Koffler v. Koffler , 2020 ND 184 ( 2020 )

Filed 08/27/20 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2020 ND 184Brandi Lynn Koffler, Plaintiff and Appellant
v.
Beau Jerome Koffler, Defendant and Appellee
No. 20190378
Appeal from the District Court of Cass County, East Central Judicial District,
the Honorable Tristan J. Van de Streek, Judge.
REVERSED AND REMANDED.
Opinion of the Court by Tufte, Justice.
Jason W. McLean, Fargo, N.D., for plaintiff and appellant; submitted on brief.
Jerilynn B. Adams, Fargo, N.D., for defendant and appellee; submitted on
brief.
Koffler v. Koffler
No. 20190378
Tufte, Justice.
[¶1] Brandi Koffler appeals from a second amended judgment modifying
Beau Koffler’s child support obligation. She argues the district court erred
by finding there was a material change in circumstances warranting a
modification of child support. We reverse and remand, concluding the court’s
finding of a material change in circumstances warranting modification of the
child support obligation is clearly erroneous.
I
[¶2] In January 2019, Brandi and Beau Koffler were divorced. Brandi Koffler
was awarded primary residential responsibility for the parties’ two minor
children. The parties stipulated Beau Koffler would pay $3,007 per month in
child support. The district court adopted the parties’ stipulation. A judgment
consistent with the stipulation was entered. In May 2019, the judgment was
amended to modify the parenting plan, but it did not modify the child support
obligation.
[¶3] In July 2019, Beau Koffler moved to modify his child support obligation,
arguing there was a material change in circumstances warranting a
modification because his employment at Precision Plumbing was terminated
and his income was significantly reduced. He claimed his child support
obligation was based on a net monthly income of approximately $11,800 and
his net monthly income had been reduced to $4,250 after the termination of his
employment. He requested his child support obligation be reduced to $1,216.
[¶4] Brandi Koffler opposed the motion, arguing the termination of Beau
Koffler’s employment did not constitute a material change in circumstances
because the change was self-induced. She alternatively argued the change in
employment was a voluntary change resulting in a reduction in income and
Beau Koffler’s income should be imputed under the child support guidelines.
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[¶5] After a hearing, the district court granted Beau Koffler’s motion to
modify his child support obligation. The court found Beau Koffler lost his job
as a result of performance issues, the termination of his employment was a
material change in circumstances, the termination of employment was not self-
induced, and the material change justified modifying the child support
obligation. The court found Beau Koffler’s current net monthly income is
$4,250, and ordered his child support obligation be reduced to $1,216 per
month for two children. A second amended judgment was entered.
II
[¶6] Brandi Koffler argues the district court erred by finding a material
change of circumstances occurred. She claims the termination of Beau Koffler’s
employment is not a material change in circumstances because it was a self-
induced change. She contends the termination was known, foreseen, and
contemplated because his employment was terminated for work performance
issues, the problems were present throughout 2018, and he was aware there
would be consequences if he did not improve his work performance.
[¶7] “Child support determinations involve questions of law which are subject
to the de novo standard of review, findings of fact which are subject to the
clearly erroneous standard of review, and may, in some limited areas, be
matters of discretion subject to the abuse of discretion standard of review.”
Solwey v. Solwey, 2018 ND 82, ¶ 9, 908 N.W.2d 690 (quoting Jacobs-Raak v.
Raak, 2016 ND 240, ¶ 26, 888 N.W.2d 770). The district court’s decision on
whether a material change in circumstances has occurred is a finding of fact,
which will not be reversed on appeal unless it is clearly erroneous. Gunia v.
Gunia, 2009 ND 32, ¶ 10, 763 N.W.2d 455. 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, on the entire record, this Court is left with a definite and firm
conviction a mistake has been made. Id. at ¶ 9.
[¶8] The divorce judgment setting Beau Koffler’s child support obligation was
filed on January 11, 2019. Beau Koffler moved to modify his child support
obligation on July 29, 2019. When a party moves to modify a child support
obligation within one year of entry of the obligation, the moving party must
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show a material change of circumstances before the court may modify the
obligation. N.D.C.C. § 14-09-08.4(4). The party must also present sufficient
evidence to justify modification under the child support guidelines. Harger v.
