No. 91-389 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1993 

IN RE THE MARRIAGE OF 

GORDON R. SULLIVAN, 

Petitioner and Appellant, 

and 

ANNETTE M. SULLIVAN, 

Respondent and Respondent. 

APPEAL FROM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable Thomas M. McKittrick, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Antonia P. Marra; Bell & Marra, Great Falls, Montana 

For Respondent: 

Robert F. James and William 0. Bronson; James, Gray 

& McCafferty, Great Falls, Montana 

Submitted on Briefs: December 22, 1992 

Decided: June 10, 1993 

Filed: 
Justice John Conway Harrison delivered the Opinion of the Court. 

This is an appeal from the Eighth Judicial District, Cascade 

County, the Honorable Thomas M. McKittrick presiding. Appellant 

Gordon Sullivan (Gordon) appeals from an order holding him in 

contempt, determining child support, allocating tax exemptions and 

medical costs, and refusing to modify child support retroactively. 

He also appeals from an order awarding attorney's fees to 

respondent Annette Sullivan (Annette). We affirm in part, reverse 

in part, and remand for further proceedings. 

Gordon raises the following issues on appeal: 

1. Did the District Court err in determining the amount of 

child support? 

2. Did the District Court err in allocating the tax 

exemptions and medical costs? 

3. Did the District Court err in refusing to modify child 

support retroactive to the time Gordon filed his first motion for 

modification? 

4. Did the District Court err in holding Gordon in contempt 

and awarding Annette her attorney's fees and costs? 

Gordon and Annette were married on July 18, 1970. They 

dissolved their marriage under the terms of a Decree of Dissolution 

entered by the District Court on September 19, 1985. Three 

children--Riley, Amanda, and Ryan, all minors at the time of the 

dissolution--were born of the marriage. The decree incorporated 

the provisions of a Property Settlement Agreement dated September 

17, 1985 (the 1985 agreement) . The agreement provided that: 1) the 

2 
parties would have joint custody of the children with Annette given 

exclusive discretion to determine the primary residence; 2) Gordon 

would pay Annette child support of $150 per child per month through 

the clerk of the district court; 3) child support would increase to 

$175 a month per child in one year, and $200 a month per child two 

years from the date of the agreement; 4) Gordon could claim Amanda 

and Ryan for income tax exemptions if his child support and 

maintenance obligations were current; 5) Gordon would provide 

medical and dental insurance and be responsible for the deductibles 

for the children during their minority, while both parties would be 

responsible for expenses not covered by insurance; and 6) the 

successful party would be awarded reasonable attorney's fees in any 

action commenced to enforce, modify, or interpret any provision of 

the agreement. 

At the time of the dissolution Gordon worked as the Director 

of Marketing and Special Projects at Columbus Hospital, earning 

approximately $36,000 a year from all sources. Annette worked as 

a secretary earning approximately $10,000 a year from all sources. 

In 1985 or 1986, Gordon suffered a work-related back injury 

which he exacerbated a few years later. He received $568 bi-weekly 

workers' compensation benefits through December 1989, at which time 

he received a $14,900 lump sum impairment award. The hospital 

eliminated Gordon's position on April 4, 1988, before he could 

return to work. 

In August 1988, Annette moved for an order requiring Gordon to 

show cause why he should not be held in contempt for failing to pay 
over $3,000 in past due child support payments, letting the health 

insurance coverage lapse, failing to pay maintenance, and failing 

to pay necessary dental bills for his children. Gordon responded 

to that motion with a counter-motion, based on his reduced income, 

asking the court to reduce the amount of child support and require 

Annette to obtain insurance. 

On December 19, 1989, the parties finally entered into a 

stipulation (the 1989 stipulation) regarding enforcement of the 

1985 agreement. The District Court entered an order 1) requiring 

the parties to abide by the stipulation; 2) modifying the 1985 

agreement where inconsistent with the stipulation; 3) entering 

judgment against Gordon pursuant to the stipulation; and 4) 

modifying child support to $200 a month for each of two children, 

eliminating child support for Riley who was living with Gordon at 

that time. 

