Wheeler v. Wheeler

VANDE WALLE, Chief Justice.

Geraldine [“Gerridee”] Wheeler appealed from an order terminating spousal support. We reverse, concluding that the trial court’s finding of a material change in circumstances is clearly erroneous.

Gerridee and R.W. [“Bert”] Wheeler were divorced in 1984 after 35 years of marriage. The original divorce judgment incorporated the parties’ stipulated agreement, whereby Bert agreed to pay Gerridee $2,430 per month spousal support until his anticipated retirement from his law practice in 1994. If Bert retired between January 1994 and January 1996, his support obligation was to drop to $1,000 per month, and support was to terminate on January 1, 1996. If Gerridee obtained employment, support was to be reduced by an amount equal to one-third of her gross monthly income, with a maximum reduction of $430 per month.

Gerridee obtained employment which resulted in reduction of support by the $430 maximum. In 1986 Bert moved to modify the judgment to eliminate all support payments, arguing that Gerridee had achieved economic rehabilitation. The trial court reduced the support payments to $700 per month, and Gerridee appealed.

We agreed with the trial court that there had been a material change of circumstances, but remanded for reconsideration of the amount of support, taking into account the retirement needs of Gerridee. Wheeler v. Wheeler, 419 N.W.2d 923 (N.D.1988). No hearing was held on remand, because the parties executed a new agreement on spousal support. This new agreement, dated September 1,1988, provided:

“1. The plaintiff, R.W. Wheeler, commencing on the 5th day of September, 1988, shall pay to Gerridee Wheeler, for her support, maintenance and retirement, the sum of One Thousand Four Hundred and Sixty Dollars ($1,460) per month until and through September 5, 1992. Thereafter, R.W. Wheeler shall pay the sum of Five Hundred Dollars ($500) per month until his death. Should Gerridee Wheeler remarry prior to October, 1992, the support obligation under this paragraph shall reduce to Five Hundred Dollars ($500) per month.”

The judgment was amended accordingly.

Bert retired from the full-time practice of law on September 1, 1992. He continued making payments as required by the amended judgment until April 1994, when he made a partial payment. Since that time, he has made only one additional partial payment. On September 14, 1994, the Clerk of District Court mailed a notice of arrearage to Bert, and on October 24, 1994, an order to show cause threatening a contempt finding was served upon Bert.

Bert subsequently moved to modify the judgment to eliminate his support obligation. After the district court initially denied the motion, Bert filed a motion for reconsideration and an affidavit. The court then granted Bert’s motion and ordered elimination of Bert’s spousal support obligation.

On appeal, Gerridee first asserts that the district court lacked jurisdiction to modify the amended judgment. She argues that, while the original judgment included language specifically reserving continuing jurisdiction over support matters, the second stipulation and amended judgment deleted that language. Gerridee argues that jurisdiction to modify in the first appeal was premised upon this language in the original judgment, see Wheeler, supra, and deletion of that language was intended by the parties in their second stipulation to prevent further modification of the support provisions.

Gerridee has misread our opinion in the first appeal. We did not imply that jurisdiction to modify the original judgment was dependent upon an express reservation of continuing jurisdiction in the judgment. As we explained in Wheeler, a court’s continuing jurisdiction to modify ongoing spousal support is statutory.

Section 14-05-24, N.D.C.C., provides:

“Permanent alirhony — Division of property. When a divorce is granted, the court shall make such equitable distribution of the real and personal property of the parties as may seem just and proper, and may compel either of the parties to provide for the maintenance of the children of the marriage, and to make such suitable allowances to the other party for support during life or for a shorter period as to the court may seem just, having regard to the circumstances of the parties respectively. The court from time to time may modify its orders in these respects.”

We have interpreted that provision to authorize modification of spousal support upon a showing of changed circumstances. E.g., Ramsdell v. Ramsdell, 454 N.W.2d 522 (N.D.1990); Schaff v. Schaff 449 N.W.2d 570 (N.D.1989). This authority exists notwithstanding the decree contains the stipulation of the parties as to permanent alimony, although we have said the court “ ‘should be more reluctant to order a revision and modification of a decree where such a decree was based on agreement than where such decree is based on the finding of the court as to ability to pay.’ ” Eberhart v. Eberhart, 301 N.W.2d 137, 143 (N.D.1981), quoting Bryant v. Bryant, 102 N.W.2d 800, 807 (N.D.1960). We conclude the district court had jurisdiction to modify the support provisions of the judgment.

Gerridee asserts that the district court erred in finding a material change in circumstances warranting modification of spousal support. We agree.

We delineated the standards for modifying spousal support in Wheeler, supra, 419 N.W.2d at 925 (citations omitted):

“To modify spousal support, circumstances must have changed materially.... Slight, or even moderate, changes in the parties’ relative incomes are not necessarily material.... ‘Material change’ means something which substantially affects the financial abilities or needs of a party.... The reason for changes in income must be examined, ... as well as the extent that the changes were contemplated at the time of the agreed decree.”

Because the decree is based upon a stipulated agreement of the parties, rather than upon the court’s original findings, and because the parties are in a better position to understand their circumstances than is the trial court, we view the issue of whether the change in circumstances was contemplated with greater scrutiny. Huffman v. Huffman, 477 N.W.2d 594, 597 (N.D.1991); see also Wheeler, supra.

