IN RE MARRIAGE OF KENYON v. Kenyon

• Decision Date: 15 December 2004
• Docket Number: No. 02-3041.,02-3041.
• Citation: 2004 WI 147,690 N.W.2d 251,277 Wis.2d 47
• Parties: IN RE the MARRIAGE OF: Julie A. KENYON, Joint-Petitioner-Appellant-Petitioner, v. Ralph C. KENYON, Joint-Petitioner-Respondent.
• Court: Wisconsin Supreme Court

277 Wis.2d 47

2004 WI 147

690 N.W.2d 251

IN RE the MARRIAGE OF: Julie A. KENYON, Joint-Petitioner-Appellant-Petitioner, v. Ralph C. KENYON, Joint-Petitioner-Respondent.

No. 02-3041.

Supreme Court of Wisconsin.

Oral argument October 6, 2004.

Decided December 15, 2004.

For the joint-petitioner-appellant-petitioner there was a brief by Earl H. Munson and Boardman, Suhr, Curry & Field, LLP, Madison, and oral argument by Earl H. Munson, Jr.

For the joint-petitioner-respondent there was a brief (in the court of appeals) by Charles Schutze and Schutze Law Office, Sun Prairie, and oral argument by Charles J. Schutze.

¶ 1. JON P. WILCOX, J.

This is a review of an unpublished court of appeals decision, Kenyon v. Kenyon, No. 02-3041, unpublished slip op. at 1 (Wis. Ct. App. Nov. 26, 2003), which affirmed an order of the Circuit Court for Dane County, Moria Krueger, Judge, that denied Julie Kenyon's motion to increase a maintenance award.

¶ 2. We hold that for purposes of evaluating a substantial change in the parties' financial circumstances during a maintenance modification proceeding, the appropriate comparison is to the set of facts that existed at the time of the most recent maintenance order, whether that is the original divorce judgment or a previous modification order. At the hearing, the circuit court should adhere to the findings of fact made in the previous proceeding and may not retry the issues decided in that proceeding. It should compare the facts regarding the parties' current financial status with those surrounding the previous order in determining whether the movant has established the requisite substantial change in circumstances so as to warrant modification of the maintenance award. Further, once a party has demonstrated the requisite substantial change in financial circumstances, the circuit court is not bound by either issue preclusion or claim preclusion to reinstate the amount of maintenance established in the original judgment of divorce, especially when the judgment of divorce has been previously revised by an order modifying maintenance payments.

¶ 3. However, we conclude that the circuit court in this case applied the wrong legal standard in rendering its decision because it focused chiefly on Julie Kenyon's need for maintenance at her present standard of living and whether it would be inequitable to force Ralph Kenyon to pay additional maintenance for an indefinite period. Last term, in Rohde-Giovanni v. Baumgart, 2004 WI 27, ¶ 31, 269 Wis. 2d 598, 676 N.W.2d 452, we clarified that once a substantial change in the parties' financial circumstances is demonstrated, the circuit court must consider the dual maintenance objectives of support and fairness when modifying a maintenance award. Here, in conformity with the controlling precedent at the time, the circuit court did not consider the fairness objective in relation to both parties. Therefore, we reverse the decision of the court of appeals and remand for a new hearing under the appropriate standard.

I. FACTUAL BACKGROUND AND PROCEDURAL POSTURE

¶ 4. The facts are undisputed. Ralph and Julie Kenyon were married on March 25, 1977. Both parties had been previously married and divorced. The Kenyons received a judgment of divorce on June 30, 1993. The divorce decree awarded an equal division of property. Mr. Kenyon was awarded the family residence and was ordered to make the mortgage payment and other related payments for the residence. In addition, Mr. Kenyon was ordered to obtain refinancing and compensate Ms. Kenyon $14,690 for her interest in the marital estate. The circuit court also ordered maintenance of an indefinite term to be paid by Mr. Kenyon in the amount of $866.66 per month. In its findings of fact, the circuit court noted that Ms. Kenyon possessed extreme physical disabilities and that there was "no basis upon which to find an earning capacity." The court noted that she was unemployed but was attending a technical school in pursuit of a degree in graphic arts. Thus, the circuit court ordered a mandatory review "as to the amount and continuation of maintenance" in September 1995, stating "[i]t is anticipated by the Court that maintenance shall be paid until approximately the end of summer, 1995, when it is expected that Ms. Kenyon will have completed school and have secured employment."