In the 1989 stipulation, the parties agreed: 

1. Gordon owed Annette $3,600 in past due maintenance but was 

to have a credit of $2,992.98 as an offset against that amount; 

2. Gordon owed Annette $4,920 in past due child support that 

was to be offset by $1,500 for the amount Annette owed Gordon 

because Riley lived with Gordon for ten months in 1989; 

3. Gordon owed Annette $1,300 in attorney's fees she incurred 

in bringing her motion to enforce the dissolution decree. 

Gordon further stipulated that any child support or 

maintenance arrearages, or any obligations agreed to under the 

stipulation would become an attachment on any lump sum payment he 
received for his workers1 compensation claim. Gordon received a 

$50,000 lump sum settlement of his claim in November 1990. 

On November 13, 1990, Gordon renewed his original motion to 

modify child support, which he had made in 1988, and asked that the 

modification be retroactive to his first motion. He also asked 

that he be allowed to claim as tax exemptions the two children who 

were then living with him. 

Annette responded by asking the court to hold Gordon in 

contempt for failing to comply with the court order enforcing the 

1989 stipulation. She also asked the court to determine the new 

amount of child support effective October 23, 1990--the date the 

parties entered into a stipulation modifying residential custody 

and allowing for re-examination and reduction of child support. 

After a hearing on the renewed motion to modify child support, 

the court entered its findings of fact, conclusions of law and 

order on February 28, 1991: 

1. Holding Gordon in contempt for failing to pay from his 

lump sum workers' compensation settlement, all sums due and owing; 

2. Holding Gordon responsible for Annette's attorney's fees; 

3. Setting Gordon's child support obligation at $72 per month 

for the one child still living with Annette; 

4. Ordering Gordon to pay Annette $9,324.13 and to 

immediately release to Annette as partial payment the $6,520 held 

in escrow by the clerk of the district court; 

5. Requiring Annette's attorney to submit an affidavit of 

attorney's fees; 
6. Allowing Annette tax exemptions for Amanda and Ryan and 

allowing Gordon an exemption for Riley for the year 1990. 

Gordon moved to alter or amend this judgment. The court 

denied this motion except for a correction to give Gordon credit 

for $1,000 Annette had previously received. 

The court held a hearing on attorney's fees on March 25, 1991, 

after which it ordered Gordon to pay Annette $3,357.25 as her 

reasonable attorney's fees. 

Gordon appeals from the order dated February 28, 1991, from 

the order awarding attorney's fees, and from an order denying his 

motion to alter or amend the judgment. 

I 

Did the District err in determining the amount of child 

support? 

At the hearing on Gordon's renewed motion, Annette presented 

testimony from John Koch, a staff attorney for the Montana 

Department of Social and Rehabilitation Services, Child Support 

Enforcement Division. Mr. Koch explained how he determined on 

Worksheet #2 that Gordon owed Annette $72 per month in child 

support. He based his calculation on a gross income of $32,450 for 

Gordon. This was a two-year average of the $14,900 Gordon received 

in 1989 and the $50,000 he received in 1990. Gordon assigns error 

to the court's use of these figures to determine gross income 

because they are, according to Gordon, a replacement of a stream of 

income. He argues the $50,000 is meant to be a replacement of 

income at a rate of $149.50 per week over nine and one-half years 
under 5 39-71-701, MCA. 

Workers' compensation benefits are one of the factors to be 

considered in determining child support under 5 40-4-204(2), MCA. 

See In re Marriage of Durbin (1991), 251 Mont. 51, 823 P.2d 243. 

They are also specifically included as an item of gross income 

under the regulations promulgated by the Department of Social and 

Rehabilitation Services. 46.30.1508(1)(a), ARM. 

Mr. Koch testified that there was no specific rule on how a 

lump sum award of workers' compensation benefits should be treated. 

Mr. Koch agreed that it would be reasonable to spread the benefits 

over the nine and one-half years they were intended to replace, but 

said that "[wle essentially want to leave that up to a trier of 

fact to determine." In its findings of fact the District Court 

found that: 1) Gordon had received $598 bi-weekly payments for most 

of 1989; 2) Gordon received a $14,900 lump sum (impairment award) 

in 1989: 3) Gordon received a $50,000 lump sum settlement of his 

workers' compensation claim in 1990; 4) after receiving the 

settlement in 1990 he bought ski equipment for each of his 

children, himself, and his current wife, and he bought ski passes 

for each of these people except for Ryan, who was living with 

Annette; 5) Gordon purchased two vehicles in late 1990; 6) Gordon 

spent over $26,000 of his settlement between November 1990 and 

January 21, 1991; 7) Gordon presented no authority supporting his 

claim that the Child Support Guidelines provide for spreading the 

income over nine and one-half years. 

