[7] For the appellant-petitioner there were briefs by Vance M. Waggoner and Denissen, Kranzush, Mahoney & Ewald, S.c., Green Bay, and oral argument by Mr. Waggoner.

[8] For the respondent there were briefs and oral argument by Michael J. Balskus, assistant district attorney.

[9] Chief Justice Heffernan.

[10] The opinion of the court was delivered by: Heffernan

[11] This is a review of an unpublished decision of the court of appeals, which affirmed the decision of the circuit court for Brown county, William J. Duffy, circuit Judge, that the Department of Health and Social Services was authorized by statute to promulgate a rule that takes the income of non-liable family members into consideration in determining the liable family member's ability to pay for social services rendered to a dependent from a prior marriage. In addition, we address whether sec. 766.55(2)(c)2 of the Marital Property Act prohibits consideration of the non-liable spouse's income in satisfying a pre-determination-date obligation of the other spouse. We affirm the decision of the court of appeals.

[12] The facts are not in dispute. A.L.W. is the adopted daughter of J.G.W., the petitioner, and his former wife, N.R.W. N.R.W. died in March 1984, and J.G.W. subsequently married his current wife, V.W., in January of 1985. V.W. is neither the biological nor adoptive parent of A.L.W. J.G.W. is the only person liable to the Department for services provided to A.L.W.

[13] On November 19, 1985, the Outagamie county circuit court found A.L.W. to be a Child in Need of Protection and Services. The court ordered that A.L.W. be placed outside of her home in a residential treatment center. The court also ordered that parental support be determined by the Outagamie Department of Social Services, retroactive to the date of placement.

[14] The Department issued four orders to J.G.W. requiring him to make monthly payments to the Department for services rendered to A.L.W. *fn1 J.G.W. appealed each order to the circuit court. At a hearing before Judge William J. Duffy it was established that the Department applied the uniform fee schedule, which combined the income of J.G.W. and of V.W., his wife, and considered that J.G.W.'s family has four dependents (J.G.W., V.W., A.L.W., and V.W.'s daughter) to determine his ability to pay. The circuit court held that the Department had statutory authority to consider non-liable family members' income in determining the liable person's ability to pay. J.G.W. disagreed and appealed the decision of the circuit court. The court of appeals affirmed the circuit court's decision in an unpublished decision and order dated August 23, 1988. J.G.W. petitioned this court for review of the court of appeals decision and, in addition, asked this court to consider the effect of sec. 766.55(2)(c)2 of the Marital Property Act upon this case. *fn2 We granted the petition for review.

[15] J.G.W. asserts two issues for review. He claims that Chapter 46 of the Wisconsin Statutes does not authorize the Department to consider the income of non-liable family members in determining how much he owes the Department for services rendered to A.L.W. In addition, J.G.W. asserts that the Marital Property Act prohibits the Department from considering his non-liable spouse's income in order to determine his liability for a pre-determination-date obligation.

[16] First we address J.G.W.'s argument that Wis. Admin. Code secs. HSS 1.03(11) and 1.01(2)(e) exceed statutorily conferred authority by imposing liability for the care of his adopted daughter on his spouse, who is not made liable under secs. 46.03(18) or 46.10, Stats. In In Matter of Guardianship of Klisurich, 98 Wis. 2d 274, 281, 296 N.W.2d 742 (1980), this court held that the legislative directive to establish fee schedules and guidelines regarding ability to pay was a lawful delegation of authority to the Department. In this case, we are only concerned with the Department's authority to act within the confines of the statute, not with the legislative authority to impose liability upon relatives for the support of other dependent relatives. In determining whether an administrative agency has exceeded its statutory authority in promulgating a rule, we must look to the enabling statute to determine whether there is express or implied authorization for the rule. Brown County v. H&SS Department, 103 Wis. 2d 37, 48, 307 N.W.2d 247 (1981).

[17] Chapter 46 of the Wisconsin Statutes imposes liability upon certain family members for social services rendered by the Department to other family members. The purpose of secs. 46.03(18) and 46.10, Stats., is to recoup the costs of providing social services and treatment by requiring liable family members to pay their fair share. In Matter of Guardianship of Klisurich, 98 Wis. 2d at 281. Section 46.03(18)(a) directs the Department to establish a uniform system of fees for services provided by the Department. *fn3 Pursuant to this delegation, the Department promulgated a schedule of fees which takes into consideration the total family income and the number of dependents to arrive at a maximum monthly fee which the liable person must pay.

[18] Under sec. 46.03(18)(b), Stats., J.G.W. is liable for services rendered to his adopted daughter because he is a parent under that section. *fn4 However, J.G.W.'s wife, V.W., is neither the biological, nor the adoptive, parent of A.L.W. and, therefore, is not a liable person under sec. 46.03(18). Nevertheless, sec. HSS 1.03(11) Wis. Adm. Code (1985) bills the liable family member on the basis of the family's ability to pay. *fn5 "Family" is defined in Section HSS 1.01(2)(e) Wis. Adm. Code (1985) as an adult, the adult's spouse, and any other persons who meet internal revenue service standards as their dependents. Under this scheme, the Department considers all family income, including non-liable family members' income, in determining the liable family member's ability to pay.

[19] The court of appeals held that sec. 46.03(18), Stats., provided authority for the Department to consider the family's financial resources, the number of dependents, and each family member's income in determining the responsible person's ability to pay. We conclude that both secs. 46.03(18) and 46.10(3) require that the Department consider the liable person's family resources in determining their ability to pay. Section 46.10(3) provides:

[20] After investigation of the liable persons' ability to pay, the department shall make collection from the person who in the opinion of the department under all of the circumstances is best able to pay, giving due regard to relationship and the present needs of the person or of the lawful dependents . . . .

[21] Section 46.03(18)(c), Stats., provides in part:

[22] The department shall make collections from the person who in the opinion of the department is best able to pay, giving due regard to the present needs of the person or of his or her lawful dependents. The department may bring action in the name of the department to enforce the liability established under par. (b).

[23] By directing the Department to give due regard to relationship and the present needs of the lawful dependents, both secs. 46.10(3) and 46.03(18) authorize the Department to consider non-liable family members' income in determining a liable family member's ability to pay.

[24] We find the case of Ponath v. Hedrick, 22 Wis. 2d 382, 389, 126 N.W.2d 28 (1964), instructive. In Ponath, this court interpreted a statute which, much like secs. 46.03(18) and 46.10, Stats., imposed liability upon relatives for the cost of supporting dependent family members according to their ability to pay. In determining Mrs. Hedrick's ability to pay for the support of her aged mother, the court stated that it could properly consider her husband's income and economic position. *fn6

[25] If the wife has an income that can be considered, then the trial court, under sec. 52.01, Stats., is free to consider her husband's economic position both in terms of his worth and his income. This is because the court should consider these factors in determining the extent to which the husband has sufficient income or other economic position in order for him to assume responsibility for his wife's basic needs, thus freeing her income for possible consideration as an ability to pay on her part for a portion or all of the support furnished to a dependent relative under the statute.

[26] But since, in the case at bar, Mrs. Hedrick had no income that could be legally considered in charging her with a duty to support her mother, there was no basis for the trial court to consider her husband's economic position or income.

[27] 22 Wis. 2d at 390.

[28] Although the court was interpreting another statute, the principles are the same. When the legislature instructs an agency or a court to consider an individual's ability to pay, giving due regard to that person's lawful dependents, it is appropriate to consider the income of each family member.

[29] The family income concept promulgated pursuant to secs. HSS 1.01(2)(e) and 1.03(11), Wis. Adm. Code (1985) follows the legislature's directive to determine the liable person's ability to pay by considering both the needs and the resources of each family member. J.G.W. suggests that the legislature only contemplated consideration of his family's needs and not their contributions to the family. This is an unreasonable interpretation of the legislature's directive to determine the liable person's ability to pay. As this court noted in the Ponath case, if a family member is contributing to the support of the liable family member, that allows a greater proportion of the liable person's income to be used for the support of the dependent relative. That is, their ability to pay increases. If the Department were to look only at how much the liable person's family costs him or her without considering how much the family contributes to that person's support, the Department would not be following the legislative mandate to determine the person's ability to pay.

[30] Furthermore, we disagree with petitioner that HSS secs. 1.01(2)(e) and 1.03(11) of the Wisconsin Administrative Code impose liability on J.G.W.'s non-liable spouse. Considering the family's resources does not mean that the individual's liability is shifted to the non-liable family members. It is his ability to pay that is determined on the basis of his family's income. It is only J.G.W.'s income which may be used to satisfy his obligation to the Department. HSS sec. 1.03(14)(a), Wis. Adm. Code (1985), limits J.G.W.'s liability to the sum of his unearned income and one-half of his earned income. *fn7 In addition, if the calculated amount due would create a hardship on the family, a lower payment may be authorized. See sec. HSS 1.03(14)(b), Wis. Adm. Code. These safeguards insure that a responsible person's liability is limited to that individual's income. Therefore, we conclude that HSS secs. 1.01(2)(e) and 1.03(11) (1985), which utilize the family income concept in order to determine a liable person's ability to pay for services rendered to a dependent relative are authorized by the legislature in secs. 46.10 and 46.03(18), Stats.

[31] J.G.W. also argues that sec. 766.55(2)(c)2 of the Marital Property Act prohibits the Department from satisfying his obligations which arose prior to January 1, 1986, with his non-liable spouse's income. *fn8 Sections 766.55(2)(c)1 and 2, Stats., prohibit the use of a new spouse's income to satisfy an obligation incurred by the other spouse either prior to the couple's marriage or prior to enactment of the Marital Property Act. Petitioner asserts that this obligation arose prior to January 1, 1986 (effective date of the Marital Property Act), and therefore, sec. 766.55(2)(c)2 applies. Section 766.55(2)(c) provides in part:

[32] (2) After the determination date all of the following apply:

[33] (c) 1. . . . .

[34] 2. An obligation incurred by a spouse before, on or after January 1, 1986, that is attributable to an obligation arising before January 1, 1986, or to an act or omission occurring before January 1, 1986, may be satisfied only from property of that spouse that is not marital property and from that part of marital property which would have been the property of that spouse but for the enactment of this chapter.

[35] Under sec. 766.55(2)(c)2, Stats., petitioner correctly states that only his individual salary, his social security checks, and his interest income may be used to satisfy his obligation to the Department because it is a pre-Act obligation. Petitioner then claims sec. 766.55(2)(c)2 prohibits the Department from considering any of his wife's earned or unearned income in determining his liability to the Department. Petitioner argues that, by considering his non-liable spouse's income in determining his ability to pay, the Department is in effect using her income to "satisfy" his pre-Act obligation in violation of sec. 766.55(2)(c)2. We disagree.

[36] Whether or not the legislature's use of the word, "satisfy," in sec. 766.55(2)(c)2, Stats., was intended to prohibit the Department from considering the resources of a non-liable spouse in determining a liable person's ability to pay for a dependent relative's care is ambiguous. When a statute is ambiguous, we turn to the rules of statutory construction to determine the legislative intent of that statute. Kollasch v. Adamany, 104 Wis. 2d 552, 563, 313 N.W.2d 47 (1981). When construing a statute, the court must consider it in relation to its scope, history, context, subject matter and object to be accomplished or remedied. Id.

[37] The object to be accomplished by sec. 766.55(2)(c)2, Stats., is to insure that premarital or pre-Act creditors do not receive a windfall due to enactment of the Marital Property Act. *fn9 The concern of sec. 766.55, as reflected in the use of the term, "satisfy," is to prevent premarital creditors from having access to the non-obligated spouse's income or assets which were attributed to the obligated spouse by virtue of enactment of the Marital Property Act.

[38] Prior to enactment of the Marital Property Act, the legislature authorized consideration of the non-obligated family member's income for purposes of determining the liable family member's ability to pay, but did not authorize the use of the non-liable family members' income to "satisfy" the debt. See secs. 46.10(3) and 46.03(18), Stats. 1973, and Ponath v. Hedrick, supra. The actual liability of the responsible family member was limited to that individual's income. Therefore, under the former law, none of the non-obligated spouse's income could be used to "satisfy" the obligated spouse's debt, although the non-obligated spouse's income could be considered in determining the obligated spouse's ability to pay. J.G.W. asserts that, when the legislature passed sec. 766.55(2)(c)2 it intended to change existing law so that whatever windfall existed for creditors prior to the Marital Property Act would be removed. We find no support for this interpretation of sec. 766.55. To the contrary, the legislature's concern was simply to insure that enacting the Marital Property Act would not create a windfall for pre-Act creditors by imputing the non-liable spouse's income or assets to the liable spouse. See note 9 (supra) . On the basis of this history, we therefore conclude that the legislative prohibition against using a non-liable spouse's income to "satisfy" a pre-marital or pre-Act obligation in sec. 766.55(2) consistent with prior legislative enactments, was not intended to prohibit consideration of the non-liable spouse's income in determining the liable spouse's ability to pay under Chapter 46 of the Wisconsin Statutes.

[39] Finally, J.G.W. relies on this court's decisions in In re Marriage of Poindexter, 142 Wis. 2d 517, 419 N.W.2d 223 (1988), and In re Marriage of Burger v. Burger, 144 Wis. 2d 514, 424 N.W.2d 691 (1988), which hold that none of a new spouse's income is available under the Marital Property Act to satisfy maintenance or support obligations of a prior marriage. J.G.W. argues that, under Poindexter, the non-obligated spouse's income cannot even "enhance" the assets available to satisfy a pre-marital obligation. 142 Wis. 2d at 542. We agree with petitioner's interpretation of these cases, insofar as they prohibit the use of the non-obligated spouse's income to "satisfy" the obligated spouse's pre-Act obligations. However, both Poindexter and Burger presented a different situation from this case and, therefore, do not provide support for J.G.W.'s position. The obligated spouse in both of those cases had no income. The question presented was whether the non-obligated spouse's income or assets could be imputed to the obligated spouse for purposes of satisfying the obligated spouse's premarital obligations.

[40] In this case, J.G.W. has his own income. If J.G.W. had no income, the Department would not be able to use any of V.W.'s income to "satisfy" J.G.W.'s obligation, regardless of how much money V.W. might have. That was precisely the result reached in Poindexter, Burger, and Ponath v. Hedrick. Our holdings in Poindexter and Burger are consistent with the requirement that none of the non-obligated spouse's income may be used to "satisfy" the obligated spouse's pre-Act obligation even though the non-obligated spouse's income may be taken into consideration in determining the liable spouse's ability to pay.

[41] In summary, we conclude that the Department has not exceeded its statutorily conferred authority by promulgating HSS secs. 1.01(2)(e) and 1.03(11) (1985), which implement the family income concept in determining a liable person's ability to pay for a dependent relative's care. We also conclude that sec. 766.55(2)(c)2, Stats., does not prohibit the Department from considering the non-liable spouse's income in determining the liable spouse's ability to pay under HSS secs. 1.03(11) and 1.01(2)(e), Wis. Adm. Code (1985).

[42] By the Court. -- Decision affirmed.

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Opinion Footnotes

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[43] *fn1 The initial order was issued on December 27, 1985 requiring petitioner to pay $921.18 for services rendered to A.L.W. beginning on November 25, 1985. Three subsequent amended orders were issued on February 25, 1986 ($1001.54), June 2, 1986 ($1192.21), and July 3, 1986 ($1148.67, $1044.17 and $1007.17), which adjusted the petitioner's liability due to a change in his economic circumstances.

[44] *fn2 Petitioner raised this issue for the first time in his petition for review before this court. This case was first heard on oral argument on September 6, 1989. At that oral argument the parties did not fully address the marital property issue. On September 11, 1989, this court ordered the parties to further brief the marital property issue and invited the Family Law Section of the State Bar of Wisconsin to file an amicus brief discussing the impact of the Marital Property Act on this case. The case was again scheduled for oral argument on January 4, 1990. No amicus brief was submitted. Although petitioner has waived his right to have this issue reviewed, we choose to consider the effect of the Marital Property Act on this case because it is a question of law, the issue has now been fully briefed, and it is an issue of sufficient public interest to merit decision. See Wirth v. Ehly, 93 Wis. 2d 433, 444, 287 N.W.2d 140 (1980).

[45] *fn3 Section 46.03(18)(a), Stats., provides in part:

[46] The department of health and social services shall establish a uniform system of fees for services provided or purchased by the department of health and social services, a county department . . . . A county department under s. 46.215, 46.22, 51.42 or 51.437 shall apply the fees which it collects under this program to cover the cost of such services.

[47] *fn4 Section 46.03(18)(b), Stats., provides:

[48] Any person receiving services provided or purchased under par. (a) or the spouse of the person and, in the case of a minor, the parents of the person, . . . shall be liable for the services in the amount of the fee established under par. (a) . . . .

[49] *fn5 Section HSS 1.03(11) and (12), Wis. Adm. Code (1985), provide:

[50] (11) BILLING ON THE BASIS OF ABILITY TO PAY.

[51] (a) A responsible party who provides full financial information and authorizations for billing all applicable insurance shall be billed on the basis of the family's ability to pay.

[52] (b) For each family, ability to pay shall be determined in the following manner:

[53] 1. The annual gross income of family members shall be determined and totaled except that the earned income of any child who is a full time student or a part-time student but not a full time employe shall be excluded. Income from self-employment or rent shall be the total net income after expenses. The income of any family member in a residential setting is treated separately under this rule.

[54] 2. The monthly average income shall be computed by dividing the annual gross income by 12.

[55] 3. Monthly payments from court ordered obligations shall be subtracted from monthly average income.

[56] 4. For services other than care to minors . . . .

[57] (12) MAXIMUM MONTHLY PAYMENT. A family providing full financial information shall be billed at a monthly rate that does not exceed the maximum amount computed by means of the following formulas:

[58] (c) Other services for children. For other services to children, the maximum monthly payment for a parent shall be computed as follows:

[59] 3. The department shall publish a schedule annually for agencies to compute maximum monthly payment rates under this paragraph.

[60] *fn6 See sec. 52.01, Stats. (1956), which provided in part:

[61] (1) The parent, spouse and child of any dependent person (as defined in s. 49.01) who is unable to maintain himself shall maintain such dependent person, so far as able, in a manner approved by the authorities having charge of the dependent, or by the board in charge of the institution where such dependent person is; but no child of school age shall be compelled to labor contrary to the child labor laws.

[62] Section 52.01, Stats. (1956) was subsequently renumbered sec. 49.90 and amended by 1985 Act 29, secs. 1108 to 1114.

[63] *fn7 Section HSS 1.03(14)(a) provides:

[64] In cases where family members who contribute to the family income are not responsible parties for the liability being charged to the family, the maximum monthly payment rate shall not exceed the sum of the unearned and one-half the earned income of responsible party or parties, less an amount equal to that used by the Wisconsin AFDC program for work related expenses.

[65] *fn8 The initial order was entered on December 27, 1985, and the three amended orders were entered after January 1, 1986. Petitioner argues that because the latter three orders were "amended orders" they relate back to the first or "initial order" which was entered prior to January 1, 1986, the parties' determination date under sec. 766.01(5)(c), Stats. We agree with petitioner that these subsequent orders should relate back to the date of the first order because these latter orders simply modified the amount that petitioner owed due to a change in his economic circumstances. Therefore, we conclude that all of the orders constitute an obligation which arose prior to January 1, 1986, the parties' determination date.

[66] *fn9 The comments to sec. 8 of the Uniform Marital Property Act, upon which sec. 766.55, Stats., is based, provide in part:

[67] This prevents a windfall to the premarital creditor by a marriage, for no interest in marital property attributable to the effort of the new spouse of the obligated party becomes available to enhance the assets available to that creditor to satisfy a debt of the obligated spouse. The objective is that the marriage should be neutral as far as the premarital creditor is concerned, neither adding to nor detracting from the assets available for satisfaction of the claim.

19900222

05/10/90 MARRIAGE DANIEL ABITZ v. SHAROL ABITZ Important discussion of New Spouse Income and child support obligations

[1] SUPREME COURT OF WISCONSIN

[2] No. 87-1944

[3] 1990.WI.145 <http://www.versuslaw.com>, 455 N.W.2d 609, 155 Wis. 2d 161

[4] May 10, 1990

[5] IN RE THE MARRIAGE OF: DANIEL ABITZ, PETITIONER-RESPONDENT-PETITIONER,

SHAROL ABITZ, RESPONDENT-APPELLANT

[6] Affirming 147 Wis. 2d 880, 434 N.W.2d 621 (Ct. App. 1988). Review of a decision of the Court of Appeals.

[7] For the petitioner-respondent-petitioner there were briefs by Roger A. Glenn and Glenn & Hoff, S.c., Appleton, and oral argument by Roger A. Glenn.

[8] For the respondent-appellant there was a brief by Bruce Chudacoff and Chudacoff & Liebzeit, Appleton, and oral argument by Bruce Chudacoff.

[9] Steinmetz, J.

[10] The opinion of the court was delivered by: Steinmetz

[11] Petitioner Daniel Abitz seeks review of an unpublished decision of the court of appeals that reversed an order entered by the circuit court for Outagamie county, Judge Harold V. Froehlich, which modified a child support order. When modifying the award, the circuit court set child support by considering the appellant's (Sharol Abitz's) one-half interest in marital property income. The circuit court then multiplied the marital property income by the relevant percentage standard taken from HSS 80, Wis. Admin. Code.

[12] The issue central to the Disposition of this case is whether the circuit court erred when it considered Sharol's marital property income in setting her support obligation. The court of appeals held that it was error for the circuit court to give any consideration to Sharol's marital property income when setting support. We agree. We disagree with the court of appeals Conclusion that only Sharol's income can be considered. Because the court of appeals decision failed to discuss use of the percentage standards found at HSS 80, Wis. Admin. Code, on revision of a child support order, we also discuss the central issue in terms of what the obligated parent's gross income is for purposes of applying the standard.

[13] The second issue presented is whether the nonobligated spouse's income and assets can be made available toward the satisfaction of the obligated parent's child support obligation, and it has already been decided by this court. This issue concerns the impact sec. 766.55(2)(c), Stats., of the Marital Property Act has on premarital or preact obligations. Section 766.55(2)(c)1 and 2 provides: *fn1

[14] Section 766.55 Obligation of spouse . . . (2) After the determination date all of the following apply: . . .

[15] (c)1. An obligation incurred by a spouse before or during marriage that is attributable to an obligation arising before marriage or to an act or omission occurring before marriage may be satisfied only from property of that spouse that is not marital property and from that part of marital property which would have been the property of that spouse but for the marriage.

[16] 2. An obligation incurred by a spouse before, on or after January 1, 1986, that is attributable to an obligation arising before January 1, 1986, or to an act or omission occurring before January 1, 1986, may be satisfied only from property of that spouse that is not marital property and from that part of marital property which would have been the property of that spouse but for the enactment of this chapter.

[17] The impact of sec. 766.55(2)(c), Stats., was discussed in In re Marriage of Poindexter, 142 Wis. 2d 517, 419 N.W.2d 223 (1988) and In re Marriage of Burger v. Burger, 144 Wis. 2d 514, 424 N.W.2d 691 (1988). The impact of sec. 766.55(2)(c) on premarital or preact obligations was again reviewed in In Interest of A.L.W., 153 Wis. 2d 412, 451 N.W.2d 416 (1990). In all three cases, it was held that sec. 766.55(2)(c) prohibits the use of a nonliable spouse's income to "satisfy" a premarital or preact obligation.

[18] In the case now before us, both parties agree that this situation is governed either by sec. 766.55(2)(c)1 or 2, Stats. More importantly, neither party argues that the child support ordered violates sec. 766.55(2)(c). Both the record and orders of the circuit court reflect its realization that sec. 766.55(2)(c) had an impact on the ultimate sum of child support that could be satisfied by Sharol and therefore awarded to Daniel. Thus, the ultimate impact of sec. 766.55(2)(c) is not in dispute in this case. For purposes of clarification, however, we hold that absent an express finding of shirking or transfer with intent to defraud, the circuit court abuses its discretion when it orders child support at an amount greater than that which can be fully satisfied through sole use of income and assets of the obligated parent as defined and made available to the circuit court pursuant to the language of sec. 766.55(2)(c).

[19] The facts are undisputed. The petitioner, Daniel Abitz, and the respondent, Sharol Abitz (now Sharol Bassett), were married on August 19, 1967. Two children were born of the marriage: Jeffrey, born October 17, 1968, and Kelly, born February 7, 1974. *fn2 During their marriage, Daniel worked full-time while Sharol never worked outside their home more than 20 hours a week. In 1983, Daniel initiated divorce proceedings against Sharol. The judgment of divorce was effective March 7, 1984.

[20] In part, the judgment of divorce gave the parties joint custody of their then two minor children but placed primary physical custody with Daniel. The judgment of divorce did not require Sharol to pay any child support, apparently because Sharol was at that time financially unable to support herself. Rather, the issue of child support was left open to future court order. Both parties have subsequently remarried. In 1986, Daniel married Patricia Long, and in December, 1985, Sharol married James Bassett (Bassett).

[21] The issues before this court arise out of a matter initially raised by Daniel in a post-divorce affidavit supporting an order to show cause for modification of judgment dated February 3, 1986. An order to show cause issued by Outagamie county Commissioner Jeffrey S. Brandt required Sharol to pay child support for their two minor children. Arguments on the issues raised in the order to show cause were heard on various occasions before Commissioner Brandt who acted for the family court commissioner's office pursuant to Outagamie county court rules. The last hearing was on August 12, 1986. In the order modifying judgment dated October 14, 1986, Commissioner Brandt made findings of fact and conclusions of law consistent with a finding of a substantial change in circumstance. He set and ordered sums to be paid by Sharol as child support. Daniel appealed the determination of the family court commissioner to the circuit court of Outagamie county pursuant to sec. 767.13(6), Stats. A hearing de novo was held on April 21, 1987, before Judge Harold V. Froehlich.

[22] At the hearing, Sharol's current employer testified that she applied only for part-time work and gave no reason for wanting only part-time work. Furthermore, Sharol claimed no disability or physical limitation that would have caused her to be able to work only part-time. The employer testified that Sharol would be given more work hours if she wanted them.

[23] Sharol also testified as to the manner in which she and Bassett handle their money. According to her, their respective incomes are put into a joint fund and all expenses are paid out of money in that fund. She further testified that "what is mine is his and his is mine, so I take what I want."

[24] Judge Froehlich issued his first decision and order modifying judgment on June 30, 1987. In that decision, the Judge made findings of fact that Sharol had a current monthly gross income of $650 and that Bassett had a current monthly gross income of $3,718. The total monthly gross income for their household was therefore found to be $4,368.

[25] Judge Froehlich's Conclusions of law found a substantial change in circumstances which allowed modification of the child support provisions in the original judgment of divorce. The Judge concluded that Sharol had a legal responsibility to support her child and that she was in the position to do so. The court computed the amount of child support by adding Sharol's income to Bassett's income, dividing that sum in half and multiplying the quotient by 17 percent. The 17 percent figure represents the standard figure used to determine support owed for one child pursuant to rules promulgated under HSS 80, Wis. Admin. Code.

[26] The circuit court then arrived at and ordered the sum of $371 as the proper amount of child support due. Since this amount did not exceed Sharol's actual gross income of $650, the support obligation was found by the court to be "satisfied from that part of her marital property which would have been her property but for the marriage" pursuant to sec. 766.55(2)(c)1, Stats.

[27] Daniel brought a motion to reconsider and/or clarify the order modifying judgment. A hearing on the motion was held before Judge Froehlich on August 14, 1987. As a result thereof, the court issued a decision and order modifying judgment dated September 29, 1987, which constituted the final ruling of the court.

[28] The circuit court, in its final order, made the following relevant findings:

[29] 2. That the respondent's current monthly net income from her job exceeds $400 per month and in addition she has interest income on her property division.

[30] 3. I incorporate herein by reference all of the findings of fact, Conclusions of law and order entered by this court on June 30, 1987, together with all decisions issued from the bench in the April 21, 1987 hearing or the August 14, 1987 hearing except those inconsistent with the new findings I make today.

[31] The court then made the following Conclusions of law:

[32] 1. I incorporate all Conclusions of law made in my order modifying judgment dated June 30, 1987.

[33] 2. That as an additional Conclusion of law I find that I may not utilize the respondent's new husband's income to satisfy the respondent's obligation to pay child support and that is the basis of my modification of the amounts due on the arrearage. However, her income is one-half of her earnings and one-half of her husband's income under the marital property act and I have determined her support obligations on this basis. *fn3

[34] 3. That I do not feel that it is appropriate to set support at the standard percentage as applied against this respondent's income as she has the ability, given her financial circumstances, to pay more and I am convinced that she could work more hours if she wanted to.

[35] The record of the hearings reflects that the trial court modified the award upon evidence that part of Sharol's $650 income included roughly $200 in principle income from her divorce settlement. The Judge took 17 percent of the $200 surplus -- about $34 -- and subtracted that amount from the original award of $371 to arrive at the $337 award ordered. Sharol appealed to the court of appeals. Both Sharol and Daniel joined in a petition to this court to bypass the court of appeals pursuant to sec. 808.05, Stats., and Rule 809.60. This court denied the petition to bypass.

[36] In an unpublished decision the court of appeals reversed the circuit court's order modifying judgment. The court of appeals relied as controlling on our holdings in Poindexter, 142 Wis. 2d 517, and Burger, 144 Wis. 2d 514. Following the reasoning of Poindexter and Burger, the court of appeals concluded that when setting child support the circuit court erred in considering Sharol's marital property rights in her current husband's income. The court of appeals stated that only Sharol's income could be considered along with the needs of the children and the parent's ability to pay. The court of appeals stated that it was a question of fact whether Sharol's remarriage constituted a substantial change in circumstances justifying modification of child support under sec. 767.32, Stats., which must be "determined by the trial court in view of all the facts and circumstances of the parties." Abitz v. Abitz, No. 87-1944, unpublished slip op. at 4 (Wis. Ct. App. Nov. 22, 1988). When making its determination, the court of appeals instructed the circuit court not to consider the new spouse's income to satisfy the premarital child support obligation.

[37] Daniel petitioned this court for review pursuant to secs. 808.10 and Rule 809.62, Stats. We granted the petition.

[38] It is necessary to first harmonize sec. 766.55(2)(c), Stats., with sec. 767.32(1), which governs revisions of child support upon divorce. We have already discussed the impact sec. 766.55(2)(c) has on the ultimate order of a child support award. However, a reading of the court of appeals decision leads to the Conclusion that the court of appeals determined that sec. 766.55(2)(c) also restricts that income which can be considered by the circuit court as it attempts to set a child support award. *fn4 We disagree and conclude that this analysis fails to harmonize the statutes. We hold that the statutes are best harmonized and remain individually viable through the distinction between income which can be considered by a circuit court to "set" or determine one's ability to pay a child support order and income that is available to "satisfy" a child support obligation.

[39] In a somewhat analogous situation, we discussed the difference between income that can be considered when determining one's ability to pay (setting the obligation) and income available to satisfy an obligation. In A.L.W., we reviewed the legislative intent behind the use of the ambiguous word "satisfy" in sec. 766.55(2)(c), Stats. We then stated that, "n the basis of this history, we therefore conclude that the legislative prohibition against using a non-liable spouse's income to 'satisfy' a pre-marital or pre-Act obligation in sec. 766.55(2)(c) consistent with prior legislative enactments, was not intended to prohibit consideration of the non-liable spouse's income in determining the liable spouse's ability to pay under Chapter 46 of the Wisconsin Statutes." A.L.W., 153 Wis. 2d at 426.

[40] We conclude that the distinction between income that can be considered by the circuit court when setting as opposed to satisfying a premarital or preact obligation as discussed in A.L.W. is equally valid in the analysis made on revision of an obligation of child support under sec. 767.32(1), Stats.

[41] Section 767.32(1), Stats., provides in relevant part:

[42] (1) After a judgment providing for child support under s. 767.25 . . . the court may, from time to time, on the petition, motion or order to show cause of either of the parties . . . revise and alter such judgment respecting the amount of such maintenance or child support and the payment thereof, . . . and may make any judgment respecting any of the matters which such court might have made in the original action . . . . Any change in child support because of alleged change in circumstances shall take into consideration each parent's earning capacity and total economic circumstances. *fn5

[43] Modification of a child support judgment is within the sound discretion of the circuit court although modification may only be made upon a finding of a substantial or material change in circumstances of the parties or children. Burger, 144 Wis. 2d at 523. The court's exercise of discretion will not be overturned unless the court has abused its discretion. Id. at 523. The court's exercise of discretion will be affirmed where the decision of the court reflects a "reasoning process dependent on facts in, or reasonable inferences from, the record and a Conclusion based on proper legal standards." Ashraf v. Ashraf, 134 Wis. 2d 336, 340-41, 397 N.W.2d 128 (Ct. App. 1986).

[44] In contrast to the economic restrictions of sec. 766.55(2)(c), Stats., sec. 767.32(1) expressly mandates two economic considerations be followed by the circuit court when determining ability to pay, each party's earning capacity and total economic circumstances. Pursuant to sec. 767.255(6), Stats., a circuit court's consideration of each party's earning capacity includes review of:

[45] The record reflects that Daniel's earning capacity as a full-time teacher is not in dispute. Sharol's earning capacity as a beautician is in dispute. Although the record reflects that Sharol had never worked outside the home more than 15 to 20 hours per week while married to Daniel and that she suffered serious health problems subsequent to their divorce, the record also reflects that she is of substantially improved health and that extra work hours would be made available to her if she requested them.

[46] Consideration of a party's earning capacity can manifest itself in an express finding of shirking which justifies a child support order in arrears. See, e.g., In re Paternity of R.L.M., 143 Wis. 2d 849, 422 N.W.2d 890 (Ct. App. 1988); In re Marriage of Roellig v. Roellig, 146 Wis. 2d 652, 431 N.W.2d 759 (Ct. App. 1988). The circuit court in this case made no express finding that Sharol was shirking her obligation of support. Rather, the court apparently considered earning capacity in tandem with Sharol's economic circumstances in order to determine her ability to pay.

[47] Section 767.32(1), Stats., also mandates consideration of the parties' total economic circumstances when determining an obligated party's ability to pay. Sharol conceded at oral argument before this court that a review of her total economic circumstances included consideration of her second husband's income. This court made that fact clear in Miller v. Miller, 67 Wis. 2d 435, 227 N.W.2d 626 (1975). *fn6

[48] The distinction between the setting of and the satisfaction of a child support award keeps a circuit court's review of total economic circumstances properly unrestricted by considerations that might otherwise be made of marital property definitions of income. A comparison of principles underlying the Marital Property Act with principles underlying child support furthers our Conclusion that marital property principles of income are not applicable.

[49] The Marital Property Act is designed to govern property ownership during the course of an on-going marriage and property division only upon the death of a spouse. The Marital Property Act was not intended to alter divorce law. See generally Weisburger, "The Marital Property Act Does Not Alter Divorce Law," 60 Wis. Bar. Bull. 14 (1987); Furrh, "Divorce and the Marital Property Act: The Wisconsin Cases," 15 Community Prop. J. 41 (1989). No language within the Marital Property Act expressly or impliedly preempts the factors that the circuit court must consider when determining an obligated parent's ability to pay child support pursuant to sec. 767.32(1), Stats. Likewise, no language within the Marital Property Act restricts the traditionally broad definition of income that can be considered by the circuit court upon review of total economic circumstances. More specifically, the primary concern of sec. 766.55 is to prevent premarital creditors from receiving a windfall through access to a nonobligated spouse's income or assets otherwise attributable to the obligated parent due to enactment of the Marital Property Act. See A.L.W., 153 Wis. 2d at 425 and n.9.

[50] Where sec. 766.55(2)(c), Stats., protects the nonobligated spouse from bearing the financial burden of premarital debts owed by his or her spouse, the child support statutes in ch. 767 protect the welfare of the child. Principles which underlie an obligation to support a child upon divorce follow the primary rule that both parents have the obligation to support the minor children of their marriage. "ivorce terminates only the relationship of husband and wife, and does not affect in any manner the parental relations or duties of the parties." Hutschenreuter v. Hutschenreuter, 23 Wis. 2d 318, 321, 127 N.W.2d 47 (1964). The stated goal of child support is to provide the greatest amount of income possible in order to maintain the children at the standard of living they would have enjoyed had the family remained intact. See Sommer v. Sommer, 108 Wis. 2d 586, 589-90, 323 N.W.2d 144 (Ct. App. 1982). As this court stated in Kritzik v. Kritzik, 21 Wis. 2d 442, 448, 124 N.W.2d 581 (1963):

[51] n his role as a family court, the trial court represents the interests of society in promoting the stability and best interests of the family. It is his task to determine what provisions and terms would best guarantee an opportunity for the children involved to grow to mature and responsible citizens, regardless of the desires of the respective parties. This power, vested in the family court, reflects a recognition that children involved in a divorce are always disadvantaged parties and that the law must take affirmative steps to protect their welfare. (Footnote omitted.)

[52] Absent the distinction between setting and satisfying a child support obligation, it is clear that the protections afforded the nonobligated spouse would override the goals of child support by greatly restricting the income sources that the circuit court could consider when determining ability to pay. Our Conclusion best protects both goals.

[53] Sharol's arguments, especially those made at oral argument before this court, appear to be in accord with our method of harmonizing secs. 766.55(2)(c) and 767.32(1), Stats. Sharol concedes that the $337 child support obligation ordered might well have been justified under a traditional review of sec. 767.32(1). Sharol argues, however, that the trial court erred at law when it exercised its discretion to apply the percentage standards under HSS 80, Wis. Admin. Code, to her marital property income. *fn7 We agree. Having already concluded that marital property principles of income do not enter into a child support analysis, it is necessary to determine to what income the percentage standards are to be applied by harmonizing use of the percentage standards under sec. 767.25(1j) with their use under sec. 767.32(1).

[54] Although secs. 767.25 and 767.32(1), Stats., share the same principles, statutory revisions made to sec. 767.25 manifest legislative intent to restrict the circuit court's ability to exercise its discretion on the initial setting of a child support order. Relevant sections of sec. 767.25 provide:

[55] (1j) Except as provided in sub. (1m), the court shall determine child support payments by using the percentage standard established by the department of health and social services under s. 46.25(9)(a).

[56] (1m) Upon request by a party, the court may modify the amount of child support payments determined under sub. (1j) if, after considering the following factors, the court finds by the greater weight of the credible evidence that use of the percentage standard is unfair to the child or to any of the parties:

[57] Prior to the codification of sec. 767.25(1j) and (1m), Stats., effective July 1, 1987, application of the percentage standards promulgated into rule at HSS 80, Wis. Admin. Code, could be applied in lieu of the factors listed at the total discretion of the circuit court. See sec. 767.25(1m) and (1p) (1983-84). Changes made pursuant to 1985 Act 29 and first codified at sec. 767.25(1j) (1985-86) now mandate the use of the percentage standard. Under the percentage standard calculations, the needs of the child are presumed. Likewise, it is presumed that the custodial parent shares his or her income with the child. It is also presumed that the award set via use of the percentage standard calculations is fair. See Preface, Child Support Percentage of Income Standard, ch. HSS 80, Wis. Admin. Code. Thus, under sec. 767.25(1j), the discretion of the circuit court has been greatly circumscribed. Discretion in the initial determination of child support under sec. 767.25 can only be exercised by the circuit court upon the request of a party pursuant to sec. 767.25(1m). Upon request, the circuit court may modify the percentage calculation award only if, after considering the factors listed, "he court finds by the greater weight of the credible evidence that use of the percentage standard is unfair to the child or any of the parties." Section 767.25(1m).

[58] To date, the legislature has not manifested a similar intent to restrict the broad discretion exercised by the circuit courts on revision of child support orders pursuant to sec. 767.32(1), Stats. Absent legislative direction, we will not act so as to mandate use of the percentage standard on revision of child support and thereby reduce the circuit court's broad discretion at this stage. To the contrary, we read sec. 767.32(1) as analogous to the request a party makes under sec. 767.25(1m) for discretionary revision of an initial award. By analogy, the movant or petitioner under sec. 767.32(1) will only be successful in his or her attempt to revise an earlier judgment awarding child support if he or she shows that the award is unfair under circumstances as they stand since the time of the original order.

