Mahoney v. Mahoney, 930349CA

Citation516 N.W.2d 656
Decision Date10 May 1994
Docket NumberNo. 930349CA,930349CA
PartiesDebra Susan MAHONEY, Plaintiff and Appellee, v. Timothy James MAHONEY, Defendant and Appellant. Civ.
CourtCourt of Appeals of North Dakota

Jonathan T. Garaas (argued) of Garaas Law Firm, Fargo, for plaintiff and appellee.

Randolph E. Stefanson (argued) of Stefanson, Landberg & Plambeck, Moorhead, MN, for defendant and appellant.

RALPH J. ERICKSTAD, Chief Surrogate Judge.

Timothy James Mahoney appeals from an order denying his motion to modify spousal and child support. He also appeals from the trial court's refusal to rule on his motion for reconsideration. We reverse the order denying the motion to modify and remand for further proceedings.

A September 1992 judgment granted Debra Susan Mahoney a divorce from Timothy after a 15-year marriage. Debra was awarded custody of the couple's three children: Ryan, Kaileen, and Colin. The trial court estimated Timothy's 1992 gross annual income as a surgeon at Dakota Clinic in Fargo to be $242,100, including $30,000 in contributions for his "pension/profit sharing" plan. At the time of the July 1992 divorce trial, Timothy's gross monthly pay was $15,800 and net monthly pay was $10,890. After trial, but before entry of judgment, Timothy informed the court by affidavit that he had submitted his resignation to Dakota Clinic on August 1, 1992, effective at the end of October 1992, and that he would be ineligible to receive the clinic's profit sharing distribution at the end of the year.

The divorce judgment ordered Timothy to pay child support of $4,080 per month, and spousal support of $2,000 per month for a period of four years. After entry of judgment, the parties entered into a stipulated agreement waiving their rights to appeal from the judgment.

In May 1993, Timothy moved to reduce his child support and spousal support obligations on the ground that "there has been a significant change in his financial circumstances...." In an affidavit, Timothy again informed the court that he had resigned from Dakota Clinic effective October 1992 and had started his own practice with two other surgeons who also had been employed at the clinic. Timothy explained that because those two surgeons resigned from the clinic, if he had stayed he would have had "to be working under an extremely burdensome schedule at a time when I was attempting to spend significantly more time with my children during visitation." He said that he had "philosophical and ethical differences with Dakota Clinic regarding the need for research and the type of work load which we were expected to carry," and that a psychologist he was seeking assistance from "strongly advised me to make changes in my career."

Timothy stated that he started his new practice on November 1, 1992, sharing overhead and call responsibility with the other two physicians. According to Timothy, they practice under the "umbrella" of Surgical Associates and each of them contributed $45,000 "to start up the group." Timothy stated that none of the physicians "took a salary initially" and that he "hope[d] to start drawing a salary in June 1993." Each physician passed corporate resolutions limiting his salary to $5,000 per month and Timothy stated that each "decided that the practices will not be able to support a higher salary for at least two years."

Timothy stated that since starting his own practice, he has been meeting his living expenses and paying the child and spousal support obligations solely by depleting his savings and a $24,000 inheritance from his mother's estate. Timothy said it was "impossible" for him to continue paying the child and spousal support ordered by the court and that he did not expect to "ever achieve the income levels which the court predicted." But Timothy said he believed his new practice "will be better for me in the long run" because he would be able "to control my hours such that I can exercise my visitation with my children," and because it would "allow me to achieve personal goals that could not be reached at Dakota Clinic." Timothy also stated that the new practice "will allow me to better control my overhead and thus deal with the significant changes in medical reimbursement rates." According to Timothy, reimbursement rates for surgeons under the Medicare program, which accounts for 50 percent of his practice, have dropped 66 1/3 percent since April 1992 and "Blue Cross/Blue Shield of North Dakota will be cutting reimbursement for all specialities by 20 percent starting June 1, 1993." Timothy submitted a financial statement and requested that the court decrease his child support obligation to the guideline amount of $1,368 per month and decrease his spousal support obligation to $500 per month, even though "this level of support would still require that I deplete assets in order to meet my monthly expenses...." Timothy also presented an affidavit from his accountant who stated that during early 1993, Timothy's practice had "insufficient cash flow for him to take a $5,000 per month salary."

