State ex rel. Tegegne v. Andalo

866 N.W.2d 550

STATE of South Dakota, ex rel., Fatima K. TEGEGNE, Plaintiff and Appellee

v.Tadesse M. ANDALO, Defendant and Appellant.

No. 27196.

Supreme Court of South Dakota.

Considered on Briefs May 26, 2015.

Decided July 1, 2015.

Richard L. Johnson, Sioux Falls, South Dakota, Attorney for plaintiff and appellee.

Steven K. Rabuck of Nichols & Rabuck, PC Sioux Falls, South Dakota, Attorneys for defendant and appellant.

Opinion

ZINTER, Justice.

[¶ 1.] Fatima Tegegne (Mother) brought an action against Tadesse Andalo (Father) to establish Father's child support obligation and to determine arrearages. With respect to arrearages, a child support referee recommended that Father receive a credit for mortgage payments as well as for food, clothing, and school supplies Father had purchased for the children while he was absent from the home. The circuit court adopted the recommendation in part and rejected it in part. The court gave Father no credit for mortgage payments and food, but it allowed a credit for clothing and school supplies. Father appeals the denial of credit for the mortgage payments and food. We reverse and remand to accept the referee's recommendation.

Facts and Procedural History

[¶ 2.] Mother and Father lived together, had two children, but never married. During the course of the relationship, Father made a down payment on a house, and Mother and Father each paid one-half of the mortgage payments. After they separated, Mother obtained physical custody of the children. Father obtained his own housing and has been absent from the familial home ever since. Father, however, continued to pay one-half of the mortgage payments. When the house was later sold, Mother and Father divided the proceeds equally.

[¶ 3.] Mother subsequently brought this action to establish Father's child support obligation and to determine arrearages. The circuit court approved the child support referee's recommendation for future support in the full amount required by the child support guidelines. That award has not been appealed.

[¶ 4.] Father's appeal arises out of the circuit court's rejection of the referee's recommendation that Father receive a credit for the mortgage payments and food he allegedly provided when he was absent from the home.¹ In the proceedings below, Father requested that he receive a credit for the mortgage payments as well as for food, clothing, school supplies, and other items he provided the children after the parties' separation. Father testified and introduced bank statements, sales receipts, and other documentation to support his request. Mother, however, objected to a credit for the mortgage payments and food.² She contended that Father had no right to a credit for mortgage payments, and she disputed that food was provided to the children. She did agree that Father provided the other items for the children.

[¶ 5.] The referee determined that Father's child support arrearages for the time he was absent from the home would have been $26,130 if the calculation were made under the child support guidelines. The referee, however, determined that Father should be given the credits he requested because his expenditures constituted “maintenance, education, and support” of the children within the meaning of the statute governing child support arrearages. See SDCL 25–7–6.1. And because the credits were greater than the scheduled child support, the referee recommended that Father owed no arrearages. In making his recommendation, the referee specifically found Mother's assertion that Father never purchased food for the children was not credible.

[¶ 6.] The circuit court rejected the referee's recommended credit for the mortgage payments. The court noted that Father was “financially bound to make those mortgage payments due to a separate, binding financial obligation to which he and [Mother], as non-married persons, had voluntarily agreed.” The court further noted that Father received benefits from the mortgage payments because they increased his equity in the house, which increased the amount of his proceeds from the sale of the house.

[¶ 7.] The circuit court also rejected the referee's recommended credit for food purchases. The court relied on Mother's general denial that Father provided food. The circuit court concluded that the referee clearly erred in finding that Mother's testimony was not credible. The court did, however, allow Father a credit for the school supplies, clothing, and other items that Mother did not dispute were provided.

[¶ 8.] Thus, the court ordered Father to pay $23,165.68, the scheduled amount of arrearages less a credit for the school supplies, clothing, and other items that Mother agreed Father had purchased for the children ($26,130 scheduled support—$2,964.32 credits = $23,165.68). Father appeals the circuit court's disallowance of mortgage payments (a credit of $25,517.97). Father also appeals the court's conclusion that the referee clearly erred in finding that Father purchased food for the children (a credit of $2,241.08).