[59] However, this case presents an unresolved issue of first impression in the discretionary use of the percentage standard on revision of child support orders when the non-custodial parent has remarried. *fn8 The question we must resolve is what is the "gross income" of a remarried, non-custodial parent for purposes of calculating the "base" to which the relevant percentage standard is ultimately applied.

[60] The percentage standard is applied to a "base," defined as "the monthly income at which the child support obligation is determined . . . ." HSS 80.02(3), Wis. Admin. Code. The base is derived from calculations made from the paying parent's "gross income." "Gross income" is broadly defined under HSS 80.02(12) as income "derived from any source and realized in any form." The reference for the gross income definition is the federal income tax definition found at 26 C.F.R. 1.61-1. *fn9

[61] We conclude that the gross income issue is resolved, absent direction from the legislature or the Department of Health and Social Services, by harmonizing application of HSS 80 percentage standards as applied in initial determinations of child support under sec. 767.25(1j), Stats., with the discretionary application of the standard under sec. 767.32(1). In order to harmonize these statutes in this respect, this court makes one assumption. It is assumed that when the percentage standard is applied in the initial determination of child support at the final judgment of divorce pursuant to sec. 767.25(1j), the paying parent is single. Therefore, his or her gross income is derived solely from his or her individually earned income and assets.

[62] We hold that a circuit court that chooses to use the percentage standard in the exercise of his or her broad discretion when revising a child support obligation pursuant to sec. 767.32(1), Stats., must apply the same principles of gross income as are available to it under our assumed application pursuant to sec. 767.25(1j). Thus, in order to properly apply the percentage standard on revision when the paying parent has remarried, the circuit court must determine the paying parent's gross income as if he or she were still single. The circuit court would then convert that gross income into the base to which it would apply the relevant percentage standard.

[63] In no uncertain terms does our holding, which restricts the definition of gross income for purposes of applying the percentage standards, otherwise restrict the circuit court's total discretion to contemporaneously review on its own initiative the percentage standard award as it revises a child support order pursuant to sec. 767.32(1), Stats. The circuit court retains broad discretionary powers to adjust the percentage calculation to arrive at an award it determines is fair in light of the knowledge it has before it concerning the parties' earning capacities and total economic circumstances.

[64] Relevant to the central issue in this case, we conclude that marital property principles of income are not to be considered under statutes in ch. 767 which deal with issues of child support. We conclude that the use of the percentage standards of HSS 80, Wis. Admin. Code, on revision of a child support order pursuant to sec. 767.32(1), Stats., is purely discretionary with the circuit court. We further conclude, however, that should the circuit court choose to apply the percentage standard under circumstances in which the paying parent has remarried, then gross income shall be calculated as if that parent had remained single. We further conclude that no restraints are otherwise placed upon the circuit court's discretion on revision of a child support order to adjust a percentage calculation in light of the parties' earning capacities and total economic circumstances as we have defined them herein.

[65] The court of appeals decision is affirmed, and the case is remanded to the circuit court for redetermination and order of child support not inconsistent with this opinion.

[66] By the Court. -- The decision of the court of appeals is affirmed.

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Opinion Footnotes

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[67] *fn1 In this case, the circuit court used sec. 766.55(2)(c)1, Stats., having to do with premarital, postact obligations rather than sec. 766.55(2)(c)2, which covers the preact obligations. Although both In re Marriage of Poindexter, 142 Wis. 2d 517, 419 N.W.2d 223 (1988) and In re Marriage of Burger v. Burger, 144 Wis. 2d 514, 424 N.W.2d 691 (1988) interpreted sec. 766.55(2)(c)2, the difference between these statutes is insignificant for purposes of our analysis.

[68] *fn2 At the time of the revision hearings before Judge Froehlich, the Abitz's eldest child, Jeffrey, had reached 18 years of age, and Sharol's duty to support him had ended. However, arrearages dating back to Outagamie county court commissioner Jeffrey S. Brandt's final order were reviewed and adjusted by Judge Froehlich.

[69] *fn3 The record on motion to reconsider reflects that the following conversation took place concerning the determination of Sharol's "income:"

[70] MR. CHUDACOFF: As I understand, what you are doing in your decision, then, in terms of the philosophy of it, you are taking half of her current husband's income plus half of her income --

[71] THE COURT: Gross.

[72] MR. CHUDACOFF: -- and saying those are her income because of the marital property division.

[73] THE COURT: I'm not saying that's her income. I'm saying she is entitled under the law to petition the Court and she can get that income. She can take that income away from him.

[74] MR. CHUDACOFF: Because she has the right to take that away if she chooses to do that, you're indicating that the entitlement to support under the guidelines which is now 17 percent, would be 17 percent of the total of the two halves of gross income, and then you are saying that as long as that is an amount which is greater than her total income she pays her total income, and as long as it is less than her total income she pays that amount.

[75] As I understand your philosophy behind that, it is that, while he cannot be required to devote any of his income, whether she can get it or not, to the support of her daughter from a prior marriage because that's a pre-existing obligation, you can take as much as you want up to the total of her income from her to pay that obligation based on both the incomes.

[76] THE COURT: That's what I am doing. You got it correct. And that's what the appellate court is going to have to decide.

[77] *fn4 As stated, the court of appeals decision relied on Poindexter and Burger as controlling the determination of this case. However, Poindexter and Burger interpreted sec. 766.55(2)(c), Stats., to conclude that a nonobligated spouse's income was not available to "satisfy" maintenance or child support obligations.

[78] *fn5 Sharol's brief offers two threshold arguments. First, Sharol asserts that sec. 767.32(1), Stats., is inapplicable because the original judgment of divorce did not "provide for" child support. We disagree. In final judgments of divorce, provisions for child support are not final, and the circuit court may exercise its powers under the statutes to revise such provisions upon a finding of a substantial change in circumstances. See Romanowski v. Romanowski, 245 Wis. 199, 14 N.W.2d 23 (1944).

[79] Sharol also argues that the findings of the circuit court do not support a Conclusion that a substantial change in circumstances has occurred. We disagree. Our review of the entire record supports the circuit court's Conclusion. Support on record is sufficient. See In re Marriage of Schwantes v. Schwantes, 121 Wis. 2d 607, 631, 360 N.W.2d 69 (1984).

[80] *fn6 Sharol asserts that the circuit court erred in part because the findings do not reflect that Sharol's total economic circumstances were directly compared to Daniel's pursuant to sec. 767.32(1), Stats. We disagree that specific findings are required. The record reflects that the circuit court had full financial disclosure from both parties and their spouses at his disposal. We find such evidence of record sufficient to show that the parties' total economic circumstances were considered in the determination of Sharol's ability to pay.

[81] *fn7 The percentage standards pursuant to HSS 80.03, Wis. Admin. Code, are:

[82] (a) 17 percent for one child;

[83] (b) 25 percent for two children;

[84] (c) 29 percent for three children;

[85] (d) 31 percent for four children; and

[86] (e) 34 percent for five or more children.

[87] *fn8 We tacitly approved of discretionary use of the percentage standards at HSS 80, Wis. Admin. Code, in revision of child support orders in Burger, 144 Wis. 2d 514; see also Marriage of Long v. Wasielewski, 147 Wis. 2d 57, 432 N.W.2d 615 (Ct. App. 1988). Paying parties in both cases were single.

[88] *fn9 26 CFR 1.61-1, Gross income, provides:

[89] (a) General definition. Gross income means all income from whatever source derived, unless excluded by law. Gross income includes income realized in any form, whether in money, property, or services. Income may be realized, therefore, in the form of services, meals, accommodations, stock, or other property, as well as in cash. Section 61 lists the more common items of gross income for purposes of illustration. For purposes of further illustration, sec. 1.61-14 mentions several miscellaneous items of gross income not listed specifically in section 61. Gross income, however, is not limited to the items so enumerated.

19900510

06/16/88 MARRIAGE SUE ANN BURGER v. JAMES L. BURGER Income, new spouse income and child support

[1] SUPREME COURT OF WISCONSIN

[2] No. 87-0174

[3] 1988.WI.172 <http://www.versuslaw.com>, 424 N.W.2d 691, 144 Wis. 2d 514

[4] June 16, 1988

[5] IN RE THE MARRIAGE OF: SUE ANN BURGER, NOW KOOS, PETITIONER-RESPONDENT

JAMES L. BURGER, RESPONDENT-APPELLANT

[6] APPEAL from an order of the circuit court for Kenosha County. AFFIRMED.

[7] For the respondent-appellant there were briefs (in court of appeals) by Walter W. Stern, III and Stern, Caviale & Stern, Kenosha, and oral argument by Walter W. Stern, III.

[8] For the petitioner-respondent there was a brief (in court of appeals) by Geoffrey Dowse and Ventura, Dowse & Wagner, Kenosha, and oral argument by Geoffrey Dowse.

[9] Amicus curiae brief was filed by Daniel L. Furrh, Waukesha for the American Academy of Matrimonial Lawyers, Wisconsin Chapter and the Family Law Section, State Bar of Wisconsin.

[10] Day, J.

[11] The opinion of the court was delivered by: Day

[12] DAY, J. This is an appeal from an order of the circuit court for Kenosha county, Honorable Michael S. Fisher, circuit Judge, modifying a judgment of divorce, which this court accepted on certification from the court of appeals. In its certification, the court of appeals framed the sole issue for review as follows: "Whether, in analyzing each parent's earning capacity and total economic circumstances to determine whether to modify a child support order under sec. 767.32(1), Stats., the trial court must consider half the marital income of a remarried, voluntarily unemployed, custodial parent under the marital property reform act, ch. 766, Stats." After acceptance of certification of the present action, this court decided Poindexter v. Poindexter, 142 Wis. 2d 517, 419 N.W.2d 223 (1988). Though Poindexter dealt with modification of maintenance in a divorce action, application of the statutory interpretation of sec. 766.55(2)(c)2, Stats., barring use of marital property income to satisfy a pre-marital obligation, is equally applicable in analyzing modification of child support provisions. Following the analysis of Poindexter, none of a new spouse's income is available under the Marital Property Reform Act for consideration of support obligations, which would be classified as a pre-Act debt. Counsel for Mr. Burger conceded at oral argument that Poindexter resolved the certified issue.

[13] Although this case could be remanded to the court of appeals since the issue certified is resolved by existing case law, in the interests of judicial economy, we address the other issues argued by the parties on appeal. We conclude the circuit court's holdings concerning increased child support, arrearage credit, contempt for failure to pay support, ability to claim the minor children as dependents for tax purposes, and employer deductions under wage assignment, were resolved within properly exercised discretion. We therefore affirm the circuit court's order.

[14] The facts are not in dispute. Sue Ann Burger (now Koos) and James L. Burger (Burger) were divorced in 1981. Ms. Koos was awarded custody of the parties' two children, then six and four years of age. Mr. Burger was ordered to pay $75.00 per week for child support. At the time of the divorce, Koos was employed and earning approximately $12,000 annually. Burger's gross income was $408 per week.

[15] In 1982, Koos remarried. She terminated her outside employment while pregnant with the first of two children she had with her new husband, and thereafter remained at home to care for her children.

[16] In December, 1985, Koos filed an order to show cause for an increase in child support, and to determine and require payment of arrearage. On January 16, 1986, the acting family court commissioner hearing the motion concluded a substantial change of circumstances existed and increased child support to $115 per week. The amount of support was determined based on Burger's representations at the hearing, estimating his 1985 gross income at $17,500, plus disability benefit payments, for a gross weekly income of $458.40. The commissioner then apparently applied the percentage standard established under sec. 767.25(1p), Stats. (1985-86)1, to arrive at the $115 support figure ($458.40 x 25% = $114.60, rounded to the nearest dollar = $115).

[17] On February 14, 1986, written findings of fact supporting the revised support order were signed by the acting family court commissioner. They establish that Koos, though no longer employed outside the home, was contributing to "her family, home and community by working in the home," that the two children of the parties were four and a half years older and "their needs are bound to increase," and that Burger had an increased ability to pay support. Burger's income was found to be $532.00 per week based on figures reported in his financial disclosure statement, which he had submitted to the court subsequent to the order to show cause hearing. The amount of his arrearage was fixed at $3,440. Although Burger's income as reported in his disclosure statement and adopted in the findings of fact was greater than that relied upon by the commissioner in revising the amount of child support based on percentage of income, weekly support payments remained at $115.

[18] On June 15, 1986, Burger was ordered to show cause why he should not be held in contempt for failure to follow the revised support order. Koos alleged that Burger was then $4,186.03 in arrears in making child support payments. Of that amount, $746.30 had accrued since support had been increased from $75 to $115 per week. The acting family court commissioner found Burger had increased his arrearage by the additional amount of support required since the February, 1986 order, and she ordered payment of the arrearage in one month or Burger would be held in contempt and would be required to spend five days in jail. On May 28, 1986, based on a request to review the commissioner's order, Circuit judge Michael Fisher stayed the contempt order pending further order.

[19] Burger then sought review of the revised child support order before Judge Fisher, asking that the increased amount of support be modified. He further requested an order prohibiting his employer from deducting support from separate regular and holiday paychecks issued in the same week under his wage assignment, and sought a finding reducing his arrearage in the amount of social security benefits paid to his children while he was disabled. He also requested the right to claim both children as dependents for income tax purposes. Koos, in her reply motion, asked the court to uphold the commissioner's contempt and arrearage findings and further sought a wage assignment for Burger's unemployment compensation benefits.

[20] After a hearing regarding these matters, Judge Fisher affirmed the decision of the family court commissioner, finding that there was a sufficient change of circumstances to award an increase in child support. The court found these circumstances included the fact that the parties' children were older and had greater needs, Koos was not working and Burger's income had increased.

[21] Examining Burger's ability to pay increased support, the court determined his actual income was $28,360 by adding his taxable 1985 income to disability benefits he received. Giving Burger the benefit of the doubt concerning intermittent unemployment and disability layoffs which he claimed would occur again as they had in the past, the court then affirmed the commissioner's $115 support calculation, though it was based on twenty-five percent of Burger's estimated income of approximately $17,500 rather than his substantially greater actual income of $28,360. The court denied Burger's motion to prohibit his employer from deducting child support payments from every check, including one-day holiday paychecks, under his wage assignment, because Burger had been continuously in arrears since 1982. It further denied his motion to modify the original divorce judgment provision which awarded one tax exemption to Burger and one tax exemption to Koos for their dependent children.

[22] By written decision on November 4, 1986, the court credited Burger with $1,325 towards his arrearage during the time he was disabled, unable to work, and his children received $4,464 in social security benefits. The $1,325 credit was equal to the amount of support Burger had failed to pay during the time he was not working at all but only receiving social security disability benefits and sick pay. Burger was not given credit toward arrearages which had accrued before or after this time, but was ordered to pay his remaining arrearage by December 4, 1986, or he would be found in contempt of court. The court further ordered execution of a wage assignment for unemployment compensation received by Burger.

[23] Burger appealed to the court of appeals, alleging the circuit court abused its discretion in: 1) determining a change of circumstances existed sufficient to modify child support when his former wife voluntarily left the workforce to have children with her second spouse, 2) failing to credit the full amount of social security benefits paid to his children toward his arrearage, 3) finding him in contempt for failure to pay child support, 4) denying him an award of both tax exemptions for the parties' minor children, and 5) failing to curtail his employer's practice of deducting child support payments from regular and holiday paychecks issued in the same week under his court ordered wage assignment ordered by the court. The court of appeals certified this case pursuant to Rule 809.61, Stats., and we accepted the case in entirety for review.

[24] Burger first alleges that the circuit court abused its discretion in increasing his payment of child support without a sufficient showing of a change in circumstances. The statutory provision for modification of a divorce judgment as it pertains to child support states, in pertinent part:

[25] 767.32 Revision of judgment. (1) After a judgment providing for child support . . . the court may, from time to time, on the petition of either of the parties, . . . revise and alter such judgment respecting the amount of child support and the payment thereof . . . . Any change inchild support because of alleged change in circumstances shall take into consideration each parent's earning capacity and total economic circumstances.

[26] This court has held that modification of a judgment of divorce relating to child support may only be made when there has been a substantial or material change in circumstances of the children. Severson v. Severson, 71 Wis. 2d 382, 386, 238 N.W.2d 116, 119 (1976). A modification of child support rests within the sound discretion of the circuit court and will not be overturned absent an abuse of the court's discretion. Proper exercise of this broad discretion exists where the record reflects that the court considered the needs of the custodial parent and children, and the ability of the non-custodial parent to pay. Edwards v. Edwards, 97 Wis. 2d 111, 116, 293 N.W.2d 160, 163 (1980).

[27] In increasing support, the circuit court in this case based its holding on findings that the parties' children were older, and the custodial parent, Koos, was not working. The court further found that the non-custodial parent, Burger, had the ability topay increased support because his annual income had substantially increased since the divorce was granted. We conclude these findings were sufficient to warrant an increase of the support paid by Burger.

[28] Increased age, or the reaching of school age, of minor children has been held sufficient to establish increased need and, therefore, an increase in support payments consistent with the children's best interests and the non-custodial parent's ability to pay. Klipstein v. Klipstein, 47 Wis. 2d 314, 318, 177 N.W.2d 57, 59 (1970); Chandler v. Chandler, 25 Wis. 2d 587, 592, 131 N.W.2d 336, 339 (1964); Kritzik v. Kritzik, 21 Wis. 2d 442, 447, 124 N.W.2d 581, 585 (1963). In the present action, the court's recognition that the parties' children were four and one-half years older than when support was initially set provided sufficient factual basis to conclude a substantial or material change in circumstances had occurred.

[29] Having established need, the court was also required to consider Burger's ability to pay increased support. The test for assessing ability to pay is whether the paying parent in "present economic circumstances can absorb the increased expenditure." Kritzik, 21 Wis. 2d at 448, 124 N.W.2d at 585. We conclude Burger's ability to pay was adequately demonstrated by the circuit court.

[30] Examining the record, it is clear that the family court commissioner intended to use the percentage standard for setting support which was in. effect at that time, and that this method was approved by the circuit court. Contrary to Burger's assertions on appeal, Koos' income was irrelevant in determining his children's need or his ability to pay the percentage fixed sec. 767.25(1p), Stats. The paying parent's income was the sole relevant factor to be considered under that statute.

[31] In applying the percentage standard to the facts of this case, the circuit court allowed the amount of support to remain based on Burger's estimated income rather than determining percentage of support based on his greater, actual income. The court intended by this measure to counteract future wage reductions because Burger claimed he would be periodically unable to work as a result of physical disability and because of future layoffs at the factory where he was employed. The record shows that although these problems had occurred within the year prior to the support hearing, Burger's income was over $28,000. No showing was made that these problems would reduce Burger's income below that amount in the future. Moreover, the court was under no obligation to determine Burger's ability to pay based on prospective changes. Anderson v. Anderson, 72 Wis. 2d 631, 643, 242 N.W.2d 165, 171 (1976) (ability to pay is to be made upon the basis of the circumstances existing at the time such determination is made). Considering the circumstances, the court, in exercising its discretion, was most generous to Burger in setting his support payments at a lower rate. Burger had no cause to complain that he was required to pay less than the statutory percentage, when, under sec. 767.25(1p), Stats., twenty-five percent of his actual income could have been ordered as support.

[32] We conclude that the circuit court adequately determined Burger's ability to pay based upon circumstances existing at the time of the support hearing. It properly acted within its discretion in revising the child support payments with modification for the unusual mitigating factors affecting Burger's income.

[33] The second issue raised by Burger is that the circuit court failed to give him credit for the full amount of social security benefits paid to his children at a time when he was fully disabled and did not make some support payments. Reduction of support arrears is a matter within the sound discretion of the circuit court, and arrears are to be canceled only upon cause or justification. The retroactive modification of support arrears is a discretionary remedy which should provide a just result in light of all circumstances. O'Brien v. Freiley, 130 Wis. 2d 174, 179, 387 N.W.2d 85, 87-88 (Ct. App. 1986), citing Rust v. Rust, 47 Wis. 2d 565, 570, 177 N.W.2d 888, 891 (1970).

[34] Application of dependent children's social security benefits to a non-custodial parent's arrearage is an issue of first impression in this state although other jurisdictions have addressed this matter. Generally, social security benefits have not been considered to be a replacement for or synonymous with child support payments, but are treated as a separate benefit which accrues to a person's children because that person has become disabled. A number of jurisdictions have refused to credit child support arrearages accumulated prior to the paying parent's entitlement to disability benefits. See, e.g., Robinson v. Robinson, 651 P.2d 454, 455-56 (Colo. Ct. App. 1982) (social security disability dependent benefits may not be credited beyond monthly amount of child support obligation); Potts v. Potts, 240 N.W.2d 680 (Iowa 1976) (disabled parent should be credited for social security dependency payments only to the extent of child support obligation during the period such benefits are paid); Folds v. Lebert, 420 So. 2d 715 (La. Ct. App. 1982) (credit for arrearages from social security during period of actual disability); Gerlich v. Gerlich, 379 N.W.2d 689, 691 (Minn. Ct. App. 1986) (child's receipt of social security benefits from the account of the parent charged with support does not constitute payment from that parent); Romero v. Romero, 101 N.M. 345, 682 P.2d 201 (Ct. App. 1984) (social security benefits credited to child support arrearage only for months for which benefits were received); see also Fowler v. Fowler, 156 Conn. 569, 244 A.2d 375, 377 (1968) (in sound discretion of trial court whether to credit child support arrearages with social security benefits).

[35] Under the facts of this case, Burger was already in arrears before the period of disability which entitled his children to social security benefits. He did make partial support payments during the period. The court found he had sustained an additional arrearage during the period of his disability of $1,325. We conclude the circuit court properly exercised its discretion in giving Burger credit only for the amount of support he was unable to pay during the time the social security benefits were received.

[36] Burger's third allegation, that he was improperly held in contempt, is based on his interpretation of Anderson v. Anderson, 72 Wis. 2d 631, 242 N.W.2d 165 (1976), which he claims holds that the fact an arrearage in support payments has accrued does not by itself support a finding of contempt. It is true that mere inability to pay child support cannot form the basis for a contempt finding. However, a person can be held in contempt of court for failure to pay money where "the refusal is willful and contemptuous and not a result of his inability to pay." Anderson, 72 Wis. 2d 631, at 647, 242 N.W.2d 165, at 173, quoting O'Connor v. O'Connor, 48 Wis. 2d 535, 542, 180 N.W.2d 735, 739 (1970); see also secs. 767.30(3) and 767.305, Stats. In Rust v. Rust, 47 Wis. 2d 565, 570-71, 177 N.W.2d 888, 891 (1970), this court held that the contempt power of a court is the proper remedy for flouting an order for payment of support.

[37] Considering the gross income available to Burger, we conclude inability to pay was not demonstrated on this record. Moreover, Burger's continuing arrearages, beginning in 1982 and specifically accruing after his former spouse brought orders to show cause for his failure to pay, are evidence of willful disobedience. If the circuit court concludes from past performance that a paying parent cannot be relied upon to keep up on support obligations until some legal force is exerted, use of contempt is "perfectly justified." See Foregger v. Foregger, 48 Wis. 2d 512, 521, 180 N.W.2d 578, 582-83 (1970) There is no doubt on this record that the circuit court properly exercised its discretion. The evidence amply supports that the finding of contempt was warranted.

[38] Burger contends a fourth error in the circuit court's modification occurred because it failed to grant him the ability to claim both children as dependents for tax purposes. There is no specific statute in Wisconsin which controls Disposition of tax exemptions upon judgment of divorce or its modification. The Internal Revenue Code, sec. 152(e) (1988), makes an assumption that the custodial parent should be permitted to claim children as dependents for tax purposes unless the non-custodial parent has provided more support than the custodial parent or the original divorce decree awarded the tax exemption to the non-custodial parent. Neither of these showings is supported by the record in this action.

[39] Burger claims that since Koos has no earnings, she is not entitled to a tax exemption. The tax exemption determination is not presumed to be awarded to a particular parent or on the basis of earning under the modification of judgment statute, sec. 767.32. The circuit court articulated a rational basis for finding that Burger should not be rewarded with both tax exemptions because of his continued arrearages. We conclude no abuse of discretion occurred in making this ruling.

[40] Finally, Burger argues that his employer's practice of taking child support payments out of checks issued in the same week violates the wage assignment of the divorce decree because his initial support order specified that he was responsible for paying only $75.00 per week. Under the wage assignment as revised by the circuit Judge, a discretionary finding was made that, because Burger had been in arrears for a prolonged period of years, his employer's practice was appropriate. The power vested in the family court to promote stability and the best interests of the family regardless of the desires of the respective parties, "reflects a recognition that children involved in a divorce are always disadvantaged parties and that the law must take affirmative steps to protect their welfare." Krause, 58 Wis. 2d at 509, 206 N.W.2d at 595 (1973), quoting Kritzik, 21 Wis. 2d at 448, 124 N.W.2d at 585. Burger failed to show why the court's exercise of discretion in making such a finding was unreasonable in light of his continued arrearages. See Wisconsin Public Service Corp. V. Krist, 104 Wis. 2d 381, 395, 311 N.W.2d 624, 631 (1981) (appellate courts will not reverse a circuit court refusal to grant relief unless the court abused its discretion or no reasonable basis exists for the court's decision). We therefore affirm its wage assignment holding.

--------------------------------------------------------------------------------

Opinion Footnotes

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[41] 1 Section 767.25, Stats. (1985-86), provides guidelines for setting the initial amount of child support upon entering a judgment for divorce and is helpful in determining a fair amount of support upon modification. Subsection (1p), which no longer exists under current statutes but was in effect at the time the commissioner heard this case, reads:

[42] In lieu of determining child support payments under sub. (1m) [a multiple factor analysis], the court may order either or both parents to pay an amount determined by using the percentage standard adopted under s. 767.395(3).

[43] The Department of Health and Social Services guidelines adopted pursuant to sec. 767.395, Stats., at the time support was modified in this case permitted a percentage of gross income standard to be used in establishing child support. The method of calculating the paying parent's obligation under this standard was based solely upon a percentage rate. For two children, the rate was set at twenty-five percent of the paying parent's income. See Wisconsin Department of Health and Social Services Child Support Enforcement Manual, Ch. V, Part C, "Support Obligations and Paternity," 1-2 (July, 1984).

19880616

Biel case: discussion of contempt, child support, arrears, modification

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

(The decision of the Court is referenced in the North Western Reporter in a table captioned "Wisconsin Court of Appeals Table of Unpublished Opinions".)

In re the Marriage of: PENNY R. BIEL, Petitioner-Respondent

JOHN M. BIEL, Appellant.

86-09,41, 86-1470.

Court of Appeals of Wisconsin.

Feb. 25, 1988.

Circuit Court, Dodge County

Affirmed in part, reversed in part, and cause remanded

Appeal from orders of the circuit court for Dodge county: Daniel W. Klossner, Jr., Judge.

Before DYKMAN, J., EICH, J., and SUNDBY, J..

PER CURIAM.

***1

(Cite as: 143 Wis.2d 892, 422 N.W.2d 461, 1988 WL 36581, ***1 (Wis.App.))

John Biel appeals from orders denying motions for postconviction relief to dismiss contempt orders of December 18, 1984 and January 23, 1986. [FN1] The parties are not in agreement as to the issues but we consider them to be: (1) Is the trial court's finding that John changed his employment to avoid support payments clearly erroneous? (2) Did the trial court abuse its discretion in finding John in contempt? (3) Did the trial court abuse its discretion in failing to apply the reduction in John's reduced support obligation retroactively? (4) Did the trial court abuse its discretion in failing to consider John's halftime care of his children in determining John's support obligation? (5) Did the trial court err in failing to grant John's motion for postconviction relief from the December 1984 contempt order on the grounds he was denied the effective assistance of counsel?

FN1 Appeal No. 86-0941 involves the order denying relief from the December 18, 1984 contempt order and appeal No. 86-1470 involves the order

denying relief from the January 23, 1986 contempt order. These appeals are consolidated pursuant to sec. (Rule) 809.10(3), Stats. John previously appealed from the January 1986 contempt order. Following our decision in In re Marriage of Biel v. Biel, 130 Wis.2d 335, 387 N.W.2d 295 (Ct. App. 1986), that appeal was voluntarily dismissed.

We conclude that: (1) The trial court's findings are not clearly erroneous. (2) The trial court did not abuse its discretion in finding John in contempt but that the purge conditions were excessive. (3) The trial court abused its discretion in failing to apply retroactively a reduction in John's support obligation and thereby reduce the arrearage. (4) The trial court did not abuse its discretion in determining the amount of reduced support. (5) John was not denied the effective assistance of counsel. We therefore affirm the order denying relief from the December 18, 1984 contempt order. The order denying relief from the January 23, 1986 contempt order is affirmed in part, reversed in part and we remand the cause for further proceedings consistent with this opinion.

BACKGROUND OF THE CASE

At the time of the divorce, John was ordered to pay $700 child support and $100 maintenance each month. These obligations were based on his fulltime and overtime employment at John Deere Company and parttime employment as a local restaurant. He lived with his mother and cared for the parties' two children halftime.

Subsequent to the divorce, John moved out of his mother's house and rented an apartment in the neighborhood where the family had lived during the marriage. John had primary custody of the children during the summer, when he paid no support obligation.

In September 1984 John Deere ordered a shift change. John then took a leave of absence from John Deere until March 1985. Upon returning to John Deere his earnings were made the subject of a wage assignment. At that time his gross weekly earnings from John Deere for a forty-hour week were $534.67. When his wages were made subject to the wage assignment, John terminated his employment with John Deere. Thereafter he received three payments during the summer of aid to families with dependent children and supplemented that income with bartending employment.

***2

(Cite as: 143 Wis.2d 892, 422 N.W.2d 461, 1988 WL 36581, ***2 (Wis.App.))

The family court commissioner filed three contempt motions. [FN2] The last motion resulted in a finding of civil contempt and a sentence of six months to be served in the county jail. John was granted leave to purge himself of this contempt by: (1) paying $11,370.75 to the clerk of court by January 31, 1986 to satisfy support and maintenance arrearages, (2) paying child support in the amount of $115 weekly commencing January 27, 1986.

FN2 Contempt proceedings were heard by the trial court on October 18, 1984, December 18, 1984 and January 3 and 17, 1986. The trial court dismissed the contempt order resulting from the October 1984 proceedings because John was unrepresented by counsel. The December 1984 proceedings are the subject of John's claim of ineffective assistance of counsel. Pertinent facts to that claim will be stated later in the opinion.

At the hearing on the family court commissioner's contempt motion, the court also heard John's motion to amend the divorce judgment to reduce maintenance and child support, correct the child support and maintenance arrearages, expunge the arrearages according to the redetermined support, and to stay all further contempt proceedings pending appeal. The court amended the divorce judgment to eliminate John's maintenance obligation and to reduce child support to $115 per week. The court refused to correct the arrearages of record or to expunge any portion thereof.

II.

FINDINGS OF CONTEMPT

A person may be held in contempt of court for failure to pay court-ordered support only where that failure is willful and not the result of an inability to pay. Anderson v. Anderson, 72 Wis.2d 631, 647, 242 N.W.2d 165, 173 (1976). 'The essential finding in such a contempt must be that the defendant is able to pay or should be able to pay if he can work and will not and the refusal to pay is willful and with intent to avoid payment.' Id., quoting O'Connor v. O'Connor, 48 Wis.2d 535, 542-53, 180 N.W.2d 735, 740 (1970). A trial court's factual findings in a contempt matter will be sustained on appeal unless clearly erroneous. Sec. 805.17(2), Stats.; see also Schroeder v. Schroeder, 95 Wis.2d 415, 418, 290 N.W.2d 548, 549 (Ct. App. 1980), rev'd on other grounds, 100 Wis.2d 625, 302 N.W.2d 475 (1981).

In the January 1986 contempt proceedings the trial court found that John willfully and intelligently reduced his income thereby reducing his ability to pay his child support. This court has already determined that John's decision to quit his factory job and return to finish his college degree 'evidences that [John] flagrantly disregarded his obligation to support his children.' In re Marriage of Biel v. Biel, No. 85-0434, slip op. at 6 (Wis. Ct. App. July 9, 1986). [FN3]

FN3 We cite this unpublished opinion not for precedential value but as law of the case. Sec. (Rule) 809.23(3), Stats.

The facts upon which Biel, supra, was based remain the same. John quit John Deere because the wage assignment, coupled with a reduced work week due to his final exams at the university, did not leave him sufficient funds to care for his children halftime. He admitted the 'wage assignment was a primary factor' influencing him to quit.

***3

(Cite as: 143 Wis.2d 892, 422 N.W.2d 461, 1988 WL 36581, ***3 (Wis.App.))

John's termination of employment because of the wage assignment justified a finding of contemptuous conduct. John had the burden to show that legitimate purposes underlay his termination of employment. See Balaam v. Balaam, 52 Wis.2d 20, 30, 187 N.W.2d 867, 872 (1971) (person against whom contempt is charged has the burden of showing his conduct is not contemptuous). John testified that he had planned on staying fulltime at John Deere on third shift and continue schooling parttime if the court commissioner would accept a lower support amount. John did not explain why he abandoned his plan, failed to seek a modification of the order, or why he didn't take an additional leave of absence at John Deere during his exam period. He simply contends that he had a right to refuse work in order to provide time for visiting his children and for pursuing further education.

John did not satisfy his burden. The finding that John willfully violated the support order is supported by the evidence.

III.

ABUSE OF DISCRETION ON PURGE ORDER

Although the evidence supported the 1986 finding of contempt, the conditions of the purge were excessive. A trial court cannot imprison a person for not satisfying terms which are impossible to satisfy. Shillitani v. United States, 384 U.S. 364, 371 (1966). The trial court allowed John to purge his contempt by paying $11,370.75 in fourteen days and by paying $115 weekly child support. The terms of the purge, plainly exceeded the limited means available to John. The trial court should have imposed satisfiable conditions. We reverse the requirements of the purge and direct the trial court to revise the conditions.

IV.

RETROACTIVE REDUCTION IN SUPPORT

John contends that the trial court, upon finding a change of circumstances justifying a reduction in child support, erred in not retroactively reducing support and the arrearage to the tieme when the chnaged circumstances first occurred. John claims the support should have been reduced as of the fall of 1984, when John's employment situation changed, or at least as of May 1985, when Epnny Biel's income increased. We conclude that the trial court abused its discretion by not reducing child support and arrearages as of May 1985. [FN4]

FN4 John's claim that support should have been reduced in the fall of 1984 was decided against him in In re Marriage of Biel v. Biel, No. 85- 0434, supra. We determined there that the trial court did not abuse its

discretion in refusing to modify child support on the conditions existing in 1984. We cannot address the issue here.

A change of circumstances allows modification of child support. Anderson, 72 Wis.2d at 649, 242 N.W.2d 174. Arrearanges in child support can be reduced for cause or justification. O'Brien v. Freiley, 130 Wis.2d 174, 179, 387 N.W.2d 85, 88 (Ct. App. 1986). The decision to retroactively modify support is discretionary. Id. A discretionary decision must have a reasonable basis. Wisconsin Public Service Corp. v. Krist, 104 Wis.2d 381, 395, 311 N.W.2d 624, 631 (1981).

***4

(Cite as: 143 Wis.2d 892, 422 N.W.2d 461, 1988 WL 36581, ***4 (Wis.App.))

Penny became a fulltime employee in May 1985. Before then, she worked partime from four hours to forty hours per week. Her hourly wage during fulltime employment exceeded her partitime pay. The trial court's decision to reduce support was based solely on Penny's changed circumstances.

The trial court's refusal to reduce arrearages was an abuse of discretion. The aim of a retroactive modification of arrears is to achieve a result which is just in light of all circumstances. O'Brien, 130 Wis.2d at 179, 387 N.W.2d at 88. Penny's substantially increased employment exhibited a significant change of circumstances which warranted a reduction in arrearages to a time contemporaneous with the change. The trial court's decision to reduce only future support had no reasonable basis.

EFFECT OF HALFTIME CARE ON SUPPORT

John complains that no court has addressed the issue of his halftime care of the children. In his December 1985 motion to amend the divorce judgment, John asked the court to reduce the amount of child support on the grounds that he had the children living with him fifty percent of the time. However, at the hearing John did not argue that his halftime care of the children constituted a change in circumstances justifying a reduction in child support.

John did argue at the hearing that Penny had enough money considering that he had the children halftime. The trial court did consider this and specifically found that Penny remained in need of child support. The trial court did not abuse its discretion in ordering child support according to the percentage standards.

VI.

INEFFECTIVE ASSISTANCE OF COUNSEL

John contends that because his attorney was unprepared he received ineffective assistance of counsel at the December 18, 1984 contempt hearing. Counsel was appointed by the public defender's office four days before the hearing and had no opportunity to review the papers served on John prior to the hearing. Counsel first met John immediately before the hearing. Counsel first saw the contempt papers as the hearing got underway.

A claim based on ineffective assistance of counsel must show both deficient performance by counsel and prejudice to the defenant. State v. Pitsch, 124 Wis.2d 628, 633, 369 N.W.2d 711, 714 (1985), citing Strickland v. Washington, 466 U.S. 668 (1984). [FN5] The defendant must affirmatively prove prejudice, by showing a reasonable probability that, but for counsel's unprofessional errors, the proceeding would have produced a different result. Pitsch at 641- 42, 369 N.W.2d at 718-19.

FN5 John argues that 'the standard in Wisconsin is less stringent than the test set forth by the United States Supreme Court in Strickland.' Such an argument requires briefing. Pitsch, 124 Wis.2d at 646-48, 369 N.W.2d at 721. John has not briefed this issue so we consider his claim of ineffective assistance under the federal constitution.

John's trial counsel did not testify at a postjudgment hearing. Ordinarly, the defendant must raise a claim of ineffective counsel by motion and hearing in the trial court. State v. Mosley, 102 Wis.2d 636, 657, 307 N.W.2d 200, 212 (1981). The hearing allows counsel to explain the reasons for his conduct. Id. The hearing may show that the trial counsel's conduct was a deliberate trial strategy. State v. Burroughs, 117 Wis.2d 293, 308, 344 N.W.2d 149, 157 (1984). Testimony by counsel would have served no purpose in this case. John alleges ineffectiveness from counsel's failure to prepare adequately. Lack of preparation cannot be a legitime trial strategy. We therefore address the issue without testimony by trial counsel.

***5

(Cite as: 143 Wis.2d 892, 422 N.W.2d 461, 1988 WL 36581, ***5 (Wis.App.))

At the December 18, 1984 hearing, John explained why he left his job at John Deere. The John Deere job paid him $330 per week. He worked from 3:30 p.m. to midnight. He testified that his desire to visit his children induced his change of employment. His children attended school during the day and therefore could not be visited at that time. He obtained a parttime job at a tavern that paid him $80 per week. The trial court concluded that the testimony provided no valid reason for John's failure to pay support. If his counsel had been prepared, John alleges he would have testified that a desire to obtain further education also induced him to leave his job.

John has shown no mitigating circumstances that a prepared counsel could have raised and could have overcome the evidence of his contempt. The trial court appropriately concluded from the evidence that John's desire to visit his children provided no valid reason for terminating his employment. A desire to pursue further education also did not justify the failure to pay support. The divorce judgment imposed a support obligation. By the support obligation, the judgment determined the best interests of the children. It placed support ahead of visitation and education in providing for their interest. Until the judgment was modified because of changed circumstances, support was the primary obligation, visitation and education secondary. John had no right to redetermine their best interests. His counsel's lack of preparation was not prejudicial.

There also exists no basis to conclude that the absence of effective counsel had a cumulative effect on the subsequent proceedings, consequently warranting a new trial. John's 1984 contempt hearings were not relevant to the ultimate finding of contempt in January 1986. The evidence plainly showed a wrongful violation of a valid court order. John has identified no new evidence or legal argument which counsel could not presented, and which would have established a reasonable probability of a finding of noncontemptuous conduct. Therefore, the rulings on contempt could not have been adversely affected by the absence of counsel at one hearing or presence of ineffective counsel at another.

By the Court.--Order in appeal No. 86-0941 affirmed. Order in appeal No. 86- 1470 affirmed in part and reversed in part. Cause remanded for proceedings consistent with this opinion. No costs to either party.