Debra resisted Timothy's motion to modify the divorce decree and moved for a continuance, claiming that Timothy's discovery responses were not complete and that additional time was required to prepare for the hearing. Debra also presented an affidavit disputing Timothy's financial representations and claiming that any change of circumstances is "voluntary" and a "sham."

At the hearing on the motion, Timothy's attorney rested on the information contained in the affidavits. After hearing argument of counsel, the trial court denied both Debra's motion for continuance and Timothy's motion to modify the divorce judgment. The court determined that "there is not a material substantial change in circumstances," explaining: 1

"What happened here was that [Timothy] has decided to open his private practice. He did not approach the Court beforehand, as he should have, and gotten an answer. And instead, he went ahead to open his private practice. He loaned $45,000 to his private practice. Now he complains that his assets are more or less depleted, even an inheritance from his mother of $24,000. He felt that his schedule at Dakota Clinic was going to be burdensome. He wanted to spend more time with his children. He had some type of philosophical difference with the clinic regarding research and the type of work load he would be carrying. He wishes to be a specialist, I think it is, in vascular surgery and contends that he couldn't do that there. So in October of 1992, he resigned from the clinic.... At the same time that he indicates that it's in the best interest of his children to make this move, he wishes to reduce their child support by--to almost a third of what he's paying now. This voluntary move is certainly one of the most arrogant things I have seen done in a long time, in what is an apparent attempt to satisfy his own feelings and with regard to his situation and deprive his children and his former spouse of what the Court has declared rightly to be [theirs].... He indicates that he depleted his savings and other items of that, and the Court also finds [Timothy] knew when he made the move that he was obligated on all of these support items, and yet he did so without approaching the Court. There might have been a way to do it in some proper manner if he had approached the Court in the first place, but he chose voluntarily not to do that.... All of these things that [Timothy] wants to do are for himself. As I indicated, it's rather a hedonistic move that he's made to the expense of ... his former spouse and children.

* * * * * *

"I think, and it also just seems to me that it's just common sense, you don't have to be a legal beagle or a lawyer to realize that when you have a judgment and it says, 'This is what you pay to take care of your children. This is what you owe your former spouse until she can get on her feet,' you don't just run out there and do what you want to do and then wipe that all out and then ask forgiveness. It seems to me, the business way to proceed, the common sense way to proceed, and the passion and moral way to proceed is to approach the Court with it and see if something can be worked out. That wasn't done in this case."

To ensure Timothy's compliance with his support obligations, the trial court imposed an immediate income withholding order and placed a lien on his Dakota Clinic Retirement Plan. The court directed the retirement plan administrator to make monthly payments to the clerk of district court to satisfy the support obligations unless Timothy provided the administrator with receipts from the clerk showing full payment. The court further ordered Timothy to be "solely responsible" for all taxes and penalties imposed by law for withdrawal of money from his retirement account.

Timothy substituted counsel and moved for reconsideration of the trial court's denial of the motion to modify, presenting additional affidavits to the court. Before the motion was to be heard, the trial judge's office informed Timothy that the hearing was cancelled and that the judge would not issue an order on the motion for reconsideration. Timothy appealed from the order denying his motion to modify and from the trial court's "refusal to hear or rule upon" his motion for reconsideration.


Debra asserts that Timothy has no right to appeal from the trial court's order denying the motion for modification of the divorce decree because "Timothy could have brought another motion based upon the Trial Court's continuing jurisdiction" under Sec. 14-05-24, N.D.C.C. Debra's position, which would effectively shield all modification proceedings from appellate review, finds no support in the law.

Section 14-05-25, N.D.C.C., provides in part that "all orders and decrees touching the alimony and maintenance of either party to a marriage and for the custody, education, and support of the children are subject to revision on appeal in all particulars ...." [Emphasis...

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