Grossman v. Lerud
2014 ND 235
| N.D. | 2014Background
- Dustin Lerud and Megan Grossman share a minor child; Lerud was originally ordered to pay child support with income imputed at minimum wage.
- Grossman sought review; the State moved to increase Lerud’s child support to $542/month based on imputed income under the North Dakota child support guidelines.
- Evidence showed Lerud worked as a farm manager in Minnesota and performed seasonal grain marketing; the State submitted tax returns, P&Ls, W-2s, and the Job Service North Dakota 2012 Employment and Wages publication.
- A judicial referee found Lerud underemployed and imputed income using six-tenths of the North Dakota statewide average for an entry-level farm manager from the Job Service publication.
- Lerud did not dispute underemployment but argued the proper ‘‘statewide average earnings’’ should be Minnesota’s statewide average (his work domicile), submitting federal labor statistics to support that view.
- The referee and the district court rejected Lerud’s proposed Minnesota standard (citing lack of farm-acreage evidence and that the ND job description better matched his work) and entered an amended judgment increasing support; Lerud appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether "statewide average earnings" in N.D. Admin. Code § 75-02-04.1-07(3) means the obligor's state of residence or North Dakota statewide averages | The State (statutory real party) argued the term refers to North Dakota statewide averages for imputing income | Lerud argued the term should mean the statewide average of the state where he works/lives (Minnesota) | The court held the term is ambiguous but, based on rulemaking history and harmony with related regs, it must be read to mean North Dakota statewide averages for imputations under the ND guidelines |
| Whether using ND statewide averages conflicts with related regulations (e.g., opportunity within 100 miles) | The State argued ND averages are consistent with the regulations and prevent circumvention by relocation | Lerud argued using ND averages is improper for out-of-state obligors and may be unfair given regional differences | The court held using ND averages harmonizes the regulations and prevents obligors from evading obligations by moving out of state; out-of-state obligors may seek relief under subsection (6) with proof |
| Whether the district court erred by not relying on Lerud’s profit-and-loss statements | The State/district court treated Lerud’s tax returns as reliable evidence of income | Lerud contended P&Ls showed different income and should have been considered | The court held no error: Lerud provided no evidence disputing the tax returns’ reflection of income, so finding of underemployment stands |
| Whether prior case law requires using the obligor’s domiciled-state averages | Lerud relied on cases considering ‘‘community’’ employment contexts to support domiciled-state averages | The State argued prior cases predate the 2008 amendment and are distinguishable | The court held prior cases (e.g., Richter) are distinguishable and do not require the domiciled-state standard post-amendment |
Key Cases Cited
- State ex rel. K.B. v. Bauer, 763 N.W.2d 462 (N.D. 2009) (standards of review for child support determinations)
- Serr v. Serr, 746 N.W.2d 416 (N.D. 2008) (failure to comply with guidelines is legal error)
- Gadeco, LLC v. Indus. Comm’n, 830 N.W.2d 535 (N.D. 2013) (administrative regulation construction follows statutory rules)
- Great Western Bank v. Willmar Poultry Co., 780 N.W.2d 437 (N.D. 2010) (statutory language given plain meaning; harmonize related provisions)
- Western Gas Resources, Inc. v. Heitkamp, 489 N.W.2d 869 (N.D. 1992) (statutory ambiguity defined)
- Kaspari v. Olson, 799 N.W.2d 348 (N.D. 2011) (use legislative history when statutory language is ambiguous)
- Richter v. Houser, 598 N.W.2d 193 (N.D. 1999) (prior underemployment/community-work analysis)