NO. 92-241 INTHESUPREME

COURTOFTHESTATEOFMONTANA 1993

IN RETHEMARRIAGEOF JOANNJOCELYNNIKOIAISEN,

Petitioner andAppellant, and ALANKRISNIKOLAISEN,

Respondent andRespondent.

APPEALFROM: District Court of the Fifteenth Judicial District,

In andfor the County of Sheridan, TheHonorable M.JamesSorte, Judge presiding.

COUNSELOFRECORD:

ForAppellant: Richard J. Carstensen, Attorney at Law, Billings, Montana For Respondent: Laura Christoffersen, Gallagher, Archambeault, &Knierim, Wolf Point, Montana

Filed:Justice William E. Hunt, Sr., delivered the opinion of the Court.

Appellant JoAnn Jocelyn Nikolaisen appeals from ajudgment of the Fifteenth Judicial District Court, Sheridan County, modifying the divorce decree regarding child support and custody. Weaffirm in part and reverse and remand. JoAnn (Joey) presents to this Court three issues for our consideration which wereduce and rephrase as follows: 1. Did the District Court abuse its discretion in modifying child custody andvisitation of the minor children? 2. Did the District Court err in allowing respondent to incorporate the provisions of his Chapter 12 bankruptcy plan as well as other "legitimate business expenses" when it calculated child support? 3. Did the District Court err in failing to order respondent to pay Joey's educational loans? Alan and Joey Nikolaisen were married onAugust 4, 1972, in Plentywood. Twochildren were born into the marriage. The parties primarily resided in Plentywood until the original dissolution decree was entered onJune 8, 1987. Currently, Alan lives on his farm near Plentywood and is anaccountant andfarmer/rancher. Joey is a counselor and lives in Billings. Both parties have had physical custody of the children over an extended period of time. From 1985 to the entry of the decree, Alan had physical custody of the children. Since 1987 to the present, Joey has had primary physical custody of the children pursuant to a joint custody 2agreement signed by both parties. The original decree and custody

agreement does not provide for custody after 1988. Both children have ailments which require medical attention. The oldest child, Jessica, was 14years old at the time of trial. She suffers from around back deformity known as kyphosis. If the condition is left untreated it will result in back deformity and poor posture, and in some cases back pain is also experienced. Joshua was 11years old at the time of trial. Hewas five feet tall and weighed approximately 170 lbs. Hehas been diagnosed as having a severe weight problem and may also have slightly high blood pressure resulting from his excessive weight. Currently, both children reside with Joey in Billings. Both parents have had difficulty getting their children to respond to medical treatment. Joey has not been able to get Jessica to wear aback brace which would correct the curvature in her spine, and has taken the position that she will not force her to wear the brace. Alan's efforts have been more successful. While Jessica is in his care he has been able to get her to wear the brace. Alan has had difficulty getting cooperation from Joey regarding medical appointments to determine the future course ofJessica's condition. Onone occasion, Alan madeanappointment with Jessica's orthopedic doctor in Billings for spinal x-rays. Upon his arrival from Plentywood, Alan found out that Joey had canceled the appointment and had taken the children to Flathead Lake. 3Both parents also differ on how to best deal with Joshua's

weight problem. While in his father's care in the summer months, Joshua, with Alan in attendance, participates in aweight program with good results. During the summer of 1989, Joshua lost 20 pounds, and in the summer of 1990 lost approximately 15 pounds. WhenJoshua returned to Joey's care, the program was discontinued. At the beginning of 1990, Joshua was approximately 37 pounds heavier than the summer before. Every summer that hehas returned to Plentywood, Joshua has regained the weight that had been lost, plus hehas put onsomeadditional weight. During amedical visit, Alan discovered that Joshua mayhave high blood pressure due to his excessive weight. Alan asked Joey to have Joshua's blood pressure rechecked in Billings, which Joey either failed to door failed to advise Alan that she did. Joey believes that exercise is the best method of weight loss and purchased amembership at the YMCAwhich Joshua has not used. Alan's visitation rights which were originally agreed upon in the custody agreement have gradually eroded with time andhave been frustrated by Joey. Alan has primary custody of the children during part of the summer and on school holidays. Over the past year, Jessica has increasingly refused to visit with her father. Joey has stated that she would not force Jessica to visit with Alan. OnJuly 2, 1991, the District Court ordered Jessica to spend two weeks with Alan in Plentywood over the Labor Dayweekend.

