Collett v. Collett
| Decision Date | 09 December 2005 |
| Docket Number | No. S-04-850.,S-04-850. |
| Citation | 270 Neb. 722,707 N.W.2d 769 |
| Parties | Shan COLLETT, appellant, v. Kimberly A. COLLETT, appellee. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
An appellate court entrusts the modification of an alimony award to the discretion of the trial court and reviews the trial court's decision de novo on the record for abuse of discretion.
A judicial abuse of discretion exists when reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition.
A material change of circumstances constituting grounds for modification of a dissolution decree means the occurrence of something which, had it been known to the dissolution court at the time of the initial decree, would have persuaded the court to decree differently.
Changes in circumstances which were within the contemplation of the parties at the time of the decree, or that were accomplished by the mere passage of time, do not justify a change or modification of an alimony award.
Federal preemption arises from the Supremacy Clause of the U.S. Constitution and is the concept that state law that conflicts with federal law is invalid.
Before state law governing domestic relations will be overridden as preempted by federal law, it must do major damage to clear and substantial federal interests.
John F. Simmons and Jeffrey L. Hansen, of Simmons Olsen Law Firm, P.C., Scottsbluff, for appellant.
A. James Moravek, of Curtiss, Moravek, Curtiss, Margheim & Miller, Alliance, for appellee.
Shan Collett appeals from an order of the district court for Box Butte County which modified the alimony award included in a decree dissolving his marriage to Kimberly A. Collett. The modification increased the alimony which Shan was required to pay Kimberly from $1 per year to $950 per month for 123 months and required Shan to maintain insurance on his life, with Kimberly as the named beneficiary, until the alimony is paid in full. We affirm the judgment of the district court.
Both parties are veterinarians. During their marriage, First National Bank made a loan to Shan to enable him to open a veterinary practice in Alliance, Nebraska. Although the loan documents are not included in the record, it is apparent from the testimony that the loan was secured by a building, various equipment, and inventory purchased by Shan for the practice. Kimberly did not sign the promissory note, but she executed a written guaranty because the bank would not otherwise make the loan to Shan.
The clinic experienced financial difficulties soon after opening in September 2000. Shan defaulted on payments to the bank, and in November 2001, he filed a bankruptcy proceeding under chapter 7 of the U.S. Bankruptcy Code. Kimberly received notice of the bankruptcy prior to trial in the dissolution action and advised her lawyer of the filing, but she did not file an adversary proceeding or petition for her own discharge in bankruptcy.
Trial in the dissolution proceeding initiated by Shan was held on December 6, 2001. Shan testified that the value of the clinic property was approximately equal to the outstanding balance due on the loan. Shan also offered evidence that he intended to move to California, where he had secured employment as a veterinarian at a gross annual salary of $67,500, plus benefits and bonuses as deemed appropriate by his employer. At the time of trial, Kimberly was employed in Alliance, with an annual income of $52,000.
The decree of dissolution was filed on March 8, 2002, and provided in relevant part:
20. Commencing January 1, 2002, and on the first day of each year thereafter, [Shan] shall pay to [Kimberly] the sum of $1 alimony.
a. This alimony payment shall terminate only upon the death of [Kimberly]; or
b. On the first day of the month after which [Kimberly] has no further liability for debts discharged by [Shan]; or
c. On the first day of the month after which [Kimberly] has no further liability for student loans to be paid by [Shan].
If [Kimberly] must pay any money on [Shan's] debts discharged in bankruptcy or if [Kimberly] must pay any more than 50% of the consolidated student loan, either result is a material change in circumstances requiring that the $1 per year alimony be increased to a monthly amount that will, after requiring [Shan] to pay [Kimberly's] increased income tax liability due to the alimony award, pay all of [Kimberly's] payments to discharge these two obligations in full.
. . . .
24. [Shan] is ordered to pay all debts incurred during the marriage as it appears that everything owed was connected to his self-employment and the opening of his new vet clinic. Since he has filed bankruptcy, all of these bills will be discharged anyway.
