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FAMILY LAW: Contract support allows parties to make decisions without fear of court intervention

Gregg Herman

Listening to oral arguments is generally frustrating for me.

Case in point: On Oct. 6, the Wisconsin Supreme Court heard oral arguments in May v. May, No. 2010AP177 (filed Jan. 6). The Court of Appeals certified the case to the high court to decide “the enforceability of child support stipulations that set a child support payment amount and then restrict the payor’s right to request downward adjustments.”

In May, the parties stipulated that Michael May would pay a minimum amount of child support for 33 months and could not seek a reduction during that time period. Seventeen months later, he lost his job and sought relief. The trial court found that the stipulation was not against public policy and denied his motion. Michael appealed.

The Court of Appeals in its certification noted a conflict between a footnote in Frisch v. Henrichs, 2007 WI 102, ¶74, n.23, 304 Wis. 2d 1, 736 N.W. 2d 85, in which the Supreme Court appears to allow a floor in child support as long as it is only for a limited period of time, and the Court of Appeals’ decision in Jalovec v. Jalovec, 2007 WI App 206, 305 Wis. 2d 467, 739 N.W.2d 834, which held that a stipulation setting a four-year floor on child support violates public policy.

What causes my frustration as an observer is that occasionally a lawyer, or even a justice, misstates the law. In this case, a justice, hopefully, simply misspoke when saying there is a two-year prohibition on changing custody and placement. (In case that justice is reading this, it’s a higher burden for two years, not a prohibition).

In addition, sometimes it seems the questioning by the court and the responses by the lawyers miss the real issues. In this case, the continual actions by Michael over the years to reduce child support, while no doubt important to Ms. May, should not be the basis for establishing public policy in Wisconsin.

Rather, the public policy issue present in May is the freedom of parties to contract. The closest analogy is not custody and placement statutes, but maintenance. Wisconsin courts have long recognized that spousal support may be paid in a non-modifiable fashion instead of statutory maintenance, which is subject to modification. If the parties agree to waive maintenance and have support paid in a contractual fashion, they will be held to their agreement. Ross v. Ross, 149 Wis. 2d 713, 439 N.W.2d 639 (Ct. App. 1989). Even a stipulation providing for maintenance will be non-modifiable if that was the intent of the parties. Nichols v. Nichols, 162 Wis. 2d 96, 469 N.W.2d 619 (1991).

Although I disagree with it, there is at least a valid argument that stipulations placing a ceiling on child support should not be enforceable since the children would be surrendering a higher standard of income without their consent. Why, however, would that argument prevail when the stipulation provides for a floor, which is designed to protect the children’s standard of living?

The freedom to contract support is important as it allows parties to make decisions without fear of court intervention. People frequently make vocational choices based on factors other than money. They may go into a preferable field, leave a horrible boss (hopefully, not as in the movie), make a vocational choice to spend more time with their children or for myriad other reasons.

Where support is modifiable, these decisions must be made with one eye — and sometimes both — on the unknown vagaries of what a court might think. If support is contractual, both parties know the extent of their financial obligations and can plan accordingly.

If child support floors are enforceable, this does not lead a payor in financial straits to debtor’s prison. Just as with Section 71 payments, a remedial contempt action requires a court to find that the alleged contemnor has the ability to obey the order. See Gregg Herman, “The Law of Contempt,” 30 W.J..F.L. 2 (Spring, 2010).

As I’ve argued before, the best interests of children would be promoted by discouraging litigation between parents. As long as their basic needs are met, children would be better served with fewer financial resources and a peaceful environment, rather than more money and less peace.

If you don’t believe me, just ask a child whose parents are warring.

Gregg Herman is a shareholder with Loeb & Herman SC, Milwaukee, which practices exclusively family law. Herman can be reached at gherman@loebherman.com.

2 comments

  1. See, Patrickus v. Patrickus, 2000 WI Ap 255, para. 11-15. Maintenance stipulations are only worth what the court says the are. You may think you have a valid one and then, “poof” that good old doctrine of “public policy” is applied and suddenly your stipulation is worthless.

    I completely agree with the concept of freedom to contract. But when it comes to family law, the court always has the last word.

  2. I have been in court now for six years, and in 1999 my ex and I agree and stipulated outside of the court regarding child support and maintenance. The court now wants to say it was a court order for child support and maintenance under the agreement. It is not a court order and I am not subject to Wis 767/785. The court lost it’s jursidiction over the matter when it accepted the contract agreement which precludes a party from being subjected to the family code. I am not confused on this issue, the court wants it both ways. This has nothing the do with public policy, it has to do with individuals having the right to contract without court intervention. Courts do not like being left out on these matters. The Appeals Court views stipulated agreements as contracts which are not subject to the family code. If one party violate the contract, that party can file a breach of contract. It’s that simple people!

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