Inclusion in the official reports is not recommended.

Wis.App., 1988.

Biel v. Biel

Beaumont case: discussion of child support modification

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

(The decision of the Court is referenced in the North Western Reporter in a table captioned "Wisconsin Court of Appeals Table of Unpublished Opinions".)

In re the Marriage of Robert J. BEAUMONT, Petitioner-Appellant-Cross

Respondent,

Darlene K. BEAUMONT, Respondent-Respondent-Cross Appellant.

No. 90-2024.

Court of Appeals of Wisconsin.

Aug. 28, 1991.

Appeal and Cross-Appeal from an order of the circuit court for Waukesha county: Marianne E. Becker, Judge.

Circuit Court, Waukesha County

AFFIRMED IN PART, REVERSED IN PART AND REMANDED.

Before NEAL NETTESHEIM, P.J., and BROWN and ANDERSON, JJ.

PER CURIAM.

***1

(Cite as: 164 Wis.2d 432, 476 N.W.2d 25, 1991 WL 198132, ***1 (Wis.App.))

Robert Beaumont appeals an order reducing his child support obligation that was not made retroactive to June 16, 1989, the date he filed his motion for a reduction. Darlene Beaumont cross-appeals. She claims that no substantial change of circumstances was demonstrated to support the reduction, that the circuit court abused its discretion by requiring only $100 per month to be paid on the child support arrears, and that the circuit court failed to consider her motion for attorney's fees. We affirm the reduction of support but reverse and remand for further consideration of the refusal to retroactively modify arrears. Because the existing arrearage may be modified on remand, we also direct the court to exercise its discretion in determining the payment on support arrears and to consider Darlene's request for attorney's fees.

The parties were divorced in 1981. Robert's gross annual income was approximately $210,000 and he was ordered to pay $4000 per month in family support for Darlene and their three minor children. An order modifying support to $2000 per month for child support and $350 per month for maintenance was entered on March 28, 1986. [FN1]

In June 1989, the parties' second son graduated from high school at age eighteen. Robert again moved the court for a reduction in support based on the son's emancipation and a decrease in his income due to changes in federal income tax laws. [FN2] By an order of June 6, 1990, child support was reduced to $800 per month and maintenance was set at $200 per month. The reduction was effective January 1, 1990. Robert was found to be $9310 in arrears because he had unilaterally reduced his child support payments to $670 per month during the pendency of his motion, from June 16, 1989 to April 16, 1990.

Upon consideration of the record, it was unclear whether the order reducing support was based on considerations which had previously resulted in a reduction of child support. [FN3] By an order of June 27, 1991, we remanded the record to the circuit court for the sole purpose of having the court clarify the reasons for the reduction. See sec. 808.075(6), Stats. The circuit court entered its "Findings and Decision on Remand for Clarification" on July 24, 1991. We retained jurisdiction of the appeal and now address the issues raised by the parties.

We first address Darlene's contention that a substantial change of circumstances was not demonstrated. The parent seeking the modification has the burden of establishing that there has been a substantial change. Long v. Wasielewski, 147 Wis.2d 57, 60, 432 N.W.2d 615, 616 (Ct.App.1988). The "before" and "after" circumstances and whether a change has occurred are facts which we review under a clearly erroneous test. Harris v. Harris, 141 Wis.2d 569, 574, 415 N.W.2d 586, 588-89 (Ct.App.1987). Because the determination that the change is substantial is a legal conclusion intertwined with the factual findings, we give weight to the circuit court's conclusion, but that decision is not controlling. Id. at 574, 415 N.W.2d at 589.

***2

(Cite as: 164 Wis.2d 432, 476 N.W.2d 25, 1991 WL 198132, ***2 (Wis.App.))

Although we were originally concerned that the circuit court had twice relied on certain financial changes in considering support, the clarification decision allays those concerns. The reduction was based on the emancipation of the parties' second child. The emancipation of a child is, as a matter of law, a change in circumstances warranting reconsideration of support. See Resong v. Vier, 157 Wis.2d 382, 389, 459 N.W.2d 591, 594 (Ct.App.1990).

The circuit court also relied on a substantial change in Robert's business circumstances. The court found Robert to be financially overextended and suffering because of the termination of his professional association with his brother, the reduction of his client base by two-thirds, the loss of up to 42% of his gross income, and the existence of a tax lien and debt to his brother. These findings are supported by the testimony summarized in the court's clarification decision and are not clearly erroneous. The business changes do appear to be substantial. We conclude a substantial change of circumstances existed to support the reduction.

We turn to Robert's claim that the support order should have been retroactively modified to the date he filed his motion for a reduction. Robert's child support arrears would have been $910, rather than $9310, if the order had been made retroactive. The reduction of support arrears is a matter within the sound discretion of the circuit court, and arrears are to be canceled only upon cause or justification. Burger v. Burger, 144 Wis.2d 514, 526, 424 N.W.2d 691, 696 (1988).

It appears that the circuit court refused to consider any reduction of arrears because Robert had unilaterally reduced his support payment while the motion was pending. Indeed, the record only hints at the circuit court's rationale for making the reduction retroactive to January 1, 1990. The record does not reflect the proper exercise of discretion. Under the facts here, the mere "self-help" reduction is not sufficient reason to refuse a retroactive reduction. Robert filed his motion for a support reduction the same month that his second child became emancipated and may have fallen victim to the court's calendar in obtaining an ultimate ruling. Therefore, we remand this issue to the circuit court for the exercise of its discretion and consideration of Robert's claim for a reduction of his support arrears. [FN4]

Darlene contends that the circuit court failed to make any findings when ordering Robert to pay $100 a month on the support arrears. She claims that the payment will not keep pace with the accruing interest. It does appear that the circuit court failed to exercise its discretion when determining the amount to be paid on the arrears. However, the amount of the arrears and, consequently, the appropriate payment may change upon the exercise of the circuit court's discretion as to Robert's claim for a retroactive modification. Therefore, we remand this issue to the circuit court for further consideration.

***3

(Cite as: 164 Wis.2d 432, 476 N.W.2d 25, 1991 WL 198132, ***3 (Wis.App.))

Darlene argues that the circuit court failed to address her motion for attorney's fees. There was no denial of Darlene's motion. It appears to have been overlooked. On remand, the circuit court will have an opportunity to address the motion.

No costs to either party.

By the Court.--Order affirmed in part; reversed in part and cause remanded.

This opinion will not be published. Rule 809.23(1)(b)5, Stats.

FN1. The order is not of record here. The parties do not disagree on the modification made.

FN2. In 1988 Robert had unsuccessfully moved the court for a reduction in child support and maintenance.

FN3. The 1986 order reducing support contained the parties' stipulation that the forthcoming emancipation of the parties' oldest son was not to be considered a change of circumstance for a subsequent reduction. Yet the circuit court mentioned the oldest child's emancipation in its decision reducing support. Further, the court noted that Robert has another child for whom he pays support and that his business had taken a turn for the worse due to a change in tax laws. The circuit court acknowledged that these factors had been considered before. The record of the prior modification proceedings in 1986 and 1988 were not before us and we were unable to determine what, if any, consideration had previously been given to the factors relied upon here.

FN4. Robert suggests that just cause existed for the retroactive reduction of his child support arrears because the required payment of support beyond the age of majority is extrajudicial and a nullity. O'Neill v. O'Neill, 17 Wis.2d 406, 408, 117 N.W.2d 267, 269 (1962). We recognize that this was not an instance where child support was differentiated per child and it cannot be easily calculated what amount, if any, was support for the emancipated child. Cf. Poehnelt v. Poehnelt, 94 Wis.2d 640, 289 N.W.2d 296 (1980). That alone does not preclude a finding as to what amount of

the support reduction is attributable to the emancipation of the second child and reducing the arrears based on that finding.

Wis.App.,1991.

Beaumont v. Beaumont

Luna case: child support, arrears, modification

In re the MARRIAGE OF Julia LUNA, Petitioner,

STATE of Wisconsin, Appellant,

Ramiro LUNA, Jr., Respondent-Respondent. [FN<<dagger>>]

FN<<dagger>> Petition for review denied.

No. 92-1753.

Court of Appeals of Wisconsin.

Submitted on Briefs April 6, 1993.

Opinion Released March 1, 1994.

Opinion Filed March 1, 1994.

Father moved for review of court commissioner's order increasing his child support obligations by ordering that he pay $465 per month, plus $40 per month on arrears of $17,000. The Circuit Court, Milwaukee County, Dominic S. Amato, J., ruled that father's income should be treated as marital property, and held in trust fund for benefit of children until such time as they no longer received benefits through grant of Aid to Families with Dependent Children (AFDC). State appealed. The Court of Appeals, Schudson, J., held that trial court had no authority to treat noncustodial parent's postdivorce income as marital property and order child support payments into trust fund for children to defeat state's statutory right to reimbursement of AFDC payments.

Reversed and remanded.

In re Marriage of Luna

[1] KeyCite this headnote

356A SOCIAL SECURITY AND PUBLIC WELFARE

356AV Family, Parental, and Child Welfare Assistance

356AV(A) Aid to Families with Dependent Children

356Ak194.19 k. Set-off and recoupment; liens.

Wis.App.,1994.

Although modification of child support is within discretion of trial court and will not be overturned unless court erroneously exercises that discretion, court erroneously exercises that discretion where its modification deprives the state of reimbursement for AFDC payments to custodial spouse. W.S.A. 49.19(4)(h)1 b.

In re Marriage of Luna

[2] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k248 Disposition of Property

134k252.1 k. Discretion of court.

Wis.App.,1994.

Trial court abused its discretion in proceeding to modify child support in attempting to circumvent state's statutory right to reimbursement for AFDC payments to custodial parent by setting child support at zero, classifying an amount equivalent to the child support as "marital property," and ordering father to pay that amount into a trust for benefit of children until such time as they no longer received benefits through AFDC. W.S.A. 49.19(4)(h)1 b, 767.32(2).

In re Marriage of Luna

[2] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k308 k. Order, judgment, or decree as to support.

Wis.App.,1994.

In re Marriage of Luna

[2] KeyCite this headnote

356A SOCIAL SECURITY AND PUBLIC WELFARE

356AV Family, Parental, and Child Welfare Assistance

356AV(A) Aid to Families with Dependent Children

356Ak194.19 k. Set-off and recoupment; liens.

Wis.App.,1994.

In re Marriage of Luna

[3] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k248 Disposition of Property

134k252.3 Particular Property or Interests and Mode of Allocation

134k252.3(3) k. Separate property and property acquired before marriage.

Wis.App.,1994.

Trial court in proceeding to modify child support had no authority to classify noncustodial parent's postdivorce income as "marital property" under statute authorizing court to divide property of parties to divorce, as marital property is to be divided at time of divorce or legal separation, and noncustodial parent's income earned years after divorce action could not retroactively be labeled "marital property." W.S.A. 766.31, 767.255.

In re Marriage of Luna

[3] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k248 Disposition of Property

134k253 Proceedings for Division or Assignment

134k253(1) k. In general.

Wis.App.,1994.

**480

(Cite as: 183 Wis.2d 20, 515 N.W.2d 480, **480)

*22

(Cite as: 183 Wis.2d 20, *22, 515 N.W.2d 480, **480)

For the appellant, State of Wis., the cause was submitted on the briefs of Milwaukee **481

(Cite as: 183 Wis.2d 20, *22, 515 N.W.2d 480, **481)

County Dept. of Child Support Enforcement, with Faye Simon and Theodore Spyres of Milwaukee.

The respondent did not file a brief.

For the minor children the cause was submitted on the briefs of Halling & Cayo, S.C., guardian ad litem for the minor children, with Patricia L. Grove of Milwaukee.

Before WEDEMEYER, P.J., and SULLIVAN and SCHUDSON, JJ.

*23

(Cite as: 183 Wis.2d 20, *23, 515 N.W.2d 480, **481)

SCHUDSON, Judge.

The State of Wisconsin appeals from the trial court order placing Ramiro Luna, Jr.'s child support payments and arrearages into a trust fund in which the money will be held for the benefit of his and Julia Luna's three children until such time as they no longer receive benefits through a grant of Aid to Families with Dependent Children. The issue is whether the trial court has the authority to treat the non-custodial parent's post-divorce income as marital property and order the child support payments into a trust fund for the children where the custodial parent receives AFDC benefits. We reverse.

The basic facts are not in dispute. Ramiro and Julia Luna divorced in 1987. In 1992, Mr. Luna sought a reduction in his child support payments. The family court commissioner, however, increased Mr. Luna's child support obligations, based on his income, ordering that he pay $465 per month, plus $40 per month on arrears of $17,000.

Mr. Luna moved the trial court for a review of the court commissioner's order. The trial court found no flaw in the amount determined by the commissioner. The trial court ruled, however, that Mr. Luna's income should be treated as marital property under § 767.255, Stats., [FN1] and held in a trust fund "so the State doesn't get it...." The court further ruled that Ms. Luna could *24

(Cite as: 183 Wis.2d 20, *24, 515 N.W.2d 480, **481)

apply to the court for disbursement of the funds "at such time as she no longer receives AFDC." [FN2]

FN1. Section 767.255, Stats., provides, in part, "[u]pon every judgment of annulment, divorce or legal separation, or in rendering a judgment in an action under s. 767.02(1)(h) [action for property division], the court shall divide the property of the parties and divest and transfer the title of any such property accordingly."

FN2. There was some variance between the trial court's oral ruling and its written order that stated, in part:

THE COURT FINDS:

1. The Respondent has the ability to comply with the payment of the current order of $465.00 per month for child support and $40.00 per month toward arrears;

2. That, pursuant to § 767.255, Wis.Stats., the Respondent's income can be treated as marital property, and therefore what has been determined to be child support payments, can be converted into a trust fund with the money paid into the fund held for the benefit of the children at such time as they no longer receive AFDC benefits.

NOW THEREFORE THE COURT ORDERS:

1. That child support is set at zero.

2. That repayment of existing child support arrears is set at zero.

3. That the Respondent shall continue to make the previously ordered payments of $505.00 per month to the Clerk of the Circuit Court. Said payments shall be placed in a trust fund for the children of this marriage.

4. That said trust funds shall only be released to the Petitioner at such time as she is no longer receiving AFDC and petitions the Court for the release of said funds.

The State argues that the trial court erred by: (1) reducing the child support and arrears to zero; (2) converting Mr. Luna's post-divorce income into marital property, in an amount equal to that ordered as support by the family court commissioner; and (3) directing Mr. Luna to pay that amount to a child support trust, thereby denying the State its right to seek reimbursement for AFDC payments to Ms. Luna. The State contends that the child support payments and *25

(Cite as: 183 Wis.2d 20, *25, 515 N.W.2d 480, **481)

arrears due to Ms. Luna are owed to the State pursuant to § 49.19(4)(h)1.b, Stats., which states:

Except as provided under sub. (5)(a)1m, when any person applies for or receives aid under this section, any right of the parent or any dependent child to support or maintenance from any other person, including any right to unpaid amounts accrued at the time of application and any right to amounts accruing during the time aid is paid under this section, is assigned to the state.

(Emphasis added.) The State is correct.

[1] The statute expressly assigns to the State any right to child support that an **482

(Cite as: 183 Wis.2d 20, *25, 515 N.W.2d 480, **482)

AFDC recipient has under the statute. See In re Lachelle A.C., 180 Wis.2d 708, 713-714, 510 N.W.2d 718, 720 (Ct.App.1993). Although a modification of child support is within the discretion of the trial court and will not be overturned unless the trial court erroneously exercised that discretion, Burger v. Burger, 144 Wis.2d 514, 523, 424 N.W.2d 691, 695 (1988), a trial court does erroneously exercise its discretion where it deprives the State of reimbursement for payments, pursuant to § 49.19(4)(h) 1.b, Stats. See Lachelle A.C., 180 Wis.2d at 716, 510 N.W.2d at 721. See also Resong v. Vier, 157 Wis.2d 382, 387, 459 N.W.2d 591, 593 (Ct.App.1990) (where exercise of discretion is based upon error of law, trial court acts beyond limits of discretion and decision cannot stand).

In State v. Halverson, 162 Wis.2d 453, 470 N.W.2d 313 (Ct.App.1991), the trial court refused to increase the non-custodial parent's support obligation because most of it would reimburse the State for AFDC payments and would not benefit the family. *26

(Cite as: 183 Wis.2d 20, *26, 515 N.W.2d 480, **482)

Id. at 455, 470 N.W.2d at 314-315. We reversed, concluding that "[t]he court's refusal [to increase the support] negates the legislative plan to require parents to support their children ... [because the statutes] allow the state to recover from the noncustodial parent child support assistance which the state has paid or will pay because the noncustodial parent is not paying his or her appropriate child support." Id. at 457, 470 N.W.2d at 315.

In Lachelle A.C., which we decided after the trial court's order in this case, we reversed a trial court order placing child support arrearages into a trust for the child because she and her mother received AFDC during the time when past support accrued. We explained that although a trial court has discretion to set up a trust for the benefit of children, [FN3] it cannot do so to deprive the State of reimbursement for AFDC payments. See Lachelle A.C., 180 Wis.2d at 714-716, 510 N.W.2d at 720-721. Thus, we concluded that "[t]he trial court had no authority to order that the past support be paid into [a] trust. The right to that support no longer belongs to [the AFDC recipient]. It has by legislative mandate been assigned to the State." Id. at 713-714, 510 N.W.2d at 720. [FN4]

FN3. Section 767.25(2), Stats., provides that "[t]he court may protect and promote the best interests of the minor children by setting aside a portion of the child support which either party is ordered to pay in a separate fund or trust for the support, education and welfare of such children."

FN4. We recently addressed the issue of whether the trial court could allow equitable credit for past support paid where the State seeks reimbursement of AFDC payments. In re Cheyenne D.L., 181 Wis.2d 868, 512 N.W.2d 522 (Ct.App.1993). In Cheyenne D.L., the putative father was allowed a credit for past support obligations because he was found to have supported the mother and the child during the time that past support was owed. Even though the mother received AFDC during that period and the State was entitled to reimbursement, we affirmed the trial court's conclusion that it would be unfair to require that support be paid twice for the same period.

In distinguishing Cheyenne D.L. from Halverson, Lachelle A.C. and the present case, we note that under § 49.19(4)(h)1.b, Stats., the

State has a right to "unpaid amounts accrued at the time of application [for AFDC] and any right to amounts accruing during the time aid is paid under this section." (Emphasis added.) In Cheyenne D.L., the trial court found that past support had actually been paid and the court allowed a credit for those amounts. In the other cases, however, the support was unpaid and the issues concerned (1) whether to order that the support be paid, because to do so would reimburse the State for AFDC, or (2) whether the unpaid support could be ordered into a trust, thus avoiding reimbursement to the State.

*27

(Cite as: 183 Wis.2d 20, *27, 515 N.W.2d 480, **482)

[2] In the present case, the trial court apparently attempted to circumvent the State's statutory right to reimbursement by setting child support at zero, classifying an amount equivalent to the child support as "marital property," and ordering the payments into a trust. Section 767.32(2), Stats., however, mandates that the court apply the percentage standard when revising a judgment or order with respect to child support payments. [FN5] The trial court may deviate from **483

(Cite as: 183 Wis.2d 20, *27, 515 N.W.2d 480, **483)

that standard upon considering the factors listed in *28

(Cite as: 183 Wis.2d 20, *28, 515 N.W.2d 480, **483)

§ 767.25(1m), Stats., [FN6] and finding by the greater weight of the credible evidence that the percentage standard is unfair to the child or to any of the parties. Applying the statutory standard and factors, the family court commissioner set Mr. Luna's child support at $465.00 per month, plus $40.00 per month for existing arrears.

FN5. Section 767.32(2), Stats., states that if the court revises a child support judgment or order, "it shall do so by using the percentage standard established by the department of health and social services...." That provision is subject to (2m), which states: "Upon request by a party, the court may modify the amount of revised child support payments determined under sub. (2) if, after considering the factors listed in s. 767.25(1m) or 767.51(5), as appropriate, the court finds, by the greater weight of the credible evidence, that the use of the percentage standard is unfair to the child or to any of the parties."

FN6. Among the factors listed in § 767.25(1m), Stats., are: the financial resources of the child or of both parents; the amount of maintenance received by either party; the educational needs of the child; the physical, mental and emotional needs of child; the earning capacity of each parent; and the best interests of the child.

Overturning the family court commissioner's decision and setting child support at zero, the trial court failed to make any findings or apply the standard required under the statute for such a modification. Indeed, the only reason the trial court gave for its decision was "so the State doesn't get it, so it goes into a fund for the children." We conclude that in this respect, also, the trial court erroneously exercised its discretion based on its failure to apply the law.

[3] Additionally, we conclude that the trial court had no authority to classify Mr. Luna's post-divorce income as "marital property" under § 767.255, Stats. The statute provides that "[u]pon every judgment of annulment, divorce or legal separation, or in rendering a judgment in an action under s. 767.02(1)(h) [for property division], the court shall divide the property of the parties and divest and transfer the title of any such property accordingly." (Emphasis added.) A clear reading of this statute indicates that marital property is to be divided at the time of divorce or legal separation. A *29

(Cite as: 183 Wis.2d 20, *29, 515 N.W.2d 480, **483)

non-custodial parent's income earned years after the divorce action cannot retroactively be labeled marital property under § 766.31, Stats. [FN7] See § 767.32(1), Stats. ("nor shall the provisions of a judgment with respect to final division of property be subject to revision or modification").

FN7. Section 766.31(1), Stats., "Classification of property of spouses," provides that "[a]ll property of spouses is marital property...." (Emphasis added.) Once the parties are divorced, they are

no longer "spouses" and their property is not subject to this section.

The Guardian ad Litem argues that since the action was originally a divorce action, the trial court can consider Mr. Luna's income as property under § 767.255, Stats. The Guardian ad Litem cites several cases in which she argues future income was treated as property at the time of divorce for purposes of valuation and division between the spouses. See, e.g., Haugan v. Haugan, 117 Wis.2d 200, 343 N.W.2d 796 (1984) (future earnings of student spouse to be considered in determining property division and maintenance award for non-student spouse who put student-spouse through school); Bloomer v. Bloomer, 84 Wis.2d 124, 267 N.W.2d 235 (1978) (pension benefits characterized as property at the time of divorce); Krebs v. Krebs, 148 Wis.2d 51, 435 N.W.2d 240 (1989) (although entire property division was subject to § 767.255, injured spouse presumptuously entitled to personal injury proceeds, which were part of a structured settlement to receive income over a term of years). The distinction between those cases and this one, however, is that in this case post-divorce future income was not taken into consideration at the time of the divorce, pursuant to § 767.255.

*30

(Cite as: 183 Wis.2d 20, *30, 515 N.W.2d 480, **483)

Finally, the Guardian ad Litem argues that not permitting the creation of a trust in these circumstances violates the children's equal protection rights under the State and Federal Constitutions. Lachelle A.C. directly addressed this argument and concluded that equal protection was not violated because "[t]he State has a legitimate interest in conserving the limited funds it has available to provide for all needy children. The clear objective of the statute--to allow the State to recoup AFDC funds where possible--is reasonably related to the legislature's need to conserve those limited funds." Lachelle A.C., 180 Wis.2d at 715, 510 N.W.2d at 721.

The trial court erroneously exercised discretion by setting child support at zero, converting post-divorce income into marital property, and ordering that income into a trust. Accordingly, we reverse the trial **484

(Cite as: 183 Wis.2d 20, *30, 515 N.W.2d 480, **484)

court order and remand for further proceedings consistent with this opinion.

Order reversed.

Peterson case: income, child support modification

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

(The decision of the Court is referenced in the North Western Reporter in a table captioned "Wisconsin Court of Appeals Table of Unpublished Opinions".)

In re the Marriage of Joanne S. PETERSON, Petitioner-Appellant,

Larry A. PETERSON, Respondent-Respondent.

No. 91-2047.

Court of Appeals of Wisconsin.

Dec. 16, 1992.

Before NETTESHEIM, P.J., and ANDERSON and SUNDBY, JJ.

PER CURIAM

***1

(Cite as: 173 Wis.2d 304, 498 N.W.2d 912, 1992 WL 367488, ***1 (Wis.App.))

Joanne Peterson appeals from an order denying her motion for maintenance, to increase child support, for a money judgment on child support arrears, and for attorney's fees. We conclude that the trial court's finding regarding Larry Peterson's income is clearly erroneous. We reverse that portion of the order increasing child support by only $154 per month, denying maintenance and awarding only part of Joanne's attorney's fees. We remand for further proceedings on those issues. Because we conclude that the provision regarding the child support arrears is a proper use of the trial court's discretion, we affirm that portion of the order.

Joanne and Larry were divorced on June 16, 1988 after twenty-two years of marriage. Larry was required to pay $700 per month child support for the two minor children in Joanne's custody. Maintenance for Joanne was left open for further review because Larry's income, as represented at the time of the divorce, did not justify an award of maintenance.

In 1990, Joanne moved the court for an increase in child support to $1500 a month, an award of maintenance, a money judgment for child support arrears in the amount of $52,097, an order compelling Larry to liquidate his interest in seaside property in Haiti and apply the proceeds toward the arrears, and for attorney's fees. Inasmuch as Larry is self-employed as a consultant, keeps no records of his income or expenses, has no checking or bank accounts and does not timely file income tax returns, Joanne attempted to prove Larry's actual income by tracing and evaluating his expenditures. Her mode of proof is akin to the net worth theory frequently employed by the Internal Revenue Service to calculate the income tax liability of taxpayers who have inadequate records. See Holland v. United States, 348 U.S. 121, 125, 75 S.Ct. 127, ---, 99 L.Ed. 150 (1954). Joanne's proof consisted of over two hundred cashier's checks which Larry and his second wife used to pay bills and garner their money.

The trial court found that there had been a substantial change in circumstances since the time of divorce. It found that Larry's income had increased, that his ability to earn income was greater, and that given the availability of bank funds Larry was no longer on shaky financial grounds and had the ability to pay debts. The trial court acknowledged that Larry's conduct is designed to make it difficult to determine his exact income and assets for the purpose of setting support. It noted several times that it did not believe Larry and that his self-generated financial declarations had limited credibility.

The trial court imputed an additional $10,000 to Larry's income and found his yearly income to be $41,000. It consequentially increased child support by $154 a month. It denied Joanne's request for an additional increase in child support and maintenance because it found that Larry does not have the ability to pay. It ordered Larry to pay $4000 on the child support arrearage by the end of 1991 and gave Joanne a lien upon any real estate Larry might own for the child support arrears. Larry was also required to make a $1500 contribution to Joanne's attorney's fees.

***2

(Cite as: 173 Wis.2d 304, 498 N.W.2d 912, 1992 WL 367488, ***2 (Wis.App.))

Having found that a substantial change in circumstances occurred, it was within the trial court's discretion to modify or refuse to modify the child support award. Long v. Wasielewski, 147 Wis.2d 57, 60, 432 N.W.2d 615, 616 (Ct.App.1988). The same is true with respect to maintenance. Discretion is properly exercised if the record reflects that the court considered the needs of the custodial parent and children, and the ability of the noncustodial parent to pay. Id. at 60-61, 432 N.W.2d at 616. A misuse of discretion occurs when the trial court fails to consider the proper factors or makes a mistake with respect to the facts upon which the determination is based. Id. at 61, 432 N.W.2d at 616.

Here the dispositive findings are that Larry's income is only $41,000 and that he does not have the ability to pay a greater amount of child support or maintenance. A trial court's income determination is a finding of fact which we will not set aside unless clearly erroneous. DeLaMatter v. DeLaMatter, 151 Wis.2d 576, 588, 445 N.W.2d 676, 681 (Ct.App.1989). This is one of the rare instances in which we conclude that the trial court's findings are clearly erroneous.

It is not sufficient for reversal of the trial court's findings that there is evidence to support a contrary finding. Fidelity & Deposit Co. v. First Nat'l Bank, 98 Wis.2d 474, 484, 297 N.W.2d 46, 51 (Ct.App.1980). To command a reversal, evidence in support of a contrary finding must itself constitute the great weight and clear preponderance of the evidence. Id. at 484-85, 297 N.W.2d at 51. This is true of the evidence Joanne produced in support of her requests for child support and maintenance.

Joanne produced over two hundred cashier's checks which reflected some of Larry's expenditures for the last months of 1989 and the first ten months of 1990 (up to the date of the first evidentiary hearing on her motion). She categorized the expenses, included reasonable amounts for household expenses, and imputed certain expenses not exhibited in the checks but testified to by Larry or his wife, such as loan payments, gas, fifteen trips to Haiti, life insurance, rent and live-in help. For example, Joanne demonstrated that Larry's car payments for four automobiles used by himself and his family were $1454.18 a month. Joanne's aggregation excluded sixteen cashier's checks written to Larry or his wife in denominations of $1000, $5000, $6000, $9000 and $10,000 because Larry testified that it was possible that those checks had been cashed and recycled into other checks used to pay bills. The sum of the figures demonstrated that Larry spent an average of $12,655 a month for a twenty-two month period and a minimum of $9104 a month. In addition to the monthly expenditures, Joanne proved that Larry had paid $80,000 towards acquiring an interest in property in Haiti. At one point Larry obtained a $22,000 check to buy an airplane but he ultimately decided to cancel the purchase.

***3

(Cite as: 173 Wis.2d 304, 498 N.W.2d 912, 1992 WL 367488, ***3 (Wis.App.))

We acknowledge that the trial court's findings are based, in part, on a credibility determination and that due regard must be given to the opportunity of the trial court to judge the credibility of the witnesses. DeLaMatter, 151 Wis.2d at 583, 445 N.W.2d at 679. However, the trial court found Larry to be totally incredible. Larry's testimony was that he acquired funds through innumerable loans, wedding gifts, and loans from family members. There was no factual underpinning for Larry's explanation of his lifestyle. On the other hand, Joanne presented overwhelming demonstrative evidence that Larry was living well beyond the $31,000 income reported on his tax return. Moreover, her calculations were based only on the expenditures Joanne was able to trace through the checks. Larry's strategy to hide his income and assets undoubtedly included numerous cash expenditures as well.

The trial court explained that Joanne's assumptions "are built on sand." Yet the figures she used for loan payments, rent, gas and utilities were supported by the testimony. Her figures for food and clothing were based on her own experience in providing for her family and were not unreasonable, especially in the absence of any evidence to the contrary. See Taglianetti v. United States, 398 F.2d 558, 568 (1st Cir.1968), aff'd, 394 U.S. 316, 89 S.Ct. 1099, 22 L.Ed.2d 302 (1969) (where the government produces evidence of expenditures which are particularly within the knowledge of the defendant, the burden of coming forward with more precise information shifts to the defendant).

The trial court found that Larry lived on loans and gifts. Implicitly the trial court relied on the loans and gifts as sources covering Larry's monthly expenses. Larry produced a handwritten list of loans and other funds, including the sale of some assets. Other than the $2000 gift from his mother- in-law and $2300 in wedding gifts, the funds listed on Larry's exhibit did not generate enough cash to support the monthly expenditures Joanne demonstrated.

The car loans did not generate any cash for monthly expenses. Larry testified that one of the bank loans and the loan from his brother went directly into the Haiti land deal. The $5000 loan from Larry's in-laws was used as a down payment on a residential land contract. Many of the assets sold by Larry were sold prior to the divorce and Larry's representation of values was impeached as inflated. The $50,000 he received for the sale of his customer list also went directly to the Haiti land deal. We also note that Larry's low business income resulted from deductions which did not require cash disbursements, such as the residential office proration.

Even assuming gifts and loans were spent on monthly expenses, the trial court failed to exercise its discretion in concluding that they did not provide a regular stream of income. The trial court found that Larry, for whatever reason, had an open line of credit with his bank and did not have to provide financial security to obtain money from the bank. Larry admitted that he got many gifts and they appeared to be frequent in occurrence. Gifts may be considered as one of the "intertwined circumstances" used in measuring a husband's ability to pay. Harris v. Harris, 141 Wis.2d 569, 582, 415 N.W.2d 586, 592 (Ct.App.1987). The effect of a gift may be evaluated by its apparent or ulterior purpose, its source, and the probability of it recurring in a regular fashion. Id. The trial court failed to explain why the loans and gifts, which were regularly available to Larry, were to be ignored as a source of funds from which child support or maintenance could be paid. This is a misuse of discretion. See Schinner v. Schinner, 143 Wis.2d 81, 104, 420 N.W.2d 381, 390 (Ct.App.1988).

***4

(Cite as: 173 Wis.2d 304, 498 N.W.2d 912, 1992 WL 367488, ***4 (Wis.App.))

We conclude that the trial court's finding that Larry's income is only $41,000 a year is clearly erroneous. The same is true of its finding that Larry does not have the ability to pay more in child support or anything in maintenance. Joanne's evidence supports a finding that Larry's income is in excess of $120,000 a year. The $12,655 a month average expenditure supports a monthly child support award of $3163 pursuant to the support guidelines. Reliance on the net worth or expenditures mode of proof is appropriate in a case of this nature. Indeed, it appears that the trial court applied that theory in part. However, in light of the trial court's rejection of Larry's financial declarations, we are left with the nagging question as to why only $10,000 additional income was imputed to Larry.

Reversal is required even though the trial court was not convinced that Joanne had proved a need for $1500 a month child support or that her monthly budget supported a need for maintenance. Our reading of the trial court's decision leads us to conclude that those findings were secondary to the finding that Larry does not have the ability to pay. Further, Joanne testified that her monthly expenses for the children increased $500, and even more with the addition of a teenage driver. The trial court also failed to consider Joanne's testimony that despite being able to meet her monthly budget, her lifestyle is greatly reduced from that enjoyed during the marriage. She lives in a much smaller house in a less desirable location. Joanne is unable to provide the children with opportunities that they otherwise would have had if the marriage had continued.

We reverse that portion of the order denying Joanne's request for greater child support and maintenance. The issues are remanded to the trial court for new findings and such further proceedings deemed necessary, including the taking of additional evidence. We sympathize with the formidable task faced by the trial court as a result of Larry's financial shenanigans. However, a family court is to "utilize its creative talents to monitor and control such deceptive tactics." Schinner, 143 Wis.2d at 105, 420 N.W.2d at 390.

Joanne asks that upon reversal the case be reassigned to a new judge. Judicial assignment is not within the authority of this court. Joanne has a statutory right of substitution under sec. 801.58(7), Stats. If she timely files a request for substitution, the case is properly reassigned. Our reversal is not merely for a clarification of the judgment but for new findings and possibly a new evidentiary hearing. Substitution would not be foreclosed by the Bacon-Bahr rule which facilitates efficient allocation of judicial resources by not requiring a new judge to supply the rationale for the discretionary decisions of another judge. See State ex rel. Parrish v. Circuit Ct., 148 Wis.2d 700, 704, 706, 436 N.W.2d 608, 610, 611 (1989).

We turn to the issue of Larry's contribution to Joanne's attorney's fees. The trial court awarded Joanne a partial contribution on the ground that Larry's tactics generated her fees. It denied contribution on the remaining portion of her fees on the ground that her demands for child support and maintenance were unreasonable and that she had "overtried" her position. See Ondrasek v. Ondrasek, 126 Wis.2d 469, 484, 377 N.W.2d 190, 196 (Ct.App.1985). From our conclusion that Joanne's proof overwhelmingly supports her requests, it follows that she has not "overtried" her case. Therefore, we confirm the award of $1500 in attorney's fees but remand the issue of an additional contribution towards Joanne's attorney's fees for further consideration.

***5

(Cite as: 173 Wis.2d 304, 498 N.W.2d 912, 1992 WL 367488, ***5 (Wis.App.))

The remaining issue is the trial court's refusal to reduce the full amount of the child support arrears to a money judgment and to order liquidation of Larry's interest in the Haiti property. Such an order is within the discretion of the trial court and will be affirmed if there is any reasonable basis for it. See Overson v. Overson, 140 Wis.2d 752, 757, 412 N.W.2d 896, 898 (Ct.App.1987).

The trial court proceeded under sec. 767.30, Stats., in what it determined was a two-step process. It explained that it first had to order a lien on property or require Larry to give security for the arrears under sec. 767.30(2). The trial court then explained that Larry had to disobey that order before the money judgment could be granted under sec. 767.30(3)(c). Joanne disagrees with the trial court's reading of sec. 767.30. However, we need not decide the correctness of the trial court's interpretation.

The trial court, in the exercise of its discretion, concluded that a money judgment was not appropriate at this time because Larry was not under an order to make payments on the arrears which accrued under the temporary order. Section 767.30, Stats., gives the trial court options for enforcing support orders. We cannot conclude that the option chosen was unreasonable. Indeed, the trial court tried to impress upon Larry the importance of paying the arrears. It left open the possibility of a money judgment in the future. The request to liquidate Larry's interest in the Haiti property is extraordinary. The trial court did not misuse its discretion by denying that form of relief.

Order affirmed in part; reversed in part and cause remanded.

Wis.App.,1992.

In re the Marriage of Joanne S. PETERSON, Petitioner-Appellant, v. Larry A. PETERSON, Respondent-Respondent.

Niemi case: interest, child support, credit for payments

DOUGLAS COUNTY CHILD SUPPORT ENFORCEMENT UNIT FOR Dianne NIEMI, Petitioner-

Appellant,

Robert P. FISHER, Respondent-Respondent. [FN<<dagger>>]

FN<<dagger>> Petition for Review Denied.

No. 95-1960.

Court of Appeals of Wisconsin.

Submitted on Briefs Feb. 5, 1996.

Opinion Released March 12, 1996.

Opinion Filed March 12, 1996.

Some 26 years after husband began accumulating arrearage, wife moved for judgment on arrearages. After remand, 517 N.W.2d 700, the Circuit Court, Douglas County, Joseph A. McDonald, J., credited husband's arrearages with payments he allegedly made directly to wife. Wife appealed. The Court of Appeals, Myse, J,. held that: (1) circuit court was without power to grant husband credit against child support arrearages for payments he made directly to wife, rather than to clerk of court as required by divorce judgment, and (2) circuit court had no discretion in assessing interest on child support arrearages.

Reversed and remanded.

Cane, P.J., dissented with separate opinion.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[1] KeyCite this headnote

30 APPEAL AND ERROR

30XVI Review

30XVI(A) Scope, Standards, and Extent, in General

30k838 Questions Considered

30k842 Review Dependent on Whether Questions Are of Law or of Fact

30k842(1) k. In general.

Wis.App.,1996.

Questions of law are reviewed without deference to trial court.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[2] KeyCite this headnote

361 STATUTES

361VI Construction and Operation

361VI(A) General Rules of Construction

361k180 Intention of Legislature

361k181 In General

361k181(1) k. In general.

Wis.App.,1996.

Court's purpose in interpreting statute is to ascertain and give effect to legislature's intent.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[3] KeyCite this headnote

361 STATUTES

361VI Construction and Operation

361VI(A) General Rules of Construction

361k187 Meaning of Language

361k190 k. Existence of ambiguity.

Wis.App.,1996.

If language of statute is clear and unambiguous, court gives language its ordinary meaning and applies it to facts of case.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[4] KeyCite this headnote

361 STATUTES

361VI Construction and Operation

361VI(A) General Rules of Construction

361k187 Meaning of Language

361k190 k. Existence of ambiguity.

Wis.App.,1996.

Courts look beyond statutory language only if statute is ambiguous.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[5] KeyCite this headnote

361 STATUTES

361VI Construction and Operation

361VI(A) General Rules of Construction

361k187 Meaning of Language

361k190 k. Existence of ambiguity.

Wis.App.,1996.

Statute is ambiguous if reasonable people could understand it in more than one way.

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[6] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.App.,1996.

Trial court was without power to grant husband credit against child support arrearages for payments he made directly to wife, rather than to clerk of court as required by divorce judgment, though trial court found as matter of fact that husband did make direct payments to wife. W.S.A. 767.32(1m, 1r); 1993 Act. 481, § 9326(2).

Douglas County Child Support Enforcement Unit for Niemi v. Fisher

[7] KeyCite this headnote

219 INTEREST

219I Rights and Liabilities in General

219k21 k. Verdicts, findings, and awards.

