Equitable Estoppel as a Defense to Support (October 2010)

Material for South Carolina Department of Social Services Child Support Enforcement CLE, October 2010. Published in American Journal of Family Law, Summer 2012.

Two recent South Carolina Supreme Court opinions, Ables v. Gladden, 378 S.C. 558, 664 S.E.2d 442 (2008) and Strickland v. Strickland, 375 S.C. 76, 650 S.E.2d 465 (2007), abolished the defense of laches in the collection of back child support or alimony, while authorizing the continued use of a similar defense, equitable estoppel, in such collection cases.  Equitable estoppel is actually a more powerful defense than laches as it not only blocks past enforcement of the order but stops future enforcement too.  Kelley v. Kelley, 368 S.C. 602, 606, n.2, 629 S.E.2d 388 (Ct. App. 2006).

There are six elements of an equitable estoppel defense:

The elements of equitable estoppel as related to the party being estopped are: (1) conduct which amounts to a false representation, or conduct which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) the intention that such conduct shall be acted upon by the other party; and (3) actual or constructive knowledge of the real facts. The party asserting estoppel must show: (1) lack of knowledge, and the means of knowledge, of the truth as to the facts in question; (2) reliance upon the conduct of the party estopped; and (3) a prejudicial change of position in reliance on the conduct of the party being estopped.

Ables, 378 S.C. at 566-67.

What type of facts makes a successful equitable estoppel defense in a child support or alimony collection case?  In Kelley, the following facts were cited by the Court of Appeals in its analysis of Husband’s equitable estoppel claim:

Husband and Wife divorced on July 30, 1974, after fourteen years of marriage. The divorce decree required Husband to pay child support of fifty dollars per week per child and alimony of twenty-five dollars per week. At the time of the divorce, Husband lived in Florida and Wife lived in South Carolina. The court awarded Wife custody of the two children, Chuck and Kevin, who, at the time, were twelve and ten respectively.

Less then(sic) a year after the divorce, Wife sent Chuck to live with Husband in Florida because she thought Husband could better control him. Husband’s counsel wrote a letter dated March 25, 1975, memorializing an agreement that would “reduce Husband’s support payments by one-half (½) from this time forward and Husband will have complete custody and control of Chuck Kelley.” Former Family Court Judge John A. Mason signed the bottom of this letter.

The parties continued under this half-support custody agreement for almost two years, until Chuck went back to live with Wife. By order dated September 23, 1977, the provisions of the original divorce decree were reinstated, and Husband was required to make payments to Wife to resolve a support arrearage of $4,450. This arrangement also did not last long. Less than five months after the 1977 order, Chuck returned to live with Husband in Florida, where he remained permanently. Wife maintained custody of Kevin at that time.

Six months after Chuck returned to Florida to live with Husband, Wife’s then attorney obtained an ex parte order invoking the automatic arrest provision of the September 1977 order. This order was neither issued with notice to Husband’s counsel nor was it ever served on Husband. Moreover, Wife’s current attorney conceded no evidence existed to show the order was served on Husband.

Less than one month after the ex parte order was signed, Kevin, who was then fifteen, went to Florida to visit Husband and decided to move there permanently as well. Husband claims that at this point, because the two children lived with him, he and Wife orally agreed that he no longer owed her any alimony, and she did not owe him child support. Wife disputes the existence of any such agreement.

On October 5, 2001, Wife instituted a rule to show cause, seeking to hold Husband in contempt for failure to obey the previous orders requiring him to pay alimony. Husband answered and moved to dismiss based upon laches, expiration of the statute of limitations, and estoppel.

Id. 368 S.C. at 64-66.

The Court of Appeals found equitable estoppel applied with this reasoning:

Wife’s conduct conveyed the impression that Husband was no longer obligated to pay alimony based on Husband’s understanding that Wife agreed to waive alimony in exchange for him having custody of the children and based on Wife’s failure to demand alimony from Husband in over twenty years. Further, Wife intended Husband to rely on the agreement that he not pay her alimony, so that he, in turn, would not pursue child support against her. Husband’s decision not to seek child support also shows he was justified in relying on the parties’ decision to mutually waive support obligations. Lastly, Husband changed his position in reliance on the agreement because if he had known he had a lingering support obligation, he would have sought to have his obligation reduced or eliminated.

Id. at 609.

In Strickland, the Supreme Court found that Wife’s claim for past due alimony was barred by equitable estoppel on the following facts:

Upon the parties’ divorce in April 1988, the family court awarded $1200 per month in permanent periodic alimony to Appellant/Respondent Carol Strickland (“Wife”) to be paid by Respondent/Appellant Krom Strickland (“Husband”). This monthly total was increased by $200 in November 1990 after the family court held Husband in contempt of court for failing to remain current on his alimony obligation. In May 1992, the parties signed a consent order providing that instead of making payments to the county clerk of court, all further alimony would be paid directly to Wife, and any arrears would be “worked out between the parties.” From November 1990 until December 1997, Husband paid Wife $300 per month in alimony payments. During this time, Wife did not object to Husband’s failure to pay the full amount awarded by the court. In July 1998, Husband made a onetime payment of $500 (at Wife’s request). After this, Husband made no further payments to Wife and Wife made no additional requests for alimony until December 2004 when her lawyer contacted Husband to discuss “a deficient alimony claim.”

Id. 375 S.C. at 81.  Based on these facts, the Supreme Court found Wife was equitably estopped from pursuing her claim for past due alimony:

Beginning as early as 1990, Wife’s conduct conveyed the impression that she was willing to accept alimony in an amount different from that articulated in the 1988 divorce decree. Wife accepted Husband’s $300 monthly alimony payments for seven years and further testified that she agreed on $300 per month as long as I could make my other payments—because he was trying to get straightened out. Furthermore, Wife pursued no alimony—other than a single request in July 1998—when Husband’s monthly payments altogether ceased, testifying that at that time, “I told him as long as I could make it that I would not go after him.”

