Tschider v. Tschider

• Decision Date: 18 April 2019
• Docket Number: No. 20180104,20180104
• Citation: 926 N.W.2d 126
• Parties: Melanie J. TSCHIDER, a/k/a Su Lin Tschider, Plaintiff, Appellee, and Cross-Appellant v. Stacy L. TSCHIDER, Defendant, Appellant, and Cross-Appellee and State of North Dakota, Statutory Real Party in Interest
• Court: North Dakota Supreme Court

926 N.W.2d 126

Melanie J. TSCHIDER, a/k/a Su Lin Tschider, Plaintiff, Appellee, and Cross-Appellant

v.Stacy L. TSCHIDER, Defendant, Appellant, and Cross-AppelleeandState of North Dakota, Statutory Real Party in Interest

No. 20180104

Supreme Court of North Dakota.

Filed April 18, 2019

Douglas W. Murch (argued) and Robert J. Schultz (on brief), Fargo, ND, for plaintiff, appellee, and cross-appellant.

Steven T. Ottmar (argued) and Joanne H. Ottmar (appeared), Jamestown, ND, for defendant, appellant, and cross-appellee.

McEvers, Justice.

[¶1] Stacy Tschider appeals and Melanie Tschider, also known as Su Lin Tschider, cross-appeals from a judgment that granted joint parenting responsibility of their minor child and awarded child support, distributed the parties’ property and debts, and awarded spousal support to Melanie Tschider. We conclude the district court erred in holding a provision of the parties’ prenuptial agreement was unconscionable and unenforceable and erred in awarding spousal support. We, however, conclude the court’s property distribution was not clearly erroneous and the court did not abuse its discretion in denying her request for attorney fees. We affirm in part, reverse in part, and remand for further proceedings.

I

[¶2] Stacy Tschider and Melanie Tschider were married in December 2002 and have one minor child born in 2004. Shortly before their marriage, both parties signed a prenuptial agreement in December 2002. The parties began dating in 1995 and began living together in 1996. At the time of their marriage, Melanie Tschider had a net worth of less than $50,000 and annual income of $55,548. Stacy Tschider had a net worth of $1,783,500 and an annual income of about $245,000. He had ownership interests in six businesses with a book value of about $2.9 million and five parcels of investment real estate, resulting in substantial annual income. In August 2015, Melanie Tschider commenced this divorce action.

[¶3] The district court bifurcated the issues in this case for trial. In November 2016 the court held a trial on residential responsibility for the child and on the validity of the parties’ prenuptial agreement. After the first trial, the court awarded joint residential responsibility and determined an amount for child support. The court also held the prenuptial agreement was valid, except for a provision addressing spousal support. Specifically, the court held that the agreement’s paragraph 16 was unconscionable and unenforceable. This paragraph states:

SUPPLEMENTATION OF INCOME IN EVENT OF CHILDREN

16. In the event children are born of the marriage, and in the event Su-Lin and Stacy decide or determine it is in the best interests that Su-Lin reduce or terminate her employment so as to allow Su-Lin to spend more time with the children, and in the event the parties divorce, then, and in that event, it is mutually agreed that Stacy shall supplement Su-Lin’s income as provided herein. The supplementation of income as described above shall be in a sum equal to the difference between Su-Lin’s monthly income at the time of marriage or at the time Su-Lin reduces or terminates her employment for purposes of spending more time with the children, whichever is greater, and the monthly income earned by Su-Lin following the divorce. It is acknowledged and agreed that the supplementation amount may vary from month-to-month depending upon Su-Lin’s actual income. It is mutually agreed that Stacy’s obligation to supplement Su-Lin’s income shall terminate two (2) years from the date Stacy makes his first supplemental income payment to Su-Lin pursuant to this agreement; it being the intention of the parties that Stacy’s obligation to supplement Su-Lin’s income shall be limited to a total of twenty-four (24) monthly payments.

It is acknowledged and agreed that the foregoing income supplementation payments shall be deemed temporary alimony and not child support payments.

[¶4] In June 2017, the district court held a second trial on the remaining issues. At the second trial, the parties presented further evidence regarding child support, division of assets and liabilities, enforcement of the prenuptial agreement, spousal support, and attorney fees.

[¶5] In January 2018, the district court issued its further findings of fact and order for judgment that divided the parties’ remaining joint property, ordered Stacy Tschider to pay child support of $2,878 a month beginning June 2017, and ordered him to pay spousal support of $6,500 per month for five years beginning on September 1, 2015, through August 1, 2020, and then $4,000 per month for two additional years until August 1, 2022. Final judgment was entered in February 2018.

