Meyer v. Meyer, 20030214.

• Decision Date: 05 May 2004
• Docket Number: No. 20030214.,20030214.
• Citation: 2004 ND 89,679 N.W.2d 273
• Parties: Timothy R. MEYER, Plaintiff and Appellee v. Diane L. MEYER, Defendant and Appellant.
• Court: North Dakota Supreme Court

679 N.W.2d 273

2004 ND 89

Timothy R. MEYER, Plaintiff and Appellee v. Diane L. MEYER, Defendant and Appellant.

No. 20030214.

Supreme Court of North Dakota.

May 5, 2004.

Leslie Johnson Aldrich, Johnson Law Office, P.C., Fargo, ND, for plaintiff and appellee.

Charles A. Stock, Johannson, Rust, Fagerlund, Yon & Stock, PA, Crookston, MN, for defendant and appellant.

VANDE WALLE, Chief Justice.

[¶ 1] Diane Meyer appealed from an amended judgment modifying Timothy Meyer's spousal support obligation from $800 per month to $300 per month. We reverse and remand.

I

[¶ 2] Timothy and Diane Meyer were divorced in February 1998. The original decree, based upon the parties' stipulation, provided Timothy Meyer would pay $800 per month in spousal support to Diane Meyer for ten years. At the time of the decree, Timothy Meyer was earning $72,000 per year, and Diane Meyer was earning $22,000 per year.

[¶ 3] On January 1, 2003, Timothy Meyer's employer, Krider Equipment, was sold to Titan Machinery, Inc. His income at the time of the sale was approximately $79,000. After the sale, Timothy Meyer's salary was reduced to $50,000 per year. As a result, he moved for termination of his spousal support obligation or, in the alternative, a reduction in the amount of support. A hearing was held before a judicial referee, who determined there was a material change in circumstances and recommended the spousal support obligation be reduced to $300 per month for the remainder of the ten-year support obligation. Diane Meyer requested a review of the referee's findings, and upon review, the district court affirmed the findings and recommendation of the referee and ordered entry of an amended judgment reducing Timothy Meyer's support obligation to $300 per month.

II

[¶ 4] On appeal, Diane Meyer asserts the court's modification of spousal support is clearly erroneous because Timothy Meyer's reduction in income does not constitute a material change in circumstances; the district court did not adequately consider that the original decree was based upon a stipulation by the parties; and the reduction in Timothy Meyer's income was contemplated by the parties in the original decree.

[¶ 5] When there has been an initial award of spousal support, the trial court retains jurisdiction and may modify the award at least as long as support continues. Bellefeuille v. Bellefeuille, 2001 ND 192, ¶ 19, 636 N.W.2d 195. The party seeking modification of spousal support bears the burden of showing a material change in circumstances warrants modification. Quamme v. Bellino, 2002 ND 159, ¶ 14, 652 N.W.2d 360. The trial court's determination regarding a material change in circumstances warranting a modification of spousal support is a finding of fact and will not be reversed on appeal unless it is clearly erroneous. Lohstreter v. Lohstreter, 2001 ND 45, ¶ 10, 623 N.W.2d 350. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, although there is some evidence to support it, on the entire evidence we are left with a definite and firm conviction a mistake has been made. Id. Not every financial change in circumstances justifies a modification, and if a change is self-induced no modification is warranted. Schmitz v. Schmitz, 2001 ND 19, ¶ 8, 622 N.W.2d 176. A material change in circumstances means something that substantially affects the parties' financial abilities or needs, and the reasons for changes in income must be examined as well as the extent to which the changes were contemplated by the parties at the time of the initial decree. Schmalle v. Schmalle, 1998 ND 201, ¶ 12, 586 N.W.2d 677. A contemplated change is one taken into consideration by the district court in fashioning its original decree. Quamme, at ¶ 14.

A.

[¶ 6] The record supports the trial court's finding Timothy Meyer was earning $72,000 per year while Diane Meyer was earning $22,000 per year when the original decree was entered, resulting in an annual income differential of $50,000 between them. The record also supports the trial court's finding that Timothy Meyer's income had been reduced to $50,000 when he moved for modification as a result of the sale of his employer. Since the divorce, Diane Meyer has experienced an increase of income to $32,000 per year, resulting in an income differential between her and Timothy Meyer of $18,000 per year.

