author: VANDE WALLE, Chief Justice.

text:
    2000 ND 151
    In the Matter of the ESTATE OF Greg SAGMILLER, Deceased. Ford Motor Credit Company, Claimant and Appellant, v. Jeanette Sagmiller, Personal Representative of the Estate of Greg Sagmiller, deceased, Respondent and Appellee.
    No. 20000055.
    Supreme Court of North Dakota.
    Aug. 18, 2000.

      Dennis W. Lindquist, Mandan, N.D., for claimant and appellant.
    Thomas B. Bair, Bair, Bair & Garrity, LLP, Mandan, N.D., for respondent and appellee.
   VANDE WALLE, Chief Justice.

[¶ 1] Ford Motor Credit Company (“FMCC”) appealed from an order denying FMCC’s claim against the Estate of Greg Sagmiller. We reverse and remand with directions to enter an order allowing the claim.

[f 2] In November 1998, Greg Sagmiller bought a 1999 Ford Ranger pickup from Bill Barth Ford/Mercury Motors of Man-dan for $19,740.48. FMCC financed the sale in the amount of $18,595.45. Sagmil-ler died on April 12, 1999. On April 22, 1999, FMCC repossessed the vehicle. It sent a Notice of Repossession and Right to Redeem to Greg Sagmiller’s last known address on April 23, 1999. Nineteen days later, on May 12, Ford sold the vehicle at a dealers-only auction, the Minneapolis Auto Auction, for $15,500. After applying the proceeds of the sale to the outstanding balance, FMCC petitioned the Estate to allow its claim and the claim was denied. Ford petitioned the court to allow the claim and asked for a hearing. After the hearing, the district court denied the claim because the pickup was not sold in a commercially reasonable manner.

[¶ 3] The district court cites two reasons for concluding FMCC did not meet its burden to demonstrate it acted in a commercially reasonable manner: 1) the manner of sale was a private, dealers-only auction; and 2) the price obtained at the auction. Regarding the manner of sale, the district court said:

FMCC explained it took all its repossessed vehicles to the auction. It said it could not do otherwise because it did not have a motor vehicle dealer[’]s license. This does not explain why it could not have one of its customer dealers sell vehicles on consignment at retail. Presumably a better price could be realized than at a dealers-only auction when the buyers are motivated to buy at the lowest price possible in order to be" able to resell the vehicle for a profit. '

[¶ 4] Regarding the price obtained for the pickup, the district court said:

Here, the balance owed on the truck at the time of the sale was $18,506.70. FMCC’s own internal document says the wholesale value of the truck was $22,150. No evidence of retail value was submitted at trial, but it is reasonable to assume the retail value would exceed the wholesale value. Interestingly, FMCC presented no evidence of value. The truck was sold at auction for $15,500. The evidence viewed- most favorably to FMCC is that the auction, price and the fair market value of the truck differed by more than $2,000.

I

[¶ 5] Section 41-09-50(3), N.D.C.C., requires every aspect of a disposition, “including the method, manner, time, place, and terms” to be commercially reasonable. The secured creditor has the burden of proof to show the commercial reasonableness of the disposition of collateral where commercial reasonableness is challenged and the secured party seeks a deficiency judgment. Am. State Bank of Killdeer v. Hewson, 411 N.W.2d 57, 61 (N.D.1987). Once the secured party makes a prima facie case indicating the collateral was sold in a commercially reasonable manner, the burden of persuasion, not the burden of proof, shifts to the debt- or to elicit specific evidence of commercial unreasonableness. Id.

[¶ 6] Whether or not a sale of collateral was conducted in a commercially reasonable manner is essentially a factual question. Id. at 60. A finding of fact will not be set aside unless it is clearly erroneous. N.D.R.Civ.P. 52(a). A finding of fact is clearly erroneous if it is induced by an erroneous conception of the law, if there is no evidence to support it, or if, although there' is some evidence to support it, on the entire record, a reviewing court is left with a definite and firm conviction a mistake has been made. Kaler v. Kraemer, 1999 ND 237, ¶ 18, 603 N.W.2d 698.

[¶ 7] A primary reason the district court found the sale was not commercially reasonable was the price the automobile garnered at auction. Sagmiller cites, as did the district court, the fact one of FMCC’s documents states the wholesale value of the pickup was '$22,150. The document was provided to FMCC by the Minneapolis Auto Auction, but there was no testimony as to how this number was calculated: A different FMCC document suggests wholesale value was $16,509. •

[¶ 8] We have stated before the disparity between price received at auction and the estimated value of the collateral is an important factor, but is not dispositive in determining whether collateral was sold in a commercially reasonable manner. Hewson, 411 N.W,2d at 64-65. Section 41-09r 53(2), N.D.C.C., states:

The fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the secured party is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. If the secured party either sells the collateral in the usual manner in any recognized market therefor or if he sells at the price current in such market at the time of his sale or’ 'if he has otherwise sold in conformity with reasonable commercial practices among dealers in the type of property sold he has sold in a commercially reasonable manner.

[¶ 9] The price obtained here is not enough to demonstrate the sale was not commercially reasonable. Thus, we turn to the other reason the district court gave for finding the sale to be commercially unreasonable.

[¶ 10] Another reason the district court cited in finding the sale commercially unreasonable was the fact the collateral was sold at a dealers-only auction in Minneapolis. A witness from FMCC testified it is FMCC’s practice to take all repossessed vehicles to the Minneapolis Auto Auction. Courts in several jurisdictions, under many contexts, have held dealers-only auctions may constitute commercially reasonable sales. See Chrysler Credit Corp. v. B.J.M., Jr., Inc., 834 F.Supp. 813, 837 (E.D.Penn.1993) (holding sale of dealer’s inventory at dealers-only auction was commercially reasonable and did not prevent floor plan financier from seeking deficiency judgment); Ford Motor Credit Co. v. Mathis, 660 So.2d 1273, 1277 (Miss.1995) (holding disposition of debtor’s automobile at dealers-only auction was not per se commercially unreasonable and reversing and remanding for evaluation based on factors such as manner, method, time, place and terms of sale); Garden Nat’l Bank of Garden City v. Cada, 241 Kan. 494, 738 P.2d 429, 432 (1987) (concluding sale of collateral at automobile auction in which participation was limited to dealers was a private sale and commercially reasonable); Ford Motor Credit Co. v. Russell, 519 N.W.2d 460, 465-66 (Minn.App. 1994) (holding sale of collateral at auction for wholesale dealers was presumed to be commercially reasonable); Beard v. Ford Motor Credit Co., 41 Ark.App. 174, 850 S.W.2d 23, 28-29 (1993) (concluding dealers-only auction was “private sale” within Uniform Commercial Code and such sale was commercially reasonable); Union Nat’l Bank of Wichita v. Schmitz, 18 Kan.App.2d 403, 853 P.2d 1180, 1187 (1993) (reversing the trial court and concluding a dealers-only auction was a commercially reasonable manner of disposing of automobile in this case); Calcote v. Citizens & Southern Nat’l Bank, 179 Ga.App. 132, 345 S.E.2d 616, 619 (1986) (holding evidence supported finding sale of automobile at auction held for dealers only was commercially reasonable).

[¶ 11] The Estate of Sagmiller criticizes the wholesale disposition of the collateral here because, it argues, the pickup could have garnered a higher price at a retail sale. A dealers-only auction is considered a private sale, see, e.g., Beard, 850 S.W.2d at 28-29, and private sales are approved under the Uniform Commercial Code. See N.D.C.C. § 41-09-50(3) (stating “[disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts”).