Harger, 2002 ND 76, ¶ 8, 644 N.W.2d 182. Beau Koffler had the burden to
prove a material change of circumstances existed and to present sufficient
evidence justifying a modification under the guidelines.
[¶9] A material change is one that is not contemplated or foreseen at the time
of the prior hearing. Gunia, 2009 ND 32, ¶ 10, 763 N.W.2d 455; Schmidt v.
Reamann, 523 N.W.2d 70, 72 (N.D. 1994). Evidence of a change in financial
circumstances is a significant factor in deciding whether a material change has
occurred, but there must also be inquiry into the cause of the change. Dunnuck
v. Dunnuck, 2006 ND 247, ¶ 14, 724 N.W.2d 124. The type of change in
circumstances governs the inquiry, and we have explained:
If it involves spousal or child support, or both, the basic inquiry is:
Has a substantial change in the financial ability of the payer
occurred? If yes, what was or is the underlying cause? Was it self-
induced or is it the result of economic conditions, or has the payer
become physically or mentally disabled, or did the payer incur new
or additional financial obligations and, if so, were they voluntarily
assumed or were they imposed by other factors?
Muehler v. Muehler, 333 N.W.2d 432, 434 (N.D. 1983). “Generally, a self-
induced change in circumstances does not constitute valid grounds for a
modification.” Id. “The guidelines do not allow ‘an obligor with an established
earnings history to drastically reduce his income, and thereby his ability to pay
child support, upon a whim,’ or ‘voluntarily, without good reason.’” Mahoney v.
Mahoney, 538 N.W.2d 189, 192 (N.D. 1995) (quoting Olson v. Olson, 520
N.W.2d 572, 574 (N.D. 1994)). See also N.D. Admin. Code § 75-02-04.1-07
(imputing income based on earning capacity).
[¶10] The district court granted Beau Koffler’s motion to modify his child
support obligation, finding there was a material change in circumstances
which warranted a modification. The court found Beau Koffler’s income was
approximately $12,500 per month when the original judgment was entered,
and his income had decreased considerably since that time because he lost his
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job as a result of performance issues. The court found Beau established that
his income is now $62,400 per year and that his child support obligation does
not reflect his current circumstances. The court found:
Now that a material change in circumstances has been
established, the question becomes whether a reduction in child
support is warranted. Beau cannot meet his current obligation.
Although Beau is responsible for getting fired, that change in
income is not self-induced. There is no evidence that Beau wanted
to get fired or sabotaged his work in order to get fired. Rather
Beau had a lot of problems at work that eventually led to his
termination. After he was terminated Beau obtained another job.
This is not a case where Beau has quit working to frustrate his
support obligations.
Brandi argues that Beau’s firing was self-induced and his
obligation should not be reduced. This argument is unpersuasive.
In Schulte v. Kramer, 2012 ND 163, 820 N.W.2d 318, the obligor
was fired for stealing from his employer. Beau was fired for a host
of performance issues and his firing cannot be reduced to one
discrete incident. These facts are readily distinguishable from the
present case. As a result, the Court concludes that a reduction in
child support obligation is warranted.
The court found there was a material change in circumstances and Beau
Koffler’s income is now $62,400 per year, and the court ordered Beau Koffler’s
child support obligation be reduced to $1,216 per month.
[¶11] This Court considered whether a material change of circumstances
existed under similar facts in Schulte v. Kramer, 2012 ND 163, 820 N.W.2d
318. Although the issue in Schulte was the existence of a material change in
circumstances for purposes of modification of spousal support, our analysis of
whether a material change existed in that case is relevant to the issues raised
in this appeal.
[¶12] In Schulte, a spousal support obligor moved to modify his spousal
support obligation after he was fired from his employment for removing a
discarded antenna from the employer’s garbage. Schulte, 2012 ND 163, ¶¶ 4-
7, 820 N.W.2d 318. The district court granted the obligor’s motion, finding the
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obligor’s annual income had decreased from $60,000 to $30,000, the significant
reduction in income constituted a material change in circumstances, and the
parties had not contemplated the change in income at the time of the divorce
judgment. Id. at ¶ 16. The district court also found the obligor’s actions led to
his termination and reduction in income, but the reduction in income was not
voluntary or self-induced or made in bad faith and the employer’s response was
not foreseeable. Id. at ¶ 18.
