931 N.W.2d 244
S.D.2019Background
- Cleopatra Cameron was the primary beneficiary of an irrevocable trust with express spendthrift provisions that forbid direct payments to her creditors and leave distributions to trustee discretion.
- A California family court during Cleopatra’s divorce ordered the trust (joined nominally) to make direct monthly child support (and interim spousal/support-related attorney fees) payments to ex-husband Christopher, relying on Cal. Prob. Code §15305 and Ventura Cty. precedent.
- Trustees (Wells Fargo, BNY, others) at times complied and paid; later the trust situs was moved to South Dakota and new trustees/trust protector ceased direct payments as inconsistent with the spendthrift clause and South Dakota law.
- Cleopatra petitioned the South Dakota circuit court for supervision and a declaration whether the trust may make direct child support payments to Christopher; the circuit court held South Dakota law governs enforcement methods and that the trust is prohibited from making such direct payments.
- The South Dakota Supreme Court affirmed, concluding the California direct-payment mechanism was an enforcement method (not entitled to full faith and credit as a compulsory enforcement device) and South Dakota statutes bar creditor access to spendthrift trust distributions, including child-support creditors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the California order requiring direct trust payments is entitled to full faith and credit | Christopher: CA judgment is valid; its direct-payment enforcement should be recognized and enforced in SD | Trust/Cameron: The CA order is a method of enforcement, and forum law (SD) controls enforcement mechanisms | Held: The CA order was an enforcement method; full faith and credit does not require SD to adopt CA's enforcement mechanism; SD law governs enforcement |
| Whether the trust may make direct child support payments despite spendthrift provision | Christopher: Public policy should not let trust law evade child support obligations; CA precedent permits trustee compulsion under §15305 | Trust/Cameron: SD statutes protect spendthrift trusts from creditor claims; SD rejects Restatement (Third) positions allowing child-support reach | Held: SD law (SDCL Chapter 55 provisions) bars creditors, including child-support obligees, from reaching or compelling trust distributions; direct payments prohibited |
Key Cases Cited
- Riley v. New York Trust Co., 315 U.S. 343 (recognition of sister-state judgments limits relitigation)
- Milliken v. Meyer, 311 U.S. 457 (full faith and credit precludes inquiry into merits of sister-state judgment)
- Baker by Thomas v. Gen. Motors Corp., 522 U.S. 222 (forum state may apply its own enforcement mechanisms for foreign judgments)
- V.L. v. E.L., 136 S. Ct. 1017 (per curiam) (presumption of jurisdiction for judgments on their face)
- Ventura Cty. Dep't of Child Support Servs. v. Brown, 117 Cal.App.4th 144 (Cal. Ct. App.) (narrow exception allowing a court to order trustee to satisfy child-support where trustee acted in bad faith)
- Wooster v. Wooster, 399 N.W.2d 330 (S.D. 1987) (South Dakota recognition of valid foreign judgments for comity)