Fernandez v. Fernandez

Statutes cited

Key holdings

Practitioner summary

The question presented was "whether parents can, by stipulation, eliminate or abridge a trial court's statutory authority to review and modify a child support order." The court answered no, holding that a stipulated waiver of the right to seek modification of a child support order for changed circumstances, as provided in NRS 125B.080(3) and NRS 125B.145(4), is unenforceable. On the standard of review, the court explained that although the trial court has discretion in how it applies the child support statutes, "it commits legal error when it misinterprets or fails to follow the statutes as written," citing Lewis v. Hicks, 108 Nev. 1107, 843 P.2d 828 (1992). The court's framework began with the statutory scheme. Parents have a duty of support, NRS 125B.020(1), which "is discharged by complying with a court order for support or with the terms of a judicially approved settlement," NRS 125B.120(1). The district court has jurisdiction over custody and support in dissolution actions, NRS 125.510; NRS 125B.080, and may award support even where parents agree none should be paid, citing Atkins v. Atkins, 50 Nev. 333, 259 P. 288 (1927). Even agreed-upon support orders must be calculated and reviewed under the formula and guidelines in NRS 125B.070 and NRS 125B.080; deviations require stipulated facts and written findings under NRS 125B.080(2), and the deviation factors in NRS 125B.080(9) are exclusive, citing Anastassatos v. Anastassatos, 112 Nev. 317, 913 P.2d 652 (1996). The court retains continuing jurisdiction: under NRS 125.510(1)(b) it may "[a]t any time modify or vacate" its support and custody orders; NRS 125B.145(4) permits review at any time on changed circumstances and deems a 20-percent change in the obligor's gross monthly income a changed circumstance requiring review; NRS 125B.145(1)(b) mandates review at least every three years on a parent's request; and NRS 125B.145(2)(b) directs modification in accordance with NRS 125B.070 and 125B.080 when appropriate. Because the Legislature enacted "broadly unqualified" modification statutes and — unlike Connecticut, see Amodio v. Amodio, 743 A.2d 1135 (Conn. App. Ct. 2000) — provided no exception for decrees precluding modification, the court declined to imply one: "We thus interpret the modification statutes to mean what they say, with no implied judicial exceptions." The court aligned itself with the majority position that public policy prevents enforcement of purportedly nonmodifiable child support orders, quoting In re Marriage of Alter, 89 Cal. Rptr. 3d 849 (Ct. App. 2009), and canvassing authority including Grimes v. Grimes, 621 A.2d 211 (Vt. 1992). It also invoked Willerton v. Bassham, 111 Nev. 10, 889 P.2d 823 (1995), which held that "the state has a compelling interest in seeing that any provisions for the support of a child incorporated in...settlement agreements are modifiable" and characterized NRS Chapter 125B's modification provisions as "protections" that cannot be waived by agreement. In a footnote, the court distinguished Renshaw v. Renshaw, 96 Nev. 541, 611 P.2d 1070 (1980), which was prosecuted solely as a breach of contract action involving an agreement neither incorporated nor merged into the decree; here, the mother did not dispute that the support order and its stipulated modifications were incorporated and merged into the decree. The court rejected the mother's proposed asymmetry — that nonmodification agreements should be enforceable against downward, though not upward, modification. First, the stipulation here was general, setting both a floor and a ceiling; the reciprocal promises were "corresponding equivalents," citing Restatement (Second) of Contracts § 184 cmt. a (1981), taking partial enforcement off the table. Second, neither the statutes nor public policy supports the premise that more court-ordered support is always better for the child: the formula and guideline statutes aim at support "adequate to the child's needs, fair to both parents," citing Barbagallo v. Barbagallo, 105 Nev. 546, 779 P.2d 532 (1989), partially overruled on other grounds by Wright v. Osburn, 114 Nev. 1367, 970 P.2d 1071 (1998). Court-ordered support is "not a fixed obligation but one that is subject to readjustment as circumstances may direct," citing Riemer v. Riemer, 73 Nev. 197, 314 P.2d 381 (1957). The court further held that the trial court "created its own modification standard" by conditioning relief on the father's exhaustion of assets; the modification statutes do not support such a test, which the court said was closer to the standard in the enforcement statutes than to the changed-circumstances standard. The court also rejected the mother's estoppel-by-part-performance argument: the property settlement was concluded and support obligations set before the waiver stipulation, and estoppel is not available to resurrect a contract right public policy invalidates, citing Krieman v. Goldberg, 571 N.W.2d 425 (Wis. Ct. App. 1997). On the scope of remand, Rivero v. Rivero, 125 Nev. ___, 216 P.3d 213 (2009), forecloses the father's argument that NRS 125B.145(1)(b) entitles him to modification conforming to NRS 125B.070 and NRS 125B.080 based solely on the passage of three years; changed circumstances are still required to modify. The court noted that the 2003 amendment to NRS 125B.145 equating a 20-percent income change with changed circumstances applies to the motion because it clarified an existing statute and is invoked prospectively, citing Ramacciotti v. Ramacciotti, 106 Nev. 529, 795 P.2d 988 (1990). Because neither the original decree nor the modified orders included the deviation findings required by NRS 125B.070 and NRS 125B.080(6), the bases for the historical deviations will have to be reconstructed on remand unless the father proves his alleged income change, which appears to satisfy NRS 125B.145(4). Finally, addressing the parties' confusion over Rivero's reference to NRS 125B.145(2)(b)'s "taking into account the best interests of the child" language, the court explained that, unlike the custody setting where NRS 125.480(1) makes the child's best interest "the sole consideration," in the support setting the parents' and child's interests are interwoven, and the child's best interest is tied to fair support as defined in NRS 125B.070 and 125B.080 — not to perpetuating a support order the obligor parent's changed circumstances may make unreasonable.

