Minimum child support agreements don't violate public policy if limited in duration

By Joe Forward, Legal Writer, State Bar of Wisconsin

April 3, 2012 – Agreements that require one parent to make minimum “floor” child support payments to the other parent for a period of time, without modification, will generally be upheld, the Wisconsin Supreme Court clarified in a recent decision.

In 2007, Michael May (May) agreed to pay his ex-wife (Suzanne) a minimum of $1,200 per month in child support and also agreed that he would not seek a reduction for 33 months.

In return, Suzanne agreed to pay 100 percent of child care costs and allowed May to pay decreased amounts on child support arrearages that he owed.

A circuit court judge entered an order based on the parties’ stipulations.

About a year-and-a-half later, May sought a reduction in monthly child support payments after losing his job. A court commissioner denied his motion, and a circuit court affirmed, ruling that May was “equitably estopped” from seeking a reduction based on the 2007 agreement.

The court of appeals certified the case to the Wisconsin Supreme Court, which recently affirmed the circuit court in May v. May, 2012 WI 35 (April 3, 2012), by a 6-1 vote.

Public policy and equitable estoppel

The Wisconsin Supreme Court explained that child support stipulations and agreements should generally be upheld when parties freely and knowingly enter agreements, the stipulations are fair and equitable, and the stipulations do not violate public policy considerations.

The public policy at issue, the court explained, concerns the best interests of the child, and “a stipulation that sets an unmodifiable floor for child support for a limited term does not necessarily run afoul of the public policy of protecting the best interests of the child.”

May argued that unmodifiable child support floors violate public policy per se – since changed circumstances could negatively impact the best interest of the child – and thus the agreement at issue could not be enforced on equitable estoppel grounds.

But unlike unmodifiable ceilings, which violate public policy, unmodifiable floor payments don’t prevent payee parents from seeking additional support for their children, the court noted.

“This is important because the payee is the parent that a court and the parties have determined to be more in need of financial support, as between the two parents, in order to provide for the best interest of the child,” wrote Justice Roggensack.

The supreme court majority reiterated that the best interest of the child drives the analysis, and agreeing to pay floor minimums can reduce litigation on the issue.

“Agreements that provide an unmodifiable child support floor for a limited period of time often are created to lessen litigation between the parties,” wrote Justice Patience Roggensack. “Repetitive litigation and the tension it creates are not in the best interests of children.”

Limited duration and equitable power

The court ruled that in general, unmodifiable child support floor amounts will be upheld if payable not more than 33 months, noting that under Wis. Stat. § 767.59(1f)(b)2, child support agreements are subject to the rebuttable presumption that changed circumstances should allow modification after 33 months, unless support is tied to a percentage of income.

In addition, the supreme court majority explained that circuit courts have “equitable power” to modify child support agreements that, based on circumstances unforeseen at the time of the agreement and stipulation, adversely impact the best interest of the child at issue.

However, the court ruled that May did not demonstrate the existence of circumstances warranting the circuit court’s exercise of equitable power to modify the 2007 order.

Concurrence and dissent

Justice Ann Walsh Bradley wrote a concurring opinion, agreeing with the ultimate conclusion but questioning whether the majority opinion creates a new standard, “unforeseen circumstances,” for circuit courts to follow when exercising authority to modify stipulations.

“Does the majority intend to create a new standard? Whatever it is doing, it should be clearly stated in order to provide clear guidance to litigants and courts,” Justice Bradley wrote.

Chief Justice Shirley Abrahamson wrote a dissenting opinion, disagreeing with the majority’s analysis and stating: “[T]he circuit court’s discretionary decision was not based on the legal standard the majority creates today.”

The chief justice would have remanded the case to let May determine whether “unforeseen circumstances” that “adversely affect the interests of the child” demand modification.