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08/01/2017 09:07 AM CDT




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                                Nebraska Court of A ppeals A dvance Sheets
                                     24 Nebraska A ppellate R eports
                                        STATE ON BEHALF OF LOCKWOOD v. LAUE
                                                 Cite as 24 Neb. App. 909




                         State      of    Nebraska  on behalf of Dawn Lockwood,
                                appellant, and      Dawn Lockwood, appellee,
                                             v. Travis Laue, appellee.
                                                      ___ N.W.2d ___

                                           Filed August 1, 2017.    No. A-16-627.

                1.	 Equity: Appeal and Error. On appeal from an equity action, an appel-
                    late court tries factual questions de novo on the record and, as to ques-
                    tions of both fact and law, is obligated to reach a conclusion independent
                    of the conclusion reached by the trial court, provided that where credible
                    evidence is in conflict in a material issue of fact, the appellate court
                    considers and may give weight to the fact that the trial judge heard
                    and observed the witnesses and accepted one version of the facts rather
                    than another.
                2.	 Contempt: Appeal and Error. In a civil contempt proceeding where
                    a party seeks remedial relief for an alleged violation of a court order,
                    an appellate court employs a three-part standard of review in which (1)
                    the trial court’s resolution of issues of law is reviewed de novo, (2) the
                    trial court’s factual findings are reviewed for clear error, and (3) the trial
                    court’s determinations of whether a party is in contempt and of the sanc-
                    tion to be imposed is reviewed for abuse of discretion.
                3.	 Child Support: Actions: Final Orders. Upon receipt of a child support
                    referee’s findings and recommendations, the district court is provided
                    the opportunity to have a further hearing and review regarding the rec-
                    ommendation, and has the ability to accept or reject all or any part of the
                    report before its final disposition in ratifying or modifying the recom-
                    mendations of the referee.
                4.	 Equity. In an equitable action, the district court is vested with broad
                    equitable powers and discretion to fashion appropriate relief.
                5.	 Child Support: Equity. An exception hearing to a child support ref-
                    eree’s report is an equitable action, and it is within the discretion of the
                    district court to allow the presentation and receipt of new or additional
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            Nebraska Court of A ppeals A dvance Sheets
                 24 Nebraska A ppellate R eports
                STATE ON BEHALF OF LOCKWOOD v. LAUE
                         Cite as 24 Neb. App. 909

     evidence at an exception hearing upon receiving the referee’s findings
     and recommendations.
 6.	 Child Support: Actions: Final Orders. The child support referee’s rec-
     ommendation is a nonbinding recommendation, and the final determina-
     tion is left to the district court.
 7.	 Child Support: Equity. As the district court is provided the discretion
     to accept or reject all or any part of the referee’s report and ratify or
     modify the referee’s findings and recommendations, so shall the district
     court in a court of equity have the discretion to receive additional or
     new evidence at an exception hearing.
 8.	 Child Support: Appeal and Error. When a child support referee makes
     a report and no exception is filed, the district court reviews the referee’s
     report de novo on the record.
 9.	 Child Support: Equity. If an exception is filed to a child support ref-
     eree’s report, the party filing an exception is entitled to a hearing and
     the district court as a court of equity has the discretion to allow the
     presentation of new or additional evidence.

   Appeal from the District Court for Buffalo County: William
T. Wright, Judge. Affirmed.
  Shawn R. Eatherton, Buffalo County Attorney, and Andrew
W. Hoffmeister for appellant.
   Bergan E. Schumacher, of Bruner Frank, L.L.C., for appel-
lee Dawn Lockwood.
   Moore, Chief Judge, and Inbody and R iedmann, Judges.
   Inbody, Judge.
                      INTRODUCTION
  The State of Nebraska appeals the decision of the Buffalo
County District Court finding that Dawn Lockwood was not in
contempt of court for failing to pay court-ordered child support
and in refusing to allow the State to present additional evi-
dence at the exception hearing to the referee’s report.
                 STATEMENT OF FACTS
  In July 2014, the district court ordered Lockwood to pay
$50 per month in child support. In December 2015, the State
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             STATE ON BEHALF OF LOCKWOOD v. LAUE
                      Cite as 24 Neb. App. 909