Wis.App.,1996.

Trial court had no discretion in assessing interest on child support arrearage, even though it determined awarding interest would be inequitable. W.S.A. 767.25(6).

**802

(Cite as: 200 Wis.2d 807, 547 N.W.2d 801, **802)

*809

(Cite as: 200 Wis.2d 807, *809, 547 N.W.2d 801, **802)

For the petitioner-appellant the cause was submitted on the briefs of Joseph J. Mihalek of Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, Minnesota.

For the respondent-respondent the cause was submitted on the brief of Chris A. Gramstrup, Superior.

Before CANE, P.J., and LaROCQUE and MYSE, JJ.

MYSE, Judge.

Dianne Niemi appeals a judgment ordering Robert P. Fisher to pay $3,000 in arrearages. The trial court determined that while Fisher had arrearages of over $18,000 calculated from the records of the clerk of court, Fisher should be credited for direct payments he made and for the period of time his son lived with him. Niemi contends that: (1) the trial court lacked power to grant Fisher a credit against his arrearages; (2) if the trial court had the power to grant the credit, it erroneously exercised its discretion by requiring Fisher to pay only $3,000 in arrearages; and (3) the trial court erred when it denied Niemi's motion for statutory interest on the arrearages under *810

(Cite as: 200 Wis.2d 807, *810, 547 N.W.2d 801, **802)

§ 767.25(6), Stats. We conclude that the trial court lacked power to grant Fisher a credit against his arrearages and erred when it denied Niemi statutory interest. [FN1] Therefore, we reverse and remand to the trial court with directions to order Fisher to pay the total amount of the arrearages and award interest pursuant to § 767.25(6).

FN1. Because we conclude that the trial court lacked power to grant Fisher a credit against his arrearages, we do not reach the issue whether the trial court erroneously exercised its discretion.

Fisher and Niemi were divorced on July 8, 1966. Niemi was awarded custody of their two minor children, and Fisher was ordered to pay $165 per month for child support through the clerk of court. Fisher failed to make approximately ten years of child support payments through the clerk of court, resulting in arrearages of over $18,000.

In 1992, Niemi moved for judgment on the arrearages. At the hearing, Fisher claimed that he regularly made child support payments directly to Niemi, with some exceptions. He further claimed that he even paid $200 per month for a period of time to make up arrearages. Niemi denied that he made direct payments to her for child support except for the $330 that was noted in the court's payment record for 1970. Niemi claimed that all other direct payments she received from Fisher were for health insurance and medical expenses, which Fisher was required to pay under the divorce judgment. The trial court dismissed her claim for child support arrears concluding that the doctrines of laches, equitable estoppel and waiver precluded **803

(Cite as: 200 Wis.2d 807, *810, 547 N.W.2d 801, **803 )

Niemi from collecting the arrearages. Niemi appealed. We reversed concluding that the defenses of laches, equitable estoppel and waiver did not apply with regard to her delay in *811

(Cite as: 200 Wis.2d 807, *811, 547 N.W.2d 801, **803 )

filing for judgment, and remanded for the trial court to determine whether Fisher made direct payments. [FN2] See Douglas County Child Support Enforcement Unit v. Fisher, 185 Wis.2d 662, 517 N.W.2d 700 (Ct.App.1994).

FN2. Because the parties did not raise the issue in the previous appeal or this appeal, we did not and do not address whether equitable estoppel could apply to the method in which Fisher made payments.

On remand, and after a hearing, the trial court found that Fisher had made direct payments to Niemi and that Fisher should be credited for the direct payments and for the period of time his son came to live with him. Although the exact amount of the direct payments was difficult to determine, the trial court found as a fact that the arrearage was $3,000. The trial court also denied Niemi's motion for statutory interest on the arrearages pursuant to § 767.25(6), Stats.

[1][2][3][4][5] Because each of the issues Niemi raises requires the interpretation of a statute, we are presented with questions of law that we

(Cite as: 200 Wis.2d 807, *811, 547 N.W.2d 801, **803)

review without deference to the trial court. Shorewood v. Steinberg, 174 Wis.2d 191, 201, 496 N.W.2d 57, 61 (1993). Our purpose in interpreting a statute is to ascertain and give effect to the legislature's intent. Id. If the language of the statute is clear and unambiguous, we give the language its ordinary meaning and apply it to the facts of the case. Id. We look beyond the statutory language only if the statute is ambiguous. Id. A statute is ambiguous if reasonable people could understand it in more than one way. Id.

[6] First, Niemi contends that the trial court was without power to grant Fisher a credit toward arrearages. Niemi argues that the Wisconsin Legislature, in *812

(Cite as: 200 Wis.2d 807, *812, 547 N.W.2d 801, **803)

1993 Wis.Act 481, removed the power of the courts to grant credit against child support arrearages, effective June 11, 1994, a few weeks after our previous remand in this case. [FN3]

FN3. We issued our previous decision in this case on May 24, 1994. See Douglas County Child Support Enforcement Unit v. Fisher, 185 Wis.2d 662, 517 N.W.2d 700 (Ct.App.1994). 1993 Wis.Act 481 was published on June 10, 1994, and the relevant portions became effective June 11, 1994.

Prior to 1993 Wis.Act 481, a trial court had discretion to grant equitable credit against arrearages for direct expenditures made for support in a manner other than that prescribed in the order or judgment, if the order or judgment was entered prior to August 1, 1987. See Schulz v. Ystad, 155 Wis.2d 574, 603-04, 456 N.W.2d 312, 323 (1990); Rummel v. Karlin, 167 Wis.2d 400, 402- 03, 481 N.W.2d 695, 697 (Ct.App.1992). While Schulz concluded that § 767.32(1m), Stats., effective August 1, 1987, prohibited credits against arrearages, it also determined that the statute applied prospectively only. Rummel, 167 Wis.2d at 403, 481 N.W.2d at 697.

In 1993 Wis.Act 481, § 118, the legislature amended § 767.32(1m), Stats., to add the underlined language and provide as follows:

In an action under sub. (1) to revise a judgment or order with respect to child support, maintenance payments or family support payments, the court may not revise the amount of child support, maintenance payments or family support payments due, or an amount of arrearages in child support, maintenance payments or family support payments that has accrued, prior to the date that notice of the action is given to the respondent, except to correct previous errors in calculations.

*813

(Cite as: 200 Wis.2d 807, *813, 547 N.W.2d 801, **803)

Further, the legislature created § 767.32(1r), Stats., which provides:

In an action under sub. (1) to revise a judgment or order with respect to child support or family support, the court may not grant credit to the payer against support due prior to the date on which the action is commenced or payments made by the payer on behalf of the child other than payments made to the clerk of court under s. 767.265 or 767.29 or as otherwise ordered by the court.

1993 Wis.Act 481, § 119.

Section 767.32(1m) and (1r), Stats., unambiguously provide that a trial court cannot **804

(Cite as: 200 Wis.2d 807, *813, 547 N.W.2d 801, **804)

grant credit for direct payments for support made in a manner other than that prescribed in the order or judgment providing for support. This is consistent with Schulz and Rummel which conclude that § 767.32(1m) prohibits equitable credits. However, in 1993 Wis.Act 481, the legislature made it clear that the new law applied retroactively. Section 9326(2) of 1993 Wis.Act 481 provides as follows:

Revisions of Child Support Judgments or Orders. The treatment of section 767.32(1m) and (1r) of the statutes first applies to arrearages existing, and child support, maintenance payments and family support payments past due, on the effective date of this subsection [June 11, 1994], regardless of when the judgment or order under which the arrearages accrued, or the child support, maintenance payments or family support payments are owed, was entered. (Emphasis added.)

The trial court's judgment was entered on April 19, 1995. Under the unambiguous language of the Act, as *814

(Cite as: 200 Wis.2d 807, *814, 547 N.W.2d 801, **804)

of June 11, 1994, a court is without discretion to grant credits against arrearages regardless of when the judgment or order was entered. Accordingly, the trial court was without power to grant Fisher credit in its judgment on April 19, 1995.

Fisher, however, argues that Niemi's original motion was filed pursuant to § 767.30(3)(c), Stats., to determine the amount of arrearages and was not an action under § 767.32(1), Stats., to revise a judgment or order. Section 767.32(1m) and (1r) applies only to revisions under § 767.32(1).

It is irrelevant that Niemi's original motion was filed pursuant to § 767.30(3)(c), Stats. Fisher requested that he be given credit for direct payments he made for child support. Section 767.30(3)(c) does not authorize the court to grant credit against arrearages. The court's authority to grant credit is derived from § 767.32(1), Stats. See Schulz. To grant a credit, the court must revise the judgment under § 767.32(1) with respect to the method in which payments are made. Moreover, the only statute dealing specifically with credit is § 767.32(1r), which specifically states that a court cannot grant credit. Accordingly, we conclude that the trial court was acting pursuant to § 767.32(1) when it granted the credit and under § 767.32(1r), the court was without power to do so.

[7] Next, Niemi contends that the trial court erred when it refused to award her interest under § 767.25(6), Stats. Section 767.25(6) states: "A party ordered to pay child support under this section shall pay simple interest at the rate of 1.5% per month on any amount unpaid, commencing the first day of the 2nd month after the month in which the amount was due." (Emphasis added.)

*815

(Cite as: 200 Wis.2d 807, *815, 547 N.W.2d 801, **804)

Under the unambiguous language of § 767.25(6), Stats., a person ordered to pay child support is required to pay interest when child support is overdue. The language makes interest on unpaid child support mandatory. Further, § 767.25(6) applies to arrearages accrued as of its effective date on July 2, 1983, as well as support arrearages accruing after that date. Greenwood v. Greenwood, 129 Wis.2d 388, 392, 385 N.W.2d 213, 215 (Ct.App.1986).

The trial court determined that it would be inequitable to award Niemi interest because she did not timely exercise her rights. However, under § 767.25(6), Stats., the trial court had no discretion in assessing interest on the child support arrearage, even though it determined awarding interest would be inequitable. Because § 767.25(6) requires Fisher to pay interest on his child support arrearage, we conclude the trial court erred when it denied Niemi's motion for interest.

We confess that the results of this case are troublesome because the trial court determined as a fact that Fisher made direct payments. Because § 767.32(1m) and (1r), Stats., precludes recognition of these payments, Niemi is unfairly enriched by double payments. This is a public policy decision made by the legislature, apparently on the belief that the public interest in addressing the problem of nonpayment of child support is best served by limiting payments to those made in accordance with the divorce judgment. This policy fixes arrearages with certainty and facilitates the determination as to who owes arrearages and what amount. Because**805

(Cite as: 200 Wis.2d 807, *815, 547 N.W.2d 801, **805 )

creation of public policy expressed by clear and unambiguous legislation is the exclusive prerogative of the legislative branch of government, the courts *816

(Cite as: 200 Wis.2d 807, *816, 547 N.W.2d 801, **805 )

are powerless to do anything other than apply the policy as determined by the legislature.

Because we conclude that the trial court was without power to grant Fisher a credit against his arrearages and the trial court was required to award Niemi interest on the arrearages, we reverse the judgment and remand to the trial court to order Fisher to pay the total amount of arrearages and award Niemi interest on the arrearages pursuant to § 767.25(6), Stats.

Judgment reversed and cause remanded.

DISSENTING OPINION

CANE, Presiding Judge (dissenting ).

I respectfully dissent. Dianne Niemi relies on §§ 767.32(1m) and 767.32(1r), Stats., to prohibit the circuit court from granting any credits for payments not made through the clerk of court. Section 767.32(1m) provides that the circuit court may not revise the amount of child support due under an order or judgment for support prior to the date that the notice of a

(Cite as: 200 Wis.2d 807, *816, 547 N.W.2d 801, **805)

petition to revise support is given to the custodial parent. This section eliminated a child support obligor's right to petition for retroactive modification of support and thereby redefine his or her obligation with respect to accumulated support arrearages. Schulz v. Ystad, 155 Wis.2d 574, 598, 456 N.W.2d 312, 321 (1990). What is important to note is that § 767.32 is directed at an obligor parent's efforts to revise the amount of child support payments. Section 767.32(1r) also refers to an action to revise the amount of child support and prohibits the circuit court from giving credit against the support payment other than payments made through the clerk of court.

*817

(Cite as: 200 Wis.2d 807, *817, 547 N.W.2d 801, **805)

However, Dianne Niemi's motion was filed pursuant to § 767.30(3)(c), Stats., which provides:

If the party fails to pay a payment ordered under sub. (1) ... the court may by any appropriate remedy enforce the judgment, or the order as if it were a final judgment, including any past due payment and interest. Appropriate remedies include but are not limited to:

....

Here, Niemi's original motion alleges "that said Respondent failed to maintain regular child support payments as ordered by the aforementioned divorce judgment, and accordingly, he has accrued an arrears...." In short, the purpose of these hearings in response to Niemi's motion was not to revise the amount of a child support order, but rather to obtain a money judgment for the child support payments not made, the arrears.

The factual issue before the trial court was whether Robert Fisher made the required child support payments. Fisher contended that his payments were made directly to Niemi while she contended that the few payments he made were for health insurance. Rejecting Niemi's testimony, the trial court found that Fisher made a substantial number of child support payments by check or money order directly to Niemi. It also concluded that Fisher's support payments were not required when their youngest son lived with Fisher. The evidence more than amply supports the trial court's findings. Consequently, I would reject the application of § 767.32, Stats., to this proceeding which was solely for the purpose of obtaining a money judgment for the unpaid child support.

*818

(Cite as: 200 Wis.2d 807, *818, 547 N.W.2d 801, **805)

Additionally, I would conclude that even if § 767.32, Stats., applies, Niemi is equitably estopped from asserting this statute, and the trial court is permitted to consider the support payments made directly to Niemi. Here, the trial court found that for years Fisher made his support payments by check or money order directly to Niemi and that she accepted these payments on a regular basis without objection. This is understandable because both parents were living in California when Fisher started paying Niemi directly, making it less practical to pay through the clerk of circuit court in Douglas County, Wisconsin. Niemi also consented to their youngest son living with Fisher for about five months shortly before the son reached age eighteen.

**806

(Cite as: 200 Wis.2d 807, *818, 547 N.W.2d 801, **806)

I recognize that in Schulz the supreme court permitted the circuit court to allow credit against the support payments to avoid a manifest injustice or unjust enrichment. However, the court was reviewing the general rule existing prior to the adoption of § 767.32(1m), Stats. Because we are now dealing with a statute, I also recognize that we must not refuse to apply a statute because its strict application would create a hardship. It is our duty to expound the statute as it stands, even if the consequence is a hardship.

However, as the supreme court recognized in Schulz, we cannot close our eyes to reality. To conclude that these repeated payments were not made with Niemi's express or implied consent ignores reality. Similarly, the reality of the circumstances suggests that Niemi consented to their youngest son living with Fisher. The trial court's findings are clear and amply supported by the evidence. Except for the sum of $3,000, Fisher made his court-ordered child support *819

(Cite as: 200 Wis.2d 807, *819, 547 N.W.2d 801, **806)

payments directly to Niemi, who repeatedly accepted these payments without objection.

Therefore, I would conclude under these circumstances that Niemi is equitably estopped from asserting § 767.32(1m) and (1r), Stats., which under the majority's analysis prevents the trial court from considering the payments made outside the clerk of court's office. [FN1] To require Fisher to pay again for the child support payments results in a manifest injustice to Fisher and an unjust enrichment for Niemi. A custodial parent should not be permitted to directly accept the child support payments and then later recover a money judgment for those same payments simply because they were not made through the clerk of court.

FN1. Fisher did not raise this particular equitable estoppel argument because the purpose and focus at the hearing was to determine what support payments Fisher made and, accordingly, any arrearage. Although Fisher never presented this particular argument, I would conclude under the circumstances it is appropriate for this court to address this issue.

Finally, I would also construe § 767.32(1r), Stats., to only prevent the trial court from giving credit against the required support payments when it involves gifts or other voluntary expenditures made on behalf of the child, not support payments made directly to the custodial parent. The purpose of this statute is to prevent unilateral modifications of court orders, which tend to interfere with the right and responsibility of the custodial parent to decide how the support money should be spent. When the support money is given directly to the custodial parent, this consideration is no longer applicable.

I do agree with the majority however that Fisher must pay interest on the unpaid child support payments. *820

(Cite as: 200 Wis.2d 807, *820 , 547 N.W.2d 801, **806)

That interest should be on the $3,000 of unpaid payments.

Krueger case: tax intercept and child support

In re the Marriage of Patricia KRUEGER, Petitioner-Respondent,

Terrence KRUEGER, Appellant.

No. 85-1114.

Court of Appeals of Wisconsin.

Submitted on Briefs Aug. 5, 1986.

Opinion Released Aug. 26, 1986.

Opinion Filed Aug. 26, 1986.

Tax refund intercept proceeding was brought, and the Circuit Court, La Crosse County, Dennis G. Montabon, J., directed county clerk of court to certify father as delinquent in child support payments. Father appealed. The Court of Appeals, Sundby, J., held that: (1) father was delinquent despite compliance with stipulated order; (2) statute was clear and unambiguous, and therefore, reference to legislative intent was unnecessary; (3) father had no contract by reason of stipulation preventing child support agency from using other available procedures to collect arrearages; (4) order was not res judicata in tax refund intercept proceeding; and (5) county child support agency was not estopped by stipulation and order from certifying delinquent payments.

Affirmed.

Krueger v. Krueger

[1] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.App.,1986.

Father was delinquent in payment of court-ordered child support payments on date of tax refund intercept notice despite his being current under stipulated order, entered into after father was ordered to show cause why he ought not to be held in contempt of court for failure to pay child support required by divorce judgment. W.S.A. 46.255, 46.255(1, 3), 767.30(3).

Krueger v. Krueger

[2] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k277 k. Right to and collection of arrears.

Wis.App.,1986.

Court was not required to consider legislative intent of statute requiring clerk of court to certify to Department of Health and Social Services delinquent payments of person obligated to make court-ordered child support or maintenance payments to determine whether legislature intended to nullify stipulation and order by which support delinquency of father was being satisfied, entered into prior to effective date of statute. W.S.A. 46.255(1).

Krueger v. Krueger

[2] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.App.,1986.

Krueger v. Krueger

[3] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.App.,1986.

Father had no contract by reason of stipulation preventing child support agency from using other available procedures to collect arrearages, and therefore, no contractual right of father was impaired by tax refund intercept proceeding. W.S.A. 46.255(1).

Krueger v. Krueger

[4] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311 Enforcement of Order, Judgment, or Decree as to Support

134k311(2) k. Contempt proceedings.

Wis.App.,1986.

Stipulated order under which father executed income assignment for current child support and arrearages, entered after rule to show cause why father ought not to be held in contempt for failure to pay child support required by divorce judgment, was not res judicata in tax refund intercept proceeding. W.S.A. 46.255(1).

Krueger v. Krueger

[5] KeyCite this headnote

156 ESTOPPEL

156III Equitable Estoppel

156III(A) Nature and Essentials in General

156k62 Estoppel Against Public, Government, or Public Officers

156k62.3 k. Counties and subdivisions thereof.

Wis.App.,1986.

County child support agency was not estopped by stipulation and order, pursuant to which father executed income assignment for current child support and arrearages, from certifying delinquent payments in tax refund intercept proceeding. W.S.A. 46.255.

Krueger v. Krueger

[6] KeyCite this headnote

156 ESTOPPEL

156III Equitable Estoppel

156III(A) Nature and Essentials in General

156k62 Estoppel Against Public, Government, or Public Officers

156k62.3 k. Counties and subdivisions thereof.

Wis.App.,1986.

Equitable estoppel could not be asserted against county child support agency in tax refund intercept proceeding on basis of stipulated order under which father executed income assignment for current child support and arrearages, as action asserted to be inequitable was mandated by statute. W.S.A. 46.255.

**784

(Cite as: 133 Wis.2d 269, 395 N.W.2d 783, **784)

*271

(Cite as: 133 Wis.2d 269, *271, 395 N.W.2d 783, **784)

Thomas M. Olson and Olson & Olstad, La Crosse, for appellant.

Jeffrey D. Kohl, La Crosse, for petitioner-respondent.

Before GARTZKE, P.J., and DYKMAN and SUNDBY, JJ.

SUNDBY, Judge.

Terrence Krueger appeals from an order in a tax refund intercept proceeding under sec. 46.255, Stats., directing the La Crosse County Clerk of Court to certify him as delinquent in child support payments.

ISSUES

Terrence contends: (1) because he is current in making payments required by a stipulated order to reduce his arrearages, he is not delinquent in making court-ordered child support payments; (2) the 1983 amendment to sec. 46.255(1), Stats., which made certification mandatory, cannot nullify a prior order; and (3) the county is estopped from certifying his delinquent payments. We conclude Terrence was delinquent in child support payments when the tax refund intercept notice was given, that the 1983 amendment does not nullify the order or deprive him of vested rights, and *272

(Cite as: 133 Wis.2d 269, *272, 395 N.W.2d 783, **784)

estoppel does not apply to the mandatory duty imposed by sec. 46.255(1). Therefore, we affirm.

FACTS

The facts are undisputed. On January 3, 1983, Terrence was ordered to show cause why he ought not be held in contempt of court for failure to pay child support required by a divorce judgment. A stipulated order was entered March 30, 1983, under which he executed an income assignment for current support in the amount of $45 per week plus $5 per week as payment on arrearages of $6,868.

On November 8, 1984, the county child support agency pursuant to sec. 46.255(1), Stats., certified the arrearages to the Department of Health and Social Services in order to attach any state tax refund or other credit due Terrence. After a hearing **785

(Cite as: 133 Wis.2d 269, *272, 395 N.W.2d 783, **785)

under sec. 46.255(3), the circuit court held that the county child support agency is not estopped from proceeding under sec. 46.255 by reason of the stipulated order and ordered that La Crosse county certify Terrence as a person delinquent in the payment of court- ordered child support payments.

STANDARD OF REVIEW

The case turns on construction of sec. 46.255, Stats. The application of a statute to a particular set of facts is a question of law. Neis v. Educ. Bd. of Randolph School, 128 Wis.2d 309, 313, 381 N.W.2d 614, 616 (Ct.App.1985). We decide questions of law without deference to the trial court. Id.

*273

(Cite as: 133 Wis.2d 269, *273, 395 N.W.2d 783, **785)

ANALYSIS

Section 46.255, Stats., provides in part:

(1) If a person obligated to provide child support or maintenance is delinquent in making court-ordered payments the clerk of court, upon application of the county designee under s. 59.07(97) or the department, shall certify the delinquent payment to the department.

(2) At least annually, the department of health and social services shall provide the certifications to the department of revenue.

(a) Delinquency

[1] Terrence contends that he is not delinquent in making court-ordered child support payments within the meaning of sec. 46.255(1), Stats, because he is current under the stipulated order. He contends that "court-ordered payments" refers to the last order of the court, the stipulated order of March 30, 1983. Terrence argues he is not "delinquent" because he has not failed or neglected to make the "court-ordered payments."

The stipulated order was entered pursuant to sec. 767.30(3), Stats., which provides:

If the party fails to pay a payment ordered under sub. (1) ..., the court may by any appropriate remedy enforce the judgment, or the order as if it were a final judgment, including any past due payment and interest. Appropriate remedies include but are not limited to:

....

(b) Contempt of court under ch. 785.

*274

(Cite as: 133 Wis.2d 269, *274, 395 N.W.2d 783, **785)

The order did not modify the divorce judgment or Terrence's child support obligations. The stipulated order related to Terrence's contempt and not to "court-ordered" child support.

Both the stipulation and the order refer to "the presently outstanding arrearages." Terrence's argument that paying $5 per week towards an arrearage of $6,868 makes him current in making court-ordered payments is illogical. The stipulated order merely reduces Terrence's delinquency and does not eliminate it.

We conclude that the trial court correctly determined Terrence was delinquent in the payment of court-ordered child support payments on the date of the tax refund intercept notice.

(b) The 1983 Amendment

Section 46.255, Stats., was created by sec. 772, ch. 20, Laws of 1981 to supplement the child and spousal support program of sec. 46.25, Stats. As created, sec. 46.255(1) read:

If a person obligated to provide support payments for a child is delinquent in making court-ordered payments, and the county designee authorized under s. 59.07(97) to administer the child support and paternity program is unable to secure payment after making reasonable effort, the county designee for the county in which the order was rendered may certify the delinquent payment as uncollectible to the department.

Section 46.255(1), Stats. (1981) was amended to its present form by sec. 966, 1983 Wis.Act 27, effective July 2, 1983. The 1983 amendment made certification mandatory and deleted the requirement that the child *275

(Cite as: 133 Wis.2d 269, *275, 395 N.W.2d 783, **785)

support agency make reasonable collection efforts before using the certification procedure. Terrence argues: (1) the legislature did not intend to nullify stipulations and orders that forestalled the use of the pre-1983 amendment certification procedure; (2) the 1983 amendment **786

(Cite as: 133 Wis.2d 269, *275, 395 N.W.2d 783, **786)

impairs his contract in violation of art. 1, sec. 10 of the United States Constitution; and (3) the order of March 30, 1983 is res judicata.

Legislative Intent

[2] Terrence argues the legislature by the 1983 amendment did not intend to nullify stipulations and orders by which support delinquencies are being satisfied. He asks us to consider the legislative intent as revealed by the drafting record of the 1983 amendment.

When a statute is clear and unambiguous, the statute must be interpreted on the basis of its plain meaning. Tahtinen v. MSI Ins. Co., 122 Wis.2d 158, 167, 361 N.W.2d 673, 678 (1985). This court has found that sec. 46.255(1), Stats., is clear and unambiguous. Marriage of Howard v. Howard, 130 Wis.2d 206, 209, 387 N.W.2d 96, 97 (Ct.App.1986).

When we look at the plain meaning of sec. 46.255(1), Stats., we find that its language clearly and unambiguously requires the clerk of court, upon application of the county designee or the Department of Health and Social Services, to certify to the Department delinquent payments of a person obligated to make court-ordered child support or maintenance payments. Thus, it is not appropriate for us to resort to extrinsic aids such as the legislative drafting records in construing the *276

(Cite as: 133 Wis.2d 269, *276, 395 N.W.2d 783, **786)

statute. Tahtinen, 122 Wis.2d at 166, 361 N.W.2d at 677.

Impairment of Contract, Res Judicata

[3][4] Terrence argues that if sec. 46.255(1), Stats., as amended, is applied to him, his "contract" with the county child support agency is impaired or, alternatively, if the stipulated order became part of the divorce judgment, that order is res judicata and the agency is bound by it. Terrence had no contract by reason of the stipulation preventing the child support agency from using other available procedures to collect arrearages from him. No right of Terrence is impaired by these proceedings. Nor is the order of March 30 res judicata. In order for a judgment or final order to bar a subsequent action, there must be not merely identity of subject matter but also of the cause of action. Rahr v. Wittmann, 147 Wis. 195, 202, 132 N.W. 1107, 1110 (1911). These proceedings are distinct from contempt proceedings as an enforcement remedy.

[5][6] Finally, Terrence argues that the county child support agency is estopped because of the stipulation and order from certifying delinquent payments. Equitable estoppel cannot be asserted against the government when the action asserted to be inequitable is mandated by law. See State v. Madison, 120 Wis.2d 150, 161, 353 N.W.2d 835, 841 (Ct.App.1984). The legislature requires governmental agencies charged with the *277

(Cite as: 133 Wis.2d 269, *277, 395 N.W.2d 783, **786)

responsibility of administering the child support program to use the certification procedures under sec. 46.255, Stats., to collect delinquent court-ordered child support payments from state tax refunds or credits owed to the obligor. There is no room for Terrence's equitable argument.

Order affirmed.

Krieman case: child support modification

In re the Marriage of Janice KRIEMAN, Petitioner-Respondent, [FN<<dagger>>]

FN<<dagger>> Petition to review denied.

Mark A. GOLDBERG, Respondent-Appellant.

No. 96-3489.

Court of Appeals of Wisconsin.

Submitted on Briefs Aug. 29, 1997.

Opinion Released Oct. 8, 1997.

Opinion Filed Oct. 8, 1997.

In ongoing child support proceedings incident to divorce, former wife filed motion for remedial contempt, and former husband moved to modify child support payments established by stipulation between parties. The Circuit Court for Walworth County, Michael S. Gibbs, J., ordered husband imprisoned for six months and required him to pay arrearages and make current payments, and denied motion for modification. Husband appealed. The Court of Appeals, Snyder, P.J., held that: (1) husband's failure to pay child support was neither willful nor intentional, as required to subject him to remedial sanctions for contempt, and (2) child support stipulation containing language absolutely prohibiting modification of child support under any circumstances, with no time limitation or opportunity for review, offended public policy.

Reversed and remanded.

Krieman v. Goldberg

[1] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(10) k. Review.

Wis.App.,1997.

Court of Appeals reviews trial court's use of its contempt power in child support proceeding to determine whether court properly exercised its discretion.

Krieman v. Goldberg

[2] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(9) k. Enforcement of decree.

Wis.App.,1997.

Person may be held in contempt in child support proceeding if he or she refuses to abide by order made by competent court.

Krieman v. Goldberg

[3] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(9) k. Enforcement of decree.

Wis.App.,1997.

If court imposes remedial sanction for contempt in child support proceeding, compliance with purge provision must be in power of contemnor.

Krieman v. Goldberg

[4] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(9) k. Enforcement of decree.

Wis.App.,1997.

Principal findings that court seeking to hold person in contempt for failure to make child support payments must make are that person is able to pay and refusal to pay is willful and with intent to avoid payment.

Krieman v. Goldberg

[5] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(10) k. Review.

Wis.App.,1997.

Court of Appeals will not set aside trial court's findings of fact in proceeding for child support unless findings are clearly erroneous. W.S.A. 805.17(2).

Krieman v. Goldberg

[6] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311 Enforcement of Order, Judgment, or Decree as to Support

134k311(2) k. Contempt proceedings.

Wis.App.,1997.

Failure of former husband to pay child support pursuant to stipulation was neither willful nor intentional, as required to subject him to remedial sanctions for contempt, in postdivorce proceedings, despite fact that at time his employer was shut down by Federal Trade Commission, husband had already earned more than threshold yearly figure set forth in stipulation; husband had no notice that his employer would be put out of business, husband's payments were current at that time, and terms of stipulation did not require husband to save and set aside money to satisfy child support obligations.

Krieman v. Goldberg

[7] KeyCite this headnote

170B FEDERAL COURTS

170BVIII Courts of Appeals

170BVIII(K) Scope, Standards, and Extent

170BVIII(K)1 In General

170Bk754 Review Dependent on Whether Questions Are of Law or of Fact

170Bk755 k. Particular cases.

Wis.App.,1997.

Construction of written contract, including stipulation agreement with respect to child support, is question of law, to be determined by Court of Appeals independently, with no deference to conclusions of the trial court.

Krieman v. Goldberg

[7] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(10) k. Review.

Wis.App.,1997.

Krieman v. Goldberg

[8] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k230 Permanent Alimony

134k236 k. Stipulations and agreements of parties.

Wis.App.,1997.

Although trial court is prohibited from modifying waiver of spousal maintenance or final division of property, this prohibition does not exist for child support; this policy recognizes importance of best interests of child in considering support issues and allows court to modify earlier award if there is change in circumstances unforeseen at time divorce judgment was entered. W.S.A. 767.32(1).

Krieman v. Goldberg

[8] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k248 Disposition of Property

134k249.2 k. Stipulations and agreements of parties.

Wis.App.,1997.

Krieman v. Goldberg

[8] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k307 k. Application for allowance or support and proceedings thereon.

Wis.App.,1997.

Krieman v. Goldberg

[8] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.2 Grounds and Rights of Parties

134k309.2(4) k. Agreement or stipulation, and effect thereof.

Wis.App.,1997.

Krieman v. Goldberg

[9] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.2 Grounds and Rights of Parties

134k309.2(4) k. Agreement or stipulation, and effect thereof.

Wis.App.,1997.

To invoke estoppel to prevent modification of child support agreement established by stipulation, party opposing modification must show that both parties entered into stipulation freely and knowingly, that settlement was fair and equitable and not illegal or against public policy, and that party seeking modification seeks to be released from agreement's terms on grounds that court could not have entered order it did without their agreement.

Krieman v. Goldberg

[10] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.2 Grounds and Rights of Parties

134k309.2(4) k. Agreement or stipulation, and effect thereof.

Wis.App.,1997.

Child support stipulation containing language absolutely prohibiting modification of child support under any circumstances, with no time limitation or opportunity for review, offended public policy, and payor spouse was therefore not estopped from seeking modification of his support obligations due to material change in circumstances; payee spouse retained equitable right to request modification upon change of circumstances in which best interests of child required modification, and payor spouse had same rights as payee spouse.

Krieman v. Goldberg

[11] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.2 Grounds and Rights of Parties

134k309.2(4) k. Agreement or stipulation, and effect thereof.

Wis.App.,1997.

Best interests of child are served through policy which does not preclude either party to child support agreement from seeking modification in child support because of change of circumstances, even where parties stipulate to nonmodifiable amount of support.

**427

(Cite as: 214 Wis.2d 163, 571 N.W.2d 425, **427)

*164

(Cite as: 214 Wis.2d 163, *164, 571 N.W.2d 425, **427)

On behalf of the respondent-appellant, the cause was submitted on the briefs of Richard J. Podell of Richard J. Podell & Associates, S.C. of Milwaukee.

On behalf of the petitioner-respondent, the cause was submitted on the brief of Wallace K. McDonell of *165

(Cite as: 214 Wis.2d 163, *165, 571 N.W.2d 425, **427)

Allen, Harrison, Williams, McDonell & Swatek of Whitewater.

Before SNYDER, P.J., and NETTESHEIM and ANDERSON, JJ.

SNYDER, Presiding Judge.

Mark A. Goldberg appeals from a trial court order finding him in contempt for failure to pay child support as required by a prior stipulation agreement and from an order denying his motion to revise his child support obligations. Goldberg claims that the trial court erred because: (1) it found him in contempt when he did not intentionally fail to make child support payments after he lost his job; (2) it issued a punitive sanction for a remedial contempt order which he did not have the ability to purge; and (3) as a matter of public policy he should not be estopped by a stipulation agreement from requesting a modification of his child support obligations.

We agree that the trial court's use of its contempt power in this instance was a misuse of discretion because Goldberg's failure to pay the agreed-upon child support was not intentional. We also conclude that because the stipulation agreement was absolute, as a matter of public policy Goldberg is not estopped from seeking a modification of his support obligations due to his changed financial circumstances. The stipulation required him to pay a certain amount of child support, regardless of his income, without any stated time limitation to provide an opportunity for reevaluation. We therefore reverse and remand for further proceedings.

Goldberg and Janice Krieman were married in 1976. They were divorced in 1987 and custody of their four children went to Krieman. It is apparent from the record in this case that various postdivorce issues have been the subject of litigation; much of the litigation has *166

(Cite as: 214 Wis.2d 163, *166, 571 N.W.2d 425, **427)

pertained to the level of child support Goldberg is required to pay. [FN1] Although the parties were married in Illinois and resided there until after their divorce, at the time of this action Goldberg was living in Florida and Krieman was residing in Wisconsin with their children. [FN2]

FN1. In January 1995, a family court commissioner concluded that Goldberg was improperly diverting income to his second wife's credit (she worked as his administrative assistant) in order to lessen his support obligations. The commissioner reallocated the Goldbergs' income for child support

purposes and ultimately computed arrearages of $61,696.10 for a four-year period. The parties subsequently settled and Goldberg paid $40,000 plus attorney's fees.

FN2. The oldest child was born on August 16, 1978; triplets were born on December 5, 1981.

On November 1, 1995, after protracted litigation over Goldberg's support obligations, the trial court signed an order based on the parties' stipulation in which Goldberg and Krieman agreed to the following terms:

1. [Mark Goldberg's] child support payment to Janice Krieman shall be $31,200.00 per year, payable in the amount of $1,300.00 on the 1st of the month and $1,300.00 on the 15th of the month, commencing November 1, 1995, and continuing until Ross Goldberg reaches age 18 on August 16, 1996. Thereafter, respondent's child support shall be reduced to $28,000.00 per year ....

2. [Mark Goldberg's] child support obligation shall remain the same regardless of his income.

....

4. The parties agree that [Mark Goldberg's] income fluctuates on a monthly and yearly *167

(Cite as: 214 Wis.2d 163, *167, 571 N.W.2d 425, **427)

basis. They further agree that $100,000 per year is an accurate estimate of the respondent's income and that the child support amounts agreed to herein are, therefore, in conformity with the percentage standards established by [DHSS] in Wis. Stats. 46.25(9).

**428

(Cite as: 214 Wis.2d 163, *167, 571 N.W.2d 425, **428)

5. The parties further agree that [Mark Goldberg's] earning capacity is approximately $100,000 per year, but that he has the potential to earn substantially more or substantially less than said amount. The parties agree that it is in the best interests of the children and both parties that the child support amount agreed to herein be established as the final modification of child support herein. They agree that regardless of [Mark Goldberg's] future income, the child support level shall remain the same. Therefore, neither party shall under any circumstances have the right to petition the court for a modification of the child support provided for herein.

At the time the stipulation was entered into, Goldberg was employed as a telemarketer for Best Marketing. Subsequent to the above order, Goldberg made timely and appropriate payments until August 15, 1996.

In July 1996 the Federal Trade Commission (FTC) filed charges against several telemarketing companies and secured a permanent injunction against Best Marketing, shutting down the business for "deceptive acts or practices." Goldberg lost his job and, due to the circumstances of the injunction, was limited in his ability to obtain another telemarketing position. [FN3] He eventually *168

(Cite as: 214 Wis.2d 163, *168, 571 N.W.2d 425, **428)

obtained a sales position in men's wear earning a salary of $13,000 annually.

FN3. According to Goldberg's testimony, he was advised by legal counsel not to seek another telemarketing job while the FTC was conducting its investigation. He testified that his earning capacity in telemarketing was much higher than what he could earn for other sales commission work.

Goldberg made substantially reduced payments to Krieman beginning August 15, 1996, and continued to make timely but reduced payments thereafter. On September 18, Krieman filed a Motion for Remedial Contempt. At the motion hearing, the trial court looked at the combined income of Goldberg and his second wife for 1995 and 1996 and concluded that "[s]ince he already ... made that money [$175,000 in 1995 and $100,000 in 1996] there is no way that he can claim here that he didn't have the ability to pay the support.... [The support calculations] were based on $100,000.00 a year, and he's already exceeded that figure." The trial court found that Goldberg had intentionally failed to pay child support and ordered him committed to the county jail for six months.

In order to purge the contempt order, Goldberg was required to pay an arrearage of $6298, currently due payments of $1166.67 on the first and fifteenth of the month, and attorney's fees. The trial court also denied Goldberg's motion to revise his child support payments, finding that the earlier stipulation of the parties was entered into "freely and knowingly" and that based on the terms of the stipulation Goldberg could not "attempt to modify the child support contrary to the agreement." The trial court subsequently denied Goldberg's motions for reconsideration and to stay the contempt sanctions. Goldberg now appeals.

*169

(Cite as: 214 Wis.2d 163, *169, 571 N.W.2d 425, **428)

Contempt Order

[1][2][3][4] We review a trial court's use of its contempt power to determine whether the court properly exercised its discretion. See Haeuser v. Haeuser, 200 Wis.2d 750, 767, 548 N.W.2d 535, 543 (Ct.App.1996). A person may be held in contempt if he or she refuses to abide by an order made by a competent court. See id. at 767, 548 N.W.2d at 542. In the case of a remedial sanction, compliance with the purge provision must be in the power of the contemnor. See State ex rel. N.A. v. G.S., 156 Wis.2d 338, 343, 456 N.W.2d 867, 869 (Ct.App.1990). The principal findings that a court must make are that "the person is able to pay and the refusal to pay is willful and with intent to avoid payment." Haeuser, 200 Wis.2d at 767, 548 N.W.2d at 543.

