MARRIAGE OF HUTCHINSON

• Decision Date: 22 May 2003
• Parties: In the Matter of the MARRIAGE OF Gretchen D. HUTCHINSON, nka Gretchen Delius, Respondent, and Robert B. Hutchinson, II, Appellant.
• Court: Oregon Court of Appeals

69 P.3d 815

187 Or. App. 733

In the Matter of the MARRIAGE OF Gretchen D. HUTCHINSON, nka Gretchen Delius, Respondent, and

Robert B. Hutchinson, II, Appellant.

15-99-14554, A116876

Court of Appeals of Oregon, En Banc.

Argued and Submitted January 6, 2003.

Resubmitted April 2, 2003.

Decided May 22, 2003.

Inge D. Wells, Eugene, argued the cause for appellant. With her on the brief was Wells & Wells.

Mark D. Perrin argued the cause and filed the brief for respondent.

Before DEITS, Chief Judge, and EDMONDS, LANDAU, HASELTON, ARMSTRONG, LINDER, WOLLHEIM, KISTLER, BREWER and SCHUMAN, Judges.

Resubmitted En Banc April 2, 2003.

BREWER, J.

Husband appeals from a judgment that modified his monthly spousal support obligation to wife by reducing it from $6,000 to $3,000. Husband contends that the trial court should have reduced the support award to $250 per month and that, because he is unemployed and has no immediate prospects of finding employment, the court erred in attributing to him potential income of $120,000 per year. Husband also assigns error to the court's decision to make the modification retroactive to April 1, 2001, the due date of the support installment accruing in the month after he filed his motion for modification, rather than ordering wife to execute a satisfaction of any support arrearages that had accrued since December 1, 2000, pursuant to terms specified in the parties' marital settlement agreement (MSA). On de novo review, we reduce husband's spousal support obligation to $1,500 per month, effective April 1, 2001.

The parties were married in 1967, and they separated in 1999. They have two adult children. In July 2000, when their marriage was dissolved, husband was 58 years old and wife was 54 years old. Husband had a college degree and, for many years, had been a successful marketing executive for major hotel enterprises. Beginning in 1979, the parties resided in Asia so that husband could pursue his career. In March 2000, husband was terminated from his employment with a Hong Kong-based hotel business. At that time, husband was earning an annual salary of $240,000. Husband then worked as a consultant for several hotel clients until June 2000, earning approximately $48,000 for that work. Husband was unemployed in July 2000, when the dissolution judgment was entered.

Wife earned a bachelor's degree in 1969. She was employed as an elementary school teacher for two years early in the marriage. However, wife worked as a homemaker throughout the remainder of the marriage. After the parties moved to Asia, wife wrote travel articles as a hobby, but she did not receive any income from that activity. Wife moved to Oregon when the parties separated in 1999.

The parties' MSA, which was incorporated into the dissolution judgment, provided that husband would pay indefinite spousal support of $6,000 per month to wife. It also divided the parties' property. Wife was awarded the condominium in which she resides; two rental properties; two parcels of property in the Philippines, one that she owns outright and another that she co-owns with husband; half of husband's retirement accounts and severance pay from his last job; and half of his retirement benefits from a previous job. Husband was awarded his interest in a trust created by his family, consisting of a parcel of property in Washington, plus the other half of the accounts and benefits described above.

The M.S.A. § also contained the following provision:

"Husband is currently unemployed. Husband shall make good faith efforts to obtain employment. If Husband obtains employment hereafter defined as being an employee, owner, operator, or CEO of a business or acting as an independent contractor, less reasonable business expenses * * * within six months of May 1, 2000, the parties shall re-evaluate the support at that time without the need to show an unanticipated substantial economic change in circumstances. The parties acknowledge that Husband had a brief contract which has been completed where he received income during the finalization of this case that shall not be considered a basis for re-evaluation or modification of support. Any increase or decrease in support that results from any evaluation or modification proceedings filed, shall be effective the month in which Husband begins employment. If Husband fails to obtain employment within six months of May 1, 2000, he shall have the right to seek modification, without the need to show an unanticipated substantial economic change in circumstances with any such modification taking effect the seventh month from May 1, 2000. If Husband fails to obtain a modification, support shall continue at $6,000 per month until an agreement is reached by the parties or further order of the Court. If Husband's salary * * * should exceed $250,000, * * * Wife shall be able to during the next 36 months from May 1, 2000, seek a modification to increase spousal support without the need to prove an unanticipated substantial economic change of circumstance. The court shall consider evidence of the parties' life style during the marriage in that hearing. If during the 36 months from May 1, 2000, Husband's salary * * * falls below $250,000 * * * despite his good faith efforts, Husband has the right to seek modification without the need to show an unanticipated substantial change in circumstances."

