Lawrence F. Lefebvre v. Linda R. Lefebvre ( 2021 )

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
February 23, 2021
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10 and
RULE 809.62.
Appeal No. 2019AP2126 Cir. Ct. No. 1995FA955652
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT I
IN RE THE MARRIAGE OF:
LAWRENCE F. LEFEBVRE,
PETITIONER-APPELLANT,
V.
LINDA R. LEFEBVRE,
RESPONDENT-RESPONDENT.
APPEAL from an order of the circuit court for Milwaukee County:
JANE V. CARROLL, Judge. Affirmed in part, reversed in part, and cause
remanded for further proceedings.
Before Brash, P.J., Donald and White, JJ.
Per curiam opinions may not be cited in any court of this state as precedent
or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2019AP2126
¶1 PER CURIAM. Lawrence F. Lefebvre appeals from an order of the
trial court modifying the maintenance he is required to pay to his former wife,
Linda R. Lefebvre, including the imposition of retroactive arrearages in the amount
of $78,200. Lawrence argues that the trial court erroneously exercised its discretion
in calculating the modification. Lawrence also appeals the court’s finding that he
was in contempt of court for failing to pay life insurance premiums in accordance
with their marital settlement agreement (MSA), arguing that the evidence is
insufficient to support that finding.
¶2 We conclude that the court failed to consider certain relevant factors
in modifying Lawrence’s maintenance payments, and thus did erroneously exercise
its discretion in that regard. We therefore reverse those portions of the trial court’s
order regarding the amount of maintenance owed by Lawrence, including the related
arrearages, and remand this matter for further proceedings consistent with this
opinion. However, we affirm the trial court’s order finding Lawrence in contempt
for failing to pay life insurance premiums.
BACKGROUND
¶3 The parties in this case were divorced on January 30, 1996, after
almost thirty years of marriage. Both were represented by counsel during the
divorce proceedings. At the time the divorce was finalized, they executed an MSA
which provided, among other things, for the payment of maintenance by Lawrence
to Linda, based on a percentage of his gross earned income. The maintenance
payments were to continue for an indefinite period, but would terminate upon the
death of either party or the remarriage of Linda. Furthermore, the retirement of
Lawrence, or Linda living in a marriage-like situation, would be considered a
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“change in circumstance” triggering Lawrence’s right to bring a motion to modify
the maintenance order.
¶4 Also included in the MSA, as relevant to this appeal, was a provision
for property division involving four rental properties in Milwaukee owned by
Lawrence and Linda at the time of their divorce. The MSA provided that they were
to split the income and expenses relating to these rental properties until December
2004, at which time Linda conveyed her interest in the properties to Lawrence.
From that time forward, Lawrence was entitled to all of the income generated by
those properties.
¶5 In November 2015, Linda filed an order to show cause to pursue
contempt proceedings against Lawrence for failure to pay maintenance. In that
order, Linda stated that according to the MSA, Lawrence was to pay her 50% of his
gross earned income. Linda alleged that since December 1998, Lawrence had
deliberately understated his gross earned income, and further, that he had not made
any maintenance payments since 2011. Additionally, Linda asserted that she had
paid bills that Lawrence was obligated to pay under the MSA, including life
insurance premium payments, for which she was seeking reimbursement.
¶6 Shortly after Linda filed the order to show cause, Lawrence filed a
motion to terminate maintenance. In an accompanying affidavit, Lawrence stated
that he had retired from his employment with Steen-Macek, a paper distributor, in
2001. Since then, he had continued to pay Linda maintenance “as [he] could,” often
paying more than 50% of “any income [he] had,” although he unilaterally stopped
making maintenance payments beginning in 2011. He explained that the only
income he currently has is social security and some income from managing rental
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properties. He also noted that he had recently filed bankruptcy. He therefore was
seeking to terminate his maintenance obligation under the MSA.