First National Bank eventually foreclosed and took possession of the real and personal property of the clinic which was owned by Shan and apparently pledged as security on the loan. The bank sold the real estate, and Kimberly assisted the bank in disposing of the remaining equipment and inventory. By this time, Shan had moved to California and did not assist in the liquidation. After the sale of all property, equipment, and inventory, there was a deficiency for which the bank sued Kimberly as guarantor. Summary judgment was entered in favor of the bank on November 25, 2003, in the amount of $68,696, which included the deficiency and accumulated interest.
On December 4, 2003, Kimberly filed a motion to modify alimony. In her operative amended motion filed on February 25, 2004, Kimberly cited the language of the decree pertaining to alimony and alleged that by virtue of the deficiency judgment against her, there was a material change in circumstances requiring an increase in the alimony award until the deficiency judgment was paid in full. Shan filed an answer generally denying her allegations and further alleging that the original alimony award was void as a conditional order. Shan also alleged that modification would "violate the `fresh start' benefit of filing bankruptcy," that the debt which was the subject of the deficiency judgment had been discharged in his bankruptcy, that Kimberly "had the option of filing an adversary proceeding in the bankruptcy case to declare the marital debts non-discharged and failed to do so," and that the bankruptcy was contemplated at the time of the decree of dissolution and therefore did not constitute a material change in circumstances.
At a hearing on her motion, Kimberly introduced evidence that in order to satisfy the deficiency judgment, she would be required to pay $800 a month for 122 months, plus a final payment of $181.46. She also submitted evidence that an increase of $800 a month in her alimony would increase her tax liability by approximately $164.41 per month and that her income had decreased while her expenses had increased since entry of the decree.
The district court determined that the provisions in paragraph 20(b) and (c) of the original decree were void and unenforceable. The court also found there was a material change in circumstances because payment of the deficiency judgment would substantially reduce Kimberly's income and standard of living. The court determined that the change in circumstances was not contemplated by the parties at the time of the dissolution because they both believed the assets of Shan's veterinary practice in Alliance would be sufficient to cover his loan to the bank. Based upon these findings, the district court modified its original alimony award and ordered Shan to pay alimony in the amount of $950 per month effective July 1, 2004, for a period of 123 months, with the payments to terminate "only in the death of [Kimberly] or the completion of the above-required alimony payments." The court also ordered Shan to obtain term life insurance in the amount of $70,000 until the alimony was paid in full.
Shan commenced this timely appeal, which we removed to our docket on our own motion pursuant to our statutory authority to regulate the caseloads of the appellate courts of this state. See Neb.Rev.Stat. § 24-1106(3) (Reissue 1995).
Shan's sole assignment of error is that the district court erred in increasing the award of alimony.
An appellate court entrusts the modification of an alimony award to the discretion of the trial court and reviews the trial court's decision de novo on the record for abuse of discretion. Bowers v. Lens, 264 Neb. 465, 648 N.W.2d 294 (2002); Pope v. Pope, 251 Neb. 773, 559 N.W.2d 192 (1997). A judicial abuse of discretion exists when reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition. Bowers v. Scherbring, 259 Neb. 595, 611 N.W.2d 592 (2000).
Neither party has appealed from the determination of the district court that portions of the decree of dissolution were conditional and void, and we therefore disregard those provisions in our analysis. So viewed, the decree awarded Kimberly alimony in the amount of $1 per year. The purpose of alimony is to provide for the continued maintenance or support of one party by the other when the relative economic circumstances and the other criteria enumerated in Neb.Rev.Stat. § 42-365 (Reissue 2004) make it appropriate. See Hosack v. Hosack, 267 Neb. 934, 678 N.W.2d 746 (2004).
Because alimony, albeit nominal, was allowed in the original decree, the award is subject to modification for "good cause shown" pursuant to § 42-365. In this context, "good...
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