[¶ 12] Moreover, retail dispositions are not necessarily superior to wholesale dispositions. The Kansas Supreme Court stated in discussing the question of wholesale versus retail disposition of goods:

In many cases, a retail sale of the goods will command a much higher price; however, a retail sale may involve more expenses and usually will take much longer to conclude. This in turn may not be reasonably feasible in view of higher storage expense and higher interest accumulation on the obligation. In some cases, a sale to a dealer on the wholesale market may be the more reasonable approach. Sales to a dealer seem to be suggested under §. 9-504 and the official comments under that section and also in the official comment to § 9-507(2) which suggests that sale of repossessed collateral through a dealer may be the better method in the long run since the secured party does not usually maintain his own facilities for making such sales. The answer to the question whether a sale on the retail or wholesale market is commercially reasonable must generally depend upon the circumstances of each particular case and, therefore, is a question of fact for the factfinder to determine.

Westgate State Bank v. Clark, 231 Kan. 81, 642 P.2d 961, 970 (1982).

[¶ 13] Schmitz, 853 P.2d 1180, a case out of Kansas, is particularly persuasive because of its similarity to the case at bar. Schmitz purchased a used automobile for $4,662.40, borrowing the money from Union National Bank of Wichita. He defaulted on the loan and voluntarily surrendered the vehicle to the Bank. The Bank sold the vehicle at a dealers-only auction for $920, minus a $75 sale fee. The Bank sought recovery of the deficiency amount of $2,087.97.

[¶ 14] The trial court held the creditor had not sustained its burden of proof to show the sale was commercially reasonable. The Kansas Court of Appeals reversed stating:

The method utilized to dispose of the collateral in this case was a well-known, regularly scheduled, dealer-only wholesale auction. The trial court’s findings that this sale was commercially unreasonable are so broad that they virtually declare any dealers-only wholesale auction to be not commercially reasonable. In deciding this issue, the- trial court focused solely-on the nature of the auction and the price received for the vehicle. The trial court’s decision, if allowed to stand, would mean that a dealer-only wholesale auction could not be commercially reasonable. This is not the law, and the trial court erred in reaching this conclusion. -

Id. at 1184.

[¶ 15] The district court here stated, “Presumably a better price could be realized than at " a dealers-only auction when the buyers are motivated to buy at the lowest price possible ■ in order to be able to resell the vehicle for a profit.” With our discussion of retail versus wholesale dispositions in mind, it may not be presumed, without evidence, a retail disposition is superior to a wholesale dealers-only disposition. Furthermore, speculation on whether a different mode of sale may have brought a better price does not support a finding of commercial unreasonableness. See N.D.C.C. § 41-09-53(2) (stating “[t]he fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the secured party is not of itself sufficient to establish that- the sale was not made in a commercially reasonable manner”).

[¶ 16] We agree with the Schmitz court that such a holding would render dealers-only auctions (and possibly all wholesale auctions) commercially unreasonable per se. Any time collateral is sold at wholesale and there is a deficiency, the debtor can claim the secured creditor should have gotten a better price. This, however, does not demonstrate the collateral was sold- in a commercially unreasonable manner. See N.D.C.C. § 41-09-53(2). While we do not hold that dealers-only auctions are commercially reasonable per se, neither are they commercially unreasonable per se.

[¶ 17] Hewson, a decision of this Court, was cited by Sagmiller’s Estate and relied upon by the district court. In October 1984, Hewson purchased a tractor with dozer for the sum of $40,000 borrowed from American State Bank of Killdeer. Hewson defaulted and voluntarily surrendered the tractor with dozer in November 1985. The bank sold the tractor at public auction to the highest bidder for $8,700 and thereafter sought a deficiency for the remaining amount. The district court granted the Bank’s motion for summary judgment, concluding the tractor with doz-er was sold in a commercially reasonable manner.

[¶ 18] This Court reversed and remanded, concluding whether the tractor with dozer was sold in a commercially reasonable manner presented a genuine issue of material fact that precluded summary judgment. We noted the disparity between the price received at the auction and the fair market value of the machinery as stated by the debtor. We also considered Hewson’s affidavit, in which he attested:

Rather than selling the tractor in the normal method and manner of disposing of farm equipment, the tractor was sold along with a bunch of boats and used snowmobiles. Attached to this Affidavit as Exhibit ‘B’ is a copy of an advertisement of the auction sale. The advertisement shows and reveals that:
1. The tractor was the only piece of farm equipment offered for sale.
2. All of the remaining property was recreational property.
3. The sale was held in a cold, unheated building in the middle of winter at 6:30 p.m.
4. Much of the property was old.

Id. at 64.

[¶ 19] We said the disparity in price, “taken in connection with Hewson’s other statements in his affidavit which are supported by the newspaper advertisement, raises an issue of fact which should have been submitted to a jury rather than being decided by the court as a matter of law.” Id. at 65.

[¶ 20] One obvious distinction between this case and Hewson is procedural. While in Hewson, the trial court determined commercial reasonableness as a matter of law, without a trial, here the district court held an evidentiary hearing and determined commercial reasonableness as the trier-of-fact. Moreover, the facts of this case, determined after eviden-tiary hearing and not on summary judgment, distinguish it from the alleged facts in Hewson.

[¶ 21] The disparity between the price received and the claimed fair market value is not as great here as it was in Hewson. Secondly, in Hewson the creditor allegedly sold the tractor with equipment unlike the tractor, while here the creditor sold the collateral with like equipment, automobiles at the Minneapolis Auto Auction. Unlike Hewson, the sale here was targeted to the people who would know the value of the collateral and would have an interest in purchasing it. Finally, in this case there has been no accusation regarding any deficiencies in the specific sale itself, as there was in Hewson.

[¶ 22] Importantly, the focus in Hewson was on all aspects of the sale, not merely on whether the sale was a public or private auction, or whether the price garnered was at or below market value.

[¶ 23] We recognize commercial reasonableness is determined on a case-by-case basis and generally depends on the aggregate circumstances of the sale, see Lindberg v. Williston Indus. Supply Corp., 411 N.W.2d 368, 374 (N.D.1987), with the secured creditor having the burden of proof. Hewson, 411 N.W.2d at 61. We also recognize deference is to be given to the findings of the trial court. In re Z.R., 1999 ND 214, ¶ 11, 602 N.W.2d 723. Here, however, the district court’s narrow rationale relies on an unsupported presumption and, if allowed to stand, would broadly limit a creditor’s options. Because the evidence does not support a finding of commercial unreasonableness, we turn to the issue of whether the sale was conducted in a commercially reasonable manner.

II

[¶ 24] A creditor is to demonstrate every aspect of a disposition is commercially reasonable, including “the method, manner, time, place and terms.” N.D.C.C. § 41-09-50. FMCC could have better targeted its evidence to these specific factors. Nevertheless, the uncontradicted testimony of FMCC’s witness is sufficient to demonstrate the collateral was sold in a commercially reasonable manner.

[¶ 25] The only witness who testified at the hearing was Aaron Robbins, an account manager for FMCC. Robbins said it was FMCC’s practice to bring all of its repossessed cars to auctions. He testified he specifically uses the Minneapolis Auto Auction. Robbins, who said he has provided estimates for the value of “hundreds” of vehicles, testified he thought $15,500 was a reasonable price for the pickup. He also testified the fact the pickup’s color was orange would have a negative effect on- its value. Robbins said there was an FMCC representative at the auction who had authority to reject an auction price received if she did not think it was equivalent to the pickup’s worth. The representative did not object to the price the pickup sold for.

