a statute is ambiguous, we turn to the rules of statutory construction to determine the legislative intent of that statute. Kollasch v. Adamany, 104 Wis. 2d 552, 563, 313 N.W.2d 47 (1981). When construing a statute, the court must consider it in relation to its scope, history, context, subject matter and object to be accomplished or remedied. Id.

[37] The object to be accomplished by sec. 766.55(2)(c)2, Stats., is to insure that premarital or pre-Act creditors do not receive a windfall due to enactment of the Marital Property Act. *fn9 The concern of sec. 766.55, as reflected in the use of the term, "satisfy," is to prevent premarital creditors from having access to the non-obligated spouse's income or assets which were attributed to the obligated spouse by virtue of enactment of the Marital Property Act.

[38] Prior to enactment of the Marital Property Act, the legislature authorized consideration of the non-obligated family member's income for purposes of determining the liable family member's ability to pay, but did not authorize the use of the non-liable family members' income to "satisfy" the debt. See secs. 46.10(3) and 46.03(18), Stats. 1973, and Ponath v. Hedrick, supra. The actual liability of the responsible family member was limited to that individual's income. Therefore, under the former law, none of the non-obligated spouse's income could be used to "satisfy" the obligated spouse's debt, although the non-obligated spouse's income could be considered in determining the obligated spouse's ability to pay. J.G.W. asserts that, when the legislature passed sec. 766.55(2)(c)2 it intended to change existing law so that whatever windfall existed for creditors prior to the Marital Property Act would be removed. We find no support for this interpretation of sec. 766.55. To the contrary, the legislature's concern was simply to insure that enacting the Marital Property Act would not create a windfall for pre-Act creditors by imputing the non-liable spouse's income or assets to the liable spouse. See note 9 (supra) . On the basis of this history, we therefore conclude that the legislative prohibition against using a non-liable spouse's income to "satisfy" a pre-marital or pre-Act obligation in sec. 766.55(2) consistent with prior legislative enactments, was not intended to prohibit consideration of the non-liable spouse's income in determining the liable spouse's ability to pay under Chapter 46 of the Wisconsin Statutes.

[39] Finally, J.G.W. relies on this court's decisions in In re Marriage of Poindexter, 142 Wis. 2d 517, 419 N.W.2d 223 (1988), and In re Marriage of Burger v. Burger, 144 Wis. 2d 514, 424 N.W.2d 691 (1988), which hold that none of a new spouse's income is available under the Marital Property Act to satisfy maintenance or support obligations of a prior marriage. J.G.W. argues that, under Poindexter, the non-obligated spouse's income cannot even "enhance" the assets available to satisfy a pre-marital obligation. 142 Wis. 2d at 542. We agree with petitioner's interpretation of these cases, insofar as they prohibit the use of the non-obligated spouse's income to "satisfy" the obligated spouse's pre-Act obligations. However, both Poindexter and Burger presented a different situation from this case and, therefore, do not provide support for J.G.W.'s position. The obligated spouse in both of those cases had no income. The question presented was whether the non-obligated spouse's income or assets could be imputed to the obligated spouse for purposes of satisfying the obligated spouse's premarital obligations.

[40] In this case, J.G.W. has his own income. If J.G.W. had no income, the Department would not be able to use any of V.W.'s income to "satisfy" J.G.W.'s obligation, regardless of how much money V.W. might have. That was precisely the result reached in Poindexter, Burger, and Ponath v. Hedrick. Our holdings in Poindexter and Burger are consistent with the requirement that none of the non-obligated spouse's income may be used to "satisfy" the obligated spouse's pre-Act obligation even though the non-obligated spouse's income may be taken into consideration in determining the liable spouse's ability to pay.

[41] In summary, we conclude that the Department has not exceeded its statutorily conferred authority by promulgating HSS secs. 1.01(2)(e) and 1.03(11) (1985), which implement the family income concept in determining a liable person's ability to pay for a dependent relative's care. We also conclude that sec. 766.55(2)(c)2, Stats., does not prohibit the Department from considering the non-liable spouse's income in determining the liable spouse's ability to pay under HSS secs. 1.03(11) and 1.01(2)(e), Wis. Adm. Code (1985).

[42] By the Court. -- Decision affirmed.

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Opinion Footnotes

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[43] *fn1 The initial order was issued on December 27, 1985 requiring petitioner to pay $921.18 for services rendered to A.L.W. beginning on November 25, 1985. Three subsequent amended orders were issued on February 25, 1986 ($1001.54), June 2, 1986 ($1192.21), and July 3, 1986 ($1148.67, $1044.17 and $1007.17), which adjusted the petitioner's liability due to a change in his economic circumstances.

[44] *fn2 Petitioner raised this issue for the first time in his petition for review before this court. This case was first heard on oral argument on September 6, 1989. At that oral argument the parties did not fully address the marital property issue. On September 11, 1989, this court ordered the parties to further brief the marital property issue and invited the Family Law Section of the State Bar of Wisconsin to file an amicus brief discussing the impact of the Marital Property Act on this case. The case was again scheduled for oral argument on January 4, 1990. No amicus brief was submitted. Although petitioner has waived his right to have this issue reviewed, we choose to consider the effect of the Marital Property Act on this case because it is a question of law, the issue has now been fully briefed, and it is an issue of sufficient public interest to merit decision. See Wirth v. Ehly, 93 Wis. 2d 433, 444, 287 N.W.2d 140 (1980).

[45] *fn3 Section 46.03(18)(a), Stats., provides in part:

[46] The department of health and social services shall establish a uniform system of fees for services provided or purchased by the department of health and social services, a county department . . . . A county department under s. 46.215, 46.22, 51.42 or 51.437 shall apply the fees which it collects under this program to cover the cost of such services.

[47] *fn4 Section 46.03(18)(b), Stats., provides:

[48] Any person receiving services provided or purchased under par. (a) or the spouse of the person and, in the case of a minor, the parents of the person, . . . shall be liable for the services in the amount of the fee established under par. (a) . . . .

[49] *fn5 Section HSS 1.03(11) and (12), Wis. Adm. Code (1985), provide:

[50] (11) BILLING ON THE BASIS OF ABILITY TO PAY.

[51] (a) A responsible party who provides full financial information and authorizations for billing all applicable insurance shall be billed on the basis of the family's ability to pay.

[52] (b) For each family, ability to pay shall be determined in the following manner:

[53] 1. The annual gross income of family members shall be determined and totaled except that the earned income of any child who is a full time student or a part-time student but not a full time employe shall be excluded. Income from self-employment or rent shall be the total net income after expenses. The income of any family member in a residential setting is treated separately under this rule.

[54] 2. The monthly average income shall be computed by dividing the annual gross income by 12.

[55] 3. Monthly payments from court ordered obligations shall be subtracted from monthly average income.

[56] 4. For services other than care to minors . . . .

[57] (12) MAXIMUM MONTHLY PAYMENT. A family providing full financial information shall be billed at a monthly rate that does not exceed the maximum amount computed by means of the following formulas:

[58] (c) Other services for children. For other services to children, the maximum monthly payment for a parent shall be computed as follows:

[59] 3. The department shall publish a schedule annually for agencies to compute maximum monthly payment rates under this paragraph.

[60] *fn6 See sec. 52.01, Stats. (1956), which provided in part:

[61] (1) The parent, spouse and child of any dependent person (as defined in s. 49.01) who is unable to maintain himself shall maintain such dependent person, so far as able, in a manner approved by the authorities having charge of the dependent, or by the board in charge of the institution where such dependent person is; but no child of school age shall be compelled to labor contrary to the child labor laws.

[62] Section 52.01, Stats. (1956) was subsequently renumbered sec. 49.90 and amended by 1985 Act 29, secs. 1108 to 1114.

[63] *fn7 Section HSS 1.03(14)(a) provides:

[64] In cases where family members who contribute to the family income are not responsible parties for the liability being charged to the family, the maximum monthly payment rate shall not exceed the sum of the unearned and one-half the earned income of responsible party or parties, less an amount equal to that used by the Wisconsin AFDC program for work related expenses.

[65] *fn8 The initial order was entered on December 27, 1985, and the three amended orders were entered after January 1, 1986. Petitioner argues that because the latter three orders were "amended orders" they relate back to the first or "initial order" which was entered prior to January 1, 1986, the parties' determination date under sec. 766.01(5)(c), Stats. We agree with petitioner that these subsequent orders should relate back to the date of the first order because these latter orders simply modified the amount that petitioner owed due to a change in his economic circumstances. Therefore, we conclude that all of the orders constitute an obligation which arose prior to January 1, 1986, the parties' determination date.

[66] *fn9 The comments to sec. 8 of the Uniform Marital Property Act, upon which sec. 766.55, Stats., is based, provide in part:

[67] This prevents a windfall to the premarital creditor by a marriage, for no interest in marital property attributable to the effort of the new spouse of the obligated party becomes available to enhance the assets available to that creditor to satisfy a debt of the obligated spouse. The objective is that the marriage should be neutral as far as the premarital creditor is concerned, neither adding to nor detracting from the assets available for satisfaction of the claim.

19900222

05/10/90 MARRIAGE DANIEL ABITZ v. SHAROL ABITZ Important discussion of New Spouse Income and child support obligations

[1] SUPREME COURT OF WISCONSIN

[2] No. 87-1944

[3] 1990.WI.145 <http://www.versuslaw.com>, 455 N.W.2d 609, 155 Wis. 2d 161

[4] May 10, 1990

[5] IN RE THE MARRIAGE OF: DANIEL ABITZ, PETITIONER-RESPONDENT-PETITIONER,

SHAROL ABITZ, RESPONDENT-APPELLANT

[6] Affirming 147 Wis. 2d 880, 434 N.W.2d 621 (Ct. App. 1988). Review of a decision of the Court of Appeals.

[7] For the petitioner-respondent-petitioner there were briefs by Roger A. Glenn and Glenn & Hoff, S.c., Appleton, and oral argument by Roger A. Glenn.

[8] For the respondent-appellant there was a brief by Bruce Chudacoff and Chudacoff & Liebzeit, Appleton, and oral argument by Bruce Chudacoff.

[9] Steinmetz, J.

[10] The opinion of the court was delivered by: Steinmetz

[11] Petitioner Daniel Abitz seeks review of an unpublished decision of the court of appeals that reversed an order entered by the circuit court for Outagamie county, Judge Harold V. Froehlich, which modified a child support order. When modifying the award, the circuit court set child support by considering the appellant's (Sharol Abitz's) one-half interest in marital property income. The circuit court then multiplied the marital property income by the relevant percentage standard taken from HSS 80, Wis. Admin. Code.

[12] The issue central to the Disposition of this case is whether the circuit court erred when it considered Sharol's marital property income in setting her support obligation. The court of appeals held that it was error for the circuit court to give any consideration to Sharol's marital property income when setting support. We agree. We disagree with the court of appeals Conclusion that only Sharol's income can be considered. Because the court of appeals decision failed to discuss use of the percentage standards found at HSS 80, Wis. Admin. Code, on revision of a child support order, we also discuss the central issue in terms of what the obligated parent's gross income is for purposes of applying the standard.

[13] The second issue presented is whether the nonobligated spouse's income and assets can be made available toward the satisfaction of the obligated parent's child support obligation, and it has already been decided by this court. This issue concerns the impact sec. 766.55(2)(c), Stats., of the Marital Property Act has on premarital or preact obligations. Section 766.55(2)(c)1 and 2 provides: *fn1

[14] Section 766.55 Obligation of spouse . . . (2) After the determination date all of the following apply: . . .

[15] (c)1. An obligation incurred by a spouse before or during marriage that is attributable to an obligation arising before marriage or to an act or omission occurring before marriage may be satisfied only from property of that spouse that is not marital property and from that part of marital property which would have been the property of that spouse but for the marriage.

[16] 2. An obligation incurred by a spouse before, on or after January 1, 1986, that is attributable to an obligation arising before January 1, 1986, or to an act or omission occurring before January 1, 1986, may be satisfied only from property of that spouse that is not marital property and from that part of marital property which would have been the property of that spouse but for the enactment of this chapter.

[17] The impact of sec. 766.55(2)(c), Stats., was discussed in In re Marriage of Poindexter, 142 Wis. 2d 517, 419 N.W.2d 223 (1988) and In re Marriage of Burger v. Burger, 144 Wis. 2d 514, 424 N.W.2d 691 (1988). The impact of sec. 766.55(2)(c) on premarital or preact obligations was again reviewed in In Interest of A.L.W., 153 Wis. 2d 412, 451 N.W.2d 416 (1990). In all three cases, it was held that sec. 766.55(2)(c) prohibits the use of a nonliable spouse's income to "satisfy" a premarital or preact obligation.

[18] In the case now before us, both parties agree that this situation is governed either by sec. 766.55(2)(c)1 or 2, Stats. More importantly, neither party argues that the child support ordered violates sec. 766.55(2)(c). Both the record and orders of the circuit court reflect its realization that sec. 766.55(2)(c) had an impact on the ultimate sum of child support that could be satisfied by Sharol and therefore awarded to Daniel. Thus, the ultimate impact of sec. 766.55(2)(c) is not in dispute in this case. For purposes of clarification, however, we hold that absent an express finding of shirking or transfer with intent to defraud, the circuit court abuses its discretion when it orders child support at an amount greater than that which can be fully satisfied through sole use of income and assets of the obligated parent as defined and made available to the circuit court pursuant to the language of sec. 766.55(2)(c).

[19] The facts are undisputed. The petitioner, Daniel Abitz, and the respondent, Sharol Abitz (now Sharol Bassett), were married on August 19, 1967. Two children were born of the marriage: Jeffrey, born October 17, 1968, and Kelly, born February 7, 1974. *fn2 During their marriage, Daniel worked full-time while Sharol never worked outside their home more than 20 hours a week. In 1983, Daniel initiated divorce proceedings against Sharol. The judgment of divorce was effective March 7, 1984.

[20] In part, the judgment of divorce gave the parties joint custody of their then two minor children but placed primary physical custody with Daniel. The judgment of divorce did not require Sharol to pay any child support, apparently because Sharol was at that time financially unable to support herself. Rather, the issue of child support was left open to future court order. Both parties have subsequently remarried. In 1986, Daniel married Patricia Long, and in December, 1985, Sharol married James Bassett (Bassett).

[21] The issues before this court arise out of a matter initially raised by Daniel in a post-divorce affidavit supporting an order to show cause for modification of judgment dated February 3, 1986. An order to show cause issued by Outagamie county Commissioner Jeffrey S. Brandt required Sharol to pay child support for their two minor children. Arguments on the issues raised in the order to show cause were heard on various occasions before Commissioner Brandt who acted for the family court commissioner's office pursuant to Outagamie county court rules. The last hearing was on August 12, 1986. In the order modifying judgment dated October 14, 1986, Commissioner Brandt made findings of fact and conclusions of law consistent with a finding of a substantial change in circumstance. He set and ordered sums to be paid by Sharol as child support. Daniel appealed the determination of the family court commissioner to the circuit court of Outagamie county pursuant to sec. 767.13(6), Stats. A hearing de novo was held on April 21, 1987, before Judge Harold V. Froehlich.

[22] At the hearing, Sharol's current employer testified that she applied only for part-time work and gave no reason for wanting only part-time work. Furthermore, Sharol claimed no disability or physical limitation that would have caused her to be able to work only part-time. The employer testified that Sharol would be given more work hours if she wanted them.

[23] Sharol also testified as to the manner in which she and Bassett handle their money. According to her, their respective incomes are put into a joint fund and all expenses are paid out of money in that fund. She further testified that "what is mine is his and his is mine, so I take what I want."

[24] Judge Froehlich issued his first decision and order modifying judgment on June 30, 1987. In that decision, the Judge made findings of fact that Sharol had a current monthly gross income of $650 and that Bassett had a current monthly gross income of $3,718. The total monthly gross income for their household was therefore found to be $4,368.

[25] Judge Froehlich's Conclusions of law found a substantial change in circumstances which allowed modification of the child support provisions in the original judgment of divorce. The Judge concluded that Sharol had a legal responsibility to support her child and that she was in the position to do so. The court computed the amount of child support by adding Sharol's income to Bassett's income, dividing that sum in half and multiplying the quotient by 17 percent. The 17 percent figure represents the standard figure used to determine support owed for one child pursuant to rules promulgated under HSS 80, Wis. Admin. Code.

[26] The circuit court then arrived at and ordered the sum of $371 as the proper amount of child support due. Since this amount did not exceed Sharol's actual gross income of $650, the support obligation was found by the court to be "satisfied from that part of her marital property which would have been her property but for the marriage" pursuant to sec. 766.55(2)(c)1, Stats.

[27] Daniel brought a motion to reconsider and/or clarify the order modifying judgment. A hearing on the motion was held before Judge Froehlich on August 14, 1987. As a result thereof, the court issued a decision and order modifying judgment dated September 29, 1987, which constituted the final ruling of the court.

[28] The circuit court, in its final order, made the following relevant findings:

[29] 2. That the respondent's current monthly net income from her job exceeds $400 per month and in addition she has interest income on her property division.

[30] 3. I incorporate herein by reference all of the findings of fact, Conclusions of law and order entered by this court on June 30, 1987, together with all decisions issued from the bench in the April 21, 1987 hearing or the August 14, 1987 hearing except those inconsistent with the new findings I make today.

[31] The court then made the following Conclusions of law:

[32] 1. I incorporate all Conclusions of law made in my order modifying judgment dated June 30, 1987.

[33] 2. That as an additional Conclusion of law I find that I may not utilize the respondent's new husband's income to satisfy the respondent's obligation to pay child support and that is the basis of my modification of the amounts due on the arrearage. However, her income is one-half of her earnings and one-half of her husband's income under the marital property act and I have determined her support obligations on this basis. *fn3

[34] 3. That I do not feel that it is appropriate to set support at the standard percentage as applied against this respondent's income as she has the ability, given her financial circumstances, to pay more and I am convinced that she could work more hours if she wanted to.

[35] The record of the hearings reflects that the trial court modified the award upon evidence that part of Sharol's $650 income included roughly $200 in principle income from her divorce settlement. The Judge took 17 percent of the $200 surplus -- about $34 -- and subtracted that amount from the original award of $371 to arrive at the $337 award ordered. Sharol appealed to the court of appeals. Both Sharol and Daniel joined in a petition to this court to bypass the court of appeals pursuant to sec. 808.05, Stats., and Rule 809.60. This court denied the petition to bypass.

[36] In an unpublished decision the court of appeals reversed the circuit court's order modifying judgment. The court of appeals relied as controlling on our holdings in Poindexter, 142 Wis. 2d 517, and Burger, 144 Wis. 2d 514. Following the reasoning of Poindexter and Burger, the court of appeals concluded that when setting child support the circuit court erred in considering Sharol's marital property rights in her current husband's income. The court of appeals stated that only Sharol's income could be considered along with the needs of the children and the parent's ability to pay. The court of appeals stated that it was a question of fact whether Sharol's remarriage constituted a substantial change in circumstances justifying modification of child support under sec. 767.32, Stats., which must be "determined by the trial court in view of all the facts and circumstances of the parties." Abitz v. Abitz, No. 87-1944, unpublished slip op. at 4 (Wis. Ct. App. Nov. 22, 1988). When making its determination, the court of appeals instructed the circuit court not to consider the new spouse's income to satisfy the premarital child support obligation.

[37] Daniel petitioned this court for review pursuant to secs. 808.10 and Rule 809.62, Stats. We granted the petition.

[38] It is necessary to first harmonize sec. 766.55(2)(c), Stats., with sec. 767.32(1), which governs revisions of child support upon divorce. We have already discussed the impact sec. 766.55(2)(c) has on the ultimate order of a child support award. However, a reading of the court of appeals decision leads to the Conclusion that the court of appeals determined that sec. 766.55(2)(c) also restricts that income which can be considered by the circuit court as it attempts to set a child support award. *fn4 We disagree and conclude that this analysis fails to harmonize the statutes. We hold that the statutes are best harmonized and remain individually viable through the distinction between income which can be considered by a circuit court to "set" or determine one's ability to pay a child support order and income that is available to "satisfy" a child support obligation.

[39] In a somewhat analogous situation, we discussed the difference between income that can be considered when determining one's ability to pay (setting the obligation) and income available to satisfy an obligation. In A.L.W., we reviewed the legislative intent behind the use of the ambiguous word "satisfy" in sec. 766.55(2)(c), Stats. We then stated that, "n the basis of this history, we therefore conclude that the legislative prohibition against using a non-liable spouse's income to 'satisfy' a pre-marital or pre-Act obligation in sec. 766.55(2)(c) consistent with prior legislative enactments, was not intended to prohibit consideration of the non-liable spouse's income in determining the liable spouse's ability to pay under Chapter 46 of the Wisconsin Statutes." A.L.W., 153 Wis. 2d at 426.

