Case Title: TOM D. McMILLAN v. RAMONA J. McMILLAN

Citation: 

Docket Number: 84-285

State: wyoming

Court: Wyoming Supreme Court

Date: 1985-07-10T00:00:00Z

Document:
TOM D. McMILLAN v. RAMONA J. McMILLAN1985 WY 86702 P.2d 1279Case Number: 84-285Decided: 07/10/1985Supreme Court of Wyoming
TOM D. McMILLAN, SR., 
APPELLANT (DEFENDANT), 

v. 

RAMONA J. McMILLAN, 
APPELLEE (PLAINTIFF).

 
 
Appeal from the District 
Court, WestonCounty, Paul T. Liamos, Jr., 
J.

 
 
J. John Sampson, 
Newcastle, for appellant.

Donald B. Hansen 
of Jones, Dumbrill & Hansen, Newcastle, for appellee.

Before THOMAS, C.J., and 
ROSE, ROONEY, BROWN and CARDINE, JJ. 

ROSE, 
Justice.

[¶1.]     On April 2, 1981, a 
decree was entered in the district court in and for WestonCounty, granting plaintiff-appellee Ramona 
J. McMillan a divorce from defendant-appellant Tom D. McMillan, Sr. The property 
of the parties was divided, and Tom was ordered to pay Ramona $800 per month for 
a period of ten years, as alimony. On August 8, 1984, the appellant filed a 
motion to, among other things, reduce alimony payments, which motion was, by 
order dated October 9, 1984, denied.

[¶2.]     The appellant urges 
these following errors:

1. "The district court 
erred and abused its discretion when it denied appellant's motion to modify 
decree of divorce, to reduce appellant's alimony 
payments."

2. "The court erred in 
considering the alimony as a property settlement."

FACTS

[¶3.]     Appellant is the 
president, sole stockholder and only director of McMillan and Son, Inc., a 
corporation which performs oil-well drilling services. In 1981, the "gross 
income cash flow" of McMillan and Son was $467,000, while in 1983 the cash flow 
had been reduced to $208,000. Tom McMillan's "gross salary and ad-gross income" 
had been reduced between 1980 and 1983 as follows:



 
 
1983

1982

1981

1980

Gross 
      Salary

$12,000

$12,000

$35,000

$50,000

Adjusted 
      Gross Income

$  9,527

$13,661

$39,134

$61,217

 
 

[¶4.]     In spite of these 
figures indicating business and personal-income reduction, the district court 
found that the appellant treated his business finances as though they were his 
personal affairs in many important respects, and that he was still able to pay 
the $800 per month which the decree of divorce directed he should pay to his 
former wife.

[¶5.]     In support of the trial 
judge's conclusion that the appellant habitually and freely comingled his 
personal and corporate monies, the record reveals that Mr. McMillan had borrowed 
over $127,000 from the corporation, but had not executed a promissory note until 
two weeks before the modification hearing. An Internal Revenue Service audit 
showed that corporate assets were habitually assigned to McMillan's personal 
use, and even after the audit he continued to conduct his affairs in this way. 
He paid for much of his living and recreational expenses through the business 
checking account. A certified public accountant hired by appellee examined the 
business books to find and testify to approximately $40,000 of questionable 
expenses paid by the corporation for the period November, 1983 to September, 
1984. This certified public accountant also found that McMillan and Son was 
strong financially and had no debt.

[¶6.]     By reason of the manner 
in which appellant conducted his business, the district court found 
that

"* * * Mr. McMillan and 
his corporation * * * are one.

"Tom McMillan runs the 
business. He is the business,"

and we find that 
the trial court was justified in coming to this 
conclusion.

POINT I 
DECIDED

[¶7.]     We will hold in 
deciding the second issue, that the payments ordered by the trial court were a 
part of the property-settlement provisions of the decree following the entry of 
which the court loses jurisdiction, Paul 
v. Paul, Wyo., 631 P.2d 1060, 1064 (1981); but we would not have found an 
abuse of the trial court's discretion even if the payments were considered to be 
alimony.

[¶8.]     We have held on 
countless occasions that the district court's decision regarding the 
modification of alimony and support-payment provisions contained in divorce 
decrees will not be disturbed unless there is a clear abuse of discretion. Heyl v. Heyl, 
Wyo., 518 P.2d 28 (1974); Tanner v. Tanner, Wyo., 482 P.2d 443 (1971); Salmeri v. Salmeri, Wyo., 554 P.2d 1244 (1976); Rubeling v. Rubeling, Wyo., 406 P.2d 283 (1965); Lonabaugh v. 
Lonabaugh, 46 Wyo. 23, 22 P.2d 199 (1933). 

[¶9.]     In resolving the 
question which asks whether the trial court has abused its discretion, we seek 
to discover whether the trial court could reasonably have come to the conclusion 
it did. Martinez v. State, Wyo., 611 P.2d 831 
(1980). In the case at bar, we have no trouble whatever in concluding that any 
change of financial circumstance suffered by appellant has not rendered him 
incapable of paying the sum of money to the appellee which was decreed by the 
court. The ultimate question is whether the appellant possesses the ability to 
pay. Lonabaugh v. Lonabaugh, 
supra.

[¶10.]  It was for the trial court to decide 
whether the appellant treated the corporation as though it were one and the same 
entity as Tom McMillan, and the record supports the trial judge's decision that 
they have been treated for business as well as personal purposes as one and the 
same. This being so and it having been established that the company was 
financially sound, it appears to this court, as it did to the trial court, that 
Mr. McMillan's circumstances have not changed so dramatically as to preclude his 
complying with the payments to the appellee that were mandated by the divorce 
decree.