¶7 The matter first went before a family court commissioner, who
determined that Lawrence owed Linda $2,000/month in maintenance, based on all
his current sources of income. However, Lawrence timely filed a motion for the
trial court to conduct a de novo review of the court commissioner’s order.1 At a
pretrial conference on the matter, the parties agreed that a determination of the
definition of “[gross] earned income” under the MSA was necessary to proceed, and
elected to pursue this issue through motions for summary judgment.
¶8 In Lawrence’s motion for partial summary judgment on this issue, he
contended that the definition of gross earned income represents income earned from
working a job and does not include rents, capital gains, social security benefits, or
income from private pensions and annuities. Linda also filed a motion for partial
summary judgment, arguing that gross earned income should include all of the
income Lawrence declared on his income tax returns, including the rents he collects
from his investment properties and the fees he receives from managing rental
properties for others. Furthermore, Linda asserted that because gross earned income
was not defined in the MSA, and the parties had differing definitions which were
both reasonable, the term was ambiguous. She thus urged the court to look to
extrinsic evidence—specifically, Lawrence’s tax returns and the varying amounts
of the maintenance payments he had paid over the years—to make a determination
of what the parties believed the term meant. Based on her definition and
1
This matter was initially assigned to the Honorable Kevin E. Martens, who heard the
cross motions for partial summary judgment. The Honorable Jane V. Carroll presided over the
subsequent court trial and issued the order that is the subject of this appeal. We refer to them both
as the trial court.
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No. 2019AP2126
calculations, Linda contended that Lawrence was in arrears for maintenance in an
amount over $220,000.
¶9 After a hearing on both parties’ motions, conducted in February 2017,
the trial court granted Lawrence’s motion and denied Linda’s motion. The trial
court agreed with Lawrence’s definition of “gross earned income,” based on the
definition in Black’s Law Dictionary and the “common sense” meaning of the term.
Simply put, he found that gross earned income meant “the money that a person earns
from working at a job,” and that was “the obligation and the agreement the parties
have for the purpose of maintenance” under the MSA. Additionally, the trial court
specifically noted that with regard to rental income—“at least up till that … 2004
date” when Linda conveyed her interest in their rental properties to Lawrence—the
rental income from those properties “is something different than the gross earned
income” referenced in the MSA. However, after a request for clarification by Linda
regarding whether Lawrence’s job as a property manager “collecting rents” was
included in the court’s definition, the court stated that its definition would
“encompass anything that constitutes employment income … not employment in
the sense you have an employer. It’s income through work, self-employment or
something else.”
¶10 The parties then agreed to utilize the services of a financial expert
who, using the definition determined by the court, would calculate the amount of
maintenance owed by Lawrence, if any. The financial expert calculated that
Lawrence had overpaid maintenance in the range of $87,374-$93,822. Linda
contested this calculation, however, stating that it was inaccurate because it did not
include any rents that Lawrence had received as income. Linda asserted that this
rental income should be included as part of Lawrence’s gross earned income in
calculating his maintenance obligations based on the trial court’s clarification that
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No. 2019AP2126
the term included income from self-employment. Linda explained that she believed
this to be a “viable issue” for determination at the impending court trial on the
matter.
¶11 That court trial was held in May 2019. Both Lawrence and Linda
testified, as well as the financial expert. Ultimately, the trial court found that
Lawrence was in contempt for failing to make the insurance premium payments,
and ordered that he pay Linda $21,200.76 plus reasonable attorney’s fees.
¶12 Additionally, while the trial court denied Linda’s motion for contempt
based on Lawrence’s failure to pay maintenance, it found that there was “no basis
in fact or law to terminate maintenance at this time.” Furthermore, noting the earlier
partial summary judgment ruling2 that the definition of gross earned income in the
MSA “contemplated money earned from employment,” the court found that
“Lawrence is still working full time managing his own properties,” and that he
could, if he so chose, continue to manage rental properties for others as he did from
2002-2006.
