Court Opinion

ID: 9514144
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:44:49.873924+00
Date Added: 2024-06-11T09:06:12.559780
License: Public Domain

MARING, Justice,
dissenting.
[¶ 20] I respectfully dissent. I would affirm the trial court’s judgment dismissing D. Luke Davis’s action for wrongful conversion against Pamela Gordon Davis.
[¶ 21] D. Luke Davis brought an action against Pamela Gordon Davis alleging wrongful conversion of personal property in the amount of $16,325, which represented the amount of overpayment of child support when Social Security children’s insurance benefits were paid in a lump sum to Pamela Gordon Davis as representative payee for the parties’ children. D. Luke Davis alleged that Pamela Gordon Davis’s receipt of these monies created an overpayment of child support, that he was entitled to their immediate return, and that Pamela Gordon Davis had wrongfully deprived him of these monies despite his demand for return of the monies in her possession. He prayed for a judgment to be entered against Pamela Gordon Davis in “the amount of $16,325 or such greater amount as is determined to be appropriate once all monies received by Defendant from the Social Security Administration are identified.” D. Luke Davis brought this action against Pamela Gordon Davis individually and not as a representative or custodian of the children.
[¶ 22] “Conversion is the wrongful exercise of dominion over the personal property of another in a manner inconsistent with, or in defiance of, the owner’s rights.” Kummer v. City of Fargo, 516 N.W.2d 294, 298 (N.D.1994). Our Court has held that “an act which might otherwise constitute a conversion is privileged when authorized by a court order which is valid on its face.” Id. at 298-99. “It is well settled that child support belongs to the child, and the custodial parent has only a representational right to collect support on behalf of the child.” Sweeney v. Sweeney, 2002 ND 206, ¶ 22, 654 N.W.2d 407 (citing Toni v. Toni, 2001 ND 193, ¶ 11, 636 N.W.2d 396; Sullivan v. Quist, 506 N.W.2d 394, 397 (N.D.1993); Spilovoy v. Spilovoy, 488 N.W.2d *713873, 877 (N.D.1992); Sprynczynatyk v. Celley, 486 N.W.2d 230, 232 (N.D.1992)). “Child support under the guidelines is modeled upon the assumption that the presumptive amount will be paid to the custodial parent, as obligee, to use for the child’s current expenses.” Schleicher v. Schleicher, 551 N.W.2d 766, 768 (N.D.1996). We have noted that “children cannot wait for support.” Id.
[¶ 23] In the present case, Pamela Gordon Davis received child support for the parties’ children from D. Luke Davis under a court order. Under N.D.C.C. § 14-08.1-05, “a due and unpaid child support payment becomes a judgment as a matter of law.” Marchus v. Marchus, 2006 ND 81, ¶ 7, 712 N.W.2d 636. A trial court has continuing jurisdiction to modify child support. Id. at ¶ 8. The appropriate procedure to modify child support is to bring a motion to modify child support and to amend the judgment. See, e.g., Throndset v. Hawkenson, 532 N.W.2d 394, 397 (N.D.1995) (citing Gerhardt v. Robinson, 449 N.W.2d 802, 804 (N.D.1989)). We have held: “Generally, a modification of child support should be made effective from the date of the motion to modify, absent good reason to set some other date, and the ‘court retains discretion to set some later effective date, but its reasons for doing so should be apparent or explained.’ ” Marchus, 2006 ND 81, ¶ 8, 712 N.W.2d 636 (quoting Geinert v. Geinert, 2002 ND 135, ¶ 10, 649 N.W.2d 237) (emphasis omitted). D. Luke Davis brought an action against Pamela Gordon Davis for wrongful conversion of his personal property instead of bringing a motion to amend child support. Pamela Gordon Davis’s act of taking possession of child support is privileged under a court ordered judgment and cannot serve as the basis for a conversion claim. The children had a legal right to the child support, and Pamela Gordon Davis had a legal right to receipt of the child support for the children as their custodial parent.