The M.S.A. § did not expressly specify the purpose of the spousal support award.¹ However, the award provided wife with approximately 30 percent of husband's pretax income based on his most recent annual salary of $240,000. Husband did not secure employment after the dissolution. On March 28, 2001, he moved to modify his support obligation to $1,500 per month for a period of three years. In June 2001, husband moved back to the United States to live with his parents in order to "live much more cheaply[.]" In September, he amended his motion to request termination of spousal support or, in the alternative, a permanent reduction to an amount "to be determined at trial." Also in September, husband received a tax refund of more than $33,000.

The case was tried in October 2001. At trial, husband requested a reduction in spousal support to $250 per month. He testified that he had used his share of the property division and a portion of the tax refund to pay his living expenses, legal fees, and spousal support. Husband's uniform support affidavit showed monthly income of $413 per month, based on annualizing a one-time gift from his mother plus interest income of $80, to offset monthly expenses of approximately $2,550, excluding spousal support. At the time of trial, husband still had $21,700 of the refund proceeds.

Husband acknowledged that he had rejected a job offer, in late 2000, for $120,000 per year and that he recently had applied for a job that would have paid an annual salary of $150,000. He testified that he had attempted to find work by networking with colleagues and employment agencies and looking through the newspaper classifieds. He stated that his search had been impeded by several factors, including his age; his specialized qualifications and experience; the difficulty of locating work in Asia and, for that matter, in the United States after having worked abroad for 20 years; the repercussions on the hotel industry of the events of September 11, 2001; and the blow that prolonged unemployment had delivered to his confidence level.

At the time of modification, wife was working 30 to 40 hours per week at an hourly rate of $9, without benefits, in a "paint-your-own-pottery" business. She had no plans to return to teaching. She testified that, even if she renewed her teaching certification—a two-year process—her prospects for finding work in her teaching field, art, were poor. Wife had invested the liquid assets that she received in the property division in several investment accounts, one of which had lost value. Wife testified that, in order to make ends meet, she had been forced to dip into assets that she had hoped to preserve for her retirement.² At the time of modification, wife had monthly income of approximately $1,200, excluding spousal support payments, and monthly expenses of approximately $4,220, including a $1,400 payment on her condominium and a $930 car payment and excluding an estimated $1,000 monthly payment for attorney fees.

Wife called as a witness a career and placement consultant, who identified job categories as well as actual openings for which husband was qualified, including a position in the $120,000 to $150,000 range. He stated that "in the 50, $60,000 range represents the type of job in this occupation that I would think [husband] would have no trouble getting at all" but that jobs in a range exceeding $120,000 per year are "less plentiful and more difficult to get." The witness concluded that, although he "could be way off," husband could find work in the lower salary range by January 2002, and in the higher range by the next summer.

The trial court determined that husband had an earning capacity of $120,000 per year, and it modified the spousal support award to $3,000 per month, effective April 1, 2001.

In his first assignment of error, husband argues that the trial court erred in attributing to him a potential annual income of $120,000 because he had been unemployed since mid-2000, and he had no immediate prospects of finding employment at that salary level. In response, wife reminds us that husband turned down a job offer for $120,000 per year and that he had interviewed for a job paying $150,000 per year shortly before the modification trial. Wife also asserts that husband failed to rebut her evidence that husband was qualified for employment at an annual salary in the range of $120,000 to $150,000.

An award of spousal support may be modified based on a finding that there has been a substantial, unanticipated change in circumstances since the time of the earlier award. Tomos and...