The party seeking modification bears the burden of proving a material change in circumstances which warrants modification. Schaff, supra; Schmidt v. Schmidt, 432 N.W.2d 860 (N.D.1988). We recognize that a trial court’s determination of whether there has been an uncontemplated material change in circumstances warranting a modification of spousal support is a finding of fact which will only be set aside on appeal if it is clearly erroneous. Hager v. Hager, 539 N.W.2d 304 (N.D.1995); Huffman, supra.

In this case, the trial court’s memorandum opinion contains only cryptic, conclu-sory statements about material changes in circumstances, rather than explicit findings. Findings of fact should be sufficiently stated so we are able to understand the factual basis for the trial court’s decision, Porth v. Glasoe, 522 N.W.2d 439 (N.D.1994), particularly in view of our standards for modification as set forth in cases such as Eberhart and Wheeler, supra.

Although we would ordinarily remand for clarification of missing or conclusory findings of fact, we will not do so when, through inference or deduction, we can discern the rationale for the result reached by the trial court. Alvarez v. Carlson, 524 N.W.2d 584 (N.D.1994). We may rely upon implied findings of fact when the record enables us to understand the factual determinations made by the trial court and the basis for its conclusions of law and judgment. Reinecke v. Griffeth, 533 N.W.2d 695 (N.D.1995). In this case, it appears that the court based its finding of changed circumstances on three factors: (1) Bert’s income had declined; (2) Bert had health problems; and (3) Gerridee’s income had increased.

We consider first Bert’s reduction in income and his health problems. Bert voluntarily retired from his law practice on September 1, 1992. In November 1993, Bert first learned that he suffered from atherosclerosis. The record does not support Bert’s assertion that his health problems were the cause of his reduction in income. Rather, Bert’s own affidavit demonstrates that he voluntarily retired, with the resulting reduction in income, more than a year before his health problems surfaced.

We have held that a support obligor’s decision to retire constitutes a voluntary reduction in income which does not warrant a modification of spousal support. See Huffman, supra. As explained in Koch v. Williams, 456 N.W.2d 299, 301 (N.D.1990) (citations omitted):

“While it is true that the ‘change of circumstances’ necessary to warrant modification is one based primarily on a change in financial circumstances, ... it is also true that not every change in financial circumstances justifies a modification.... When the change is voluntary or self-induced, no modification is warranted because the obligor, by voluntarily placing herself or himself in a less financially secure position, is without clean hands and precluded from seeking equity. Even though the law never requires impossibilities, NDCC § 31-11-05(22), one who voluntarily dissipates or reduces income is not protected either from the consequences of such conduct or by equitable maxims.”

See also Mahoney v. Mahoney, 516 N.W.2d 656 (N.D.Ct.App.1994).

Furthermore, it was clearly within the contemplation of the parties that Bert would eventually retire from his law practice. The original stipulation and decree included express provisions governing support upon Bert’s retirement. The second stipulation provided that Bert would pay $1,460 per month until September 1992, when his monthly support obligation would drop to $500. Not coincidentally, Bert retired on September 1, 1992. Changes in the parties’ financial circumstances which were contemplated or foreseen at the time of the initial divorce judgment or subsequent modification do not constitute a material change in circumstances warranting modification. E.g., Schmidt v. Reamann, 523 N.W.2d 70 (N.D.1994); Rueckert v. Rueckert, 499 N.W.2d 863 (N.D.1993); Huffman, supra.

Nor do Bert’s health problems provide a sufficient basis for modification. Bert voluntarily retired long before he learned that he had health problems. He has not presented evidence that his income declined further because of his health problems. Furthermore, Bert’s health problems could hardly be considered unforeseeable. Bert was 65 years old when the second stipulation was agreed to in 1988. At that time, he agreed to make support payments until his death. It is foreseeable that in the future, persons at Bert’s stage in life might experience health problems.

The third factor relied upon by the trial court was the increase in Gerridee’s income. The trial court found that Gerri-dee’s adjusted gross income for 1993 was $57,841. Of that amount, $6,000 was spousal support. The court made no finding of Ger-ridee’s income at the time of the second stipulation in September 1988. According to our opinion in Wheeler, supra, Gerridee earned approximately $46,000, not including spousal support, in the year before Bert’s first modification motion in 1986. The record does not support a finding of a significant, unforeseeable increase in Gerridee’s income between the prior modification in 1988 and the order terminating support in 1995. A slight or moderate increase in a party’s income which was foreseeable at the time of the original decree or prior modification does not constitute a material change in circumstances warranting modification of support. See Wheeler, supra.

Bert also argues that there is a substantial disparity between his income and Gerridee’s. However, any disparity between the parties’ incomes has been caused by the reduction in Bert’s income attributable to his voluntary retirement from the practice of law, not by an unexpected increase in Gerri-dee’s income. A disparity in the parties’ relative incomes caused by one party’s voluntary reduction in income is not a material change in circumstances warranting modification of support. See Huffman, supra; Koch, supra; Mahoney, supra.

Upon review of the record, we conclude the trial court’s finding that there has been an uncontemplated material change in the parties’ financial circumstances warranting modification is clearly erroneous. We therefore reverse the order terminating Bert’s spousal support obligation.

LEVINE, Surrogate Judge, and SANDSTROM, J., concur. The Honorable MARY MUEHLEN MARING was not a member of the Court when this case was heard and did not participate in this decision.