ATTORNEY FOR APPELLANT			ATTORNEY FOR APPELLEE

John O. Feighner				Stephen P. Rothberg

Fort Wayne, Indiana				Fort Wayne, Indiana

IN THE

SUPREME COURT OF INDIANA

MARK STEVEN NILL,				)

							)

	Appellant (Respondent Below),	)  Cause No. 43S03-9611-CV-704

							)  in the Supreme Court

		v.					)

							)  Cause No. 43A03-9506-CV-205

KAREN (NILL) MARTIN,			)  in the Court of Appeals

							)

	Appellee (Petitioner Below).	)

APPEAL FROM THE KOSCIUSKO CIRCUIT COURT

The Honorable Gary L. Calhoun, Judge

Cause No. 43C01-8904-DR-291

SHEPARD, Chief Justice.

	The Court of Appeals held in this case that divorced parents who agreed to child support payments different than those ordered

in their decree of dissolution "substantially complied" with the

decree.  We hold that such agreements must be submitted for court

approval before they can be given legal effect.

	 I.  Facts

	The marriage of appellant Mark Nill and appellee Karen (Nill)

Martin  ended in  dissolution during October 1990.  The trial court

gave Karen Martin custody of the couple’s three minor children,

George, Bryan, and Daniel.  It ordered Mark Nill to pay $2,100 per

month for support of the three boys in what the Indiana Court of

Appeals determined was an order in gross.   

	While visiting their father, all three boys were involved in

a serious automobile accident on December 29, 1992.  George and

Bryan were injured severely enough to require medical treatment,

and the youngest boy, Daniel, was killed. 

	In January 1993 Mark Nill made his usual $2,100 payment. 

Sometime in February 1993, Mark Nill talked to Karen Martin about

reducing child support payments in the aftermath of Daniel’s death. 

(R. at 152.)  On his own initiative, he decreased the support

payment to $1,500 for February 1993.  (R.  at 152-153, 205-06.)  In

March, Karen Martin’s lawyer sent Mark Nill a letter agreeing to

accept support of $1,677 per month. (R.  at 152-153, 205-06.) 

	There is conflict in the record about when payment of the new

support amount was to be effective.1  The new agreement was informal; it was not submitted for court action.  

	About a year later, on March 24, 1994, Karen Martin filed a

petition to modify, later amended and supplemented.  Karen Martin

asked the court to order Mark Nill to contribute toward the college

expenses of their eldest son Bryan, and to pay any child support

arrearage.  Mark Nill responded with his own petition for

modification.  He contended that Daniel’s death was a change of

circumstances which required a change in the support amount.  He

also sought a determination of responsibility for Bryan’s college

expenses.

	The trial court issued a modified order which recognized that

informal agreements modifying child support cannot alter the legal

obligations of court decrees.  It nevertheless found that "equity

dictates that the court enforce and adopt this order" as though the 

court had previously approved it.  (R.  at 66.)  It also disposed

of other issues raised by the petitions of the parties.

	Each side appealed.  The Court of Appeals considered whether

the trial court:  1) erred in giving legal effect to the parties' modification agreement, pertinent to computing Mark Nill’s child

support arrearage; 2) erred in ordering Mark Nill to pay both child

support and college expenses; 3) erred in computing orthodontia

expenses; and 4) erred in awarding Karen Martin attorney fees. 

Nill v. Martin, 666 N.E.2d 9376, 937-38 (Ind. Ct. App. 1996).

	We grant transfer to consider the first issue:  whether the

trial court erred in finding that the original support order had

been effectively modified by the couple’s informal agreement.  As

to the remaining issues, we summarily affirm the Court of Appeals. 

Ind. Appellate Rule 11(B)(3). 

II.  Modification of Child Support

	The Indiana Code provides that a court may modify a child

support award, "only upon a showing of changed circumstances so

substantial and continuing as to make the terms unreasonable." 

Ind. Code Ann. § 31-1-11.5-17(a)(1)(West Supp. 1996).  The Code

explicitly limits retroactive modifications of delinquent support

payments. Ind. Code Ann. 31-2-11-12(a)(West Supp. 1996).  These

legislative policies concerning modification are described in our

caselaw as follows:  

It has long been the rule of this state that a

noncustodial parent may not	unilaterally reduce proportionately a support order in gross for several

children but must make payments of support in the manner,

amount and at times required by the support, at least

until such order has been set aside.