[40] We conclude that the distinction between income that can be considered by the circuit court when setting as opposed to satisfying a premarital or preact obligation as discussed in A.L.W. is equally valid in the analysis made on revision of an obligation of child support under sec. 767.32(1), Stats.

[41] Section 767.32(1), Stats., provides in relevant part:

[42] (1) After a judgment providing for child support under s. 767.25 . . . the court may, from time to time, on the petition, motion or order to show cause of either of the parties . . . revise and alter such judgment respecting the amount of such maintenance or child support and the payment thereof, . . . and may make any judgment respecting any of the matters which such court might have made in the original action . . . . Any change in child support because of alleged change in circumstances shall take into consideration each parent's earning capacity and total economic circumstances. *fn5

[43] Modification of a child support judgment is within the sound discretion of the circuit court although modification may only be made upon a finding of a substantial or material change in circumstances of the parties or children. Burger, 144 Wis. 2d at 523. The court's exercise of discretion will not be overturned unless the court has abused its discretion. Id. at 523. The court's exercise of discretion will be affirmed where the decision of the court reflects a "reasoning process dependent on facts in, or reasonable inferences from, the record and a Conclusion based on proper legal standards." Ashraf v. Ashraf, 134 Wis. 2d 336, 340-41, 397 N.W.2d 128 (Ct. App. 1986).

[44] In contrast to the economic restrictions of sec. 766.55(2)(c), Stats., sec. 767.32(1) expressly mandates two economic considerations be followed by the circuit court when determining ability to pay, each party's earning capacity and total economic circumstances. Pursuant to sec. 767.255(6), Stats., a circuit court's consideration of each party's earning capacity includes review of:

[45] The record reflects that Daniel's earning capacity as a full-time teacher is not in dispute. Sharol's earning capacity as a beautician is in dispute. Although the record reflects that Sharol had never worked outside the home more than 15 to 20 hours per week while married to Daniel and that she suffered serious health problems subsequent to their divorce, the record also reflects that she is of substantially improved health and that extra work hours would be made available to her if she requested them.

[46] Consideration of a party's earning capacity can manifest itself in an express finding of shirking which justifies a child support order in arrears. See, e.g., In re Paternity of R.L.M., 143 Wis. 2d 849, 422 N.W.2d 890 (Ct. App. 1988); In re Marriage of Roellig v. Roellig, 146 Wis. 2d 652, 431 N.W.2d 759 (Ct. App. 1988). The circuit court in this case made no express finding that Sharol was shirking her obligation of support. Rather, the court apparently considered earning capacity in tandem with Sharol's economic circumstances in order to determine her ability to pay.

[47] Section 767.32(1), Stats., also mandates consideration of the parties' total economic circumstances when determining an obligated party's ability to pay. Sharol conceded at oral argument before this court that a review of her total economic circumstances included consideration of her second husband's income. This court made that fact clear in Miller v. Miller, 67 Wis. 2d 435, 227 N.W.2d 626 (1975). *fn6

[48] The distinction between the setting of and the satisfaction of a child support award keeps a circuit court's review of total economic circumstances properly unrestricted by considerations that might otherwise be made of marital property definitions of income. A comparison of principles underlying the Marital Property Act with principles underlying child support furthers our Conclusion that marital property principles of income are not applicable.

[49] The Marital Property Act is designed to govern property ownership during the course of an on-going marriage and property division only upon the death of a spouse. The Marital Property Act was not intended to alter divorce law. See generally Weisburger, "The Marital Property Act Does Not Alter Divorce Law," 60 Wis. Bar. Bull. 14 (1987); Furrh, "Divorce and the Marital Property Act: The Wisconsin Cases," 15 Community Prop. J. 41 (1989). No language within the Marital Property Act expressly or impliedly preempts the factors that the circuit court must consider when determining an obligated parent's ability to pay child support pursuant to sec. 767.32(1), Stats. Likewise, no language within the Marital Property Act restricts the traditionally broad definition of income that can be considered by the circuit court upon review of total economic circumstances. More specifically, the primary concern of sec. 766.55 is to prevent premarital creditors from receiving a windfall through access to a nonobligated spouse's income or assets otherwise attributable to the obligated parent due to enactment of the Marital Property Act. See A.L.W., 153 Wis. 2d at 425 and n.9.

[50] Where sec. 766.55(2)(c), Stats., protects the nonobligated spouse from bearing the financial burden of premarital debts owed by his or her spouse, the child support statutes in ch. 767 protect the welfare of the child. Principles which underlie an obligation to support a child upon divorce follow the primary rule that both parents have the obligation to support the minor children of their marriage. "ivorce terminates only the relationship of husband and wife, and does not affect in any manner the parental relations or duties of the parties." Hutschenreuter v. Hutschenreuter, 23 Wis. 2d 318, 321, 127 N.W.2d 47 (1964). The stated goal of child support is to provide the greatest amount of income possible in order to maintain the children at the standard of living they would have enjoyed had the family remained intact. See Sommer v. Sommer, 108 Wis. 2d 586, 589-90, 323 N.W.2d 144 (Ct. App. 1982). As this court stated in Kritzik v. Kritzik, 21 Wis. 2d 442, 448, 124 N.W.2d 581 (1963):

[51] n his role as a family court, the trial court represents the interests of society in promoting the stability and best interests of the family. It is his task to determine what provisions and terms would best guarantee an opportunity for the children involved to grow to mature and responsible citizens, regardless of the desires of the respective parties. This power, vested in the family court, reflects a recognition that children involved in a divorce are always disadvantaged parties and that the law must take affirmative steps to protect their welfare. (Footnote omitted.)

[52] Absent the distinction between setting and satisfying a child support obligation, it is clear that the protections afforded the nonobligated spouse would override the goals of child support by greatly restricting the income sources that the circuit court could consider when determining ability to pay. Our Conclusion best protects both goals.

[53] Sharol's arguments, especially those made at oral argument before this court, appear to be in accord with our method of harmonizing secs. 766.55(2)(c) and 767.32(1), Stats. Sharol concedes that the $337 child support obligation ordered might well have been justified under a traditional review of sec. 767.32(1). Sharol argues, however, that the trial court erred at law when it exercised its discretion to apply the percentage standards under HSS 80, Wis. Admin. Code, to her marital property income. *fn7 We agree. Having already concluded that marital property principles of income do not enter into a child support analysis, it is necessary to determine to what income the percentage standards are to be applied by harmonizing use of the percentage standards under sec. 767.25(1j) with their use under sec. 767.32(1).

[54] Although secs. 767.25 and 767.32(1), Stats., share the same principles, statutory revisions made to sec. 767.25 manifest legislative intent to restrict the circuit court's ability to exercise its discretion on the initial setting of a child support order. Relevant sections of sec. 767.25 provide:

[55] (1j) Except as provided in sub. (1m), the court shall determine child support payments by using the percentage standard established by the department of health and social services under s. 46.25(9)(a).

[56] (1m) Upon request by a party, the court may modify the amount of child support payments determined under sub. (1j) if, after considering the following factors, the court finds by the greater weight of the credible evidence that use of the percentage standard is unfair to the child or to any of the parties:

[57] Prior to the codification of sec. 767.25(1j) and (1m), Stats., effective July 1, 1987, application of the percentage standards promulgated into rule at HSS 80, Wis. Admin. Code, could be applied in lieu of the factors listed at the total discretion of the circuit court. See sec. 767.25(1m) and (1p) (1983-84). Changes made pursuant to 1985 Act 29 and first codified at sec. 767.25(1j) (1985-86) now mandate the use of the percentage standard. Under the percentage standard calculations, the needs of the child are presumed. Likewise, it is presumed that the custodial parent shares his or her income with the child. It is also presumed that the award set via use of the percentage standard calculations is fair. See Preface, Child Support Percentage of Income Standard, ch. HSS 80, Wis. Admin. Code. Thus, under sec. 767.25(1j), the discretion of the circuit court has been greatly circumscribed. Discretion in the initial determination of child support under sec. 767.25 can only be exercised by the circuit court upon the request of a party pursuant to sec. 767.25(1m). Upon request, the circuit court may modify the percentage calculation award only if, after considering the factors listed, "he court finds by the greater weight of the credible evidence that use of the percentage standard is unfair to the child or any of the parties." Section 767.25(1m).

[58] To date, the legislature has not manifested a similar intent to restrict the broad discretion exercised by the circuit courts on revision of child support orders pursuant to sec. 767.32(1), Stats. Absent legislative direction, we will not act so as to mandate use of the percentage standard on revision of child support and thereby reduce the circuit court's broad discretion at this stage. To the contrary, we read sec. 767.32(1) as analogous to the request a party makes under sec. 767.25(1m) for discretionary revision of an initial award. By analogy, the movant or petitioner under sec. 767.32(1) will only be successful in his or her attempt to revise an earlier judgment awarding child support if he or she shows that the award is unfair under circumstances as they stand since the time of the original order.

[59] However, this case presents an unresolved issue of first impression in the discretionary use of the percentage standard on revision of child support orders when the non-custodial parent has remarried. *fn8 The question we must resolve is what is the "gross income" of a remarried, non-custodial parent for purposes of calculating the "base" to which the relevant percentage standard is ultimately applied.

[60] The percentage standard is applied to a "base," defined as "the monthly income at which the child support obligation is determined . . . ." HSS 80.02(3), Wis. Admin. Code. The base is derived from calculations made from the paying parent's "gross income." "Gross income" is broadly defined under HSS 80.02(12) as income "derived from any source and realized in any form." The reference for the gross income definition is the federal income tax definition found at 26 C.F.R. 1.61-1. *fn9

[61] We conclude that the gross income issue is resolved, absent direction from the legislature or the Department of Health and Social Services, by harmonizing application of HSS 80 percentage standards as applied in initial determinations of child support under sec. 767.25(1j), Stats., with the discretionary application of the standard under sec. 767.32(1). In order to harmonize these statutes in this respect, this court makes one assumption. It is assumed that when the percentage standard is applied in the initial determination of child support at the final judgment of divorce pursuant to sec. 767.25(1j), the paying parent is single. Therefore, his or her gross income is derived solely from his or her individually earned income and assets.

[62] We hold that a circuit court that chooses to use the percentage standard in the exercise of his or her broad discretion when revising a child support obligation pursuant to sec. 767.32(1), Stats., must apply the same principles of gross income as are available to it under our assumed application pursuant to sec. 767.25(1j). Thus, in order to properly apply the percentage standard on revision when the paying parent has remarried, the circuit court must determine the paying parent's gross income as if he or she were still single. The circuit court would then convert that gross income into the base to which it would apply the relevant percentage standard.

[63] In no uncertain terms does our holding, which restricts the definition of gross income for purposes of applying the percentage standards, otherwise restrict the circuit court's total discretion to contemporaneously review on its own initiative the percentage standard award as it revises a child support order pursuant to sec. 767.32(1), Stats. The circuit court retains broad discretionary powers to adjust the percentage calculation to arrive at an award it determines is fair in light of the knowledge it has before it concerning the parties' earning capacities and total economic circumstances.

[64] Relevant to the central issue in this case, we conclude that marital property principles of income are not to be considered under statutes in ch. 767 which deal with issues of child support. We conclude that the use of the percentage standards of HSS 80, Wis. Admin. Code, on revision of a child support order pursuant to sec. 767.32(1), Stats., is purely discretionary with the circuit court. We further conclude, however, that should the circuit court choose to apply the percentage standard under circumstances in which the paying parent has remarried, then gross income shall be calculated as if that parent had remained single. We further conclude that no restraints are otherwise placed upon the circuit court's discretion on revision of a child support order to adjust a percentage calculation in light of the parties' earning capacities and total economic circumstances as we have defined them herein.

[65] The court of appeals decision is affirmed, and the case is remanded to the circuit court for redetermination and order of child support not inconsistent with this opinion.

[66] By the Court. -- The decision of the court of appeals is affirmed.

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Opinion Footnotes

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[67] *fn1 In this case, the circuit court used sec. 766.55(2)(c)1, Stats., having to do with premarital, postact obligations rather than sec. 766.55(2)(c)2, which covers the preact obligations. Although both In re Marriage of Poindexter, 142 Wis. 2d 517, 419 N.W.2d 223 (1988) and In re Marriage of Burger v. Burger, 144 Wis. 2d 514, 424 N.W.2d 691 (1988) interpreted sec. 766.55(2)(c)2, the difference between these statutes is insignificant for purposes of our analysis.

[68] *fn2 At the time of the revision hearings before Judge Froehlich, the Abitz's eldest child, Jeffrey, had reached 18 years of age, and Sharol's duty to support him had ended. However, arrearages dating back to Outagamie county court commissioner Jeffrey S. Brandt's final order were reviewed and adjusted by Judge Froehlich.

[69] *fn3 The record on motion to reconsider reflects that the following conversation took place concerning the determination of Sharol's "income:"

[70] MR. CHUDACOFF: As I understand, what you are doing in your decision, then, in terms of the philosophy of it, you are taking half of her current husband's income plus half of her income --

[71] THE COURT: Gross.

[72] MR. CHUDACOFF: -- and saying those are her income because of the marital property division.

[73] THE COURT: I'm not saying that's her income. I'm saying she is entitled under the law to petition the Court and she can get that income. She can take that income away from him.

[74] MR. CHUDACOFF: Because she has the right to take that away if she chooses to do that, you're indicating that the entitlement to support under the guidelines which is now 17 percent, would be 17 percent of the total of the two halves of gross income, and then you are saying that as long as that is an amount which is greater than her total income she pays her total income, and as long as it is less than her total income she pays that amount.

[75] As I understand your philosophy behind that, it is that, while he cannot be required to devote any of his income, whether she can get it or not, to the support of her daughter from a prior marriage because that's a pre-existing obligation, you can take as much as you want up to the total of her income from her to pay that obligation based on both the incomes.

[76] THE COURT: That's what I am doing. You got it correct. And that's what the appellate court is going to have to decide.

[77] *fn4 As stated, the court of appeals decision relied on Poindexter and Burger as controlling the determination of this case. However, Poindexter and Burger interpreted sec. 766.55(2)(c), Stats., to conclude that a nonobligated spouse's income was not available to "satisfy" maintenance or child support obligations.

[78] *fn5 Sharol's brief offers two threshold arguments. First, Sharol asserts that sec. 767.32(1), Stats., is inapplicable because the original judgment of divorce did not "provide for" child support. We disagree. In final judgments of divorce, provisions for child support are not final, and the circuit court may exercise its powers under the statutes to revise such provisions upon a finding of a substantial change in circumstances. See Romanowski v. Romanowski, 245 Wis. 199, 14 N.W.2d 23 (1944).

[79] Sharol also argues that the findings of the circuit court do not support a Conclusion that a substantial change in circumstances has occurred. We disagree. Our review of the entire record supports the circuit court's Conclusion. Support on record is sufficient. See In re Marriage of Schwantes v. Schwantes, 121 Wis. 2d 607, 631, 360 N.W.2d 69 (1984).

[80] *fn6 Sharol asserts that the circuit court erred in part because the findings do not reflect that Sharol's total economic circumstances were directly compared to Daniel's pursuant to sec. 767.32(1), Stats. We disagree that specific findings are required. The record reflects that the circuit court had full financial disclosure from both parties and their spouses at his disposal. We find such evidence of record sufficient to show that the parties' total economic circumstances were considered in the determination of Sharol's ability to pay.

[81] *fn7 The percentage standards pursuant to HSS 80.03, Wis. Admin. Code, are:

[82] (a) 17 percent for one child;

[83] (b) 25 percent for two children;

[84] (c) 29 percent for three children;

[85] (d) 31 percent for four children; and

[86] (e) 34 percent for five or more children.

[87] *fn8 We tacitly approved of discretionary use of the percentage standards at HSS 80, Wis. Admin. Code, in revision of child support orders in Burger, 144 Wis. 2d 514; see also Marriage of Long v. Wasielewski, 147 Wis. 2d 57, 432 N.W.2d 615 (Ct. App. 1988). Paying parties in both cases were single.

[88] *fn9 26 CFR 1.61-1, Gross income, provides:

[89] (a) General definition. Gross income means all income from whatever source derived, unless excluded by law. Gross income includes income realized in any form, whether in money, property, or services. Income may be realized, therefore, in the form of services, meals, accommodations, stock, or other property, as well as in cash. Section 61 lists the more common items of gross income for purposes of illustration. For purposes of further illustration, sec. 1.61-14 mentions several miscellaneous items of gross income not listed specifically in section 61. Gross income, however, is not limited to the items so enumerated.

19900510

06/16/88 MARRIAGE SUE ANN BURGER v. JAMES L. BURGER Income, new spouse income and child support

[1] SUPREME COURT OF WISCONSIN

[2] No. 87-0174

[3] 1988.WI.172 <http://www.versuslaw.com>, 424 N.W.2d 691, 144 Wis. 2d 514

[4] June 16, 1988

[5] IN RE THE MARRIAGE OF: SUE ANN BURGER, NOW KOOS, PETITIONER-RESPONDENT

JAMES L. BURGER, RESPONDENT-APPELLANT

[6] APPEAL from an order of the circuit court for Kenosha County. AFFIRMED.

[7] For the respondent-appellant there were briefs (in court of appeals) by Walter W. Stern, III and Stern, Caviale & Stern, Kenosha, and oral argument by Walter W. Stern, III.

[8] For the petitioner-respondent there was a brief (in court of appeals) by Geoffrey Dowse and Ventura, Dowse & Wagner, Kenosha, and oral argument by Geoffrey Dowse.

[9] Amicus curiae brief was filed by Daniel L. Furrh, Waukesha for the American Academy of Matrimonial Lawyers, Wisconsin Chapter and the Family Law Section, State Bar of Wisconsin.

[10] Day, J.

[11] The opinion of the court was delivered by: Day

[12] DAY, J. This is an appeal from an order of the circuit court for Kenosha county, Honorable Michael S. Fisher, circuit Judge, modifying a judgment of divorce, which this court accepted on certification from the court of appeals. In its certification, the court of appeals framed the sole issue for review as follows: "Whether, in analyzing each parent's earning capacity and total economic circumstances to determine whether to modify a child support order under sec. 767.32(1), Stats., the trial court must consider half the marital income of a remarried, voluntarily unemployed, custodial parent under the marital property reform act, ch. 766, Stats." After acceptance of certification of the present action, this court decided Poindexter v. Poindexter, 142 Wis. 2d 517, 419 N.W.2d 223 (1988). Though Poindexter dealt with modification of maintenance in a divorce action, application of the statutory interpretation of sec. 766.55(2)(c)2, Stats., barring use of marital property income to satisfy a pre-marital obligation, is equally applicable in analyzing modification of child support provisions. Following the analysis of Poindexter, none of a new spouse's income is available under the Marital Property Reform Act for consideration of support obligations, which would be classified as a pre-Act debt. Counsel for Mr. Burger conceded at oral argument that Poindexter resolved the certified issue.

[13] Although this case could be remanded to the court of appeals since the issue certified is resolved by existing case law, in the interests of judicial economy, we address the other issues argued by the parties on appeal. We conclude the circuit court's holdings concerning increased child support, arrearage credit, contempt for failure to pay support, ability to claim the minor children as dependents for tax purposes, and employer deductions under wage assignment, were resolved within properly exercised discretion. We therefore affirm the circuit court's order.

[14] The facts are not in dispute. Sue Ann Burger (now Koos) and James L. Burger (Burger) were divorced in 1981. Ms. Koos was awarded custody of the parties' two children, then six and four years of age. Mr. Burger was ordered to pay $75.00 per week for child support. At the time of the divorce, Koos was employed and earning approximately $12,000 annually. Burger's gross income was $408 per week.

[15] In 1982, Koos remarried. She terminated her outside employment while pregnant with the first of two children she had with her new husband, and thereafter remained at home to care for her children.

[16] In December, 1985, Koos filed an order to show cause for an increase in child support, and to determine and require payment of arrearage. On January 16, 1986, the acting family court commissioner hearing the motion concluded a substantial change of circumstances existed and increased child support to $115 per week. The amount of support was determined based on Burger's representations at the hearing, estimating his 1985 gross income at $17,500, plus disability benefit payments, for a gross weekly income of $458.40. The commissioner then apparently applied the percentage standard established under sec. 767.25(1p), Stats. (1985-86)1, to arrive at the $115 support figure ($458.40 x 25% = $114.60, rounded to the nearest dollar = $115).

[17] On February 14, 1986, written findings of fact supporting the revised support order were signed by the acting family court commissioner. They establish that Koos, though no longer employed outside the home, was contributing to "her family, home and community by working in the home," that the two children of the parties were four and a half years older and "their needs are bound to increase," and that Burger had an increased ability to pay support. Burger's income was found to be $532.00 per week based on figures reported in his financial disclosure statement, which he had submitted to the court subsequent to the order to show cause hearing. The amount of his arrearage was fixed at $3,440. Although Burger's income as reported in his disclosure statement and adopted in the findings of fact was greater than that relied upon by the commissioner in revising the amount of child support based on percentage of income, weekly support payments remained at $115.