4Ononeoccasion, Joeyenticed Joshuato cut short his visitation by

offering to buyhimtickets to aconcert in Billings. Communication between the parents with regard to the welfare of the children hasbroken down. Joeyhasfailed to notify Alan of the children's activities, eventhough hehasattended suchevents when advised of the time and date. In addition, Joey has continually failed to advise Alan of the children's educational progress andmedical conditions. Both parties have filed amotion for modification of custody andsupport. Joey claims that the children want to live with her andare nowwell accustomed to Billings. Alan counters that Joey is failing to meetthe medical andphysical needsof the children, does not encourage visitation, and in fact, impedes visitation. Thechildren were appointed aGuardian adLitem for the litigation. TheDistrict Court proceedings were stayed pending the outcome of Alan's Chapter 12bankruptcy action andthe filing of aplan. A hearing washeld onNovember 19, 1991, to determine custody and child support. Both the Guardian ad Litem and the family's psychologist recommendedthat the children continue to reside with Joey. Both children expressed their desire to live with Joey. On March 6, 1992, the District Court issued its Findings of Fact and Conclusions of LawandOrder. Joey appeals the decision of the District Court.

5I.

Didthe District Court abuseits discretion inmodifying child custody andvisitation of the minor children? Joey declares that it was error for the District Court to adopt verbatim Alan's proposed findings of fact andconclusions of law. Wediscourage district courts from adopting verbatim findings of fact andconclusions of law submitted bythe prevailing party. In re Marriage of Hurley (1986), 222Mont. 287, 295-96, 721 P.2d 1279, 1285. Although adistrict court mayadopt verbatim findings of fact andconclusions of law, the practice does not constitute

error per se. Whenreviewing the adequacy ofthe findings of fact andconclusions of law, weexamine whether they are sufficiently comprehensive andpertinent to provide abasis for adecision, and whether they are supported by substantial evidence. Hurlev, 721 P.2dat 1285. With the exception of child support calculations, we hold that the District Court's findings of fact andconclusions of lawmeet the above test. Joey argues that the court's custody and visitation order should bestricken because it is based upon facts that were not before the court andthe issues should beresolved bythe court as necessary following the development of anyfacts that might occur later.Recently we have stated the following principles when reviewing adistrict court's order modifying physical custody of a child: 6Joint custody is presumed to be in the best interest of

the child, §40-4-224(l), MCA, and is awarded to assure frequent and continual contact of the minor child with both parents. Physical custody should be arranged as equally as practical between the parents to comply with the express purpose of an award of joint custody, with the child's best interest as the primary consideration. Section 40-4-224(2), MCA. Modification of physical custody within a joint custody arrangement is proper when the change is in the best interest of the child. A request to change the physical custodian of the child requires an application of §40-4-224(2), MCA, which states in part: "[J]oint custody" means an order awarding custody of the minor child to both parents and providing that the physical custody and residency of the child shall beallotted between the parents in such a way as to assure the child frequent and continuing contact with both parents. The allotment of time between the parents must be as equal as possible: however, (a) each case shall be determined according to its own practicalities, with the best interest of the child asthe primary consideration

. . . . The District Court must consider the factors set forth in §40-4-212, MCA, when determining whether the modification of physical custody is in the child's best interest. The court is under no obligation to consider the more stringent factors set forth in §40-4-219, MCA, when faced with an action for modification of physical custody rather than an action for termination of joint custody. In re Marriage of Ulland (1992), 251 Mont. 160, 166-67, 823 P.2d 864, 868-69. In its order, the District Court ordered Joey to take whatever action she believes is necessary to reduce Joshua's weight. Joshua's placement was on a temporary basis contingent upon his demonstrating a substantial decrease in his weight by the summer

