Woelfel v. Gifford

Filed 9/15/20 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2020 ND 197
Brian Lee Woelfel, Jr., Plaintiff and Appellee
v.
Abbey Lynn Gifford, Defendant and Appellant
No. 20190331
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 Crothers, Justice.
Leah J. duCharme, Fargo, ND, for plaintiff and appellee.
Jacey L. Johnston (argued) and Olivia A. Jureidinim (on brief), Grand Forks,
ND, for defendant and appellant.
Woelfel v. Gifford
No. 20190331
Crothers, Justice.
[¶1] Abbey Gifford appeals from a judgment granting her and Brian Woelfel
equal residential responsibility for their minor child and determining child
support. We conclude the district court erred by including an “automatic”
change of custody provision that purports to modify the original residential
responsibility decision without consideration of the child’s best interests at the
time of a potential move. We reverse and remand for further proceedings.
I
[¶2] Gifford and Woelfel are the parents of K.L.W., born in 2016. In December
2018 Woelfel commenced this action to establish the parties’ parental
responsibilities for the child. The district court held a three-day trial in July
and August 2019. After trial, the district court entered findings of fact,
conclusions of law, and order for judgment granting the parties equal
residential responsibility and shared parenting time.
[¶3] In awarding equal residential responsibility, the district court stated:
“So long as both parties reside in Fargo, it is in K.L.W.’s best interests for him
to continue to reside in Fargo and for [Gifford and Woelfel] to continue with
equal residential responsibility and shared parenting time. . . . If [Gifford]
relocates more than 45 miles from Fargo, it is in K.L.W.’s interests to primarily
reside with [Woelfel], in Fargo.” The court included a provision in the judgment
that “[i]f [Gifford] relocates more than 45 miles away from [Woelfel’s] home,
[Woelfel] shall have primary residential responsibility of K.L.W.” The court’s
parenting time schedule provides that the parties will share parenting time
equally, but includes contingent provisions if the parties reside or are living in
communities more than 45 miles apart.
[¶4] When determining child support, the district court offset each party’s
respective obligations because it awarded equal residential responsibility,
ordering Gifford to pay Woelfel monthly child support of $285. The court also
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ordered, “If [Gifford] relocates . . . to Grand Forks, the offset should not apply,
and [Gifford’s] monthly child support obligation shall be $669 per month.”
II
[¶5] Gifford argues the district court erred in awarding equal residential
responsibility and failed to conduct a proper analysis of the best-interest
factors.
[¶6] Our review of the district court’s residential responsibility decision is
well established:
“A district court’s decisions on [primary residential responsibility]
. . . are treated as findings of fact and will not be set aside on appeal
unless clearly erroneous. A finding of fact is clearly erroneous if it
is induced by an erroneous view of the law, if no evidence exists to
support it, or if the reviewing court, on the entire evidence, is left
with a definite and firm conviction a mistake has been made.
Under the clearly erroneous standard of review, we do not reweigh
the evidence or reassess the credibility of witnesses, and we will
not retry a [primary residential responsibility] case or substitute
our judgment for a district court’s initial [primary residential
responsibility] decision merely because we might have reached a
different result. A choice between two permissible views of the
weight of the evidence is not clearly erroneous, and our deferential
review is especially applicable for a difficult [primary residential
responsibility] decision involving two fit parents.”
Lessard v. Johnson, 2019 ND 301, ¶ 12, 936 N.W.2d 528 (quoting Grasser v.
Grasser, 2018 ND 85, ¶ 17, 909 N.W.2d 99). “The court is not required to make
separate findings for each best interest factor, but the court’s findings must
contain sufficient specificity to show the factual basis for the primary
residential responsibility decision.” Lessard, at ¶ 13 (citing Rustad v.
Baumgartner, 2018 ND 268, ¶ 4, 920 N.W.2d 465). See also N.D.C.C. § 14-09-
06.2(1)(a)-(m).
[¶7] Gifford mainly raises factual arguments regarding each contested factor,
pointing to evidence she claims the district court overlooked or ignored. She
argues the district court erred by failing to consider evidence supporting her
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and disregarding evidence supporting Woelfel in deciding that best-interest
factors (d), (e), (h), (k), and (m) favored Woelfel. She further argues the court
erred in deciding best-interest factors (a), (b), (c), (f), (g), and (j) were neutral
when a consideration of “all evidence” supports finding these factors weighed
in her favor.
[¶8] By arguing the district court erred in finding various factors either
favored Woelfel or were neutral, Gifford seeks to have this Court reweigh the
evidence and find the factors either favored her or were neutral. She asserts
Woelfel has problems with anger and alcohol use and the court erred in finding
the domestic violence presumption was not triggered. We disagree.
[¶9] The district court considered the evidence and made extensive findings
on each best-interest factor after viewing the evidence and witnesses at trial,
and we will not second-guess its credibility determinations. Based on our
review, the court did not clearly err in awarding equal residential
responsibility and shared parenting time. However, as discussed below, the
district court may need to reconsider its equal residential responsibility
decision because the court included an “automatic” change to Woelfel having
primary residential responsibility if Gifford moves more than 45 miles from
Fargo.