filed an affidavit and application for an order to show cause
regarding Lockwood’s failure to pay child support. The district
court ordered Lockwood to appear to show cause why she
should not be held in contempt.
   In February 2016, the district court child support referee
held a hearing on the order to show cause. Lockwood was
represented by a court-appointed attorney. The State indicated
Lockwood was delinquent in the amount of $791.85 in child
support. The State offered Lockwood’s child support payment
history, which was received into evidence. The child support
payment history indicated Lockwood had not paid child sup-
port since May 2015. The referee stated that the exhibit cre-
ated a rebuttable presumption that Lockwood was in willful
and contumacious civil contempt of the district court’s order
to pay $50 a month in child support. The referee stated that
because the exhibit created a rebuttable presumption, the bur-
den of proof shifted to Lockwood to convince the court she
was not in contempt. The referee allowed Lockwood to pro-
ceed with evidence.
   Lockwood testified that in July 2014, when the child sup-
port order was entered, she was in prison in Topeka, Kansas,
after turning herself in on a warrant in April of that year.
After her release in August 2014, she found a job at a motel
earning $8 an hour, but left after 5 months because her physi-
cal limitation of “bulging disks [did not allow her] to stoop.”
Following working at the motel, Lockwood then worked at a
fast-food restaurant for about 6 months, initially earning $7.50
an hour until she was promoted to general manager earning
$10 an hour. After Lockwood was terminated from that job,
she worked at a convenience store for a couple months, earn-
ing $10 an hour. Lockwood was then jailed in Buffalo County
from July 2015 until January 2016. Lockwood stated she did
not have a current driver’s license because it was suspended for
failure to pay child support while she was in jail. Lockwood
also indicated that although her husband was employed full
time, they were currently living in a hotel and she was
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             STATE ON BEHALF OF LOCKWOOD v. LAUE
                      Cite as 24 Neb. App. 909

cleaning rooms there to receive reduced rent. Lockwood stated
that since her release from jail, she has worked with a voca-
tional rehabilitation program to develop an individualized plan
for employment. Lockwood also indicated that she is working
in coordination with a nonprofit agency to gain employment
skills, namely obtaining and maintaining a job, and commu-
nity support, including budgeting and bill paying. Lockwood
stated she had submitted employment applications to 12 dif-
ferent businesses, provided a journal indicating the jobs to
which she had applied, with copies of electronic and paper job
applications she completed, and she informed the referee of
interviews resulting from the applications. Lockwood informed
the referee that her nonpayment of child support was not inten-
tional, that she was doing everything in her power to obtain
employment in order to pay her child support obligation, and
that she intended to pay off the child support obligation as
soon as she gained employment.
   On cross-examination, Lockwood indicated she was in jail
for 1 day in July 2015 and again from October 2015 to January
2016. When the State asked Lockwood about what efforts she
made to be employed from April to October 2015, Lockwood
stated that she was seeing her psychiatrist on a regular basis to
get her medication stabilized for treatment of a mental illness
disability. During that time, Lockwood cleaned rooms for a
reduced rent at a hotel for approximately $20 per room.
   On redirect examination, Lockwood stated that she suf-
fers from severe social anxiety and schizoaffective disor-
der, but she was taking medication to help keep it con-
trolled. Lockwood also said that she was actively seeking
employment despite her mental illness disability. Lockwood
acknowledged that she was behind in rent, “barely making
ends meet,” and also having difficulty because she did not
have a driver’s license.
   At the conclusion of the evidence and closing arguments,
the referee stated: “The [c]ourt finds[,] as counsel pointed
out, the burden is by clear and convincing evidence that . . .
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             STATE ON BEHALF OF LOCKWOOD v. LAUE
                      Cite as 24 Neb. App. 909