Based on the foregoing findings, the District Court concluded 
that the worksheet prepared by Mr. Koch was a "reasonable method 

for determining the child support due and owing under this fact 

situati~n.~~ Specifically the court relied on the fact that Gordon 

had not treated the lump sum as if it would last for nine and onehalf years and that it would be spent by June 1991. 

A presumption exists in favor of the district court's 

determination of child support, and that determination will only be 

overturned where the court abused its discretion. In re Marriage 

of Sacry (1992), 253 Mont. 378, 382, 833 P.2d 1035, 1038. 

Here, the District Court properly found that Gordon would have 

spent the entire $50,000 lump settlement by June of 1991. However, 

it did not find, nor was there any evidence to suggest, that Gordon 

would receive further workers' compensation benefits. Therefore, 

there was no basis for presuming that Gordon's income would be 

$32,450 after 1990. Although we sympathize with the District Court 

in its dilemma, we conclude that it abused its discretion in 

attributing that amount of income to Gordon after 1990. 

In the 1989 stipulation, the parties agreed on the amount of 

support Gordon owed as of December of that year. We will not 

disturb the amounts agreed to in that stipulation. (See our 

discussion of Issue 111.) For 1990, we believe that the child 

support in this case should be determined based on the income 

Gordon actually received that year. Therefore, the $50,000 lump 

sum settlement should be used to determine his obligation for 1990. 

A second calculation will then be necessary to determine the amount 

of child support due beginning in 1991. 
Under the unique facts of this case, we believe this method 

accurately reflects the manner in which Gordon treated his income 

and at the same time reflects the fact that Gordon will apparently 

not receive future workers' compensation benefits. We therefore 

remand for a redetermination of child support. 

I1 

Did the District Court err in determining the allocation of 

tax exemptions and medical costs? 

We will first address the allocation of tax exemptions. The 

dissolution decree and the 1985 agreement provided that Annette 

would be entitled to claim Riley for the taxable year 1985 and any 

other year thereafter and that Gordon would be entitled to claim 

Amanda and Ryan for 1985 and thereafter provided that he was 

current on his child support obligation. At that time Annette was 

the primary residential custodian of all three children. In 

December 1989, the parties agreed and the court entered an order 

recognizing Gordon as the primary residential custodian of Riley. 

On October 23, 1990, the parties stipulated that Gordon would be 

the residential custodian of Amanda as she had been living with him 

since August of that year. 

The order of February 28, 1991, allowed Annette to claim tax 

exemptions for Ryan and Amanda for 1990 and allowed Gordon to claim 

Riley as an exemption. Amanda had lived with Annette until August 

of 1990. This order does not comport with the tax exemption 

arrangement in the 1985 agreement, rather it comports with the tax 

code. See I.R.C. §§ 151, 152. The court then ordered that future 
tax exemptions would be determined by the tax code and by the 1985 

agreement. Gordon takes issue with this order because he claims 

the tax regulations and the 1985 agreement are in conflict with 

each other and with the current custody arrangement. It appears 

that the tax exemption provision of the agreement no longer applies 

as the parties have stipulated to a change in custody and they do 

not challenge the 1990 arrangement, which is in line with the tax 

code. This appears to leave the parties to follow only the tax 

regulations in the future, and does not warrant a remand on this 

issue. 

Gordon also claims error because the court awarded a combined 

principal and interest payment of $373.16 to Annette based on a 

principal of $336.47 which he claims he does not owe. Gordon's 

claim arises only because he has not looked closely at the 

pertinent exhibit. That exhibit clearly identifies the payment as 

one for "medical + premium." This combines two amounts stipulated 

in the 1989 stipulation. Gordon claims there is no figure of 

$336.47 contained in that agreement. True. But the amount is the 

sum of an $80 insurance premium and $256.47 in medical bills. We 

hold there was no error. 

I11 

Did the District Court err in failing to make the modification 

of child support retroactive to the time Gordon filed his first 

motion for modification? 

