Schmalle v. Schmalle

• Decision Date: 19 November 1998
• Docket Number: No. 980114,980114
• Parties: Elmer W. SCHMALLE, Plaintiff, Appellant and Cross-Appellee, v. Bettianne SCHMALLE, Defendant, Appellee and Cross-Appellant. Civil
• Court: North Dakota Supreme Court

Page 677

586 N.W.2d 677

1998 ND 201

Elmer W. SCHMALLE, Plaintiff, Appellant and Cross-Appellee, v. Bettianne SCHMALLE, Defendant, Appellee and Cross-Appellant.

Civil No. 980114

Supreme Court of North Dakota.

Nov. 19, 1998.

Henry H. Howe, of Howe & Seaworth, Grand Forks, for plaintiff, appellant and cross-appellee.

Timothy W. McCann, of Lindquist, Jeffrey & Jensen, East Grand Forks, for defendant, appellee and cross-appellant.

SANDSTROM, Justice.

¶1 In these post-judgment divorce proceedings, Elmer Schmalle appeals from a second and a third amended judgment, and Bettianne Schmalle cross-appeals from the third amended judgment. We reverse the trial court's modification of spousal support, affirm the court's clarification of Bettianne Schmalle's interest in Elmer Schmalle's military retirement benefits, affirm the court's decision Bettianne Schmalle's bankruptcy rendered inoperable a provision for indemnification of credit card debt assigned to her in the initial decree, and we remand with directions.

I

¶2 Elmer and Bettianne Schmalle were married in October 1970. During the marriage, Elmer Schmalle served in the United States Air Force, and Bettianne Schmalle worked at several jobs, including one with Security Pacific National Bank beginning in 1984. In 1991, the parties divorced in California under a stipulated agreement. When the divorce decree was entered, the parties had two minor children, one born in 1974 and the other in 1979. The decree awarded Bettianne Schmalle custody of the children, ordered Elmer Schmalle to pay $280 per month per child for child support, reserved jurisdiction over spousal support, allocated the parties' marital debt, and divided their marital property.

¶3 In August 1993, the older child was no longer a minor, and the younger child began living with Elmer Schmalle in North Dakota. In 1995, the California decree was filed in North Dakota under N.D.C.C. ch. 28-20.1, the Uniform Enforcement of Foreign Judgments Act. In March 1995, Elmer Schmalle formally moved for custody of the younger child and sought child support from Bettianne Schmalle. A first amended judgment was entered awarding Elmer Schmalle custody and ordering Bettianne Schmalle to pay $330 per month in child support, beginning April 1, 1995.

¶4 In October 1995, Elmer Schmalle moved to modify the first amended judgment, seeking to terminate the court's spousal support jurisdiction and to hold Bettianne Schmalle in contempt for failure to pay three credit card debts assigned to her by the initial divorce decree. Bettianne Schmalle responded North Dakota courts did not have jurisdiction over spousal support. She alternatively sought spousal support if the trial court ruled it had jurisdiction. After a February 1996 hearing, the court ordered Elmer Schmalle to pay $500 per month spousal support for four years, beginning March 1, 1996. The court ruled Bettianne Schmalle's bankruptcy rendered inoperable a provision for indemnification of credit card debt assigned to her in the initial divorce decree. A second amended judgment was filed on June 12, 1996. No notice of entry of this judgment was served on Elmer Schmalle until February 1997.

¶5 Meanwhile, in December 1996, Bettianne Schmalle moved under N.D.R.Civ.P. 60 to clarify the original division of Elmer Schmalle's military pension. Elmer Schmalle resisted her motion and sought reconsideration of spousal and child support. In February 1997, the court heard those motions. After delay caused by the 1997 flood, the trial court, in January 1998, ruled on the motion to clarify the division of the parties' retirement benefits; terminated Bettianne Schmalle's child support obligation; and eliminated Elmer Schmalle's spousal support obligation, effective February 1 1998. A third amended judgment was entered in February 1998. Elmer Schmalle appealed from the second and the third amended judgments, and Bettianne Schmalle cross-appealed from the third amended judgment.

¶6 The trial court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. §§ 27-05-06 and 28-20.1-02. The appeals are timely under N.D.R.App.P. 4(a). ¹ This Court has jurisdiction under N.D. Const. art. VI, §§ 2, 6, and N.D.C.C. § 28-27-01.

II

¶7 Elmer Schmalle contends the trial court erred in ordering him to pay Bettianne Schmalle spousal support in the June 1996 second amended judgment.