Lockwood is in contempt. I fail to find that the State has met
its burden. A $50 order isn’t much, and I don’t recall ever —.”
The State interrupted, claiming, “I think you mean the defend­
ant[,] not the State.” In response, the referee stated, “We’ll sort
it out. The caption is no longer up to date. We need to find — I
need to find by clear and convincing evidence that you’re in
contempt. I just don’t find it. You’ve made a lot of efforts.”
The referee found that Lockwood could not pay the child sup-
port during the months she was incarcerated. The court noted
Lockwood’s mental health breakdown, her need for medica-
tion, and that she bartered her rent by doing work where she
was residing. The referee stated, two more times, “I just don’t
find the State’s met its burden.”
   In its March 2016 report, the referee initially indicated that
the State established a prima facie case of contempt against
Lockwood for being delinquent in her child support obligation.
The report acknowledged that Lockwood was incarcerated “for
significant periods of time” since the July 2014 child support
order was entered, she received discounted rent for house-
keeping services, her incarceration did not cause a willful or
intentional act of nonpayment of child support, her four felony
convictions reduced her ability to be gainfully employed, and
she provided significant documentation of her efforts to gain
employment. The referee’s report stated: “Based upon the
totality of the evidence received and arguments submitted, the
State did not meet its burden of proof by clear and convincing
evidence that the obligor willfully or intentionally failed to
pay child support.” Consequently, the referee’s report recom-
mended the district court order the dismissal of the order to
show cause without prejudice.
   Following the filing of the referee’s report with the district
court, the State filed an exception to the report, claiming that
the State provided sufficient proof Lockwood was in contempt
for failing to pay previously ordered child support and that the
referee should not have recommended dismissal of the order
to show cause.
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             STATE ON BEHALF OF LOCKWOOD v. LAUE
                      Cite as 24 Neb. App. 909

   In May 2016, the district court held a hearing on the
exception filed by the State. The court initially said that the
hearing was on an appeal; in response, the State informed
the court that it was an exception, not an appeal. The bill of
exceptions from proceedings with the referee were received
into evidence. The State informed the court that the hearing
was a trial de novo and, as a result, the State wanted to offer
additional evidence consisting of Lockwood’s pay history and
wage history. Lockwood objected to the receipt of the State’s
additional evidence, claiming that the evidence was not rel-
evant because the hearing was based on whether the referee
was correct. The court stated its opinion that the hearing was
de novo on the record and received the exhibits condition-
ally, deferring its decision, to determine relevancy until the
court could determine the appropriate standard of review.
Consequently, the State made an offer of proof regarding
the exhibits.
   Also at the hearing, the State argued it is the child support
obligor’s burden to show whether nonpayment of child sup-
port is not willful and contumacious. The State additionally
claimed that the hearing taking place with the court was a
contempt hearing. In response, Lockwood claimed that the
hearing was solely a review of the referee’s findings. The court
instructed the parties to submit simultaneous briefs.
   In its June 2016 order, the district court overruled the
State’s exception and dismissed the order to show cause. In
its order, the court stated that it did not receive or consider
the additional evidence presented by the State at the exception
hearing because additional evidence was “irrelevant,” since
the hearing was de novo on the record. The court determined
that the State met its initial burden of establishing a prima
facie case of Lockwood’s child support arrearage and that
the burden then shifted to Lockwood to establish the arrear-
age was not the result of a willful act. The court agreed with
the referee and determined that, based upon its review of the
received evidence, Lockwood overcame the presumption that
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             STATE ON BEHALF OF LOCKWOOD v. LAUE
                      Cite as 24 Neb. App. 909

she was willfully and contumaciously in contempt because
she established she did not have the ability to pay at the time
of the hearing with the referee.
   The State timely filed this appeal.