[¶13] This Court reversed the district court’s termination of the spousal
support obligation. Schulte, 2012 ND 163, ¶ 28, 820 N.W.2d 318. We held the
district court’s finding that a material change in circumstances existed because
the obligor’s income was significantly reduced after his employment was
terminated was not clearly erroneous. Id. at ¶ 17. But we further held the
district court applied an erroneous view of the law by finding the material
change warranted modification of the support obligation. Id. We said the
district court’s findings that the obligor’s actions led to his termination and
that the reduction in income was not voluntary or self-induced were directly
conflicting. Id. at ¶ 18. We explained the district court erred when it required
the employer’s response to the obligor’s theft be foreseeable by the obligor and
when it found the reduction in income was not voluntary or self-induced
because of the unforeseeable nature of the firing. Id. at ¶ 19. This Court held,
“Under our caselaw, once the trial court found [the obligor’s] actions led to his
termination, it essentially determined the reduction in income was self-
induced, thereby triggering the necessity of further inquiry into whether a
substantial showing of good faith or cause could be established to justify
modification regardless of the self-induced conduct.” Id. at ¶ 20. This Court
held the evidence and case law supported the obligor’s voluntary and knowing
conduct being the cause of his reduction in income, placing him in a less
financially secure position, and the district court applied an erroneous view of
the law when it determined the material change justified a modification of
support. Id. at ¶¶ 21, 27.
[¶14] Here, the district court found Beau Koffler was responsible for losing his
job because of performance issues, but it rejected Brandi Koffler’s argument
that the firing was self-induced. The court said this case is different from
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Schulte because Beau Koffler was fired for a host of performance issues that
cannot be reduced to one discrete incident such as stealing from his employer.
Whether the conduct that led to termination was one voluntary act or multiple
voluntary acts is not relevant; Beau Koffler’s actions led to the termination of
his employment.
[¶15] Beau Koffler had been employed by Precision Plumbing since 2004 and
had previously earned substantial performance bonuses, including a
performance bonus in 2016 which resulted in total earnings of $298,150.
Evidence established Beau Koffler’s employment was terminated on the basis
of his work performance, including: “Attendance issues with scheduled
meetings and workdays, incompletion [or] follow through on Precision
Plumbing work, general contractors’ refusal to work with Beau due to his
reliability on projects, and employee morale in the office and job site were
negatively impacted.” Testimony from a Precision Plumbing executive
established Beau Koffler was late or failed to show up to meetings, there were
issues with the timeliness of his completion of projects, and his boss spoke to
him on numerous occasions about the problems with his performance.
Evidence exists that Beau Koffler had performance issues throughout 2018,
and there were discussions about his employment status, opportunities to
improve, and the consequences for failure to improve. The reasons given for
Beau Koffler’s termination were all within his control, and the evidence
supports the district court’s finding that Beau Koffler is responsible for the
termination of his employment.
[¶16] The district court’s finding that Beau Koffler was responsible for the
termination of his employment directly conflicts with its finding that the
termination was not self-induced. Beau Koffler’s knowing and voluntary
conduct caused his reduction in income. Once the court found Beau Koffler’s
actions led to the termination of his employment, the court essentially
determined the reduction in income was self-induced.
[¶17] We conclude the district court misapplied the law by finding Beau
Koffler’s reduction in income, which he was responsible for, was a material
change warranting reduction of his child support obligation. Under a proper
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application of the law there is no material change in circumstances warranting
modification. We reverse the district court’s decision and remand for the court
to reinstate the prior child support obligation.
III
[¶18] We have considered the remaining issues and arguments and conclude
they are either unnecessary to our decision or are without merit. We reverse
the second amended judgment and remand.
[¶19] Jerod E. Tufte
Daniel J. Crothers
Lisa Fair McEvers
Gerald W. VandeWalle
Jon J. Jensen, C.J.
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