[¶ 26] When asked why FMCC did not sell ears at dealerships for retail prices, Robbins said FMCC isn’t licensed to sell vehicles themselves. When asked why FMCC did .not get licensed, Robbins said, “It wouldn’t make a difference even if we did that — even if it was done that way, if you add in the commission costs that are associated with it. Ford Credit would get a higher price just bringing it to an auction — or the Minneapolis auction in our area.” Robbins’ testimony was challenged on cross-examination:

Q All right. Thank you. Just one more point Mr. Robbins, you said that one of the reasons that you don’t try to sell them on retail and you take them to auction is if you sold them at retail, you’d have to pay commissions and things like that, is that what your testimony was?
A 'Well Ford Credit isn’t licensed to sell them anywhere but at auction.
Q Okay but you could sell them at retail somehow, couldn’t you, through consignment or some other arrangement?
A No.
Q You couldn’t, huh? Could you get a retail license if you wanted to?
A I suppose. I’m not even sure, I would just be speculating.'
Q Okay but I guess what I’m getting at is if you really wanted to sell this at retail or try to sell it at retail, Ford Motor could do that, couldn’t it?
A No.
Q You have a dealer network, don’t
■ you?
A ■ A dealership might be able to sell their vehicles on their lot for retail but Ford Credit is not a dealership.
Q Yeah, but you work with all the dealers in the State of North Dakota, right?
A I work with them on a business rela-
.. tionship for them to send contracts ,to Ford Motor Credit, not vehicles.
Q Don’t you think one of them would sell it on a — after you repoed, it, don’t you think one of them would put it on their lot and try to sell it retail for you if you asked them to?
A No.

[¶ 27] Robbins’ testimony was uncontra-dicted. While the trial court determines the credibility of witnesses, Wallwork Lease & Rental Co., Inc. v. Schermerhorn, 398 N.W.2d 127, 131 (N.D.1986), here the trial court rejected the testimony and relied on an unsupported presumption that a retail sale would bring a better price. That assumption is not warranted by the facts or the law. See Schmitz, 853 P.2d at 1186 (concluding based upon the statutes and opinions cited “the mere fact collateral is sold at wholesale and not ‘exposed to the retail market’ is not in and of itself sufficient to render a sale commercially unreasonable”).

[¶ 28] The uncontradicted testimony of Robbins is sufficient to sustain FMCC’s burden to prove the collateral was sold in a commercially reasonable manner. The evidence not only supports a commercially reasonable sale, but there is little or no evidence to the contrary. The fact the pickup could have brought a higher price at a different sale or on a different day is not sufficient to overcome the evidence of commercial reasonableness. The Estate of Sagmiller has adduced no specific evidence of commercial unreasonableness, short of evidence of the price. See Hewson, 411 N.W.2d at 61 (concluding once the secured party makes a prima facie case indicating the collateral was sold in a commercially reasonable manner, the burden of persuasion, not the burden of proof, shifts to the debtor to elicit specific evidence of commercial unreasonableness).

[¶ 29] The district court’s finding of commercial unreasonableness is clearly erroneous because it was based on a presumption not supported by the law or the facts. We reverse that decision and remand with instructions to enter an order allowing FMCC’s claim against the Estate of Sag-miller.

[¶ 30] DALE V. SANDSTROM, WILLIAM A. NEUMANN, MARY MUEHLEN MARING, CAROL RONNING KAPSNER, JJ., concur.

      . Many of the cases cited consider whether a dealers-only auction is a public or private sale because notice requirements are less stringent for a private sale than a public sale. See N.D.C.C. § 41-09-50(3) (stating "Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor....”). Most courts have concluded a dealers-only auction is a private sale. See, e.g., Garden Nat’l Bank of Garden City v. Cada, 241 Kan. 494, 738 P.2d 429, 432 (1987).
      At the district court, the Estate of Sagmiller challenged whether FMCC properly complied with notice provisions. On appeal, the Estate has not challenged the sufficiency of notice and our review of the record indicates FMCC properly complied with the Code's notice requirements. See N.D.C.C. § 41-09-50(3).

      . The Estate of Sagmiller argued FMCC "dumped” the repossessed vehicle quickly without trying to get a reasonable price for it. As part of this argument, the Estate claimed the vehicle was sold on May 3, 1999, shortly after it was repossessed on April 22, 1999. After a review of the record, it appears May 3, 1999 was the legal sale date, that is the earliest date the pickup could have been sold. The pickup was not actually sold, however, until May 12, 1999.


source: Caselaw Access Project

author: KAPSNER, Justice.

license: Public Domain

text:
    2000 ND 162
    Howard SNORTLAND, Plaintiff and Appellant, v. STATE of North Dakota acting through its agencies, the North Dakota Department of Public Instruction and North Dakota Teachers Fund for Retirement, Defendant and Appellee.
    No. 20000025.
    Supreme Court of North Dakota.
    Aug. 23, 2000.

      James J. Coles, Coles Law Firm, PC, Bismarck, for plaintiff and appellant.
    . Douglas B. Anderson, Assistant Attorney General, Bismarck, for defendant and appellee.
   KAPSNER, Justice.

[¶ 1] Howard Snortland appealed from a summary judgment dismissing his action against the State for breach of an employment contract. We conclude Snortland’s action is barred as a matter of law by the six-year statute of limitations, and we affirm.

I

[¶ 2] The underlying facts are undisputed. Snortland served as superintendent of the Department of Public Instruction (“Department”) from January 1, 1977, through December 31, 1980. As superintendent, Snortland was statutorily required to serve as a member of the Board of Trustees (“Board”) of the Teachers’ Fund for Retirement (“Fund”). See N.D.C.C. § 15-39.1-05 (1980). During his term of office, Snortland received payments designated by the Legislature as “annual salary” in the amount of $22,500 per year. As an elected state official, Snortland also received payments designated by the Legislature as “state officer’s expense payments,” commonly referred to as “unvouchered expense payments,” in amounts established by legislative appropriations.

[¶ 3] Snortland was qualified to participate in the Fund because he was the Department’s superintendent. Snortland was eligible to receive retirement benefits from the Fund using a formula based on his “monthly salary,” defined as “one-twelfth of the annual salary paid.... ” N.D.C.C. § 15-39.1-10(2X1980). Assessments representing Snortland’s contributions to the Fund were deducted from his monthly salary during his term, and were paid quarterly by the Department to the state treasurer along with the Department’s contribution. N.D.C.C. § 15-39.1-09 (1980). While Snortland served as superintendent, the Department reported his salary to the Fund as the amount designated as his annual salary. Snortland’s W-2 forms for tax years 1977 through 1980 showed only those payments designated as annual salary were reported to the Internal Revenue Service (“IRS”). Snortland, however, reported as taxable income for state and federal income tax purposes his annual salary and the un-vouchered expense payments he received.

[¶ 4] Snortland’s earnings statements showed deductions for retirement were withheld from his monthly salary. The Fund’s records showed no additional assessments or contributions were made to the Fund based on Snortland’s unvouch-ered expense payments.

[¶ 5] The Board met in September 1980 and discussed whether unvouchered expense payments received by a school superintendent in addition to his salary reported for income tax purposes could be included in salary for retirement benefit calculations. The Board members and executive secretary agreed only salary reported for IRS purposes should be used as income for Fund purposes, but decided to investigate further before taking final action. The executive secretary requested a legal opinion from an attorney, who responded by letter that, based on the North Dakota Supreme Court’s decision in Walker v. Omdahl, 242 N.W.2d 649 (N.D.1976), “unvouchered expenses would not be subject to assessment for the purposes of the [Fund].” In December 1980, the Board adopted the attorney’s recommendation, but Snortland did not attend the meeting.