                  ASSIGNMENTS OF ERROR
   The State contends the district court erred in failing to find
Lockwood in contempt of court in consideration of all the facts
given to the court, particularly that she overstated her time
spent in jail and admitted to bartering her earnings in exchange
for reduced rent, while ignoring evidence that Lockwood had
been in the past and was at the time of the hearing employed
in exchange for a reduced rate of rent.
   The State further contends that the district court erred
when, at the exception hearing to the referee’s report, the
court refused to allow the State to present additional evidence
of more periods of nonpayment and Lockwood’s wage earn-
ing history.

                    STANDARD OF REVIEW
   [1] On appeal from an equity action, an appellate court tries
factual questions de novo on the record and, as to questions
of both fact and law, is obligated to reach a conclusion inde-
pendent of the conclusion reached by the trial court, provided
that where credible evidence is in conflict in a material issue
of fact, the appellate court considers and may give weight to
the fact that the trial judge heard and observed the witnesses
and accepted one version of the facts rather than another. Klein
v. Oakland/Red Oak Holdings, 294 Neb. 535, 883 N.W.2d
699 (2016).
   [2] In a civil contempt proceeding where a party seeks reme-
dial relief for an alleged violation of a court order, an appel-
late court employs a three-part standard of review in which
(1) the trial court’s resolution of issues of law is reviewed de
novo, (2) the trial court’s factual findings are reviewed for
clear error, and (3) the trial court’s determinations of whether
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             STATE ON BEHALF OF LOCKWOOD v. LAUE
                      Cite as 24 Neb. App. 909

a party is in contempt and of the sanction to be imposed is
reviewed for abuse of discretion. Martin v. Martin, 294 Neb.
106, 881 N.W.2d 174 (2016).

                            ANALYSIS
                     A dditional Evidence at
                       Exception Hearing to
                         R eferee’s R eport
   The State contends the district court abused its discretion
when it did not receive or consider the additional evidence
regarding Lockwood’s period of nonpayment and wage earning
history presented by the State at the exception hearing.
   Regarding the assignment of a case to a child support ref-
eree, the right to file an exception to the referee’s recommen-
dations, and the district court’s adoption or rejection of the
referee’s recommendation, Neb. Rev. Stat. § 43-1613 (Reissue
2016) provides:
         In any and all cases referred to a child support referee
      by the district court . . . the parties shall have the right
      to take exceptions to the findings and recommendations
      made by the referee and to have a further hearing before
      such court for final disposition. The court upon receipt
      of the findings, recommendations, and exceptions shall
      review the child support referee’s report and may accept
      or reject all or any part of the report and enter judgment
      based on the court’s own determination.
(Emphasis supplied.)
   Moreover, Neb. Ct. R. § 4-110 provides further guidelines
when a party exercises the right to take exception following the
recommendations made by the child support referee. Section
4-110 states:
         In all cases referred by a child support referee, the
      parties shall have the right to take exception within 14
      days to the findings and recommendations of the referee
      and to have a review by the district court before final
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             STATE ON BEHALF OF LOCKWOOD v. LAUE
                      Cite as 24 Neb. App. 909