In this instance, the court's finding of contempt rests on its factual finding regarding Goldberg's ability to pay. Before issuing the contempt order, the trial court made factual findings that: (1) Goldberg had failed to pay $6298 in child support in 1996; (2) in 1996, up to July, Goldberg earned $100,000 in his telemarketing job; (3) that income was the base line set in the stipulation and "he cannot now claim that he is unable to pay the child **429

(Cite as: 214 Wis.2d 163, *169, 571 N.W.2d 425, **429)

support ordered pursuant to the stipulation"; and (4) Goldberg's failure to pay support was willful and intentional as "he has not shown that he was unable to pay the support."

[5][6] This court will not set aside a trial court's findings of fact unless they are clearly erroneous. See id.; see also § 805.17(2), Stats. However, based on the following, we conclude that the trial court misapplied the law when it found that Goldberg's failure to pay support was willful and intentional. Goldberg testified that the *170

(Cite as: 214 Wis.2d 163, *170, 571 N.W.2d 425, **429)

FTC closed his employer on July 17, 1996 and that he did not have any notice or knowledge that this would occur. This fact was uncontested by Krieman. He also testified that the $100,000 earned for the first eight months of 1996 was a combined household income and included his wife's earnings. Goldberg also gave detailed testimony as to the disposition of those earnings.

Goldberg testified that his wife's income in 1996 accounted for approximately $22,200 of their combined income. [FN4] It was not disputed that Goldberg had already paid approximately $17,200 in child support in 1996 and $1000 per month in health insurance and medical bills. According to Goldberg's testimony, his tax liability for this time period was approximately $35,000.

FN4. At the time the stipulation agreement was reached, the trial court had determined that $31,200 of the Goldbergs' combined income was

attributable to his wife. Although there was some disagreement as to the precise figure (Krieman's counsel argued that $18,200 of the income that Goldberg reported as their combined income was attributable to Goldberg's wife in 1996), for purposes of our analysis of the appellate issue this difference is immaterial.

Calculations using these figures show that Goldberg retained between $14,000 and $18,000 for his own living expenses during the first eight months of 1996. [FN5] Even using the higher figure, Goldberg then had approximately $2700 per month for living expenses, or *171

(Cite as: 214 Wis.2d 163, *171, 571 N.W.2d 425, **429)

slightly more than the amount he was contributing each month for child support--$2600. [FN6]

FN5. This is based on the following calculations, using round numbers. The Goldbergs' combined income for the first eight months of 1996 was $100,000. Subtracting the tax liability leaves $65,000. We next deduct the amount of child support Goldberg had already paid in 1996--$17,000--as well as the $1000 per month he paid in medical expenses, and the total left is $36,000. However, these calculations have not yet deducted that portion of his income attributable to his wife. If the smaller income figure is attributed to her--$18,000--that leaves a total of $18,000 for Goldberg's living expenses.

FN6. This figure is based on his support for all four children. As of August 16, 1996, when his oldest child turned eighteen, the stipulation agreement required that Goldberg pay $1166.67 on the first and fifteenth of each month. This does not include any medical payments Goldberg might be obligated to pay.

In mid-July, this income was cut off when the FTC closed the telemarketing business that employed both Goldbergs. The trial court's determination that Goldberg's failure to pay support was willful and that "he has not shown that he was unable to pay the support" is not supported by the facts of record. The trial court's analysis of this issue erroneously opines that because Goldberg had already earned the threshold figure of $100,000 in the first eight months of 1996, he had to have set aside the amount required to satisfy his child support obligations for the entire year. First, this finding fails to take into account the fact that a portion of the threshold income was attributable to his wife and was unavailable to satisfy support obligations. See Abitz v. Abitz, 155 Wis.2d 161, 164, 455 N.W.2d 609, 610 (1990). Second, this analysis also suggests that Goldberg was required to save and put aside money to meet his child support obligations; this was not required in the stipulation agreement. The trial court's reasoning also ignores the effect of a sudden and unexpected job loss, particularly the loss of such a high-paying position. We conclude that the trial court misused its discretion when it found that Goldberg's failure to pay was willful and intentional and therefore *172

(Cite as: 214 Wis.2d 163, *172, 571 N.W.2d 425, **429)

reverse the trial court order finding Goldberg in contempt. [FN7]

FN7. Goldberg's second issue, whether the trial court issued a punitive sanction for remedial contempt, is moot in light of the above conclusion and will not be addressed. See State ex rel. Wis. Envtl. Decade v. Joint Comm., 73 Wis.2d 234, 236, 243 N.W.2d 497, 498 (1976).

**430

(Cite as: 214 Wis.2d 163, *172, 571 N.W.2d 425, **430)

Krieman responds, however, that Goldberg's actions were similar to those of the payor in Van Offeren v. Van Offeren, 173 Wis.2d 482, 496 N.W.2d 660 (Ct.App.1992), who quit a well-paying job and attempted to start his own business. The new business did not generate sufficient income for him to pay his support obligations and he fell behind. See id. at 490, 496 N.W.2d at 662. The court held that the payor's voluntary pursuit of a business with no immediate prospect of earning an income adequate to meet his support obligations would support a finding of contempt. See id. at 499, 496 N.W.2d at 666.

We disagree that Goldberg's circumstances are analogous. Goldberg's employer was unexpectedly closed down, leaving Goldberg without a source of income. The circumstances of his loss of income were completely out of his control. We are not persuaded that the rule of Van Offeren is applicable to these facts.

Modification of the Child Support Order

At the same hearing where the trial court found Goldberg in contempt for his failure to pay child support as required by the stipulation agreement, it also considered Goldberg's motion requesting modification of his child support obligations due to changed circumstances. Krieman argued that Goldberg was estopped from requesting modification by the stipulation agreement the court had ordered the previous November. *173

(Cite as: 214 Wis.2d 163, *173, 571 N.W.2d 425, **430)

The trial court agreed with Krieman, finding that because both parties had entered into the agreement "freely and knowingly" and that Goldberg had agreed "not to come in and attempt to modify the child support order" he was now estopped from making a request for modification in spite of his changed financial circumstances.

[7] Resolution of this issue requires us to construe the stipulation agreement between the parties. The construction of a written contract is a question of law. See Levy v. Levy, 130 Wis.2d 523, 528, 388 N.W.2d 170, 172 (1986). We determine questions of law independently, with no deference to the conclusions of the trial court. See id. at 529, 388 N.W.2d at 172-73.

[8] The trial court retains jurisdiction to modify a divorce judgment providing for child support. See § 767.32(1), Stats. Although a trial court is prohibited from modifying a waiver of spousal maintenance or a final division of property, this prohibition does not exist for child support. See Ondrasek v. Tenneson, 158 Wis.2d 690, 695, 462 N.W.2d 915, 917 (Ct.App.1990). This policy recognizes the importance of the best interests of the child when support issues are considered and allows a court to modify an earlier award when there is a change in circumstances unforeseen at the time the divorce judgment was entered. See id.

[9] Krieman, however, argues that Goldberg is estopped from seeking a modification of his obligations because of the stipulation agreement. She claims that "a child support agreement with a floor provision has been specifically approved in the Honore v. Honore, 149 Wis.2d 512, 439 N.W.2d 827 (Ct.App.1989)." There, we held that the father was estopped from requesting a reduction in his child support obligations. *174

(Cite as: 214 Wis.2d 163, *174, 571 N.W.2d 425, **430)

See Honore v. Honore, 149 Wis.2d 512, 518, 439 N.W.2d 827, 829 (Ct.App.1989). To invoke estoppel in the instant case, Krieman must show that both she and Goldberg entered into the stipulation freely and knowingly, that the settlement was fair and equitable and not illegal or against public policy, and that Goldberg seeks to be released from the agreement's terms on the grounds that the court could not have entered the order it did without their agreement. See Ondrasek, 158 Wis.2d at 694-95, 462 N.W.2d at 917.

We conclude that the dispositive portion of Krieman's estoppel claim lies in whether enforcement of the parties' stipulation agreement violates public policy. The trial court found that the parties entered into the agreement freely and knowingly. At the time the agreement was reached, both parties, represented by counsel, agreed that it was just and equitable and that it was done "to resolve a long-term disagreement of the parties concerning child support." The facts of record support the trial court's findings as to these aspects of the estoppel claim, but the trial court did not specifically address the **431

(Cite as: 214 Wis.2d 163, *174, 571 N.W.2d 425, **431)

public policy issue of whether an agreement with language that absolutely prohibits the modification of child support under any circumstances offends public policy. [FN8]

FN8. The trial court stated in its findings, "[T]he overall settlement was fair and equitable and not illegal or against public policy."

Krieman claims that the public policy issue was considered in Honore when this court considered the question of "whether a party to a divorce may stipulate to maintaining a certain level of child support notwithstanding a subsequent reduction in the party's income." Honore, 149 Wis.2d at 513, 439 N.W.2d at 827. The parties' agreement stated that the payor *175

(Cite as: 214 Wis.2d 163, *175, 571 N.W.2d 425, **431)

father had agreed to "maintain this level of support [$700 monthly], notwithstanding a reduction in his income or other financial factors at least until the youngest child ... is in first grade, or until September 1, 1989." Id. at 514, 439 N.W.2d at 827 (emphasis added). We concluded that such a stipulation was not contrary to public policy. See id. at 513, 439 N.W.2d at 827.

However, that stipulation differs from the Krieman-Goldberg stipulation in one significant respect. The stipulation in Honore included a point in time at which the stipulated payment could be reviewed and adjusted based on a change of circumstances. Thus, the payor spouse in that case was bound to a certain level of payment for a time certain, at which point he could request a reevaluation. In the instant case, the agreement as written contained no such provision. [FN9] Because the agreement in the instant *176

(Cite as: 214 Wis.2d 163, *176, 571 N.W.2d 425, **431)

case contains no time-limiting language, we are not bound by our conclusion in Honore. We therefore consider whether this particular stipulation offends public policy.

FN9. We recognize that all child support arrangements have a finite limit inherent in them due to the fact that ordinary support runs until the eighteenth or nineteenth birthday of the child. However, the arrangement in Honore v. Honore, 149 Wis.2d 512, 439 N.W.2d 827 (Ct.App.1989), included not only a date certain at which time the arrangement could be reexamined, but also stated that this is tied to the point in time when the youngest child is presumed to begin first grade. Thus, the agreement incorporated a point in time when it would be logical to reexamine both

parents' financial circumstances.

Our analysis is further supported by the decision of another court which considered this issue. In Nicholson v. Combs, 437 Pa.Super. 334, 650 A.2d 55 (1994), the court upheld a nonmodifiable three-year freeze on child support, but noted that "[the parties] bargained for nonmodifiability for a specified limited period of time." Id. at 58 (emphasis added).

The Pennsylvania Supreme Court subsequently reviewed this case. See Nicholson v. Combs, 550 Pa. 23, 703 A.2d 407 (1997). It noted that the payor was subject to both the contractual support agreement and a support order entered by the family court (which order could be enforced through contempt proceedings). Based on that, the court concluded that if the payee sought redress in family court, it was within the power of the court to determine that a payor's inability to pay allowed for a downward modification of support obligations. See id. 703 A.2d at 416. However, such a modification would not preclude a payee from suing on the contractual support agreement and a court sitting in law or equity from making a determination that the terms of the contract were enforceable. See id. at 417.

[10] The other side of this issue was considered by this court in Ondrasek, 158 Wis.2d at 692, 462 N.W.2d at 916, in which we held that "a divorce stipulation that waives or sets a ceiling on child support and prevents modification of child support offends public policy." We concluded that "if a waiver or 'ceiling' of the entire child support obligation is deemed unmodifiable, the needs of a child could be left unsatisfied." Id. at 696, 462 N.W.2d at 918. The underpinnings of this policy are a recognition that even if a stipulation is fair when it is created, it may not be fair in the future. See id. Although the Ondrasek decision focused on the best interests of the child and was concerned with a modification in favor of a payee, in this instance we consider the public policy of requiring a payor who has stipulated to a certain base rate of support to absolutely continue that payment level regardless of any change in circumstances. It is necessary to consider the equitable nature of estoppel.

*177

(Cite as: 214 Wis.2d 163, *177, 571 N.W.2d 425, **431)

In Nichols v. Nichols, 162 Wis.2d 96, 469 N.W.2d 619 (1991), the supreme court considered the question of whether a stipulation in a divorce judgment that maintenance was not subject to modification could be upheld. In considering whether this provision violated **432

(Cite as: 214 Wis.2d 163, *177, 571 N.W.2d 425, **432)

public policy, the court stated, "The doctrine of estoppel set forth in Rintelman [v. Rintelman, 118 Wis.2d 587, 348 N.W.2d 498 (1984) ] is equitable only if it applies to both payors and payees of maintenance." Nichols, 162 Wis.2d at 114, 469 N.W.2d at 626. "If payees may seek modification of nonmodifiable maintenance due to financial setbacks suffered since the divorce, but payors of maintenance may not do the same, the payor is denied the benefit of his or her bargain, while the payee receives the benefit of his or her bargain without risking the effects of what he or she agreed to in the stipulation." Id. (footnote omitted).

[11] While the Nichols case concerned maintenance payments in a divorce action, we conclude that the reasoning is analogous when applied to the case at bar. Ondrasek stands for the proposition that the best interests of the child are served through a policy which does not preclude a payee from seeking a modification in child support because of a change of circumstances, even though the parties had stipulated to a nonmodifiable amount of support. However, as suggested by the analysis of Nichols, such a position is only fair if it is applied equitably to both sides.

Pursuant to Ondrasek, Krieman retains the ability, in spite of the stipulation agreement, to come back to the court and request a modification of the support agreement if there is a change in circumstances and the best interests of the children require a modification of the payment. To prohibit the payor parent from exercising the same right ignores the reality that the *178

(Cite as: 214 Wis.2d 163, *178, 571 N.W.2d 425, **432)

supporting parent's financial circumstances may change dramatically for reasons beyond the payor's control. A stipulation that purports to make child support nonmodifiable and is unlimited as to time could impoverish the payor parent and place him or her in financial jeopardy. A court must consider the vagaries of life and the reality that a specific circumstance may require an adjustment of an agreed-upon level of support, even where the parties have entered into a stipulation agreement. To hold otherwise and subject a payor parent to an unreviewable stipulation for child support could jeopardize a payor parent's financial future, may have detrimental effects on the parent/child relationship and in this way would ultimately not serve the best interests of the child. This case presents a compelling change in a payor parent's ability to pay child support. We conclude that the absolute stipulation agreement, with no time limitation or opportunity for review, is against public policy. Goldberg is not estopped by the stipulation from seeking a modification of his support obligations due to a material change in circumstances.

We conclude that the trial court's contempt order was a misuse of discretion where it failed to recognize that Goldberg's failure to pay the agreed-upon support was not willful, but rather due to the FTC shutting down his employer. Additionally, as a matter of public policy, no party can bind himself or herself to an absolute stipulation as to child support with no time- limiting language. This ignores reality and the possibility of a chain of events beyond the control of the payor. We therefore remand the cause for further consideration of these issues.

*179

(Cite as: 214 Wis.2d 163, *179, 571 N.W.2d 425, **432)

Orders reversed and cause remanded.

END OF DOCUMENT

Van Offeren case: child support modification

In re the Marriage of: Virginia A. VAN OFFEREN, Petitioner-Respondent,

William L. VAN OFFEREN, Respondent-Appellant. [FN<<dagger>>]

FN<<dagger>> Petition for review denied.

No. 92-0530.

Court of Appeals of Wisconsin.

Submitted on Briefs Sept. 14, 1992.

Opinion Released Dec. 30, 1992.

Opinion Filed Dec. 30, 1992.

Husband's postdivorce motion to temporarily eliminate child support and maintenance was denied and the Circuit Court, Racine County, Stephen A. Simanek, J., found that reduction of income caused by husband's change of employment was shirking and husband was found in contempt for being in arrears on support and maintenance. Husband appealed. The Court of Appeals, Nettesheim, P.J., held that: (1) husband's decision to leave previous employment was voluntary; (2) voluntarily leaving well-paying job to start new business without first securing comparable income was "shirking"; (3) finding husband in contempt for failing to pay support or maintenance was not abuse of discretion; and (4) requiring husband to pay wife's attorney fees was not clear error.

Affirmed.

Van Offeren v. Van Offeren

[1] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k278 Appeal

134k286 Review

134k286(3) Discretion of Lower Court

134k286(3.1) k. In general.

Formerly 134k286(3)

Wis.App.,1992.

Award of child support and maintenance is ordinarily reviewed under abuse of discretion standard.

Van Offeren v. Van Offeren

[1] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k312 Appeal

134k312.6 Review

134k312.6(4) Discretion of Court

134k312.6(4.1) k. In general.

Formerly 134k312.6(4)

Wis.App.,1992.

Award of child support and maintenance is ordinarily reviewed under abuse of discretion standard.

Van Offeren v. Van Offeren

[2] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.1 Right, Duties and Liabilities in General

285k3.1(5) k. Circumstances affecting duty to support in general.

Wis.App.,1992.

Award of child support is measured by needs of custodial parent and children and then-existing ability of noncustodial parent to pay.

Van Offeren v. Van Offeren

[3] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.1 Right, Duties and Liabilities in General

285k3.1(5) k. Circumstances affecting duty to support in general.

Wis.App.,1992.

"Shirking," which justifies child support award based on noncustodial parent's earning capacity rather than actual earnings, is established where obligor intentionally avoids duty to support or where obligor unreasonably diminishes or terminates income in light of support obligation.

See publication Words and Phrases for other judicial constructions and definitions.

Van Offeren v. Van Offeren

[4] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k306 k. Grounds for award as to support.

Wis.App.,1992.

Noncustodial father "shirked" child support obligations by voluntarily leaving well-paying position that enabled father to meet child support and maintenance obligations without first securing comparable source of income; obligor opened new business believing that it would take five or six years to reach income level comparable to previous job.

Van Offeren v. Van Offeren

[5] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k260 Enforcement of Order, Judgment, or Decree

134k269 Contempt Proceedings

134k269(1) k. What constitutes contempt.

Wis.App.,1992.

Mere inability to pay support or maintenance cannot support finding of contempt.

Van Offeren v. Van Offeren

[5] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311 Enforcement of Order, Judgment, or Decree as to Support

134k311(2) k. Contempt proceedings.

Wis.App.,1992.

Mere inability to pay support or maintenance cannot support finding of contempt.

Van Offeren v. Van Offeren

[6] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(9) k. Enforcement of decree.

Wis.App.,1992.

Person may be held in contempt for failing to pay child support or maintenance where failure is willful and contemptuous and not result of inability to pay.

Van Offeren v. Van Offeren

[7] KeyCite this headnote

93 CONTEMPT

93II Power to Punish, and Proceedings Therefor

93k60 Evidence

93k60(1) k. Presumptions and burden of proof.

Wis.App.,1992.

Burden of proof in contempt proceeding is on person against whom contempt is charged to show that conduct is not contemptuous.

Van Offeren v. Van Offeren

[8] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k260 Enforcement of Order, Judgment, or Decree

134k269 Contempt Proceedings

134k269(1) k. What constitutes contempt.

Wis.App.,1992.

Noncustodial father's arrearage on child support and maintenance obligation supported finding of contempt where father left job which provided him with financial ability to pay support and maintenance without first securing comparable income, pursued business with no immediate prospect of earning income, and invested substantial sum of money in business and new home.

Van Offeren v. Van Offeren

[8] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311 Enforcement of Order, Judgment, or Decree as to Support

134k311(2) k. Contempt proceedings.

Wis.App.,1992.

Van Offeren v. Van Offeren

[9] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k220 Allowance for Counsel Fees and Expenses

134k223 k. Discretion of court.

Wis.App.,1992.

Award of attorney fees in divorce action is discretionary and will be upheld on appeal unless trial court abused its discretion.

Van Offeren v. Van Offeren

[9] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k278 Appeal

134k286 Review

134k286(3) Discretion of Lower Court

134k286(4) k. Temporary alimony, counsel fees and expenses.

Wis.App.,1992.

Award of attorney fees in divorce action is discretionary and will be upheld on appeal unless trial court abused its discretion.

Van Offeren v. Van Offeren

[10] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k220 Allowance for Counsel Fees and Expenses

134k224 k. Grounds.

Wis.App.,1992.

Attorney fees are awarded in divorce proceeding based upon showing of need, ability to pay, and reasonableness of fees.

Van Offeren v. Van Offeren

[11] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k220 Allowance for Counsel Fees and Expenses

134k224 k. Grounds.

Wis.App.,1992.

Ordering husband who voluntarily left well-paying job to start new business to pay wife's attorney fees was not abuse of discretion, even if trial court's order already required husband to pay amount equal to husband's anticipated gross monthly income, where wife had to depend on contributions from others to support herself and children, husband chose to divert income and assets into newly formed business and new house, and attorney fees resulted from responding to husband's motion to eliminate child support and maintenance and wife's motion to enforce support and maintenance award. W.S.A. 805.17(2).

Van Offeren v. Van Offeren

[12] KeyCite this headnote

134 DIVORCE

134V Alimony, Allowances, and Disposition of Property

134k277 k. Right to and collection of arrears.

Wis.App.,1992.

Requiring husband to satisfy child support and maintenance arrearage before requiring wife to reimburse husband for previous overpayment was not abuse of discretion, where husband remained entitled to reimbursement of overpayment and wife was in dire financial circumstances.

Van Offeren v. Van Offeren

[12] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.App.,1992.

**661

(Cite as: 173 Wis.2d 482, 496 N.W.2d 660, **661)

*487

(Cite as: 173 Wis.2d 482, *487, 496 N.W.2d 660, **661)

On behalf of the respondent-appellant, the cause was submitted on the briefs of Richard J. Rakita and Felicia S. Miller of Hiller & Frank, S.C. of Milwaukee.

On behalf of the petitioner-respondent, the cause was submitted on the brief of Rod J. Koenen of Stewart, Peyton, Crawford, Crawford & Stutt of Racine.

Before NETTESHEIM, P.J., and BROWN and SNYDER, JJ.

NETTESHEIM, Presiding Judge.

William Van Offeren appeals from a trial court order denying his post- divorce motion to temporarily eliminate child support and maintenance. William primarily contends that the trial court erred when it determined that the reduction of income caused by his change of employment constituted "shirking." He also argues that the court abused its discretion by finding him in contempt for being in arrears on support and maintenance, by requiring him to satisfy the arrearage before his ex-wife had to return an overpayment made pursuant to their property division, and by requiring him to contribute to his ex-wife's attorney's fees.

Because William unreasonably reduced his income by voluntarily terminating his employment and starting his own business, we agree with the trial court's finding that William was shirking and that he was thus not entitled to a reduction of his child support or maintenance obligations. Because we also conclude that the *488

(Cite as: 173 Wis.2d 482, *488, 496 N.W.2d 660, **661)

trial court did not abuse its discretion as to the additional issues William presents, we affirm.

I. FACTS AND TRIAL COURT RULING

The historical facts are not in dispute. William and Virginia Van Offeren were divorced on March 15, 1989. At the time of the divorce, all four of the Van Offerens' children were minors. The trial court based its award of child support and maintenance upon William's earnings of about **662

(Cite as: 173 Wis.2d 482, *488, 496 N.W.2d 660, **662)

$45,000 a year as a division manager at S.C. Johnson, Inc. (Johnson Wax). [FN1]

FN1. The divorce judgment ordered William to pay $1178 or 31% of his gross income per month for child support. It also awarded Virginia four years maintenance at $700 per month, to be reduced to $500 after three years.

After the divorce, William's relationship with management at Johnson Wax apparently deteriorated. He was reassigned from his position as a first-shift manager to a third-shift supervisor in the company's warehouse and was told that advancement within the company was improbable. Also, the third-shift supervisory position he was assigned to was scheduled for elimination within two years. William, however, could have remained on the third shift as long as his job performance remained acceptable.

William's disenchantment with his third-shift reassignment apparently led to Johnson Wax offering him a separation package as an inducement to leave by June 30, 1990. The package consisted of eight months salary plus the proceeds of an accumulated separations benefit plan. [FN2] Before accepting the package, William consulted with several employment counselors to explore moving *489

(Cite as: 173 Wis.2d 482, *489, 496 N.W.2d 660, **662)

laterally to another company. He also investigated opening a video tape rental franchise. His research indicated that although the projected net corporate earnings for a franchise's first year of operation were zero, substantial increases were to be expected in the following years. [FN3]

FN2. The trial court found that William was earning about $60,000 per year with bonuses. The package consisted of a lump sum payment of $32,898, which represented eight months salary, and with William's accumulated separation benefits plan, totaled about $45,000.

FN3. The projected net corporate earnings for operating a franchise were zero for the first year, $5000 to $15,000 for the second year, $20,000 to $35,000 for the third and fourth years, and between $60,000 and $90,000 after five years.

William voluntarily terminated his employment with Johnson Wax effective June 30, 1990. After receiving the separation package, he prepaid his child support through June 1991. He also paid Virginia her interest in his separation benefits plan which was awarded to her under the divorce judgment. [FN4]

FN4. To satisfy his child support obligation through June 1991, William made a lump sum payment to Virginia of $10,198.38, which represented 31% of the eight months salary he received from Johnson Wax as part of his separation package. Virginia was also paid $3639.67, which represented her interest under the divorce judgment in William's accumulated separation benefits plan.

William and his current wife then purchased a video rental franchise and formed a corporation for the purpose of starting the rental business. [FN5] Each contributed $7500 of their own funds towards the franchise fee, and they financed the remainder of moneys needed with bank loans. Each of them also invested $26,000 in personal funds for the purchase of a home near the business.

FN5. William is the principal shareholder of the corporation, owning 51% of the stock. His current wife owns the remaining 49%.

The business opened in February 1991. As a fledgling venture, profits from the business were needed *490

(Cite as: 173 Wis.2d 482, *490, 496 N.W.2d 660, **662)

for operating expenses, maintaining a current inventory, and accumulating funds for the opening of a possible second franchise in 1993. To ensure the financial viability of the business, neither William nor his current wife expected to draw a salary from the business until January 1992, when William anticipated drawing a gross monthly income of $1500. Consequently, as of July 1991, William was in arrears on support, and Virginia began to depend on contributions from friends, relatives, the church, and federal and state assistance to provide for herself and the children.

On July 17, 1991, William filed the motion which inspired this appeal. He moved the court, in relevant part, to hold open his child support and maintenance obligations until he was able to receive a regular income from the business, and to order Virginia to reimburse him for the amount he overpaid her [FN6] when satisfying her interest **663

(Cite as: 173 Wis.2d 482, *490, 496 N.W.2d 660, **663)

in his Johnson Wax separation benefits plan. [FN7]

FN6. The parties stipulated that Virginia was overpaid $1200.81.

FN7. Virginia responded to the motion by moving the court for an order to show cause why William should not be held in contempt for failing to pay

child support, failing to provide a copy of his annual tax returns, and failing to maintain a supplemental life insurance policy.

The hearing was held on October 16, 1991. The trial court found that William had voluntarily left Johnson Wax without first securing a comparable source of income and that he had knowingly started a new business that projected zero net corporate earnings for the first year. The court also found that he had invested a substantial amount of money in the business and in a new home. Finally, the court found that he had accumulated an arrearage of $4873 in child support and maintenance.

*491

(Cite as: 173 Wis.2d 482, *491, 496 N.W.2d 660, **663)

Though assuming that William's decision to leave Johnson Wax was well intended, the court found that it was "unreasonable" for William to leave without first securing a comparable source of income and to instead pursue a livelihood that would generate zero income the first year. Relying on In re R.L.M., 143 Wis.2d 849, 422 N.W.2d 890 (Ct.App.1988), the court concluded that to support a determination of shirking it need not find that William intended to avoid his support obligations; it was sufficient to find that William's voluntary reduction of income was unreasonable. The court additionally found William in contempt for not paying support. It imputed to him the income he would have earned at Johnson Wax and ordered that the amount of child support and maintenance remain the same as that required under the divorce judgment. The court then fashioned an order which, while requiring William to pay the full amount of maintenance ordered under the divorce judgment, also allowed William one year in which to pay a portion of the ordered child support and to accrue the difference as an arrearage. The court also ordered William to satisfy the entire $4873 support and maintenance arrearage he had accumulated before Virginia had to reimburse him for the amount he overpaid her from his separation package. The order further directed William to contribute to Virginia's attorney's fees. William appeals. [FN8]

FN8. On March 11, 1992, William moved the trial court for a modification of the court's October 16, 1991 support order. He alleged, inter alia, that he had become a serial payor upon his current wife giving birth to their child. See Wis.Adm.Code sec. HSS 80.04(1). The trial court reduced his monthly child support obligation--thereby reducing the accruing arrearage--but refused to modify the monthly amount required under the court's October order. William therefore only appeals the court's October order.

*492

(Cite as: 173 Wis.2d 482, *492, 496 N.W.2d 660, **663)

II. SHIRKING

A. Standard of Review

[1][2] We first determine whether the trial court properly based William's support and maintenance obligations on the income he would have earned had he stayed at Johnson Wax. Ordinarily, an award of child support and maintenance is reviewed under the abuse of discretion standard of review. See Roellig v. Roellig, 146 Wis.2d 652, 655, 431 N.W.2d 759, 760-61 (Ct.App.1988). This determination is measured by the needs of the custodial parent and children and the then-existing ability of the noncustodial parent to pay. Besaw v. Besaw, 89 Wis.2d 509, 517, 279 N.W.2d 192, 195 (1979).

[3] This rule, however, is subject to a "shirking" exception. Roellig, 146 Wis.2d at 657, 431 N.W.2d at 761. Where this exception applies it is proper to examine the noncustodial parent's earning capacity rather than actual earnings. See id. Shirking is established where the obligor intentionally avoids the duty to support or where the obligor unreasonably diminishes or terminates his or her income in light of the support obligation. R.L.M., 143 Wis.2d at 852-53, 422 N.W.2d at 892.

The issue in this case is whether William unreasonably terminated his employment at Johnson Wax. The legal standard of reasonableness presents a question of law. Ozaukee County v. Flessas, 140 Wis.2d 122, 127, 409 N.W.2d 408, 410 (Ct.App.1987). Ordinarily, an appellate court need not defer to the trial court's determination of a question of law; however, because the **664

(Cite as: 173 Wis.2d 482, *492, 496 N.W.2d 660, **664)

trial court's legal conclusion as to reasonableness is so intertwined with the factual findings supporting that conclusion, *493

(Cite as: 173 Wis.2d 482, *493 , 496 N.W.2d 660, **664)

an appellate

(Cite as: 173 Wis.2d 482, *493, 496 N.W.2d 660, **664)

court should give weight to the trial court's reasonableness conclusion. Id. We therefore review the trial court's ruling as a question of law, but one to which we must pay appropriate deference.

B. Analysis

William's argument is twofold: (1) the determination that his voluntary reduction in income was unreasonable is not a sufficient basis upon which to base a shirking determination; and (2) because he reasonably believed his termination was imminent, he did not voluntarily leave Johnson Wax.

1. Voluntary decision to leave Johnson Wax.

[4] We address the latter aspect of William's argument first. William relies on a series of events at Johnson Wax to support his conclusion that he reasonably believed his termination was "forced" and that he had no "choice" but to accept the separation package and leave Johnson Wax because his termination was imminent. William testified that he was reassigned from his first-shift managerial position to a third-shift supervisory position in the company's warehouse. He also testified that he was told by management that a promotion off of the third shift was improbable, and he was not permitted to interview for other company positions. Additionally, he testified that Johnson Wax offers severance packages only in cases of involuntary termination with cause.

Other evidence, however, does not support William's theory. William himself testified that despite his reassignment and the improbability of ever being promoted off of the third shift, he was assured of a position with the company as long as his job performance remained acceptable. Additionally, since the divorce *494

(Cite as: 173 Wis.2d 482, *494, 496 N.W.2d 660, **664)

William had received a pay raise, and his most recent job performance review was favorable. William may have correctly perceived that a plateau had been reached in his career. And, he may have been justified in his belief that the remainder of his career at Johnson Wax would have been spent on the third shift. Based on our review of the record and of other cases in which a voluntary change in financial status was at issue, we conclude the trial court properly found that William voluntarily chose to terminate his employment. [FN9]

FN9. Compare Knutson v. Knutson, 15 Wis.2d 115, 117, 111 N.W.2d 905, 907 (1961) (divorced spouse voluntarily left his well-paid medical practice and left the state for the express purpose of intentionally reducing his income in order to avoid his alimony obligation); In re R.L.M., 143 Wis.2d 849, 853-54, 422 N.W.2d 890, 892 (Ct.App.1988) (noncustodial parent's voluntary choice to work part time and attend school does not relieve parent of the amount of support which could reasonably be paid if parent would have worked full time); Tozer v. Tozer, 121 Wis.2d 187, 190, 358 N.W.2d 537, 539 (Ct.App.1984) (fact that divorced spouse

voluntarily quit job before securing alternative employment was factor considered in determination that spouse was not entitled to a reduction in child support or maintenance) with Balaam v. Balaam, 52 Wis.2d 20, 27- 28, 187 N.W.2d 867, 871 (1971) (where husband's income had been reduced due to a deterioration of his business and there was no evidence that the reduction was for the purpose of avoiding support and maintenance, ability to pay should be based on husband's actual earnings at the time the award is sought); Wallen v. Wallen, 139 Wis.2d 217, 225-26, 407 N.W.2d 293, 296-97 (Ct.App.1987) (where divorced father was involuntarily laid off from work through no fault of his own and there was no evidence of bad faith in failing to recover financially, child support should have been based on his actual earnings at the time of the divorce).

*495

(Cite as: 173 Wis.2d 482, *495, 496 N.W.2d 660, **664)

2. Lack of intent to avoid support and maintenance obligations.

William next argues that because his decision to leave Johnson Wax was well intended, it was error to find that he was guilty of shirking his support and maintenance obligations. He relies on Balaam v. Balaam, 52 Wis.2d 20, 187 N.W.2d 867 (1971), and this court's decision in Wallen v. Wallen, 139 Wis.2d 217, 407 N.W.2d 293 (Ct.App.1987), as support for his argument.

In Balaam, our supreme court dealt with the question of whether a husband was intentionally shirking his support obligations **665

(Cite as: 173 Wis.2d 482, *495, 496 N.W.2d 660, **665 )

where it appeared

(Cite as: 173 Wis.2d 482, *495, 496 N.W.2d 660, **665)

that he was earning less at the time of the divorce than he had earned in previous years. There, the husband's reduction in income was due to a deterioration of his business; the reduction in income was involuntary. Balaam, 52 Wis.2d at 27-28, 187 N.W.2d at 871. The court held that absent a finding of intent to disregard support obligations, the trial court's consideration of the husband's earning capacity--rather than actual earnings-- was improper. Id. at 28-29, 187 N.W.2d at 872. See also Edwards v. Edwards, 97 Wis.2d 111, 119 & n. 4, 293 N.W.2d 160, 165 (1980); Wallen, 139 Wis.2d at 224, 407 N.W.2d at 295. The Balaam court also stated, however, that:

A divorced husband should be allowed a fair choice of a means of livelihood and to pursue what he honestly feels are his best opportunities even though he might for the present, at least, be working for a lesser financial return. This rule is, of course, subject to reasonableness commensurate with his obligations to his children and his former wife.

*496

(Cite as: 173 Wis.2d 482, *496, 496 N.W.2d 660, **665)

Balaam, 52 Wis.2d at 28, 187 N.W.2d at 871 (emphasis added).

In R.L.M., 143 Wis.2d at 852, 422 N.W.2d at 892, we were confronted with a situation where, like here, although the father obligated to pay child support had voluntarily reduced his income, it was not for the purpose of avoiding his support obligations. Nonetheless, the trial court took a dim view of the reduction, finding that it was "unfair" for him to voluntarily deprive the child of support. Id. at 851, 422 N.W.2d at 891. We agreed, stating:

It makes no difference to his child whether the court elects to call T.J.W.'s failure to meet his support obligations "shirking" or gives it some other name. In either instance, the effect is identical--T.J.W.'s [voluntary] decision to reduce his income by working part-time effectively deprives his child of the support to which the child is reasonably entitled. When this occurs, the trial court need not base its support award on the noncustodial spouse's current earnings; instead, the court is permitted to base its support order on the spouse's potential income.

Id. at 853-54, 422 N.W.2d at 892.

We acknowledge that a shirking determination usually implies a finding of intent to avoid support obligations. See id. at 852, 422 N.W.2d at 892; Wallen, 139 Wis.2d at 224, 407 N.W.2d at 296. However, even where the obligated person's voluntary reduction in income is well intended, we conclude it is proper, as suggested by Balaam and R.L.M., to assess the reasonableness of that decision in light of the person's support or maintenance obligations. Such a rule adequately protects those entitled to support and maintenance, yet permits the obligor to reasonably choose a means of livelihood and to pursue *497

(Cite as: 173 Wis.2d 482, *497, 496 N.W.2d 660, **665)

what the obligor honestly believes are the best opportunities though the financial returns may, for the present, be less. See Balaam, 52 Wis.2d at 28, 187 N.W.2d at 871; see also R.L.M., 143 Wis.2d at 853, 422 N.W.2d at 892.

Applying that rule here, we agree with the trial court's conclusion that William was shirking his child support and maintenance obligations.

William's argument equates self-interest with good faith. Such, however, is not the law. Here, William had a legal obligation to meet his child support and maintenance obligations. And, he had a well-paying position at Johnson Wax that enabled him to do so. Yet he voluntarily left this position without first securing a comparable source of income and chose to pursue a business knowing that it would take five to six years--when the majority of his children would be adults--before he reached a comparable income level. Instead, William could have stayed at Johnson Wax, started the business, and left when it was producing an income sufficient to allow him to continue his support payments.

The trial court was required to consider not only William's conditional right to make a career decision but also the effect of such a decision on those to whom William owed legal obligations of support and maintenance. The court's unwillingness to suspend William's support and maintenance obligations order reasonably represents a **666

(Cite as: 173 Wis.2d 482, *497, 496 N.W.2d 660, **666)

proper balancing of these competing interests. The order requires William to pay his full monthly maintenance obligation, but for one year allows him to satisfy his child support obligation based on the salary he intended to draw from the business, accrue the difference as an arrearage, and still maintain his newly-formed business.

*498

(Cite as: 173 Wis.2d 482, *498, 496 N.W.2d 660, **666)

Our decision here should not be overread. The law recognizes the right of an obligor to make career decisions which, in some instances, will diminish the income available to meet the obligor's support or maintenance duty. Indeed, in the appropriate case, such a decision may be the more prudent career decision over the long term, despite its immediate disadvantage to both the obligor and the obligee. However, since the reasonableness of the conduct is the standard, this right is qualified--not absolute.

III. CONTEMPT

William also argues that because his reduced income rendered him unable to pay and there was no finding that he intended to avoid his obligations, the trial court abused its discretion by finding him in contempt for being in arrears on child support and maintenance.

As of October 15, 1991, William was in arrears by $3660 in child support and $1213 in maintenance. The trial court found him in contempt for his willful failure to pay and ordered him incarcerated with work release privileges for a period not to exceed six months. The order was stayed for three years upon the condition that William make his full monthly maintenance and child support payments as modified.

[5][6][7] It is true that mere inability to pay support or maintenance cannot support a finding of contempt. Burger v. Burger, 144 Wis.2d 514, 528, 424 N.W.2d 691, 697 (1988). However, a person may be held in contempt for failure to pay where that failure is willful and contemptuous and not the result of an inability to pay. Id. In a contempt proceeding, the burden of proof is on the person against whom the contempt is charged to show that *499

(Cite as: 173 Wis.2d 482, *499, 496 N.W.2d 660, **666)

the conduct is not contemptuous. Besaw, 89 Wis.2d at 517, 279 N.W.2d at 195.

[8] Considering our discussion in the preceding section, we conclude that William's arrearage was the result of his willful disobedience and not of an inability to pay. William had the financial ability to pay support and maintenance. Yet, in an unreasonable disregard of those obligations, he left his well-paying job at Johnson Wax without first securing a comparable income. He also chose to pursue a business with no immediate prospect of earning an income adequate to enable him to meet his support obligations and invested a substantial sum of money in the business and in a new home. William was thus directly responsible for his inability to meet his obligations and for allowing the arrearages to accrue. If the court concludes from past performance that a paying parent cannot be relied upon to keep up on support obligations until some legal force is exerted, use of contempt is perfectly justified. Burger, 144 Wis.2d at 528, 424 N.W.2d at 697. Because the evidence amply supports the trial court's finding, the trial court properly exercised its discretion by finding William in contempt.