7vacation in 1992. If Joey cannot get Joshua to lose the weight,

then Alan maypetition the court for achange of custody. In his medical report, Dr. Peter Teal, an orthopedist, concluded that Jessica would derive very little benefit from wearing aback brace because its effectiveness diminishes once a female child reaches full growth at age15or 16. In its findings, the District Court ordered the parents to makeanappointment with another doctor specializing in kyphosis and obtain a second opinion. If the opinion is that Jessica needs to wear abrace, then Joeywould begiven onemonthto demonstrate that shecanget Jessica to wear the brace. If Joey cannot obtain Jessica's compliance, physical custody of Jessica shall betransferred to Alan. Nosecond medical opinion wassubmitted into evidence for this appeal. Thecourt wasconfronted with balancing the children's wishes against what would beintheir best interests, aswell asensuring that the children haveacontinuing relationship with their father. Thecourt found that the children hadfamilial andeducational ties in both Billings andPlentywood. Therecord demonstrates that the court considered at length the children's health andwelfare. The court recognized that the children did not wish to move from Billings to Plentywood. Thecourt tailored its order sothat the children could remain in Billings so long as Joey is properly attending to the children's medical problems. Both of the children's medical conditions are treatable, andthe order offers 8an incentive to Joey to ensure the children receive proper

treatment. With regard to the visitation, the court ordered a more detailed arrangement than the existing custody agreement. Again the court balanced the wishes of the children, specifically Jessica, against Alan's right to see his children and foster a meaningful relationship with them. Therecord demonstrates that Joey, onseveral occasions, hasactively undermined Alan% right to

seethe children. Although shestated attrial that sheencourages the children to visit their father, the pattern of her actions have, in reality, discouraged the children from visiting him. The court ordered that the parties should restrict the children's nonschool activities if the refuse tovisit the noncustodial parent and ordered Alan and Joey to attend counseling sessions. This portion of the order is an attempt by the court to reduce the friction between the parties and have both parents actively encourage the children to have a relationship with the other parent. In addition, the District Court ordered Alan andJessica to attend counseling sessions in an effort to facilitate more communication between the two sothat Jessica will want to spend

moretime with her father. Wehold that the District Court did not abuse its discretion in modifying custody andvisitation. II. Did the District Court err in allowing respondent to incorporate the provisions of his Chapter 12bankruptcy plan as 9well as other "legitimate business expenses" when it calculated

child support? In its child support calculation, the District Court found that Alan had $102,000 in gross income while Joey had approximately $25,000 in gross income. The District Court deducted from Alan's gross income expenditures for replacement cows, office equipment, and astock waterer. The court also deducted approximately $38,465

as a result of payments being made under Alan's Chapter 12 bankruptcy, as well as an additional $38,203 in various farm expenses. The court deducted the necessary tax payments from Alan's net income after business deductions. The court found that Alan's net income available for child support amounted to approximately $10,500, while finding that Joey had net income of $25,000 available for child support. The court did not deduct taxes from Joey's gross income, even though there was evidence offered regarding her tax liability. The court ordered Alan to pay $300 amonth in child support for the entire year while Joey was responsible for approximately $600 amonth. The court ordered Joey to pay three months of child support to Alan when the children are required to reside with Alan during the summer which could be deducted from Alan's overall obligation. Joey argues that the District Court improperly used several business deductions from Alan's farm/ranch operation to reduce Alan's child support obligation. Specifically, she maintains that the court should not have applied Alan's Chapter 12bankruptcy plan 10payments to determine the amount of his child support obligation