[18] On June 15, 1986, Burger was ordered to show cause why he should not be held in contempt for failure to follow the revised support order. Koos alleged that Burger was then $4,186.03 in arrears in making child support payments. Of that amount, $746.30 had accrued since support had been increased from $75 to $115 per week. The acting family court commissioner found Burger had increased his arrearage by the additional amount of support required since the February, 1986 order, and she ordered payment of the arrearage in one month or Burger would be held in contempt and would be required to spend five days in jail. On May 28, 1986, based on a request to review the commissioner's order, Circuit judge Michael Fisher stayed the contempt order pending further order.

[19] Burger then sought review of the revised child support order before Judge Fisher, asking that the increased amount of support be modified. He further requested an order prohibiting his employer from deducting support from separate regular and holiday paychecks issued in the same week under his wage assignment, and sought a finding reducing his arrearage in the amount of social security benefits paid to his children while he was disabled. He also requested the right to claim both children as dependents for income tax purposes. Koos, in her reply motion, asked the court to uphold the commissioner's contempt and arrearage findings and further sought a wage assignment for Burger's unemployment compensation benefits.

[20] After a hearing regarding these matters, Judge Fisher affirmed the decision of the family court commissioner, finding that there was a sufficient change of circumstances to award an increase in child support. The court found these circumstances included the fact that the parties' children were older and had greater needs, Koos was not working and Burger's income had increased.

[21] Examining Burger's ability to pay increased support, the court determined his actual income was $28,360 by adding his taxable 1985 income to disability benefits he received. Giving Burger the benefit of the doubt concerning intermittent unemployment and disability layoffs which he claimed would occur again as they had in the past, the court then affirmed the commissioner's $115 support calculation, though it was based on twenty-five percent of Burger's estimated income of approximately $17,500 rather than his substantially greater actual income of $28,360. The court denied Burger's motion to prohibit his employer from deducting child support payments from every check, including one-day holiday paychecks, under his wage assignment, because Burger had been continuously in arrears since 1982. It further denied his motion to modify the original divorce judgment provision which awarded one tax exemption to Burger and one tax exemption to Koos for their dependent children.

[22] By written decision on November 4, 1986, the court credited Burger with $1,325 towards his arrearage during the time he was disabled, unable to work, and his children received $4,464 in social security benefits. The $1,325 credit was equal to the amount of support Burger had failed to pay during the time he was not working at all but only receiving social security disability benefits and sick pay. Burger was not given credit toward arrearages which had accrued before or after this time, but was ordered to pay his remaining arrearage by December 4, 1986, or he would be found in contempt of court. The court further ordered execution of a wage assignment for unemployment compensation received by Burger.

[23] Burger appealed to the court of appeals, alleging the circuit court abused its discretion in: 1) determining a change of circumstances existed sufficient to modify child support when his former wife voluntarily left the workforce to have children with her second spouse, 2) failing to credit the full amount of social security benefits paid to his children toward his arrearage, 3) finding him in contempt for failure to pay child support, 4) denying him an award of both tax exemptions for the parties' minor children, and 5) failing to curtail his employer's practice of deducting child support payments from regular and holiday paychecks issued in the same week under his court ordered wage assignment ordered by the court. The court of appeals certified this case pursuant to Rule 809.61, Stats., and we accepted the case in entirety for review.

[24] Burger first alleges that the circuit court abused its discretion in increasing his payment of child support without a sufficient showing of a change in circumstances. The statutory provision for modification of a divorce judgment as it pertains to child support states, in pertinent part:

[25] 767.32 Revision of judgment. (1) After a judgment providing for child support . . . the court may, from time to time, on the petition of either of the parties, . . . revise and alter such judgment respecting the amount of child support and the payment thereof . . . . Any change inchild support because of alleged change in circumstances shall take into consideration each parent's earning capacity and total economic circumstances.

[26] This court has held that modification of a judgment of divorce relating to child support may only be made when there has been a substantial or material change in circumstances of the children. Severson v. Severson, 71 Wis. 2d 382, 386, 238 N.W.2d 116, 119 (1976). A modification of child support rests within the sound discretion of the circuit court and will not be overturned absent an abuse of the court's discretion. Proper exercise of this broad discretion exists where the record reflects that the court considered the needs of the custodial parent and children, and the ability of the non-custodial parent to pay. Edwards v. Edwards, 97 Wis. 2d 111, 116, 293 N.W.2d 160, 163 (1980).

[27] In increasing support, the circuit court in this case based its holding on findings that the parties' children were older, and the custodial parent, Koos, was not working. The court further found that the non-custodial parent, Burger, had the ability topay increased support because his annual income had substantially increased since the divorce was granted. We conclude these findings were sufficient to warrant an increase of the support paid by Burger.

[28] Increased age, or the reaching of school age, of minor children has been held sufficient to establish increased need and, therefore, an increase in support payments consistent with the children's best interests and the non-custodial parent's ability to pay. Klipstein v. Klipstein, 47 Wis. 2d 314, 318, 177 N.W.2d 57, 59 (1970); Chandler v. Chandler, 25 Wis. 2d 587, 592, 131 N.W.2d 336, 339 (1964); Kritzik v. Kritzik, 21 Wis. 2d 442, 447, 124 N.W.2d 581, 585 (1963). In the present action, the court's recognition that the parties' children were four and one-half years older than when support was initially set provided sufficient factual basis to conclude a substantial or material change in circumstances had occurred.

[29] Having established need, the court was also required to consider Burger's ability to pay increased support. The test for assessing ability to pay is whether the paying parent in "present economic circumstances can absorb the increased expenditure." Kritzik, 21 Wis. 2d at 448, 124 N.W.2d at 585. We conclude Burger's ability to pay was adequately demonstrated by the circuit court.

[30] Examining the record, it is clear that the family court commissioner intended to use the percentage standard for setting support which was in. effect at that time, and that this method was approved by the circuit court. Contrary to Burger's assertions on appeal, Koos' income was irrelevant in determining his children's need or his ability to pay the percentage fixed sec. 767.25(1p), Stats. The paying parent's income was the sole relevant factor to be considered under that statute.

[31] In applying the percentage standard to the facts of this case, the circuit court allowed the amount of support to remain based on Burger's estimated income rather than determining percentage of support based on his greater, actual income. The court intended by this measure to counteract future wage reductions because Burger claimed he would be periodically unable to work as a result of physical disability and because of future layoffs at the factory where he was employed. The record shows that although these problems had occurred within the year prior to the support hearing, Burger's income was over $28,000. No showing was made that these problems would reduce Burger's income below that amount in the future. Moreover, the court was under no obligation to determine Burger's ability to pay based on prospective changes. Anderson v. Anderson, 72 Wis. 2d 631, 643, 242 N.W.2d 165, 171 (1976) (ability to pay is to be made upon the basis of the circumstances existing at the time such determination is made). Considering the circumstances, the court, in exercising its discretion, was most generous to Burger in setting his support payments at a lower rate. Burger had no cause to complain that he was required to pay less than the statutory percentage, when, under sec. 767.25(1p), Stats., twenty-five percent of his actual income could have been ordered as support.

[32] We conclude that the circuit court adequately determined Burger's ability to pay based upon circumstances existing at the time of the support hearing. It properly acted within its discretion in revising the child support payments with modification for the unusual mitigating factors affecting Burger's income.

[33] The second issue raised by Burger is that the circuit court failed to give him credit for the full amount of social security benefits paid to his children at a time when he was fully disabled and did not make some support payments. Reduction of support arrears is a matter within the sound discretion of the circuit court, and arrears are to be canceled only upon cause or justification. The retroactive modification of support arrears is a discretionary remedy which should provide a just result in light of all circumstances. O'Brien v. Freiley, 130 Wis. 2d 174, 179, 387 N.W.2d 85, 87-88 (Ct. App. 1986), citing Rust v. Rust, 47 Wis. 2d 565, 570, 177 N.W.2d 888, 891 (1970).

[34] Application of dependent children's social security benefits to a non-custodial parent's arrearage is an issue of first impression in this state although other jurisdictions have addressed this matter. Generally, social security benefits have not been considered to be a replacement for or synonymous with child support payments, but are treated as a separate benefit which accrues to a person's children because that person has become disabled. A number of jurisdictions have refused to credit child support arrearages accumulated prior to the paying parent's entitlement to disability benefits. See, e.g., Robinson v. Robinson, 651 P.2d 454, 455-56 (Colo. Ct. App. 1982) (social security disability dependent benefits may not be credited beyond monthly amount of child support obligation); Potts v. Potts, 240 N.W.2d 680 (Iowa 1976) (disabled parent should be credited for social security dependency payments only to the extent of child support obligation during the period such benefits are paid); Folds v. Lebert, 420 So. 2d 715 (La. Ct. App. 1982) (credit for arrearages from social security during period of actual disability); Gerlich v. Gerlich, 379 N.W.2d 689, 691 (Minn. Ct. App. 1986) (child's receipt of social security benefits from the account of the parent charged with support does not constitute payment from that parent); Romero v. Romero, 101 N.M. 345, 682 P.2d 201 (Ct. App. 1984) (social security benefits credited to child support arrearage only for months for which benefits were received); see also Fowler v. Fowler, 156 Conn. 569, 244 A.2d 375, 377 (1968) (in sound discretion of trial court whether to credit child support arrearages with social security benefits).

[35] Under the facts of this case, Burger was already in arrears before the period of disability which entitled his children to social security benefits. He did make partial support payments during the period. The court found he had sustained an additional arrearage during the period of his disability of $1,325. We conclude the circuit court properly exercised its discretion in giving Burger credit only for the amount of support he was unable to pay during the time the social security benefits were received.

[36] Burger's third allegation, that he was improperly held in contempt, is based on his interpretation of Anderson v. Anderson, 72 Wis. 2d 631, 242 N.W.2d 165 (1976), which he claims holds that the fact an arrearage in support payments has accrued does not by itself support a finding of contempt. It is true that mere inability to pay child support cannot form the basis for a contempt finding. However, a person can be held in contempt of court for failure to pay money where "the refusal is willful and contemptuous and not a result of his inability to pay." Anderson, 72 Wis. 2d 631, at 647, 242 N.W.2d 165, at 173, quoting O'Connor v. O'Connor, 48 Wis. 2d 535, 542, 180 N.W.2d 735, 739 (1970); see also secs. 767.30(3) and 767.305, Stats. In Rust v. Rust, 47 Wis. 2d 565, 570-71, 177 N.W.2d 888, 891 (1970), this court held that the contempt power of a court is the proper remedy for flouting an order for payment of support.

[37] Considering the gross income available to Burger, we conclude inability to pay was not demonstrated on this record. Moreover, Burger's continuing arrearages, beginning in 1982 and specifically accruing after his former spouse brought orders to show cause for his failure to pay, are evidence of willful disobedience. If the circuit court concludes from past performance that a paying parent cannot be relied upon to keep up on support obligations until some legal force is exerted, use of contempt is "perfectly justified." See Foregger v. Foregger, 48 Wis. 2d 512, 521, 180 N.W.2d 578, 582-83 (1970) There is no doubt on this record that the circuit court properly exercised its discretion. The evidence amply supports that the finding of contempt was warranted.

[38] Burger contends a fourth error in the circuit court's modification occurred because it failed to grant him the ability to claim both children as dependents for tax purposes. There is no specific statute in Wisconsin which controls Disposition of tax exemptions upon judgment of divorce or its modification. The Internal Revenue Code, sec. 152(e) (1988), makes an assumption that the custodial parent should be permitted to claim children as dependents for tax purposes unless the non-custodial parent has provided more support than the custodial parent or the original divorce decree awarded the tax exemption to the non-custodial parent. Neither of these showings is supported by the record in this action.

[39] Burger claims that since Koos has no earnings, she is not entitled to a tax exemption. The tax exemption determination is not presumed to be awarded to a particular parent or on the basis of earning under the modification of judgment statute, sec. 767.32. The circuit court articulated a rational basis for finding that Burger should not be rewarded with both tax exemptions because of his continued arrearages. We conclude no abuse of discretion occurred in making this ruling.

[40] Finally, Burger argues that his employer's practice of taking child support payments out of checks issued in the same week violates the wage assignment of the divorce decree because his initial support order specified that he was responsible for paying only $75.00 per week. Under the wage assignment as revised by the circuit Judge, a discretionary finding was made that, because Burger had been in arrears for a prolonged period of years, his employer's practice was appropriate. The power vested in the family court to promote stability and the best interests of the family regardless of the desires of the respective parties, "reflects a recognition that children involved in a divorce are always disadvantaged parties and that the law must take affirmative steps to protect their welfare." Krause, 58 Wis. 2d at 509, 206 N.W.2d at 595 (1973), quoting Kritzik, 21 Wis. 2d at 448, 124 N.W.2d at 585. Burger failed to show why the court's exercise of discretion in making such a finding was unreasonable in light of his continued arrearages. See Wisconsin Public Service Corp. V. Krist, 104 Wis. 2d 381, 395, 311 N.W.2d 624, 631 (1981) (appellate courts will not reverse a circuit court refusal to grant relief unless the court abused its discretion or no reasonable basis exists for the court's decision). We therefore affirm its wage assignment holding.

--------------------------------------------------------------------------------

Opinion Footnotes

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[41] 1 Section 767.25, Stats. (1985-86), provides guidelines for setting the initial amount of child support upon entering a judgment for divorce and is helpful in determining a fair amount of support upon modification. Subsection (1p), which no longer exists under current statutes but was in effect at the time the commissioner heard this case, reads:

[42] In lieu of determining child support payments under sub. (1m) [a multiple factor analysis], the court may order either or both parents to pay an amount determined by using the percentage standard adopted under s. 767.395(3).

[43] The Department of Health and Social Services guidelines adopted pursuant to sec. 767.395, Stats., at the time support was modified in this case permitted a percentage of gross income standard to be used in establishing child support. The method of calculating the paying parent's obligation under this standard was based solely upon a percentage rate. For two children, the rate was set at twenty-five percent of the paying parent's income. See Wisconsin Department of Health and Social Services Child Support Enforcement Manual, Ch. V, Part C, "Support Obligations and Paternity," 1-2 (July, 1984).

19880616

Biel case: discussion of contempt, child support, arrears, modification

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

(The decision of the Court is referenced in the North Western Reporter in a table captioned "Wisconsin Court of Appeals Table of Unpublished Opinions".)

In re the Marriage of: PENNY R. BIEL, Petitioner-Respondent

JOHN M. BIEL, Appellant.

86-09,41, 86-1470.

Court of Appeals of Wisconsin.

Feb. 25, 1988.

Circuit Court, Dodge County

Affirmed in part, reversed in part, and cause remanded

Appeal from orders of the circuit court for Dodge county: Daniel W. Klossner, Jr., Judge.

Before DYKMAN, J., EICH, J., and SUNDBY, J..

PER CURIAM.

***1

(Cite as: 143 Wis.2d 892, 422 N.W.2d 461, 1988 WL 36581, ***1 (Wis.App.))

John Biel appeals from orders denying motions for postconviction relief to dismiss contempt orders of December 18, 1984 and January 23, 1986. [FN1] The parties are not in agreement as to the issues but we consider them to be: (1) Is the trial court's finding that John changed his employment to avoid support payments clearly erroneous? (2) Did the trial court abuse its discretion in finding John in contempt? (3) Did the trial court abuse its discretion in failing to apply the reduction in John's reduced support obligation retroactively? (4) Did the trial court abuse its discretion in failing to consider John's halftime care of his children in determining John's support obligation? (5) Did the trial court err in failing to grant John's motion for postconviction relief from the December 1984 contempt order on the grounds he was denied the effective assistance of counsel?

FN1 Appeal No. 86-0941 involves the order denying relief from the December 18, 1984 contempt order and appeal No. 86-1470 involves the order

denying relief from the January 23, 1986 contempt order. These appeals are consolidated pursuant to sec. (Rule) 809.10(3), Stats. John previously appealed from the January 1986 contempt order. Following our decision in In re Marriage of Biel v. Biel, 130 Wis.2d 335, 387 N.W.2d 295 (Ct. App. 1986), that appeal was voluntarily dismissed.

We conclude that: (1) The trial court's findings are not clearly erroneous. (2) The trial court did not abuse its discretion in finding John in contempt but that the purge conditions were excessive. (3) The trial court abused its discretion in failing to apply retroactively a reduction in John's support obligation and thereby reduce the arrearage. (4) The trial court did not abuse its discretion in determining the amount of reduced support. (5) John was not denied the effective assistance of counsel. We therefore affirm the order denying relief from the December 18, 1984 contempt order. The order denying relief from the January 23, 1986 contempt order is affirmed in part, reversed in part and we remand the cause for further proceedings consistent with this opinion.

BACKGROUND OF THE CASE

At the time of the divorce, John was ordered to pay $700 child support and $100 maintenance each month. These obligations were based on his fulltime and overtime employment at John Deere Company and parttime employment as a local restaurant. He lived with his mother and cared for the parties' two children halftime.

Subsequent to the divorce, John moved out of his mother's house and rented an apartment in the neighborhood where the family had lived during the marriage. John had primary custody of the children during the summer, when he paid no support obligation.

In September 1984 John Deere ordered a shift change. John then took a leave of absence from John Deere until March 1985. Upon returning to John Deere his earnings were made the subject of a wage assignment. At that time his gross weekly earnings from John Deere for a forty-hour week were $534.67. When his wages were made subject to the wage assignment, John terminated his employment with John Deere. Thereafter he received three payments during the summer of aid to families with dependent children and supplemented that income with bartending employment.

***2

(Cite as: 143 Wis.2d 892, 422 N.W.2d 461, 1988 WL 36581, ***2 (Wis.App.))

The family court commissioner filed three contempt motions. [FN2] The last motion resulted in a finding of civil contempt and a sentence of six months to be served in the county jail. John was granted leave to purge himself of this contempt by: (1) paying $11,370.75 to the clerk of court by January 31, 1986 to satisfy support and maintenance arrearages, (2) paying child support in the amount of $115 weekly commencing January 27, 1986.

FN2 Contempt proceedings were heard by the trial court on October 18, 1984, December 18, 1984 and January 3 and 17, 1986. The trial court dismissed the contempt order resulting from the October 1984 proceedings because John was unrepresented by counsel. The December 1984 proceedings are the subject of John's claim of ineffective assistance of counsel. Pertinent facts to that claim will be stated later in the opinion.

At the hearing on the family court commissioner's contempt motion, the court also heard John's motion to amend the divorce judgment to reduce maintenance and child support, correct the child support and maintenance arrearages, expunge the arrearages according to the redetermined support, and to stay all further contempt proceedings pending appeal. The court amended the divorce judgment to eliminate John's maintenance obligation and to reduce child support to $115 per week. The court refused to correct the arrearages of record or to expunge any portion thereof.

II.

FINDINGS OF CONTEMPT

A person may be held in contempt of court for failure to pay court-ordered support only where that failure is willful and not the result of an inability to pay. Anderson v. Anderson, 72 Wis.2d 631, 647, 242 N.W.2d 165, 173 (1976). 'The essential finding in such a contempt must be that the defendant is able to pay or should be able to pay if he can work and will not and the refusal to pay is willful and with intent to avoid payment.' Id., quoting O'Connor v. O'Connor, 48 Wis.2d 535, 542-53, 180 N.W.2d 735, 740 (1970). A trial court's factual findings in a contempt matter will be sustained on appeal unless clearly erroneous. Sec. 805.17(2), Stats.; see also Schroeder v. Schroeder, 95 Wis.2d 415, 418, 290 N.W.2d 548, 549 (Ct. App. 1980), rev'd on other grounds, 100 Wis.2d 625, 302 N.W.2d 475 (1981).

In the January 1986 contempt proceedings the trial court found that John willfully and intelligently reduced his income thereby reducing his ability to pay his child support. This court has already determined that John's decision to quit his factory job and return to finish his college degree 'evidences that [John] flagrantly disregarded his obligation to support his children.' In re Marriage of Biel v. Biel, No. 85-0434, slip op. at 6 (Wis. Ct. App. July 9, 1986). [FN3]

FN3 We cite this unpublished opinion not for precedential value but as law of the case. Sec. (Rule) 809.23(3), Stats.

The facts upon which Biel, supra, was based remain the same. John quit John Deere because the wage assignment, coupled with a reduced work week due to his final exams at the university, did not leave him sufficient funds to care for his children halftime. He admitted the 'wage assignment was a primary factor' influencing him to quit.

***3

(Cite as: 143 Wis.2d 892, 422 N.W.2d 461, 1988 WL 36581, ***3 (Wis.App.))

John's termination of employment because of the wage assignment justified a finding of contemptuous conduct. John had the burden to show that legitimate purposes underlay his termination of employment. See Balaam v. Balaam, 52 Wis.2d 20, 30, 187 N.W.2d 867, 872 (1971) (person against whom contempt is charged has the burden of showing his conduct is not contemptuous). John testified that he had planned on staying fulltime at John Deere on third shift and continue schooling parttime if the court commissioner would accept a lower support amount. John did not explain why he abandoned his plan, failed to seek a modification of the order, or why he didn't take an additional leave of absence at John Deere during his exam period. He simply contends that he had a right to refuse work in order to provide time for visiting his children and for pursuing further education.