ISSUE NO. 
2

Alimony or Property 
Settlement

[¶11.]  The appellant argues that the trial court 
abused its discretion when, in off-hand remarks at the close of the modification 
hearing, the judge observed that the payments provided for in the original 
decree were really a part of the property settlement instead of 
alimony.

[¶12.]  The decree of divorce 
provided:

"Tom D. McMillan, Sr., is 
also ordered to pay to Ramona J. McMillan the sum of $800.00 per month for a 
period of 10 years. The first payment shall be due on April 6, 1981, and like 
payments shall be due monthly thereafter. This order and decree shall constitute 
a lien upon all the real property of Tom D. McMillan, Sr., which he receives in 
this decree of divorce, until all the payments are paid in full. Said lien shall 
also continue in existence against the estate of Tom D. McMillan, Sr., if he 
should die before all of said monthly payments are paid. These payments are to 
be alimony payments so that they are deductible upon his income tax 
returns."

[¶13.]  It is contended by the appellee that the 
trial judge treated the payment provision as a part of the property settlement 
between the parties but, in an attempt to be helpful to Mr. McMillan, called it 
alimony so he could deduct the payment for income-tax purposes. Of course, if 
the payments were a part of the property settlement, the trial court was without 
jurisdiction to change the payments. Paul 
v. Paul, supra.

[¶14.]  In Paul v. Paul we 
said:

"`There is a widely 
recognized rule that the trial court does not have power to modify a decree 
insofar as it contains an agreed property settlement or if it is in the nature 
of a property settlement. For cases illustrating this rule, see Lay v. Lay, 162 Colo. 43, 425 P.2d 704, 
707; Salomon v. Salomon, Fla., 196 So. 2d 111, 112; Kerr v. Kerr, [309] 
Minn. [124], 243 N.W.2d 313, 314; see also, 24 Am.Jur.2d, Divorce and 
Separation, § 821, p. 933; 27B C.J.S. Divorce § 300(4), p. 385. These cases do 
not recognize any exception based upon the changed financial condition of the 
parties.

"`We have most persuasive 
Wyoming 
authority for the disposal hereof. In Moore v. Moore, 33 Wyo. 230, 237 P. 235, 
this court earlier recognized that under § 5006, C.S. 1920, a precursor of § 
20-2-116, W.S. 1977, that if payments were to be made in lieu of a division of 
the property, a decree should not be modified. In Strahan v. Strahan, Wyo., 
400 P.2d 542, 545-546, this court made the following 
observation:

"`"To say that the court 
has a continuing jurisdiction and a responsibility to revise its provisions for 
the custody of children, according to their best interest and welfare, is not to 
say the court retains the same kind of continuing jurisdiction with respect to 
the civil rights of the parents, as between each other."

"`The final answer rests 
in Salmeri v. Salmeri, Wyo., 554 P.2d 1244, 1248-49, when this court said:

"`"* * * We cannot 
interpret our statute authorizing the court to alter a decree for alimony or 
allowance for children as permitting it to interfere with or modify what has 
become a money judgment. Just because the final judgment for a fixed sum of 
money grows out of a divorce action does not continue the power of the court 
granting the divorce * * * to extend the time for payment thereof or otherwise 
modify the same. When the final judgment is entered the discretionary powers of 
the courts are exhausted."' 631 P.2d  at 1064-1065, quoting from Pavlica v. Pavlica, Wyo., 587 P.2d 639, 640-641 
(1978)."

[¶15.]  Since the issue is for us to decide, we 
must look at what the payment provision is in law - not what the judge called 
it. The above-quoted segment of the decree calls for the payment of a sum 
certain - $800 a month for 10 years - and fixes the obligation as a lien upon 
real property in order to secure the payment even after death of the parties. 
These are the characteristics of a property settlement, and we hold that this is 
what it was. We said in Warren v. Warren, Wyo., 
361 P.2d 525, 527 (1961):

"Alimony granted as 
support and maintenance terminates upon the death of either of the parties. 
[Citations.] This is not true, however, of payments which are themselves an 
integral part of the adjustment of property rights."

[¶16.]  It is clear to us that the payments 
contemplated by the trial court's decree of divorce were in fact a part of the 
adjustment of the property rights of the parties, since the sum is certain and 
payments do not terminate upon the death of either of the parties if the full 
ten years of payment at the rate of $800 per month have not been fully 
discharged.

[¶17.]  In Lonabaugh v. Lonabaugh, supra, this 
court distinguished between a property-settlement provision with respect to 
which the trial court does not have subsequent authority to modify, and an 
alimony provision over which modification authority is retained. We observed 
that a distinguishing characteristic is indicated where the payment is 
enforceable even though the wife survives the husband. It is to be noted that 
this court was concerned with the substance of the decree in Lonabaugh, rather than its wording. The 
decree referred to the payments to the wife as a part of the property 
settlement, but the attendant provisions were possessed of the characteristics 
of alimony in that payments were to cease upon remarriage, and so the trial 
court treated the provision as alimony. Here, the reverse is true. The trial 
court called the payment alimony for the tax convenience of the husband, but the 
fact that the sum which must be paid can be computed with certainty and is 
required to be paid even after death of either of the parties leaves no room for 
doubt but that the provision was in fact a part of the property 
settlement.

[¶18.]  We have held, in a case which is 
controlling here, that, where a divorce decree ordered the husband to pay the 
former wife $75 per month for a period of ten years, it was immaterial whether 
the payment was classified as property settlement or alimony since the decree 
provided for a sum certain - a characteristic of property settlement, and 
inconsistent with alimony. Neagle v. 
Neagle, Wyo., 481 P.2d 661 (1971). 

Affirmed.