In re Marriage of Baker, 550 N.E.2d 82, 87 (Ind.  Ct.  App.  1990); Stitle v.  Stitle, 245 Ind. 168, 182, 197 N.E.2d 174, 183 (1963). 

 	Our law regards custodial parents who receive child support funds as trustees who hold the funds for the use and benefit of the

child.  Corbridge v. Corbridge, 230 Ind. 201, 102 N.E.2d 764 (1952).  The custodial parent, as a constructive trustee, may not

contract away the benefits of the trust.  Grace v. Quigg, 150 Ind. App. 371, 379, 276 N.E.2d 594 (1971).

	A corollary to this rule provides that once funds have accrued

to a child's benefit under a court order, the court may not annul

them in a subsequent proceeding.  Zirkle v. Zirkle, 202 Ind. 129,  172 N.E. 129, 172 N.E. 152192 (1930).  This is true even with respect to the death

of a child who is one of several children who are the beneficiaries

of an order in gross.  Kaplon v.  Harris, 567 N.E.2d 1130 (Ind. 1991). 

	In this case, the Court of Appeals correctly noted the

foregoing rules.  Nill, 666 N.E.2d 936, 938.  It nevertheless affirmed the trial court's retroactive modification of support.

Nill, 666 N.E.2d at 939.  It cited three narrow situations in which credit for accrued support obligations has been allowed:  1) when

support payments have been made by the obligated party even though

the payments are technically non-conforming; 2) when the parties

have agreed to and carried out an alternative method of payment which substantially complies with the spirit of the decree; and 3)

when the obligated parent takes the child into his or her home,

assumes custody, provides necessities, and exercises parental

control for such a period of time that a permanent change of

custody is demonstrated.2  The Court of Appeals held that Nill had substantially complied by paying through an agreed alternative

method.

	This holding confuses the method of payment with the amount of payment.  It is true that credit has been allowed for payments that do not technically conform to the original support decree.  For

example, where the obligated parent makes payments directly to the

custodial parent rather than through the clerk of the court, we

have recognized these payments when there was sufficient proof to

convince a trier of fact that the required payments were actually

made.  O'Neill v. O'Neill, 535 N.E.2d 523.  (Ind. 1989).  We have also recognized "substantial compliance" where the parties agree to

an alternative method of payment that comports with the spirit of

the original decree.  O'Neill, 535 N.E.2d at 424 (citing Payson v. Payson, 442 N.E.2d 1123, 1129 (Ind. Ct. App. 1982).  In Payson, for example, the non-custodial father typically paid through the clerk

but gave cash directly to the mother, by her agreement, during 

weeks when he missed the payments at the clerk’s office.  Id. at 1127, 1130. 

	By contrast, the informal arrangement between Mark  Nill and

Karen Martin reduced the actual amount of support below that

ordered in the divorce decree.  The new informal agreement thus did

not "substantially comply with the spirit of the original support

decree."  O'Neill, 535 N.E.2d at 524. 

	The legislative and judicial policies against informal

modification may work an occasional inequity, but the relatively

bright-line rules are hardly without their benefits.  If parties

could effect legal modifications of child support through informal

means, disputes over amounts and methods and effective dates would

certainly multiply.  Disagreements over such issues have led to

expensive litigation in this case through three levels of courts. 

A bright-line rule limiting informal arrangements and effecting

modifications only after the date a petition for modification is

filed short-circuits many disputes.  The time and money spent

litigating informal agreements that later go awry could be well

spent for the support of children.  Compared to the cost of

litigation such as that before us now, submitting for court

approval an agreed order modifying is among the simplest of legal

tasks.  It is certainly within the talentcapabilities of diligent laymen.

	Judge Shields outlined the rationale for decisions which

promote consistency and predictability in the law of child support 

in Whitman v. Whitman, 405 N.E.2d 608 (Ind. Ct. App. 1980).  In declining to give credit for non-conforming payments, she wrote:

One purpose of a rule of law is to provide, with a

reasonable degree of certainty, a rule to which an

individual can conform his conduct...While we do not

condemn or look askance at equity, nevertheless, in this

particular area we feel predictability	and certainty has superior merit.  The obligated parent knows payment as

ordered is required and any deviation can result in court

censure.  The parent receiving the support can reasonably

plan and depend on the ordered support in fulfilling the

awesome responsibility of providing day-to-day care and

support for the child in his or her custody.  Both

parties know that if circumstances change, or any

question arises concerning the use of support funds, or

the necessity of the payment that the available remedy is

through judicial review, as soon as possible.