John did not satisfy his burden. The finding that John willfully violated the support order is supported by the evidence.

III.

ABUSE OF DISCRETION ON PURGE ORDER

Although the evidence supported the 1986 finding of contempt, the conditions of the purge were excessive. A trial court cannot imprison a person for not satisfying terms which are impossible to satisfy. Shillitani v. United States, 384 U.S. 364, 371 (1966). The trial court allowed John to purge his contempt by paying $11,370.75 in fourteen days and by paying $115 weekly child support. The terms of the purge, plainly exceeded the limited means available to John. The trial court should have imposed satisfiable conditions. We reverse the requirements of the purge and direct the trial court to revise the conditions.

IV.

RETROACTIVE REDUCTION IN SUPPORT

John contends that the trial court, upon finding a change of circumstances justifying a reduction in child support, erred in not retroactively reducing support and the arrearage to the tieme when the chnaged circumstances first occurred. John claims the support should have been reduced as of the fall of 1984, when John's employment situation changed, or at least as of May 1985, when Epnny Biel's income increased. We conclude that the trial court abused its discretion by not reducing child support and arrearages as of May 1985. [FN4]

FN4 John's claim that support should have been reduced in the fall of 1984 was decided against him in In re Marriage of Biel v. Biel, No. 85- 0434, supra. We determined there that the trial court did not abuse its

discretion in refusing to modify child support on the conditions existing in 1984. We cannot address the issue here.

A change of circumstances allows modification of child support. Anderson, 72 Wis.2d at 649, 242 N.W.2d 174. Arrearanges in child support can be reduced for cause or justification. O'Brien v. Freiley, 130 Wis.2d 174, 179, 387 N.W.2d 85, 88 (Ct. App. 1986). The decision to retroactively modify support is discretionary. Id. A discretionary decision must have a reasonable basis. Wisconsin Public Service Corp. v. Krist, 104 Wis.2d 381, 395, 311 N.W.2d 624, 631 (1981).

***4

(Cite as: 143 Wis.2d 892, 422 N.W.2d 461, 1988 WL 36581, ***4 (Wis.App.))

Penny became a fulltime employee in May 1985. Before then, she worked partime from four hours to forty hours per week. Her hourly wage during fulltime employment exceeded her partitime pay. The trial court's decision to reduce support was based solely on Penny's changed circumstances.

The trial court's refusal to reduce arrearages was an abuse of discretion. The aim of a retroactive modification of arrears is to achieve a result which is just in light of all circumstances. O'Brien, 130 Wis.2d at 179, 387 N.W.2d at 88. Penny's substantially increased employment exhibited a significant change of circumstances which warranted a reduction in arrearages to a time contemporaneous with the change. The trial court's decision to reduce only future support had no reasonable basis.

EFFECT OF HALFTIME CARE ON SUPPORT

John complains that no court has addressed the issue of his halftime care of the children. In his December 1985 motion to amend the divorce judgment, John asked the court to reduce the amount of child support on the grounds that he had the children living with him fifty percent of the time. However, at the hearing John did not argue that his halftime care of the children constituted a change in circumstances justifying a reduction in child support.

John did argue at the hearing that Penny had enough money considering that he had the children halftime. The trial court did consider this and specifically found that Penny remained in need of child support. The trial court did not abuse its discretion in ordering child support according to the percentage standards.

VI.

INEFFECTIVE ASSISTANCE OF COUNSEL

John contends that because his attorney was unprepared he received ineffective assistance of counsel at the December 18, 1984 contempt hearing. Counsel was appointed by the public defender's office four days before the hearing and had no opportunity to review the papers served on John prior to the hearing. Counsel first met John immediately before the hearing. Counsel first saw the contempt papers as the hearing got underway.

A claim based on ineffective assistance of counsel must show both deficient performance by counsel and prejudice to the defenant. State v. Pitsch, 124 Wis.2d 628, 633, 369 N.W.2d 711, 714 (1985), citing Strickland v. Washington, 466 U.S. 668 (1984). [FN5] The defendant must affirmatively prove prejudice, by showing a reasonable probability that, but for counsel's unprofessional errors, the proceeding would have produced a different result. Pitsch at 641- 42, 369 N.W.2d at 718-19.

FN5 John argues that 'the standard in Wisconsin is less stringent than the test set forth by the United States Supreme Court in Strickland.' Such an argument requires briefing. Pitsch, 124 Wis.2d at 646-48, 369 N.W.2d at 721. John has not briefed this issue so we consider his claim of ineffective assistance under the federal constitution.

John's trial counsel did not testify at a postjudgment hearing. Ordinarly, the defendant must raise a claim of ineffective counsel by motion and hearing in the trial court. State v. Mosley, 102 Wis.2d 636, 657, 307 N.W.2d 200, 212 (1981). The hearing allows counsel to explain the reasons for his conduct. Id. The hearing may show that the trial counsel's conduct was a deliberate trial strategy. State v. Burroughs, 117 Wis.2d 293, 308, 344 N.W.2d 149, 157 (1984). Testimony by counsel would have served no purpose in this case. John alleges ineffectiveness from counsel's failure to prepare adequately. Lack of preparation cannot be a legitime trial strategy. We therefore address the issue without testimony by trial counsel.

***5

(Cite as: 143 Wis.2d 892, 422 N.W.2d 461, 1988 WL 36581, ***5 (Wis.App.))

At the December 18, 1984 hearing, John explained why he left his job at John Deere. The John Deere job paid him $330 per week. He worked from 3:30 p.m. to midnight. He testified that his desire to visit his children induced his change of employment. His children attended school during the day and therefore could not be visited at that time. He obtained a parttime job at a tavern that paid him $80 per week. The trial court concluded that the testimony provided no valid reason for John's failure to pay support. If his counsel had been prepared, John alleges he would have testified that a desire to obtain further education also induced him to leave his job.

John has shown no mitigating circumstances that a prepared counsel could have raised and could have overcome the evidence of his contempt. The trial court appropriately concluded from the evidence that John's desire to visit his children provided no valid reason for terminating his employment. A desire to pursue further education also did not justify the failure to pay support. The divorce judgment imposed a support obligation. By the support obligation, the judgment determined the best interests of the children. It placed support ahead of visitation and education in providing for their interest. Until the judgment was modified because of changed circumstances, support was the primary obligation, visitation and education secondary. John had no right to redetermine their best interests. His counsel's lack of preparation was not prejudicial.

There also exists no basis to conclude that the absence of effective counsel had a cumulative effect on the subsequent proceedings, consequently warranting a new trial. John's 1984 contempt hearings were not relevant to the ultimate finding of contempt in January 1986. The evidence plainly showed a wrongful violation of a valid court order. John has identified no new evidence or legal argument which counsel could not presented, and which would have established a reasonable probability of a finding of noncontemptuous conduct. Therefore, the rulings on contempt could not have been adversely affected by the absence of counsel at one hearing or presence of ineffective counsel at another.

By the Court.--Order in appeal No. 86-0941 affirmed. Order in appeal No. 86- 1470 affirmed in part and reversed in part. Cause remanded for proceedings consistent with this opinion. No costs to either party.

Inclusion in the official reports is not recommended.

Wis.App., 1988.

Biel v. Biel

Beaumont case: discussion of child support modification

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

(The decision of the Court is referenced in the North Western Reporter in a table captioned "Wisconsin Court of Appeals Table of Unpublished Opinions".)

In re the Marriage of Robert J. BEAUMONT, Petitioner-Appellant-Cross

Respondent,

Darlene K. BEAUMONT, Respondent-Respondent-Cross Appellant.

No. 90-2024.

Court of Appeals of Wisconsin.

Aug. 28, 1991.

Appeal and Cross-Appeal from an order of the circuit court for Waukesha county: Marianne E. Becker, Judge.

Circuit Court, Waukesha County

AFFIRMED IN PART, REVERSED IN PART AND REMANDED.

Before NEAL NETTESHEIM, P.J., and BROWN and ANDERSON, JJ.

PER CURIAM.

***1

(Cite as: 164 Wis.2d 432, 476 N.W.2d 25, 1991 WL 198132, ***1 (Wis.App.))

Robert Beaumont appeals an order reducing his child support obligation that was not made retroactive to June 16, 1989, the date he filed his motion for a reduction. Darlene Beaumont cross-appeals. She claims that no substantial change of circumstances was demonstrated to support the reduction, that the circuit court abused its discretion by requiring only $100 per month to be paid on the child support arrears, and that the circuit court failed to consider her motion for attorney's fees. We affirm the reduction of support but reverse and remand for further consideration of the refusal to retroactively modify arrears. Because the existing arrearage may be modified on remand, we also direct the court to exercise its discretion in determining the payment on support arrears and to consider Darlene's request for attorney's fees.

The parties were divorced in 1981. Robert's gross annual income was approximately $210,000 and he was ordered to pay $4000 per month in family support for Darlene and their three minor children. An order modifying support to $2000 per month for child support and $350 per month for maintenance was entered on March 28, 1986. [FN1]

In June 1989, the parties' second son graduated from high school at age eighteen. Robert again moved the court for a reduction in support based on the son's emancipation and a decrease in his income due to changes in federal income tax laws. [FN2] By an order of June 6, 1990, child support was reduced to $800 per month and maintenance was set at $200 per month. The reduction was effective January 1, 1990. Robert was found to be $9310 in arrears because he had unilaterally reduced his child support payments to $670 per month during the pendency of his motion, from June 16, 1989 to April 16, 1990.

Upon consideration of the record, it was unclear whether the order reducing support was based on considerations which had previously resulted in a reduction of child support. [FN3] By an order of June 27, 1991, we remanded the record to the circuit court for the sole purpose of having the court clarify the reasons for the reduction. See sec. 808.075(6), Stats. The circuit court entered its "Findings and Decision on Remand for Clarification" on July 24, 1991. We retained jurisdiction of the appeal and now address the issues raised by the parties.

We first address Darlene's contention that a substantial change of circumstances was not demonstrated. The parent seeking the modification has the burden of establishing that there has been a substantial change. Long v. Wasielewski, 147 Wis.2d 57, 60, 432 N.W.2d 615, 616 (Ct.App.1988). The "before" and "after" circumstances and whether a change has occurred are facts which we review under a clearly erroneous test. Harris v. Harris, 141 Wis.2d 569, 574, 415 N.W.2d 586, 588-89 (Ct.App.1987). Because the determination that the change is substantial is a legal conclusion intertwined with the factual findings, we give weight to the circuit court's conclusion, but that decision is not controlling. Id. at 574, 415 N.W.2d at 589.

***2

(Cite as: 164 Wis.2d 432, 476 N.W.2d 25, 1991 WL 198132, ***2 (Wis.App.))

Although we were originally concerned that the circuit court had twice relied on certain financial changes in considering support, the clarification decision allays those concerns. The reduction was based on the emancipation of the parties' second child. The emancipation of a child is, as a matter of law, a change in circumstances warranting reconsideration of support. See Resong v. Vier, 157 Wis.2d 382, 389, 459 N.W.2d 591, 594 (Ct.App.1990).

The circuit court also relied on a substantial change in Robert's business circumstances. The court found Robert to be financially overextended and suffering because of the termination of his professional association with his brother, the reduction of his client base by two-thirds, the loss of up to 42% of his gross income, and the existence of a tax lien and debt to his brother. These findings are supported by the testimony summarized in the court's clarification decision and are not clearly erroneous. The business changes do appear to be substantial. We conclude a substantial change of circumstances existed to support the reduction.

We turn to Robert's claim that the support order should have been retroactively modified to the date he filed his motion for a reduction. Robert's child support arrears would have been $910, rather than $9310, if the order had been made retroactive. The reduction of support arrears is a matter within the sound discretion of the circuit court, and arrears are to be canceled only upon cause or justification. Burger v. Burger, 144 Wis.2d 514, 526, 424 N.W.2d 691, 696 (1988).

It appears that the circuit court refused to consider any reduction of arrears because Robert had unilaterally reduced his support payment while the motion was pending. Indeed, the record only hints at the circuit court's rationale for making the reduction retroactive to January 1, 1990. The record does not reflect the proper exercise of discretion. Under the facts here, the mere "self-help" reduction is not sufficient reason to refuse a retroactive reduction. Robert filed his motion for a support reduction the same month that his second child became emancipated and may have fallen victim to the court's calendar in obtaining an ultimate ruling. Therefore, we remand this issue to the circuit court for the exercise of its discretion and consideration of Robert's claim for a reduction of his support arrears. [FN4]

Darlene contends that the circuit court failed to make any findings when ordering Robert to pay $100 a month on the support arrears. She claims that the payment will not keep pace with the accruing interest. It does appear that the circuit court failed to exercise its discretion when determining the amount to be paid on the arrears. However, the amount of the arrears and, consequently, the appropriate payment may change upon the exercise of the circuit court's discretion as to Robert's claim for a retroactive modification. Therefore, we remand this issue to the circuit court for further consideration.

***3

(Cite as: 164 Wis.2d 432, 476 N.W.2d 25, 1991 WL 198132, ***3 (Wis.App.))

Darlene argues that the circuit court failed to address her motion for attorney's fees. There was no denial of Darlene's motion. It appears to have been overlooked. On remand, the circuit court will have an opportunity to address the motion.

No costs to either party.

By the Court.--Order affirmed in part; reversed in part and cause remanded.

This opinion will not be published. Rule 809.23(1)(b)5, Stats.

FN1. The order is not of record here. The parties do not disagree on the modification made.

FN2. In 1988 Robert had unsuccessfully moved the court for a reduction in child support and maintenance.

FN3. The 1986 order reducing support contained the parties' stipulation that the forthcoming emancipation of the parties' oldest son was not to be considered a change of circumstance for a subsequent reduction. Yet the circuit court mentioned the oldest child's emancipation in its decision reducing support. Further, the court noted that Robert has another child for whom he pays support and that his business had taken a turn for the worse due to a change in tax laws. The circuit court acknowledged that these factors had been considered before. The record of the prior modification proceedings in 1986 and 1988 were not before us and we were unable to determine what, if any, consideration had previously been given to the factors relied upon here.

FN4. Robert suggests that just cause existed for the retroactive reduction of his child support arrears because the required payment of support beyond the age of majority is extrajudicial and a nullity. O'Neill v. O'Neill, 17 Wis.2d 406, 408, 117 N.W.2d 267, 269 (1962). We recognize that this was not an instance where child support was differentiated per child and it cannot be easily calculated what amount, if any, was support for the emancipated child. Cf. Poehnelt v. Poehnelt, 94 Wis.2d 640, 289 N.W.2d 296 (1980). That alone does not preclude a finding as to what amount of

the support reduction is attributable to the emancipation of the second child and reducing the arrears based on that finding.

Wis.App.,1991.

Beaumont v. Beaumont

Luna case: child support, arrears, modification

In re the MARRIAGE OF Julia LUNA, Petitioner,

STATE of Wisconsin, Appellant,

Ramiro LUNA, Jr., Respondent-Respondent. [FN<<dagger>>]

FN<<dagger>> Petition for review denied.

No. 92-1753.

Court of Appeals of Wisconsin.

Submitted on Briefs April 6, 1993.

Opinion Released March 1, 1994.

Opinion Filed March 1, 1994.

Father moved for review of court commissioner's order increasing his child support obligations by ordering that he pay $465 per month, plus $40 per month on arrears of $17,000. The Circuit Court, Milwaukee County, Dominic S. Amato, J., ruled that father's income should be treated as marital property, and held in trust fund for benefit of children until such time as they no longer received benefits through grant of Aid to Families with Dependent Children (AFDC). State appealed. The Court of Appeals, Schudson, J., held that trial court had no authority to treat noncustodial parent's postdivorce income as marital property and order child support payments into trust fund for children to defeat state's statutory right to reimbursement of AFDC payments.

Reversed and remanded.

In re Marriage of Luna

[1] KeyCite this headnote

356A SOCIAL SECURITY AND PUBLIC WELFARE

356AV Family, Parental, and Child Welfare Assistance

356AV(A) Aid to Families with Dependent Children

356Ak194.19 k. Set-off and recoupment; liens.

Wis.App.,1994.

Although modification of child support is within discretion of trial court and will not be overturned unless court erroneously exercises that discretion, court erroneously exercises that discretion where its modification deprives the state of reimbursement for AFDC payments to custodial spouse. W.S.A. 49.19(4)(h)1 b.

In re Marriage of Luna

[2] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k248 Disposition of Property

134k252.1 k. Discretion of court.

Wis.App.,1994.

Trial court abused its discretion in proceeding to modify child support in attempting to circumvent state's statutory right to reimbursement for AFDC payments to custodial parent by setting child support at zero, classifying an amount equivalent to the child support as "marital property," and ordering father to pay that amount into a trust for benefit of children until such time as they no longer received benefits through AFDC. W.S.A. 49.19(4)(h)1 b, 767.32(2).

In re Marriage of Luna

[2] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k308 k. Order, judgment, or decree as to support.

Wis.App.,1994.

In re Marriage of Luna

[2] KeyCite this headnote

356A SOCIAL SECURITY AND PUBLIC WELFARE

356AV Family, Parental, and Child Welfare Assistance

356AV(A) Aid to Families with Dependent Children

356Ak194.19 k. Set-off and recoupment; liens.

Wis.App.,1994.

In re Marriage of Luna

[3] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k248 Disposition of Property

134k252.3 Particular Property or Interests and Mode of Allocation

134k252.3(3) k. Separate property and property acquired before marriage.

Wis.App.,1994.

Trial court in proceeding to modify child support had no authority to classify noncustodial parent's postdivorce income as "marital property" under statute authorizing court to divide property of parties to divorce, as marital property is to be divided at time of divorce or legal separation, and noncustodial parent's income earned years after divorce action could not retroactively be labeled "marital property." W.S.A. 766.31, 767.255.

In re Marriage of Luna

[3] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k248 Disposition of Property

134k253 Proceedings for Division or Assignment

134k253(1) k. In general.

Wis.App.,1994.

**480

(Cite as: 183 Wis.2d 20, 515 N.W.2d 480, **480)

*22

(Cite as: 183 Wis.2d 20, *22, 515 N.W.2d 480, **480)

For the appellant, State of Wis., the cause was submitted on the briefs of Milwaukee **481

(Cite as: 183 Wis.2d 20, *22, 515 N.W.2d 480, **481)

County Dept. of Child Support Enforcement, with Faye Simon and Theodore Spyres of Milwaukee.

The respondent did not file a brief.

For the minor children the cause was submitted on the briefs of Halling & Cayo, S.C., guardian ad litem for the minor children, with Patricia L. Grove of Milwaukee.

Before WEDEMEYER, P.J., and SULLIVAN and SCHUDSON, JJ.

*23

(Cite as: 183 Wis.2d 20, *23, 515 N.W.2d 480, **481)

SCHUDSON, Judge.

The State of Wisconsin appeals from the trial court order placing Ramiro Luna, Jr.'s child support payments and arrearages into a trust fund in which the money will be held for the benefit of his and Julia Luna's three children until such time as they no longer receive benefits through a grant of Aid to Families with Dependent Children. The issue is whether the trial court has the authority to treat the non-custodial parent's post-divorce income as marital property and order the child support payments into a trust fund for the children where the custodial parent receives AFDC benefits. We reverse.

The basic facts are not in dispute. Ramiro and Julia Luna divorced in 1987. In 1992, Mr. Luna sought a reduction in his child support payments. The family court commissioner, however, increased Mr. Luna's child support obligations, based on his income, ordering that he pay $465 per month, plus $40 per month on arrears of $17,000.

Mr. Luna moved the trial court for a review of the court commissioner's order. The trial court found no flaw in the amount determined by the commissioner. The trial court ruled, however, that Mr. Luna's income should be treated as marital property under § 767.255, Stats., [FN1] and held in a trust fund "so the State doesn't get it...." The court further ruled that Ms. Luna could *24

(Cite as: 183 Wis.2d 20, *24, 515 N.W.2d 480, **481)

apply to the court for disbursement of the funds "at such time as she no longer receives AFDC." [FN2]

FN1. Section 767.255, Stats., provides, in part, "[u]pon every judgment of annulment, divorce or legal separation, or in rendering a judgment in an action under s. 767.02(1)(h) [action for property division], the court shall divide the property of the parties and divest and transfer the title of any such property accordingly."

FN2. There was some variance between the trial court's oral ruling and its written order that stated, in part:

THE COURT FINDS:

1. The Respondent has the ability to comply with the payment of the current order of $465.00 per month for child support and $40.00 per month toward arrears;

2. That, pursuant to § 767.255, Wis.Stats., the Respondent's income can be treated as marital property, and therefore what has been determined to be child support payments, can be converted into a trust fund with the money paid into the fund held for the benefit of the children at such time as they no longer receive AFDC benefits.