IV. ATTORNEY'S FEES

[9][10] William also challenges the trial court's requirement that he contribute $2000 toward Virginia's attorney's fees. This is, again, a discretionary award which will be upheld unless the trial court abused its discretion. Bisone v. Bisone, 165 Wis.2d 114, 123-24, 477 N.W.2d 59, 62 (Ct.App.1991). Attorney's fees are to be awarded upon a showing of need, ability to pay, and the reasonableness of the fees. Id. at 124, 477 N.W.2d at 62. Among the factors which necessarily must be considered are the *500

(Cite as: 173 Wis.2d 482, *500, 496 N.W.2d 660, **666)

assets, income and liabilities of both parties. Anderson v. Anderson, 72 Wis.2d 631, 645, 242 N.W.2d 165, 172 (1976).

William claims that because the trial court's order already requires him to pay an amount which equals his anticipated gross monthly income, the court erred in **667

(Cite as: 173 Wis.2d 482, *500, 496 N.W.2d 660, **667)

finding that he had the ability to pay the contribution. We disagree.

[11] The trial court found that Virginia had to depend on contributions from friends, family, the church, and from federal and state assistance to provide for herself and the children. It also found that William had chosen to divert all of his income and assets into the newly-formed business and a new home, and that Virginia's attorney's fees resulted from her responding to William's motion and her contempt motion seeking to enforce the divorce judgment's award of support and maintenance. Concluding that fairness dictated that William contribute $2000 towards the fees, the court ordered him to pay $100 per month. The court specifically stated that:

I think fairness dictates that there be a contribution to Virginia's attorneys fees by William.... She wouldn't even be here had he not stopped making the payments and petitioned the Court to relieve him of any responsibility to pay child support for four kids ... and [to] be relieved from his responsibility to pay ... maintenance to his former wife who is attending school full-time, so that he can get his business venture off the ground.

....

There's no doubt he's going to be strapped, but he's strapped because he made the choice to quite [sic] a $60,000.00 a year job and start up a business that he projected would not pay him any income for a number of years.

....

*501

(Cite as: 173 Wis.2d 482, *501, 496 N.W.2d 660, **667)

Court will order that it be paid at the rate of $100.00 a month contribution. I recognize he's--he's got some financial difficulties; on the other hand, he's got--he, with his present spouse, has over $100,000.00 equity together with his spouse in a business and a house. And with that kind of equity, he should be able to squeak out $100.00 a month.

The trial court's decision tracks in all pertinent respects the relevant factors for an award of attorney's fees, and we conclude that the court's findings are not clearly erroneous. Section 805.17(2), Stats.

V. REFUSAL TO OFFSET THE OVERPAYMENT

[12] William finally challenges the requirement that he satisfy his support and maintenance arrearage before Virginia reimburses him for the amount she was overpaid to satisfy her interest in the separation benefits plan. Specifically, he argues that the trial court abused its discretion by refusing to offset the amount Virginia was overpaid against either his accumulated arrearage or his contribution to Virginia's attorney's fees.

We first address the trial court's precise decision on this point. The court recognized that William had overpaid Virginia when the separation payment was made. William asked that this overpayment be credited back to him by an offset against his obligations to Virginia. The court rejected this mechanism. However, the court did not reject William's basic premise that he had overpaid Virginia and that he was properly entitled to reimbursement. Instead, in light of Virginia's dire financial circumstances, the court chose to first require William to satisfy his support and maintenance arrearages before *502

(Cite as: 173 Wis.2d 482, *502, 496 N.W.2d 660, **667)

requiring Virginia to reimburse William. We conclude that under the unique and compelling facts of this case, the trial court's decision was not an abuse of discretion.

VI. COSTS

Virginia claims that William's issues on appeal are frivolous and requests us to order fees and costs pursuant to Rule 809.25(3)(a), Stats. However, Virginia's motion was filed after the filing of her respondent's brief and was therefore untimely. See id.

Nonetheless, we choose to address Virginia's motion on the merits. See Rule 809.83(2), Stats. We conclude that given the uncertainty of the law of shirking and contempt with regard to the element of intent, we cannot find that William's arguments are made in bad faith or without the support of a good faith argument for an extension, **668

(Cite as: 173 Wis.2d 482, *502, 496 N.W.2d 660, **668 )

modification or reversal of existing law. See Rule 809.25(3)(c)2, Stats. We therefore decline to order the costs and fees as requested.

Order affirmed.

END OF DOCUMENT

Ress case: child support modification

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

(The decision of the Court is referenced in the North Western Reporter in a table captioned "Wisconsin Court of Appeals Table of Unpublished Opinions".)

In re the Marriage of Mary E. RESS, n/k/a Mary E. Goepel, Petitioner-

Respondent,

Harold F. RESS, Respondent-Appellant.

No. 91-2883.

Court of Appeals of Wisconsin.

July 15, 1992. [FN*]

Appeal from an Order of the circuit court for Racine county; Michael S. Fisher, Judge. Affirmed.

Circuit Court, Racine County

AFFIRMED.

Before NETTESHEIM, P.J., and BROWN and SNYDER, JJ.

PER CURIAM.

***1

(Cite as: 170 Wis.2d 344, 492 N.W.2d 188, 1992 WL 276601, ***1 (Wis.App.))

Harold Ress appeals pro se from an order denying the motion of the Racine County Child Support Agency for reconsideration of an order determining Mary Ress' child support arrearage to be $109.46. Harold and the agency [FN1] argue that the arrearage is $5,338.10 as calculated by the agency and that the trial court erred in not accepting the agency's calculation. We conclude that the trial court's determination is supported by the evidence and that it implemented its previous orders and Wis.Adm.Code ch. HSS 80. We affirm the order.

When Mary and Harold divorced in 1983, their three minor children resided with Harold. Mary was employed as a teacher and was obligated to pay child support. In December 1987, an order was entered requiring Mary to pay child support according to the percentage of income standards set forth in Wis.Adm.Code ch. HSS 80. The order set forth a dollar amount, $434.42, to be paid by way of a wage assignment for the period commencing September 1987 and terminating at the end of the 1987-88 school year. The order directed that future payments were required in the amount of 29% of Mary's gross income with appropriate reductions in the percentage as the children became emancipated. Subsequently, the custody of one of the children was transferred to Mary and joint custody was ordered as to another. An order dated March 14, 1989 held child support in abeyance as of December 27, 1988 pending resolution of an outstanding motion. [FN2] According to an order entered March 26, 1990, Mary recommended child support payments for the one child residing with Harold in September 1989. The order found her to be in arrears for support due from June 1 to September 1, 1989 and required her to pay as those arrears "17 percent of her gross income, or $527.42 per month, $287.71 per pay period."

Upon the expected emancipation of the child residing with Harold, Mary moved the court for an order discontinuing child support payments. At the May 28, 1991 hearing, Mary presented an exhibit [FN3] demonstrating the agency's calculation of the arrearage, her calculation of the arrearage based on her understanding of the support orders, and a calculation by the monthly method described by Wis.Adm.Code ch. HSS 80. [FN4] The trial court determined that the figures based on the administrative code's method (the ch. HSS 80 calculation) represented the proper calculation of the arrearage. Upon recalculating the arrearage under the trial court's determination, the agency moved for reconsideration producing yet a fourth set of figures as the calculation of the arrearage.

Determining the amount of a child support arrearage requires fact finding as to amount due and the amount paid. The trial court's findings of fact will not be overturned on appeal unless they are clearly erroneous. Section 805.17(2), Stats. Here, there is no dispute as to the amount of support Mary paid from October 1987 through May 28, 1991. The parties disagree on the method to be used to calculate the arrearage under the three previous support orders for those years in which Mary was obligated for support for only a portion of the year.

***2

(Cite as: 170 Wis.2d 344, 492 N.W.2d 188, 1992 WL 276601, ***2 (Wis.App.))

Harold first argues that the trial court inappropriately relieved Mary from a stipulation dated December 17, 1987. He does not explain the stipulation or how the court relieved Mary from it. We cannot address arguments that we do not understand and we will not consider the stipulation of December 17, 1987.

Both Harold and the agency argue that the trial court erred in rejecting the arrearage calculation prepared by the agency and "certified" to the court in an exhibit. The agency relies on sec. 889.10, Stats., which provides:

When a public officer is required or authorized by law to make a certificate or affidavit touching an act performed by him or to a fact ascertained by him in the course of his official duty and to file or deposit it in a public office such certificate or affidavit when so filed or deposited shall be received as presumptive evidence of the facts therein stated unless its effect is declared by some special provision of law.

Section 889.10, Stats., creates a rebuttable presumption of the accuracy of the facts contained in a certification or affidavit of a public official. [FN5] The presumption does not impede the trial court's fact-finding function and does not prevent its reliance on other credible evidence. The trial court accepted the accuracy of the figures contained in the agency's document but decided that it did not properly implement the previous support orders. Thus, the trial court's determination was in part a question of law as to the interpretations of the previous support orders and not merely a rejection of the accuracy of the agency's calculation. Contrary to the agency's position, the court was not required to make a specific finding that the presumption created by sec. 889.10 was overcome.

Harold and the agency also argue that the trial court's determination is not in conformity with the gross income method of calculation contained in Wis.Adm.Code ch. HSS 80. Yet Mary demonstrated how the numbers were calculated using the percentages and her gross income. [FN6] We agree with the trial court that the ch. HSS 80 calculation implemented the use of the percentage of gross income method.

The problem with the calculation presented by the agency in its motion for reconsideration is that it fails to implement the trial court's previous support orders, particularly where gaps in support were created. Judgments are construed at the time of their entry and in the same manner as other written instruments. Weston v. Holt, 157 Wis.2d 595, 600, 460 N.W.2d 776, 779 (Ct.App.1990). Although the record is somewhat confusing, upon close examination the support orders are not ambiguous. Even if they were, construction is allowed and the court will consider the whole record. Id. at 601, 460 N.W.2d at 779. We conclude that the ch. HSS 80 calculation covers support for all periods in which support was due.

The first disputed calculation is for the 1987-88 school year. The agency contends that $9,560.14--29% of Mary's salary for that year--is due. [FN7] However, rather than a straight application of the percentage, the order of December 17, 1987 governed that school year. The order determined that Mary was in arrears in the amount of $737.68 as of October 27, 1987 and that $434.42 was due from each remaining paycheck Mary would receive for the 1987-88 school year. There were eighteen remaining pay periods and the sum of $7,819.56 was due. That amount is incorporated in the trial court's determination.

***3

(Cite as: 170 Wis.2d 344, 492 N.W.2d 188, 1992 WL 276601, ***3 (Wis.App.))

The agency's calculation of support for the 1988-89 school year fails to acknowledge the provisions of the orders of March 14, 1989 and March 26, 1990. [FN8] The 1989 order held support in abeyance effective December 20, 1988. The 1990 order determined the arrearage for the intervening period. An arrearage was due only for the period between June 1 and September 1, 1989. [FN9] Thus, a straight application of the percentage to Mary's gross income is not appropriate because she had been relieved of the obligation of support for the first several months of 1989. The ch. HSS 80 calculation adopted by the trial court properly separated these periods in determining support due from Mary's 1988-89 salary. [FN10]

The last conflict between the figures is for the amount due from Mary's 1990- 91 salary. Support was due for only part of that school year due to the emancipation of the child. The amount incorporated in the ch. HSS 80 calculation for this period is $27.64 more than that advanced by the agency simply because the month multiplier was 8.55 rather than 8.5. There is no prejudicial error in this calculation.

The agency argues that the trial court failed to add statutory interest under sec. 767.25(6), Stats. The statute does not direct the trial court to add interest as a routine matter. It directs that interest shall be paid and permits the clerk of court to apply payments towards any applicable interest. Here, the agency did not include any interest in its calculation and did not ask the court to make the determinations necessary to have interest imputed under the statute. We will not consider an issue raised for the first time on appeal on which the trial court was not given an opportunity to rule or make findings.

By the Court.--Order affirmed.

This opinion will not be published. See Rule 809.23(1)(b)5, Stats.

FN* Petition for Review Filed.

FN1. The Racine County Child Support Agency has filed a brief as an intervenor.

FN2. The March 14, 1989 order is not in the record. However, Mary and the agency have included it in the appendix to their briefs and the order was described and relied upon in testimony at the hearing to determine the arrearage. The order's absence from the record is not fatal to our recitation of its provisions.

FN3. The record does not include Mary's exhibit with the three sets of calculations. A copy has been included in the appendix to Mary's brief without objection. The three sets of calculations were testified to at length and we look to the exhibit only as a helpful summary of that testimony.

FN4. The administrative code determines child support on a monthly basis. Wis.Adm.Code sec. HSS 80.02(3) defines the base income to be "the monthly

income at which the child support obligation is determined, which is calculated by adding together the payer's gross income adjusted for child support and the payer's imputed income for child support, and dividing by 12." Wis.Adm.Code sec. HSS 80.03 provides in part: "(1) DETERMINING CHILD SUPPORT USING THE PERCENTAGE STANDARD. The payer's base shall be determined by adding together the payer's gross income ... and dividing by 12."

FN5. We do not address whether the unsigned handwritten document attached to the agency's motion for reconsideration was sufficient to constitute a certificate or affidavit within the meaning of sec. 889.10, Stats.

FN6. Harold argues that Mary's calculations were not credible. However, Mary testified as to the various methods of calculation and why differences arose between them. The evidence was simply "number-crunching" and needed no additional verification.

FN7. The calculation is $32,966 x .29% = $9,560.14.

FN8. The agency's calculation is $35,670 x .29% = $10,344.30.

FN9. Harold's argument that child support subsequently determined should have been made retroactive to January 1989 was rejected on appeal. Ress v. Ress, No. 90-1031-FT, unpublished slip op. (Wis.Ct.App. Oct. 10, 1990).

FN10. The ch. HSS 80 calculation is ($35,670 12) x .29 x 3.645 months = $3142.08 for the September to December 1988 period and ($35,670 12) x .17 x 3 months = $1515.98 for the June to September 1989 period. These calculations use Mary's 1988-89 salary. The dollar figures used in the March 26, 1990 order for the June to September arrearage were based on Mary's 1989-90 salary. In adopting the calculation, the court acknowledged that the figures were in error and chose to use the percentage set forth in the order rather than the dollar figures. This was an appropriate implementation of the order because it stated in the alternative that the arrearage was "17 percent of her gross income."

Wis.App.,1992.

Ress v. Ress

Cameron case: child support and arrears

James H. CAMERON, Petitioner-Respondent,

Jane P. CAMERON n/k/a Jane Wise, Defendant-Appellant-Petitioner.

No. 95-0311.

Supreme Court of Wisconsin.

Argued Dec. 3, 1996.

Decided April 22, 1997.

Former wife moved for order directing former husband to pay past-due child support. The Circuit Court, Sawyer County, Norman L. Yackel, J., entered order creating trust into which $118,140 in arrearages would be paid. Former wife appealed. The Court of Appeals, 197 Wis.2d 618, 541 N.W.2d 164, affirmed in part, reversed in part, and remanded with directions. Appeal was taken. The Supreme Court, Janine P. Geske, J., held that: (1) trial court abused its discretion by imposing trust on former husband's child support arrearages without consent of former wife as primary custodian of children and without any evidence to support finding that former wife was unable to wisely manage support money; (2) standard of living for children would be that which children would have enjoyed had marriage continued and, thus, had to accommodate parents' subsequent financial prosperity or adversity; and (3) trust funded with child support arrearages earmarked for past needs was not proper mechanism by which to address future support needs of children.

Decision of Court of Appeals reversed and cause remanded to Circuit Court to vacate its order and for further proceedings.

Cameron v. Cameron

[1] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(7) k. Amount of award.

Wis.,1997.

Trial court properly exercises its discretion to determine amount parent should pay to support children, and to determine how sum should be paid, when it considers needs of primary custodian and children, as well as ability of other parent to pay. W.S.A. 767.08(2)(b), 767.25.

Cameron v. Cameron

[2] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(10) k. Review.

Wis.,1997.

As in case of modification of child support order, reviewing court will uphold trial court's imposition of trust on arrearages stemming from support order entered before effective date of statute precluding retroactive revision of child support arrearages, if trial court examined relevant facts, made proper findings, applied proper standard of law, and reached conclusion that reasonable judge could reach. W.S.A. 767.32(1m).

Cameron v. Cameron

[3] KeyCite this headnote

30 APPEAL AND ERROR

30XVI Review

30XVI(A) Scope, Standards, and Extent, in General

30k844 Review Dependent on Mode of Trial in Lower Court

30k846 Trial by Court in General

30k846(6) k. Consideration and effect of findings or failure to make findings.

Wis.,1997.

Absent required findings of fact, reviewing court may independently review record and affirm judgment if it is clearly supported by preponderance of evidence, reverse judgment if it is not so supported, or remand for findings and conclusions.

Cameron v. Cameron

[3] KeyCite this headnote

30 APPEAL AND ERROR

30XVII Determination and Disposition of Cause

30XVII(A) Decision in General

30k1106 Remand Without Decision

30k1106(5) k. To amend verdict, findings, or judgment.

Wis.,1997.

Cameron v. Cameron

[4] KeyCite this headnote

30 APPEAL AND ERROR

30XVI Review

30XVI(H) Discretion of Lower Court

30k944 Power to Review

30k946 k. Abuse of discretion.

Wis.,1997.

If exercise of discretion is based upon error of law, trial court has acted beyond limits of its discretion and its decision will not stand.

Cameron v. Cameron

[5] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(9) k. Enforcement of decree.

Wis.,1997.

Statutes suggesting legislative approval of child support trusts established as part of original support scheme do not explicitly preclude imposition of trust as repository for support arrearages under prior law allowing retroactive modification of child support arrearages. W.S.A. 767.25(2), 767.32.

Cameron v. Cameron

[6] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(9) k. Enforcement of decree.

Wis.,1997.

When noncustodial parent seeks imposition of trust on arrearages owed under child support order entered before effective date of statute precluding retroactive modification of arrearages, that parent must demonstrate by substantial evidence that trust, which substantially alters custodial parent's decision making authority, is in best interests of children, and, if primary custodian does not consent to trust, trial court must make factual finding that primary custodian was incapable or unwilling to wisely manage child support money before stripping him or her of decision-making authority. W.S.A. 767.32(1m), 767.325(1).

Cameron v. Cameron

[7] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.,1997.

Trial court abused its discretion by imposing trust on former husband's child support arrearages, stemming from support order entered before effective date of statute precluding retroactive modification of support arrearages, without consent of former wife who was children's primary custodian, and without any evidence to support finding that former wife was unable or unwilling to wisely manage support money so that it would be in best interests of children to modify her decision-making authority. W.S.A. 767.32(1m), 767.325(1).

Cameron v. Cameron

[8] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(7) k. Amount of award.

Wis.,1997.

When court sets amount of child support, it is bound to consider needs of children, needs of parent with primary physical placement, and ability of other parent to pay, including level of subsistence and comfort in everyday life that was enjoyed by children because of their parents' financial resources.

Cameron v. Cameron

[9] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.2 Grounds and Rights of Parties

134k309.2(3) k. Particular cases.

Wis.,1997.

Standard of living for children of divorced parents is not capped at standard of living enjoyed at time of divorce, but rather is simply that which children would have enjoyed had marriage continued, and thus accommodates parents' subsequent financial prosperity or adversity. W.S.A. 767.25(1m)(c).

Cameron v. Cameron

[10] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.,1997.

Although interests of children of divorced parents are at heart of child support system, parents have cognizable interests too as reflected in statute providing for imposition of interest on unpaid child support obligations. W.S.A. 767.25(6).

Cameron v. Cameron

[11] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k311.5 k. Right to and collection of arrears; retrospective modification.

Wis.,1997.

Mere lack of certainty of future income from former husband's specialty coffee business did not supply evidentiary foundation for finding of business volatility relied upon by trial court as basis for imposing trust upon former husband's child support arrearages; although business created little income in its early years, it had been operating profitably for last several years.

Cameron v. Cameron

[12] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(8) k. Decree or order.

Wis.,1997.

Trust funded with child support arrearages earmarked for past needs is not proper mechanism by which to address future support needs of children; statutory support modification mechanism remains available should parent in future contend that circumstances have changed such that he or she is unable to meet his or her current child support obligation. W.S.A. 767.32(1).

Cameron v. Cameron

[12] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(9) k. Enforcement of decree.

Wis.,1997.

**127

(Cite as: 209 Wis.2d 88, 562 N.W.2d 126, **127)

*91

(Cite as: 209 Wis.2d 88, *91, 562 N.W.2d 126, **127)

For the defendant-appellant-petitioner there was a brief by Timothy M. Doyle and Thrasher, Doyle, Pelish & Franti, Ltd., Rice Lake and oral argument by Timothy M. Doyle.

*92

(Cite as: 209 Wis.2d 88, *92, 562 N.W.2d 126, **127)

For the petitioner-respondent there was a brief by Donald L. Hoeft, Steven E. Antolak and London, Anderson, Antolak & Hoeft, Ltd., Minneapolis, MN and oral argument by Steven E. Antolak.

¶ 1 JANINE P. GESKE, Justice.

Jane Wise (Wise) asks us to reverse the decision of the court of appeals affirming an order of the circuit court imposing a trust on child support arrearages owed by her former husband, James Cameron (Cameron). [FN1] Pursuant to that order, Cameron and Wise jointly own the trust, but disbursements are controlled by the circuit court. The question presented is whether the circuit court erred by imposing a trust on past due child support owed by Cameron when it made no finding that Wise was unable or unwilling to wisely manage the child support money owed. [FN2] We hold that in this case, the circuit court erred when it imposed a trust on child support arrearages without the consent of Wise, the primary custodian, or without any evidence to support a finding that Wise was unable or unwilling to wisely manage that support money. We therefore reverse the order of the circuit court creating the trust and remand for further proceedings consistent with this opinion.

FN1. Cameron v. Cameron, 197 Wis.2d 618, 541 N.W.2d 164 (1995).

FN2. Wise also asks us to decide whether a trust is in the best interest of the children if at its inception the trust does not provide for a disposition of trust funds once the youngest child reaches the age of majority. Because we reverse the order creating the trust, we need not decide this second question.

¶ 2 The Sawyer County circuit court, Norman L. Yackel, granted a divorce to Wise **128

(Cite as: 209 Wis.2d 88, *92, 562 N.W.2d 126, **128)

and Cameron in the spring of 1987. The divorce judgment included an order *93

(Cite as: 209 Wis.2d 88, *93, 562 N.W.2d 126, **128)

for joint custody and gave Wise primary physical placement of the couple's three minor children. Under the terms of the divorce judgment, Cameron was to pay as child support the greater of 29% of his gross monthly income from all sources, or the sum of $4,640.00 per year. The court imposed interest at the statutory rate of 1.5% per month on any amount of child support unpaid. At that time the parties did not ask that any of the child support money be placed in a trust for the benefit of the children. The record indicates that Cameron made some payments toward his child support obligation.

¶ 3 On December 15, 1993, Wise moved the circuit court for an order requiring Cameron to immediately pay all past due child support and to determine the appropriate amount of current child support. [FN3] Cameron filed a cross- motion on April 18, 1994, seeking, among other things, a "fair and equitable disposition of all amounts claimed due as child support" and a modification of the existing child support order. In his memorandum addressing those motions, Cameron urged the circuit court to place any existing arrearages into a separate trust for the support, education and welfare of the children, citing Wis. Stat. § 767.25(2) (1993-94). [FN4]

FN3. Wise's motion also included a motion to find Cameron in contempt for his failure to pay child support as previously ordered by the court, and for implementation of an immediate income assignment for enforcement of child support.

FN4. Wis. Stat. § 767.25(2) The court may protect and promote the best interests of the minor children by setting aside a portion of the child support which either party is ordered to pay in a separate fund or trust for the support, education and welfare of such children.

All future statutory references are to the 1993-94 volume unless otherwise noted.

¶ 4 *94

(Cite as: 209 Wis.2d 88, *94, 562 N.W.2d 126, **128)

On September 1, 1994, the circuit court held a hearing on the parties' motions. In a written decision filed December 27, 1994, the circuit court found that Cameron owed $118,140, including interest, in past-due child support through year-end 1993. [FN5] The court refused to retroactively reduce Cameron's child support obligation, and also denied Cameron's cross-motion for equitable credit for items he purchased for the children in the years between the divorce and these motions. The court set Cameron's prospective support payments at a flat rate of $2,500.00 per month, instead of maintaining the prior percentage formula. The $2,500 was determined to be the approximate equivalent of 29% of Cameron's current income, but an amount more easily calculated. The prospective support amount is not at issue in this review.

FN5. The circuit court also determined that Cameron's child support obligation for 1994 would be calculated consistent with its decision based on $30,000.00 per year. It is not clear from the circuit court's decision whether any 1994 arrearages were to be placed in the trust or paid to Wise outright.

¶ 5 Cameron argued that the court could retroactively reduce the child support order, based on our holding in Schulz v. Ystad, 155 Wis.2d 574, 456 N.W.2d 312 (1990), as applied to support orders entered before August 1, 1987. See Wis. Stat. § 767.32(1m)(1985-86). The circuit court found that Cameron failed to meet the Schulz criteria for retroactive reduction. [FN6]

FN6. In December, 1993, when Wise filed her motions for payment of past due support, and in April, 1994, when Cameron filed his cross-motion to modify the existing support order, our holding in Schulz v. Ystad, 155 Wis.2d 574, 456 N.W.2d 312 (1990) applied. In Schulz we said that a court could retroactively grant equitable credit against child support arrearages stemming from an order or judgment entered before August 1, 1987, the effective date of Wis.Stat. § 767.32(1m). Otherwise, we read Wis.Stat. § 767.32(1m) to apply only prospectively in prohibiting credits against support arrearages.

In 1993 Wis. Act 481, §§ 118 and 119, the legislature amended Wis.Stat. § 767.32(1m) and (1r) to "unambiguously provide that a trial court cannot grant credit for direct payments for support made in a manner other than that prescribed in the order or judgment providing for support." Douglas Cty. Child Support v. Fisher, 200 Wis.2d 807, 813, 547 N.W.2d 801 (Ct.App.1996). The Douglas court read the 1993 amendments to apply retroactively, pursuant to sec. 9326(2) of 1993 Wis. Act 481. Thus, as of June 11, 1994, a court has no discretion to grant credits against support arrearages regardless of when the judgment or order

was entered. 200 Wis.2d at 814, 547 N.W.2d 801.

This limitation on Schulz does not affect our holding here with regard to the impropriety of imposing the trust mechanism on arrearages owed by Cameron. Imposition of the trust on arrearages did not retroactively or prospectively reduce the amount of child support due under the original order. Despite Cameron's cross-motion, the circuit court declined to grant Cameron any credits against the arrearages owed, and thus did not violate the amendments to Wis.Stat. § 767.32(1m).

¶ 6 *95

(Cite as: 209 Wis.2d 88, *95, 562 N.W.2d 126, **128)

Finally, the circuit court addressed disposition of the arrearages owed. The court's solution, originally proposed by Cameron, was to create a trust funded by the arrearages, including interest, owed by Cameron. The funds were to be placed in the trust for the benefit of the children. The circuit court provided that Wise and Cameron would own **129

(Cite as: 209 Wis.2d 88, *95, 562 N.W.2d 126, **129)

the trust, but the court would control the disbursements.

¶ 7 Before deciding to impose the trust, the court found that Cameron's business was continuing to operate profitably. The court went on to say that it had "no way of knowing how profitable the corporation will be in the future." The court specifically found "that the *96

(Cite as: 209 Wis.2d 88, *96, 562 N.W.2d 126, **129)

specialty coffee business is volatile. Mr. Cameron's income could change substantially. There is no certainty that his income will continue to increase." The court concluded that "[a] trust assures the children, as best can be expected, sufficient resources for their support in the event James Cameron is unable to provide for the children" at the rate of $2,500.00 per month.

¶ 8 Wise appealed. The court of appeals upheld the lower court's authority to establish the trust, citing Resong v. Vier, 157 Wis.2d 382, 391-92, 459 N.W.2d 591 (Ct.App.1990). The court of appeals concluded that once support has been awarded absent a trust, the circuit court must apply a "necessary to the best interest of the child" standard before imposing a trust under Wis. Stat. § 767.25(2). 197 Wis.2d at 625, 541 N.W.2d 164. The appellate court further held that a circuit court may impose a trust on support arrearages if it makes the proper factual findings. Id. at 626, 541 N.W.2d 164. Such findings are those which demonstrate that the trust is necessary to protect the children's best interests. Id.

¶ 9 When the circuit court set up the trust here, it considered factors set out in Wis. Stat. § 767.25(1m), [FN7] *97

(Cite as: 209 Wis.2d 88, *97, 562 N.W.2d 126, **129)

but essentially based its decision to impose a trust on a single finding. Specifically, the circuit court found that there was a potential for Cameron's income from his coffee business to change substantially over the remaining years of his children's minority. The court of appeals acknowledged that the circuit court did not explicitly find that the trust imposed on Cameron's arrearages was "necessary to the best interest of the children." Nevertheless, the appellate court affirmed the lower court by concluding that the circuit court's reasoning satisfied that standard, and that imposition *98

(Cite as: 209 Wis.2d 88, *98, 562 N.W.2d 126, **129)

of **130

(Cite as: 209 Wis.2d 88, *98, 562 N.W.2d 126, **130)

the trust on Cameron's arrearages was a reasonable exercise of the court's discretion. [FN8]

FN7. Wis. Stat. § 767.25(1m)(1993-94) provides:

Upon request by a party, the court may modify the amount of child support payments determined under sub. (1j) if, after considering the following factors, the court finds by the greater weight of the credible evidence that use of the percentage standard is unfair to the child or to any of the parties:

(a) The financial resources of the child.

(b) The financial resources of both parents as determined under s. 767.255.

(bj) Maintenance received by either party.

(bp) The needs of each party in order to support himself or herself at a level equal to or greater than that established under 42 USC 9902(2).

(bz) The needs of any person, other than the child, whom either party is legally obligated to support.

(c) The standard of living the child would have enjoyed had the marriage not ended in annulment, divorce or legal separation.

(d) The desirability that the custodian remain in the home as a full-time parent.

(e) The cost of day care if the custodian works outside the home, or the value of custodial services performed by the custodian if the custodian remains in the home.

(ej) The award of substantial periods of physical placement to both parents.

(em) Extraordinary travel expenses incurred in exercising the right to periods of physical placement under s. 767.24.

(f) The physical, mental and emotional health needs of the child, including any costs for health insurance as provided for under sub. (4m).

(g) The child's educational needs.

(h) The tax consequences to each party.

(hm) The best interests of the child.

(hs) The earning capacity of each parent, based on each parent's education, training and work experience and the availability of work in or near the parent's community.

(i) Any other factors which the court in each case determines are relevant.

Although the circuit court here did not specifically cite Wis. Stat. § 767.32(2m) (1993-94), that statute authorizes the court to consider the factors set out in Wis. Stat. § 767.25(1m) when considering a request for modification of support.

FN8. Wise also appealed the circuit court's decision to permit Cameron's $6,000.00 contribution toward her attorney's fees to be taken from the trust. The court of appeals reversed this part of the lower court order, Cameron v. Cameron, 197 Wis.2d 618, 630, 541 N.W.2d 164 (Ct.App.1995), and Cameron does not raise it as an issue here.

¶ 10 The question before us is under what circumstances can a circuit court impose a trust on child support arrearages. Neither party contends that the circuit court lacked authority to find that Cameron owed arrearages under the original support order. The question is whether the imposition of a trust on those arrearages is appropriate in the absence of any evidence to support a finding that Wise either consented to the trust, or was unable or unwilling to wisely manage those arrearages.

¶ 11 Placing support arrearages in a trust jointly owned by the parents and controlled by the court is a substantial alteration of the custodial parent's decision making authority. After a review of the statutes and cases concerning child support and child custody matters, we conclude that statutory and case law do not directly control our answer to this question. However, we discern from those sources a legislative scheme focusing on the best interests of the children, and also taking into consideration the needs and abilities of the custodial parent, and the financial circumstances of both parents.

[1] ¶ 12 The circuit court has discretion to determine and adjudge the amount a person should reasonably contribute to the support of his or her child, and shall also determine how that sum should be paid. *99

(Cite as: 209 Wis.2d 88, *99, 562 N.W.2d 126, **130)

Wis. Stat. §§ 767.25, 767.08(2)(b). The court properly exercises its discretion when it considers the needs of the primary custodian and the children, as well as the ability of the other parent to pay. Jacquart v. Jacquart, 183 Wis.2d 372, 381, 515 N.W.2d 539 (Ct.App.1994).

[2][3] ¶ 13 As in the case of a modification of a support order, we will uphold the circuit court's imposition of a trust on arrearages, if the court examined the relevant facts, made the proper findings, applied a proper standard of law and reached a conclusion that a reasonable judge could reach. See Mary L.O. v. Tommy R.B., Jr., 199 Wis.2d 186, 193, 544 N.W.2d 417 (1996). Absent the required findings, we may independently review the record. See Kastelic v. Kastelic, 119 Wis.2d 280, 285, 350 N.W.2d 714 (Ct.App.1984). When there is a failure to make findings of fact, we may affirm the judgment if it is clearly supported by a preponderance of the evidence, reverse the judgment if it is not so supported, or remand for the making of findings and conclusions. State v. Williams, 104 Wis.2d 15, 22, 310 N.W.2d 601 (1981).

[4] ¶ 14 Finally, if an exercise of discretion is based upon an error of law, the circuit court has acted beyond the limits of its discretion and its decision will not stand. Resong, 157 Wis.2d at 387, 459 N.W.2d 591. Our decision in Schulz requires us to consider whether the circuit court erroneously exercised its discretion by ordering that the arrearages be placed in a trust available for the future needs of the minor Cameron children, instead of regarding the arrearages as presently due and owing. 155 Wis.2d at 583, 456 N.W.2d 312.

*100

(Cite as: 209 Wis.2d 88, *100, 562 N.W.2d 126, **130)

¶15 We first consider the statutory scheme for child support and custody. When the court grants a divorce, it may order either or both parents to pay an amount reasonable or necessary to fulfill a duty to support a child. Wis. Stat. § 767.25(1)(1987-88). [FN9] Except as otherwise provided, the court shall determine child support payments by using a percentage standard set by the department of health and social services. Wis. Stat. § 767.25(1j). A party ordered to **131

(Cite as: 209 Wis.2d 88, *100, 562 N.W.2d 126, **131)

pay child support under ch. 767, Stats., shall pay simple interest at the rate of 1.5% per month on any amount unpaid. Wis. Stat. § 767.25(6). In Wisconsin, there is an expectation that the primary custodian shares his or her income directly with the children. Wis. Adm.Code ch. HSS 80 Preface (1995); Cook v. Cook, 208 Wis.2d 166, 184 n. 13, 560 N.W.2d 246, 253 (1997). When a court initially orders support payments, it may protect the minor children's best interests by establishing a separate fund or trust for the support, education and welfare of the children. Wis. Stat. § 767.25(2).

FN9. 767.25 Child support. (1) Whenever the court approves a stipulation for child support under s. 767.10, enters a judgment of annulment, divorce or legal separation, or enters an order or a judgment in an action under s. 767.02(1)(f) or (j) or 767.08, the court shall do all of the following:

(a) Order either or both parents to pay an amount reasonable or necessary to fulfill a duty to support a child. The support amount may be expressed as a percentage of parental income or as a fixed sum, or as a combination of both in the alternative by requiring payment of the greater or lesser of either a percentage of parental income or a fixed sum.

¶ 16 As of June 11, 1994, a circuit court may modify only prospectively the amount of child support due under an order or judgment providing for child *101

(Cite as: 209 Wis.2d 88, *101, 562 N.W.2d 126, **131)

support pursuant to Wis. Stat. § 767.32(1m). But the question before us does not concern a modification of the current support order. If that were the case, we would follow the support modification statute, Wis. Stat. § 767.32(1).

[5] ¶ 17 A trust is permissible when it meets the best interest of the child. Wis. Stat. § 767.25(2). It is not clear from the language of Wis. Stat. § 767.25(2) whether it applies only to trusts established by the original order for support. The placement of this provision in the section entitled Child support, and not within Wis. Stat. § 767.32, Revision of certain judgments, suggests a legislative approval of trusts established as part of the original support scheme. The statutes, however, do not explicitly preclude the imposition of a trust as a repository for support arrearages.

¶ 18 Concluding that no statute controls the parameters for imposition of such a trust, we next consider relevant common law. Schulz did not address the use of a trust as a discretionary remedy for disposition of child support arrearages. One month after our decision in Schulz, the court of appeals considered the imposition of a trust on child support arrearages in Resong, 157 Wis.2d 382, 459 N.W.2d 591.

¶ 19 In Resong the plaintiff and defendant divorced after 24 years of marriage. The court ordered the husband to pay a set monthly amount in child support for their three minor children. He failed to remain current in those payments and the wife later sought to collect the arrearages. At that point the husband moved to reduce his child support obligation from 17% of his gross income to 17% of his salary only. Alternatively, he asked that some of the support money be placed in a trust for the post-majority education of the couple's remaining minor child. 157 Wis.2d at 385, 459 N.W.2d 591.

¶ 20 *102

(Cite as: 209 Wis.2d 88, *102, 562 N.W.2d 126, **131)

The circuit court determined that the existing support order of $900 month was not necessary for the last child's support, but declined to reduce the husband's obligation. Instead, the court ordered all monthly payments over $600 placed in a trust for the child's college education. Id. at 385-86, 459 N.W.2d 591.

¶ 21 The Resong court of appeals held that the lower court erred in considering the child's post-majority expenses when it set the current child support. 157 Wis.2d at 385, 459 N.W.2d 591. On that basis, the court of appeals reversed the order and remanded for further proceedings. Id. The Resong court then turned to the establishment of the trust. Id. at 391, 459 N.W.2d 591.

¶ 22 The Resong court cautioned that imposition of a trust should not be undertaken lightly. Resong drew a parallel between eliminating a custodial parent's right to make spending decisions and the gravity of altering the parent's custodial power. Id. at 391-92, 459 N.W.2d 591. In dicta, the Resong court concluded that once support has been awarded absent a trust, the circuit court must apply the "necessary to the best interest of the child" standard of the custody modification statute if it wishes to establish a child support trust. Id. at 392, 459 N.W.2d 591. We draw from Resong the admonition that when such a substantial alteration in the decision making authority of a parent is proposed, a court should exercise restraint.

¶ 23 Two cases decided after Resong considered imposition of a trust as part of the original support order. In **132

(Cite as: 209 Wis.2d 88, *102, 562 N.W.2d 126, **132)

Hubert v. Hubert, 159 Wis.2d 803, 811, 465 N.W.2d 252 (Ct.App.1990), the trust was designated for the post- majority education needs of the children. There, the former husband was a highly paid cardiac surgeon and the custodial parent sought a percentage of her former husband's gross income as child support. *103

(Cite as: 209 Wis.2d 88, *103, 562 N.W.2d 126, **132)

She also asked that part of that percentage be placed in a trust for their children's post-majority education. Hubert, 159 Wis.2d at 813, 465 N.W.2d 252. The circuit court set support at $4,000 per month, ruling that application of the percentage formula would be unfair to the payor. The court also held that it lacked authority to impose a trust for post-majority needs. Id. at 813, 465 N.W.2d 252.

¶ 24 The Hubert court of appeals first criticized the lower court's imposition of a flat monthly support amount. According to the court of appeals, the circuit court in Hubert failed to consider certain statutory factors when it deviated from the percentage standard. 159 Wis.2d at 815, 465 N.W.2d 252. The circuit court gave no explanation as to why the children should not be supported at the economic level they would have enjoyed had there been no divorce, only stating that it "would be absurd" to continue to maintain the children at that same standard of living. Id. at 815, 465 N.W.2d 252. Instead, the circuit court established child support in the amount the father volunteered to pay, without an independent examination of all of the relevant statutory factors. This determination, according to the court of appeals, was arbitrary and not reasoned from the facts in the record. Id.

