CREDITING “UNPAID” CHILD SUPPORT

June 1, 2011 § 2 Comments

Lawyers and the courts are often called upon to clean up the mess made by the parties when they make a handshake deal to modify a judgment.  Here’s a fairly common setting …

The custodial mom and son aren’t getting along.  The child is a rebellious teenager who is not interested in school.  He has fallen in with the wrong crowd and appears headed for trouble.  Non-custodial dad agrees for the child to come live with him to finish out the school year and get him straightened out.  Junior lives with dad for 10 months, does better in school, gets his head right, and returns to live with mom.  During the 10 months Junior was with his father, dad did not pay the $300 a month child support ordered by the court in the divorce judgment.  As soon as Junior returns home, mom files a contempt action against dad, wanting her $3,000 in child support arrearage, plus interest and attorney’s fees.

Mom claims that the law of Mississippi is that the court can not enforce a modification by the parties, and that if dad had wanted to be relieved of child support he should have gotten a court order.

Dad points to the fact that he supported the child 100% during the 10 months Junior was with him, and the money would be an unjust enrichment for mom.

Who’s right?

In the case of Varner v. Varner, 588 So.2d 428, 434 (Miss. 1991), the parties had three children with a “global” child support obligation of $600.  One of the children came to live with the father for a number of years.  The court said:

The law remains firm that court-ordered child support payments vest in the child as they accrue and may not thereafter be modified or forgiven, only paid.  But this does not mean that equity may not at times suggest ex post facto approval of extra-judicial adjustments in the manner and form in which payments have been made.

The court went on to find that the father had, indeed, made the child support payments ordered by the court for Junior’s benefit.  He just did not make the payments to the mom.  The court cited the case of Alexander v. Alexander, 494 So.2d 365, 368 (Miss. 1986), quoting it as follows:

If we affirm the chamcellor’s back award of child support to Mrs. Alexander, we will create a situation of unjust enrichment in Mrs. Alexander.  This is true because nduring the entire period of time for which Mrs. Alexander claimed support Mr. Alexander had the child in his custody, was supporting the child, and furthermore, was paying the child the $200 a month child support called for by the decree.

Under these circumstances Mrs. Alexander would have no claim to the back child support except to accept it as a conduit to pass directly to the child or back to Mrs. Alexander for the use and benefit of the child.  We consider this a vain and foolish act.  In our opinion, when the custodial parent received full child support during the time she had custody of the child, did not complain when the child moved in with the other parent, and accepted this arrangement for 20 months with the child support being paid directly to the child, the parent paying the child support is entitled to full credit for all child support paid to the child.  He is also entitled to [credit for] any additional support which he has evinced by satisfactory proof to the trial court.

The court went on to say that the father may receive credit for having paid child support where the child lived with him for a time and he paid the support directly to, or for the benefit of, the child.  The effect of Varner is that the paying parent is granted a pro rata credit for child support.  In Varner (at page 434), that meant that the father received a $200 a month credit against his “global” child support obligation of $600 a month for three children; in other words, since 1/3 of the children lived with him for a time, he is entitled to a pro rata reduction of 1/3.       

The decision also includes the familiar admonishment that parties who modify a court judgment without court approval do so at their peril, and they encouraged parties to obtain a judgment incorporating their agreement before embarking on it.

A similar issue arose in Dorr v. Dorr, 797 So. 2d 1008, 1012-1015 (Miss. App. 2001), in which Houston Dorr was ordered to pay child support to his former wife, Susanne Dorr.  In return, Houston was given the right to claim the child as a dependent for tax purposes.  Houston failed to make consistent child-support payments from 1985 to 1994.  In 1988, Houston and Susanne made an extra-judicial agreement whereby Houston relinquished his right to claim the child as a dependent for tax purposes.  Susanne claimed the tax exemption from 1988 through 1994 and received a $4,300 tax benefit from doing so.  Then, in 1998, Susanne filed suit against Houston for the back child support. The COA  found that, although the chancellor had no authority to enforce the extra-judicial agreement, the chancellor erred by not giving Houston credit for giving up his right to the exemption.  The court held: 

In our view, this financial benefit to [Susanne] for the child’s benefit, though not directly derived from [Houston]’s own income, in equity ought to be considered as a credit towards [Houston]’s recurring child support obligations accruing during the same period, much in the same manner that such indirect payments as social security payments to dependent children derived through the efforts of the obligee have been allowed as credit toward child support.  See , e.g., Bradley v. Holmes, 561 So. 2d 1034, 1035 (Miss. 1990).

Dorr was followed in the COA case of Potts v. Windham, decided March 1, 2011, at ¶ 8.  The trial court had denied credit to the father for the amount of the mother’s income tax refund because his income was such that he would not have paid any income taxes had he filed, whether or not he claimed the child as a dependent.  In reversing, the COA noted that the mother had realized a $4,300 credit by claiming the child, and that the benefit to her, not to the father, was the relevant yardstick to determine whether there would be unjust enrichment.    

In the Bolton v. Bolton, decided May 24, 2011, by the COA, at ¶ 47, the following language appears:

Courts award child-support to the custodial parent for the benefit and protection of the child. Smith v. Smith, 20 So. 3d 670, 674 (¶13) (Miss. 2009). “Such benefits belong to the child, and the custodial parent has a fiduciary duty to hold them for the use of the child.” Id. “The law remains firm that court-ordered child-support payments vest in the child as they accrue and may not thereafter be modified or forgiven, only paid.” Id. “But this does not mean that equity may not at times suggest ex post facto approval of extra judicial adjustments in the manner and form in which support payments have been made.” Id. “The noncustodial parent may be entitled to credit for any additional support which he/she has evinced by satisfactory proof to the trial court.” Id.   

In Bolton, the parties had resumed cohabitation after the divorce for a time, and the father was given credit for around $10,000 in payments that he was able to prove he had made for the benefit of the child during the time that the parties lived together.  The credit reduced his arrearage in child support from around $14,000 to around $4,000.   

To sum it up, your client may just be entitled to some credit for payments made for the benefit of the child in lieu of child support.  The result appears to rely on a situation where there is either an actual live-in situation or an actual intended exchange of value in place of child support.  Don’t expect your client, though, to get credit for birthday presents, new shoes, school supplies, or toys purchased in the ordinary course of being a non-custodial parent.   

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