NO. 96-082 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

IN RE THE MARRIAGE OF 

KATHRYN A. WIDHALM, n/k/a 

KATHRYN A. MILLER, 

APPEAL FROM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable Robert P. Goff, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Dennis P. Clarke, Smith, Walsh, Clarke & Gregoire, 

Great Falls, Montana 

For Respondent: 

Michael S. Smartt, Big Sky Law Center, Great Falls, 

Montana 

Filed: 

Submitted on Briefs: September 12, 1996 

~~~id~d: November 7, 1996 
Justice William E. Hunt, Sr. delivered the Opinion of the Court 

Appellant Kathryn A. Miller (Kitty) and Cross-Appellant 

Bernard J. Widhalm (Bernard) appeal the decision of the Eighth 

Judicial District Court, Cascade County, determining the parties' 

respective child support obligations. 

Affirmed with instructions. 

ISSUES 

Kitty raises two issues on appeal: 

1. Did the District Court err in concluding that Kitty had a 

retroactive child support obligation regarding the two younger 

daughters, who live with Bernard? 

2. Did the District Court err 'by refusing to award Kitty 

attorney's fees and costs in this action? 

Bernard raises two additional issues on appeal: 

3. Did the District Court err by refusing to construe certain 

payments Bernard makes to Kitty as income to be considered when 

determining Kitty's child support obligation? 

4. Did the District Court err by imputing nearly $25,000 in 

income to Bernard for the year 1990 when determining his child 

support obligation? 

FACTS 

Kitty and Bernard were divorced in 1983. They have three 

daughters who, at the time of the hearing, were eighteen, fifteen, 

and eleven. At the time of their divorce, the parties entered into 

a settlement agreement which addressed the issues of custody and 

child support. The settlement agreement provided that Kitty and 

2 
Bernard would have joint custody of the girls, with Bernard having 

physical custody during the school year and Kitty having physical 

custody during the summers. The parties made this arrangement 

anticipating that Kitty would be attending college and nurse's 

training. The parties also agreed that neither would pay child 

support to the other, but that each would be responsible for all 

costs incurred by the children during the time he or she had 

physical custody of them. 

As anticipated, Kitty enrolled in and completed college and 

nurse's training. In 1986, she began working as a nurse in Great 

Falls. The children continued to reside with Bernard during the 

school year and with Kitty during the summer. In 1987, the parties 

oldest daughter moved in with Kitty permanently, while the younger 

two remained with Bernard. In 1990, Bernard moved the District 

Court to modify the divorce decree and determine the child support 

obligations of both parties. 

STANDARD OF REVIEW 

In child support modification casks, this Court will review a 

district court's findings of fact to determine whether they are 

clearly erroneous. In re Marriage of Kovash (1995) , 270 Mont . 517, 

521, 893 P.2d 860, 863 (citing In re Marriage of Hill (1994), 265 

Mont. 52, 874 P.2d 705). We will review a district court's 

conclusions of law to determine whether the interpretation of the 

law was correct. Kovash, 893 P.2d at 863 (citing In re Marriage of 

Barnard (1994), 264 Mont. 103, 870 P.2d 91). We will review a 

district court's overall decision regarding modification of child 
support to determine whether the court abused its discretion. 

Kovash, 893 P.2d at 863. 

Both Kitty and Bernard extensively discuss the settlement 

agreement created at the time of their divorce. Bernard construes 

the settlement agreement one way, Kitty construes it another, and 

both base their allegations of error, at least in part, on the 

District Court's "misinterpretation" of that document. Such a 

discussion is largely beside the point. 

Separation or settlement agreements providing for support, 

custody or visitation of children are not binding upon the District 

Court. Section 40-4-201(2), MCA. Because it is the children, and 

not the parents, who are beneficiaries of child support decrees, 

the custody and support of children are never left to contract 

between the parties. In re Marriage of Mager (19901, 241 Mont. 78, 

80-81, 785 P.2d 198, 200 (quoting In re Marriage of Neiss (1987), 

228 Mont. 479, 481-82, 743 P.2d 1022, 1024). In matters relating 

to children, the best interests of the children are paramount. 

Maqer, 785 P.2d at 200; Neiss, 743 P.2d at 1024. Therefore, the 

fact that the District Court disregarded or modified the settlement 

agreement's child support provisions is not, in and of itself, 

error. Rather, we will review the District Court's decision for an 

abuse of discretion, keeping in mind the best interests of the 

children. 

DISCUSSION 

1. Did the District Court err in concluding that Kitty had a 

retroactive child support obligation regarding the two younger 

daughters, who live with Bernard? 
Kitty asserts that the District Court erred in finding that 

her responsibility to support the children began in 1986, when she 

finished her education, moved to Great Falls, and obtained 

employment as a nurse. She points out that Bernard did not move 

for a determination of child support Gntil 1990, and that the law 

generally will not allow the imposition of a retroactive child 

support obligation. 

Section 40-4-208 (1) , MCA, provides that the provisions of a 

decree which concern child support may be modified by a court only 

as to installments accruing subsequent to actual notice to the 

parties of the motion for modification. This statutory provision 

should be strictly construed. In re Marriage of Petranek (1992), 

255 Mont. 458, 460, 843 P.2d 784, 786. 

This Court has carved out an equitable exception to this 

statutory rule in cases where the parties have orally agreed to 

modify an existing child support order, and have relied on that 

oral modification. See, for example, In re Marriage of Jensen 

(1986), 223 Mont. 434, 727 P.2d 512. But Bernard cannot and does 

not argue that such an oral modification was made in this case. 

Nor did the District Court articulate any rationale supporting its 

determination that Kitty's child support obligation should be 

retroactive. While the District Court properly made Kitty 

responsible for some measure of child support, a retroactive child 

support obligation cannot be imposed in the face of a clear 