Whitman, 405 at 613.

III.  Conclusion

	We remand this matter for a computation of the support owed by

Mark Nill giving effect to the court's modification only from the

date of the petition for modification.  The trial court is

otherwise affirmed.

Dickson, Sullivan, and Selby, JJ., concur.

Boehm, J., dissents with separate opinion.

ATTORNEY FOR APPELLANT

John O. Feighner

Fort Wayne, Indiana

ATTORNEY FOR APPELLEE

Stephen P. Rothberg

Fort Wayne, Indiana

	IN THE

	INDIANA SUPREME COURT

						)

MARK STEVEN NILL,     		)	

						)

	Appellant-Respondent,	)	Indiana Supreme Court 

						)	Cause No. 43S03-9611-CV-704

	v.					)

						)	Indiana Court of Appeals

KAREN (NILL) MARTIN,		)	Cause No. 43A03-9506-CV-205

						)	

	Appellee-Petitioner.	)

						)

APPEAL FROM THE KOSCIUSKO CIRCUIT COURT

The Honorable 	Gary L. Calhoun, Judge

Cause No. 43C01-8904-DR-291

ON PETITION TO TRANSFER

BOEHM, J., dissenting.

	I respectfully dissent.  In this case it is clear that both

the custodial parent and the non-custodial parent agreed that it

was appropriate to reduce the overall support level as a result of

the death of one of the three children.  Death of a child, like

emancipation, is plainly a legitimate reason to adjust an in gross

support order by some amount.  Ind. Code § 31-1-11.5-12(e)(1) (Supp. 1996) (the duty to support a child terminates at the time of emancipation).  Identification of a death requires no legal advice

or ruling.  In this regard, it is unlike emancipation, which

presents a question of law and is therefore an even better

candidate to be resolved without unnecessary legal intervention. 

More importantly, as the Court of Appeals noted, the determination

of the amount properly attributed to the two surviving children in

this case was not implemented unilaterally by one parent.  Rather,

the precise amount was agreed.  The agreement was reduced to writing that is not ambiguous; indeed it is stipulated.  ThThere is no claim of overreaching,

duress, or anything else that suggests that one of the parents was

not able to evaluate the situation and agree to an appropriate

adjustment.  Nor is there any claim of collusion to divert trust

funds from a child.

	I agree with the Court of Appeals majority that this case fits

within the concept of the "substantial compliance" exception to the

requirement of court approval.  Prior cases have permitted the parties to agree without court intervention, for example, that

property of the value of the order may be provided in lieu of cash. 

This case presents a very similar issue in that it raises the

question whether the parties may agree on the portion of an in

gross order attributable to one child.  I would recognize an exception to the general rule that modification of in gross orders

requires court approval.  If the custodial and non-custodial

parents agree on a reduction in the total level of support after

the death or emancipation of a child under an in gross order, I

would not require resort to the courts.  The statute explicitly

permits a parent unilaterally to terminate support obligations in the event of emancipation of a child.  It does not speak directly

to the consequences of a death, but neither does it prohibit

modification by agreement under those circumstances.  I would not

prevent either party from petitioning at any time for modification

of the agreed amount attributable to the remaining children.   But

until that happened, I would not force the parties to consult or

engage legal advice where their reasonable expectation is that none

is needed.

	I do not believe my position does violence to existing

precedents.  The majority cites cases such as Kaplon v. Harris and In re Marriage of Baker.  These cases, among others, stand for the rule set out in Kirchoff v. Kirchoff, 619 N.E.2d 592, 596 (Ind. Ct. App. 1993).  Kirchoff held that a parent subject to an order in gross -- i.e., one that provides a lump sum for more than one child

-- must pay the total amount specified in the order or apply for

the modification of the order by a court.  This rule and the cases

that created and applied it dealt with instances of unilateral

action by the obligated parent.  However, they say nothing about

the power of the parties to reach an agreement on their own, as to

the amount attributable to each child.  That is what occurred in

this case.  Thus, the rule in Kirchoff is sensible to protect the custodial parent and the child from a unilateral decrease in

support by the non-custodial parent subject to an in gross order. 