[¶ 24] Her possession of the Social Security children’s insurance benefits is authorized by federal law. D. Luke Davis has no legal interest in the children’s insurance benefits. Under the Social Security Act, 42 U.S.C. § 402, every dependent child of an individual who is entitled to Social Security benefits shall be entitled to a child’s insurance benefit. I agree with the court in Mask v. Mask, 95 N.M. 229, 620 P.2d 883, 886 (1980), that “the benefit inures directly to the child, notwithstanding the prerequisite status of the parent. No indices of the father’s ownership ever attached to these funds.” See also Keith v. Purvis, 982 So.2d 1033, 1038 (Miss.Ct. App.2008). Upon meeting the requirements of the law, the children have a legal right to the benefits. Under 20 C.F.R. § 404.2001(b)(1) (2010), the Social Security Administration will select a representative payee if the beneficiaries, due to their youth, may be unable to manage their own benefits. Generally, if a beneficiary is under age 18, they will pay benefits to a representative payee, the person who has custody of the beneficiary. 20 C.F.R. 404.2010(b); 20 C.F.R. 404.2021(c). “A payee may not be required to use benefit payments to satisfy a debt of the beneficiary, if the debt arose prior to the first month for which payments are certified to a payee.” 20 C.F.R. § 404.2040(d) (2010). In addition, 42 U.S.C. § 407(a), states:
The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
*714“The Supreme Court of the United States has stated that this statute bars the use of any legal process to reach social security benefits.” Steel v. Hartwick, 209 W.Va. 706, 551 S.E.2d 42, 45 (2001) (citing Philpott v. Essex County Welfare Board, 409 U.S. 413, 93 S.Ct. 590, 34 L.Ed.2d 608 (1973)). It further must be noted, the representative payee must account to the Social Security Administration for the use of the benefits by written reports at least once a year. 20 C.F.R. § 404.2065 (2006). The children’s insurance benefits clearly are the property of the children for use for their care and needs. D. Luke Davis never had an ownership interest in the benefits and neither did Pamela Gordon Davis. D. Luke Davis has no viable action for wrongful conversion against Pamela Gordon Davis. Pamela Gordon Davis does not have possession of any personal property in which D. Luke Davis has an ownership interest. In light of these provisions and the caselaw, any requirement for some sort of reimbursement from Pamela Gordon Davis, would have to be out of monies other than the payments for benefits actually made by the Social Security Administration. Apparently, according to the record, D. Luke Davis abandoned his claim for wrongful conversion on January 13, 2009, at the time set for the trial of the matter. When the court asked what his claim for $15,727.97 was based on, D. Luke Davis through his attorney, stated:
That is the amount of money that he paid for child support during the period of January 1 of 2004 through February of 2007.... And under the laws of the State of North Dakota and the administrative code and the child support, there must be a credit given to him for the Social Security dependency benefits that are coming about as a result of Mr. Davis’[s] disability.
D. Luke Davis’s attorney also clarified:
And we have never asked for the Social Security monies themselves. We merely identify that Social Security monies are a logical source for the repayment of those monies, but it has to be done by Pamela Davis from her available monies, because she’s gotten paid twice for the same time period.
Pamela Gordon Davis’s attorney responded that “the plaintiffs claim is based on wrongful conversion.... I think that the Complaint should be dismissed....” Pamela Gordon Davis’s attorney argued the money was all paid for the benefit of the children, and Pamela Gordon Davis should not be required to pay any of the Social Security money back to D. Luke Davis. The trial court never ruled on Pamela Gordon Davis’s motion to dismiss the Complaint and proceeded to take testimony from both parties. It appears on the record that the matter was tried on the interpretation of N.D. Admin. Code § 75-02-04.1-02(11) without any motion to amend the Complaint or to amend the pleadings to conform to the evidence. See N.D.R.Civ.P. 15.
[¶ 25] Some obligors who have claimed that they are entitled to be reimbursed by the custodial parent of the children have brought actions claiming their former wife was unjustly enriched. Courts have dismissed those actions stating the plaintiff obligor “[i]s not entitled to restitution for benefits which the defendant had a legal right to receive.” Steel, 551 S.E.2d at 45; see, e.g., Newman v. Newman, 451 N.W.2d 843, 845 (Iowa 1990) (“We hold that a disabled parent who does not seek modification of a support obligation may not later claim unjust enrichment by the custodial parent who receives social security as well as child support payments.”); Keith v. Purvis, 982 So.2d 1033, 1039 (Miss.Ct.App.2008) (“[A] non-custodial parent is not entitled to reimbursement from a custodial parent for child support payments that *715have vested in the minor child and have been paid pursuant to [a] valid court order.”); cf. Miller v. Jacobsen, 2006 SD 33, 714 N.W.2d 69.