[¶ 6] Snortland’s 1980 reelection bid for superintendent of the Department was unsuccessful, and he decided to retire when his term expired on December 31, 1980. Snortland submitted his application for retirement benefits to the Fund in January 1981, and the Fund calculated his retirement benefits based on his annual salary alone. The Fund sent Snortland his first retirement check in February 1981 and correspondence informing him of the assessments and contributions that had been credited to his account.

[¶ 7] Snortland believed, even before taking office as superintendent of the Department, that unvouchered expense payments made to state-elected officials constituted salary. Before his retirement, a Department employee told Snortland his retirement benefits would be based on his statutory salary and would not include un-vouchered expenses. After Snortland’s retirement in 1981, the Board’s executive secretary also told him his retirement benefits would be based on his annual salary alone. Snortland admitted it remained his opinion, after discussing the issue with the Department employee and the Board’s executive secretary, that he was not “treated fairly” by being paid retirement benefits based solely on his annual salary. Snort-land also said he “griped about it” to other persons during the 1980s.

[¶ 8] After discussing the matter in January 1998 with a person described by Snortland as a pension and benefits expert, Snortland brought this breach of contract action in August 1998 against the State through the Department and the Fund. Snortland alleged, in addition to benefits he has received since his retirement based on payments to him designated as annual salary, he should also have been entitled to receive retirement benefits based on his unvouehered expense payments. Snortland contended the Department breached his employment contract by failing “to properly and accurately report [his] compensation to the appropriate state agency responsible for determining and paying the retirement benefits,” thereby “depriving [him] of his legal and proper retirement benefits.... ” The State raised the affirmative defense that Snortland’s action was barred by either the three-year statute of limitations under N.D.C.C. § 28-01-22.1, or the six-year statute of limitations under N.D.C.C. § 28-01-16.

[¶ 9] The trial court granted the State’s motion for summary judgment, concluding as a matter of law that Snortland’s action was barred by the six-year statute of limitations under N.D.C.C. § 28-01-16. Snortland appealed.

II

[¶ 10] Summary judgment under N.D.R.Civ.P. 56 is a procedural device for properly disposing of a lawsuit without trial if, after viewing the evidence in the light most favorable to the non-moving party, there are no genuine issues of material fact or conflicting inferences which can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Dan Nelson Const., Inc. v. Nodland & Dickson, 2000 ND 61, ¶ 13, 608 N.W.2d 267.

[¶ 11] The statute of limitations for a breach of contract action is six years after the claim for relief has accrued. N.D.C.C. § 28-01-16(1). The discovery rule, which determines when the claim accrues for purposes of computing limitations, applies to a breach of contract claim. Wells v. First American Bank West, 1999 ND 170, ¶¶ 10-11, 598 N.W.2d 834. The discovery rule postpones a claim’s accrual until the plaintiff knew, or with the exercise of reasonable diligence should have known, of the wrongful act and its resulting injury. Id. at ¶ 10. An objective standard is used for the knowledge requirement of the discovery rule, which focuses upon whether the plaintiff is aware of facts that would place a reasonable person on notice a potential claim exists, without regard to the plaintiffs subjective beliefs. BASF Corp. v. Symington, 512 N.W.2d 692, 695 (N.D.1994). Although entry of summary judgment on the issue of when a statute of limitations begins to run is ordinarily inappropriate, if uncontroverted facts exist that demonstrate the time when a reasonable person would have been placed on notice, a court may resolve the question as a matter of law. Dan Nelson Const, Inc., 2000 ND 61, ¶ 18, 608 N.W.2d 267. In these circumstances, the issue becomes one of law because the evidence is such that reasonable minds could draw but one conclusion. See Schanilec v. Grand Forks Clinic, Ltd., 1999 ND 165, ¶ 20, 599 N.W.2d 253.

[¶ 12] The State argues, and the trial court ruled as a matter of law, the statute of limitations began to run when Snortland received his first retirement check in 1981. We agree.

[¶ 13] Snortland said he believed, even before taking office as superintendent of the Department in 1977, the unvouchered expense payments made to state-elected officials constituted salary. Snortland knew, or certainly should have known from his W-2 forms, only those payments designated by the Legislature as annual salary had been reported to the IRS. Snortland also knew from his earnings statements the Fund assessments were being made from his salary payments, but were not being made from the unvouchered expense payments. A Department employee informed Snortland before his retirement, and the Board’s executive secretary informed him shortly afterward, that his retirement benefits would be based on his statutory salary and would not be based on any amounts paid as unvouchered expenses. When Snortland received his first retirement check in 1981, confirming to him that his retirement benefits were not based on the additional unvouchered expense payments, Snortland knew, or a reasonable person in his position would have known, of his potential claim for additional retirement benefits. Indeed, Snortland expressed his feelings of unfair treatment by the Fund and continued to “gripe about it” to others during the 1980s.

[¶ 14] Snortland argues the State is equitably estopped from relying on the statute of limitations because the Board’s executive secretary breached a fiduciary duty owed to him as a beneficiary of the Fund. In an affidavit, Snortland claimed:

It is my feeling that I would have taken action on this matter years ago had I received any information at all from the board of trustees or their representatives other than the assertion by [the executive secretary] that this matter had been conclusively determined by a decision of the North Dakota Supreme Court. At no time did [the executive secretary] or any other representative or member of the board of trustees or anyone else representing the State of North Dakota state to me that I should have this matter reviewed by my own experts or legal counsel or that there were any aspects of the issue regarding my retirement benefits which had not been conclusively determined by the highest Court in the state. Now that discovery has proceeded in this action it now appears as if the information given to me as absolute fact and stated as the law in the State of North Dakota was merely the opinion of one attorney, ... who was in fact working for the benefit of [the Fund] and who provided them with an opinion that was in their benefit and adverse to my interests without any disclosure as to any potential conflict of interest on his part as the attorney for [the Fund].

[¶ 15] Successfully claiming “es-toppel against a government entity is not an easy accomplishment.” Dan Nelson Const., Inc., at ¶ 30. Equitable estoppel may preclude application of a statute of limitations as a defense by one whose actions mislead another, thereby inducing that person to not file a timely claim, but the plaintiffs reliance on the defendant’s conduct must be reasonable, and there must be some form of affirmative deception by the defendant. Narum v. Faxx Foods, Inc., 1999 ND 45, ¶ 24, 590 N.W.2d 454. The existence of a fiduciary relationship may give rise to a duty to disclose, see Rolin Mfg., Inc. v. Mosbrucker, 544 N.W.2d 132, 136 (N.D.1996); Krueger v. St. Joseph’s Hospital, 305 N.W.2d 18, 25 (N.D.1981), relieving the injured party of the burden of showing an affirmative deception to postpone the running of a statute of limitations. See Malachowski v. Bank One, Indianapolis, 590 N.E.2d 559, 563 (Ind.1992); Lumber Village, Inc. v. Siegler, 135 Mich.App. 685, 355 N.W.2d 654, 658 (1984). However, we reject Snortland’s contention a fiduciary relationship arose under these undisputed facts.