¶ 5. A maintenance modification hearing was held on November 21, 1995. While the circuit court noted that Ms. Kenyon did not complete school and was not self-supporting as hoped, it nevertheless found a change in circumstances in that she was now steadily employed on a part-time basis making floral arrangements. The circuit court found that Ms. Kenyon received steady income from Social Security and her part-time job. Specifically, the court found that Ms. Kenyon was receiving $448 per month in disability payments from Social Security and was earning $563 per month as a result of her part-time job, which she worked 20 hours per week. Thus, the circuit court found "that a reduction in maintenance is appropriate and that the reduction should be such that the wife has some incentive to increase her earned income from whatever sources she is capable." The circuit court therefore ordered that maintenance be reduced by $500 a month and that Mr. Kenyon pay maintenance at a rate of $366 a month.

¶ 6. On April 11, 2002, Ms. Kenyon filed a motion to increase maintenance. In her motion, she stated that her medical condition had substantially deteriorated to such an extent that she was "totally incapacitated and unemployable by any definition." A hearing on the motion was held on July 18, 2002. While the circuit court found a substantial change in circumstances because Ms. Kenyon was no longer able to work due to her disability, the court nevertheless concluded that modification of the maintenance award was not warranted. The circuit court concluded that Ms. Kenyon was able to live a very modest lifestyle within her limited means and therefore did not need an increase in maintenance. The circuit court also expressed its opinion that Ms. Kenyon needed to start trying to generate money and stated that it had never intended for Mr. Kenyon to be her primary source of income for the rest of her life.

¶ 7. Thus, on August 11, 2002, the circuit court entered an order denying Ms. Kenyon's motion to increase maintenance. The court of appeals affirmed, concluding that the circuit court did not erroneously exercise its discretion. Kenyon, No. 02-3041, unpublished slip op. at 3.

¶ 8. On review before this court, Ms. Kenyon, relying on Miner v. Miner, 10 Wis. 2d 438, 441, 103 N.W.2d 4 (1960), contends that the circuit court was required, as a matter of law, to reinstate the amount of maintenance established in the original divorce decree. She argues that when parties' financial circumstances are essentially the same as those at the time of the original divorce decree, the original maintenance order controls by virtue of issue preclusion or claim preclusion. Thus, Ms. Kenyon asserts that the original judgment of divorce is the baseline from which all changed circumstances must be evaluated and that because the parties' financial circumstances now are essentially the same as they were at the time of divorce, she is automatically entitled to the level of maintenance established by the divorce decree. Further, Ms. Kenyon argues that the circuit court erroneously exercised its discretion because its order forces her to survive at a subsistence level while allowing Mr. Kenyon to preserve the marital standard of living, contrary to LaRocque v. LaRocque, 139 Wis. 2d 23, 35, 406 N.W.2d 736 (1987). Ms. Kenyon states that a maintenance modification decision should not be based on whether the payee is able to live parsimoniously on a modest level of income.

¶ 9. In contrast, Mr. Kenyon argues that the circuit court was not obligated, as a matter of law, to restore maintenance to the level established in the divorce decree because the standard for reviewing post-judgment maintenance is not the same as the standard used to derive the initial award of maintenance. According to Mr. Kenyon, under Johnson v. Johnson, 217 Wis. 2d 124, 127-28, 576 N.W.2d 585 (Ct. App. 1998), the LaRocque "fairness" standard does not apply to modification decisions.¹ Further, Mr. Kenyon argues that although there was a change in circumstances in that Ms. Kenyon was no longer able to work, this change did not warrant an increase in maintenance because it did not affect her income level, due to the fact that she was able to decrease her expenses. Mr. Kenyon contends that this court should not reverse the circuit court's decision because the result in this case complied with the applicable law and is one at which a reasonable court could arrive.

II. STANDARD OF REVIEW

¶ 10. A circuit court decision to modify maintenance is reviewed under the erroneous exercise of discretion standard. Rohde-Giovanni, 269 Wis. 2d 598, ¶ 17. "A circuit court engages in an erroneous exercise of discretion when it fails to consider relevant factors, bases its award on factual errors, makes an error of law, or grants an excessive or inadequate award." Id., ¶ 18. However, when reviewing a circuit court's exercise of discretion, we review issues of law de novo. Id., ¶ 19.

¶ 11. Whether claim preclusion applies to a particular factual scenario is a question of law subject to de novo review by this court. N. States Power Co. v. Bugher, 189 Wis. 2d 541, 551, 525 N.W.2d 723 (1995). In addition, the threshold inquiry in determining the applicability of issue preclusion is whether there is an identity of issues in the two actions. State v. Miller, 2004 WI App 117, ¶ 20, 274 Wis. 2d 471, 683 N.W.2d 485. This presents a question of law because it requires the application of a legal standard to undisputed facts. Id. (citing Paige K.B. v. Steven G.B., 226 Wis. 2d 210, 224, 594 N.W.2d 370 (1999)).

III. ANALYSIS

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