In plain language

Hony Fernandez and Jennifer Fernandez (now known as Jennifer Rothman) divorced in 1998 after a brief marriage that produced two children. Both worked in the securities industry. The original divorce decree required the father to pay $3,000 per month in child support, plus health insurance, uncovered medical expenses, a housekeeper, and a nanny or day care. In 1999, the parties agreed to raise support to $4,000 per month (effective 2001) and to add private-school tuition. In 2000, after a failed reconciliation, they entered a third stipulation giving both parents joint physical custody — and in that stipulation, both parents "voluntarily waive[d] any right they may have pursuant to Chapter 125B of the Nevada Revised Statutes" to seek modification of the father's child support obligation. By 2007, according to the father's motion, his fortunes had reversed dramatically. He had once earned between $500,000 and more than $4,000,000 a year trading securities, but heavy market losses beginning in 2002 left him earning $3,000 a month selling cars, plus a similar amount in interest — while his child support obligations totaled roughly $80,000 a year. The mother, meanwhile, had remarried; her household income equaled or exceeded his, and the two had comparable net worth. The trial court itself found that if it applied the statutory child support formula to the parties' current incomes, "neither party would be obligated to pay child support to the other." Even so, it refused to modify the order, relying on the parties' waiver and on the fact that the father could still pay from his remaining assets. The Nevada Supreme Court reversed. It held that parents cannot, by agreement, strip a court of its statutory power to review and modify child support. Once a support agreement is incorporated into a divorce decree, it becomes a court order, not just a private contract, and Nevada's statutes provide for its periodic review and modification — up or down — as circumstances change. Quoting a California decision, the court concluded that "the court always has the power to modify a child support order, upward or downward, regardless of the parents' agreement to the contrary." The court also rejected the trial court's approach of requiring the father to draw down his assets before modification could be considered, and it rejected the mother's argument that her partial performance of the agreement barred the father from challenging it. One limit remained for the father, however. Under the court's recent decision in Rivero v. Rivero, the mere fact that more than three years had passed since the last review entitled him to a review, but not automatically to a modification: on remand, he must still demonstrate changed circumstances. The court noted that his alleged income drop — more than 80 percent — appears to satisfy the statutory trigger, under which a change of 20 percent or more in the support obligor's gross monthly income is deemed a changed circumstance requiring review for modification.