¶ 25 The Hubert court next addressed the custodial parent's request for imposition of a trust. The court of appeals held that a court has discretion under Wis. Stat. § 767.25(2) to create a trust for post-majority needs, as long as the funds are paid to the trust during the children's minority. Id. at 817, 465 N.W.2d 252. Unlike the facts in Resong, in Hubert it was the primary care giver who requested the trust. Thus there arose no "specter of the court altering the authority of the custodial parent or stripping her of her decision-making authority." Id.

¶ 26 Similarly, in the most recent case affirming a trust as part of the original support order, we were *104

(Cite as: 209 Wis.2d 88, *104, 562 N.W.2d 126, **132)

not asked to strip the custodial parent of decision-making authority. Mary L.O., 199 Wis.2d 186, 544 N.W.2d 417. There we focused on use of the percentage standard of Wis. Stat. § 767.51(4m) when a court orders child support in a paternity action. The child's father was a professional football player with an exceptionally high current income but a limited career span expectancy. Id. at 190, 544 N.W.2d 417. Because the funds might not be available later, the lower court ruled that the child's best interests were served by ordering the father to pay child support according to the percentage guidelines. On review we concluded that the application of the percentage standard in Mary L.O. was not an erroneous exercise of the circuit court's discretion to fashion a child support order serving the child's best interests. Id. at 199, 544 N.W.2d 417.

¶ 27 The second issue in Mary L.O. was whether the circuit erred by imposing a trust on the monthly support payments in excess of $1,500.00. Id. at 200, 544 N.W.2d 417. We held there that the trust was permissible under Wis. Stat. § 767.51(5)(e), a paternity statute, but that any trust payments must be made from child support paid while the child is still a minor. Id. at 201, 544 N.W.2d 417.

¶ 28 Among the key distinctions between Mary L.O., Hubert, and this case is that in Mary L.O. and Hubert the custodial parent did not object to the trust. In Mary L.O. and Hubert, the trust was imposed solely on prospective support money and not on arrears. Moreover, part of the Mary L.O. trust fund was a liquid "discretionary fund" from which the custodial parent could make the decision to withdraw money without prior approval of the non-custodial parent. 199 Wis.2d at 192, 544 N.W.2d 417. Finally, in Mary L.O. the circuit court found that the father's high income as a professional football player was for a limited duration. The father's ability to continue to support his child, based on his education *105

(Cite as: 209 Wis.2d 88, *105, 562 N.W.2d 126, **132)

and prior work experience, was questionable. Id. at 195-96, 544 N.W.2d 417. Based on all of the above distinctions, affirmance of the trusts established in Mary L.O. and Hubert does not require affirmance of the trust here.

**133

(Cite as: 209 Wis.2d 88, *105, 562 N.W.2d 126, **133)

[6] ¶ 29 We conclude that no statute or prior case law directly controls the question before us. We are persuaded, however, that the standard articulated in Resong, as we modify it here, is appropriate for assessing the limited circumstances under which a trust may be imposed on child support arrearages. The Resong standard involves determining whether the trust is necessary to the best interests of the child, parallel to the statutory scheme for child custody matters. Today we modify that standard, to require a determination only that the trust is in the best interests of the child. We draw upon another principle from the statutes governing revision of custody orders to establish the required burden of proof. [FN10] When a non-custodial parent seeks imposition of a trust on arrearages owed, that parent must demonstrate by substantial evidence that the trust, which substantially alters the custodial parent's decision making authority, is in the best interests of the children. See Wis. Stat. § 767.325(1). [FN11]

FN10. Although here we draw upon principles identified in the revision of custody and placement statute, Wis. Stat. § 767.325, we do not transplant its requirements governing the timing and manner of custody modifications to the imposition of trusts on child support arrearages.

FN11. Wis. Stat. § 767.325 Revision of legal custody and physical placement orders.

(1) SUBSTANTIAL MODIFICATIONS. (a) Within 2 years after initial order.

Except as provided under sub. (2), a court may not modify any of the following orders before 2 years after the initial order is entered under s. 767.24, unless a party seeking the modification, upon petition, motion, or order to show cause shows by substantial evidence that the modification is necessary because the current custodial conditions are physically or emotionally harmful to the best interest of the child:

1. An order of legal custody.

2. An order of physical placement if the modification would substantially alter the time a parent may spend with his or her child.

(b) After 2-year period. 1. Except as provided under par. (a) and sub. (2), upon petition, motion or order to show cause by a party, a court may modify an order of legal custody or an order of physical placement where the modification would substantially alter the time a parent may spend with his or her child if the court finds all of the following:

a. The modification is in the best interest of the child.

b. There has been a substantial change of circumstances since the entry of the last order affecting legal custody or in the last order substantially affecting physical placement.

2. With respect to subd. 1, there is a rebuttable presumption that:

a. Continuing the current allocation of decision making under a legal custody order is in the best interest of the child.

b. Continuing the child's physical placement with the parent with whom the child resides for the greater period of time is in the best interest of the child.

3. A change in the economic circumstances or marital status of either party is not sufficient to meet the standards for modification under subd. 1.

*106

(Cite as: 209 Wis.2d 88, *106, 562 N.W.2d 126, **133)

¶30 The Resong standard which we adopt as modified also requires, when the primary custodian does not consent to the trust, a factual finding as to whether the primary custodian was incapable or unwilling to wisely manage the child support money. Without such a finding, a court may not strip the primary custodian of his or her decision-making authority.

[7] ¶ 31 There are several reasons for our conclusion that the circuit court erred when it imposed a trust on the arrearages owed by Cameron. First, unlike the custodial parents in Mary L.O. and Hubert, Wise did *107

(Cite as: 209 Wis.2d 88, *107, 562 N.W.2d 126, **133)

not consent to imposition of a trust on the support money owed.

¶ 32 Second, the circuit court failed to make, and the court of appeals failed to require, any factual findings suggesting that Wise was incapable or unwilling to wisely manage the child support money. Resong, 157 Wis.2d at 392, 459 N.W.2d 591. To the contrary, the circuit court found that Wise was running her own business successfully and appeared to be an astute business person when testifying. Despite Cameron's significant underpayment of his child support obligation, the minor Cameron children "got along" under Wise's management of the $7,000 or $8,000 per year Cameron supplied, and her own resources.

¶ 33 Third, Cameron requested the trust, but failed to show by substantial evidence that a trust substantially altering the decision making authority of the primary custodial **134

(Cite as: 209 Wis.2d 88, *107, 562 N.W.2d 126, **134 )

parent, was in the best interests of the children.

¶ 34 Thus, under the Resong standard that we modify here, it was an erroneous exercise of discretion for the circuit court to dictate how the arrearages owed by Cameron should be controlled. In the absence of any findings that Wise consented to the trust, or was unable or unwilling to wisely manage the support money, it is in the best interest of the children to leave the decision-making authority over the support arrearages solely to Wise, the primary custodian.

[8] ¶ 35 Cameron argues that the children have "gotten along" over the years and thus he should not be forced to pay the arrearages. This argument flies in the face of the original support order and also disregards the standard of living to which children of divorced *108

(Cite as: 209 Wis.2d 88, *108, 562 N.W.2d 126, **134 )

parents are entitled. When a court sets an amount of child support, it is bound to consider the needs of the children, the needs of the parent with primary physical placement, and the ability of the other parent to pay. Edwards v. Edwards, 97 Wis.2d 111, 116,

(Cite as: 209 Wis.2d 88, *108, 562 N.W.2d 126, **134)

293 N.W.2d 160 (1980). The court also considers the level of subsistence and comfort in everyday life that was enjoyed by the children because of their parents' financial resources. Hubert, 159 Wis.2d at 815 n. 2, 465 N.W.2d 252.

[9] ¶ 36 The standard of living for children of divorced parents is not capped at the standard of living enjoyed at the time of divorce. It accommodates the parents' subsequent financial prosperity or adversity. The standard is simply that which the children would have enjoyed had the marriage continued. Wis. Stat. § 767.25(1m)(c). See also Sommer v. Sommer, 108 Wis.2d 586, 590, 323 N.W.2d 144 (Ct.App.1982)(children are entitled to share in the "fruits of post-divorce economic improvements" of their parents).

[10] ¶ 37 The interests of children of divorced parents are at the heart of our child support system. Greenwood v. Greenwood, 129 Wis.2d 388, 392, 385 N.W.2d 213 (Ct.App.1986). While the children's interests are the focus, parents have cognizable interests too. For example, the purpose of imposing interest on unpaid child support obligations is to encourage prompt payment of current support "for the benefit of the child and the custodial parent." Greenwood, 129 Wis.2d at 392-93, 385 N.W.2d 213 (emphasis added). Another purpose of the interest requirement is to provide some compensation for "recipients" who do not receive timely payments. See Greenwood, 129 Wis.2d at 393, 385 N.W.2d 213. There are important policy reasons for the legislature's *109

(Cite as: 209 Wis.2d 88, *109, 562 N.W.2d 126, **134)

encouragement of timely support payments. "Payment of past due arrearages is ... to be encouraged, for not only have the child and the custodial parent been deprived of the payments over time, but the noncustodial parent, contrary to court order, has enjoyed the use and benefit of those funds." Id. Other jurisdictions hold a similar perspective.

"If one parent is allowed to improvidently close his eyes and wallet to his obligations so as to require the other parent to utilize an added portion of his or her assets or income to fill that void, the children's right to adequate support is effectively diminished.... To the extent that the (custodial parent) has been forced to expend child support funds for (obligations of the noncustodial parent) that otherwise would have been available for other needs, the court must conclude that the 'best interests' of (the children) have been impaired by the defendant's conduct."

Hoefers v. Jones, 288 N.J.Super. 590, 672 A.2d 1299, 1306-07 (Ch.Div.1994), aff'd, 288 N.J.Super. 478, 672 A.2d 1177 (App.Div.1996).

¶ 38 Thus we conclude that in this case, the order of the circuit court establishing the trust improperly benefited Cameron, the parent responsible for the arrearages. Wise was forced to meet a large part of Cameron's child support obligation for at least the years 1987 through 1993 with her own resources.

¶ 39 A circuit court may enforce an order for child support by contempt proceedings, an account transfer under § 767.267, or through other enforcement mechanisms as provided under § 767.30. Wis. Stat. § 767.08(2)(c). Were we to uphold the trust mechanism in this case, we would indeed be converting support law to "a sort of sporting lottery." **135

(Cite as: 209 Wis.2d 88, *109, 562 N.W.2d 126, **135)

Schulz, 155 Wis.2d at 606, 456 N.W.2d 312 (Day, J., dissenting). Upholding the *110

(Cite as: 209 Wis.2d 88, *110, 562 N.W.2d 126, **135)

trust here would signal non-custodial parents that non-payment of support is worth the gamble, because once arrearages reached a certain magnitude the court might return at least partial ownership of the support money to the delinquent payor in the form of a trust. We will not sanction such gamesmanship at the expense of children, primary custodians who meet their obligations, and the taxpaying public. When the non-custodial parent seeks a trust on arrearages, he or she must prove by substantial evidence that a substantial alteration in the decision making authority of the primary custodian is in the best interests of the children.

¶ 40 We need not consider that part of the court of appeals' decision concerning final disposition of any remaining trust funds after the Cameron children reach majority. Nonetheless, we observe that the court of appeals left open the possibility that unspent arrearages will be returned to Cameron. This possibility circumvents the circuit court's refusal to reduce the originally ordered support amount.

¶ 41 The circuit court erred in one other regard. It acted to dispose of the past amounts owed by gauging the future support needs of the Cameron children. We do not doubt that the circuit court was attempting to serve the best interests of the children when it found that Cameron's coffee business was volatile. Nevertheless, we discern no basis in the record for the court's finding.

[11] ¶ 42 The fact that Cameron had little income from his business in the early years does not support the finding that his business, operating profitably for the last several years, will at some point in the future take a serious downward turn, or cease altogether as *111

(Cite as: 209 Wis.2d 88, *111, 562 N.W.2d 126, **135)

was likely under the facts of Mary L.O. We are hard pressed to identify any businessperson possessing a "certainty that his income will continue to increase." The mere lack of certainty does not supply the evidentiary foundation for a finding of business volatility.

[12] ¶ 43 A trust funded with money earmarked for past needs is not the proper mechanism by which to address future support needs. The modification mechanism of Wis. Stat. § 767.32(1) remains available to Cameron should he, in the future, contend that circumstances have changed such that he is unable to meet his current support obligation of $2,500 per month.

¶ 44 Thus, for all of the above reasons, we reverse the decision of the court of appeals affirming the order of the circuit court imposing a trust on support arrearages. In establishing the trust without Wise's consent, the circuit court failed to make any factual findings regarding Wise's ability and willingness to wisely manage the support money. The circuit court also misapplied the law in this case by using a trust mechanism, funded by arrearages, to meet potential future support needs.

The decision of the court of appeals is reversed and the cause remanded to the circuit court to vacate the order imposing the trust and for further proceedings consistent with this opinion.

END OF DOCUMENT

Brinkman: recent discussion of modification of custody and child support

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

(The decision of the Court is referenced in the North Western Reporter in a table captioned "Wisconsin Court of Appeals Table of Unpublished Opinions".)

In re the Marriage of Jeff P. BRINCKMAN, Petitioner-Respondent-Cross-Appellant,

Maura Brinckman WEHRENBERG, Respondent-Appellant-Cross-Respondent.

No. 97-2207.

Court of Appeals of Wisconsin.

Feb. 25, 1999.

APPEAL and CROSS-APPEAL from orders of the circuit court for Crawford County: ROBERT W. WING, Judge. Affirmed.

Before Dykman, P.J., Vergeront and Roggensack, JJ.

DYKMAN, P.J.

***1

(Cite as: 224 Wis.2d 935, 592 N.W.2d 318, 1999 WL 93156, ***1 (Wis.App.))

Ms. Wehrenberg (formerly Mrs. Brinckman), appeals from an order holding that Jeff Brinckman did not shirk his child support responsibilities when he closed his law practice in Onalaska and moved to Prairie du Chien. She contends that the trial court erroneously exercised its discretion regarding procedure when it did not: (1) allow her to testify under oath in the same manner that it permitted Mr. Brinckman to testify; and (2) order Mr. Brinckman to produce certain business and financial records, which she had subpoenaed. We reject these assertions and affirm.

Mr. Brinckman cross-appeals. He alleges that the trial court erroneously exercised its discretion when it: (1) found that he did not pay his share of the children's medical expenses; (2) did not re-establish his weekday placement privileges; and (3) appointed a guardian ad litem to mediate placement disputes between the parties. We reject these arguments and affirm.

BACKGROUND

Mr. Brinckman and Ms. Wehrenberg had two children, Robert, who was born on October 5, 1987, and Bridget, who was born on February 9, 1989. They were granted a divorce on June 26, 1991. Under their stipulation, which was approved by the trial court and incorporated into the divorce judgment, the parties agreed to joint custody of the children with Ms. Wehrenberg having primary physical placement. Mr. Brinckman was to receive physical placement of the children every Tuesday, Thursday, every other weekend, alternating holidays, and sixteen days during the summer. He also was to pay twenty-five percent of his gross income as child support.

In April 1995, Ms. Wehrenberg informed Mr. Brinckman that she and the children were going to move approximately sixty miles from Onalaska to Prairie Du Chien, so that she could take a job there. Mr. Brinckman filed a motion for a change in the primary placement of the two children.

In June 1995, Ms. Wehrenberg moved the children to Prairie du Chien, making weekday placement difficult for Mr. Brinckman. There is evidence that she failed on several occasions to take the children to Onalaska to visit Mr. Brinckman, and often would not allow Mr. Brinckman to pick them up for visits. Mr. Brinckman responded by filing a contempt motion. Prior to the motion hearing, the trial court appointed Attorney Gerald Wright to act as the children's guardian ad litem, and it also appointed Dr. Beverly Bliss, Ph.D., to conduct psychological evaluations of Mr. Brinckman, Ms. Wehrenberg and their two children.

On September 18, 1995, a hearing was held on both the primary placement motion and the contempt motion. Mr. Brinckman testified and presented evidence at the hearing. Ms. Wehrenberg, who was represented by counsel, did not testify or present any evidence. The trial court denied Mr. Brinckman's motion for a change in primary placement. It also eliminated Mr. Brinckman's Tuesday and Thursday placement privileges after reviewing Dr. Bliss's report in which she concluded that the high level of conflict between the parties was beginning to take its toll on the children, and that the conflict increased as the number of visits or exchanges increased.

***2

(Cite as: 224 Wis.2d 935, 592 N.W.2d 318, 1999 WL 93156, ***2 (Wis.App.))

On December 31, 1995, asserting that he wanted to be closer to his children, Mr. Brinckman closed his law practice in Onalaska and moved to Prairie du Chien, where he opened a law office. The move to Prairie du Chien caused Mr. Brinckman's income to drop significantly, which meant a decrease in the amount he paid in child support. On January 18, 1996, Ms. Wehrenberg filed a motion to increase Mr. Brinckman's child support payments. On January 22, 1996, Mr. Brinckman filed a motion to reinstate his Tuesday and Thursday placement privileges, arguing that such visitation was again feasible because of his move to Prairie du Chien. On June 18, 1996, Ms. Wehrenberg, who was no longer represented by counsel, filed additional motions, alleging that Mr. Brinckman was shirking and that he had not paid his part of the children's medical bills.

A motion hearing was held on June 25, 1996. The trial court denied all the motions except the one concerning the medical bills, which it granted several months later. Ms. Wehrenberg appeals and Mr. Brinckman cross-appeals.

BACKGROUND

I. Appeal

Ms. Wehrenberg raises several issues in which she claims the trial court erroneously exercised its discretion. "A discretionary determination, to be sustained, must demonstrably be made and based upon the facts appearing in the record and in reliance on the appropriate and applicable law." Hartung v. Hartung, 102 Wis.2d 58, 66, 306 N.W.2d 16, 20 (1981). "Additionally, and most importantly, a discretionary determination must be a product of a rational mental process by which the facts of record and law relied upon are stated and are considered together for the purpose of achieving a reasoned and reasonable determination." Id. We will not reverse a discretionary decision in a divorce action if the record discloses that discretion was in fact exercised and we can perceive a reasonable basis for the decision. See Metz v. Keener, 215 Wis.2d 626, 631, 573 N.W.2d 865, 868 (Ct.App.1997).

Ms. Wehrenberg asserts that the trial court erroneously exercised its discretion when it denied her shirking motion without allowing her an opportunity to testify under oath. While the trial court did not allow her to testify under oath in the same manner in which it allowed Mr. Brinckman to testify, it allowed her to ask questions and introduce evidence as an advocate. When the trial court recognized that Ms. Wehrenberg was having difficulty proving her case, it advised her to focus on the critical issue of whether Mr. Brinckman moved to Prairie du Chien to avoid paying child support. It stated:

So the question really is, is it reasonable for Mr. Brinckman to pick up and quit his law practice in La Crosse to move his practice and his residence to Prairie du Chien in order to be closer to his children? Now if you can prove, one, that he is not here because of his children, then that would show that that would be unreasonable. And if you can show that it is unreasonable for him to be closer to his children, and that, that making a move like that is unreasonable for him to be close to his children, then you have proved shirking. If you can't, you haven't proved shirking.

***3

(Cite as: 224 Wis.2d 935, 592 N.W.2d 318, 1999 WL 93156, ***3 (Wis.App.))

And while the trial court advised her of what she needed to prove, Ms. Wehrenberg did not offer any evidence to support her claim that Mr. Brinckman reduced his income in order to avoid paying child support. The trial court apparently decided that because she presented no other evidence as to Mr. Brinckman's motive, it was not necessary for her to testify as a witness on this issue.

While we are satisfied that the trial court gave Ms. Wehrenberg several opportunities to introduce evidence, it erroneously exercised its discretion when it did not permit her to testify in the same manner that it allowed Mr. Brinkman to testify. When a trial court erroneously exercises its discretion, we determine whether the error was harmless. Under § 805.18(2), STATS., a judgment shall not be reversed or set aside, for procedural errors, unless the errors affected the substantial rights of the party seeking to reverse or set aside the judgment.

We conclude that the trial court did not affect Ms. Wehrenberg's substantial rights when it did not allow her to testify. The evidence suggested that Mr. Brinckman moved to Prairie du Chien to be closer to his children, not to shirk his child support responsibilities. Ms. Wehrenberg presented no evidence to dispute this conclusion when she questioned Mr. Brinckman, and she does not tell us what evidence she would have produced if she had been given the opportunity to testify.

Ms. Wehrenberg also argues that the trial court erroneously exercised its discretion when it failed to provide her with Mr. Brinckman's business and personal financial records, which she had subpoenaed prior to the hearing. [FN1] She apparently subpoenaed these records to establish that Mr. Brinckman voluntarily reduced his income when he closed his law practice in Onalaska and moved to Prairie du Chien. However, that issue was not in dispute. Mr. Brinckman conceded that he voluntarily reduced his income when he closed his practice and moved to Prairie du Chien. The dispositive issue was whether his motive for reducing his income was to avoid paying child support.

FN1. Prior to the hearing, Ms. Wehrenberg filed a motion requesting that

Mr. Brinckman provide various financial records regarding his law practice in order to establish shirking. Ms. Wehrenberg raised this issue at the hearing.

Ms. Wehrenberg: The records that were subpoenaed, Your honor, do I get a copy of those?

The Court: No. They haven't been supplied, there is no need for them. No.

While Ms. Wehrenberg may have been entitled to this information, it would not have helped her prove that Mr. Brinckman reduced his income to avoid paying child support. The trial court, as the trier of fact, was convinced that Mr. Brinckman's motive for moving was to be closer to his children; therefore, it concluded that the financial records were unnecessary. Even if the trial court erred, this information would have not altered the court's decision as to Mr. Brinkman's motive. Therefore, we conclude that the trial court's procedural errors were harmless.

II. Cross-Appeal

A. Medical Bills

In his cross-appeal, Mr. Brinckman asserts that the trial court erred by ordering him to pay one of his children's unpaid medical bills. This order stems from the trial court's decision at the June 25 hearing in which it gave Ms. Wehrenberg an opportunity to submit a written itemization of the children's unpaid medical bills. The court said that once it received this information it would render a decision. After some delay, Ms. Wehrenberg submitted this information to the court. The court reviewed it and then ordered Mr. Brinckman to pay the $606.37 owed to the Gunderson clinic.

***4

(Cite as: 224 Wis.2d 935, 592 N.W.2d 318, 1999 WL 93156, ***4 (Wis.App.))

In his briefs, Mr. Brinckman raises several reasons why the trial court erred in this matter. First, Mr. Brinckman contends that the trial court erred in ordering him to pay these medical expenses when all the evidence presented at the June 25 hearing demonstrated that he had paid his share of these expenses. Second, he asserts that the trial court erred in allowing Ms. Wehrenberg an opportunity to submit evidence after the hearing and off the record. Third, he argues that the trial court erroneously exercised its discretion when it did not rule on the several written objections that he submitted via the mail. Fourth, he contends that the trial court erroneously exercised its discretion when it made rulings without holding another in-court hearing. Fifth, he argues that the trial court erred in considering Ms. Wehrenberg's letter and bill summary, which he believes is inadmissible hearsay. Sixth, he asserts that the trial court erred when it interpreted the divorce judgment, which stated that each party was to pay one-half of the children's medical expenses not covered by insurance, and to require him to pay one-half of the "litigation expenses" incurred by Ms. Wehrenberg for the preparation of her expert psychologists. Finally, he argues that the trial court erred in requiring him to pay these expenses when both parties had the right to challenge the failure of the insurer to pay expenses covered under the plan, or to challenge a health care provider who charges more than it agreed to charge, and that the mere existence of an unpaid bill from a health care provider is not in and of itself proof that a divorced parent owes anything, particularly when a divorced party disputes liability for such a bill.

We conclude that Mr. Brinckman waived his right to appeal the procedural and evidentiary issues listed above by failing to object at the June 25 hearing when the trial court set out the process that it was going to employ. An objection not made to the trial court is waived. See Christenson v. Equity Coop. Livestock Sale Ass'n., 134 Wis.2d 300, 306, 396 N.W.2d 762, 765 (Ct.App.1986). A contemporaneous objection gives the trial court the opportunity to correct its own errors and thereby avoid unnecessary delays through appeals, reversals, and new trials. See State v. Holt, 128 Wis.2d 110, 124, 382 N.W.2d 679, 686 (Ct.App.1985). Since Mr. Brinckman failed to make a contemporaneous objection when the trial court made its ruling as to the process it would use, the objection is now waived. See McGarrity v. Welch Plumbing Co., 104 Wis.2d 414, 417 n. 2, 312 N.W.2d 37, 39 n. 2 (1981).

However, we will reach the issue of whether the trial court erroneously exercised its discretion in holding Mr. Brinckman liable for the unpaid medical bill. We review a trial court's discretionary determinations under an erroneous exercise of discretion standard. See Hartung, 102 Wis.2d at 66, 306 N.W.2d at 20. A trial court exercises appropriate discretion when it examines the relevant facts, applies a proper standard of law, uses a demonstrative rational process, and reaches a conclusion that a reasonable judge could reach. See State v. Sullivan, 216 Wis.2d 768, 780, 576 N.W.2d 30, 36 (1998).

***5

(Cite as: 224 Wis.2d 935, 592 N.W.2d 318, 1999 WL 93156, ***5 (Wis.App.))

On May 16, 1997, after reviewing the various medical bills, the trial court sent Mr. Brinckman and Ms. Wehrenberg each the following letter, which set out its reasons for holding Mr. Brinckman liable for the Gunderson Clinic bill.

Dr. Ms. Wehrenberg and Mr. Brinckman:

In attempting to sort through various claims regarding what medical bills were paid by what party and what medical bills remain unpaid and what party was responsible for payment of that particular medical bill, I have come to the conclusion that the Gunderson Clinic bill is the responsibility of Mr. Brinckman. Whether that bill is itself reasonable and necessary is subject to dispute. Mr. Brinckman should take steps either to contest the bill or to pay it. If Mr. Brinckman's representation to the court at the time this case was heard last year is correct, then he should be able to establish that the bill is unreasonable and uncollectable and negotiate a settlement with the Gunderson Clinic regarding this bill.

While the court finds that Mr. Brinckman is responsible for this bill, the court does not find that Mr. Brinckman is in contempt of the court order. Mr. Brinckman's failure to pay this bill was based on his reasonable belief that the charges of the Gunderson Clinic were not necessary and unreasonable since the insurance company refused to pay those charges on the same basis. If Mr. Brinckman is correct on his contention, then there will be no money due and owing the Gunderson Clinic or the Gunderson will be ultimately unable to collect their bill.

This letter now resolves all the issues presented to the court for its decision.

Sincerely yours,

Robert W. Wing

Circuit Court Judge

We are satisfied that the trial court adequately explained the reasoning for its decision, and we conclude that the court's rationale was reasonable. If Mr. Brinckman thought the bill was unreasonable or unnecessary, he could contest it. Were he unsuccessful in showing that the bill was unreasonable or unnecessary, he offers no explanation for why his insurer would not be liable for the bill. Were he successful, he does not contest that he would not have to pay the bill. The trial court believed that this was a fair way of handling the matter, and Mr. Brinckman has pointed to no evidence in the record that suggests that it is not. We therefore reject Mr. Brinckman's assertion that this was an erroneous exercise of discretion.

B. Placement privileges

Mr. Brinckman also argues that his move to Prairie du Chien made it feasible for him to see his children more, and that the trial court erred in denying his motion to re-establish weekday placement privileges. However, Mr. Brinckman fails to recognize that the trial court did not eliminate the weekday visitations because Mr. Brinckman was living in Onalaska. Rather, it eliminated weekday placement on the recommendation of Dr. Bliss, who determined that the high level of conflict that existed between Mr. Brinckman and Ms. Wehrenberg was having a negative impact on the children, and this conflict increased the more the children visited with Mr. Brinckman. In her written report, which was submitted prior to the September 18, 1995 motion hearing, Dr. Bliss stated:

***6

(Cite as: 224 Wis.2d 935, 592 N.W.2d 318, 1999 WL 93156, ***6 (Wis.App.))

Each child appeared to be very troubled by the conflicts they have experienced. They dread the fighting between the parents and the jibes and comments they hear from each demeaning the other. Conflict is the greatest predictor of maladjustment in children of divorce. These children have experienced parental conflict over most of their lives and already show signs of significant stress reactions and impairments in their relationships with their father. Containment of this conflict is the core issue that should be considered as the court adjusts the placement schedule.

....

The most significant problem with the current schedule involves the number of transitions that must be accomplished from one parent to the other and conflicts that are often probable and always possible during the exchanges.

(Emphasis added for the parties' benefit.)

At the September 18, 1995 hearing, Dr. Bliss testified regarding her report. She stated the following:

You know these schedules where kids are going back and forth multiple times frequently are for the low conflict situations. This is not a low conflict situation. If nobody goes to see any therapist the best thing the court can do is to decrease the number of transitions these kids are making in this war zone.

At the June 25, 1996 hearing, when Mr. Brinckman moved the court to re- establish the Tuesday and Thursday placement, the trial court noted that the conflict between the parties in this case had not subsided. The trial court stated:

The only thing I can see so far, you people still don't get along, and neither one of you are going to let go. That's the only thing I can see right now that has been proven conclusively.

....

I will be honest with you. Mr. Brinckman has presented his case, and he hasn't presented a case in my opinion just because of the way this has gone, his continual answers on his own case, his inability to not throw in a barb almost with every answer he makes shows me that Dr. Bliss' conclusion at the time of the last hearing, and my conclusion at that time, and this time, says that there should be no change in how the child placement order is currently written.

....

... I am going to deny Mr. Brinckman's motion to modify physical placement. In my opinion it is eminently clear the parties, both parties, it is like gasoline and fire, I don't know who is responsible for the explosions, but there are explosions every time these two people come into contact with one another. And the less the children are exposed to those contacts the better. So I think there is just no purpose in allowing these children more contacts, more exchanges, and that would just simply be detrimental to their best interests in my opinion.

Section 767.325, Stats., which addresses modifying physical placement, requires that the trial court determine what is in the best interests of the child. The trial court in this case decided that the best interests of the children would be served by maintaining the existing visitation schedule. [FN2] We conclude that this was not an erroneous discretionary determination.

FN2. The following is the portion of the hearing transcript in which the

trial court discussed how Mr. Brinckman could get his weekday placement re- established:

Mr. Brinckman: One other thing, Your Honor. I know these are hard proceedings, but is there a point at which I can get back the Tuesdays and Thursdays?

The Court: The only possibility I can see, Mr. Brinckman is, one, is that you are going to have to take, Dr. Bliss has recommended anger management, ... I think you have to definitely take that at the very least.

C. Guardian ad litem

***7

(Cite as: 224 Wis.2d 935, 592 N.W.2d 318, 1999 WL 93156, ***7 (Wis.App.))

Mr. Brinckman also argues that the trial court erred when it deferred to the guardian ad litem regarding matters of placement. He contends that under Biel v. Biel, 114 Wis.2d 191, 194, 336 N.W.2d 404, 406 (Ct.App.1983), the trial court cannot delegate the power to make custody and visitation determinations to any person, and the trial court in this case erred when it delegated such power to the guardian ad litem. We agree that the trial court is not permitted to delegate final authority in making these determinations to a third party; however, the trial court in this case did not give the guardian ad litem final authority to make these determinations. The court said:

The Court: The guardian ad litem can negotiate. He has been given the authority to do that.... There is no such thing as binding arbitration in family matters. I can't do that. The law does not permit it. But he can help negotiate.

....

Mr. Wright: Your Honor, if I may get a point of clarification on my authority here, it is to negotiate, but not to arbitrate.

The Court: Well, there is nonbinding arbitration.

Mr. Wright: Nonbinding. So I can declare how they should do it, and I can't force them.

The Court: That's what the law says.

In light of the trial court's accurate statement of the law, we reject Mr. Brinckman's assertion that the trial court erroneously delegated "final" authority to determine matters of placement. The court merely gave the guardian ad litem the power to negotiate and engage in nonbinding arbitration.

We make the following observation: The single factor coursing strongly through this record is Mr. Brinckman and Ms. Wehrenberg's anger toward one another. Both use their children as weapons to attack the other. It seems to matter not at all to either Mr. Brinckman or Ms. Wehrenberg that this will inevitably damage their children. We sincerely hope both parents will change their behavior.

CONCLUSION

We are satisfied that though the trial court erred when it did not allow Ms. Wehrenberg to testify under oath at the June 25 hearing, that error was harmless. And even if the trial court erred by not requiring the production of certain financial documents that Ms. Wehrenberg subpoenaed, that error is harmless. We are equally satisfied that the trial court did not erroneously exercise its discretion when it ordered Mr. Brinckman to pay the Gunderson Clinic bill, declined to re-establish Mr. Brinckman's weekday placement privileges, and authorized the guardian ad litem to negotiate any disputes concerning placement of the children.

By the Court.--Orders affirmed

Not recommended for publication in the official reports.

Wis.App.,1999.

Brinckman v. Wehrenberg

Wingad: recent discussion of child support and joint custody

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

(The decision of the Court is referenced in the North Western Reporter in a table captioned "Wisconsin Court of Appeals Table of Unpublished Opinions".)

In re the Marriage of Jeffrey R. WINGAD, Petitioner-Appellant,

Bonnie P. WINGAD, n/k/a Bonnie P. McConnell, a/k/a Alison McConnell,

Respondent-Respondent.

No. 97-0050.

Court of Appeals of Wisconsin.

March 3, 1998.

APPEAL from an order of the circuit court for Dunn County: DONNA J. MUZA, Judge. Affirmed in part; reversed in part, and cause remanded with directions.

Before CANE, P.J., and MYSE and HOOVER, JJ.

PER CURIAM.

***1

(Cite as: 218 Wis.2d 164, 578 N.W.2d 208, 1998 WL 86288, ***1 (Wis.App.))

Jeffrey Wingad appeals an order denying his motion for change of primary physical placement of his daughter. He also challenges the order concerning child support, unreimbursed medical expenses, an educational trust, his pension plan and a contribution to his former wife's attorney fees. Because the record reflects an appropriate exercise of discretion with respect to the order denying a change of primary physical placement, child support and medical expenses, we affirm those portions of the order. Because the record and findings do not support the order with respect to the educational trust, pension plan and attorney fees, we reverse those portions of the order and remand for further proceedings. Accordingly, the order is affirmed in part, reversed in part and remanded with directions.

Jeffrey and Alison McConnell were divorced in 1989. They were awarded joint custody and equally shared placement of their daughter, born in 1985. In 1990, Alison married and moved with her husband and daughter to North Dakota. Jeffrey objected to his daughter's move, and the parties negotiated a settlement of their disputes. Their post-judgment order and stipulation provided that the parties would continue to have joint legal custody; physical placement would be with Alison during the school year and from July 15 through August 15, except as otherwise agreed. It also provided that both parents intended to remain flexible and cooperative regarding physical placement and "possible periodic changes to physical placement from time to time," while being sensitive to the child's well-being and "specific desires, wishes, and needs as relates to said physical placement with each of the parties."

Additionally, the parties stipulated that neither party would pay child support and that Alison would be responsible for the child's medical expenses. They also agreed that Jeffrey would establish an educational trust fund and designate the trust as the beneficiary of 50% of his pension plan.

In 1992, Alison filed a motion to modify the order to require Jeffrey to pay child support and one-half of the child's medical expenses; to demonstrate that he had maintained the educational trust fund; and to set a summer visitation schedule. Jeffrey filed a motion to transfer the child's primary placement to him. At about this time, Jeffrey was terminated from his $60,000 per year engineering job due to a layoff. Alison voluntarily terminated her employment as an airline attendant to stay home as a full time parent.

The trial court appointed a guardian ad litem for the child. It ordered that Harlan Heinz, Ph.D., perform a custody study. After receiving Heinz's lengthy report and after nine days of hearings, the court denied Jeffrey's motion for change of primary physical placement. It granted Alison's motion for child support, contribution to the child's health expenses, and specified periods of placement. It further ordered Jeffrey to reimburse $20,000 to his pension fund, deposit $6,000 in the trust fund, and awarded a $7,000 contribution to Alison's attorney fees based upon a finding of "overtrial."

1. Primary physical placement

***2

(Cite as: 218 Wis.2d 164, 578 N.W.2d 208, 1998 WL 86288, ***2 (Wis.App.))

Jeffrey argues that the trial court erroneously exercised its discretion when it denied his motion to modify his daughter's primary placement. He contends that trial court misinterpreted the 1990 postjudgment order. Jeffrey maintains "that the Trial Court was bound by the terms and intent of [the 1990] Order and failed to implement them," which in his view would require a transfer of physical placement based upon the child's expressed desire to live with her father.

We reject this argument. Custody and placement issues are addressed to trial court discretion. See Licary v. Licary, 168 Wis.2d 686, 692, 484 N.W.2d 371, 374 (Ct.App.1992). While parents may stipulate to custody, the agreement is not binding on the trial court. "A contract between parents ... should be given serious consideration by the court as it normally expresses what may be best for the child; nevertheless it does not bind the court or preclude a modification of a decree based thereon." King v. King, 25 Wis.2d 550, 555, 131 N.W.2d 357, 360 (1964).

Because the child has rights which should be protected, the controlling question is not what the parties agreed, but what is in the child's best interests. Racine Family Court Comm'r v. M.E., 165 Wis.2d 530, 536-37, 478 N.W.2d 21, 23-24 (Ct.App.1991). The trial court does not solely arbitrate a dispute between two private parties. Rather, in its "role as a family court, the trial court represents the interests of society in promoting the stability and best interests of the family." Kritzik v. Kritzik, 21 Wis.2d 442, 448, 124 N.W.2d 581, 585 (1963). We conclude that the trial court correctly determined that it was not bound by the parties' 1990 post-judgment stipulation.

In a related argument, Jeffrey contends that "whether it is in [the child's] best interests that her primary placement be changed to be with him must be interpreted within the context of the criteria agreed to by the parties" in the 1990 stipulated order. [FN1] We disagree. Section 767.325(1)(b), Stats., governs modification of placement of a child subsequent to two years from the last placement order. It requires that (1) the modification be in the child's best interests and (2) there has been a substantial change in circumstances affecting placement since the last placement order. It establishes a rebuttable presumption that continuing the current placement is in the child's best interests. Section 767.325(1)(b)(2)(b), Stats.; Wiederholt v. Fischer, 169 Wis.2d 524, 530, 485 N.W.2d 442, 444 (Ct.App.1992). Just as the parties may not bind the court through a custody stipulation, neither may they dictate to the court the criteria it must apply in determining the child's best interests. See King, 25 Wis.2d at 555, 131 N.W.2d at 360.

FN1. Jeffrey contends: "Thus, when Jeff brought his motion for a change in primary placement of [the child] in September, 1992, he requested simply that the Stipulation and Post-Judgment Order be enforced as intended: that is, to promote [the child's] best interests by maintaining flexibility in placement in accord with [the child's] long-standing expression of her desires."

***3

(Cite as: 218 Wis.2d 164, 578 N.W.2d 208, 1998 WL 86288, ***3 (Wis.App.))

For his contention that a custody stipulation may define the criteria on which to determine placement, Jeffrey largely relies on two cases dealing with child support, Zutz v. Zutz, 208 Wis.2d 338, 559 N.W.2d 919 (Ct.App.1997), and Jacquart v. Jacquart, 183 Wis.2d 372, 515 N.W.2d 539 (Ct.App.1994). Neither case is persuasive authority for the proposition that the court is bound by a parties' custody stipulation. In Zutz, we merely upheld the trial court's decision not to upset the existing support agreement because, although there was a substantial change, the agreement was still serving the needs of the parties and child. Id. at 344-45, 559 N.W.2d at 921.