[¶ 16] A fiduciary relationship “generally arises when there is an unequal relationship between the parties.” L.C. v. R.P., 1997 ND 96, ¶ 12, 563 N.W.2d 799. The “party reposing the confidence must be in a position of inequality, dependence, weakness, or lack of knowledge.” Union State Bank v. Woell, 434 N.W.2d 712, 721 (N.D.1989). In this case, the members of the Board were charged with the responsibility of managing the Fund, see N.D.C.C. § 15-89.1-05 (1980), and were therefore responsible for formulating its policies. The Board was empowered to employ an executive secretary “who shall perform such duties as the board may prescribe.” N.D.C.C. § 15-39.1-06 (1980). As a member of the Board and as the executive secretary’s superior, Snortland was not in an unequal or dependent relationship with the executive secretary concerning Board policies, including the Board’s treatment of unvouchered expense payments for Fund purposes. Snortland’s absence from the meeting where the Board accepted the attorney’s recommendation is no justification for implying a fiduciary relationship. It was Snortland’s duty to attend the meeting, and he certainly was not destitute of the means of acquiring information about the meeting. See Wehner v. Schroeder, 354 N.W.2d 674, 677 (N.D.1984). Snortland had access to as much information as did the Board’s executive secretary.

[¶ 17] There was no breach of any fiduciary relationship, and there is no hint in the record of any deception designed to induce Snortland to not file a claim within the statute of limitations. We conclude the State is not equitably estopped from relying on the statute of limitations.

[¶ 18] Reasonable minds could draw but one conclusion in this case. We conclude as a matter of law Snortland knew, or reasonably should have known, he had a potential claim against the Fund when he received his first retirement check in February 1981. Consequently, the trial court correctly ruled Snortland’s claim is barred by the six-year statute of limitations under N.D.C.C. § 28-01-16(1).

Ill

[¶ 19] The summary judgment is affirmed.

[¶ 20] DALE V. SANDSTROM, WILLIAM A. NEUMANN, and MARY MUEHLEN MARING, JJ., and GORDON O. HOBERG, S.J., concur.

[¶ 21] The Honorable GORDON O. HOBERG, S.J., sitting in place of VANDE WALLE, C.J., disqualified.


author: KONENKAMP, Justice

text:
    2000 SD 101
    Margaret CULHANE, Plaintiff and Appellant, v. Stephen W. MICHELS, Defendant and Appellee.
    Nos. 21284, 21285.
    Supreme Court of South Dakota.
    Considered on Briefs May 30, 2000.
    Decided July 26, 2000.

      Gale E. Fisher, Sioux Falls, South Dakota, Attorneys for plaintiff and appellant.
    Thomas J. Welk and Lisa Hansen Marso of Boyce, Murphy, McDowell & Greenfield, Sioux Falls, South Dakota, Attorneys for defendant and appellee.
   KONENKAMP, Justice

[¶ 1.] The circuit court held that (1) alimony payments due before the effective date of SDCL 25-7-7.3 and 7.4 could be retroactively modified and that the alimony recipient had not met her burden of showing extraordinary circumstances justifying continuance of alimony after her remarriage. In addition, the court (2) denied reimbursement for medical expenses, but awarded (3) past due private school tuition, and (4) child support arrearages; and denied (5) paternity testing, and (6) disbursements. We affirm (1) in part and reverse in part; affirm (2), affirm (3), but remand for further findings, and affirm (4), (5) and (6).

Background

[¶ 2.] Margaret Culhane and Stephen W. Michels were married on May 27, 1978. The two met while attending the University of South Dakota in Vermillion. After their marriage, Michels continued his education and acquired an MBA degree. Two daughters were born during the marriage: the first on May 16, 1980, and the second on June 6, 1982. Culhane and Michels agreed in early 1986 to end their marriage.

[¶ 3.] In July 1986 they entered into a property settlement and child custody agreement. Attorney John Billings prepared the necessary documents. Billings was counsel for the Broadcaster Press, the publishing business where Michels worked as a general managing partner and Culhane performed payroll and various other office duties. Billings represented Michels. Culhane was not represented. Under the settlement, Culhane was given custody of the children, Michels was to pay $800 per month child support, the children’s medical insurance and uncovered medical expenses were allocated between the parties, and Michels would pay Culhane $1,100 in monthly alimony for two years. In addition, the parties agreed that the children would attend St. Agnes School, a Catholic grade school in Vermillion, and that Michels would pay the tuition and fees. On July 22, 1986, the circuit court adopted the settlement agreement and entered a decree of divorce.

[¶ 4.] Eleven years later, in September 1997, Culhane sued on the divorce decree to recover delinquent alimony and child support, as well as unpaid medical expenses and tuition. Michels sought to abate retroactively his alimony obligation. Both sides moved for summary judgment. Following various legal proceedings, the court ultimately held that Culhane was entitled to a portion of the alimony payments together with interest. It also granted Culhane the tuition and child support arrearages requested, denied her claim for medical expenses, and denied Michels’ request for paternity testing. Both sides were denied disbursements.

[¶ 5.] Culhane now appeals the court’s decision that she cannot recover all unpaid alimony, medical expenses, and disbursements as the “prevailing party.” Mi-chels, by notice of review, appeals the award of interest, tuition, and child support, and the denial of his request for paternity testing. As the circuit court made its decision based on depositions and affidavits, with no live testimony, we review the case de novo unimpeded by any deference to the court’s findings. Miller v. Weber, 1996 SD 47, ¶ 7, 546 N.W.2d 865, 867 (citing Muhlenkort v. Union County Land Trust, 530 N.W.2d 658, 660 (S.D.1995)).

1. Alimony and Interest

[¶ 6.] In the divorce decree of July 22, 1986, Michels was directed to pay Culhane $1,100 alimony per month for twenty-four months. Michels made only one payment. Culhane remarried in August 1986. On the advice of his attorney, Michels claims, he stopped paying alimony. Culhane says that Michels contacted her several months later and asked if he could delay payments while he “got on his feet.” She agreed to a temporary postponement. She also asserts that in November or December of 1986, attorney Billings invited her to his office and asked her to sign a form releasing Michels of his alimony obligation. She refused. Culhane says she called Michels in May of 1989 requesting some of the money he owed, but he declined. Michels did not file a motion to terminate his alimony obligation until September 1998.

[¶ 7.] Crucial to the question before us is the enactment of SDCL 25-7-7.3 and 7.4, effective July 1, 1987. SDCL 25-7-7.3 states:

Any past due support payments are not subject to modification by a court or administrative entity of this state, except those accruing in any period in which there is pending a petition for modification of the support obligation, but only from the date that notice of hearing of the petition has been given to the obligee, the obligor, and any other parties having an interest in such matter.

SDCL 25-7-7.4 provides:

Any payment or installment of support under an order for support, as defined by § 25-7A-1, whether entered by a court or an administrative entity of this state or of any other state or jurisdiction, which is unpaid after the date it is due, is a judgment by operation of law, with the full force, effect and attributes of a judgment of this state, including enforceability, and is entitled, as a judgment, to full faith and credit in this state.

[¶ 8.] In holding Michels responsible for the alimony payments due after the enactment of SDCL 25-7-7.3, the court ruled that remarriage will not automatically cancel alimony; instead, a party seeking modification must petition for a change. Because Michels did not petition for modification until 1998, the payments due after the enactment of the statute became vested and could not be retroactively terminated. However, the court differentiated the payments due before July 1, 1987, concluding that the statute did not apply to alimony accruing before its effective date. The court held that Michels could seek retroactive termination of alimony due before July 1, 1987, and that Culhane must establish extraordinary circumstances showing why alimony should continue after her remarriage. Because she failed to establish such circumstances, the court granted Michels an abatement of that part of the unpaid alimony. Culhane believes the court erred in refusing to give retroactive application to the statutes.