¶13 Therefore, in calculating Lawrence’s income for purposes of
maintenance, the trial court imputed a range for the rental income from the
investment properties currently owned by Lawrence, based on the amounts he had
claimed on his taxes from 1998 through 2018, with a “significant allowance” for
2
We note that in the trial court’s decision, it is incorrectly stated that Linda’s motion for
partial summary judgment was granted. On the contrary, the trial court specifically stated that it
was granting Lawrence’s motion for partial summary judgment and denying Linda’s motion.
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No. 2019AP2126
expenses.3 The trial court also imputed one-half of the average of the management
fees that Lawrence had earned from 2002-2006, the time frame during which he had
claimed such fees as income. Based on these calculations, the court determined that
an award for maintenance in the amount of $1,700/month was fair and equitable.4
It further determined that this maintenance award commenced on December 1,
2015—the first month after Linda had filed her order to show cause—and thus
Lawrence was forty-six months in arrears, resulting in an amount owed to Linda of
$78,200.
¶14 This appeal follows.
DISCUSSION
¶15 Lawrence’s arguments on appeal primarily challenge the trial court’s
exercise of discretion in modifying his maintenance payments. The trial court has
the authority to modify a maintenance award under WIS. STAT. § 767.59(1c)(a)
(2017-18)5 upon a “petition, motion, or order to show cause of either of the
parties[.]” See id. Such a modification “involves the exercise of discretion.”
Poindexter v. Poindexter, 142 Wis. 2d 517, 531, 419 N.W.2d 223 (1988). “[A]
discretionary determination must be the product of a rational mental process by
3
In making its determinations about imputing income, the trial court did not include
Lawrence’s income from social security, his pension, or the capital gains he realized though the
sale of investment properties.
4
In ordering a fixed amount for the maintenance payments, as opposed to a percentage of
Lawrence’s income as provided in the MSA, the trial court noted that it did not believe a
“percentage award of maintenance is fair and equitable,” citing Poindexter v. Poindexter, 142
Wis. 2d 517, 530-31, 419 N.W.2d 223 (1988) (“the use of a percentage maintenance award should
only be considered by a court when such an award is responsive to the factors enumerated in
[§] 767.26 … and when very unusual circumstances of the case warrant a deviation from a fixed
sum award”).
5
All references to the Wisconsin Statutes are to the 2017-18 version unless otherwise
noted.
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No. 2019AP2126
which the facts of record and law relied upon are stated and are considered together
for the purpose of achieving a reasoned and reasonable determination.” Hartung v.
Hartung, 102 Wis. 2d 58, 66, 306 N.W.2d 16 (1981). Conversely, the court
“engages in an erroneous exercise of discretion when it fails to consider relevant
factors, bases its award on factual errors, makes an error of law, or grants an
excessive or inadequate award.” Rohde-Giovanni v. Baumgart, 2004 WI 27, ¶18,
269 Wis. 2d 598, 676 N.W.2d 452.
¶16 Before a maintenance award can be modified, the party seeking
modification “must demonstrate that there has been a substantial change in
circumstances warranting the proposed modification.” Id., ¶30. “When modifying
maintenance awards, the [trial] court must consider the same factors governing the
original determination of maintenance[.]” Poindexter, 142 Wis. 2d at 531. These
factors “reflect and are designed to further the two primary objectives of
maintenance—‘to support the recipient spouse in accordance with the needs and
earning capacities of the parties’ and ‘to ensure a fair and equitable financial
arrangement between the parties.’” Ladwig v. Ladwig, 2010 WI App 78, ¶17, 325
Wis. 2d 497, 785 N.W.2d 664 (citation omitted). Indeed, the “correct test” for
making a modification determination is whether the result is “fair[] to both of the
parties under all of the circumstances[.]” Rohde-Giovanni, 269 Wis. 2d 598, ¶32.
¶17 As a threshold matter, we address Lawrence’s contention that Linda’s
order to show cause did not include notice that she was seeking modification of
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No. 2019AP2126
maintenance.6 Rather, Lawrence asserts that it was simply a request to find him in
contempt for failing to pay maintenance—a request that was ultimately denied.