In Jacquart, we rejected the mother's argument that the father was not complying with the flexible support arrangement provided by stipulation in the judgment. Id. at 385-87, 515 N.W.2d at 544. The record demonstrated that his annual child support contributions for their two minor children varied between $22,834 and $45,000 from 1989 to 1992. Id. at 386, 515 N.W.2d at 544. Consequently, we affirmed the trial court's discretionary decision to adhere to the existing flexible support provisions in the judgment. Id. at 387, 515 N.W.2d at 544. Because neither case supports the notion that a court is bound by a stipulated custody arrangement, Jeffrey's reliance on the 1990 custody stipulation and order as a vehicle to overturn the court's discretionary decision is greatly misplaced.

Next, Jeffrey contends that two substantial changes occurred since the 1990 stipulation and order: (1) the child consistently expressed her unequivocal desire to live with her father, based upon her distrust of Alison and fear of her step-father, and (2) Alison repeatedly interfered and failed to cooperate with Jeffrey's periods of physical placement. Jeffrey argues that the trial court clearly erred when it inferred that the child's statements that she wanted to live with her father were prompted merely by a desire to please him.

The trial court found: "It is undisputed that the minor child has told many people, including both lay witnesses and expert witnesses, that she believes her mother has lied to her, that her stepfather was mean to animals, and that she wished to live" with her father. The court also found that the child's statements "are prompted by her desire to please her father." A trial court erroneously exercises its discretion if its decision is based on a mistaken view of the evidence. See Thorpe v. Thorpe, 108 Wis.2d 189, 195-96, 321 N.W.2d 237, 240-41 (1982). Jeffrey's argument does not present grounds for reversal.

The trial court did not base its custody decision on the wishes of the child. The trial court stated: "The court is aware of the fact that the law provides that a child may express her wishes, but that her wishes are not binding upon the court or any of the parties." It also stated that nine- and ten-year-old children are not capable of making the ultimate decision as to where they should live or what is in their best interests. Because the court did not base its discretionary decision on the child's wishes but instead on the child's best interest, Jeffrey's assertion fails to present grounds for reversal.

***4

(Cite as: 218 Wis.2d 164, 578 N.W.2d 208, 1998 WL 86288, ***4 (Wis.App.))

Jeffrey also argues that the trial court clearly erred when it found that the placement arrangement was going smoothly until Alison filed a motion requesting child support, and that Jeffrey almost immediately thereafter requested a change of placement. Jeffrey recounts numerous instances when things were not going smoothly. [FN2] It is not necessary for us to review the evidence to determine whether the trial court correctly performed its fact- finding function with respect to changed circumstances because Jeffrey's burden is to show not only a substantial change in circumstances, but also that a modification of the placement was in the child's best interests. See § 767.325(1)(b), Stats.; Licary, 168 Wis.2d at 694, 484 N.W.2d at 375. The trial court determined that Jeffrey failed to show that a modification of placement was in the child's best interests.

FN2. Despite its statement that things had been going smoothly, the trial court recounted various incidents in 1991 concerning the conflicts between the parties with respect to visits. For example, Alison denied Jeffrey's request to spend time with his daughter on her birthday. Also, after representing that he would return the child after three days, Jeffrey went to Florida with the child and did not return her as scheduled. In context, the court appears to have meant that things were going more smoothly before the court proceedings were filed.

The record supports the court's determination. What is in a child's best interests is a mixed question of law and fact, with the determination of such matters as psychological factors being a question of fact. Wiederholt, 169 Wis.2d at 530-31, 485 N.W.2d at 444. We defer to the trial court's credibility assessments and affirm its factual findings unless clearly erroneous. Section 805.17(2), Stats. The trial court assessed the weight and credibility of the various expert witnesses, and relied in large part on Heinz's court-ordered custody study. The court pointed out that it was Jeffrey who demanded that Heinz be appointed. [FN3]

FN3. The trial court found that before Jeffrey requested that Heinz be appointed, Jeffery had taken the child to see Heinz on two occasions, without disclosing this information to Alison or the court, in violation of the post-judgment stipulation and order that any counseling done with the child be performed only after the parties' mutual consent.

Heinz's forty-eight-page report detailed his investigation, findings and recommendations. Based on interviews and testing, he set out his opinions with respect to the strengths and weaknesses of each parent. He opined that Alison has demonstrated her ability to have primary placement, has productively contributed to her daughter's development, has established a home for the child in which the child is well adjusted, has established a strong, stable and supportive network in the form of school, church, siblings and grandparents, and has established a family centered lifestyle to provided full-time care for her children. He viewed as Alison's weaknesses her ongoing power struggle with Jeffrey interfering with her co-parenting, and her becoming dependent on her husband to confront problems with Jeffrey, thus promoting a power struggle between them.

Heinz also observed that Jeffrey indicates that he is able and willing to take primary responsibility for the child, has a strong bond with her, has productively contributed to her development and is psychologically, physically and financially able to care for her. As weaknesses, Heinz concluded that Jeffrey has allowed his ongoing power struggle with Alison to affect his daughter's ability to hold unencumbered relationships with both parents and other significant persons in her life. He believed that Jeffrey's lifestyle was somewhat unstable with respect to jobs and relationships. He also concluded that Jeffery shared information inappropriately with his daughter, disclosing items best kept at an adult level in the family. Finally, Heinz concluded that clinical observations suggest that Jeffery has an obsessive- compulsive quality that fuels his quest for primary placement, as indicated by his custody notebook, numerous written and verbal contributions, and his increased conviction that Alison's influence is noxious. Heinz concluded that Jeffrey's interpretations of events appear increasingly distorted to support his belief system, serving to alienate his daughter from her mother and contributing to the child's confusion. Heinz recommended that the child remain placed primarily with her mother and that disrupting the current placement was not warranted. Her guardian ad litem agreed.

***5

(Cite as: 218 Wis.2d 164, 578 N.W.2d 208, 1998 WL 86288, ***5 (Wis.App.))

Jeffery called other expert witnesses who refuted Heinz's opinions. Nonetheless, the trial court, not the appellate court, is the ultimate arbiter of weight and credibility. Section 805.17(2), Stats. Its credibility assessments will not be overturned on appeal unless they are inherently or patently incredible, or in conflict with the uniform course of nature or with fully established or conceded facts. See Chapman v. State, 69 Wis.2d 581, 583, 230 N.W.2d 824, 825 (1975). Because the record demonstrates support for the trial court's conclusion that maintaining the existing primary placement was in the child's best interests, we do not overturn this determination on appeal. [FN4]

FN4. Jeffrey also argues that the trial court erroneously disallowed testimony of Dr. Schneider because the court mistakenly found that Jeffrey had failed to disclose the expert witness. Because Jeffrey's argument fails to indicate an offer of proof, we do not review this evidentiary issue on appeal. Sections 901.03(1)(b), and 805.18, Stats.

Jeffrey also argues that without making any specific findings, the court erred when it ordered that Jeffrey not send letters and cards to his daughter at school. He argues that he sent them to the school because Alison was intercepting his letters and not delivering them. He claims that the only evidence on this issue is that his daughter enjoyed receiving the correspondence and that her teacher believed it was beneficial.

We search the record for reasons to support a discretionary decision. Loomans v. Milwaukee Mut. Ins. Co., 38 Wis.2d 656, 662, 158 N.W.2d 318, 320 (1968). In view of the enormous degree of conflict surrounding the parties' relationships with one another and their daughter, we conclude that the trial court reasonably exercised its discretion. It ordered that Alison make sure that the child receives the items from her father and that her father send the items to the home. It was reasonable for the court to conclude that this order would promote stability in the child's family relationships. It also keeps the school out of the parties' conflicts. [FN5]

FN5. In his reply brief, Jeffrey argues that the guardian ad litem committed fraud on the court; that together with the judge committed major ethical violations by having ex parte communications; they interfered with placement orders; and that court rulings violated due process. Because these arguments are inadequately developed, we decline to develop them for him. State v. Gulrud, 140 Wis.2d 721, 730, 412 N.W.2d 139, 142-43 (Ct.App.1987).

2. Child support and health care payments

Next, Jeffrey argues that the trial court erred when (1) it found that a substantial change in circumstances occurred, (2) imputed an annual income of $28,200 to him, (3) misinterpreted the 1990 stipulation and order, and (4) ordered that he pay child support and contribute to health care costs, contrary to the parties' stipulation, while at the same time upholding the stipulated provision that he contribute to an educational trust fund. We conclude that the court correctly determined that a substantial change in circumstances occurred and imputed a $28,200 annual income. We also conclude, however, that the trial court erroneously enforced the stipulated order with respect to pension plan contributions and trust fund contributions, while at the same time requiring that Jeffrey pay child support. Accordingly, we affirm a portion of the child support order, reverse in part and remand for further proceedings consistent with our opinion.

The stipulation provided that each party waived child support in light of certain concessions made by the other: "[B]oth parties specifically desired and decided to contract for a waiver of child support, now and in the future, on any regular basis, regardless of which parent (party) may have physical placement of their minor child for the majority of any given calendar year." In consideration for the waiver of child support, the parties agreed to assume other separate obligations. Alison agreed to pay medical expenses not covered by insurance. Jeffrey agreed to establish a trust fund for their daughter for college, vocational and other needs once the child reaches eighteen. Jeffrey was required to contribute $100 per month, increasing to $300 per month in 1995, and name the trust as beneficiary to 50% of his pension fund.

***6

(Cite as: 218 Wis.2d 164, 578 N.W.2d 208, 1998 WL 86288, ***6 (Wis.App.))

The trial court found that at the time the agreement was signed, Jeffrey earned $60,000 per year, Alison earned $40,000 per year, and her new husband earned $100,000 per year. After the agreement was entered into, Jeffrey lost his job and Alison decided to leave her employment to become a full-time homemaker. The child's medical expenses were covered by Alison's husband's insurance policy.

In addition, the trial court found that Jeffrey withdrew $40,000 from his pension plan and failed to contribute $6,000 as required to the trust fund. The trial court also held that Jeffrey's attempts at finding employment were not reasonable because he refused to look outside the Eau Claire/Chippewa Falls area. Jeffrey testified that he worked as a carpet salesperson, hot air balloon pilot, and volunteers at a computer software store without pay. The court also found that Jeffrey refused to fully disclose financial information at trial, making it impossible for the court to precisely determine his exact income. Nonetheless, the court found that he likely made $28,200 per year.

The trial court found that there was a substantial change in the parties' circumstances based upon the changes in their employment status. Additionally, it stated: "Regardless of respondent's income or lack thereof, petitioner owed a duty of support to his daughter, and the court finds that he has failed in that duty." It ordered that Jeffrey pay $400 per month, according to percentage standards. See WIS. ADM.CODE § HSS 80. The court further ordered that the payments were to commence retroactively as of August 1, 1992, the date Alison filed her child support motion. It calculated an arrearage in the sum of $12,782, to be paid within six months, or accrue interest at 18% per annum.

In addition, the court required Jeffrey to deposit $6,000 into the trust fund, "to be maintained until [the child] reaches her 18th birthday." Also, the court ordered that Jeffrey "replenish the depleted pension fund by depositing $20,000 in an account in [the child's] name within 60 days of today's date. Said account shall be placed under [Alison's] control" until the child reaches age eighteen. The court further ordered that Jeffrey be responsible for one-half of any uninsured health care costs.

The modification of child support rests within the trial court's discretion. Jacquart, 183 Wis.2d at 381, 515 N.W.2d at 542. "This discretion is properly exercised when the court has considered the needs of the custodial parent and children, and the ability of the noncustodial parent to pay." Id. The party seeking to modify a child support order has the burden of demonstrating that a substantial change in circumstances has occurred and that it justifies a modification of the support order. See Thibadeau v. Thibadeau, 150 Wis.2d 109, 115, 441 N.W.2d 281, 283 (Ct.App.1989).

***7

(Cite as: 218 Wis.2d 164, 578 N.W.2d 208, 1998 WL 86288, ***7 (Wis.App.))

Jeffrey argues that the trial court could not find a substantial change in circumstances based upon Alison's voluntary decision to quit her job. He further argues that although his involuntary loss of employment is a change of circumstances, it does not justify a modification of the stipulated support order. We disagree. Alison's reduction of income from $40,000 per year to zero is a substantial change in economic circumstances. [FN6]

FN6. Jeffrey does not claim that Alison's husband's financial circumstances may be considered in evaluating Alison's total economic circumstances or that his income is a source from which to satisfy her child support obligation.

The record therefore supports the trial court's finding of a substantial change in circumstances. Whether the substantial change due to her voluntary income reduction justifies a modification of the child support order is, however, a question of fairness. See Forester v. Forester, 174 Wis.2d 78, 90-91, 496 N.W.2d 771, 776 (Ct.App.1993). In evaluating fairness in this case, the trial court was required to consider not only fairness between the parties, but also fairness with respect to the needs of the child. See Ondrasek v. Tenneson, 158 Wis.2d 690, 695, 462 N.W.2d 915, 917 (Ct.App.1990) (The paramount goal of the child support statute is to promote the best interests of the child). We conclude that under the circumstances here, the court properly exercised its discretion in deciding that Alison's decision to remain at home as a full-time homemaker resulting in a voluntary income reduction justified a modification of the existing child support order.

Jeffrey argues that the trial court erroneously imputed to him an earning capacity of $28,200 per year. We disagree. The court based its decision on two factors. First, it found that Jeffrey was not making reasonable efforts to seek employment because he restricted his search to the Eau Claire/Chippewa Falls area, and second, that Jeffrey was ordered to provide 1993 and 1994 income tax returns and had not done so. The court concluded that his "repeated failure to provide information at trial made it impossible to determine his exact income."

Although Jeffrey's initial loss of employment was involuntary, the trial court's determination that Jeffrey was not making reasonable efforts at obtaining employment amounted to an express finding of shirking, which justifies consideration of his earning capacity. See Abitz v. Abitz, 155 Wis.2d 161, 175, 455 N.W.2d 609, 615 (1990). Jeffrey argues that his job search has been diligent. The trial court, not this court, assesses the weight and credibility of testimony. In light of Jeffrey's testimony that his job search has been limited to an area not exceeding a radius of 150 miles and that he is not registered with job service, the court was entitled to conclude his efforts were not diligent.

More significantly, however, the trial court found that Jeffrey failed to make a full and accurate financial disclosure. See In re Kevin C., 181 Wis.2d 146, 160, 510 N.W.2d 746, 751 (Ct.App.1993). The court found that Jeffrey failed to provide copies of his 1993 and 1994 tax returns as ordered. [FN7] The fact that Jeffrey, "by his deliberate conduct frustrated an accurate calculation of his net income, however, does not preclude the trial court from making the appropriate finding of fact." Lellman v. Mott, 204 Wis.2d 166, 172-73, 554 N.W.2d 525, 528 (Ct.App.1996). As a result, the court was entitled to make findings based upon the facts that were available, which included Jeffrey's earnings history, educational level, health and previous employment. See id.

FN7. In his challenge to the court's child support order, Jeffrey does not attack this finding.

***8

(Cite as: 218 Wis.2d 164, 578 N.W.2d 208, 1998 WL 86288, ***8 (Wis.App.))

Alison testified that Jeffrey worked many years as an engineer, and earned over $60,000 annually, before he was laid off in 1992. Jeffrey testified that he was able to earn $300 per week in carpet sales, and had "some income" giving hot air balloon rides. He also testified that he is an independent dealer for a balloon manufacturer and volunteered some forty hours per week at a computer store. Jeffrey testified that he has rental income from the upper level of his house, which is basically a duplex, of $500 per month, which pays his mortgage payment. Additionally, Jeffrey testified that he is in good health and has no physical or mental limitations that would keep him from working. [FN8] The trial court imputed a sum which is less than what Jeffrey earned in the past as an engineer, but more than a minimum level salary. Because the record discloses a rational basis for the court's determination that support should be calculated on the basis of $28,200 per year, we do not upset it on appeal. These findings also support that court's order that Jeffrey contribute for one-half of the child's health expenses not covered by Alison's husband's insurance.

FN8. Jeffrey also explained that he had not applied for minimum wage jobs because he is working on other projects that have the potential for a much greater return.

Next, Jeffrey argues that the trial court erroneously enforced the portion of the stipulated order that required that he pay $100 a month into a trust fund for his daughter, while at the same time requiring that he pay approximately 17% of his income as child support under the percentage standards. We agree. The trial court ordered that Jeffrey's modified child support obligations are effective as of August 1, 1992, the date that Alison filed her child support motion. See § 767.32(1m), Stats. Nonetheless, it also ordered that his child support obligations [FN9] under the previous order remained in effect and found that $6,000 was owing to the trust fund at the time of the trial. [FN10]

FN9. The parties agreed on the record that Jeffrey's obligations to contribute to the trust fund and to maintain the trust as a beneficiary to his pension plan were in the nature of child support obligations.

FN10. The court made no specific findings as to how much Jeffrey had deposited into the account at the time of the hearing.

The court erred. "The child support ... payments modified by the order for revision shall cease to accrue under the original judgment or order from the date on which the order revising such payments is effective." Section 767.32(2w), Stats. Because the revised order became effective August 1, 1992, the previously ordered payments ceased at that time to accrue. As a result, we reverse the trial court's order concerning the trust fund and remand for findings as to the amount of payments that were due as of July 31, 1992. The sum necessary to fund the trust is limited to those amounts accruing as of July 31, 1992. [FN11]

FN11. We recognize that under § 767.25(2), Stats., the trial court may promote the child's best interests by setting aside a portion of child support in a trust; the trial court did not, however, make findings to support such an order in this case.

Next, Jeffrey argues that the trial court erroneously interpreted and enforced the parties' 1990 stipulation and order relating to the his pension fund and, as a result, erroneously required him to deposit $20,000 in an account in his daughter's name, to be managed and controlled by Alison. We agree. With respect to the pension fund, the stipulated order merely provides: "The trust fund shall also be the beneficiary of 50% of the pension fund of the petitioner, Jeffrey R. Wingad, as relates to his employment." Nothing in the stipulated order suggests an intent to transfer any sum from the pension fund to a separate account in the child's name. It only provides that the trust fund be named a beneficiary of the pension plan.

***9

(Cite as: 218 Wis.2d 164, 578 N.W.2d 208, 1998 WL 86288, ***9 (Wis.App.))

The trial court, however, held that the best interests of the child required that the parties not be bound by the 1990 stipulated order. Because the trial court revised the stipulated order, its terms are no longer in effect and it would be error for the trial court to continue to enforce it. See § 767.32(2w), Stats. As a result, the order requiring Jeffrey to replenish the deleted pension fund and to deposit $20,000 in an account in his daughter's name is reversed.

3. Attorneys fees

Finally, Jeffrey argues that the trial court erroneously ordered that he contribute $7,000 toward Alison's attorney fees based upon its finding of "overtrial." Because the trial court's findings do not support the order, we reverse and remand for further proceedings. The award of a contribution to attorneys fees is addressed to trial court discretion. Ondrasek v. Ondrasek, 126 Wis.2d 469, 483, 377 N.W.2d 190, 196 (Ct.App.1985). The trial court is entitled to order a contribution to attorney's fees based upon a finding of "overtrial," defined as "needless days of trial and extra preparation time." Id.

Here, the trial court made no specific findings as to the total amount or reasonableness of Alison's attorney fees. Although the court made general findings that Jeffrey caused an "overtrial" when he failed to provide tax returns; refused to comply with discovery, resulting in motions; caused a delay in trial due to a job interview; called experts to testify who had not interviewed the child; and failed to return the child after summer visitation; the court did not make a specific finding as to the amount of time needed to resolve these issues or the reasonableness of the fees charged for these items. Also, the record is unclear with respect to the total attorney fees and what portion is attributed to "overtrial." The record also fails to reveal any reason to support the court's finding that calling an expert to testify who has not interviewed the child is "overtrial."

"The failure of a trial court to explain its reasons for reaching a particular result is reversible error or an abuse of discretion unless an appellate court can come to a reasonable conclusion from the record." Thorpe, 108 Wis.2d at 198, 321 N.W.2d at 242. Because the record is unclear as to what portion of Alison's total attorney fee may be legitimately attributable to "overtrial," we reverse and remand for specific findings. The court in its discretion may receive additional evidence on this issue.

In summary, we affirm the trial court's denial of Jeffrey's motion for a change in placement. We also affirm the court's order that Jeffrey contribute $400 per month child support commencing August 1, 1992. We reverse the portion of the order requiring Jeffrey to reimburse the trust fund in the sum of $6,000 and remand for specific findings as to the amount owing as of July 31, 1992, the date that his obligation to contribute to the trust fund would have ceased pursuant to § 767.32(2w), Stats. We further reverse the portion of the order requiring that Jeffrey deposit $20,000 in a fund in the child's name. Finally, we reverse the court's order that Jeffrey contribute $7,000 to Alison's attorney fees and remand for specific findings to show the what proportion of her attorney fees were legitimately attributable to "overtrial."

***10

(Cite as: 218 Wis.2d 164, 578 N.W.2d 208, 1998 WL 86288, ***10 (Wis.App.))

Order affirmed in part; reversed in part, and caused remanded with directions. No costs on appeal.

This opinion will not be published. See Rule 809.23(1)(b)5, Stats.

Wis.App.,1998.

Wingad v. Wingad

Raz: modification of child support

In re the Marriage of Jan RAZ, Petitioner-Appellant, [FN<<dagger>>]

FN<<dagger>> Petition for review denied.

Mary BROWN, D.D.S., Respondent-Respondent.

No. 96-1997.

Court of Appeals of Wisconsin.

Submitted on Briefs Aug. 7, 1997.

Opinion Released Sept. 16, 1997.

Opinion Filed Sept. 16, 1997.

Divorced father sought modification of child support obligation due to claimed substantial change of circumstances. The Circuit Court, Milwaukee County, Gary A. Gerlach, J., modified obligation. Father appealed. The Court of Appeals, Curley, J., held that: (1) father failed to demonstrate that use of child support percentage standards was unfair to children or himself, so as to warrant deviation from percentage standards; (2) trial court properly exercised its discretion in adopting mother's expert witness' testimony as to father's actual income; and (3) appeal was not frivolous.

Affirmed.

Raz v. Brown

[1] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(10) k. Review.

Wis.App.,1997.

Determination of appropriate child support is committed to sound discretion of trial court.

Raz v. Brown

[2] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(10) k. Review.

Wis.App.,1997.

Whether trial court properly exercised its discretion in determining child support obligation is question of law.

Raz v. Brown

[3] KeyCite this headnote

30 APPEAL AND ERROR

30XVI Review

30XVI(H) Discretion of Lower Court

30k944 Power to Review

30k946 k. Abuse of discretion.

Wis.App.,1997.

Appellate court will sustain discretionary act if it finds that trial court examined relevant facts, applied proper standard of law, and using demonstrated rational process, reached conclusion that reasonable judge could reach.

Raz v. Brown

[4] KeyCite this headnote

285 PARENT AND CHILD

285k3 Support and Education of Child

285k3.3 Actions to Compel Support or Payment for Necessaries

285k3.3(7) k. Amount of award.

Wis.App.,1997.

In setting child support, trial court may only depart from statutory percentage standards if, after considering factors listed in statute, the court finds, by greater weight of credible evidence, that use of percentage standard is unfair to child or to any of the parties. W.S.A. 767.25(1j, 1m); Wis.Admin. Code § HSS 80.03(1)(b).

Raz v. Brown

[5] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.6 k. Hearing, determination, and order.

Wis.App.,1997.

Although father demonstrated, in post-divorce modification proceeding, that use of child support percentage standards would create disparity in disposable incomes of father and mother, this was insufficient to warrant deviation from percentage standards, absent evidence that children would be harmed because mother had more disposable income than father or that father would be unable to live at same standard of living he was used to. W.S.A. 767.25(1j, 1m); Wis.Admin. Code § HSS 80.03(1)(b).

Raz v. Brown

[6] KeyCite this headnote

157 EVIDENCE

157XII Opinion Evidence

157XII(F) Effect of Opinion Evidence

157k569 Testimony of Experts

157k571 Nature of Subject

157k571(7) k. Value.

Wis.App.,1997.

Trial court properly exercised its discretion in adopting mother's accountant's testimony as to father's actual income, for purposes of calculating appropriate child support obligation. Wis.Admin. Code § HSS 80.03.

Raz v. Brown

[7] KeyCite this headnote

134 DIVORCE

134VI Custody and Support of Children

134k309 Modification of Order, Judgment, or Decree as to Support

134k309.2 Grounds and Rights of Parties

134k309.2(3) k. Particular cases.

Wis.App.,1997.

Repayment of loan father had made to his company was part of father's "gross income," for purposes of determining appropriate post-divorce child support obligation. Wis.Admin. Code § HSS 80.

See publication Words and Phrases for other judicial constructions and definitions.

Raz v. Brown

[8] KeyCite this headnote

134 DIVORCE

134VIII Foreign Divorces

134k388 k. Alimony.

Wis.App.,1997.

Father's appeal from order modifying his child support obligation was not frivolous, so as to warrant assessment of fees and costs; although he was unsuccessful, father had attempted to show that application of child support percentage standards, and resulting disparity in disposable incomes of father and mother, would harm children, warranting deviation from percentage standards. W.S.A. 767.25(1j, 1m), 809.25(3); Wis.Admin. Code § HSS 80.03(1)(b).

**606

(Cite as: 213 Wis.2d 296, 570 N.W.2d 605, **606)

*298

(Cite as: 213 Wis.2d 296, *298, 570 N.W.2d 605, **606)

On behalf of the petitioner-appellant, the cause was submitted on the briefs of Jan Raz of Milwaukee.

On behalf of the respondent-respondent, the cause was submitted on the brief of Randolph E. House of Randolph E. House Law Offices of Milwaukee.

Before FINE, SCHUDSON and CURLEY, JJ.

CURLEY, Judge.

Jan Raz appeals from a post-judgment order modifying his child support obligation to $1800 per month. Raz claims the trial court erroneously exercised its discretion in calculating his child support obligation by applying the child support percentage standards. Further, he claims the trial court erred in calculating his monthly income. Under current statutory and case law, the trial court was obligated to determine child support by applying the child support percentage standards unless Raz could demonstrate that their use was unfair to the children or himself. The trial court appropriately exercised its discretion in determining that Raz had **607

(Cite as: 213 Wis.2d 296, *298, 570 N.W.2d 605, **607)

not met his burden of proof. The trial court also properly exercised its discretion in adopting the expert witness's testimony as to Raz's actual income. We affirm.

I. BACKGROUND.

Raz and Mary A. Brown were married in 1979 and divorced on December 12, 1991. At the time of the divorce, Raz and Brown entered into a marital settlement agreement which gave them joint custody of their two children with Brown having primary placement of the children. The stipulation also required Raz to pay *299

(Cite as: 213 Wis.2d 296, *299, 570 N.W.2d 605, **607)

$2100 per month in child support. At the time of the divorce, Raz's monthly income was $9688 and Brown's was $2674. Both Raz and Brown had other income from investments.

In April 1995, Raz brought motions seeking, inter alia, to modify his child support obligation due to a claimed substantial change of circumstances. After a contested hearing in front of the court commissioner, Raz was ordered to pay $1500 a month in child support. Both Raz and Brown appealed this order to the circuit court. After a contested hearing, the trial court found Brown's yearly income was $114,516, and adopted Brown's expert witness's opinion that Raz's actual yearly income was $108,384. The trial court, using the WIS. ADM.CODE § HSS 80 child support standard and the shared time payer formula, then ordered Raz to pay child support of $1800 per month. [FN1] Raz now appeals.

FN1. WISCONSIN ADM.CODE § HSS 80.04(2) provides:

(2) DETERMINING THE CHILD SUPPORT OBLIGATION OF A SHARED-TIME PAYER. The child support obligation in cases where both parents provide overnight child care beyond the threshold may be determined as follows:

(a) Determine the number of overnights, or the equivalent as determined by the court in accordance with s. HSS 80.02(25), each parent has the child per year. If the parent with less time has the child at least 110 overnights but not more than 146 overnights, follow the procedure in par. (b). If each parent has the child for at least 147 overnights but for not more than 218 overnights, follow the procedure in par. (c).

(b) In cases where the parent with less time has the child for at least 110 overnights, or the equivalent as determined by the court in accordance with s. HSS 80.02(25), per year but not more than 146 per year, determine the child support as follows:

1. Determine the child support obligation under s. HSS 80.03(1) of the parent with less time;

2. Divide by 365 the number of overnights the parent with less time has physical placement of the child to determine the percentage of the year that the parent with less time provides overnight care;

3. If the percentage under subd. 2 is over 30% but not more than 40%, reduce the child support obligation under subd. 1 in accordance with Table 80.04(2)(b).

*300

(Cite as: 213 Wis.2d 296, *300, 570 N.W.2d 605, **607)

II. ANALYSIS.

A. Standard of Review.

[1][2][3] The determination of appropriate child support is committed to the sound discretion of the trial court. Weidner v. W.G.N., 131 Wis.2d 301, 315, 388 N.W.2d 615, 622 (1986); Prosser v. Cook, 185 Wis.2d 745, 751, 519 N.W.2d 649, 651 (Ct.App.1994). Whether the trial court properly exercised its discretion is a question of law. Seep v. State Personnel Comm'n, 140 Wis.2d 32, 38, 409 N.W.2d 142, 144 (Ct.App.1987). "An appellate court will sustain a discretionary act if it finds that the trial court (1) examined the relevant facts, (2) applied a proper standard of law, and (3) using a demonstrated rational process, reached a conclusion that a reasonable judge could reach." State v. Gudenschwager, 191 Wis.2d 431, 440, 529 N.W.2d 225, 229 (1995).

A trial court, in setting child support, is statutorily obligated to use the percentage standards set by the Department of Health and Social Services. [FN2] See § 767.25(1j), Stats. ("Except as provided in sub. (1m), the court shall determine child support payments by using the percentage standard established by the department under s. 49.22(9)."). This legislative directive *301

(Cite as: 213 Wis.2d 296, *301 , 570 N.W.2d 605, **607)

has been affirmed several times by the appellate courts. See Grohmann v. Grohmann, 189 Wis.2d 532, 536, 525 N.W.2d 261, 262 (1995), and Kjelstrup v. Kjelstrup, 181 Wis.2d 973, 975, 512 N.W.2d 264, 265 (Ct.App.1994).

FN2. The Department of Health and Social Services was renamed the

(Cite as: 213 Wis.2d 296, *301, 570 N.W.2d 605, **607)

Department of Health and Family Services, effective July 1, 1996, pursuant to 1995 Wis. Act 27, §§ 9126(19) and 9426(16).

**608

(Cite as: 213 Wis.2d 296, *301, 570 N.W.2d 605, **608)

[4] The percentage standards which the Department of Health and Social Services established are set out in Chapter HSS 80 of the Wisconsin Administrative Code. The percentage standards currently require child support for two children to be set at twenty-five percent of the payer's base or adjusted base. [FN3] A trial court may only depart from the percentage standards "if, after considering the factors listed in s. 767.25(1m) ... the court finds, by the greater weight of the credible evidence, that the use of the percentage standard is unfair to the child or to any of the parties." Kjelstrup, 181 Wis.2d at 975, 512 N.W.2d at 265; see also § 767.25(1m), Stats. The factors courts may consider when contemplating a deviation from the percentage standard are found at § 767.25(1m), Stats. [FN4]

FN3. WISCONSIN ADM.CODE § HSS 80.03(1)(b) provides:

(1) DETERMINING CHILD SUPPORT USING THE PERCENTAGE STANDARD. The payer's base shall be determined by adding together the payer's gross income available for child support under sub. (2), if appropriate, and the payer's imputed income for child support and dividing by 12.... The percentage of the payer's base or adjusted base that constitutes the child support

obligation shall be:

....

(b) 25% for 2 children.

FN4. Section 767.25(1m), Stats., provides:

(1m) Upon request by a party, the court may modify the amount of child support payments determined under sub. (1j) if, after considering the following factors, the court finds by the greater weight of the credible evidence that use of the percentage standard is unfair to the child or to any of the parties:

(a) The financial resources of the child.

(b) The financial resources of both parents as determined under s. 767.255.

(bj) Maintenance received by either party.

(bp) The needs of each party in order to support himself or herself at a level equal to or greater than that established under 42 USC 9902(2).

(bz) The needs of any person, other than the child, whom either party is legally obligated to support.

(c) The standard of living the child would have enjoyed had the marriage not ended in annulment, divorce or legal separation.

(d) The desirability that the custodian remain in the home as a full-time parent.

(e) The cost of day care if the custodian works outside the home, or the value of custodial services performed by the custodian if the custodian remains in the home.

(ej) The award of substantial periods of physical placement to both parents.

(em) Extraordinary travel expenses incurred in exercising the right to periods of physical placement under s. 767.24.

(f) The physical mental and emotional health needs of the child, including any costs for health insurance as provided for under sub. (4m).

(g) The child's educational needs.

(h) The tax consequences to each party.

(hm) The best interests of the child.

(hs) The earning capacity of each parent, based on each parent's education, training and work experience and the availability of work in or near the parent's community.

(i) Any other factors which the court in each case determines are relevant.

*302

(Cite as: 213 Wis.2d 296, *302, 570 N.W.2d 605, **608)

Our supreme court recently reaffirmed the presumptive use of the child support percentage standards in high-income cases. See Luciani v. Montemurro-Luciani, 199 Wis.2d 280, 544 N.W.2d 561 (1996). In Luciani, the payer's income was substantially less than the payee's income, but the court concluded that that fact alone was insufficient to show unfairness under § 767.25(1m), Stats. The court explained:

*303

(Cite as: 213 Wis.2d 296, *303, 570 N.W.2d 605, **608)

The obligation to support one's children is a basic one. Luciani's contention that he should be relieved of this burden simply because his ex-wife earns a substantially higher income runs contrary to the paramount goal of child support, namely, securing the best interests of the children. We recognize the role that income disparity may play in a particular case, but under the facts before us, it is only relevant where Luciani can demonstrate that he is unable to pay the court ordered child support or that such disparity in income will adversely affect the children or himself.

Id. at 309, 544 N.W.2d at 572 (citation omitted). The court also restated that the party requesting the modification under the percentage standards bears the burden of proof before the trial court. Id. at 295-96, 544 N.W.2d at 567.

B. Analysis.

The trial court found that Raz failed to meet his burden to show that it would be unfair to apply the percentage standards in his case. Raz claims that the trial court's finding was an erroneous exercise of discretion. Raz does not claim that the trial court **609

(Cite as: 213 Wis.2d 296, *303, 570 N.W.2d 605, **609)

failed to examine the relevant facts, and most of the time, he does not seem to claim the trial court applied an improper standard of law. Rather, Raz appears to claim that the trial court, after applying the facts to the law, reached a conclusion that no reasonable judge could make. We disagree.

[5] The trial court's oral decision contains a thoughtful and thorough recitation of the facts and the law. The court found that, after paying child support, Raz had $4250 of disposable income, while Brown had *304

(Cite as: 213 Wis.2d 296, *304, 570 N.W.2d 605, **609)

$8253. The trial court realized that this was a significant discrepancy, but addressed the issue, stating:

Dr. Brown's budget, her income is substantially more than Mr. Raz's income. The spread between what he needs and what he's actually ending up with after taxes and paying child support--and Mr. Raz makes some very valid arguments about how the numbers aren't fair ... [B]ut the Supreme Court said the numbers alone aren't enough, and what's been presented here are numbers. I have nothing in the record that shows that it is unfair to the children in any way by applying the standards.

The court then noted that there was no evidence to show the children were harmed because Brown had more disposable income than Raz. The court also found that Raz failed to show he would be unable to live at the same standard of living he was used to. After going through all of the factors listed at § 767.25(1m), Stats., the court concluded that Raz "had not met his burden of proof in establishing that use of the standards would be unfair to him or his children." We agree.

Raz has failed to meet the difficult burden of showing that no reasonable judge could have reached the same conclusion as the trial court. The Luciani case is instructive. While Raz must pay twenty percent of his income in child support, the payer in Luciani was required to pay twenty- four percent of his income. This was true even though, as in Raz's case, the payer in Luciani was required to spend far more of his disposable income on child support than the payee. Also, the percentage standards were not found to be "unfair" in Luciani, even though the payer's income plus maintenance was one-third of the payee's income.

*305

(Cite as: 213 Wis.2d 296, *305, 570 N.W.2d 605, **609)

To escape Luciani 's holding, Raz needed to do more than point out the disparity in disposable incomes which the child support percentage standards produced. According to Luciani, income disparity is only relevant if payers can show they are unable to pay the court-ordered child support or that the income disparity will adversely affect the children or themselves. Luciani, 199 Wis.2d at 309, 544 N.W.2d at 572. Raz attempts to make this showing with several arguments. First, Raz claims that the income disparity contributes to strife between himself and Brown, thereby harming the children and himself. Second, Raz claims that, because he has less discretionary income than Brown to spend on the children, the children are harmed by living at a lower standard of living when in his care.

The stated intent of the child support percentage standard provisions is to insure that children are not adversely affected by divorce. Equalizing lifestyles between divorced parents is not one of the objectives of the provisions. The amount of discretionary income which either parent may have available to spend on their children is also a secondary consideration. What is paramount is that both parents pay a fair amount for their children's essential care.

We note that following divorce, many children find themselves living in homes where their parents have different standards of living. Some differences in standards of living are self-imposed, while others are economically imposed. Reducing a child support payment in order to equalize standards of living between parents is no guarantee that strife will subside, nor is a reduction often in the children's best interests. Therefore, the trial court properly exercised its discretion when it found that "[t]here is no evidence in this record *306

(Cite as: 213 Wis.2d 296, *306, 570 N.W.2d 605, **609)

which indicates any harm to the children because Mother has more disposable income."

We further note that much of Raz's argument attacks the actual percentage standards, rather than the court's application of those standards to the facts of this case. **610

(Cite as: 213 Wis.2d 296, *306, 570 N.W.2d 605, **610)

Indeed, Raz requests at one point that this court "correct the flaws of the present rule so as to spare other families the damage which this family has experienced." This argument is better addressed to the legislature.

Raz additionally argues that the application of the percentage standards violates his right to equal protection of the laws under the United States and Wisconsin Constitutions. Raz also includes two new arguments in his reply brief. The equal protection and the reply brief arguments were never raised in the trial court. Therefore, we decline to address these arguments. See Wirth v. Ehly, 93 Wis.2d 433, 443, 287 N.W.2d 140, 145 (1980) ("[I]ssues not raised or considered in the trial court will not be considered for the first time on appeal.").

[6][7] Finally, Raz argues that the trial court incorrectly determined his income by accepting the testimony of Brown's expert witness. [FN5] Essentially, Raz argues that a repayment of a loan is not income. He offers no support for this assertion. Brown argues that weighing the credibility of a witness is a function for the trier of fact, and that the trial court properly accepted her expert witness's testimony. We agree. Lellman v. Mott, 204 Wis.2d 166, 173, 554 N.W.2d 525, 528 (Ct.App.1996), *307

(Cite as: 213 Wis.2d 296, *307, 570 N.W.2d 605, **610)

instructs: "[T]he test to be applied by the appellate court must, of necessity, involve a determination whether the trial court's finding of fact could reasonably be made based upon the available information." (citing Hartung v. Hartung, 102 Wis.2d 58, 66, 306 N.W.2d 16, 20-21 (1981)). The trial court's reliance on an accountant, who opined that corporate repayment of a loan to Raz was a proper addition to Raz's income available for child support, is a factual finding which is reasonably supported by the record. Additionally, the definition of " gross income" found in WIS. ADM.CODE § HSS 80 includes voluntary deferred compensation. Raz's decision to give the company he owns [FN6] a loan which the company subsequently repaid falls within this definition.

FN5. Raz's objection is rendered somewhat disingenuous by his later desire to abandon this argument if the appellate court would set child support at $600 per month.

FN6. Raz owns 94% of the stock.

[8] Last, we address Brown's request that fees and costs be assessed against Raz pursuant to § 809.25(3), Stats., the frivolous appeal statute. Brown argues that Raz knew or should have known that his appeal was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification or reversal of existing law. We decline to assess costs against Raz. Although the similarities between the facts of this case and the facts of Luciani are striking, they differ in one respect; in this case, both parties had high incomes. Additionally, although he did not succeed, Raz attempted to show, as Luciani admonished, that his children would be harmed by the income disparity. These are significant distinctions.

Order affirmed.

END OF DOCUMENT

Cameron: child support and custody modification: discussion