In re the Marriage of Steab and Luna

In re the Marriage of Steab and Luna, 2013 MT 124 (May 7, 2013) (5-0) (Cotter, J.)

Issue: (1) Whether the district court was required to issue written findings and conclusions to support its order on child support arrearages; (2) whether the district court erred in imposing a 12% annual interest rate on unpaid arrearages; (3) whether the district court erred in not imposing interest on Staeb’s unpaid arrearages, only Luna’s; and (4) whether the district court erred in taking judicial notice of a bankruptcy court order releasing Staeb from marital debt owed to Luna.

Short Answer: (1) No, as it was presented via a motion; (2) yes, as the statutory rate is 10%; (3) yes; and (4) no.

Affirmed in part, reversed in part, & remanded with instructions

Facts: Launa Luna and John Steab married in 1987, and divorced in 2002. They had three children. The parties have been engaged in litigation repeatedly, including a previous appeal to this Court. The two older children have reached the age of majority. The parties share custody of their youngest daughter, and each has failed to timely pay child support to the other. Additionally, Steab did not pay all of his portion of the marital debt to Luna, and obtained an order of relief from that debt in the bankruptcy court.

Procedural Posture & Holding: The district court issued an order regarding child support arrearage on June 4, 2012. It held, without findings, that Steab’s arrearage was to be offset against Luna’s larger arrearage, and that Luna owed Steab $2,263 plus 12% annual interest until paid. It held that Steab was not required to pay interest on his arrearages, and that the marital debt owed by Steab had been discharged to the bankruptcy court and was no longer a debt owed by him to Luna. Luna appeals, and the Supreme Court affirms in part, reverses in part, and remands.

Reasoning: (1) A district court is not required to issue findings and conclusions when ruling on a motion. M.R. Civ. P. 52(a)(3). (2) As there was no interest provision in the final decree, not a stipulated agreement between the parties to a higher interest rate than the statutory rate of 10%, the district court erred in imposing 12% interest on Luna. (3) It is undisputed that Steab was delinquent in child support beginning shortly after entry of the final decree. Delinquent child support payments become a judgment debt similar to any money judgment. The record does not provide accurate or complete records upon which to calculate interests on Steab’s arrearages from 2002-2008. However, it does show that Steab owed Luna $20,648 in child support in October 2008. The district court should have imposed a 10% annual interest rate on Steab’s arrearage from that date forward.

The Court reverses and remands with instructions to recalculate the interest on the party’s arrearages using the proper rate of 10%. (4) Luna claims that the marital debt owed her by Steab could not be released in bankruptcy. However, neither this Court nor the district court may ignore a federal bankruptcy court ruling.