Title: Pauling v. Pauling

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Pauling v. Pauling1992 WY 100837 P.2d 1073Case Number: 91-248Decided: 08/20/1992Supreme Court of Wyoming
D. Michael 
PAULING,

 Appellant 
(Defendant),

v.

Tamara K. PAULING, 

Appellee 
(Plaintiff).

Appeal from District 
Court, Laramie County, Edward L. Grant, J.

Suzan C. Pauling 
of Schaefer and Associates, Laramie, for appellant.

Robert L. Nelson 
of Robert L. Nelson & Associates, Cheyenne, for appellee.

Before MACY, 
C.J., and THOMAS, CARDINE, URBIGKIT,* and GOLDEN, JJ.

* Chief Justice at time of 
oral argument

MACY, Chief 
Justice.

[¶1]      Appellant D. 
Michael Pauling (the father) appeals from the lower court's order modifying his 
child support obligation.

[¶2]      We affirm in part 
and reverse in part.

[¶3]      The father offers 
the following issues on appeal:

     I. Wyoming Statute § 
20-6-306(a) is both unconstitutional and prejudicial as applied to Appellant's 
case.

     II. The lower court's 
modification order requiring the Appellant to continue child support payments 
until minor child reached age of 21 was error.

     III. The Appellant's 
obligation to pay excess medical expenses should be modified to permit Appellant 
to insure against that obligation and permit that insurance to be credited 
against computation of "net income" and guideline support amounts.

[¶4]      Appellee Tamara 
K. Pauling (the mother) adds another issue:

     The Appellant's appeal 
is without merit and there is no good cause for the bringing of this appeal 
action, and Appell[ee] should be awarded her costs and expenses.

[¶5]      The father and 
the mother married in 1976 and had one child (the daughter). The parties 
subsequently divorced in June 1987. The divorce decree incorporated an executed 
property settlement and child custody agreement (the agreement). The agreement 
granted custody of the daughter to the mother and required the father to make 
child support payments of $300 per month.

[¶6]      On March 6, 1991, 
the mother filed a motion to modify the decree, alleging that a substantial 
change of circumstances had occurred after the court entered the divorce decree. 
The mother sought, among other things, an order requiring the father to pay 
child support payments in an amount suggested by the Wyoming child support 
guidelines because the father's income had increased by more than twenty 
percent.1 See Wyo. Stat. §§ 20-6-301 to -306 
(Supp. 1992). The mother also sought an order requiring the father to carry 
medical insurance for the daughter and to pay the daughter's medical expenses 
not covered by insurance.

[¶7]      On April 29, 
1991, the district court commissioner held a hearing on the mother's motion to 
modify the divorce decree. Evidence introduced during the hearing revealed that, 
at the time the divorce was granted in 1987, the father was earning only nominal 
wages as a summer legal intern. By 1991, the father's "net income," as defined 
in § 20-6-301(a)(ii), had risen substantially to $2,034.70 per month. The 
mother's monthly take-home pay in 1991 was $2,411 per month, plus she received 
an additional $500 per month from the father ($300 in regular support payments, 
$100 for accrued back support payments, and $100 for reimbursement of marital 
debts).

[¶8]      The district 
court commissioner also heard testimony concerning medical insurance for the 
daughter. At the time of the divorce, the father was working in a temporary 
summer job and did not have insurance readily available, whereas the mother was 
working in a hospital and could provide the daughter with coverage at a 
reasonable rate. Because the father did not have insurance available, the mother 
agreed to provide the daughter with insurance and has continued to provide such 
insurance. The parties did not make any provision in the agreement itself 
concerning who should provide the daughter with insurance coverage or who should 
pay the medical bills not covered by insurance. Insurance for the daughter 
became an issue in the modification action in part because the daughter had 
recently incurred significant medical expenses of which $23,500 were not covered 
by the mother's insurance policy. The mother assumed all liability for the 
$23,500. According to the mother, the daughter will require further medical 
care.

