Facts: Mother and Father are the parents of Child.
Father’s child support obligation was set at $55 per week. The order instructed Father to submit all child support payments to the clerk of the juvenile court. The order further stated any payments made directly to Mother in lieu of the clerk “will be considered a gift.”
For a period of time, Father paid his child support directly to the juvenile court clerk as directed in the order. Later, at Mother’s request, all child support payments were mailed directly to Mother, although the payments were sporadic and not always in the amounts specified in the child support order.
Years later, Mother sought a judgment against Father for the child support arrearage.
The trial court credited Father for all payments made directly to the juvenile court clerk and the payments made directly to Mother. A judgment was entered against Father for the $17,337 child support arrearage. Mother’s request for prejudgment interest on the arrearage was denied.
Both parties appealed.
On Appeal: The Court of Appeals affirmed in part and reversed in part.
Two issues are of interest to me in this appeal: (1) crediting Father for payments made directly to Mother in contravention of the order requiring payments to be made directly to the court clerk, and (2) the denial of prejudgment interest on the child support arrearage.
Crediting Father’s payments to Mother. Mother argued the trial court erred in awarding Father credit for the child support payments made in contravention of the child support order because Father did not show the payments were used for “necessaries.”
First, credits against a child support arrearage do not violate the prohibition on retroactive modification of child support orders as long as the amount of child support is not altered.
Second, an obligor parent is generally not given credit for child support payments made in a manner other than that specified in the operative child support order. There are, however, two recognized exceptions that permit crediting the obligor parent for non-conforming payments: (1) the “necessaries rule,” and (2) the “equitable considerations rule.” Under either exception, the court may credit the direct payments toward support arrearages as long as there is proper evidentiary support.
The necessaries rule allows a credit for voluntary payments only when made for the child’s necessaries that are not being supplied by the custodial parent.
The necessaries rule has been applied to a variety of fact patterns, including when the obligor, non-custodial parent seeks credit for (1) voluntary expenditures on the child’s behalf, (2) child support payments made payable to the child, (3) expenditures when the child shares a primary residence with or is cared for by that parent, and (4) direct payments to the obligee, custodial parent.
The types of “necessaries” that are usually considered include food, shelter, tuition, medical care, legal services, and funeral expenses.
In this case, however, the Court found the equitable considerations exception to be applicable, not the necessaries rule.
The equitable considerations rules applies in specific circumstances when, for example, (1) the obligee parent received the payments, directly or indirectly, and exercised control over the funds, or the obligee parent requested the support payments be paid to a third party and acquiesced in such payment, and (2) the specific circumstances demand a credit to avoid an injustice.
After reviewing the record, the Court commented:
[I]t is undisputed that Mother specifically asked Father to remit all support payments directly to her and that Father agreed to this non-conforming procedure.This procedure was followed for several years…. The documentary evidence established that the “memo” line on the checks confirmed that all such payments were for child support. Moreover, the check amounts were for increments of $55, which was Father’s weekly support obligation. Mother also testified she knew the checks were for support, she endorsed the checks upon receipt, deposited them into a separate bank account she had designated for child support, and that she used the funds for the child’s benefit.
The relevant factors weigh in favor of crediting Father for all child support payments remitted directly to Mother…for, to hold otherwise, would ‘unjustly enrich Mother and lead to an inequitable result.’ Therefore, we have concluded the specific circumstances in this case warrant crediting Father with all nonconforming child support payments Mother received.
Thus, the trial court was affirmed on this issue.
Prejudgment interest on the child support arrearage. Tennessee Code § 36-5-101(f)(1) states, in relevant part:
If the full amount of child support is not paid by the date when the ordered support is due, the unpaid amount is in arrears, shall become a judgment for the unpaid amounts, and shall accrue interest from the date of the arrearage, at the rate of twelve percent (12%) per year. All interest that accumulates on arrearages shall be considered child support. Computation of interest shall not be the responsibility of the clerk.
The Court has previously held that prejudgment interest for child support arrearages is mandatory, non-discretionary, and accrues from the date when the support was due, not from the date a judgment for the unpaid amounts is entered.
Accordingly, the trial court’s refusal to assess prejudgment interest on Father’s child support arrearage was reversed. The case was remanded to the trial court to award Mother prejudgment interest consistent with Tennessee Code § 36-5-101(f)(1).
K.O.’s Comment: A good case to review on the “necessaries rule” is State ex rel. DeBusk v. DeBusk.
Regarding when interest starts accruing on a child support arrearage, a divided Western Section reached the opposite conclusion in Jackson v. Jackson, holding that interest doesn’t start accruing until a judgment for the child support arrearage is entered. Knowledgable family law litigators have legal support for both arguments.
Information provided by K.O. Herston: Knoxville, Tennessee Divorce, Matrimonial and Family Law Attorney.