[¶ 26] The majority of actions in other jurisdictions for credit and reimbursement have been brought as motions to modify child support and to amend child support judgments. That is the proper manner to bring to the court a request for a credit against child support due contemporaneously with the receipt of benefits, for a credit for a lump sum payment against arrearages, and for reimbursement for overpayment of child support based on the interpretation of a Child Support Guideline.
[¶ 27] The majority opinion treats the present action by D. Luke Davis as one for reimbursement and relies for its reversal of the trial court’s judgment on an interpretation of N.D. Admin. Code § 75-02-04.1-02(11). The majority quotes the drafters of the Child Support Guidelines in support of its interpretation. I disagree that the quotes from the drafters support the majority opinion. In 1994, the drafters of the proposed amendments to the Child Support Guidelines received comments not only to N.D. Admin. Code § 75-02-04.1-02(11), but also to § 75-02-04.1-01(5). The drafters’ summary of comments states:
75-02-0^.1-01(5): Fourteen commentors addressed comments to the definition of “gross income.”
Several commentors expressed a view that the definition of “gross income” of an obligor should not include “children’s benefits.” No change based upon these comments is recommended. In North Dakota (and in several other states), courts typically permit an obligor credit for the amount of “children’s benefits” (as that term is defined in this section) on a child support obligation. A consequence is that the obligor often has his or her entire support obligation met through the benefit.
The presumption that children’s benefits should be credited toward the parent’s support obligation not exceeding the monthly support obligation, which can be rebutted only by articulate reasons supporting a conclusion to the contrary, was established in Guthmiller v. Guthmiller, 448 N.W.2d 643 (N.D.1989). Although North Dakota is not obliged to credit children’s benefits against an ob-ligor’s duty of support (see Rose v. Rose, 481 U.S. 619 [107 S.Ct. 2029, 95 L.Ed.2d 599] (1987)), these guidelines do not disturb the principle laid down in Guth-miller. Consistent with following the Guthmiller principle, such children’s benefits must be included in the obli-gor’s gross income.
In addition, the amount of the child support obligation is typically set without consideration of the obligor’s increased ability to pay child support because of the children’s benefits. Inclusion of the amount of children’s benefits in the obli-gor’s gross income takes nothing away from the child. Rather, it assures that the financial advantage gained by an obligor whose child receives children’s benefits is in fact recognized in setting the child support obligation.
(Emphasis added). When these explanations are read together with the drafters’ explanations of the amendments to N.D. Admin. Code § 75-02-04.1-02(11), it is clear that the language added relating to the right of an obligor to receive a credit toward the obligor’s child support obligation was included only to address “the proper crediting of payments,” to explain “the inclusion of ‘children’s benefits’ as part of the obligor’s gross income” and to “reinforce[] the holding in Guthmiller v. Guthmiller, 448 N.W.2d 643 (N.D.1989).”
*716[¶ 28] In Guthmiller, our Court held that there is a presumption that a credit will be applied against child support for payments made directly to a child from the Social Security Administration for children’s insurance benefits, which is rebutted only by articulated reasons supporting the conclusion to the contrary in the court’s support order. 448 N.W.2d at 648. By referring to Guthmiller in the explanation of the inclusion of subsection (11) and stating the subsection “reinforces the holding in Guthmiller” the intent was to provide only a credit for contemporaneously owed child support. I disagree with the statement in the majority opinion that our Court in Guthmiller rejected the contention that the obligor should not receive credit because the benefits are owned by the children by relying on Children & Youth Services v. Chorgo, 341 Pa.Super. 512, 491 A.2d 1374, 1377-78 (1985). The Pennsylvania court said “the enquiry should be whether it is fair and just that the support obligor be given credit for these benefits....” Id. One consideration is that the benefits are occasioned by the obligor’s employment, but the other consideration is that the children receive the same child support due them under the court order. Id. The Court, in Guthmil-ler, expressly refused to provide a credit retroactively to arrearages. Id. at 649. The Court further held that the credit should be allowed as of the time of commencing the modification proceedings. Id. This was the law at the time subsection (11) was adopted and on which the drafters relied.