[¶9]      After hearing all 
the evidence, the commissioner recommended that, pursuant to the child support 
guidelines, the father should pay $535 per month in child support payments until 
the daughter reached nineteen years of age, became married, or otherwise became 
emancipated. In his decision letter, the district judge agreed with the 
commissioner that $535 per month was the proper level of support. However, the 
judge ordered the father to make support payments until the daughter reached 
twenty-one years of age. The judge also ordered the mother to provide medical 
insurance for the daughter and the father to pay any medical expenses not 
covered by insurance.

I

[¶10]   The father contends that the 
district court improperly relied upon Wyo. Stat. § 20-6-306(a) (Supp. 1990)2 to increase his support obligation. 
More specifically, the father attacks § 20-6-306(a) as being violative of both 
the separation of powers provision found in Article 2, Section 1 and the 
contract clause found in Article 1, Section 35 of the Wyoming 
Constitution.

[¶11]   The father argues that § 
20-6-306(a) violates the separation of powers provision because it usurps the 
courts' inherent judicial power to render binding judgments and to determine 
what constitutes a final judgment. The father points out that all issues 
determined in a divorce decree are final pursuant to the doctrine of res 
judicata except in those instances when a party can establish a material or 
substantial change of circumstances. Parry v. Parry, 766 P.2d 1168, 1170 (Wyo. 
1989); Manners v. Manners, 706 P.2d 671, 674-75 (Wyo. 1985). According to the 
father, prior to the enactment of § 20-6-306(a), courts, in determining whether 
a change of circumstances had occurred, considered the child's welfare, the 
paying parent's ability to pay, the recipient's spending habits, and all other 
surrounding circumstances; a mere increase in the paying parent's income was not 
sufficient. Harrington v. Harrington, 660 P.2d 356, 360 (Wyo. 1983); Mentock v. 
Mentock, 638 P.2d 156, 158 (Wyo. 1981). The father claims that the legislature's 
enactment of § 20-6-306(a) altered the prior case law and created a conclusive 
presumption that modification of support is warranted when application of the 
support guidelines to an existing support order would result in a twenty percent 
change in the monthly support level. The father considers this conclusive 
presumption to be an unconstitutional intrusion into the judiciary's power 
because the legislature is determining when a support order should be modified 
and this determination restrains the court's power to define the finality of its 
own judgments.

[¶12]   We consider the father's claim that 
§ 20-6-306(a) is unconstitutional in light of the principle that "statutes are 
presumed to be constitutional unless affirmatively shown to be otherwise, and 
one who would deny the constitutionality of a statute has a heavy burden. The 
alleged unconstitutionality must be clearly and exactly shown beyond any 
reasonable doubt." Stephenson v. Mitchell ex rel. Workmen's Compensation 
Department, 569 P.2d 95, 97 (Wyo. 1977).

[¶13]   In this case, the father's argument 
that the legislature is unconstitutionally usurping the judiciary's power 
appears to stem from his erroneous assumption that § 20-6-306(a) requires 
a court to modify a parent's child support obligation upon finding that 
application of the guidelines would change the support amount by twenty percent 
or more per month from the amount in the existing order. Rather than requiring 
courts to modify existing support awards, § 20-6-306(a), in conjunction with §§ 
20-6-304(a) and 20-6-302, created a rebuttable presumption that modification 
would be warranted when application of the guidelines would result in a twenty 
percent change in the monthly support award. The father interprets the 
guidelines as creating a rebuttable presumption only when child support is 
initially awarded, not when a support award is modified. This view is incorrect. 
Section 20-6-306(a) requires the court to apply § 20-6-304's guidelines when 
reviewing and adjusting an existing child support order. If application of § 
20-6-304's guidelines would change the support amount by twenty percent or more, 
the court "shall consider there to be a change of circumstances sufficient to 
justify the modification of the support order." Section 20-6-306(a). The quoted 
language means that a twenty percent change in support constitutes a sufficient 
change in circumstances to modify an order; it does not mean that a court is 
obligated to modify the support order to conform to the guidelines. The 
guidelines are still only "rebuttably presumed to be the correct amount of child 
support to be awarded in any proceeding to . . . modify . . . child support 
amounts." Section 20-6-302(a). The court may deviate from the presumptively 
correct support level created by the guidelines when application of the 
guidelines would be unjust or inappropriate. To determine whether a particular 
level would be unjust or inappropriate, the court may consider a comprehensive 
list of factors enumerated in § 20-6-302(b).

[¶14]   Our conclusion that application of 
the guidelines to an existing support order does not require modification is 
reinforced by two recent opinions. Hasty v. Hasty, 828 P.2d 94 (Wyo. 1992); 
Roberts v. Roberts, 816 P.2d 1293 (Wyo. 1991). In Roberts, we said:

In seeking modification 
of an existing child support obligation, a party may petition the appropriate 
court to consider whether a change of circumstances exists sufficient to justify 
a modification of the child support order. If, upon applying the guidelines of § 
20-6-304 to the parties' circumstances at the time of review, the court finds 
the amount of child support payments would change by twenty percent or more per 
month from the amount under the existing order, "the court shall consider 
there to be a change of circumstances sufficient to justify the 
modification of the support order." Section 20-6-306(a) (emphasis 
added).

     However, applying the 
guidelines established by § 20-6-304 when a party is seeking to modify an 
existing child support order, a court may deviate from the guidelines if 
it issues a finding on the record that application of the guidelines would be 
unjust or inappropriate in that particular case. Section 20-6-302(b). We agree 
with the district court's finding:

     "Child support 
agreements made prior to the enactment of the statutory child support guidelines 
(§ 20-6-301 through § 20-6-306 W.S.) do not necessarily have to be changed 
simply because of the enactment of the statutory guidelines."

816 P.2d  at 
1295-96 (emphasis in original).

[¶15]   Given the district court's 
discretion to deviate from the guidelines when determining whether modification 
of a support order would be proper, we fail to perceive how the legislature has 
usurped the judiciary's power to determine the finality of its judgments as 
claimed by the father. The enactment of § 20-6-306(a) has not obviated the 
court's need to consider those factors it previously considered when determining 
whether child support was warranted; i.e., the child's welfare, the paying 
parent's ability to pay, the recipient's spending habits, and all other 
surrounding circumstances. Hasty, 828 P.2d  at 99.

[¶16]   In his second constitutional attack 
on § 20-6-306(a), the father claims that the statute violates the contract 
clause, Article 1, Section 35 of the Wyoming Constitution. The father contends 
that the law in effect at the time he entered into the agreement was impliedly 
incorporated into the agreement and that the law in effect at the time of his 
agreement was that child support could not be modified by merely establishing an 
increase in the noncustodial parent's income. Section 20-6-306(a), according to 
the father, altered the prior law so that a sufficient increase in the paying 
parent's income creates a conclusive presumption that modification is warranted. 
Apparently, the alleged impairment to the father's contract is that, after the 
enactment of § 20-6-306(a), he could no longer defend against a petition to 
modify his child support obligation which is made solely on the basis of an 
increase in his income.

[¶17]   Article 1, Section 35 of the 
Wyoming Constitution prohibits making any law which impairs contract 
obligations. Thus, for Article 1, Section 35 to be applicable, the allegedly 
improper law would have to impair a contract. In this case, the father assumes, 
without discussion, that the parties' settlement agreement retained its 
contractual nature despite being incorporated into the divorce decree. Whether 
the parties' pre-divorce settlement agreement survived the divorce decree as an 
independent contract depends upon whether the agreement merged into the divorce 
decree. Generally, the question of whether an agreement has merged into the 
divorce decree is significant because, once merged, the agreement loses its 
existence as a separately enforceable contract, thus limiting each party to 
judgment remedies and defenses and foreclosing any contract action. This case is 
somewhat unique because, if the parties' agreement merged into the divorce 
decree, the contract clause would be rendered inapplicable.

