In re Marriage of Freeman

• Decision Date: 15 April 2022
• Docket Number: 568,123
• Parties: In the Matter of the Marriage of Lindsey Freeman, Appellant, and Matthew Freeman, Appellee.
• Court: Kansas Court of Appeals

In the Matter of the Marriage of Lindsey Freeman, Appellant, and Matthew Freeman, Appellee.

No. 123, 568

Court of Appeals of Kansas

April 15, 2022

NOT DESIGNATED FOR PUBLICATION

Appeal from Johnson District Court; Erica K. Schoenig, Judge.

Thomas R. Buchanan and William C. Odle, of McDowell, Rice, Smith & Buchanan, P.C., of Kansas City, Missouri, for appellant.

Catherine A. Zigtema, of Zigtema Law Office LC, of Shawnee for appellee.

Before Green, P.J., Atcheson and Hurst, JJ.

MEMORANDUM OPINION

GREEN J.

Lindsey Freeman appeals the trial court's downward modification of her ex-husband Matthew Freeman's monthly maintenance obligation to her from $7, 725 to $5, 721. She argues that the trial court erred when it partially granted Matthew's maintenance modification motion because Matthew relied solely on evidence of his recently decreased income. According to Lindsey, Kansas caselaw holds that an ex-spouse's decreased income alone cannot constitute a material change in circumstances entitling that ex-spouse to the downward modification of his or her maintenance obligation. She also argues that the trial court erred because it modified Matthew's maintenance obligation based on business losses that they had contemplated while negotiating their separation agreement. She contends that Kansas caselaw holds that a foreseeable event that ex-spouses contemplated while negotiating maintenance under a separation agreement can never constitute a material change in circumstance that later entitles an ex-spouse to the downward modification of his or her maintenance obligation.

Matthew counters Lindsey's arguments in a few ways, including that he was not required to prove a material change in his circumstances to allow the trial court to modify his maintenance obligation. Although he recognizes that Kansas caselaw has held that maintenance controlled by K.S.A. 2020 Supp. 23-2903 hinges on an ex-spouse's showing a material change in circumstances, he contends that in reaching these holdings courts have misinterpreted Kansas' maintenance statutes. So, he asserts that we are not required to consider Lindsey's arguments based on whether he established a material change in circumstances as a matter of law. Thus, he asserts that we should affirm the trial court as right for the wrong reason.

As considered below, we note problems with both Lindsey's and Matthew's arguments. In short, Kansas caselaw does not support Lindsey's arguments. And Matthew's arguments are improper and unpersuasive. We, however, cannot conclude that the trial court abused its discretion in its downward modification of Matthew's monthly maintenance obligation to Lindsey from $7, 725 to $5, 721. Thus, we affirm.

Yet, in doing so, we also note an error that the trial court made when recalculating Matthew's maintenance obligation: It accidentally used Matthew's 2017 total income in its recalculation when it believed it was using Matthew's 2018 total income. Although Lindsey never points out this error that resulted in her receiving even less monthly maintenance, we direct Lindsey to K.S.A. 2020 Supp. 60-260(a), which allows her to move for relief from the trial court's inadvertent mistake after we have fully decided her appeal.

Facts

After 11 years of marriage to Matthew, Lindsey petitioned the trial court for a divorce in September 2017. Nearly a year later in August 2018, the trial court granted Lindsey's divorce petition in a decree that incorporated Lindsey and Matthew's separation agreement. This separation agreement contained a maintenance provision requiring Matthew to pay Lindsey $7, 725 per month for 36 consecutive months. It stated that Lindsey and Matthew "agree[d] and underst[ood] that [Matthew's] maintenance obligation to [Lindsey should] be subject to future modification in accordance with K.S.A. 23-2903." And it stated that the trial court retained jurisdiction to modify Matthew's maintenance obligation to Lindsey to a just and reasonable amount should Matthew ever go bankrupt. Outside of this language, though, the maintenance provision did not address the circumstances in which Matthew could move to modify his maintenance obligation to Lindsey. Nor did it explain why Lindsey and Matthew ultimately agreed that Lindsey was entitled to $7, 725 per month in maintenance.

In May 2020, Matthew moved for the downward modification of his monthly maintenance obligation to Lindsey. In his maintenance modification motion, Matthew never explained how much he wanted his monthly maintenance obligation reduced. Instead, he noted that the maintenance provision in his and Lindsey's separation agreement stated that his maintenance obligation to Lindsey was subject to future modification in accordance with K.S.A. 2020 Supp. 23-2903. Then, relying on this language, he asserted that the trial court should grant his maintenance modification motion for the following reason:

"At the time of entering into [the separation agreement], it was well known by both parties and counsel for the parties that [Matthew's] income from his business was very fluid and likely to decrease in the near future due to changes in the industry that were foreseeable as well as the expiration of a business contract [Matthew] had with a client who provided a substantial portion of [Matthew's] income.

"As suspected, [Matthew's] income has substantially decreased since August 2018 due to changes in the industry in which [Matthew] does business and a loss of clients. These changes are beyond the control of [Matthew]. This decrease is unfortunate and certainly not something [Matthew] wanted but it is the reality.

"Additionally, [Lindsey's] income has increased since spousal maintenance was agreed upon and awarded."

In her response to Matthew's motion, Lindsey agreed that when she and Matthew entered into their separation agreement, Matthew had mentioned likely future business losses. She also agreed that since entering into their separation agreement, her income of $35, 000 per year had increased "approximately $5, 000 per year." So, in her response, Lindsey admitted that her imputed income was currently $40, 000 per year. All the same, Lindsey argued that the trial court should deny Matthew's motion because his financial circumstances had not deteriorated to the extent that he could no longer afford to pay her $7, 250 per month in maintenance as they had originally agreed in their separation agreement.

Eventually, in September 2020, the trial court held a hearing on Matthew's maintenance modification motion. At the start of this hearing, both Lindsey and Matthew admitted several exhibits as proof of their past and current finances. Significantly, they admitted these financial exhibits by agreement, both telling the trial court that although they believed that each other's financial exhibits contained inaccuracies, they had no objections to the admission of any exhibits.

Later in the hearing, Matthew clarified the arguments set forth in his written maintenance modification motion. In addition to accusing Lindsey of hiding money and having unreasonable expenses, he explained that when he and Lindsey entered into their separation agreement, "[t]here was a lengthy discussion . . . and everyone was on notice that . . . he was losing his biggest client as of January 1st, 2019." He suggested that at that time, Lindsey also knew that his business was in decline because his business, which provided telecom services to other businesses, had become technologically obsolete.

Then, Matthew addressed his sources of income. Matthew explained that from his business, he paid himself a salary of $10, 000 per month before taxes. And on top of this monthly salary, he would distribute several thousand dollars in his business' dividends to himself each month. Matthew asserted that in 2019, he distributed an average of $14, 398.75 in dividends to himself each month. This resulted in Matthew's total income in 2019 being $292, 785, which was about $400, 000 less than his total income in 2018. Matthew added that although he was unsure exactly how much his 2020 total income would ultimately be, he projected that his 2020 total income would be about $100, 000 less than his 2019 total income.

Next, Matthew noted that when they initially entered into their separation agreement, he and Lindsey agreed that she was entitled to maintenance at a rate of 18 percent of the difference between their incomes. Using this rate, Matthew argued that the trial court should reduce his monthly maintenance to $3, 791.77 per month. Matthew reached this figure by subtracting Lindsey's $40, 000 imputed income from his 2019 income of $292, 785 before multiplying this figure by the 18 percent rate and then dividing it by 12 months.

Lindsey countered that Matthew had to prove that his financial circumstances had materially changed to be entitled to the downward modification of his maintenance obligation. She asserted that despite Matthew's arguments about his reduced income, Matthew had not met his burden of showing a material change in his financial circumstances for three reasons.

First Lindsey argued that Matthew could not seek the downward modification of his monthly maintenance obligation to her based on his recent business losses since they contemplated those business losses when entering into their separation agreement. Citing In re Marriage of Santee, No. 117, 222, 2018 WL 475477 (Kan. App. 2018) (unpublished opinion), Lindsey alleged that foreseeable events considered when entering into a separation agreement cannot constitute the basis for an ex-spouse's later motion to modify maintenance. Second, Lindsey argued that while Matthew's maintenance modification motion focused on his recently reduced income from his...