NOW THEREFORE THE COURT ORDERS:

1. That child support is set at zero.

2. That repayment of existing child support arrears is set at zero.

3. That the Respondent shall continue to make the previously ordered payments of $505.00 per month to the Clerk of the Circuit Court. Said payments shall be placed in a trust fund for the children of this marriage.

4. That said trust funds shall only be released to the Petitioner at such time as she is no longer receiving AFDC and petitions the Court for the release of said funds.

The State argues that the trial court erred by: (1) reducing the child support and arrears to zero; (2) converting Mr. Luna's post-divorce income into marital property, in an amount equal to that ordered as support by the family court commissioner; and (3) directing Mr. Luna to pay that amount to a child support trust, thereby denying the State its right to seek reimbursement for AFDC payments to Ms. Luna. The State contends that the child support payments and *25

(Cite as: 183 Wis.2d 20, *25, 515 N.W.2d 480, **481)

arrears due to Ms. Luna are owed to the State pursuant to § 49.19(4)(h)1.b, Stats., which states:

Except as provided under sub. (5)(a)1m, when any person applies for or receives aid under this section, any right of the parent or any dependent child to support or maintenance from any other person, including any right to unpaid amounts accrued at the time of application and any right to amounts accruing during the time aid is paid under this section, is assigned to the state.

(Emphasis added.) The State is correct.

[1] The statute expressly assigns to the State any right to child support that an **482

(Cite as: 183 Wis.2d 20, *25, 515 N.W.2d 480, **482)

AFDC recipient has under the statute. See In re Lachelle A.C., 180 Wis.2d 708, 713-714, 510 N.W.2d 718, 720 (Ct.App.1993). Although a modification of child support is within the discretion of the trial court and will not be overturned unless the trial court erroneously exercised that discretion, Burger v. Burger, 144 Wis.2d 514, 523, 424 N.W.2d 691, 695 (1988), a trial court does erroneously exercise its discretion where it deprives the State of reimbursement for payments, pursuant to § 49.19(4)(h) 1.b, Stats. See Lachelle A.C., 180 Wis.2d at 716, 510 N.W.2d at 721. See also Resong v. Vier, 157 Wis.2d 382, 387, 459 N.W.2d 591, 593 (Ct.App.1990) (where exercise of discretion is based upon error of law, trial court acts beyond limits of discretion and decision cannot stand).

In State v. Halverson, 162 Wis.2d 453, 470 N.W.2d 313 (Ct.App.1991), the trial court refused to increase the non-custodial parent's support obligation because most of it would reimburse the State for AFDC payments and would not benefit the family. *26

(Cite as: 183 Wis.2d 20, *26, 515 N.W.2d 480, **482)

Id. at 455, 470 N.W.2d at 314-315. We reversed, concluding that "[t]he court's refusal [to increase the support] negates the legislative plan to require parents to support their children ... [because the statutes] allow the state to recover from the noncustodial parent child support assistance which the state has paid or will pay because the noncustodial parent is not paying his or her appropriate child support." Id. at 457, 470 N.W.2d at 315.

In Lachelle A.C., which we decided after the trial court's order in this case, we reversed a trial court order placing child support arrearages into a trust for the child because she and her mother received AFDC during the time when past support accrued. We explained that although a trial court has discretion to set up a trust for the benefit of children, [FN3] it cannot do so to deprive the State of reimbursement for AFDC payments. See Lachelle A.C., 180 Wis.2d at 714-716, 510 N.W.2d at 720-721. Thus, we concluded that "[t]he trial court had no authority to order that the past support be paid into [a] trust. The right to that support no longer belongs to [the AFDC recipient]. It has by legislative mandate been assigned to the State." Id. at 713-714, 510 N.W.2d at 720. [FN4]

FN3. Section 767.25(2), Stats., provides that "[t]he court may protect and promote the best interests of the minor children by setting aside a portion of the child support which either party is ordered to pay in a separate fund or trust for the support, education and welfare of such children."

FN4. We recently addressed the issue of whether the trial court could allow equitable credit for past support paid where the State seeks reimbursement of AFDC payments. In re Cheyenne D.L., 181 Wis.2d 868, 512 N.W.2d 522 (Ct.App.1993). In Cheyenne D.L., the putative father was allowed a credit for past support obligations because he was found to have supported the mother and the child during the time that past support was owed. Even though the mother received AFDC during that period and the State was entitled to reimbursement, we affirmed the trial court's conclusion that it would be unfair to require that support be paid twice for the same period.

In distinguishing Cheyenne D.L. from Halverson, Lachelle A.C. and the present case, we note that under § 49.19(4)(h)1.b, Stats., the

State has a right to "unpaid amounts accrued at the time of application [for AFDC] and any right to amounts accruing during the time aid is paid under this section." (Emphasis added.) In Cheyenne D.L., the trial court found that past support had actually been paid and the court allowed a credit for those amounts. In the other cases, however, the support was unpaid and the issues concerned (1) whether to order that the support be paid, because to do so would reimburse the State for AFDC, or (2) whether the unpaid support could be ordered into a trust, thus avoiding reimbursement to the State.

*27

(Cite as: 183 Wis.2d 20, *27, 515 N.W.2d 480, **482)

[2] In the present case, the trial court apparently attempted to circumvent the State's statutory right to reimbursement by setting child support at zero, classifying an amount equivalent to the child support as "marital property," and ordering the payments into a trust. Section 767.32(2), Stats., however, mandates that the court apply the percentage standard when revising a judgment or order with respect to child support payments. [FN5] The trial court may deviate from **483

(Cite as: 183 Wis.2d 20, *27, 515 N.W.2d 480, **483)

that standard upon considering the factors listed in *28

(Cite as: 183 Wis.2d 20, *28, 515 N.W.2d 480, **483)

§ 767.25(1m), Stats., [FN6] and finding by the greater weight of the credible evidence that the percentage standard is unfair to the child or to any of the parties. Applying the statutory standard and factors, the family court commissioner set Mr. Luna's child support at $465.00 per month, plus $40.00 per month for existing arrears.

FN5. Section 767.32(2), Stats., states that if the court revises a child support judgment or order, "it shall do so by using the percentage standard established by the department of health and social services...." That provision is subject to (2m), which states: "Upon request by a party, the court may modify the amount of revised child support payments determined under sub. (2) if, after considering the factors listed in s. 767.25(1m) or 767.51(5), as appropriate, the court finds, by the greater weight of the credible evidence, that the use of the percentage standard is unfair to the child or to any of the parties."

FN6. Among the factors listed in § 767.25(1m), Stats., are: the financial resources of the child or of both parents; the amount of maintenance received by either party; the educational needs of the child; the physical, mental and emotional needs of child; the earning capacity of each parent; and the best interests of the child.

Overturning the family court commissioner's decision and setting child support at zero, the trial court failed to make any findings or apply the standard required under the statute for such a modification. Indeed, the only reason the trial court gave for its decision was "so the State doesn't get it, so it goes into a fund for the children." We conclude that in this respect, also, the trial court erroneously exercised its discretion based on its failure to apply the law.

[3] Additionally, we conclude that the trial court had no authority to classify Mr. Luna's post-divorce income as "marital property" under § 767.255, Stats. The statute provides that "[u]pon every judgment of annulment, divorce or legal separation, or in rendering a judgment in an action under s. 767.02(1)(h) [for property division], the court shall divide the property of the parties and divest and transfer the title of any such property accordingly." (Emphasis added.) A clear reading of this statute indicates that marital property is to be divided at the time of divorce or legal separation. A *29

(Cite as: 183 Wis.2d 20, *29, 515 N.W.2d 480, **483)

non-custodial parent's income earned years after the divorce action cannot retroactively be labeled marital property under § 766.31, Stats. [FN7] See § 767.32(1), Stats. ("nor shall the provisions of a judgment with respect to final division of property be subject to revision or modification").

FN7. Section 766.31(1), Stats., "Classification of property of spouses," provides that "[a]ll property of spouses is marital property...." (Emphasis added.) Once the parties are divorced, they are

no longer "spouses" and their property is not subject to this section.

The Guardian ad Litem argues that since the action was originally a divorce action, the trial court can consider Mr. Luna's income as property under § 767.255, Stats. The Guardian ad Litem cites several cases in which she argues future income was treated as property at the time of divorce for purposes of valuation and division between the spouses. See, e.g., Haugan v. Haugan, 117 Wis.2d 200, 343 N.W.2d 796 (1984) (future earnings of student spouse to be considered in determining property division and maintenance award for non-student spouse who put student-spouse through school); Bloomer v. Bloomer, 84 Wis.2d 124, 267 N.W.2d 235 (1978) (pension benefits characterized as property at the time of divorce); Krebs v. Krebs, 148 Wis.2d 51, 435 N.W.2d 240 (1989) (although entire property division was subject to § 767.255, injured spouse presumptuously entitled to personal injury proceeds, which were part of a structured settlement to receive income over a term of years). The distinction between those cases and this one, however, is that in this case post-divorce future income was not taken into consideration at the time of the divorce, pursuant to § 767.255.

*30

(Cite as: 183 Wis.2d 20, *30, 515 N.W.2d 480, **483)

Finally, the Guardian ad Litem argues that not permitting the creation of a trust in these circumstances violates the children's equal protection rights under the State and Federal Constitutions. Lachelle A.C. directly addressed this argument and concluded that equal protection was not violated because "[t]he State has a legitimate interest in conserving the limited funds it has available to provide for all needy children. The clear objective of the statute--to allow the State to recoup AFDC funds where possible--is reasonably related to the legislature's need to conserve those limited funds." Lachelle A.C., 180 Wis.2d at 715, 510 N.W.2d at 721.

The trial court erroneously exercised discretion by setting child support at zero, converting post-divorce income into marital property, and ordering that income into a trust. Accordingly, we reverse the trial **484

(Cite as: 183 Wis.2d 20, *30, 515 N.W.2d 480, **484)

court order and remand for further proceedings consistent with this opinion.

Order reversed.

Peterson case: income, child support modification

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

(The decision of the Court is referenced in the North Western Reporter in a table captioned "Wisconsin Court of Appeals Table of Unpublished Opinions".)

In re the Marriage of Joanne S. PETERSON, Petitioner-Appellant,

Larry A. PETERSON, Respondent-Respondent.

No. 91-2047.

Court of Appeals of Wisconsin.

Dec. 16, 1992.

Before NETTESHEIM, P.J., and ANDERSON and SUNDBY, JJ.

PER CURIAM

***1

(Cite as: 173 Wis.2d 304, 498 N.W.2d 912, 1992 WL 367488, ***1 (Wis.App.))

Joanne Peterson appeals from an order denying her motion for maintenance, to increase child support, for a money judgment on child support arrears, and for attorney's fees. We conclude that the trial court's finding regarding Larry Peterson's income is clearly erroneous. We reverse that portion of the order increasing child support by only $154 per month, denying maintenance and awarding only part of Joanne's attorney's fees. We remand for further proceedings on those issues. Because we conclude that the provision regarding the child support arrears is a proper use of the trial court's discretion, we affirm that portion of the order.

Joanne and Larry were divorced on June 16, 1988 after twenty-two years of marriage. Larry was required to pay $700 per month child support for the two minor children in Joanne's custody. Maintenance for Joanne was left open for further review because Larry's income, as represented at the time of the divorce, did not justify an award of maintenance.

In 1990, Joanne moved the court for an increase in child support to $1500 a month, an award of maintenance, a money judgment for child support arrears in the amount of $52,097, an order compelling Larry to liquidate his interest in seaside property in Haiti and apply the proceeds toward the arrears, and for attorney's fees. Inasmuch as Larry is self-employed as a consultant, keeps no records of his income or expenses, has no checking or bank accounts and does not timely file income tax returns, Joanne attempted to prove Larry's actual income by tracing and evaluating his expenditures. Her mode of proof is akin to the net worth theory frequently employed by the Internal Revenue Service to calculate the income tax liability of taxpayers who have inadequate records. See Holland v. United States, 348 U.S. 121, 125, 75 S.Ct. 127, ---, 99 L.Ed. 150 (1954). Joanne's proof consisted of over two hundred cashier's checks which Larry and his second wife used to pay bills and garner their money.

The trial court found that there had been a substantial change in circumstances since the time of divorce. It found that Larry's income had increased, that his ability to earn income was greater, and that given the availability of bank funds Larry was no longer on shaky financial grounds and had the ability to pay debts. The trial court acknowledged that Larry's conduct is designed to make it difficult to determine his exact income and assets for the purpose of setting support. It noted several times that it did not believe Larry and that his self-generated financial declarations had limited credibility.

The trial court imputed an additional $10,000 to Larry's income and found his yearly income to be $41,000. It consequentially increased child support by $154 a month. It denied Joanne's request for an additional increase in child support and maintenance because it found that Larry does not have the ability to pay. It ordered Larry to pay $4000 on the child support arrearage by the end of 1991 and gave Joanne a lien upon any real estate Larry might own for the child support arrears. Larry was also required to make a $1500 contribution to Joanne's attorney's fees.

***2

(Cite as: 173 Wis.2d 304, 498 N.W.2d 912, 1992 WL 367488, ***2 (Wis.App.))

Having found that a substantial change in circumstances occurred, it was within the trial court's discretion to modify or refuse to modify the child support award. Long v. Wasielewski, 147 Wis.2d 57, 60, 432 N.W.2d 615, 616 (Ct.App.1988). The same is true with respect to maintenance. Discretion is properly exercised if the record reflects that the court considered the needs of the custodial parent and children, and the ability of the noncustodial parent to pay. Id. at 60-61, 432 N.W.2d at 616. A misuse of discretion occurs when the trial court fails to consider the proper factors or makes a mistake with respect to the facts upon which the determination is based. Id. at 61, 432 N.W.2d at 616.

Here the dispositive findings are that Larry's income is only $41,000 and that he does not have the ability to pay a greater amount of child support or maintenance. A trial court's income determination is a finding of fact which we will not set aside unless clearly erroneous. DeLaMatter v. DeLaMatter, 151 Wis.2d 576, 588, 445 N.W.2d 676, 681 (Ct.App.1989). This is one of the rare instances in which we conclude that the trial court's findings are clearly erroneous.

It is not sufficient for reversal of the trial court's findings that there is evidence to support a contrary finding. Fidelity & Deposit Co. v. First Nat'l Bank, 98 Wis.2d 474, 484, 297 N.W.2d 46, 51 (Ct.App.1980). To command a reversal, evidence in support of a contrary finding must itself constitute the great weight and clear preponderance of the evidence. Id. at 484-85, 297 N.W.2d at 51. This is true of the evidence Joanne produced in support of her requests for child support and maintenance.

Joanne produced over two hundred cashier's checks which reflected some of Larry's expenditures for the last months of 1989 and the first ten months of 1990 (up to the date of the first evidentiary hearing on her motion). She categorized the expenses, included reasonable amounts for household expenses, and imputed certain expenses not exhibited in the checks but testified to by Larry or his wife, such as loan payments, gas, fifteen trips to Haiti, life insurance, rent and live-in help. For example, Joanne demonstrated that Larry's car payments for four automobiles used by himself and his family were $1454.18 a month. Joanne's aggregation excluded sixteen cashier's checks written to Larry or his wife in denominations of $1000, $5000, $6000, $9000 and $10,000 because Larry testified that it was possible that those checks had been cashed and recycled into other checks used to pay bills. The sum of the figures demonstrated that Larry spent an average of $12,655 a month for a twenty-two month period and a minimum of $9104 a month. In addition to the monthly expenditures, Joanne proved that Larry had paid $80,000 towards acquiring an interest in property in Haiti. At one point Larry obtained a $22,000 check to buy an airplane but he ultimately decided to cancel the purchase.

***3

(Cite as: 173 Wis.2d 304, 498 N.W.2d 912, 1992 WL 367488, ***3 (Wis.App.))

We acknowledge that the trial court's findings are based, in part, on a credibility determination and that due regard must be given to the opportunity of the trial court to judge the credibility of the witnesses. DeLaMatter, 151 Wis.2d at 583, 445 N.W.2d at 679. However, the trial court found Larry to be totally incredible. Larry's testimony was that he acquired funds through innumerable loans, wedding gifts, and loans from family members. There was no factual underpinning for Larry's explanation of his lifestyle. On the other hand, Joanne presented overwhelming demonstrative evidence that Larry was living well beyond the $31,000 income reported on his tax return. Moreover, her calculations were based only on the expenditures Joanne was able to trace through the checks. Larry's strategy to hide his income and assets undoubtedly included numerous cash expenditures as well.

The trial court explained that Joanne's assumptions "are built on sand." Yet the figures she used for loan payments, rent, gas and utilities were supported by the testimony. Her figures for food and clothing were based on her own experience in providing for her family and were not unreasonable, especially in the absence of any evidence to the contrary. See Taglianetti v. United States, 398 F.2d 558, 568 (1st Cir.1968), aff'd, 394 U.S. 316, 89 S.Ct. 1099, 22 L.Ed.2d 302 (1969) (where the government produces evidence of expenditures which are particularly within the knowledge of the defendant, the burden of coming forward with more precise information shifts to the defendant).

The trial court found that Larry lived on loans and gifts. Implicitly the trial court relied on the loans and gifts as sources covering Larry's monthly expenses. Larry produced a handwritten list of loans and other funds, including the sale of some assets. Other than the $2000 gift from his mother- in-law and $2300 in wedding gifts, the funds listed on Larry's exhibit did not generate enough cash to support the monthly expenditures Joanne demonstrated.

The car loans did not generate any cash for monthly expenses. Larry testified that one of the bank loans and the loan from his brother went directly into the Haiti land deal. The $5000 loan from Larry's in-laws was used as a down payment on a residential land contract. Many of the assets sold by Larry were sold prior to the divorce and Larry's representation of values was impeached as inflated. The $50,000 he received for the sale of his customer list also went directly to the Haiti land deal. We also note that Larry's low business income resulted from deductions which did not require cash disbursements, such as the residential office proration.

Even assuming gifts and loans were spent on monthly expenses, the trial court failed to exercise its discretion in concluding that they did not provide a regular stream of income. The trial court found that Larry, for whatever reason, had an open line of credit with his bank and did not have to provide financial security to obtain money from the bank. Larry admitted that he got many gifts and they appeared to be frequent in occurrence. Gifts may be considered as one of the "intertwined circumstances" used in measuring a husband's ability to pay. Harris v. Harris, 141 Wis.2d 569, 582, 415 N.W.2d 586, 592 (Ct.App.1987). The effect of a gift may be evaluated by its apparent or ulterior purpose, its source, and the probability of it recurring in a regular fashion. Id. The trial court failed to explain why the loans and gifts, which were regularly available to Larry, were to be ignored as a source of funds from which child support or maintenance could be paid. This is a misuse of discretion. See Schinner v. Schinner, 143 Wis.2d 81, 104, 420 N.W.2d 381, 390 (Ct.App.1988).

***4

(Cite as: 173 Wis.2d 304, 498 N.W.2d 912, 1992 WL 367488, ***4 (Wis.App.))

We conclude that the trial court's finding that Larry's income is only $41,000 a year is clearly erroneous. The same is true of its finding that Larry does not have the ability to pay more in child support or anything in maintenance. Joanne's evidence supports a finding that Larry's income is in excess of $120,000 a year. The $12,655 a month average expenditure supports a monthly child support award of $3163 pursuant to the support guidelines. Reliance on the net worth or expenditures mode of proof is appropriate in a case of this nature. Indeed, it appears that the trial court applied that theory in part. However, in light of the trial court's rejection of Larry's financial declarations, we are left with the nagging question as to why only $10,000 additional income was imputed to Larry.

Reversal is required even though the trial court was not convinced that Joanne had proved a need for $1500 a month child support or that her monthly budget supported a need for maintenance. Our reading of the trial court's decision leads us to conclude that those findings were secondary to the finding that Larry does not have the ability to pay. Further, Joanne testified that her monthly expenses for the children increased $500, and even more with the addition of a teenage driver. The trial court also failed to consider Joanne's testimony that despite being able to meet her monthly budget, her lifestyle is greatly reduced from that enjoyed during the marriage. She lives in a much smaller house in a less desirable location. Joanne is unable to provide the children with opportunities that they otherwise would have had if the marriage had continued.

We reverse that portion of the order denying Joanne's request for greater child support and maintenance. The issues are remanded to the trial court for new findings and such further proceedings deemed necessary, including the taking of additional evidence. We sympathize with the formidable task faced by the trial court as a result of Larry's financial shenanigans. However, a family court is to "utilize its creative talents to monitor and control such deceptive tactics." Schinner, 143 Wis.2d at 105, 420 N.W.2d at 390.