[¶ 29] In Tibor v. Bendrick, 1999 ND 92, ¶ 7, 593 N.W.2d 395, our Court held that a lump sum payment of children’s insurance benefits must be credited as a payment toward a child support obligation for the particular months or period the payment was intended to cover based on N.D. Admin. Code § 75-02-04.1-02(11). We held that the lump sum payment must be credited to child support arrearages which accrued during the period between disability and commencement of the disability benefits. Id. at ¶¶ 8-9. We never discussed the drafters’ explanations of the proposed subsection (11). Instead, our Court cited for support a number of cases from other jurisdictions that held the Social Security payment should be credited to an obligor’s arrearage accumulated after the date the obligor became disabled. Id. at ¶ 8.
[¶ 30] When the monthly Social Security payment is greater than the child support ordered by the court, the majority of courts treat the excess payment as a gratuity to the child so that the custodial parent is not obligated to repay the obligor parent the excess. Child Support Enforcement Agency v. Doe, 92 Hawai’i 276, 990 P.2d 1158, 1167-68 (Haw.Ct.App.1999). Also, the majority of courts hold that the disabled obligor parent is normally entitled to credit for Social Security disability payments that are contemporaneous with that parent’s support obligation. Id. at 1163. Further, a majority of courts hold that the obligor is entitled to a credit against ar-rearages that accumulated for the period between disability and the date benefit payments begin when a lump sum is awarded for that period. See Annotation, Right to Credit on Child Support Payments for Social Security or Other Government Dependency Payments Made for Benefit of Child, 34 A.L.R.5th 447 (1995).
[¶ 31] However, as the majority opinion admits, a majority of courts hold that an obligor is not entitled to reimbursement for payments of child support made during the period between a finding of disability and the commencement of benefits to the children and have done so on well-reasoned grounds. In Newman v. Newman, the court in denying the obligor the right *717to restitution for payments of child support back to his date of disability, held:
Under the present record, however, [the obligor] has made no showing that his disability deprived him of the financial resources to meet his obligation. ... [H]e did not pursue whatever right he may have had to a modification of his obligation. To allow him to retroactively do so now would be patently unfair to the custodial parent who has long since parted with the funds to support her charges.
As between the parties, the burden of seeking modification of a support order rightfully lies with the parent who seeks to offset a support obligation against social security benefits. ...
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We hold that a disabled parent who does not seek modification of a child support obligation may not later claim “unjust enrichment” by the custodial parent who receives social security as well as child support payments.

451 N.W.2d 843, 845 (Iowa 1990) (citations omitted) (emphasis added). The Supreme Court of Iowa further stated:
The rule in Iowa is that a child support award may be offset by social security benefits during the period in which the benefits are received; any broader application would amount to ‘an irregular variance of the terms of the decree.’... The rule is premised on the importance of meeting the current needs of children, thereby protecting their right to regular and uninterrupted support.