statutory mandate to the contrary and without any justification 

which might serve to override that mandate. Therefore, while we 
affirm the District Court's determination that Kitty has an 

obligation to contribute to the support of her children, we hold 

that the obligation may only be imposed as of the date she received 

actual notice of Bernard's motion to determine the issue of child 

support. 

2. Did the District Court err by refusing to award Kitty 

attorney's fees and costs in this action? 

Kitty argues that the District Court erred by refusing to 

award her attorney's fees and costs. She bases this allegation of 

error on a provision in the settlement agreement which provided 

that Bernard "agrees to pay [Kitty] all attorney's fees and costs 

incurred in modifying the Decree of Dissolution or the [settlement] 

agreement in the event there is a change of custody and a support 

amount required." She contends that this provision clearly 

entitles her to recover her fees and costs. We disagree. 

The settlement agreement provided for payment of attorney fees 

"in the event there is a change of custody." The only change in 

custody in this case occurred when the oldest daughter moved in 

with her mother in 1987, nearly ten years ago. This change of 

custody was accomplished by mutual agreement of the parties and 

apparently did not engender any attorney's fees. The fees in this 

case arose when Kitty answered Bernard's motion and elected to file 

a cross-motion of her own. Kitty and Bernard earn roughly the same 

income yearly, and neither is in a better position than the other 

to pay attorney's fees. Under these circumstances, it was not an 

abuse of discretion for the District Court to order each party to 
pay his or her own fees and costs, and, therefore, we affirm the 

District Court on this issue. 

3. Did the District Court err by refusing to construe certain 

payments Bernard makes to Kitty as income to be considered when 

determining Kitty's child support obligation? 

Bernard and Kitty lived and worked on Bernard's family ranch 

while they were married. When they divorced, they agreed that 

Kitty would receive a cash payment of $70,000 in lieu of her 

interest in the ranching operation. They also agreed that this 

property settlement would be disbursed by three yearly payments of 

$10,000 each, followed by eight yearly payments of $5,000 each. 

Under this schedule, Kitty is still receiving yearly payments from 

Bernard for her share of the marital estate. 

In determining Kitty's income for purposes of allocating her 

child support obligation, the District Court refused to include 

these cash payments. Bernard contends that this exclusion was 

erroneous and that the payments he makes to Kitty should be 

included when determining her income. Specifically, he contends 

that "[ilt is unjust and inappropriate that Kitty is allowed to 

spend those funds free and clear of her child support obligation." 

We disagree. 

The payments Kitty receives from Bernard represent her portion 

of the marital estate. Had she received her property via a single 

payment at the time of the divorce, such payment would not be 

considered newly-generated income to her; it would be, and is, 

merely her share of an existing asset. But instead of demanding a 

single payout, Kitty allowed Bernard to make several payments over 
time, apparently in consideration of his inability to raise such a 

large sum all at once. We fail to see how such an arrangement 

would convert her interest in a pre-existing asset into new income. 

Bernard makes much of his contention that none of the money 

"given" to Kitty has apparently been spent on the children. But 

how Kitty chooses to spend her money is her business, regardless of 

whether the money comes from her property settlement or her wages 

or some other source. So long as Kitty meets her obligations 

regarding the children's welfare she is free to manage her finances 

as she chooses. 

Bernard invites this Court to create a new obligation by which 

an individual who retains property pursuant to a divorce is 

required to expend that property on his or her children. We 

decline to do so. Just as Bernard is entitled to manage the 

property he retained after the divorce as he sees fit, Kitty is 

likewise entitled to do the same. The fact that she is receiving 

her property over time instead of all at once does not create some 

new and greater obligation on her part to the children, nor does it 

serve to convert her share of the marital property into newlyacquired income. 

4. Did the District Court err by imputing nearly $25,000 in 

income to Bernard for the year 1990 when determining his child 

support obligation? 

Bernard also asserts that the District Court erred by imputing 

nearly $25,000 in income to him for the year 1990 when calculating 

his child support obligation. This allegation is entirely without 

merit. 
In imputing the income in question, the District Court found 

that 

many of [Bernard's] expenses, which were generally level 

prior to 1990, increased sharply in 1990. [Bernard] 

offered no credible explanation for these sudden 

increases in his expenses. Further, [Bernard's] farming 

operation had its second highest gross income of all the 

periods considered in 1990, yet showed its lowest net 

income of these same periods. 

In 1990, Bernard reported just $8,621 as adjusted gross income on 

his tax return, as compared to a declared income of $32,127.58 in 

1989. Bernard attempted to exp1ai.n this sharp decrease by 

presenting evidence of numerous increased expenses. For example, 

he claimed that his fuel expenses increased by 70% and that his 

interest expenses nearly doubled. He also claimed that his rent 

expense increased six-fold in that same one year period and that, 

on his $8,621 income, he supported a family of six. The District 

Court was not persuaded by such evidence, and neither are we 

Suffice it to say that the record before us does not indicate that 

the District Court abused its discretion in deciding this issue. 

As noted above, the record in this case does not support the 

imposition of a retroactive child support obligation on Kitty. Her 

child support obligation properly began when she received actual 

notice of Bernard's motion to determine child support. Section 40- 

4-208(1), MCA. In all other respects, the order of the District 

Court is affirmed. 
We Concur: