Kelly v. Dorschner

• Court: Wisconsin Court of Appeals
• Writing for the Court: KLOPPENBURG, J.
• Docket Number: 2024AP2069
• Decision Date: 20 November 2025
• Citation: Kelly v. Dorschner, 2024AP2069 (Wis. App. Nov 20, 2025)
• Parties: IN RE THE MARRIAGE OF: SHANNON L. KELLY, PETITIONER-APPELLANT, v. JEREMY DORSCHNER, RESPONDENT-RESPONDENT.

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IN RE THE MARRIAGE OF: SHANNON L. KELLY, PETITIONER-APPELLANT, v. JEREMY DORSCHNER, RESPONDENT-RESPONDENT.

No. 2024AP2069

Court of Appeals of Wisconsin, District IV

November 20, 2025

Not recommended for publication in the official reports.

Appeal from a judgment of the circuit court for Portage County: Cir Ct. No. 2023FA163 Patricia Baker, Judge. Reversed and cause remanded for further proceedings.

Before Graham, P.J., Blanchard, and Kloppenburg, JJ.

KLOPPENBURG, J.

¶1 Shannon Kelly appeals a judgment of divorce from Jeremy Dorschner. Kelly argues that the circuit court erroneously exercised its discretion when it: (1) treated Dorschner's military pension (generally, the "pension") as his income and not as divisible property and awarded Kelly only 10% of the monthly pension payments; (2) assigned all of Kelly's student loan debt solely to her as part of the property division; (3) denied maintenance to Kelly; and (4) ended, as of the date that Kelly turns 62, Dorschner's obligation to pay the monthly cost to maintain the spousal benefit under his pension plan, for which Kelly would be the beneficiary.

¶2 We conclude that the circuit court erroneously exercised its discretion when it treated Dorschner's pension as income rather than property, and failed to adequately support its decisions to award Kelly 10% of Dorschner's monthly pension payments in lieu of maintenance to Kelly, assign all of Kelly's student loan debt to Kelly, deny maintenance to Kelly, and relieve Dorschner of the obligation to pay the cost of the spousal benefit when Kelly turns 62. Accordingly we reverse those parts of the court's judgment and remand for further proceedings.

BACKGROUND

¶3 The following facts, which provide context for all of the issues on appeal, are based on the circuit court's findings and on evidence and testimony in the record either explicitly or implicitly credited by the court.

¶4 Kelly and Dorschner married in 1999 and had three children, each of whom attained the age of majority before the divorce in 2024.

¶5 Dorschner joined the military in 1997. Due to his military service, the family moved numerous times over the course of the 25-year marriage. The last move that resulted from a military order was to Maryland in 2018.

¶6 In 2020, Kelly moved from Maryland to Arizona, and after less than a year, she moved from Arizona to Wisconsin, where she purchased and lived in a 5,500-square-foot house in Stevens Point; Dorschner remained in Maryland and moved into a recreational vehicle. Dorschner did not live in the Stevens Point house beyond weeks-long visits. In 2024, Kelly moved out of the Stevens Point house and incurred over $10,000 in expenses to move to Florida. The Stevens Point house was sold for $590,000, and the sale proceeds of $86,000 were held in trust. Some of the mortgage payments and taxes on the house, which Kelly was responsible for paying, were paid late or not at all, resulting in late fees and taxes being taken out of the sale proceeds.

¶7 Dorschner attended college for two years before joining the military. He incurred about $8,000 in student loan debt, which was paid out of family finances during the marriage. Dorschner then served in the military as an aircraft mechanic, aviation officer, and lieutenant commander, and the military paid for him to obtain a bachelor's degree and a master's degree. Dorschner retired from military service at the age of 47 in September 2023, at which time he began receiving monthly military disability and pension payments, which continued to the time of the divorce and into the future. He applied for numerous jobs after retiring but was disqualified from many of the positions to which he applied because of his disability.

¶8 Kelly obtained a bachelor's degree and a master's degree during the marriage. Kelly incurred approximately $97,000 in student loan debt, which including interest had risen to approximately $145,000 at the time of the divorce. Kelly worked part-time as a substitute teacher from 2008 to 2018, when all three of the children were still minors, and as a mental health counselor and part-time adjunct professor from 2018 to 2020. Kelly moved to Arizona in 2020 for a job as a mental health counselor, and since October 2020, she had been working at Headspace, where she was a clinical manager at the time of the divorce. At the time of the divorce, Kelly's income was on "an upwards ... trajectory."

¶9 Kelly filed for divorce in August 2023. Kelly reported a gross monthly income of $6,990.25 and a net monthly income of $5,109.40, and Dorschner reported a gross monthly income of $9,571, consisting of $5,823 from his pension and $3,748 in military disability payments. The marital estate consisted mostly of debt.