Gordon claims the District Court should have made the 

modification retroactive to his October 20, 1988, counter-motion to 
modify child support. The 1989 stipulation governs here. In the 

stipulation, Gordon agreed to the amount he owed in past due child 

support. He also agreed to the entry of an order based on that 

stipulation. Annette gave up any other claims which were past due 

and owing, other than those included in the stipulation. Gordon 

now argues that the court should reopen that order and modify what 

the parties agreed. However, the District Court was bound by the 

terms of the stipulation as they were not contrary to law, court 

rule, or public policy. School Dist. No. 4 v. Colburg (1976), 169 

Mont. 368, 372, 547 P.2d 84, 86-87. See also Morris v. McCarthy 

(1972), 159 Mont. 236, 497 P.2d 102 (district court properly 

dismissed complaint where plaintiff had stipulated in a prior 

action that he would be bound in a later action by the property 

damage award in the first action). 

The District Court did not err in refusing to make the 

modification retroactive, especially where Annette gave up some 

claims in order to reach the stipulation. 

IV 

Did the District Court err in holding Gordon in contempt and 

awarding attorney's fees and costs? 

In the 1989 stipulation, Gordon agreed that the arrearages and 

other obligations would become an attachment on any lump sum 

payment he received from his workers' compensation claim. When 

Gordon received that settlement in November 1990, rather than 

directly giving Annette the money he agreed he owed her, he placed 

$7,520--the amount of principal he determined he owed Annette--in 
escrow with the clerk of the district court pending the outcome of 

the hearing on his renewed motion. He dissipated most of the 

remaining money. The District Court held Gordon in contempt for 

failing to pay Annette the agreed sum in a timely fashion. 

Generally, contempt orders are final, conclusive, and not 

appealable except by writ of certiorari. Section 3-1-523, MCA. 

However, an exception is made for dissolution proceedings, although 

we must limit our standard of review to whether the district court 

acted within its jurisdiction and whether the evidence supports the 

findings. In re Marriage of Sessions (1988), 231 Mont. 437, 441, 

753 P.2d 1306, 1308. Here, the stipulation provided that Annette 

was to have an attachment against Gordon's workers' compensation 

settlement in an agreed amount. When Gordon received that 

settlement, he failed to release the money he agreed he owed to 

Annette in a timely fashion. Therefore, the evidence supports the 

court's finding. 

Lastly, Gordon argues that the District Court erred by 

awarding Annette her attorney 's fees and costs. In its findings in 

its Order Awarding Attorney's Fees, the District Court found that: 

1) Annette was seeking attorney's fees to pay for expenses incurred 

to enforce a previous court order for child support; 2) she had 

negotiated a lien on Gordon's workers' compensation settlement that 

was not honored by Gordon's attorneys; 3) she had to take 

extraordinary measures to discover his income; 4) he did not timely 

release funds that he knew were owing for past due child support; 

5) Gordon had over $80,000 income for a two-year period that was 
not subject to state or federal deductions; 6) Gordon's actions 

unreasonably increased Annette's attorney's fees; and 7) the amount 

submitted by Annette was a reasonable amount for attorney's fees. 

The property settlement agreement provided for an award of 

attorney's fees to the prevailing party. Section 40-4-110, MCA, 

also provides authority for awarding attorney's fees. Under the 

statute, an award of attorney's fees is discretionary and will not 

be disturbed absent an abuse of that discretion. In re Marriage of 

Swanson (1986), 220 Mont. 490, 496, 716 P.2d 219, 223. We look to 

whether substantial credible evidence supports the findings. In re 

Marriage of Hall (1990), 244 Mont. 428, 436, 798 p.2d 117, 122. 

Substantial evidence supports the District Court's findings. It 

did not abuse its discretion by awarding Annette her reasonable 

attorney's fees. 

Affirmed in part, reversed in part, and remanded for further 

proceedings in conformity with our holding. 

We 'concur: A 
June 10, 1993 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the following 

named: 

Antonia P. Marra 

BELL & MARRA 

9 Third St. N., Suite 201 

Great Falls, MT 59401 

Robert F. James & William 0. Bronson 

James, Gray & McCafferiy 

P.O. Box 2885 

Great Falls, MT 59403 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA 

BE 

Depu