[¶18]   Unfortunately, like the law in many 
states, Wyoming's law is not entirely clear on the legal status of a settlement 
agreement after the divorce decree has been entered. See, e.g., Hurd v. Nelson, 
714 P.2d 767 (Wyo. 1986); Oedekoven v. Oedekoven, 538 P.2d 1292 (Wyo. 1975); 
Ulrich v. Ulrich, 366 P.2d 999 (Wyo. 1961); and Finkbiner v. Finkbiner, 340 F.2d 878 (10th Cir. 1965). Courts in other jurisdictions have taken a variety of 
approaches to the question of when a settlement agreement merges into a divorce 
decree. See generally Doris Del Tosto Brogan, Divorce Settlement Agreements: The 
Problem of Merger or Incorporation and the Status of the Agreement in Relation 
to the Decree, 67 NEB.L.REV. 235 (1988). Some courts base their determination 
upon the language used; i.e., "incorporated" as opposed to "merged." Those 
agreements which are merely incorporated into the divorce decree survive as 
independent contracts, while those agreements which are merged cease to exist. 
See Murphy v. Murphy, 467 A.2d 129 (Del. Fam. Ct. 1983). Other courts attempting 
to determine whether the agreement merged into the divorce decree have tried to 
discern the parties' intent from the language used or from the surrounding 
circumstances. D'Huy v. D'Huy, 390 Pa. Super. 509, 568 A.2d 1289, 1292-93 
(1990). These approaches have been criticized because parties often use language 
carelessly and the parties' intent may be difficult to discern. In re Estate of 
Hereford, 162 W. Va. 477, 250 S.E.2d 45, 51 (1978); Brogan, supra at 
246.

[¶19]   In an effort to avoid the 
difficulty of determining the parties' intent while also providing a clear rule 
to guide the affairs of lawyers and lay people, Idaho has adopted a presumption 
approach to the question of merger. Phillips v. Phillips, 93 Idaho 384, 462 P.2d 49 (Idaho 1969). In Phillips, 462 P.2d 49 the Idaho Supreme Court held that a 
settlement agreement is presumed to merge into the divorce decree when, in the 
absence of clear and convincing evidence to the contrary, the parties enter into 
an agreement in contemplation of divorce and thereafter request the district 
court to approve, ratify, or confirm the agreement. Id. 462 P.2d  at 52. In our 
view, the Idaho Supreme Court's approach is preferable because it allows parties 
to create agreements which will survive the divorce decree if they so desire and 
at the same time offers a simple and direct method of determining the status of 
an agreement which does not clearly state the parties' intent. Accordingly, we 
hold that, when, in the absence of clear and convincing evidence to the 
contrary, the parties enter into a settlement agreement in contemplation of 
divorce and the district court's divorce decree incorporates or adopts by 
reference that agreement, the agreement is presumed to merge into the decree and 
will no longer be given effect. Our decision does not affect a trial court's 
authority to revise a divorce decree concerning the care, custody, or 
maintenance of children or alimony, nor does our decision affect a trial court's 
lack of authority to modify a divorce decree concerning property division. Paul 
v. Paul, 631 P.2d 1060 (Wyo. 1981); Pavlica v. Pavlica, 587 P.2d 639 (Wyo. 1978) 
(per curiam).

[¶20]   In the present case, we discern no 
clear and convincing evidence from the record of the parties' intent to make 
their agreement survive the trial court's divorce decree. In the absence of such 
evidence, we presume that the agreement merged into the divorce decree and lost 
its contractual nature. The fact that the agreement ceased to exist as a 
contract upon entry of the divorce decree renders the father's contract clause 
claim inapplicable. See Whitt v. Whitt, 490 S.W.2d 159 (Tenn. 1973).

II

[¶21]   In his second issue, the father 
claims that the district court's modification order was in error because it 
required him to continue making child support payments until the daughter 
reached twenty-one years of age. We agree. The divorce decree 
provided:

[T]he [father] shall pay 
the [mother] child support in the sum of $300.00 per month according to the 
terms of the Property Settlement and Child Custody Agreement entered into 
between the parties. That said payment shall be due [and] payable on the first 
day of each month and shall continue thereafter until said child reaches 
majority, marries, becomes self supporting or is otherwise 
emancipated.

(Emphasis 
added.) In contrast, the agreement provided: "The [father] shall pay to the 
[mother] the sum of Three Hundred Dollars ($300.00) per month as child support 
until said child reaches the age of Twenty one (21) years." (Emphasis 
added.) The district court's modification order attempted to solve the 
discrepancy by requiring support payments until the daughter reached twenty-one 
years of age. The judge explained his solution in a decision letter, 
stating:

[A]s to the discrepancy 
between 19 years and 21 years of age, the language of the agreement should 
prevail because it is more specific. It is clear that the parties and Court 
intended the Decree to reflect the agreement and it should be considered to do 
so in spite of the appar[e]nt use of the term "majority" in the Decree rather 
than reference to the specific age of 21 as in the agreement. Therefore payments 
are due until age 21 or emancipation.

[¶22]   We cannot agree with the district 
court's approach. The decree stated that support payments were to be made until 
the daughter reached her majority (nineteen years of age)3 or otherwise became emancipated. 
The record contains no explanation of why the court's decree required the father 
to continue making support payments until the daughter reached her majority 
rather than adopting the parties agreed-to termination date of twenty-one years. 
The discrepancy between the agreement and the decree may simply have been the 
result of inadvertence or mistake which occurred during the drafting of the 
decree. If the discrepancy were a mistake, the parties could have moved to 
correct the error pursuant to W.R.C.P. 60(b) within one year of the date of the 
judgment; however, neither party sought such relief. In any event, no matter 
what prompted the court to originally require support payments until the 
daughter's majority, we are now presented with the question of whether the court 
was authorized to modify the decree by extending support payments until the 
daughter reached twenty-one years of age.

[¶23]   Wyo. Stat. § 20-2-113(a) (Supp. 
1992) sets forth the district court's continuing jurisdiction to modify the 
father's child support obligations:

(a) In granting a divorce 
or annulment of a marriage, the court may make such disposition of the children 
as appears most expedient and beneficial for the well-being of the children. . . 
. Either parent may petition the court to enforce or revise the decree. The 
court has continuing subject matter and personal jurisdiction to enforce or 
revise the decree concerning the care, custody, visitation and maintenance of 
the children as the circumstances of the parents and the benefit of the children 
require[].

[¶24]   In Kamp v. Kamp, 640 P.2d 48 (Wyo. 
1982), and Jennings v. Jennings, 783 P.2d 178 (Wyo. 1989), we analyzed the 
district court's authority to modify a decree to require the payment of child 
support past the child's age of majority as well as the extent of a parent's 
duty to provide support payments beyond the child's age of majority. The 
majority opinion in Kamp held that a parent has the duty to support his child 
whenever the need for support payments is necessary and that § 20-2-113(a) 
grants the district court jurisdiction to provide for child support payments 
notwithstanding the age of the child. 640 P.2d  at 50-51. In a specially 
concurring opinion, Justice Rooney thought the majority defined a parent's duty 
to make support payments too broadly and concluded that a parent's obligation to 
support his child generally ceases when the child is emancipated, with the 
exception that, when the event triggering emancipation is reaching the age of 
majority, emancipation will not occur if the child is unable to maintain himself 
because of physical or mental deficiencies. Justice Rooney believed the court's 
jurisdiction to modify support payments was commensurate with the parent's duty 
to make support payments. Id. at 55.

[¶25]   This Court again considered the 
district court's authority to order post-majority support payments in Jennings 
when we held:

[W]hen a decree for 
termination of support upon attaining the age of majority as provided in the 
parties' incorporated agreement is entered, the obligation to support terminates 
upon the date the age of majority is attained, except that there is a duty of 
parental support of a child beyond the age of majority in the case of a 
physically or mentally disabled child because the continuing disability prevents 
such a child from becoming emancipated.

783 P.2d  at 
180.

[¶26]   By limiting a parent's duty to 
support his child beyond the age of majority to instances when the child is 
disabled, Jennings adopted the rule advocated by Justice Rooney in Kamp. See 
Jennings, 783 P.2d  at 180-82 (Urbigkit, J., specially concurring). Applying the 
rule of Jennings and of Kamp's special concurrence to the present case, we 
conclude that the district court would have continuing jurisdiction to modify 
the decree by requiring child support payments to be made past the daughter's 
age of majority only if she were physically or mentally prevented from becoming 
emancipated. Since no evidence was introduced concerning the daughter's physical 
or mental inability to become emancipated, the district court was not authorized 
to extend the father's child support obligations.

III

[¶27]   In its modification order, the 
district court required the mother to provide medical insurance for the daughter 
if coverage could be obtained through her employer or otherwise obtained at a 
reasonable cost. The district court ordered the father to pay the daughter's 
medical expenses which were not covered by the mother's insurance policy. The 
father now requests this Court to modify the district court's order to allow him 
to carry medical insurance for the daughter and to deduct the cost of providing 
such insurance from his "net income." The father's reduced net income would then 
qualify him for a lower child support obligation under the 
guidelines.

[¶28]   The father's first request, that we 
modify the lower court's order by permitting him to obtain insurance, is not 
really a request for modification. The district court's order required the 
mother to insure the daughter and the father to pay all expenses not covered by 
insurance; the order did not prevent the father from obtaining insurance. If the 
father considers it necessary to purchase insurance for those expenses not 
covered by the mother's insurance policy, it is his prerogative to buy such 
insurance; he does not need our permission.

[¶29]   The father's second request is that 
we permit him to deduct the cost of insuring his daughter when calculating his 
net income and support obligation under the guidelines. Rather than seeking 
permission from this Court to deduct the cost of insurance, the father should 
direct his request to the district court. On repeated occasions, we have said 
that the determination of whether to modify a child support obligation rests 
largely with the district court and that this Court will not disturb that 
determination except upon a grave abuse of discretion or violation of some legal 
principle. Hinckley v. Hinckley, 812 P.2d 907 (Wyo. 1991); Esponda v. Esponda, 
796 P.2d 799 (Wyo. 1990). Our role in child support modification cases is to 
prevent any abuse of discretion by the district court and to ensure compliance 
with the law, not to make modification decisions. If the father chooses to 
purchase insurance, the district court is the one which is best able to 
determine the actual cost of the insurance, whether it is deductible as 
"dependent health care coverage for all dependent children" pursuant to § 
20-6-301(a)(ii)'s net income definition, and whether any reduction in the 
father's net income should likewise reduce his child support obligation. For 
this Court to make these decisions would invade the province of the district 
court.

IV

[¶30]   Finally, the mother contends that 
the father's appeal is without merit and that attorney fees and costs should be 
assessed against the father pursuant to W.R.A.P. 10.05. W.R.A.P. 10.05 allows an 
appellee to recover certain costs when the judgment or order is affirmed. Our 
partial reversal of the lower court's order makes it unnecessary for us to 
address the mother's contention that she is entitled to attorney fees and costs 
pursuant to W.R.A.P. 10.05.

[¶31]   Affirmed in part and reversed in 
part.

FOOTNOTES

1 Wyo. Stat. § 20-6-306(a) 
(Supp. 1992) actually requires a twenty percent change in the support amount, 
not a twenty percent change in the paying parent's income.

2 Section 20-6-306(a) 
provided in pertinent part:

(a) Any party, or the 
division of public assistance and social services in the case of child support 
orders being enforced by the child support enforcement section, may petition for 
a review and adjustment of any child support order that was entered more than 
thirty-six (36) months prior to the petition or which has not been adjusted 
within thirty-six (36) months from the date of filing of the petition for review 
and adjustment. The petition shall allege that, in applying the guidelines 
established by this article, the support amount will change by twenty percent 
(20%) or more per month from the amount of the existing order. The court shall 
require the parents to complete a verified financial statement, and shall apply 
the guidelines set out in this article in conducting the review and adjustment. 
If, upon applying the guidelines to the circumstances of the parents or child at 
the time of the review, the court finds that the support amount would change by 
twenty percent (20%) or more per month from the amount of the existing order, 
the court shall consider there to be a change of circumstances sufficient to 
justify the modification of the support order.

Amended by 1991 Wyo. 
Sess. Laws ch. 161, § 3 effective April 1, 1991 ("department of family" was 
substituted for "division of public assistance and social" in the first 
sentence).

3 At the time the divorce 
decree was entered, Wyoming defined the age of majority as being nineteen years 
of age. Wyo. Stat. § 14-1-101 (Supp. 1992).