[¶ 9.] Michels argues that at the time the alimony was owed, he did not have an obligation to petition for modification or termination. Referring to Marquardt v. Marquardt, 396 N.W.2d 753 (S.D.1986), he asserts that the law at the time their divorce decree was entered allowed him to simply stop alimony payments on Culhane’s remarriage. In Mar-quardt, the former husband moved to terminate alimony when he learned of his ex-wife’s remarriage. Id. at 754. He argued that it was error for the lower court to consider the remarriage as “simply one of the factors the Court must consider” when deciding whether to modify alimony. Id. We stated, “[i]n a proceeding for modification of alimony [the] burden of proving a change in circumstances sufficient-to warrant modification is upon the party seeking modification.” Id. (quoting Rousseau v. Gesinger, 330 N.W.2d 522, 525 (S.D.1983)) (alteration in original). The operative question was whether the husband had “met his burden in proving a change of circumstances.” Id. In meeting this burden, proof that the former wife had remarried established “a prima facie case requiring the court to terminate the support payments unless there are extraordinary circumstances which justify continuance of the payments.” Id. (citations omitted). This language hardly endorses the automatic termination hypothesis. Peterson v. Peterson, 434 N.W.2d 732, 734 (S.D.1989).

[¶ 10.] Michels then cites Thomer-son v. Thomerson, 387 N.W.2d 509 (S.D. 1986), to argue that alimony payments' accruing before July 1, 1987 may be abated retroactively. In Thomerson, the couple’s 1979 divorce decree awarded the wife $150 alimony per month. Id. at 511. She received her last alimony payment in 1981 after execution on a judgment for arrear-ages up to that point. She started a contempt proceeding in- early 1985, seeking over $6,000 in unpaid alimony. The husband in turn sought retroactive modification of alimony and abatement of arrearag-es, as well as cancellation of future alimony payments. We acknowledged without elaborating that “an alimony order may be modified to retroactively abate all or part of alimony arrearages..-..” Id. at 514.

[¶ 11.] The enactment of SDCL 25-7-7.3 substantially changed the retroactive modification of support awards. In Vellinga v. Vellinga, 442 N.W.2d 472 (S.D.1989), the question was whether SDCL 25-7-7.3 should be given retroactive application. There, the husband and wife divorced in 1981, and the husband was required to pay fifteen percent of his earnings as child support. He made no payments in 1986 and few in 1987.- In September 1987, on an order to show cause, the wife sought the past due amounts. After considering SDCL 2-14-21, which states that “[n]o part of the code of laws ... shall be construed as retroactive unless such intention plainly appears,” we reasoned:

A narrow window is provided for modification of past due payments which accrue after notice of hearing is given to the obligee. Any other past due support payments are not subject to modification. The use of the term any, understood in its ordinary sense, dearly encompasses both past due support payments which accrued after the effective date of the statute and those which accmed prior to July 1, 1987.

Id. at 474 (emphasis added). Thus, we specifically held that the statute “is to be applied retroactively.” Id.

[¶ 12.] The application of the statute to past-due alimony was examined in Gunn v. Gunn, 505 N.W.2d 772 (S.D.1993). There, the husband and wife were divorced in 1982. Their decree required the husband to pay $65 per week in alimony until the wife remarried or died. He made the payments uhtil June 1986. The court found him in contempt for past-due alimony in October 1986, after which he resumed making payments. In April 1987, he again stopped paying and never resumed. In October 1992, he moved to modify Ms alimony obligation. Citing SDCL 25-7-7.3, we affirmed the trial court’s contempt order, holding the husband responsible for alimony arrearages beginning on April 27, 1987. He could not come before the court “and expect five years of nonpayment of his support obligation to be erased.” Id. at 775. See also Kier v. Kier, 454 N.W.2d 544 (S.D.1990) (the statute applies retroactively); Taylor v. Ellenbecker, 471 N.W.2d 587 (S.D.1991) (past due support obligations cannot be modified).

[¶ 13.] Michels contends that SDCL 25-7-7.3 applies to child support obligations, not alimony. He points out that while this statute is located in the chapter titled “support obligations,” encompassing support for both spouses and children, it is more strategically positioned within those statutes controlling only child support. Much the same argument can be said for SDCL 25-7-7.4. That statute refers to support “as defined by § 25-7A-1,” and states that amounts unpaid after they become due are judgments as a matter of law. Although SDCL 25-7A-1, which defines “order for support,” currently does not include alimony in its definition, when SDCL 25-7-7.4 became effective, the definition in § 25-7A-1 included “any order of the court or an administrative agency which provides for periodic payment of funds for the support of a child or maintenance of a spouse ....” (Emphasis added). At the time SDCL 25-7-7.3 and 7.4 were enacted, the Legislature evidently intended the statutes to cover both child support and alimony. Additionally, this Court has repeatedly interpreted these enactments as applying to alimony. See Taecker v. Taecker; 527 N.W.2d 295, 299-300 (S.D.1995); Gunn, 505 N.W.2d at 775; Steffens v. Peterson, 503 N.W.2d 254, 259-60 (S.D.1993). “Alimony payments become final judgments as they fall due.” Taecker, 527 N.W.2d at 299-300; see also Steffens, 503 N.W.2d at 259 (“Support payments, such as alimony, become final judgments as they fall due.”).

[¶ 14.] Michels next argues that waiver and laches bar recovery of alimony. For ten years, he asserts, “Culhane did nothing to request or demand the alimony payments.” In response, Culhane says that Michels requested a delay in paying shortly after the divorce, and that in 1989 she asked him for some of the alimony he owed. In our view, Michels alleges no act or statement by Culhane that misled him to his detriment. See Harms v. Northland Ford Dealers, 1999 SD 143, ¶ 17, 602 N.W.2d 58, 62. Waiver requires a “clear, unequivocal and decisive act or acts showing an intention to relinquish the existing right.” Ducheneaux v. Miller, 488 N.W.2d 902, 911 (S.D.1992) (quoting Hammerquist v. Warburton, 458 N.W.2d 773, 778 (S.D.1990)). These facts do not support a waiver.

[¶ 15.] Laches is also inapplicable. To prove laches, Michels must show that: “(1) [Culhane] had full knowledge of the facts upon which the action is based, (2) regardless of this knowledge, she engaged in an unreasonable delay before commencing the suit, and (3) that allowing her to maintain the action would prejudice [Michels].” Conway v. Conway, 487 N.W.2d 21, 24 (S.D.1992) (emphasis omitted); Golden v. Oahe Enterprises., Inc., 90 S.D. 263, 277, 240 N.W.2d 102, 110 (1976). Prejudice will not be inferred from the mere passage of time. City of Sioux Falls v. Miller, 492 N.W.2d 116, 120 (S.D.1992) (quoting Cheskey v. Cheskey, 298 N.W.2d 180, 183 (S.D.1980) (other citations omitted)). This is an action on a divorce judgment which may be commenced “within twenty years after the cause of action shall have accrued[.]” SDCL 15-2-6(1); Hershey v. Hershey, 467 N.W.2d 484, 486 (S.D.1991). Logically, enforcing a valid judgment would rarely invoke the application of laches, especially in a case where the judgment requires periodic payments. We affirm the circuit court’s order on alimony that came due after July 1, 1987, but reverse the order on payments due before that date, and direct that those amounts are to be included in the arrearages.