Joanne asks that upon reversal the case be reassigned to a new judge. Judicial assignment is not within the authority of this court. Joanne has a statutory right of substitution under sec. 801.58(7), Stats. If she timely files a request for substitution, the case is properly reassigned. Our reversal is not merely for a clarification of the judgment but for new findings and possibly a new evidentiary hearing. Substitution would not be foreclosed by the Bacon-Bahr rule which facilitates efficient allocation of judicial resources by not requiring a new judge to supply the rationale for the discretionary decisions of another judge. See State ex rel. Parrish v. Circuit Ct., 148 Wis.2d 700, 704, 706, 436 N.W.2d 608, 610, 611 (1989).

We turn to the issue of Larry's contribution to Joanne's attorney's fees. The trial court awarded Joanne a partial contribution on the ground that Larry's tactics generated her fees. It denied contribution on the remaining portion of her fees on the ground that her demands for child support and maintenance were unreasonable and that she had "overtried" her position. See Ondrasek v. Ondrasek, 126 Wis.2d 469, 484, 377 N.W.2d 190, 196 (Ct.App.1985). From our conclusion that Joanne's proof overwhelmingly supports her requests, it follows that she has not "overtried" her case. Therefore, we confirm the award of $1500 in attorney's fees but remand the issue of an additional contribution towards Joanne's attorney's fees for further consideration.

***5

(Cite as: 173 Wis.2d 304, 498 N.W.2d 912, 1992 WL 367488, ***5 (Wis.App.))

The remaining issue is the trial court's refusal to reduce the full amount of the child support arrears to a money judgment and to order liquidation of Larry's interest in the Haiti property. Such an order is within the discretion of the trial court and will be affirmed if there is any reasonable basis for it. See Overson v. Overson, 140 Wis.2d 752, 757, 412 N.W.2d 896, 898 (Ct.App.1987).

The trial court proceeded under sec. 767.30, Stats., in what it determined was a two-step process. It explained that it first had to order a lien on property or require Larry to give security for the arrears under sec. 767.30(2). The trial court then explained that Larry had to disobey that order before the money judgment could be granted under sec. 767.30(3)(c). Joanne disagrees with the trial court's reading of sec. 767.30. However, we need not decide the correctness of the trial court's interpretation.

The trial court, in the exercise of its discretion, concluded that a money judgment was not appropriate at this time because Larry was not under an order to make payments on the arrears which accrued under the temporary order. Section 767.30, Stats., gives the trial court options for enforcing support orders. We cannot conclude that the option chosen was unreasonable. Indeed, the trial court tried to impress upon Larry the importance of paying the arrears. It left open the possibility of a money judgment in the future. The request to liquidate Larry's interest in the Haiti property is extraordinary. The trial court did not misuse its discretion by denying that form of relief.

Order affirmed in part; reversed in part and cause remanded.

Wis.App.,1992.

In re the Marriage of Joanne S. PETERSON, Petitioner-Appellant, v. Larry A. PETERSON, Respondent-Respondent.

Niemi case: interest, child support, credit for payments

DOUGLAS COUNTY CHILD SUPPORT ENFORCEMENT UNIT FOR Dianne NIEMI, Petitioner-

Appellant,

Robert P. FISHER, Respondent-Respondent. [FN<<dagger>>]

FN<<dagger>> Petition for Review Denied.

No. 95-1960.

Court of Appeals of Wisconsin.

Submitted on Briefs Feb. 5, 1996.

Opinion Released March 12, 1996.

Opinion Filed March 12, 1996.

Some 26 years after husband began accumulating arrearage, wife moved for judgment on arrearages. After remand, 517 N.W.2d 700, the Circuit Court, Douglas County, Joseph A. McDonald, J., credited husband's arrearages with payments he allegedly made directly to wife. Wife appealed. The Court of Appeals, Myse, J,. held that: (1) circuit court was without power to grant husband credit against child support arrearages for payments he made directly to wife, rather than to clerk of court as required by divorce judgment, and (2) circuit court had no discretion in assessing interest on child support arrearages.

Reversed and remanded.

Cane, P.J., dissented with separate opinion.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[1] KeyCite this headnote

30 APPEAL AND ERROR

30XVI Review

30XVI(A) Scope, Standards, and Extent, in General

30k838 Questions Considered

30k842 Review Dependent on Whether Questions Are of Law or of Fact

30k842(1) k. In general.

Wis.App.,1996.

Questions of law are reviewed without deference to trial court.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[2] KeyCite this headnote

361 STATUTES

361VI Construction and Operation

361VI(A) General Rules of Construction

361k180 Intention of Legislature

361k181 In General

361k181(1) k. In general.

Wis.App.,1996.

Court's purpose in interpreting statute is to ascertain and give effect to legislature's intent.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[3] KeyCite this headnote

361 STATUTES

361VI Construction and Operation

361VI(A) General Rules of Construction

361k187 Meaning of Language

361k190 k. Existence of ambiguity.

Wis.App.,1996.

If language of statute is clear and unambiguous, court gives language its ordinary meaning and applies it to facts of case.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[4] KeyCite this headnote

361 STATUTES

361VI Construction and Operation

361VI(A) General Rules of Construction

361k187 Meaning of Language

361k190 k. Existence of ambiguity.

Wis.App.,1996.

Courts look beyond statutory language only if statute is ambiguous.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[5] KeyCite this headnote

361 STATUTES

361VI Construction and Operation

361VI(A) General Rules of Construction

361k187 Meaning of Language

361k190 k. Existence of ambiguity.

Wis.App.,1996.

Statute is ambiguous if reasonable people could understand it in more than one way.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[6] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.App.,1996.

Trial court was without power to grant husband credit against child support arrearages for payments he made directly to wife, rather than to clerk of court as required by divorce judgment, though trial court found as matter of fact that husband did make direct payments to wife. W.S.A. 767.32(1m, 1r); 1993 Act. 481, § 9326(2).

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[7] KeyCite this headnote

219 INTEREST

219I Rights and Liabilities in General

219k21 k. Verdicts, findings, and awards.

Wis.App.,1996.

Trial court had no discretion in assessing interest on child support arrearage, even though it determined awarding interest would be inequitable. W.S.A. 767.25(6).

**802

(Cite as: 200 Wis.2d 807, 547 N.W.2d 801, **802)

*809

(Cite as: 200 Wis.2d 807, *809, 547 N.W.2d 801, **802)

For the petitioner-appellant the cause was submitted on the briefs of Joseph J. Mihalek of Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, Minnesota.

For the respondent-respondent the cause was submitted on the brief of Chris A. Gramstrup, Superior.

Before CANE, P.J., and LaROCQUE and MYSE, JJ.

MYSE, Judge.

Dianne Niemi appeals a judgment ordering Robert P. Fisher to pay $3,000 in arrearages. The trial court determined that while Fisher had arrearages of over $18,000 calculated from the records of the clerk of court, Fisher should be credited for direct payments he made and for the period of time his son lived with him. Niemi contends that: (1) the trial court lacked power to grant Fisher a credit against his arrearages; (2) if the trial court had the power to grant the credit, it erroneously exercised its discretion by requiring Fisher to pay only $3,000 in arrearages; and (3) the trial court erred when it denied Niemi's motion for statutory interest on the arrearages under *810

(Cite as: 200 Wis.2d 807, *810, 547 N.W.2d 801, **802)

§ 767.25(6), Stats. We conclude that the trial court lacked power to grant Fisher a credit against his arrearages and erred when it denied Niemi statutory interest. [FN1] Therefore, we reverse and remand to the trial court with directions to order Fisher to pay the total amount of the arrearages and award interest pursuant to § 767.25(6).

FN1. Because we conclude that the trial court lacked power to grant Fisher a credit against his arrearages, we do not reach the issue whether the trial court erroneously exercised its discretion.

Fisher and Niemi were divorced on July 8, 1966. Niemi was awarded custody of their two minor children, and Fisher was ordered to pay $165 per month for child support through the clerk of court. Fisher failed to make approximately ten years of child support payments through the clerk of court, resulting in arrearages of over $18,000.

In 1992, Niemi moved for judgment on the arrearages. At the hearing, Fisher claimed that he regularly made child support payments directly to Niemi, with some exceptions. He further claimed that he even paid $200 per month for a period of time to make up arrearages. Niemi denied that he made direct payments to her for child support except for the $330 that was noted in the court's payment record for 1970. Niemi claimed that all other direct payments she received from Fisher were for health insurance and medical expenses, which Fisher was required to pay under the divorce judgment. The trial court dismissed her claim for child support arrears concluding that the doctrines of laches, equitable estoppel and waiver precluded **803

(Cite as: 200 Wis.2d 807, *810, 547 N.W.2d 801, **803 )

Niemi from collecting the arrearages. Niemi appealed. We reversed concluding that the defenses of laches, equitable estoppel and waiver did not apply with regard to her delay in *811

(Cite as: 200 Wis.2d 807, *811, 547 N.W.2d 801, **803 )

filing for judgment, and remanded for the trial court to determine whether Fisher made direct payments. [FN2] See Douglas County Child Support Enforcement Unit v. Fisher, 185 Wis.2d 662, 517 N.W.2d 700 (Ct.App.1994).

FN2. Because the parties did not raise the issue in the previous appeal or this appeal, we did not and do not address whether equitable estoppel could apply to the method in which Fisher made payments.

On remand, and after a hearing, the trial court found that Fisher had made direct payments to Niemi and that Fisher should be credited for the direct payments and for the period of time his son came to live with him. Although the exact amount of the direct payments was difficult to determine, the trial court found as a fact that the arrearage was $3,000. The trial court also denied Niemi's motion for statutory interest on the arrearages pursuant to § 767.25(6), Stats.

[1][2][3][4][5] Because each of the issues Niemi raises requires the interpretation of a statute, we are presented with questions of law that we

(Cite as: 200 Wis.2d 807, *811, 547 N.W.2d 801, **803)

review without deference to the trial court. Shorewood v. Steinberg, 174 Wis.2d 191, 201, 496 N.W.2d 57, 61 (1993). Our purpose in interpreting a statute is to ascertain and give effect to the legislature's intent. Id. If the language of the statute is clear and unambiguous, we give the language its ordinary meaning and apply it to the facts of the case. Id. We look beyond the statutory language only if the statute is ambiguous. Id. A statute is ambiguous if reasonable people could understand it in more than one way. Id.

[6] First, Niemi contends that the trial court was without power to grant Fisher a credit toward arrearages. Niemi argues that the Wisconsin Legislature, in *812

(Cite as: 200 Wis.2d 807, *812, 547 N.W.2d 801, **803)

1993 Wis.Act 481, removed the power of the courts to grant credit against child support arrearages, effective June 11, 1994, a few weeks after our previous remand in this case. [FN3]

FN3. We issued our previous decision in this case on May 24, 1994. See Douglas County Child Support Enforcement Unit v. Fisher, 185 Wis.2d 662, 517 N.W.2d 700 (Ct.App.1994). 1993 Wis.Act 481 was published on June 10, 1994, and the relevant portions became effective June 11, 1994.

Prior to 1993 Wis.Act 481, a trial court had discretion to grant equitable credit against arrearages for direct expenditures made for support in a manner other than that prescribed in the order or judgment, if the order or judgment was entered prior to August 1, 1987. See Schulz v. Ystad, 155 Wis.2d 574, 603-04, 456 N.W.2d 312, 323 (1990); Rummel v. Karlin, 167 Wis.2d 400, 402- 03, 481 N.W.2d 695, 697 (Ct.App.1992). While Schulz concluded that § 767.32(1m), Stats., effective August 1, 1987, prohibited credits against arrearages, it also determined that the statute applied prospectively only. Rummel, 167 Wis.2d at 403, 481 N.W.2d at 697.

In 1993 Wis.Act 481, § 118, the legislature amended § 767.32(1m), Stats., to add the underlined language and provide as follows:

In an action under sub. (1) to revise a judgment or order with respect to child support, maintenance payments or family support payments, the court may not revise the amount of child support, maintenance payments or family support payments due, or an amount of arrearages in child support, maintenance payments or family support payments that has accrued, prior to the date that notice of the action is given to the respondent, except to correct previous errors in calculations.

*813

(Cite as: 200 Wis.2d 807, *813, 547 N.W.2d 801, **803)

Further, the legislature created § 767.32(1r), Stats., which provides:

In an action under sub. (1) to revise a judgment or order with respect to child support or family support, the court may not grant credit to the payer against support due prior to the date on which the action is commenced or payments made by the payer on behalf of the child other than payments made to the clerk of court under s. 767.265 or 767.29 or as otherwise ordered by the court.

1993 Wis.Act 481, § 119.

Section 767.32(1m) and (1r), Stats., unambiguously provide that a trial court cannot **804

(Cite as: 200 Wis.2d 807, *813, 547 N.W.2d 801, **804)

grant credit for direct payments for support made in a manner other than that prescribed in the order or judgment providing for support. This is consistent with Schulz and Rummel which conclude that § 767.32(1m) prohibits equitable credits. However, in 1993 Wis.Act 481, the legislature made it clear that the new law applied retroactively. Section 9326(2) of 1993 Wis.Act 481 provides as follows:

Revisions of Child Support Judgments or Orders. The treatment of section 767.32(1m) and (1r) of the statutes first applies to arrearages existing, and child support, maintenance payments and family support payments past due, on the effective date of this subsection [June 11, 1994], regardless of when the judgment or order under which the arrearages accrued, or the child support, maintenance payments or family support payments are owed, was entered. (Emphasis added.)

The trial court's judgment was entered on April 19, 1995. Under the unambiguous language of the Act, as *814

(Cite as: 200 Wis.2d 807, *814, 547 N.W.2d 801, **804)

of June 11, 1994, a court is without discretion to grant credits against arrearages regardless of when the judgment or order was entered. Accordingly, the trial court was without power to grant Fisher credit in its judgment on April 19, 1995.

Fisher, however, argues that Niemi's original motion was filed pursuant to § 767.30(3)(c), Stats., to determine the amount of arrearages and was not an action under § 767.32(1), Stats., to revise a judgment or order. Section 767.32(1m) and (1r) applies only to revisions under § 767.32(1).

It is irrelevant that Niemi's original motion was filed pursuant to § 767.30(3)(c), Stats. Fisher requested that he be given credit for direct payments he made for child support. Section 767.30(3)(c) does not authorize the court to grant credit against arrearages. The court's authority to grant credit is derived from § 767.32(1), Stats. See Schulz. To grant a credit, the court must revise the judgment under § 767.32(1) with respect to the method in which payments are made. Moreover, the only statute dealing specifically with credit is § 767.32(1r), which specifically states that a court cannot grant credit. Accordingly, we conclude that the trial court was acting pursuant to § 767.32(1) when it granted the credit and under § 767.32(1r), the court was without power to do so.

[7] Next, Niemi contends that the trial court erred when it refused to award her interest under § 767.25(6), Stats. Section 767.25(6) states: "A party ordered to pay child support under this section shall pay simple interest at the rate of 1.5% per month on any amount unpaid, commencing the first day of the 2nd month after the month in which the amount was due." (Emphasis added.)

*815

(Cite as: 200 Wis.2d 807, *815, 547 N.W.2d 801, **804)

Under the unambiguous language of § 767.25(6), Stats., a person ordered to pay child support is required to pay interest when child support is overdue. The language makes interest on unpaid child support mandatory. Further, § 767.25(6) applies to arrearages accrued as of its effective date on July 2, 1983, as well as support arrearages accruing after that date. Greenwood v. Greenwood, 129 Wis.2d 388, 392, 385 N.W.2d 213, 215 (Ct.App.1986).

The trial court determined that it would be inequitable to award Niemi interest because she did not timely exercise her rights. However, under § 767.25(6), Stats., the trial court had no discretion in assessing interest on the child support arrearage, even though it determined awarding interest would be inequitable. Because § 767.25(6) requires Fisher to pay interest on his child support arrearage, we conclude the trial court erred when it denied Niemi's motion for interest.

We confess that the results of this case are troublesome because the trial court determined as a fact that Fisher made direct payments. Because § 767.32(1m) and (1r), Stats., precludes recognition of these payments, Niemi is unfairly enriched by double payments. This is a public policy decision made by the legislature, apparently on the belief that the public interest in addressing the problem of nonpayment of child support is best served by limiting payments to those made in accordance with the divorce judgment. This policy fixes arrearages with certainty and facilitates the determination as to who owes arrearages and what amount. Because**805

(Cite as: 200 Wis.2d 807, *815, 547 N.W.2d 801, **805 )

creation of public policy expressed by clear and unambiguous legislation is the exclusive prerogative of the legislative branch of government, the courts *816

(Cite as: 200 Wis.2d 807, *816, 547 N.W.2d 801, **805 )

are powerless to do anything other than apply the policy as determined by the legislature.

Because we conclude that the trial court was without power to grant Fisher a credit against his arrearages and the trial court was required to award Niemi interest on the arrearages, we reverse the judgment and remand to the trial court to order Fisher to pay the total amount of arrearages and award Niemi interest on the arrearages pursuant to § 767.25(6), Stats.

Judgment reversed and cause remanded.

DISSENTING OPINION

CANE, Presiding Judge (dissenting ).

I respectfully dissent. Dianne Niemi relies on §§ 767.32(1m) and 767.32(1r), Stats., to prohibit the circuit court from granting any credits for payments not made through the clerk of court. Section 767.32(1m) provides that the circuit court may not revise the amount of child support due under an order or judgment for support prior to the date that the notice of a

(Cite as: 200 Wis.2d 807, *816, 547 N.W.2d 801, **805)

petition to revise support is given to the custodial parent. This section eliminated a child support obligor's right to petition for retroactive modification of support and thereby redefine his or her obligation with respect to accumulated support arrearages. Schulz v. Ystad, 155 Wis.2d 574, 598, 456 N.W.2d 312, 321 (1990). What is important to note is that § 767.32 is directed at an obligor parent's efforts to revise the amount of child support payments. Section 767.32(1r) also refers to an action to revise the amount of child support and prohibits the circuit court from giving credit against the support payment other than payments made through the clerk of court.

*817

(Cite as: 200 Wis.2d 807, *817, 547 N.W.2d 801, **805)

However, Dianne Niemi's motion was filed pursuant to § 767.30(3)(c), Stats., which provides:

If the party fails to pay a payment ordered under sub. (1) ... the court may by any appropriate remedy enforce the judgment, or the order as if it were a final judgment, including any past due payment and interest. Appropriate remedies include but are not limited to:

....

Here, Niemi's original motion alleges "that said Respondent failed to maintain regular child support payments as ordered by the aforementioned divorce judgment, and accordingly, he has accrued an arrears...." In short, the purpose of these hearings in response to Niemi's motion was not to revise the amount of a child support order, but rather to obtain a money judgment for the child support payments not made, the arrears.

The factual issue before the trial court was whether Robert Fisher made the required child support payments. Fisher contended that his payments were made directly to Niemi while she contended that the few payments he made were for health insurance. Rejecting Niemi's testimony, the trial court found that Fisher made a substantial number of child support payments by check or money order directly to Niemi. It also concluded that Fisher's support payments were not required when their youngest son lived with Fisher. The evidence more than amply supports the trial court's findings. Consequently, I would reject the application of § 767.32, Stats., to this proceeding which was solely for the purpose of obtaining a money judgment for the unpaid child support.

*818

(Cite as: 200 Wis.2d 807, *818, 547 N.W.2d 801, **805)

Additionally, I would conclude that even if § 767.32, Stats., applies, Niemi is equitably estopped from asserting this statute, and the trial court is permitted to consider the support payments made directly to Niemi. Here, the trial court found that for years Fisher made his support payments by check or money order directly to Niemi and that she accepted these payments on a regular basis without objection. This is understandable because both parents were living in California when Fisher started paying Niemi directly, making it less practical to pay through the clerk of circuit court in Douglas County, Wisconsin. Niemi also consented to their youngest son living with Fisher for about five months shortly before the son reached age eighteen.

**806

(Cite as: 200 Wis.2d 807, *818, 547 N.W.2d 801, **806)

I recognize that in Schulz the supreme court permitted the circuit court to allow credit against the support payments to avoid a manifest injustice or unjust enrichment. However, the court was reviewing the general rule existing prior to the adoption of § 767.32(1m), Stats. Because we are now dealing with a statute, I also recognize that we must not refuse to apply a statute because its strict application would create a hardship. It is our duty to expound the statute as it stands, even if the consequence is a hardship.

However, as the supreme court recognized in Schulz, we cannot close our eyes to reality. To conclude that these repeated payments were not made with Niemi's express or implied consent ignores reality. Similarly, the reality of the circumstances suggests that Niemi consented to their youngest son living with Fisher. The trial court's findings are clear and amply supported by the evidence. Except for the sum of $3,000, Fisher made his court-ordered child support *819

(Cite as: 200 Wis.2d 807, *819, 547 N.W.2d 801, **806)

payments directly to Niemi, who repeatedly accepted these payments without objection.