A

¶8 Elmer Schmalle argues the court's award of spousal support violated due process. He contends Bettianne Schmalle did not request modification of spousal support in a motion, a notice of hearing, a responsive pleading, or the "conclusion-summary of requested relief" part of her responsive brief. He thus asserts he did not have notice she was seeking modification of spousal support.

¶9 Due process requires a party receive adequate notice and a fair opportunity to be heard. See Shipley v. Shipley, 509 N.W.2d 49, 55 (N.D.1993); Gerhardt v. Robinson, 449 N.W.2d 802, 804 (N.D.1989). In Shipley, at 55, we held a trial court's sua sponte reduction of spousal support during a contempt proceeding failed to provide the spousal support recipient with adequate notice and an opportunity to marshal evidence on the issue. In Gerhardt, at 804, this Court held a trial court's sua sponte reduction of child support during an enforcement proceeding failed to provide the obligee with adequate notice and an opportunity to marshal evidence on the issue. In both Shipley and Gerhardt, issues about modifying the respective support obligations were not raised until the contempt and the enforcement hearings.

¶10 Here, in October 1995, Elmer Schmalle moved to modify the first amended judgment to "terminate the alimony jurisdiction of the Court effective 1 November 1995." His motion raised modification of spousal support as an issue. In the body of Bettianne Schmalle's responsive brief, she argued the trial court did not have jurisdiction to modify the California court's reservation of spousal support jurisdiction. She alternatively argued "should the Court find that it does maintain jurisdiction, the support award should not be terminated, but rather, there should be an amount of spousal maintenance established." Bettianne Schmalle's responsive brief provided Elmer Schmalle with adequate notice she was seeking spousal support, and provided him with a fair opportunity to marshal evidence and be heard on the issue. We therefore reject his claim the trial court's June 1996 modification of spousal support denied him due process.

B

¶11 Elmer Schmalle contends the trial court clearly erred in modifying spousal support in the second amended judgment without a material change in circumstances. He contends the court's rationale for modifying spousal support was predicated on the prior change in custody of the younger child and on Bettianne Schmalle's resulting child support obligation. He argues neither that rationale nor any of the other factors cited by the court constitute a material change in circumstances not contemplated by the parties when the initial decree, or the first amended judgment, was entered.

¶12 A trial court's spousal support decision is treated as a finding of fact and will not be set aside on appeal unless clearly erroneous. Wheeler v. Wheeler, 419 N.W.2d 923, 925 (N.D.1988). To modify spousal support, a material change in circumstances must be shown; slight or moderate changes in the parties' relative incomes are not necessarily material. Id. A material change means something which substantially affects the parties' financial abilities or needs, and the reasons for changes in income must be examined as well as the extent the changes were contemplated by the parties at the time of the initial decree or a subsequent modification. Wheeler v. Wheeler, 548 N.W.2d 27, 31 (N.D.1996). A party claiming a material change in circumstances bears the burden of proof. Cermak v. Cermak, 1997 ND 187, p 19, 569 N.W.2d 280.

¶13 In awarding Bettianne Schmalle spousal support, the trial court reasoned she had moved with Elmer Schmalle many times while he was in the military, creating an unstable job situation for her; she did not have a high school diploma, which held her back from promotions; she had some health problems; she was now required to pay, rather than receive, child support because of the custody change; her living expenses in California now exceeded her income by over $300 per month; her gross income was about $23,700 per year; Elmer Schmalle's total taxable and nontaxable income was $44,932 per year; and he had a bachelor's degree and was an E-8 stationed at the Grand Forks Air Force Base. Based on those factors and the disparity in education and work history, the court awarded Bettianne Schmalle $500 per month in spousal support for four years, beginning March 1, 1996.

¶14 The trial court did not specifically recite a finding of a material change in circumstances. Except for the circumstances arising from increased expenses for the change in custody, the factors cited by the court existed or were reasonably contemplated by the parties when the initial decree was entered. Those factors do not justify a modification of spousal support. See Wheeler, 548 N.W.2d at 31 (stating in order to modify spousal support, there must be a material change in circumstances not contemplated when original decree entered). The court cited the change in custody and resulting child support obligation as the principle reason for awarding Bettianne Schmalle spousal support. The court recognized Bettianne Schmalle's expenses then exceeded her income by over $300 per month, in part because her rent and utilities in California were high. Elmer Schmalle argues, as a matter of policy, the change in custody and resulting child support obligation are not a material change in circumstances justifying modification of spousal support. We agree.

¶15 Section 14-09-09.7(3), N.D.C.C., creates a rebuttable presumption the amount of child support required...