[¶ 16.] Michels appeals the circuit court’s award of interest. Alimony is a support obligation subject to interest at the judgment rate. SDCL 21-1-13.1; SDCL 15-16-3; see Vander Woude v. Vander Woude, 501 N.W.2d 861, 364 (S.D.1993). A support installment becomes a judgment by operation of law as payments become due and owing. SDCL 25-7-7.4. “An award of interest on support arrearag-es is a matter of judicial discretion.” Vander Woude, 501 N.W.2d at 364 (quoting Kier, 454 N.W.2d at 546). Michels asserts that he was under the excusable impression his obligation to pay alimony automatically ended when Culhane remarried. He claims that the law at the time was confusing, and that Culhane never asked for any of the alimony payments until 1996. These circumstances, he states, demonstrate his good faith belief in the termination of his alimony obligation, and equity should refuse to allow Culhane to collect interest. He cites Prairie Lakes Health Care System, Inc. v. Wookey, 1998 SD 99, ¶ 37, 583 N.W.2d 405, 419 and Myhre v. Myhre, 296 N.W.2d 905 (S.D.1980) in support of his position.

[¶ 17.] We held in Myhre that when circumstances support a “good faith termination of alimony payments,” equity will not allow an interest award to the recipient on past due amounts. Id. at 909. There, the parties stipulated that alimony would end when the wife remarried. Id. at 906. She moved in with a man and they held themselves out as married. The ex-husband gave written notice that he would no longer be making alimony payments because of her “remarriage.” Id. at 907. Here, in contrast, there was no such agreement. Culhane states that Michels approached her and asked to postpone his payments, and that his attorney asked her to waive alimony. In addition, Culhane says that she asked Michels for the past due alimony payments in 1989. Even if she had not done so, failure to demand support payments does not negate the obligation to make those payments. Vander Woude, 501 N.W.2d at 365. We find insufficient justification for Michels’ stated belief that his support obligation had terminated, and affirm the circuit court’s award of interest.

2. Medical Expenses

[¶ 18.] Culhane argues that the circuit court ignored the language of the judgment and decree of divorce when it interpreted the decree to direct her to assume “any medical, dental or eye care expenses of the children” not covered by medical insurance. Medical expenses were incurred on behalf of the two children between 1994 and 1998. The parties’ property settlement “adopted” in the decree of divorce contained the following:

It is agreed that [Michels] shall keep in effect the medical insurance on the children of the parties until such time as [Culhane] finishes her education and is duly employed. It is agreed and understood that when [Culhane] is employed, [Michels’] obligations to maintain said insurance shall terminate. It is understood that [Michels] shall assume the costs of any medical, dental or eye care expenses of the children which are not covered by said insurance. This duty shall also remain in effect until [Mi-chels’] obligation to maintain said insurance terminates.

When this provision in the settlement agreement was repeated in the decree of divorce, the last sentence was omitted. Culhane argues that this sentence was obviously eliminated because the judge felt it was unfair to burden her with both insurance and uncovered medical expenses. She argues that it is the judgment that controls, not the stipulation. However, as we noted earlier, the settlement agreement was expressly “adopted” in the decree. See Weekley v. Weekley, 1999 SD 162, ¶ 18, 604 N.W.2d 19, 24. Thus, no actual conflict exists between the agreement and the decree.

[¶ 19.] “In determining the proper interpretation of an agreement incorporated into a divorce decree, a court must seek to ascertain and give effect to the intention of the parties.” Kier, 454 N.W.2d at 547 (citations omitted). Our reading of the insurance and medical expense provision indicates that the parties intended that once Culhane was employed, she would become responsible for both the insurance and the expenses not covered by insurance. After the divorce, Culhane returned to school and obtained a degree in nursing. The record clearly shows that she was employed before the medical expenses were incurred. We affirm the circuit court’s decision that Michels is not obligated to make these payments.

3. Tuition Expenses

[¶ 20.] Michels appeals the circuit court’s reimbursement award to Culhane for expenses incurred for the children’s tuition for the years they attended private school. In their settlement agreement, the parties provided that the children would attend St. Agnes School in Vermillion as long as Cul-hane lived in Vermillion and the children were eligible to attend that school. On expenses, the agreement stated: “It is understood that the tuition or any other fees incurred as a result of this attendance shall be paid by [Michels].”

[¶ 21.] Michels argues that the statute of limitations expired on this claim. He asserts that contract principles apply when a settlement agreement is interpreted, that the limitations period governing contract claims is six years, and therefore the claim for tuition expenses is barred. This claim, however, is based on a decree of divorce, and as we explained earlier, the time limit is twenty years. SDCL 15-2-6(1); Hershey, 467 N.W.2d at 486.

[¶ 22.] The circuit court found that Culhane met her burden of proving that she incurred tuition expenses of $3,325. This figure was based on her deposition, which in turn was based on “Exhibit 1,” apparently prepared by Culhane. Her testimony and the exhibit, however, contradict an exhibit from St. Agnes School, which shows that for the school years spanning the fall of 1986 through the spring of 1989, the tuition totaled $1,200. “Exhibit 1” also miscalculates the number of school years involved, which under the breakdown for the youngest daughter should be six rather than seven years. The single St. Agnes exhibit was the only evidence of the amount of tuition expenses incurred during the years in question. With these discrepancies, although Cul-hane has met her burden of proving that tuition was incurred, the precise amount of tuition remains unclear. We remand for further findings.

4. Child Support Arrearages

[¶ 23.] Michels challenges the circuit court’s order finding him in arrears on child support. The court awarded Cul-hane $6,000 in past child support based on $400 per month for fifteen months of ar-rearages. The judgment and decree of divorce requires Michels to “pay the sum of $800 per month for the support and maintenance of the minor children until they reach the age of 18 years.” From the outset, Michels and Culhane treated the child support as a separate obligation of $400 for each child. Michels deposited $400 per month in each girl’s savings account, and Culhane withdrew money for the children’s expenses from those accounts. When the oldest child turned eighteen in May 1998, Michels began paying $400 only to the youngest child’s account. Michels argues that the parties’ intent, as shown by their conduct, was to create an obligation to pay $400 for each child. He asserts that this interpretation is backed up by Culhane’s own statement in her affidavit ascribing payments to each child.

[¶ 24.] In O’Grady v. O’Grady, 1998 SD 89, 582 N.W.2d 707, the divorce stipulation directed the father to pay $469 per month “until the minor children reach the age of (19) or graduate from high school, whichever occurs first.” Id. ¶ 9, 582 N.W.2d at 709. When one of the four children turned nineteen and another turned eighteen and graduated from high school, the father prorated his obligation, paying for only two children ($117.50 per child) for approximately one year, then resumed paying the original amount set in the stipulation. Id. We held that there was no provision for a prorated distribution or an automatic reduction upon each child reaching the age of majority. Id. ¶ 15, 582 N.W.2d at 710. The proper remedy was for the father to seek a modification on one of the occurrences, and because he did not do so, the full support obligation continued. Id.

[¶ 25.] Similarly, in Houser v. Houser, 535 N.W.2d 882 (S.D.1995) the decree provided for child support of $400 per month “for and on behalf of the minor children,” to continue until “said children shall attain the age of majority or until further order of the Court.” Id. at 884. We held that this language did not provide for a pro rata distribution of the child support obligation, and therefore the amount was to remain at $400. Id. See also Radigan v. Radigan, 465 N.W.2d 483, 485 (S.D.1991) (order to pay $750 per month in child support “until both children reach the age of majority or until further Order of the Court” was not reduced when the oldest child reached majority).

[¶ 26.] Here, the decree does not prorate a support amount for each child. Instead, it provides for $800 per month until both reach eighteen. Whatever the parents’ subjective understanding may have been, the decree proclaims their legal obligations. The circuit court ruled that Mi-chels had not timely petitioned the court for modification of the child support obligation. Accordingly, we affirm the circuit court’s ruling that Michels was obligated to pay $800 per month in accordance with the decree.