¶10 In their position statements submitted to the circuit court, the parties made the following respective requests regarding Dorschner's pension payments, Kelly's student loan debt, maintenance, and the spousal benefit cost.

¶11 Kelly "anticipate[d]" that the circuit court would award her 50% of Dorschner's monthly pension payments. Dorschner asked that the court treat his ongoing pension payments as his income, rather than as property subject to division, and that, in lieu of ordering Dorschner to pay Kelly maintenance, the court award Kelly 10% of the monthly pension payments, for a total of $582.30 per month.

¶12 Kelly asked that the circuit court divide responsibility for her student loan debt equally between Kelly and Dorschner, and Dorschner asked that the court make Kelly "solely responsible" for her student loan debt.

¶13 Kelly asked that the circuit court grant her maintenance in the amount of $2,045.59 per month, to be reduced if the court awarded her 50% of Dorschner's monthly pension payments as part of the divorce judgment, as she "anticipate[]." Alternatively, but still assuming that the court would award her 50% of Dorschner's monthly pension payments, Kelly asked that the court hold open her claim for maintenance for an unlimited time, until Dorschner obtained employment.

¶14 Kelly asked that the circuit court require that the spousal benefit under Dorschner's pension plan continue to be paid for, either by Dorschner or by Kelly, which would guarantee Kelly receiving approximately $3,200 per month after Dorschner's death. Dorschner indicated that he would continue to pay the monthly cost of approximately $375 for that benefit.

¶15 The circuit court held a one-half day trial on June 24, 2024, at which Kelly and Dorschner testified. On June 28, 2024, the court issued an oral ruling and a written decision consistent with that ruling. The court ruled as follows regarding the four issues on appeal: (1) the court treated Dorschner's monthly pension payments as his income and awarded Kelly 10% of those monthly payments; (2) the court assigned Kelly 100% of her student loan debt, resulting in Dorschner receiving a net total of $24,191 in debt, and Kelly receiving a net total of $152,805 in debt; (3) the court declined to award Kelly maintenance; and (4) the court required Dorschner to pay the spousal benefit cost and to name Kelly as the beneficiary "until she remarries, dies[,] or until she is 62 years of age and therefore Social Security eligible."

¶16 Kelly appeals.

DISCUSSION

¶17 Kelly argues that the circuit court erred in four respects. Specifically, Kelly argues that the court: (1) erred as a matter of law and erroneously exercised its discretion by treating Dorschner's pension as his income rather than as divisible property and by awarding Kelly only 10% of Dorschner's monthly pension payments; (2) erred as a matter of law and erroneously exercised its discretion by assigning 100% of Kelly's student loan debt to her as part of its property division; (3) erroneously exercised its discretion when it denied her maintenance; and (4) erred as a matter of law and erroneously exercised its discretion when it ended Dorschner's obligation to pay the spousal benefit cost when Kelly turns 62. We begin with the applicable standard of review. We then address Kelly's property division arguments regarding the court's treatment of Dorschner's pension and her student loan debt, and her arguments regarding the court's decisions on maintenance and the spousal benefit cost.

I. Standard of Review

¶18 Decisions on property division and maintenance are committed to the sound discretion of the circuit court. McReath v. McReath, 2011 WI 66, ¶21, 335 Wis.2d 643, 800 N.W.2d 399. However, the exercise of discretion is not the equivalent of unfettered decision-making. Bahr v. Bahr, 107 Wis.2d 72, 77-78, 318 N.W.2d 391 (1982). It "must be the product of a rational mental process by which the facts of record and law relied upon are stated and are considered together for the purpose of achieving a reasoned and reasonable determination." Kennedy v. Kennedy, 145 Wis.2d 219, 222, 426 N.W.2d 85 (Ct. App. 1988); Hartung v. Hartung, 102 Wis.2d 58, 66, 306 N.W.2d 16 (1981) ("A discretionary determination, to be sustained, must demonstrably be made and based upon the facts appearing in the record and in reliance on the appropriate and applicable law.").

¶19 We will not disturb the circuit court's determinations absent an erroneous exercise of discretion. McReath, 335 Wis.2d 643, ¶21. A circuit court erroneously exercises its discretion when it fails to apply or misapplies the statutory factors, makes an error of law, bases its award on factual errors, or fails to base its decision on facts in the record. King v. King, 224 Wis.2d 235, 248, 251, 590 N.W.2d 480 (1999); LeMere v. LeMere, 2003 WI 67, ¶14, 262 Wis.2d 426, 663 N.W.2d 789; Rohde-Giovanni v. Baumgart, 2004 WI 27, ¶18, 269 Wis.2d 598, 676 N.W.2d 452. In addition, "[w]e may search the...