II

[¶6] Stacy Tschider argues the district court erred in deciding the parties’ prenuptial agreement’s paragraph 16 is unconscionable and unenforceable. He further argues that, if the provision is invalid, the court erred when it set the retroactive commencement date, the amount, and the duration of the spousal support award. In her cross-appeal, Melanie Tschider argues the parties’ entire premarital agreement is invalid and the court’s spousal support award is clearly erroneous.

[¶7] The Uniform Premarital Agreement Act, N.D.C.C. ch. 14-03.1, allows parties to contract to the disposition of their property on divorce. At the time of the parties’ 2002 prenuptial agreement, N.D.C.C. § 14-03.1-03(1)(a) and (c) provided that parties may agree to "[t]he rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located" and to "[t]he disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event." Under N.D.C.C. § 14-03.1-03(1)(d), the parties may also agree to "[t]he modification or elimination of spousal support." Section 14-03.1-07 (2002), N.D.C.C., states:

Notwithstanding the other provisions of this chapter, if a court finds that the enforcement of a premarital agreement would be clearly unconscionable, the court may refuse to enforce the agreement, enforce the remainder of the agreement without the unconscionable provisions, or limit the application of an unconscionable provision to avoid an unconscionable result.

[¶8] We have explained that under the Uniform Premarital Agreement Act, a premarital agreement may be deemed unenforceable if it is unconscionable "at the time of execution, at the time of separation or marital dissolution, or at the time of enforcement." Sailer v. Sailer , 2009 ND 73, ¶ 22, 764 N.W.2d 445 (citing N.D.C.C. § 14-03.1-06(1)(b) ; N.D.C.C. § 14-03.1-06(2) ; N.D.C.C. § 14-03.1-07 ; Estate of Lutz , 2000 ND 226, ¶ 25, 620 N.W.2d 589 ). Whether a premarital agreement is unconscionable presents a question of law; however, "it turns on factual findings related to the relative property values, the parties’ financial circumstances, and their ongoing need." Sailer , at ¶ 21 (quoting Binek v. Binek , 2004 ND 5, ¶ 10, 673 N.W.2d 594 ); see also Estate of Lutz , 1997 ND 82, ¶ 44, 563 N.W.2d 90. "The substantive enforceability of a premarital agreement is a matter of law to be decided by the court." Pember v. Shapiro , 2011 ND 31, ¶ 39, 794 N.W.2d 435 (quoting Sailer , at ¶ 21 ). "A premarital agreement is a contract, and its interpretation is a question of law, which this Court reviews de novo on the entire record." Brummund v. Brummund , 2010 ND 119, ¶ 6, 785 N.W.2d 182 (quoting Tweeten v. Tweeten , 2009 ND 164, ¶ 11, 772 N.W.2d 595 ).

[¶9] We have said that "when trial courts discuss whether a premarital agreement is ‘clearly unconscionable’ under N.D.C.C. § 14-03.1-07, the analysis requires complete factual findings about the relative property values and the other resources and foreseeable needs of the spouse asserting the premarital agreement is unconscionable." Sailer , 2009 ND 73, ¶ 26, 764 N.W.2d 445 ; see also Estate of Lutz , 1997 ND 82, ¶ 45, 563 N.W.2d 90. Here, the district court made factual findings explaining and supporting its legal conclusion that paragraph 16 is unconscionable. The court, however, declined to declare the entire prenuptial agreement unconscionable from its inception on the basis of its findings surrounding the agreement’s execution shortly before their marriage. Rather, the court made findings about the "minimal amount" of spousal support allowed to support its conclusion that the premarital agreement’s paragraph 16 is unconscionable.

[¶10] The district court found Stacy Tschider had an average income of over $800,000, while Melanie Tschider stayed home with the minor child and earned "a fraction" of that amount. The court found his income since 2009 had varied from $107,000 in 2012 to over $2,000,000 in 2014. The court found that although Melanie Tschider has accounting skills, she had been out of the work force for several years and would need to refresh her accounting skills and familiarity with new regulations before she could become fully employable. The court also found her income from the closely-held companies was not certain to continue after the divorce was final. The court therefore found Melanie Tschider was in need of rehabilitative spousal support and Stacy Tschider was capable of paying rehabilitative support. The court found the amount of reasonable support for her to reenter the workplace was $6,500 per month for five years beginning on September 1, 2015, through August 1, 2020, and then $4,000 per month for an additional two years until August 1, 2022.

[¶11] Stacy Tschider argues the district court’s finding of unconscionability is inapposite with its other findings and urges this Court to hold paragraph 16 is enforceable. He acknowledges no bright-line rule exists as to what is unconscionable regarding a waiver of spousal support in a premarital agreement but asserts Melanie Tschider has received great economic benefit from the marriage. He relies on the court’s findings that she is leaving the marriage with nearly $3...