5. Paternity Testing

[¶ 27.] Michels moved for paternity testing to learn whether he is the biological father of the youngest daughter. He offered affidavits from two of Cul-hane’s friends stating that she told them that she knew even when she was pregnant with this child that Michels was not the father. He states he only became aware of this recently. Culhane refused to answer questions on the topic during her deposition, which Michels asserts raises an adverse inference. Without further explanation, the circuit court held that “Michels is not entitled to paternity testing at this time.”

[¶ 28.] In Godin v. Godin, 168 Vt. 514, 725 A.2d 904 (1998), the Vermont Supreme Court addressed the question whether, six years after the divorce and adjudication of paternity, the father could disavow a child born during the marriage to the child’s mother and presumed to be his for fourteen years. He sought no testing before the divorce decree. Six years after the divorce became final, rumors led him to suspect he was not the biological father. He filed a pro se motion for paternity testing, but the motion was denied. As in this state, Vermont has a rebuttable presumption of parentage when a child is born while the husband and wife are married. Id. at 909 (citing 15 Vt.Stat.Ann. § 308(4) (Cum.Supp. 1998)); see SDCL 25-5-3 (“The husband and wife are presumed to be the parents of any child born to the wife during the marriage.... ”).

[¶29.] Under this statutory presumption, the Godin court wrote, “the State retains a strong and direct interest in ensuring that children born of a marriage do not suffer financially or psychologically merely because of a parent’s belated and self-serving concern over a child’s biological origins.” Id. at 910. The court acknowledged that other jurisdictions have rejected requests to reopen paternity judgments “absent clear and convincing evidence that it serves the best interests of the child.” Id. (citing In re JRW, 814 P.2d 1256, 1266-67 nn. 6-7 (Wyo.1991) (collecting eases) (other citation omitted)). As the court explained:

Although we understand plaintiffs interest in ascertaining the true genetic makeup of the child, we agree with the many jurisdictions holding that the financial and emotional welfare of the child, and the preservation of an established parent-child relationship, must remain paramount. Where the presumptive father has held himself out as the child’s parent, and engaged in an ongoing parent-child relationship for a period of years, he may not disavow that relationship and destroy a child’s long-held assumptions, solely for his own self-interest. ... Whatever the interests of the presumed father in ascertaining the genetic “truth” of a child’s origins, they remain subsidiary to the interests of the state, the family, and the child in maintaining the continuity, financial support, and psychological security of an established parent-child relationship.

Id. (internal citations omitted). The court stated that although the father had an opportunity to raise the issue of paternity during the divorce proceedings, he did not do so, and instead continued to treat the child as his own. Id. at 910-11. Finding that there was no basis to relieve the father of the legal and financial responsibilities of paternity, the court reasoned that a finding of nonpaternity would in essence leave the child without a father. Id. at 910 & n. 3.

[¶ 30.] Belated efforts to declare a child illegitimate, for whatever reasons, should seldom prevail. Michels has failed to show sufficient cause for paternity testing at this late juncture. The welfare of the child must be considered over the father’s long delayed challenge to the child’s parentage. Michels has treated both children as his own since birth. He claims that his request is not made to recover past child support, but merely to find out if he is the father and whether Culhane perpetrated fraud upon him. These are not compelling enough reasons to disrupt the life of a child born during their marriage. See Miles v. Stovall, 132 Md.App. 71, 750 A.2d 729, 735-36 (2000); Monroe v. Monroe, 329 Md. 758, 621 A.2d 898, 904-05 (1993); McDaniels v. Carlson, 108 Wash.2d 299, 738 P.2d 254, 261 (1987). We affirm the denial of Michels’ request for paternity testing.

6. Disbursements to “Prevailing Party”

[¶ 31.] Finally, Culhane appeals the circuit court’s denial of disbursements. The court held that neither party was entitled to costs or disbursements under SDCL 15-17-37 since “both parties prevailed on some of the issues and lost on some of the issues.” Culhane argues that it is not necessary that she prevail on all her claims to be the “prevailing party.”

[¶ 32.] A denial or award of disbursements is reviewed under the abuse of discretion standard. High Plains Genetics Research, Inc. v. JK Mill-Iron Ranch, 535 N.W.2d 839, 846 (S.D.1995). “ ‘Abuse of discretion’ is discretion not justified by, and clearly against, reason and evidence.” Nelson v. Nelson Cattle Co., 513 N.W.2d 900, 906 (S.D.1994) (citing Dacy v. Gors, 471 N.W.2d 576, 580 (S.D.1991)).

[¶ 33.] “The prevailing party in an action is ‘the party in whose favor the decision or verdict is or should be rendered and judgment entered.’ ” Michlitsch v. Meyer, 1999 SD 69, ¶ 12, 594 N.W.2d 731, 734 (quoting Noble v. Shaver, 1998 SD 102, ¶ 26, 583 N.W.2d 643, 648 (quoting Strand v. Courier, 434 N.W.2d 60, 65 (S.D.1988))). However, a court is not required to grant recovery for disbursements simply because a party has achieved the status of a prevailing party. Id. ¶ 13, 594 N.W.2d at 734. While SDCL 15-17-37 grants no discretion, SDCL 15-17-52 allows a court to “limit the taxation of disbursements in the interests of justice.” This statute grants discretion to deny recovery of disbursements even though SDCL 15-17-37 does not. Michlitsch, 1999 SD 69, ¶ 15, 594 N.W.2d at 734. Here, where the record supports the court’s determination, the denial of Cul-hane’s request for disbursements was not against reason and evidence, and therefore was not an abuse of discretion.

[¶ 34.] Affirmed in part, reversed in part, and remanded.

[¶ 35.] MILLER, Chief Justice, and SABERS, AMUNDSON, and GILBERTSON, Justices, concur.

      . SDCL 25-7A-R12) currently provides:
      "Order for support," a judgment, decree, or order, whether temporary, final, or subject to modification, issued by a court or an administrative agency of competent jurisdiction, which provides for the support and maintenance of a child, including a child who has attained the age of majority under the law of the issuing state, or of the parent with whom the child is living, which provides for monetary support, health care, arrearages, or reimbursement, and which may include costs and fees, interest and penalties, income withholding, attorney’s fees, and other relief[.]
      This language was enacted in 1997. 1997 S.D.Laws ch. 155, § 5.

      . No question has been raised on renewal of the judgment. SDCL 15-16-33 (judgment may be renewed "at any time prior to the expiration of ten years from the first docketing of such judgment.”).

      . This one-page exhibit lists the amount Cul-hane argues she is owed for back alimony, past due child support, medical expenses, and tuition. The following is the breakdown shown for tuition:
      [oldest daughter] school years $ 700.00 Sept. 1986 - May 1988 (2)
      $350/year
      [youngest daughter] school years $2524.00 Sept. 1986-May 1992 (7)
      $350/year X 5
      $450/yearX 1
      $450/year X 1

      . This tuition report indicates the following was paid to St. Agnes for those school years:
      1986-1987 School Year $350.00
      1987-1988 School Year $425.00
      1988-1989 School Year $425.00

      . Michels cites as authority for his request SDCL §§ 25-8-7, 9, and 12. These statutes authorize testing to establish paternity for support purposes, not to retrospectively challenge a child’s presumptive legitimacy. See Commonwealth v. O’Brien, 390 Pa. 551, 136 A.2d 451 (1957).