¶18 As noted above, under WIS. STAT. § 767.59(1c)(a), the trial court has
the authority to modify a maintenance award upon the filing of an order to show
cause by either party. The order to show cause filed by Linda indicated that
Lawrence had failed to pay maintenance in the amount of “$TBD.” Linda also
alleged that Lawrence had “deliberately understated the amount of his gross earned
income” and had not paid her anything since 2011. We conclude that this was
sufficient to put Lawrence on notice that Linda was seeking a determination of the
maintenance owed her that was based on an accurate calculation of Lawrence’s
current income.
¶19 Turning to the modification determination, the trial court determined
that there had been a substantial change in circumstances that warranted
maintenance modification. Specifically, it found that Lawrence was no longer
earning W-2 income as he had been at the time of the divorce, and instead was
deriving his income from his rental properties. With that said, we also address
Lawrence’s argument that the court failed to apply the definition for gross earned
income as determined in the earlier partial summary judgment ruling.
6
This contention was included in Lawrence’s argument that the trial court erroneously
exercised its discretion in applying the modified maintenance payments retroactively—back to
December 2015, after Linda filed her order to show cause. While we agree that applying payments
retroactively is a discretionary decision, see Rohde-Giovanni v. Baumgart, 2004 WI 27, ¶17, 269
Wis. 2d 598, 676 N.W.2d 452, we disagree that the maintenance modification ordered by the court
was retroactive in nature, in that it required Lawrence to pay the modified amount from time that
Linda initiated these proceedings with the filing of her order to show cause. Indeed, it was simply
a resumption of maintenance payments that were not previously terminated. We therefore do not
discuss this argument further.
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No. 2019AP2126
¶20 As explained above, that ruling was that gross earned income under
the MSA was “the money that a person earns from working at a job,” which the trial
court clarified included income that came from “self-employment or something
else.” The ruling included a finding that Lawrence was “still working full time
managing his own properties[.]” The court noted that the financial expert had
testified at the trial that “Lawrence is self-employed as a real estate professional, for
purposes of tax reporting, given the amount of time that he spends in managing the
properties.” Additionally, Lawrence testified that he had been self-employed as a
“landlord” since 2008. In fact, he stated that was what he had been “doing for a
living” since he retired. Thus, the court’s consideration of Lawrence’s income from
his work as a self-employed landlord was in alignment with the partial summary
judgment ruling.7
¶21 In making its modification calculations, the trial court discussed both
the objectives of maintenance as well as the statutory factors that require
consideration for maintenance determinations. It noted that many of the statutory
factors had not changed in the years since the parties were divorced, such as the
long-term length of their marriage; Linda’s earning capacity, based on educational
level, work skills and experience, and the effect her responsibilities for the care of
their children over the years had on those things; and the feasibility that Linda could
7
Additionally, we note that, although not discussed by the trial court, there is no issue as
to whether the rental income imputed to Lawrence comes from the four rental properties owned
jointly by Lawrence and Linda at the time of their divorce, which were subsequently conveyed to
Lawrence in 2004. Lawrence’s financial disclosure statement, which listed the rental properties he
owned at the time of the trial, indicated that he no longer owns those four properties. Even if
Lawrence did still own those properties, we note that “investment income from assets awarded to
a spouse as part of an equal division of property pursuant to a divorce settlement generally can be
included in calculating that spouse’s income for purposes of revising a maintenance award to the
payee spouse[.]” See Hommel v. Hommel, 162 Wis. 2d 782, 792, 471 N.W.2d 1 (1991).
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No. 2019AP2126
become self-supporting at a similar standard of living as she had when she and
Lawrence were married. See WIS. STAT. § 767.56(1c).
¶22 The trial court found that without maintenance, Linda’s expenses
were greater than her income by about $2,000 per month. The court further noted
that Linda is “in poor health” and that she is fully retired and “has no ability to earn
income beyond Social Security, pension, and maintenance[.]” In contrast, the court
found that Lawrence is still “in reasonably good health,” that he “continues to earn
an income from his rental property enterprises,” and that he is remarried and his
wife “has contributed to the family income.”