      disposition. Upon receiving the findings and recommen-
      dations, the district court shall conduct a review on the
      report of the referee and in the court’s discretion may
      ratify or modify the recommendations of the referee and
      enter judgment based thereon, with the rights of appeal
      and to move for rehearing reserved to all parties.
   [3,4] Upon receipt of a child support referee’s findings and
recommendations, the district court is provided the opportu-
nity to have a further hearing and review regarding the recom-
mendation, and has the ability to accept or reject all or any
part of the report before its final disposition in ratifying or
modifying the recommendations of the referee. While we have
found no statutory authority which specifically authorizes or
does not authorize the propriety of receiving new evidence
in the district court, the statutory language states that after
the report of the referee is filed and an exception is filed, the
district court conducts a further hearing. This is an equitable
action, and the district court is vested with broad equitable
powers and discretion to fashion appropriate relief in equity
cases. See City of Beatrice v. Goodenkauf, 219 Neb. 756, 366
N.W.2d 411 (1985) (action in equity vests trial court with
broad powers authorizing any judgment under pleadings). We
note that an evidentiary hearing or trial before a district court
has been held in some instances prior to final disposition.
See, State on behalf of Joseph F. v. Rial, 251 Neb. 1, 12, 554
N.W.2d 769, 777 (1996) (appellant “fails to direct us to any
part of the record where the district court or the district court
referee refused to allow [him] to testify or present evidence in
support of [retroactive child support]”) (emphasis supplied);
Dike v. Dike, 245 Neb. 231, 512 N.W.2d 363 (1994) (follow-
ing referee’s recommendations, district court held evidentiary
hearing); State on behalf of Dady v. Snelling, 10 Neb. App.
740, 741, 637 N.W.2d 906, 908 (2001) (appellant “filed an
exception to the referee’s report, and a trial was conducted
before the district court”).
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             STATE ON BEHALF OF LOCKWOOD v. LAUE
                      Cite as 24 Neb. App. 909

   [5-7] Based upon our review of the statute and current case
law, we determine that because this is an equitable action, it is
within the discretion of the district court to allow the presenta-
tion and receipt of new or additional evidence at an exception
hearing upon receiving the referee’s findings and recommen-
dations. Both § 43-1613 and § 4-110 provide that the referee’s
recommendation is a nonbinding recommendation, and the
final determination is left to the district court. As the district
court is provided the discretion to accept or reject all or any
part of the referee’s report and ratify or modify the referee’s
findings and recommendations, so shall the district court in
a court of equity have the discretion to receive additional or
new evidence at an exception hearing.
   [8,9] As mentioned previously, there is no statutory author-
ity on whether the district court can receive additional evi-
dence at an exception hearing or whether it is a hearing
de novo on the record. The authority suggests that when a
referee makes a report and no exception is filed, the district
court reviews the referee’s report de novo on the record.
However, if an exception is filed, the party filing an excep-
tion is entitled to a hearing and the district court as a court
of equity has the discretion to allow the presentation of new
or additional evidence. In this case, the district court did not
receive or consider any additional evidence presented by the
State at the exception hearing, stating that it was “irrelevant.”
The State made an offer of proof regarding the additional
evidence it wished the district court to consider. However,
this additional evidence was cumulative, particularly because,
at oral argument, the State acknowledged that the evidence
in their offer of proof was not as strong in comparison to
Lockwood’s admissions.
   Based upon the review of the totality of the evidence and
the State’s offer of proof, we find that the district court’s
determination in denying the State’s request to offer additional
evidence consisting of Lockwood’s pay history and wage his-
tory at the exception hearing was not error.
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             STATE ON BEHALF OF LOCKWOOD v. LAUE
                      Cite as 24 Neb. App. 909

           Factual Findings R egarding Lockwood’s
               A bility to Pay Child Support and
              Determination That Lockwood Was
                   Not in Contempt of Court
   The State contends the district court abused its discretion by
not finding Lockwood in contempt of court, particularly after
all of the facts presented to the court showed that Lockwood
overstated the time she spent in jail and admitted to bartering
her earnings in exchange for reduced rent. Additionally, the
State argues that the district court erred in its factual findings
that Lockwood had no present ability to pay child support.
   Given our review of the record, the State’s offer of proof,
and the totality of the evidence, we cannot say that the court
erred in its factual findings. And, given these findings, we
cannot say that the court erred in determining Lockwood was
unable to pay child support and was not in contempt of court.
Therefore, we find the State’s assertions to be without merit.
                        CONCLUSION
   We conclude the district court did not err in denying the
State’s request to present additional evidence at the exception
hearing regarding Lockwood’s period of nonpayment and wage
earning history. Accordingly, we affirm the district court’s
order finding that Lockwood was not in contempt for failing to
pay court-ordered child support and refusing to allow the State
to present additional evidence at the exception hearing to the
referee’s report.
                                                    A ffirmed.