because it includes payments of his homemortgage. In essence, Joey is arguing that with the exception of excluding state, federal, andsocial security taxes, noneofthe deductions awarded to Alan are proper under the guidelines. Our standard of review of the district court's findings relating to child support is that apresumption exists in favor of the district court andwewill overturn the court's findings only if it has abused its discretion. In re Marriage of Sacry (Mont. 1992), 833P.2d 1035, 49St. Rep. 452. Rule 5 of the Guidelines for determining Child Support implements apolicy of keeping the primary focus onthe needs of the children byrequiring from eachobligor's incomeonly aminimum of exclusions to beallowed. Rule 5, Guidelines for Determining Child Support (1991). The following deductions subtracted from gross incomearethe only onesallowed under the Guidelines for the determination of net income: [Flederal and state income taxes: FICA: union dues, retirement contributions, uniforms, etc., which are required as a condition of employment and are not reimbursed bythe employer; lesitimate business exoenses: andhealth insurance if the benefits are maintained for the obligor parent's dependents, including the child(ren) of the action at hand. [Emphasis added.] Rule 5, Guidelines. TheSocial &Rehabilitative Services Department is responsible for the adoption ofchild support guidelines. Section 40-4-209(5), MCA. Theyhave defined "net income" asmeaning: 11[G]ross income, including imputed income and income

attributed to assets, less anydeductions for state or federal taxes, social security, and other similar deductions required bylawor court order. Unreimbursed expenses incurred asacondition of employment such as union dues, retirement contributions, uniforms andother occupational or business exvenses should also be deducted. [Emphasis added.] 46.30.1516, ARM. We have stated that when determining income under the Guidelines, the court should examine the disposable income of the parent and not rely solely onthe parent's tax returns. In re Marriage of Gray (1990), 242Mont. 69, 73, 788P.2d 909, 912. The extent ofAlan's farm/ranch business is complex. Alan testified at considerable length regarding the income that hereceives from his farm/ranch operation and his accounting position. The evidence shows that Alan's expenses were both business and personal in nature. Thecourt considered, andthe record demonstrates, that Alan's tax returns did not provide anaccurate picture of his ability to pay child support for the last two years. Alan was not in bankruptcy during the years his tax returns were filed. In one year, hehadtaken asincome twoyears' worth of calf crops, andin another year hereceived ASCSdisaster payments which would not be payable in anormal crop year. Moreover, during those tax years, hetestified hehadtrouble getting the ASCSdeficiency payments. Dueto the lack of those payments, aswell asageneral decline in the farm economy, hebecamedelinquent in his debt obligations and

12thus the returns did not accurately reflect his debt service

requirements. Furthermore, Alan testified that hehadaddedin 75 percent of the total farm estate taxes paid asapersonal expense since his personnel residence wasonthe farm property. Headded in between one-third to three-quarters of his vehicle's value, and telephone andtravel expenses becausethey wereconsidered personal innature. TheBankruptcy Court ordered Alan to pay$39,465 tothe bankruptcy trustee for eachyear. Thededuction of the bankruptcy payments is in error. The court allowed the husband to deduct his mortgage payments onthe farm before arriving at what was available for support. These mortgage payments werepart ofthe bills that were ordered paid by the bankruptcy court. However, the principal which is applied to themortgage eachyear actually increases the husband's net equity. This is especially true whenthe husband's income of $45,000 per year asanaccountant appears to beusedto subsidize his farming operations. Suchpayments should not beallowed to besubtracted

as deductions under the guidelines. Interest onthe mortgage, however, would be a legitimate business expense. There also appears to be farm equipment purchased that should have been capitalized andnot deducted in full. TheDistrict Court hasnot followed the guidelines for determining child support. Wereverse and remand for afull reconsideration and recalculation of all factors relating to child support.

13III.

Didthe District Court err in failing to order respondent to payJoey's educational loans? Joey asserts that the Dissolution Decree provided that Alan agreed to payJoey's educational loans andthat this Court should order him to pay the loans. The record demonstrates that no evidence regarding the educational loans waspresented at trial. Wedecline to review the matter onappeal. We affirm in part and reverse and remand for a full reconsideration andrecalculation of all factors relating to child support. 0 0 &A Justice Weconcur : .I"

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