[¶ 7] Timothy Meyer's current salary is 30.6% less than his annual income when the original decree was entered. This constitutes a significant decrease. Diane Meyer asserts the parties originally contemplated that Timothy Meyer might voluntarily change jobs with a resulting reduction of income, and therefore, his reduced salary should not be considered in finding a material change in circumstances. But, while the parties may have contemplated a reduction in Timothy Meyer's income if he voluntarily changed jobs, they did not contemplate an involuntary reduction of his income resulting from the sale of his employer. Timothy Meyer had considered, but did not voluntarily make, a change of employment resulting in reduced income. More importantly, the parties did not contemplate the extent to which Timothy Meyer's income has ultimately been reduced by the sale of his employer. The change was not voluntarily incurred by Timothy Meyer, nor was it contemplated by the parties or considered by the district court in fashioning the original decree. We conclude the trial court did not err in factoring Timothy Meyer's reduction in income as relevant to its finding that a material change in circumstances existed.

B.

[¶ 8] Diane Meyer also asserts the trial court did not adequately consider that the original spousal support obligation was based upon a stipulation of the parties and should not be changed. This Court encourages spousal support awards based upon agreements between the divorcing parties and has recognized changing a stipulated support amount should only be done "with great reluctance by the trial court." Toni v. Toni, 2001 ND 193, ¶ 11, 636 N.W.2d 396. However, we have also recognized that a spousal support award based upon a stipulation by the parties can be modified upon a showing of a material change in circumstances. Id.; see also Wheeler v. Wheeler, 419 N.W.2d 923, 925 (N.D.1988)

("Wheeler I"). We are not persuaded the trial court failed to adequately consider that the original decree was based upon the parties' stipulation. The court determined the change in the parties' incomes sufficiently affected Timothy Meyer's ability to pay and Diane Meyer's need for support to warrant modification of the stipulated amount. Under the circumstances, we conclude the trial court's finding is not clearly erroneous.

[¶ 9] We reverse, however, because we are concerned with the lack of any explanation regarding the amount of the reduction in support compared to the reduction in Timothy Meyer's income. See Wheeler v. Wheeler, 548 N.W.2d 27, 30 (N.D.1996)

("Wheeler II") ("Findings of fact should be sufficiently stated so we are able to understand the factual basis for the trial court's decision, particularly in view of our standards for modification" of spousal support). In addressing whether Timothy Meyer's change in circumstances warrants a modification, the trial court only stated:

In this case, [Timothy Meyer] has experienced a material and substantial reduction in income. [Diane Meyer] has increased her income and assets since the divorce, but opines she must continue to save for retirement and pay off the mortgage on her home in order to be rehabilitated by the end of the ten-year period of spousal support. The Referee's decision to lower the monthly spousal support from $800 per month to $300 per month is a balance between the greater burden of [Timothy Meyer] and the lesser need of [Diane Meyer], and is not clearly erroneous.

Although Diane Meyer asserts the trial court erred in finding that she abandoned her rehabilitative goal or that she was rehabilitated, the trial court, in essence, concluded her rehabilitation was not complete and she continues to have a disadvantage as a result of the divorce, entitling her to continue receiving some spousal support. However, the trial court did not provide sufficient analysis regarding Diane Meyer's current need for support or Timothy Meyer's current ability to pay spousal support. Instead, it only concluded Diane Meyer's needs had changed and so had Timothy Meyer's ability to pay. Therefore, while we understand the trial court's rationale for reducing the amount of spousal support, we cannot discern its rationale for reducing Timothy Meyer's spousal support obligation from $800 per month to $300 per month. See Wheeler II at 30 (the Court will not remand for clarification if, through inference or deduction, we can discern the rationale for the result reached by the trial court). In Wheeler I, this Court stated:

If a supported spouse is not to be penalized "for her initiative and ... incentive for self betterment," Lipp v. Lipp, [355 N.W.2d 817, 819 (N.D.1984)], her agreed support should not be reduced simply because she has improved her financial ability. Her standard of living and needs, as well as those of the paying spouse, must be weighed along with their relative financial abilities.

419 N.W.2d at 927. On remand, the trial court must evaluate Timothy Meyer's current ability to pay along with Diane Meyer's current need for support, and must award support in an amount that is adequately proportional to the reduction in Timothy Meyer's income in light of Diane Meyer's need for support. In doing so, the trial court will continue to give sufficient credence to the fact the original decree was based upon a stipulated agreement by the parties while recognizing a material change in circumstances has occurred.

[¶ 10] We reverse and remand for reconsideration of the amount of support in accordance with this opinion.

[¶ 11] ...