Therefore, I would conclude under these circumstances that Niemi is equitably estopped from asserting § 767.32(1m) and (1r), Stats., which under the majority's analysis prevents the trial court from considering the payments made outside the clerk of court's office. [FN1] To require Fisher to pay again for the child support payments results in a manifest injustice to Fisher and an unjust enrichment for Niemi. A custodial parent should not be permitted to directly accept the child support payments and then later recover a money judgment for those same payments simply because they were not made through the clerk of court.

FN1. Fisher did not raise this particular equitable estoppel argument because the purpose and focus at the hearing was to determine what support payments Fisher made and, accordingly, any arrearage. Although Fisher never presented this particular argument, I would conclude under the circumstances it is appropriate for this court to address this issue.

Finally, I would also construe § 767.32(1r), Stats., to only prevent the trial court from giving credit against the required support payments when it involves gifts or other voluntary expenditures made on behalf of the child, not support payments made directly to the custodial parent. The purpose of this statute is to prevent unilateral modifications of court orders, which tend to interfere with the right and responsibility of the custodial parent to decide how the support money should be spent. When the support money is given directly to the custodial parent, this consideration is no longer applicable.

I do agree with the majority however that Fisher must pay interest on the unpaid child support payments. *820

(Cite as: 200 Wis.2d 807, *820 , 547 N.W.2d 801, **806)

That interest should be on the $3,000 of unpaid payments.

Krueger case: tax intercept and child support

In re the Marriage of Patricia KRUEGER, Petitioner-Respondent,

Terrence KRUEGER, Appellant.

No. 85-1114.

Court of Appeals of Wisconsin.

Submitted on Briefs Aug. 5, 1986.

Opinion Released Aug. 26, 1986.

Opinion Filed Aug. 26, 1986.

Tax refund intercept proceeding was brought, and the Circuit Court, La Crosse County, Dennis G. Montabon, J., directed county clerk of court to certify father as delinquent in child support payments. Father appealed. The Court of Appeals, Sundby, J., held that: (1) father was delinquent despite compliance with stipulated order; (2) statute was clear and unambiguous, and therefore, reference to legislative intent was unnecessary; (3) father had no contract by reason of stipulation preventing child support agency from using other available procedures to collect arrearages; (4) order was not res judicata in tax refund intercept proceeding; and (5) county child support agency was not estopped by stipulation and order from certifying delinquent payments.

Affirmed.

Krueger v. Krueger

[1] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.App.,1986.

Father was delinquent in payment of court-ordered child support payments on date of tax refund intercept notice despite his being current under stipulated order, entered into after father was ordered to show cause why he ought not to be held in contempt of court for failure to pay child support required by divorce judgment. W.S.A. 46.255, 46.255(1, 3), 767.30(3).

Krueger v. Krueger

[2] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k277 k. Right to and collection of arrears.

Wis.App.,1986.

Court was not required to consider legislative intent of statute requiring clerk of court to certify to Department of Health and Social Services delinquent payments of person obligated to make court-ordered child support or maintenance payments to determine whether legislature intended to nullify stipulation and order by which support delinquency of father was being satisfied, entered into prior to effective date of statute. W.S.A. 46.255(1).

Krueger v. Krueger

[2] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.App.,1986.

Krueger v. Krueger

[3] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.App.,1986.

Father had no contract by reason of stipulation preventing child support agency from using other available procedures to collect arrearages, and therefore, no contractual right of father was impaired by tax refund intercept proceeding. W.S.A. 46.255(1).

Krueger v. Krueger

[4] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311 Enforcement of Order, Judgment, or Decree as to Support

134k311(2) k. Contempt proceedings.

Wis.App.,1986.

Stipulated order under which father executed income assignment for current child support and arrearages, entered after rule to show cause why father ought not to be held in contempt for failure to pay child support required by divorce judgment, was not res judicata in tax refund intercept proceeding. W.S.A. 46.255(1).

Krueger v. Krueger

[5] KeyCite this headnote

156 ESTOPPEL

156III Equitable Estoppel

156III(A) Nature and Essentials in General

156k62 Estoppel Against Public, Government, or Public Officers

156k62.3 k. Counties and subdivisions thereof.

Wis.App.,1986.

County child support agency was not estopped by stipulation and order, pursuant to which father executed income assignment for current child support and arrearages, from certifying delinquent payments in tax refund intercept proceeding. W.S.A. 46.255.

Krueger v. Krueger

[6] KeyCite this headnote

156 ESTOPPEL

156III Equitable Estoppel

156III(A) Nature and Essentials in General

156k62 Estoppel Against Public, Government, or Public Officers

156k62.3 k. Counties and subdivisions thereof.

Wis.App.,1986.

Equitable estoppel could not be asserted against county child support agency in tax refund intercept proceeding on basis of stipulated order under which father executed income assignment for current child support and arrearages, as action asserted to be inequitable was mandated by statute. W.S.A. 46.255.

**784

(Cite as: 133 Wis.2d 269, 395 N.W.2d 783, **784)

*271

(Cite as: 133 Wis.2d 269, *271, 395 N.W.2d 783, **784)

Thomas M. Olson and Olson & Olstad, La Crosse, for appellant.

Jeffrey D. Kohl, La Crosse, for petitioner-respondent.

Before GARTZKE, P.J., and DYKMAN and SUNDBY, JJ.

SUNDBY, Judge.

Terrence Krueger appeals from an order in a tax refund intercept proceeding under sec. 46.255, Stats., directing the La Crosse County Clerk of Court to certify him as delinquent in child support payments.

ISSUES

Terrence contends: (1) because he is current in making payments required by a stipulated order to reduce his arrearages, he is not delinquent in making court-ordered child support payments; (2) the 1983 amendment to sec. 46.255(1), Stats., which made certification mandatory, cannot nullify a prior order; and (3) the county is estopped from certifying his delinquent payments. We conclude Terrence was delinquent in child support payments when the tax refund intercept notice was given, that the 1983 amendment does not nullify the order or deprive him of vested rights, and *272

(Cite as: 133 Wis.2d 269, *272, 395 N.W.2d 783, **784)

estoppel does not apply to the mandatory duty imposed by sec. 46.255(1). Therefore, we affirm.

FACTS

The facts are undisputed. On January 3, 1983, Terrence was ordered to show cause why he ought not be held in contempt of court for failure to pay child support required by a divorce judgment. A stipulated order was entered March 30, 1983, under which he executed an income assignment for current support in the amount of $45 per week plus $5 per week as payment on arrearages of $6,868.

On November 8, 1984, the county child support agency pursuant to sec. 46.255(1), Stats., certified the arrearages to the Department of Health and Social Services in order to attach any state tax refund or other credit due Terrence. After a hearing **785

(Cite as: 133 Wis.2d 269, *272, 395 N.W.2d 783, **785)

under sec. 46.255(3), the circuit court held that the county child support agency is not estopped from proceeding under sec. 46.255 by reason of the stipulated order and ordered that La Crosse county certify Terrence as a person delinquent in the payment of court- ordered child support payments.

STANDARD OF REVIEW

The case turns on construction of sec. 46.255, Stats. The application of a statute to a particular set of facts is a question of law. Neis v. Educ. Bd. of Randolph School, 128 Wis.2d 309, 313, 381 N.W.2d 614, 616 (Ct.App.1985). We decide questions of law without deference to the trial court. Id.

*273

(Cite as: 133 Wis.2d 269, *273, 395 N.W.2d 783, **785)

ANALYSIS

Section 46.255, Stats., provides in part:

(1) If a person obligated to provide child support or maintenance is delinquent in making court-ordered payments the clerk of court, upon application of the county designee under s. 59.07(97) or the department, shall certify the delinquent payment to the department.

(2) At least annually, the department of health and social services shall provide the certifications to the department of revenue.

(a) Delinquency

[1] Terrence contends that he is not delinquent in making court-ordered child support payments within the meaning of sec. 46.255(1), Stats, because he is current under the stipulated order. He contends that "court-ordered payments" refers to the last order of the court, the stipulated order of March 30, 1983. Terrence argues he is not "delinquent" because he has not failed or neglected to make the "court-ordered payments."

The stipulated order was entered pursuant to sec. 767.30(3), Stats., which provides:

If the party fails to pay a payment ordered under sub. (1) ..., the court may by any appropriate remedy enforce the judgment, or the order as if it were a final judgment, including any past due payment and interest. Appropriate remedies include but are not limited to:

....

(b) Contempt of court under ch. 785.

*274

(Cite as: 133 Wis.2d 269, *274, 395 N.W.2d 783, **785)

The order did not modify the divorce judgment or Terrence's child support obligations. The stipulated order related to Terrence's contempt and not to "court-ordered" child support.

Both the stipulation and the order refer to "the presently outstanding arrearages." Terrence's argument that paying $5 per week towards an arrearage of $6,868 makes him current in making court-ordered payments is illogical. The stipulated order merely reduces Terrence's delinquency and does not eliminate it.

We conclude that the trial court correctly determined Terrence was delinquent in the payment of court-ordered child support payments on the date of the tax refund intercept notice.

(b) The 1983 Amendment

Section 46.255, Stats., was created by sec. 772, ch. 20, Laws of 1981 to supplement the child and spousal support program of sec. 46.25, Stats. As created, sec. 46.255(1) read:

If a person obligated to provide support payments for a child is delinquent in making court-ordered payments, and the county designee authorized under s. 59.07(97) to administer the child support and paternity program is unable to secure payment after making reasonable effort, the county designee for the county in which the order was rendered may certify the delinquent payment as uncollectible to the department.

Section 46.255(1), Stats. (1981) was amended to its present form by sec. 966, 1983 Wis.Act 27, effective July 2, 1983. The 1983 amendment made certification mandatory and deleted the requirement that the child *275

(Cite as: 133 Wis.2d 269, *275, 395 N.W.2d 783, **785)

support agency make reasonable collection efforts before using the certification procedure. Terrence argues: (1) the legislature did not intend to nullify stipulations and orders that forestalled the use of the pre-1983 amendment certification procedure; (2) the 1983 amendment **786

(Cite as: 133 Wis.2d 269, *275, 395 N.W.2d 783, **786)

impairs his contract in violation of art. 1, sec. 10 of the United States Constitution; and (3) the order of March 30, 1983 is res judicata.

Legislative Intent

[2] Terrence argues the legislature by the 1983 amendment did not intend to nullify stipulations and orders by which support delinquencies are being satisfied. He asks us to consider the legislative intent as revealed by the drafting record of the 1983 amendment.

When a statute is clear and unambiguous, the statute must be interpreted on the basis of its plain meaning. Tahtinen v. MSI Ins. Co., 122 Wis.2d 158, 167, 361 N.W.2d 673, 678 (1985). This court has found that sec. 46.255(1), Stats., is clear and unambiguous. Marriage of Howard v. Howard, 130 Wis.2d 206, 209, 387 N.W.2d 96, 97 (Ct.App.1986).

When we look at the plain meaning of sec. 46.255(1), Stats., we find that its language clearly and unambiguously requires the clerk of court, upon application of the county designee or the Department of Health and Social Services, to certify to the Department delinquent payments of a person obligated to make court-ordered child support or maintenance payments. Thus, it is not appropriate for us to resort to extrinsic aids such as the legislative drafting records in construing the *276

(Cite as: 133 Wis.2d 269, *276, 395 N.W.2d 783, **786)

statute. Tahtinen, 122 Wis.2d at 166, 361 N.W.2d at 677.

Impairment of Contract, Res Judicata

[3][4] Terrence argues that if sec. 46.255(1), Stats., as amended, is applied to him, his "contract" with the county child support agency is impaired or, alternatively, if the stipulated order became part of the divorce judgment, that order is res judicata and the agency is bound by it. Terrence had no contract by reason of the stipulation preventing the child support agency from using other available procedures to collect arrearages from him. No right of Terrence is impaired by these proceedings. Nor is the order of March 30 res judicata. In order for a judgment or final order to bar a subsequent action, there must be not merely identity of subject matter but also of the cause of action. Rahr v. Wittmann, 147 Wis. 195, 202, 132 N.W. 1107, 1110 (1911). These proceedings are distinct from contempt proceedings as an enforcement remedy.

[5][6] Finally, Terrence argues that the county child support agency is estopped because of the stipulation and order from certifying delinquent payments. Equitable estoppel cannot be asserted against the government when the action asserted to be inequitable is mandated by law. See State v. Madison, 120 Wis.2d 150, 161, 353 N.W.2d 835, 841 (Ct.App.1984). The legislature requires governmental agencies charged with the *277

(Cite as: 133 Wis.2d 269, *277, 395 N.W.2d 783, **786)

responsibility of administering the child support program to use the certification procedures under sec. 46.255, Stats., to collect delinquent court-ordered child support payments from state tax refunds or credits owed to the obligor. There is no room for Terrence's equitable argument.

Order affirmed.

Krieman case: child support modification

In re the Marriage of Janice KRIEMAN, Petitioner-Respondent, [FN<<dagger>>]

FN<<dagger>> Petition to review denied.

Mark A. GOLDBERG, Respondent-Appellant.

No. 96-3489.

Court of Appeals of Wisconsin.

Submitted on Briefs Aug. 29, 1997.

Opinion Released Oct. 8, 1997.

Opinion Filed Oct. 8, 1997.

In ongoing child support proceedings incident to divorce, former wife filed motion for remedial contempt, and former husband moved to modify child support payments established by stipulation between parties. The Circuit Court for Walworth County, Michael S. Gibbs, J., ordered husband imprisoned for six months and required him to pay arrearages and make current payments, and denied motion for modification. Husband appealed. The Court of Appeals, Snyder, P.J., held that: (1) husband's failure to pay child support was neither willful nor intentional, as required to subject him to remedial sanctions for contempt, and (2) child support stipulation containing language absolutely prohibiting modification of child support under any circumstances, with no time limitation or opportunity for review, offended public policy.

Reversed and remanded.

Krieman v. Goldberg

[1] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(10) k. Review.

Wis.App.,1997.

Court of Appeals reviews trial court's use of its contempt power in child support proceeding to determine whether court properly exercised its discretion.

Krieman v. Goldberg

[2] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(9) k. Enforcement of decree.

Wis.App.,1997.

Person may be held in contempt in child support proceeding if he or she refuses to abide by order made by competent court.

Krieman v. Goldberg

[3] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(9) k. Enforcement of decree.

Wis.App.,1997.

If court imposes remedial sanction for contempt in child support proceeding, compliance with purge provision must be in power of contemnor.

Krieman v. Goldberg

[4] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(9) k. Enforcement of decree.

Wis.App.,1997.

Principal findings that court seeking to hold person in contempt for failure to make child support payments must make are that person is able to pay and refusal to pay is willful and with intent to avoid payment.

Krieman v. Goldberg

[5] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(10) k. Review.

Wis.App.,1997.

Court of Appeals will not set aside trial court's findings of fact in proceeding for child support unless findings are clearly erroneous. W.S.A. 805.17(2).

Krieman v. Goldberg

[6] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311 Enforcement of Order, Judgment, or Decree as to Support

134k311(2) k. Contempt proceedings.

Wis.App.,1997.

Failure of former husband to pay child support pursuant to stipulation was neither willful nor intentional, as required to subject him to remedial sanctions for contempt, in postdivorce proceedings, despite fact that at time his employer was shut down by Federal Trade Commission, husband had already earned more than threshold yearly figure set forth in stipulation; husband had no notice that his employer would be put out of business, husband's payments were current at that time, and terms of stipulation did not require husband to save and set aside money to satisfy child support obligations.

Krieman v. Goldberg

[7] KeyCite this headnote

170B FEDERAL COURTS

170BVIII Courts of Appeals

170BVIII(K) Scope, Standards, and Extent

170BVIII(K)1 In General

170Bk754 Review Dependent on Whether Questions Are of Law or of Fact

170Bk755 k. Particular cases.

Wis.App.,1997.

Construction of written contract, including stipulation agreement with respect to child support, is question of law, to be determined by Court of Appeals independently, with no deference to conclusions of the trial court.

Krieman v. Goldberg

[7] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(10) k. Review.

Wis.App.,1997.

Krieman v. Goldberg

[8] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k230 Permanent Alimony

134k236 k. Stipulations and agreements of parties.

Wis.App.,1997.

Although trial court is prohibited from modifying waiver of spousal maintenance or final division of property, this prohibition does not exist for child support; this policy recognizes importance of best interests of child in considering support issues and allows court to modify earlier award if there is change in circumstances unforeseen at time divorce judgment was entered. W.S.A. 767.32(1).

Krieman v. Goldberg

[8] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k248 Disposition of Property

134k249.2 k. Stipulations and agreements of parties.

Wis.App.,1997.

Krieman v. Goldberg

[8] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k307 k. Application for allowance or support and proceedings thereon.

Wis.App.,1997.

Krieman v. Goldberg

[8] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.2 Grounds and Rights of Parties

134k309.2(4) k. Agreement or stipulation, and effect thereof.

Wis.App.,1997.

Krieman v. Goldberg

[9] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.2 Grounds and Rights of Parties

134k309.2(4) k. Agreement or stipulation, and effect thereof.

Wis.App.,1997.

To invoke estoppel to prevent modification of child support agreement established by stipulation, party opposing modification must show that both parties entered into stipulation freely and knowingly, that settlement was fair and equitable and not illegal or against public policy, and that party seeking modification seeks to be released from agreement's terms on grounds that court could not have entered order it did without their agreement.

Krieman v. Goldberg

[10] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.2 Grounds and Rights of Parties

134k309.2(4) k. Agreement or stipulation, and effect thereof.

Wis.App.,1997.

Child support stipulation containing language absolutely prohibiting modification of child support under any circumstances, with no time limitation or opportunity for review, offended public policy, and payor spouse was therefore not estopped from seeking modification of his support obligations due to material change in circumstances; payee spouse retained equitable right to request modification upon change of circumstances in which best interests of child required modification, and payor spouse had same rights as payee spouse.

Krieman v. Goldberg

[11] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.2 Grounds and Rights of Parties

134k309.2(4) k. Agreement or stipulation, and effect thereof.

Wis.App.,1997.

Best interests of child are served through policy which does not preclude either party to child support agreement from seeking modification in child support because of change of circumstances, even where parties stipulate to nonmodifiable amount of support.

**427

(Cite as: 214 Wis.2d 163, 571 N.W.2d 425, **427)

*164

(Cite as: 214 Wis.2d 163, *164, 571 N.W.2d 425, **427)

On behalf of the respondent-appellant, the cause was submitted on the briefs of Richard J. Podell of Richard J. Podell & Associates, S.C. of Milwaukee.

On behalf of the petitioner-respondent, the cause was submitted on the brief of Wallace K. McDonell of *165

(Cite as: 214 Wis.2d 163, *165, 571 N.W.2d 425, **427)

Allen, Harrison, Williams, McDonell & Swatek of Whitewater.

Before SNYDER, P.J., and NETTESHEIM and ANDERSON, JJ.

SNYDER, Presiding Judge.

Mark A. Goldberg appeals from a trial court order finding him in contempt for failure to pay child support as required by a prior stipulation agreement and from an order denying his motion to revise his child support obligations. Goldberg claims that the trial court erred because: (1) it found him in contempt when he did not intentionally fail to make child support payments after he lost his job; (2) it issued a punitive sanction for a remedial contempt order which he did not have the ability to purge; and (3) as a matter of public policy he should not be estopped by a stipulation agreement from requesting a modification of his child support obligations.

We agree that the trial court's use of its contempt power in this instance was a misuse of discretion because Goldberg's failure to pay the agreed-upon child support was not intentional. We also conclude that because the stipulation agreement was absolute, as a matter of public policy Goldberg is not estopped from seeking a modification of his support obligations due to his changed financial circumstances. The stipulation required him to pay a certain amount of child support, regardless of his income, without any stated time limitation to provide an opportunity for reevaluation. We therefore reverse and remand for further proceedings.

Goldberg and Janice Krieman were married in 1976. They were divorced in 1987 and custody of their four children went to Krieman. It is apparent from the record in this case that various postdivorce issues have been the subject of litigation; much of the litigation has *166

(Cite as: 214 Wis.2d 163, *166, 571 N.W.2d 425, **427)

pertained to the level of child support Goldberg is required to pay. [FN1] Although the parties were married in Illinois and resided there until after their divorce, at the time of this action Goldberg was living in Florida and Krieman was residing in Wisconsin with their children. [FN2]

FN1. In January 1995, a family court commissioner concluded that Goldberg was improperly diverting income to his second wife's credit (she worked as his administrative assistant) in order to lessen his support obligations. The commissioner reallocated the Goldbergs' income for child support

purposes and ultimately computed arrearages of $61,696.10 for a four-year period. The parties subsequently settled and Goldberg paid $40,000 plus attorney's fees.

FN2. The oldest child was born on August 16, 1978; triplets were born on December 5, 1981.

On November 1, 1995, after protracted litigation over Goldberg's support obligations, the trial court signed an order based on the parties' stipulation in which Goldberg and Krieman agreed to the following terms:

1. [Mark Goldberg's] child support payment to Janice Krieman shall be $31,200.00 per year, payable in the amount of $1,300.00 on the 1st of the month and $1,300.00 on the 15th of the month, commencing November 1, 1995, and continuing until Ross Goldberg reaches age 18 on August 16, 1996. Thereafter, respondent's child support shall be reduced to $28,000.00 per year ....

