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Davis v. Davis

April 6, 2010

D. LUKE DAVIS, PLAINTIFF AND APPELLANT
v.
PAMELA GORDON DAVIS, DEFENDANT AND APPELLEE



Appeal from the District Court of Grand Forks County, Northeast Central Judicial District, the Honorable Joel D. Medd, Judge.

The opinion of the court was delivered by: Sandstrom, Justice.

REVERSED.

[¶1] D. Luke Davis appeals from a judgment dismissing his action against Pamela Gordon Davis to recover an overpayment of child support. Because the Child Support Guidelines mandate that D. Luke Davis be reimbursed for his overpayment of child support under the circumstances, we reverse.

I.

[¶2] D. Luke Davis and Pamela Gordon Davis divorced in February 1997. Under the terms of the divorce judgment, Pamela Gordon Davis was awarded custody of the couple's two children, and D. Luke Davis was ordered to pay a total of $425 per month in child support for both children. From January 2004 through February 2007, D. Luke Davis made child support payments totaling $15,727.97 through the Grand Forks Regional Child Support Unit.

[¶3] As the result of a work-related injury, D. Luke Davis applied for and received disability benefits under the federal Social Security Act. Under 42 U.S.C. § 402 of the Social Security Act, a child of an individual found to be disabled is eligible for additional monthly benefits. Pamela Gordon Davis applied for those benefits on behalf of the children, and in December 2006, each child began receiving $330 per month. In March 2007, the Social Security Administration also paid each child $11,791, for a total lump sum payment of $23,582, for back pay from January 2004 through March 2007. On March 30, 2007, Pamela Gordon Davis created two separate $10,000 certificates of deposit for the children as the custodian under the state Uniform Transfers to Minors Act, N.D.C.C. ch. 47-24.1. In April 2007, Pamela Gordon Davis provided written verification to the Grand Forks Regional Child Support Unit of the children's receipt of the social security payments.

[¶4] In February 2008, D. Luke Davis brought this action against Pamela Gordon Davis to recover the child support payments he had made from January 2004 through February 2007, plus interest, alleging those payments constituted an overpayment of his child support obligation after the children's social security benefits were received and credited as child support under N.D. Admin. Code § 75-02-04.1-02(11). During an evidentiary hearing, Pamela Gordon Davis testified $8,000 from the lump sum payment had been used to pay for one child's college tuition. D. Luke Davis testified the child support payments he had made "were not a gift, but under duress made by me." The district court dismissed the action. Relying on caselaw from other jurisdictions, the court concluded Pamela Gordon Davis was not required to reimburse D. Luke Davis because the child support payments from January 2004 through March 2007 "were for the immediate benefit of the supported children," the "lump sum disability payments for the children were for their benefit," and those funds "are being used for the children's benefit."

[¶5] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. D. Luke Davis's appeal is timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, §§ 2 and 6, and N.D.C.C. § 28-27-01.

II.

[¶6] D. Luke Davis argues the district court erred in dismissing his action because he is entitled to the return of the excess child support received by Pamela Gordon Davis after the lump sum social security disability benefits were credited to his child support obligation under N.D. Admin. Code § 75-02-04.1-02(11).

[¶7] This Court first addressed social security dependency benefits paid to children of a disabled obligor and their effect on an obligor's child support obligation in Guthmiller v. Guthmiller, 448 N.W.2d 643 (N.D. 1989). In Guthmiller, the obligor, who had been declared disabled and had been awarded disability payments, sought to obtain credit on his child support obligation for the children's social security benefits that his former spouse received as representative payee for the children. Id. at 644. This Court, following the majority rule, held social security dependency payments made directly to the obligor's children or for their benefit "ordinarily" constitute a change of circumstances for which the obligor is entitled to a credit toward the child support obligation. Id. at 647; see also M. DiSabatino, Annot., Right to credit on child support payments for social security or other government dependency payments made for benefit of child, 34 A.L.R.5th 447 (1995). Relying on Children and Youth Servs. v. Chorgo, 491 A.2d 1374, 1377-78 (Pa. Super. Ct. 1985), this Court rejected the contention that the obligor should not receive credit because the benefits are owned by the children, reasoning the benefits were occasioned by the obligor's employment and the obligor's receipt of a credit had no effect on the children, who would receive the same amount of support a court decided they should receive. Guthmiller, at 647. This Court did not rule a credit must always be given, an option the court in Chorgo, 491 A.2d at 1378, found was not supported by any caselaw, but held "there is a presumption that credit will be applied, which is rebutted only by articulated reasons supporting the conclusion to the contrary in the court's support order." Guthmiller, at 648. This Court also held the credit cannot be applied retroactively toward arrearages, id. at 649, and we have applied that holding in subsequent decisions. See Austin v. Towne, 1997 ND 59, ¶¶ 14-15, 560 N.W.2d 895; Mehl v. Mehl, 545 N.W.2d 777, 780-81 (N.D. 1996).

[¶8] Effective January 1, 1995, N.D. Admin. Code § 75-02-04.1-02(11) of the Child Support Guidelines was adopted to provide:

A payment of children's benefits made to or on behalf of a child who is not living with the obligor must be credited as a payment toward the obligor's child support obligation in the month (or other period) the payment is intended to cover, but may not be credited as a payment toward the child support obligation for any other month or period.

The drafters of the Child Support Guidelines explained:

75-02-04.1-02(11): Four commentors, familiar with previous drafts of the proposed rules, expressed concern that there is no provision specifically requiring that children's benefits paid directly to the child be credited against the obligor's child support obligation. Another commentor regarded any provision for such crediting as improper. The language about which the commentors were concerned (which was drafted, but not specifically proposed as a rule) provided:

A payment of children's benefits made to or on behalf of a child who is not living with the obligor must be credited as a payment toward the obligor's child support obligation in the month (or other period) the payment is intended to cover, but may not be credited as a payment toward the child support obligation for any other month (or period).

This language was not included because it does not go to the establishment of child support guidelines. However, while the subsection actually addresses the proper crediting of payments, its inclusion complements and explains the inclusion of "children's benefits" as part of the obligor's gross income. The subsection also reinforces the holding in Guthmiller v. Guthmiller, 448 N.W.2d 643 (N.D. 1989). Based on these comments, the subsection is included.

Summary of Comments Received in Regard to Proposed Amendments to N.D. Admin. Code ch. 75-02-04.1, Child Support Guidelines, pp. 10-11 (November 14, 1994). The regulation "reinforce[d]" the holding in Guthmiller by requiring that children's benefits be credited as a payment toward the obligor's child support obligation rather than creating a rebuttable presumption that the credit will be applied.

[¶9] We interpreted N.D. Admin. Code § 75-02-04.1-02(11) in Tibor v. Bendrick, 1999 ND 92, 593 N.W.2d 395. In Tibor, the obligor was declared disabled and he began receiving disability benefits, and his child began receiving monthly social security dependency benefits. Id. at ¶ 3. The child also received a lump sum payment representing social security dependency benefits from September 1995 through January 1998. Id. The district court granted the obligor's motion to eliminate his child support obligation because the monthly social security dependency benefits exceeded his monthly child support obligation, and the court determined the lump sum payment should be credited toward the obligor's child support arrearages. Id. at ¶ 5. Relying on N.D. ...


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