¶23 However, there were other relevant factors that should have been
considered in calculating the maintenance modification. In the first place, the trial
court’s calculations considered Lawrence’s income from 1998 to the time of trial,
even though Lawrence continued to pay maintenance to Linda through 2010.
Presumably, this was based on Linda’s allegation in her order to show cause that
Lawrence had “deliberately understated the amount of his gross earned income” to
Linda from 1998 to the time she filed that order.
¶24 In fact, the record shows that between 1998 and 2010, Lawrence’s
income ranged from approximately $24,500 to over $129,000. The trial court noted
that Lawrence’s reported rental income was “widely disparate” throughout that time
frame, observing that it “varied greatly from year to year” depending on the number
of properties he owned. Although it noted that some of his claimed expenses were
“unusually high,” it did not make a finding that Lawrence had deliberately
understated his income during that time frame. Without such a finding, the fact that
Linda had already received a percentage of Lawrence’s income through 2010 was a
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No. 2019AP2126
relevant factor that should have been considered in making the modification
calculation.
¶25 We apply the same reasoning to the income from the management fees
that Lawrence earned between 2002 and 2006 which the trial court imputed to
Lawrence: Linda already received maintenance payments based on that income,
and thus that is a relevant factor that should have been considered in the
modification calculation. Furthermore, in imputing that management fee income,
the court found that while Lawrence “chooses to only manage his own properties,”
he has “the skills and experience necessary to continue to earn” management fees.
However, this fails to take into consideration that at the time of the court’s decision,
Lawrence was seventy-four years old, and thirteen years older than he was at the
time he was managing additional properties. In other words, the court’s reasoning
for imputing management income to Lawrence did not include consideration of the
relevant factor that Lawrence is now older and well beyond the standard age for
retirement.
¶26 Moreover, while the trial court noted that Lawrence is remarried and
that his wife “contributed to the family income,” it did not appear to take into
account marital property laws that may apply to Lawrence’s current wife. See WIS.
STAT. § 766.31. This is also a relevant factor that should have been considered in
the modification calculations.
¶27 Because these relevant factors were not discussed by the trial court,
we conclude that it erroneously exercised its discretion by failing to consider them
when making the maintenance modification calculations. See Rohde-Giovanni,
269 Wis. 2d 598, ¶18. Therefore, further proceedings are required such that these
factors may be taken into account in calculating a maintenance modification award.
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No. 2019AP2126
¶28 Additionally, Lawrence argues that there is insufficient evidence to
support the trial court’s finding that he was in contempt for failing to pay the
premiums on the life insurance policies. “Contempt of court” includes the
intentional “[d]isobedience” of a court order. WIS. STAT. § 785.01(1)(b). The trial
court may impose either punitive or remedial sanctions upon a finding of contempt.
WIS. STAT. § 785.02. We review the trial court’s use of its contempt power under
the erroneous exercise of discretion standard. Benn v. Benn, 230 Wis. 2d 301, 308,
602 N.W.2d 65 (Ct. App. 1999).
¶29 Lawrence testified that he had not received any bills for the life
insurance premiums, although they should have been coming to him. He further
stated that he felt that Linda could have made the premium payments out of her
maintenance payments, but that “technically” he should have made them. Based on
that testimony, the trial court found that Lawrence was aware of his requirement to
pay the insurance premiums under the MSA, and that he admitted that he had not
fulfilled this obligation. Thus, that decision properly applied the law and is
supported by the record. Therefore, the trial court did not erroneously exercise its
discretion in imposing sanctions against Lawrence for his failure to pay the
premiums. See Hartung, 102 Wis. 2d at 66.
¶30 Accordingly, we reverse those portions of the trial court’s order
relating to the maintenance modifications, and remand this matter for further
proceedings consistent with this opinion. However, we affirm that part of the order
finding Lawrence in contempt of court for failing to pay the life insurance premiums
as ordered in the MSA.
By the Court.—Order affirmed in part, reversed in part, and cause
remanded for further proceedings.
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This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.
14