2. [Mark Goldberg's] child support obligation shall remain the same regardless of his income.

....

4. The parties agree that [Mark Goldberg's] income fluctuates on a monthly and yearly *167

(Cite as: 214 Wis.2d 163, *167, 571 N.W.2d 425, **427)

basis. They further agree that $100,000 per year is an accurate estimate of the respondent's income and that the child support amounts agreed to herein are, therefore, in conformity with the percentage standards established by [DHSS] in Wis. Stats. 46.25(9).

**428

(Cite as: 214 Wis.2d 163, *167, 571 N.W.2d 425, **428)

5. The parties further agree that [Mark Goldberg's] earning capacity is approximately $100,000 per year, but that he has the potential to earn substantially more or substantially less than said amount. The parties agree that it is in the best interests of the children and both parties that the child support amount agreed to herein be established as the final modification of child support herein. They agree that regardless of [Mark Goldberg's] future income, the child support level shall remain the same. Therefore, neither party shall under any circumstances have the right to petition the court for a modification of the child support provided for herein.

At the time the stipulation was entered into, Goldberg was employed as a telemarketer for Best Marketing. Subsequent to the above order, Goldberg made timely and appropriate payments until August 15, 1996.

In July 1996 the Federal Trade Commission (FTC) filed charges against several telemarketing companies and secured a permanent injunction against Best Marketing, shutting down the business for "deceptive acts or practices." Goldberg lost his job and, due to the circumstances of the injunction, was limited in his ability to obtain another telemarketing position. [FN3] He eventually *168

(Cite as: 214 Wis.2d 163, *168, 571 N.W.2d 425, **428)

obtained a sales position in men's wear earning a salary of $13,000 annually.

FN3. According to Goldberg's testimony, he was advised by legal counsel not to seek another telemarketing job while the FTC was conducting its investigation. He testified that his earning capacity in telemarketing was much higher than what he could earn for other sales commission work.

Goldberg made substantially reduced payments to Krieman beginning August 15, 1996, and continued to make timely but reduced payments thereafter. On September 18, Krieman filed a Motion for Remedial Contempt. At the motion hearing, the trial court looked at the combined income of Goldberg and his second wife for 1995 and 1996 and concluded that "[s]ince he already ... made that money [$175,000 in 1995 and $100,000 in 1996] there is no way that he can claim here that he didn't have the ability to pay the support.... [The support calculations] were based on $100,000.00 a year, and he's already exceeded that figure." The trial court found that Goldberg had intentionally failed to pay child support and ordered him committed to the county jail for six months.

In order to purge the contempt order, Goldberg was required to pay an arrearage of $6298, currently due payments of $1166.67 on the first and fifteenth of the month, and attorney's fees. The trial court also denied Goldberg's motion to revise his child support payments, finding that the earlier stipulation of the parties was entered into "freely and knowingly" and that based on the terms of the stipulation Goldberg could not "attempt to modify the child support contrary to the agreement." The trial court subsequently denied Goldberg's motions for reconsideration and to stay the contempt sanctions. Goldberg now appeals.

*169

(Cite as: 214 Wis.2d 163, *169, 571 N.W.2d 425, **428)

Contempt Order

[1][2][3][4] We review a trial court's use of its contempt power to determine whether the court properly exercised its discretion. See Haeuser v. Haeuser, 200 Wis.2d 750, 767, 548 N.W.2d 535, 543 (Ct.App.1996). A person may be held in contempt if he or she refuses to abide by an order made by a competent court. See id. at 767, 548 N.W.2d at 542. In the case of a remedial sanction, compliance with the purge provision must be in the power of the contemnor. See State ex rel. N.A. v. G.S., 156 Wis.2d 338, 343, 456 N.W.2d 867, 869 (Ct.App.1990). The principal findings that a court must make are that "the person is able to pay and the refusal to pay is willful and with intent to avoid payment." Haeuser, 200 Wis.2d at 767, 548 N.W.2d at 543.

In this instance, the court's finding of contempt rests on its factual finding regarding Goldberg's ability to pay. Before issuing the contempt order, the trial court made factual findings that: (1) Goldberg had failed to pay $6298 in child support in 1996; (2) in 1996, up to July, Goldberg earned $100,000 in his telemarketing job; (3) that income was the base line set in the stipulation and "he cannot now claim that he is unable to pay the child **429

(Cite as: 214 Wis.2d 163, *169, 571 N.W.2d 425, **429)

support ordered pursuant to the stipulation"; and (4) Goldberg's failure to pay support was willful and intentional as "he has not shown that he was unable to pay the support."

[5][6] This court will not set aside a trial court's findings of fact unless they are clearly erroneous. See id.; see also § 805.17(2), Stats. However, based on the following, we conclude that the trial court misapplied the law when it found that Goldberg's failure to pay support was willful and intentional. Goldberg testified that the *170

(Cite as: 214 Wis.2d 163, *170, 571 N.W.2d 425, **429)

FTC closed his employer on July 17, 1996 and that he did not have any notice or knowledge that this would occur. This fact was uncontested by Krieman. He also testified that the $100,000 earned for the first eight months of 1996 was a combined household income and included his wife's earnings. Goldberg also gave detailed testimony as to the disposition of those earnings.

Goldberg testified that his wife's income in 1996 accounted for approximately $22,200 of their combined income. [FN4] It was not disputed that Goldberg had already paid approximately $17,200 in child support in 1996 and $1000 per month in health insurance and medical bills. According to Goldberg's testimony, his tax liability for this time period was approximately $35,000.

FN4. At the time the stipulation agreement was reached, the trial court had determined that $31,200 of the Goldbergs' combined income was

attributable to his wife. Although there was some disagreement as to the precise figure (Krieman's counsel argued that $18,200 of the income that Goldberg reported as their combined income was attributable to Goldberg's wife in 1996), for purposes of our analysis of the appellate issue this difference is immaterial.

Calculations using these figures show that Goldberg retained between $14,000 and $18,000 for his own living expenses during the first eight months of 1996. [FN5] Even using the higher figure, Goldberg then had approximately $2700 per month for living expenses, or *171

(Cite as: 214 Wis.2d 163, *171, 571 N.W.2d 425, **429)

slightly more than the amount he was contributing each month for child support--$2600. [FN6]

FN5. This is based on the following calculations, using round numbers. The Goldbergs' combined income for the first eight months of 1996 was $100,000. Subtracting the tax liability leaves $65,000. We next deduct the amount of child support Goldberg had already paid in 1996--$17,000--as well as the $1000 per month he paid in medical expenses, and the total left is $36,000. However, these calculations have not yet deducted that portion of his income attributable to his wife. If the smaller income figure is attributed to her--$18,000--that leaves a total of $18,000 for Goldberg's living expenses.

FN6. This figure is based on his support for all four children. As of August 16, 1996, when his oldest child turned eighteen, the stipulation agreement required that Goldberg pay $1166.67 on the first and fifteenth of each month. This does not include any medical payments Goldberg might be obligated to pay.

In mid-July, this income was cut off when the FTC closed the telemarketing business that employed both Goldbergs. The trial court's determination that Goldberg's failure to pay support was willful and that "he has not shown that he was unable to pay the support" is not supported by the facts of record. The trial court's analysis of this issue erroneously opines that because Goldberg had already earned the threshold figure of $100,000 in the first eight months of 1996, he had to have set aside the amount required to satisfy his child support obligations for the entire year. First, this finding fails to take into account the fact that a portion of the threshold income was attributable to his wife and was unavailable to satisfy support obligations. See Abitz v. Abitz, 155 Wis.2d 161, 164, 455 N.W.2d 609, 610 (1990). Second, this analysis also suggests that Goldberg was required to save and put aside money to meet his child support obligations; this was not required in the stipulation agreement. The trial court's reasoning also ignores the effect of a sudden and unexpected job loss, particularly the loss of such a high-paying position. We conclude that the trial court misused its discretion when it found that Goldberg's failure to pay was willful and intentional and therefore *172

(Cite as: 214 Wis.2d 163, *172, 571 N.W.2d 425, **429)

reverse the trial court order finding Goldberg in contempt. [FN7]

FN7. Goldberg's second issue, whether the trial court issued a punitive sanction for remedial contempt, is moot in light of the above conclusion and will not be addressed. See State ex rel. Wis. Envtl. Decade v. Joint Comm., 73 Wis.2d 234, 236, 243 N.W.2d 497, 498 (1976).

**430

(Cite as: 214 Wis.2d 163, *172, 571 N.W.2d 425, **430)

Krieman responds, however, that Goldberg's actions were similar to those of the payor in Van Offeren v. Van Offeren, 173 Wis.2d 482, 496 N.W.2d 660 (Ct.App.1992), who quit a well-paying job and attempted to start his own business. The new business did not generate sufficient income for him to pay his support obligations and he fell behind. See id. at 490, 496 N.W.2d at 662. The court held that the payor's voluntary pursuit of a business with no immediate prospect of earning an income adequate to meet his support obligations would support a finding of contempt. See id. at 499, 496 N.W.2d at 666.

We disagree that Goldberg's circumstances are analogous. Goldberg's employer was unexpectedly closed down, leaving Goldberg without a source of income. The circumstances of his loss of income were completely out of his control. We are not persuaded that the rule of Van Offeren is applicable to these facts.

Modification of the Child Support Order

At the same hearing where the trial court found Goldberg in contempt for his failure to pay child support as required by the stipulation agreement, it also considered Goldberg's motion requesting modification of his child support obligations due to changed circumstances. Krieman argued that Goldberg was estopped from requesting modification by the stipulation agreement the court had ordered the previous November. *173

(Cite as: 214 Wis.2d 163, *173, 571 N.W.2d 425, **430)

The trial court agreed with Krieman, finding that because both parties had entered into the agreement "freely and knowingly" and that Goldberg had agreed "not to come in and attempt to modify the child support order" he was now estopped from making a request for modification in spite of his changed financial circumstances.

[7] Resolution of this issue requires us to construe the stipulation agreement between the parties. The construction of a written contract is a question of law. See Levy v. Levy, 130 Wis.2d 523, 528, 388 N.W.2d 170, 172 (1986). We determine questions of law independently, with no deference to the conclusions of the trial court. See id. at 529, 388 N.W.2d at 172-73.

[8] The trial court retains jurisdiction to modify a divorce judgment providing for child support. See § 767.32(1), Stats. Although a trial court is prohibited from modifying a waiver of spousal maintenance or a final division of property, this prohibition does not exist for child support. See Ondrasek v. Tenneson, 158 Wis.2d 690, 695, 462 N.W.2d 915, 917 (Ct.App.1990). This policy recognizes the importance of the best interests of the child when support issues are considered and allows a court to modify an earlier award when there is a change in circumstances unforeseen at the time the divorce judgment was entered. See id.

[9] Krieman, however, argues that Goldberg is estopped from seeking a modification of his obligations because of the stipulation agreement. She claims that "a child support agreement with a floor provision has been specifically approved in the Honore v. Honore, 149 Wis.2d 512, 439 N.W.2d 827 (Ct.App.1989)." There, we held that the father was estopped from requesting a reduction in his child support obligations. *174

(Cite as: 214 Wis.2d 163, *174, 571 N.W.2d 425, **430)

See Honore v. Honore, 149 Wis.2d 512, 518, 439 N.W.2d 827, 829 (Ct.App.1989). To invoke estoppel in the instant case, Krieman must show that both she and Goldberg entered into the stipulation freely and knowingly, that the settlement was fair and equitable and not illegal or against public policy, and that Goldberg seeks to be released from the agreement's terms on the grounds that the court could not have entered the order it did without their agreement. See Ondrasek, 158 Wis.2d at 694-95, 462 N.W.2d at 917.

We conclude that the dispositive portion of Krieman's estoppel claim lies in whether enforcement of the parties' stipulation agreement violates public policy. The trial court found that the parties entered into the agreement freely and knowingly. At the time the agreement was reached, both parties, represented by counsel, agreed that it was just and equitable and that it was done "to resolve a long-term disagreement of the parties concerning child support." The facts of record support the trial court's findings as to these aspects of the estoppel claim, but the trial court did not specifically address the **431

(Cite as: 214 Wis.2d 163, *174, 571 N.W.2d 425, **431)

public policy issue of whether an agreement with language that absolutely prohibits the modification of child support under any circumstances offends public policy. [FN8]

FN8. The trial court stated in its findings, "[T]he overall settlement was fair and equitable and not illegal or against public policy."

Krieman claims that the public policy issue was considered in Honore when this court considered the question of "whether a party to a divorce may stipulate to maintaining a certain level of child support notwithstanding a subsequent reduction in the party's income." Honore, 149 Wis.2d at 513, 439 N.W.2d at 827. The parties' agreement stated that the payor *175

(Cite as: 214 Wis.2d 163, *175, 571 N.W.2d 425, **431)

father had agreed to "maintain this level of support [$700 monthly], notwithstanding a reduction in his income or other financial factors at least until the youngest child ... is in first grade, or until September 1, 1989." Id. at 514, 439 N.W.2d at 827 (emphasis added). We concluded that such a stipulation was not contrary to public policy. See id. at 513, 439 N.W.2d at 827.

However, that stipulation differs from the Krieman-Goldberg stipulation in one significant respect. The stipulation in Honore included a point in time at which the stipulated payment could be reviewed and adjusted based on a change of circumstances. Thus, the payor spouse in that case was bound to a certain level of payment for a time certain, at which point he could request a reevaluation. In the instant case, the agreement as written contained no such provision. [FN9] Because the agreement in the instant *176

(Cite as: 214 Wis.2d 163, *176, 571 N.W.2d 425, **431)

case contains no time-limiting language, we are not bound by our conclusion in Honore. We therefore consider whether this particular stipulation offends public policy.

FN9. We recognize that all child support arrangements have a finite limit inherent in them due to the fact that ordinary support runs until the eighteenth or nineteenth birthday of the child. However, the arrangement in Honore v. Honore, 149 Wis.2d 512, 439 N.W.2d 827 (Ct.App.1989), included not only a date certain at which time the arrangement could be reexamined, but also stated that this is tied to the point in time when the youngest child is presumed to begin first grade. Thus, the agreement incorporated a point in time when it would be logical to reexamine both

parents' financial circumstances.

Our analysis is further supported by the decision of another court which considered this issue. In Nicholson v. Combs, 437 Pa.Super. 334, 650 A.2d 55 (1994), the court upheld a nonmodifiable three-year freeze on child support, but noted that "[the parties] bargained for nonmodifiability for a specified limited period of time." Id. at 58 (emphasis added).

The Pennsylvania Supreme Court subsequently reviewed this case. See Nicholson v. Combs, 550 Pa. 23, 703 A.2d 407 (1997). It noted that the payor was subject to both the contractual support agreement and a support order entered by the family court (which order could be enforced through contempt proceedings). Based on that, the court concluded that if the payee sought redress in family court, it was within the power of the court to determine that a payor's inability to pay allowed for a downward modification of support obligations. See id. 703 A.2d at 416. However, such a modification would not preclude a payee from suing on the contractual support agreement and a court sitting in law or equity from making a determination that the terms of the contract were enforceable. See id. at 417.

[10] The other side of this issue was considered by this court in Ondrasek, 158 Wis.2d at 692, 462 N.W.2d at 916, in which we held that "a divorce stipulation that waives or sets a ceiling on child support and prevents modification of child support offends public policy." We concluded that "if a waiver or 'ceiling' of the entire child support obligation is deemed unmodifiable, the needs of a child could be left unsatisfied." Id. at 696, 462 N.W.2d at 918. The underpinnings of this policy are a recognition that even if a stipulation is fair when it is created, it may not be fair in the future. See id. Although the Ondrasek decision focused on the best interests of the child and was concerned with a modification in favor of a payee, in this instance we consider the public policy of requiring a payor who has stipulated to a certain base rate of support to absolutely continue that payment level regardless of any change in circumstances. It is necessary to consider the equitable nature of estoppel.

*177

(Cite as: 214 Wis.2d 163, *177, 571 N.W.2d 425, **431)

In Nichols v. Nichols, 162 Wis.2d 96, 469 N.W.2d 619 (1991), the supreme court considered the question of whether a stipulation in a divorce judgment that maintenance was not subject to modification could be upheld. In considering whether this provision violated **432

(Cite as: 214 Wis.2d 163, *177, 571 N.W.2d 425, **432)

public policy, the court stated, "The doctrine of estoppel set forth in Rintelman [v. Rintelman, 118 Wis.2d 587, 348 N.W.2d 498 (1984) ] is equitable only if it applies to both payors and payees of maintenance." Nichols, 162 Wis.2d at 114, 469 N.W.2d at 626. "If payees may seek modification of nonmodifiable maintenance due to financial setbacks suffered since the divorce, but payors of maintenance may not do the same, the payor is denied the benefit of his or her bargain, while the payee receives the benefit of his or her bargain without risking the effects of what he or she agreed to in the stipulation." Id. (footnote omitted).

[11] While the Nichols case concerned maintenance payments in a divorce action, we conclude that the reasoning is analogous when applied to the case at bar. Ondrasek stands for the proposition that the best interests of the child are served through a policy which does not preclude a payee from seeking a modification in child support because of a change of circumstances, even though the parties had stipulated to a nonmodifiable amount of support. However, as suggested by the analysis of Nichols, such a position is only fair if it is applied equitably to both sides.

Pursuant to Ondrasek, Krieman retains the ability, in spite of the stipulation agreement, to come back to the court and request a modification of the support agreement if there is a change in circumstances and the best interests of the children require a modification of the payment. To prohibit the payor parent from exercising the same right ignores the reality that the *178

(Cite as: 214 Wis.2d 163, *178, 571 N.W.2d 425, **432)

supporting parent's financial circumstances may change dramatically for reasons beyond the payor's control. A stipulation that purports to make child support nonmodifiable and is unlimited as to time could impoverish the payor parent and place him or her in financial jeopardy. A court must consider the vagaries of life and the reality that a specific circumstance may require an adjustment of an agreed-upon level of support, even where the parties have entered into a stipulation agreement. To hold otherwise and subject a payor parent to an unreviewable stipulation for child support could jeopardize a payor parent's financial future, may have detrimental effects on the parent/child relationship and in this way would ultimately not serve the best interests of the child. This case presents a compelling change in a payor parent's ability to pay child support. We conclude that the absolute stipulation agreement, with no time limitation or opportunity for review, is against public policy. Goldberg is not estopped by the stipulation from seeking a modification of his support obligations due to a material change in circumstances.

We conclude that the trial court's contempt order was a misuse of discretion where it failed to recognize that Goldberg's failure to pay the agreed-upon support was not willful, but rather due to the FTC shutting down his employer. Additionally, as a matter of public policy, no party can bind himself or herself to an absolute stipulation as to child support with no time- limiting language. This ignores reality and the possibility of a chain of events beyond the control of the payor. We therefore remand the cause for further consideration of these issues.

*179

(Cite as: 214 Wis.2d 163, *179, 571 N.W.2d 425, **432)

Orders reversed and cause remanded.

END OF DOCUMENT

Van Offeren case: child support modification

In re the Marriage of: Virginia A. VAN OFFEREN, Petitioner-Respondent,

William L. VAN OFFEREN, Respondent-Appellant. [FN<<dagger>>]

FN<<dagger>> Petition for review denied.

No. 92-0530.

Court of Appeals of Wisconsin.

Submitted on Briefs Sept. 14, 1992.

Opinion Released Dec. 30, 1992.

Opinion Filed Dec. 30, 1992.

Husband's postdivorce motion to temporarily eliminate child support and maintenance was denied and the Circuit Court, Racine County, Stephen A. Simanek, J., found that reduction of income caused by husband's change of employment was shirking and husband was found in contempt for being in arrears on support and maintenance. Husband appealed. The Court of Appeals, Nettesheim, P.J., held that: (1) husband's decision to leave previous employment was voluntary; (2) voluntarily leaving well-paying job to start new business without first securing comparable income was "shirking"; (3) finding husband in contempt for failing to pay support or maintenance was not abuse of discretion; and (4) requiring husband to pay wife's attorney fees was not clear error.

Affirmed.

Van Offeren v. Van Offeren

[1] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k278 Appeal

134k286 Review

134k286(3) Discretion of Lower Court

134k286(3.1) k. In general.

Formerly 134k286(3)

Wis.App.,1992.

Award of child support and maintenance is ordinarily reviewed under abuse of discretion standard.

Van Offeren v. Van Offeren

[1] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k312 Appeal

134k312.6 Review

134k312.6(4) Discretion of Court

134k312.6(4.1) k. In general.

Formerly 134k312.6(4)

Wis.App.,1992.

Award of child support and maintenance is ordinarily reviewed under abuse of discretion standard.

Van Offeren v. Van Offeren