Furthermore, Wife intended Husband to rely on her actions and assertions. Wife’s communication with Husband and use of the court system early on indicate that she was clearly aware of Husband’s financial situation as well as the procedure for modification or enforcement of the alimony award. Wife herself initiated the claim which resulted in the 1992 consent order for Husband’s alimony payments to be made directly to Wife and for the arrears to be “worked out between the parties.” Later in 1992, Wife went so far as to initiate a claim to reduce the amount of alimony to $500 per month. In our opinion, the trial court correctly determined that between 1990 and 2004, Wife “by her actions, and her inactions, lulled Husband into thinking they had resolved the issue between themselves and that he did not need to take any actions to protect himself by attempting to have the Court reduce or terminate his alimony.”

Moreover, other than her 1990 contempt action for alimony in arrears, Husband had no indication that Wife was dissatisfied with the parties’ own terms of alimony. In light of Wife’s 1992 court appearances, Husband justifiably relied on Wife’s assertions that she did not need alimony on the terms ordered by the divorce decree. Specifically, the consent order for the parties to settle the issue of arrears themselves, and Wife’s subsequent initiation of a claim to significantly reduce alimony to an amount closer to that which Husband was actually paying at the time, gave Husband no reason to believe that he either needed to seek modification of alimony in light of his financial situation or ultimately face accountability for the entire amount dating back to the 1988 divorce decree.

Lastly, Husband was prejudiced in relying on Wife’s assurances that the parties had settled all issues related to alimony. The facts show, and the trial court correctly found, that Husband would not have incurred substantial farm debt beginning in 2004 if he had known he would ultimately be responsible for the full amount of his alimony obligation.

Although Husband’s almost immediate failure to adhere to the divorce decree, or at the very least seek a modification of alimony at that time, is unacceptable, Wife’s assurances and reassurances that Husband need only pay what he could justifiably resulted in Husband’s belief that his past due alimony obligations had been settled between them. Accordingly, we hold that Wife is equitably estopped from bringing a claim for enforcement of past due alimony against Husband.

Id. 375 S.C. at 86-88.  Note that Strickland found equitable estoppel even though the parties never memorialized any agreement in writing or even had a clear understanding what they had agreed to.  Wife’s mere course of conduct conveying to Husband the impression that paying $300.00 a month was acceptable was sufficient to sustain a finding of estoppel. Yet in Miles v. Miles, 355 S.C. 511, 586 S.E.2d 136 (Ct.App. 2003), the Court of Appeals rejected an estoppel argument when the parties acknowledged an oral agreement to reduce Husband’s alimony because the family court order their oral agreement modified contained language that the agreement the court order approved could only be modified with written consent of the parties.  The principles of equitable estoppel would seem to overcome any provisions in an order restricting or limiting modifications of that order as equitable estoppel requires a “course of conduct” and “prejudice” that justifies non-compliance with the order and renders enforcement of the order unjust.  Whether Miles is aberrational or carves out an exception to the principle of equitable estoppel is unclear. Kelley cites Miles for the proposition that “it is axiomatic that parties cannot modify a court order.” Kelley, 368 S.C. at 608.  Yet Kelley and Strickland apply equitable estoppel to allow parties to implicitly modify their court order.

In Ables, the Supreme Court rejected Husband’s equitable estoppel claim with the following analysis:

As evidenced by the numerous orders in the record, petitioner consistently pursued respondent for child support and medical expenses. Her claims go at least as far back as 1997 when she sent a certified letter to respondent demanding various expenses. The 1994 North Carolina order, which made respondent responsible for child support and health insurance/medical expenses, was registered in South Carolina in 1998. The record also reveals: (1) a 2002 order which set child support at $102 per week, plus $20 per week for arrears, and also set out the above-discussed formula for respondent’s obligations regarding medical expenses; (2) a 2003 order which reduced the child support obligation to $62 per week, plus the $20 for arrears; and (3) a 2004 order which increased child support to $81.79 per week, plus $20 for arrears.

The evidence therefore is undeniable petitioner never made any assurances or representations to respondent that he was not responsible for the court-ordered obligations regarding child support and medical expenses. Thus, petitioner is not equitably estopped from asserting her claims regarding retroactive child support, health insurance, and medical expenses.

Id. 378 S.C. at 569.

In analyzing whether to defend a support obligation on an equitable estoppel defense, one needs to consider the following:

▸ Did the parties have a written or oral agreement that modified the court-ordered obligation?

▸ If not, did the parties engage in a course of conduct that indicated an understanding that they would not follow the court-ordered obligation?

▸ Was it reasonable for the party claiming estoppel to rely upon the out-of-court agreement or course of conduct in not following the court order?

▸ Did the other party intend for the party claiming estoppel to rely upon the out-of-court agreement or course of conduct in not following the court order?

▸ In seeking enforcement of the court order, is the party seeking enforcement taking a position inconsistent with his or her out-of-court agreement or course of conduct?

▸ Was the party claiming estoppel reasonable in relying upon the other party’s out-of-court agreement or course of conduct to believe that the court order would not be enforced as written?

▸ Did the party claiming estoppel take some action or refrain some taking some action due to the parties’ out-of-court agreement or course of conduct?

▸ Has the party claiming estoppel been prejudiced by his or her failure to take some action due to reliance upon the parties’ out-of-court agreement or course of conduct?