Decision

[¶ 9.] We generally “review the decision to grant or deny child support under the abuse of discretion standard.” Kauth v. Bartlett, 2008 S.D. 20, ¶ 8, 746 N.W.2d 747, 750. However, “[w]hen reviewing a child support referee's findings of fact, we review for clear error, while conclusions of law are reviewed de novo.” Id. “Findings are not reversed for clear error ‘unless we are left with a definite and firm conviction a mistake has been made.’ ” Id. (quoting Wagner v. Wagner, 2006 S.D. 31, ¶ 5, 712 N.W.2d 653, 656).

Mortgage Payments

[¶ 10.] SDCL 25–7–6.1 obligates parents, who are absent from the home, to pay child support for their children. If they fail to furnish “maintenance, education, and support” for their children, they are obligated to pay the minimum amount required by the child support guidelines. SDCL 25–7–6.1.³ Thus, the question is the extent to which Father, when absent from the home, failed to furnish “maintenance, education, and support” for his children. If he failed to do so, he is liable for the amount called for under the child support guidelines. See id.

[¶ 11.] Mother argues that, in considering whether Father failed to maintain and support his children, SDCL 25–7–6.1 does not allow consideration of money he paid directly to the mortgagee. Mother points out that the mortgage payments went to the bank, not to her. Mother also contends that a mortgage is a separate legal obligation that should not be considered absent the parties' agreement. Mother points out that Father received benefits from his mortgage payments in the form of tax benefits and accumulating equity. Thus, Mother argues that mortgage payments may not be considered in making an arrearage determination under SDCL 25–7–6.1. We disagree.

[¶ 12.] By making the mortgage payments, Father assisted in providing housing for the children. We have considered the provision of housing as maintenance and support for determining child support arrearages under SDCL 25–7–6.1. See Huffaker v. Huffaker, 2012 S.D. 81, ¶ 28, 823 N.W.2d 787, 793–94 (stating that by “providing housing for [the custodial parent] and the children, [Huffaker] did not fail to furnish maintenance and support for his children”). We have also considered housing as maintenance and support in the closely related area of spousal support. See Wilson v. Wilson, 434 N.W.2d 742, 744 (S.D.1989) (stating that “support and maintenance” includes “the provision of food, clothing, habitation, and other necessities” (emphasis added)). Other courts considering the mortgage-payments issue have specifically held that such payments should be considered a credit against child support arrearages even though the payments are made to the mortgagee.⁴

[¶ 13.] Mother, however, points out that the obligor in Huffaker provided military housing at no cost. Huffaker, 2012 S.D. 81, ¶ 28, 823 N.W.2d at 793–94. Mother also points out that the obligor paid an additional $1,000 per month to the obligee. Id. Because the children in Huffaker were supported by cash payments and free housing, Mother contends that Huffaker is distinguishable. But neither of these facts detracts from the central point that the provision of housing constitutes maintenance and support, which is what is required to be considered in determining arrearages under SDCL 25–7–6.1.

[¶ 14.] Moreover, Mother's position is inconsistent with the meaning of “maintenance” and “support” in SDCL 25–7–6.1. Clearly, housing is necessary to maintain and support children. See Huffaker, 2012 S.D. 81, ¶ 28, 823 N.W.2d at 793–94. And there is nothing in SDCL 25–7–6.1 or our cases suggesting that, when there is no order specifying the manner of making support, an obligor's support may only be made by cash payments to the obligee.⁵ Indeed, the circuit court gave Father credit for the clothing, school supplies, and other items he provided. We finally see no significance in the fact that Father had a contractual obligation to pay the mortgage. Housing is necessary to support children, and it makes no difference whether the housing is provided in an owned home or through mortgages, leases, or other contractual arrangements.

[¶ 15.] In this case, Father paid one-half the cost of the house by making one-half of the monthly mortgage payments. Further, Mother and the children received the benefit of the payments. Mother and the children chose to continue occupying the house after the parties separated. Therefore, Father's mortgage payments must be considered maintenance and support of the children in determining arrearages under SDCL 25–7–6.1.

[¶ 16.] Mother's reliance on Hirzel v. Ooten, 2010 Ohio 2206, 2010 WL 1987519 (Ohio Ct.App., May 12, 2010), is misplaced. Hirzel involved a proceeding to determine ongoing support. The trial court ordered that, in lieu of ongoing child support required under the guidelines, the obligor was to directly pay mortgage payments and lawn care services without providing any cash to the...