Id. at 844 (emphasis added). In Brown v. Brown, the Supreme Court of Indiana held a disabled parent is entitled to credit against the parent’s child support' obligations for Social Security disability benefits paid to a child effective as of the date the parent files a petition to modify a support order. 849 N.E.2d 610 (Ind. 2006). In Brown, the father also claimed he was entitled to reimbursement for support overpayment because he paid $7,545 in back support toward his arrearage. Id. at 612. The court held that Social Security disability benefits to children cannot be credited against child support arrearages that are accumulated before the noncustodial parent has filed a petition to modify based on disability. Id. at 615. The court laid out some general principles on the handling of lump-sum payments of retroactive Social Security disability benefits paid to children of disabled parents. Id. “ ‘The rule is premised on the importance of meeting the current needs of children, thereby protecting their right to regular and uninterrupted support.’ ” Id. (quoting Newman, 451 N.W.2d at 844) (emphasis added). The court adopted the procedure requiring the disabled party to “ ‘petition the trial court for modification of a support order based on the apparent inability to work caused by the disability and alert the court to the pending application for benefits’ ” and “ ‘at the same time providing the custodial parent with notice that such a modification is a possibility.’ ” Id. (quoting Jenerou v. Jenerou, 200 Mich.App. 265, 503 N.W.2d 744, 746 (1993)). The court concluded “[wjhere a parent voluntarily overpays his or her child support in an attempt to receive a prospective credit, the excess amount is properly treated as a gratuity to the children and no credit is granted.” Id. “Where all or a portion of lump-sum payments of retroactive Social Security disability benefits paid to children cannot be credited against existing child support ar-rearages ... we believe the doctrine of non-conforming payments dictates the excess amount is properly treated as a gratuity to the children and no credit is granted.” Id. at 616 (emphasis added). Consistent with this reasoning, a North *718Dakota Attorney General opinion, addressing whether a child support payment in excess of the amount owed should be treated by a clerk of court as future payment of support or credited toward arrears, concluded that the overpayment could not be treated as a prepayment of future monthly child support obligations, but must be applied to reduce any arrears. N.D. Op. Atty. Gen. 96-F-24, Dec. 31, 1996. It further concluded if there were not arrears, one option would be to treat it as a voluntary payment for the immediate benefit of the supported child. Id.
[¶ 32] I conclude that a “credit” in this context is a deduction applied to something that is owed, not to something already paid. See Merriam-Webster’s Collegiate Dictionary 294 (11th ed. 2003) (defining “credit” as “(f) a deduction from an amount otherwise due”). At the time subsection (11) was adopted, it was explained by its drafters as “reinforcing]” Guthmil-lef s holding that an obligor could receive a credit for benefits paid contemporaneously with due and owing child support payments. Although our Court interpreted N.D. Admin. Code § 75-02-04.1-02(11) and allowed the application of a lump sum benefit award to arrearages that were accumulated during the period of disability, we never addressed the application of a lump sum benefit award to paid child support. In light of the drafters’ explanations, I am of the opinion that subsection (11) was a codification of this Court’s holding in Guthmiller and there was no intent to provide reimbursement of child support lawfully paid to and received by the custodial parent. The majority opinion awards a money judgment against a custodial parent, individually, which can be executed on against that person’s real and personal property. Pamela Gordon Davis lawfully came into possession of the child support by court order. Pamela Gordon Davis lawfully came into possession of Social Security children’s insurance benefits as the designated representative payee of the children. Pamela Gordon Davis does not have possession of any money in which D. Luke Davis has any ownership interest. The child support and benefits all belong to the children to be used for their needs and care. D. Luke Davis has neither proven wrongful conversion of his personal property nor unjust enrichment. I do not interpret N.D. Admin. Code § 75-02-04.1-02(11) to require that he be reimbursed from Pamela Gordon Davis personally for what he alleges is an overpayment of child support because of the children’s receipt of Social Security benefits. D. Luke Davis had the resources during his disability to pay his child support. Our child support guidelines require consideration of income from all sources in setting child support, not just wages. N.D. Admin. Code § 75-02-04.1-02(3). Further, he has received a lump sum of $36,000 as disability benefits, which are to be considered in his gross income. See N.D. Admin. Code § 75-02-04.1 — 01—(5)(b). He should have brought this as an action to modify his child support payment. A trial court has continuing jurisdiction to modify child support. Wagner v. Wagner, 2007 ND 101, ¶ 28, 733 N.W.2d 593.
[¶ 33] The majority of this Court has allowed D. Luke Davis to accomplish what he could not do in a child support proceeding. The Court retroactively modified D. Luke Davis’s child support payments from 2004 to 2007 by refunding money that was owed and paid for the benefit of his children without a motion to modify. This directly contradicts the purpose of child support and our case law. A custodial parent cannot be expected to appropriately provide for the current needs of his or her children if the parent has to worry that the noncustodial parent may someday collect *719Social Security disability benefits that entitle the noncustodial parent to reimbursement for support previously paid. With what money is Pamela Gordon Davis expected to pay this judgment?
[¶ 34] I would affirm the trial court’s judgment.
[¶ 35] MARY MUEHLEN MARING