But its rationale disappears where both parents agree.  In the

absence of collusion the parents can reliably be viewed as adequate

representatives of the remaining children’s interests.  Schrock v. Gonser, 658 N.E.2d 615 (Ind. Ct. App. 1995), reh’g denied, trans. denied is to the same effect.  In that case the majority found no agreement where the husband had unilaterally reduced his support

obligation over a nine year period as each of his children became

emancipated.  Eventually, the wife decided to seek arrearage for

the unpaid child support.  The majority cited Kirchoff and Ort and held for the wife, noting that even if she had tacitly agreed to

the reductions, the court was free to disregard them.  Because the

majority, unlike the dissent, found no agreement as to the

reduction, Schrock simply follows Kirchoff.  To the extent the majority in Schrock suggests that an explicit agreement would not be honored, I agree with the dissent in that case.

	In addition, another line of cases holds that retroactive

modification of support payments is erroneous if the modification

relates back to a date earlier than the filing of a petition to

modify.  Donegan v. Donegan, 605 N.E.2d 132, 133 n.1 (Ind. 1992); Reeves v. Reeves, 584 N.E.2d 589, 594 (Ind. Ct. App. 1992), trans. denied.  These cases deal with the limits on the power of a court to make adjustments in support for a given child, not the power of

the parties to reach an agreement as to the proper allocation of

amounts among children subject to an order in gross.  

	Finally, a handful of cases support the proposition that "[a]n

agreement to forego child support is unenforceable because the

parent has no right to contract away the child’s support benefits." 

Ort v. Schage, 580 N.E.2d 335, 336 (Ind. Ct. App. 1991); Pickett v. Pickett, 470 N.E.2d 751 (Ind. Ct. App. 1984); Haycraft v. Haycraft, 176 Ind. App. 211, 375 N.E.2d 252 (1978); Grace v. Quigg, 150 Ind. App. 371, 276 N.E.2d 594 (1971).  These cases concern situations

where the husband and wife agree to a reduction or increase in the

amount of support for a child that was entitled to support both

before and after the agreement.  The cases hold the court may

refuse to honor the agreement in order to protect the child.  But

these cases do not involve the death or emancipation of a child. 

Upon death or emancipation, the in gross order no longer accurately

reflects an appropriate amount of support.  The agreement by the

parties, then, may fairly be viewed as an implementation of the in

gross order so as to fit the current changed circumstances.  It is

simply an agreement as to what the court ordered support obligation

should become under an in gross order that, upon death or

emancipation, can no longer be accurate.  Thus, Brewer v. Brewer, 506 N.E.2d 830 (Ind. Ct. App. 1987), reh’g denied, trans. denied, which prohibits altering the support for a given child without

court approval, is also inapposite.

	Rules of law should be structured so far as possible to

facilitate the affairs of ordinary citizens without the need for

legal advice.  Most people believe that a deal is a deal if it is

clear, fair, and knowingly reached through arms length bargaining. 

The requirement of the majority that court approval be sought in

the interest of a bright line rule seems to me to miss the point

that a bright line rule works to eliminate controversy and expense

only if it is also a common sense rule that will be anticipated and

understood by the people who are to follow it.  In some circumstances everyone knows and understands that legal assistance

is required and that the rules are sufficiently complex that an

intuitive resolution by lay persons may not work.  In this

situation, however, there is nothing to suggest that the

arrangement worked out by the parties would not be honored by the

courts.  Indeed, the parties were in fact represented by counsel

who communicated the agreement to adjust the support amount. 

Presumably this was done in good faith.  That counsel also appear

not to have anticipated that the agreement would be deemed

unenforceable simply underlines the counterintuitive result

generated by the requirement of court approval.  The majority

suggests that its bright line rule will help prevent expensive

litigation.  But the rule also undoubtedly forces parties into

court unnecessarily.  It is true that in this case the parties

found themselves in a dispute on another issue that required court

intervention notwithstanding their agreement as to the proper

adjustment for the deceased child.  However, it is unknown how many

others are cheerfully operating without judicial intervention under

agreements that we now declare unlawful.  I would not force them

into court to resolve a non-dispute.