III
[¶10] Gifford argues the district court erred by ordering an automatic change
of custody if she moves more than 45 miles from Fargo.
[¶11] Although the district court awarded equal residential responsibility and
shared parenting time, the judgment states: “If [Gifford] relocates more than
45 miles away from [Woelfel’s] home, [Woelfel] shall have primary residential
responsibility of K.L.W.” The parenting time schedule also provides for
contingencies if the parties are living more than 45 miles apart. Similar
language is contained in the court’s order for judgment. The order states: “If
[Gifford] relocates to Grand Forks, the offset should not apply, and [Gifford’s]
monthly child support obligation shall be $669 per month.”
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[¶12] Gifford argues the “automatic” change in custody provision circumvents
the post-judgment limitations on modification of custody under N.D.C.C. § 14-
09-06.6, and the provision is unenforceable. See Zeller v. Zeller, 2002 ND 35,
¶¶ 17-20, 640 N.W.2d 53 (holding the district court erred in accepting a
stipulated divorce provision that automatically transferred custody upon the
occurrence of a future event).
[¶13] In Zeller, 2002 ND 35, ¶ 2, the parties agreed that if one parent’s
employer transferred that parent out of the state, the transfer would constitute
a material change in circumstances and would transfer primary residential
responsibility to the other parent. This Court concluded a stipulated divorce
provision for an automatic change in residential responsibility on the
occurrence of a future event is unenforceable and the district court retains
control over the rights of children, regardless of a contrary agreement. Id.
¶¶ 17-18. This Court held the district court erred in holding the parties’
stipulation was “law of the case” and binding on the court’s award of primary
residential responsibility. Id. at ¶ 19; see also Hageman v. Hageman, 2013 ND
29, ¶ 36, 827 N.W.2d 23 (recognizing “that any stipulated judgment precluding
modification of primary [residential] responsibility violates public policy.”). We
acknowledge this case presents a different situation, but the public policy
concerns are as significant.
[¶14] Section 14-09-06.6, N.D.C.C., governs the post-judgment modification of
primary residential responsibility and provides the court’s modification
standard. See Dickson v. Dickson, 2018 ND 130, ¶ 7, 912 N.W.2d 321; Mairs v.
Mairs, 2014 ND 132, ¶ 7, 847 N.W.2d 785. “When the parents have joint or
equal residential responsibility, however, an original determination to award
‘primary residential responsibility’ is necessary.” Dickson, ¶ 7 (quoting Mairs,
¶ 7).
[¶15] Here, the district court decided the parties should have equal residential
responsibility and shared parenting time. However, the judgment also provides
for a future “automatic” modification of its equal residential responsibility
determination with an award of primary residential responsibility to Woelfel,
without analysis under the best-interest factors at the time of Gifford’s possible
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relocation. The court’s provisions essentially seek to control a future
determination on primary residential responsibility, regardless of when
Gifford’s “imminent” relocation to Grand Forks would occur.
[¶16] While we may be inclined simply to strike the automatic change of
residential responsibility provisions and affirm the judgment as modified, the
parenting plan and child support award also contain contingent language
based on whether Gifford relocates. We therefore reverse and remand for the
district court to consider awarding either equal residential responsibility to
both parents or primary residential responsibility to one parent without the
automatic change of residential responsibility provisions. A recalculation of
child support also may be necessary.
IV
[¶17] Gifford argues the district court improperly imputed wages to Woelfel
when evidence reflected a much greater earning capacity, personal budget, and
cash flow. She argues the court erred by imputing Woelfel’s wage to that of a
construction laborer.
[¶18] We review child support decisions under the following standards:
“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. The district court errs as a
matter of law if it fails to comply with the child support guidelines
in determining an obligor’s child support obligation.”
Minyard v. Lindseth, 2019 ND 180, ¶ 6, 930 N.W.2d 626 (quoting Thompson v.
Johnson, 2018 ND 142, ¶ 8, 912 N.W.2d 315).
[¶19] The guidelines in N.D. Admin. Code ch. 75-02-04.1 govern child support
decisions. Minyard, 2019 ND 180, ¶ 7. “A correct finding of an obligor’s net
income is necessary to calculate the proper amount of child support.” Id.
“Income must be sufficiently documented through the use of tax returns,
current wage statements, and other information to fully apprise the [district]
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court” of the obligor’s income. N.D. Admin. Code § 75-02-04.1-02(7). “Each child
support order must include a statement of the net income of the obligor used
to determine the child support obligation, and how that net income was
determined.” N.D. Admin. Code § 75-02-04.1-02(9). “After establishing the
obligor’s net income, the court applies that amount to the guidelines to
calculate child support.” Minyard, at ¶ 7. The child support amount calculated
under the guidelines “is rebuttably presumed to be the correct amount of child
support in all child support determinations.” N.D. Admin. Code § 75-02-04.1-
13; see also N.D. Admin. Code § 75-02-04.1-09(1).
[¶20] Under N.D. Admin. Code § 75-02-04.1-07(1), “earnings” and
“underemployment” are defined as follows:
“a. ‘Earnings’ includes in-kind income and amounts received in lieu
of actual earnings, such as social security benefits, workers’
compensation wage replacement benefits, unemployment
insurance benefits, veterans’ benefits, and earned income tax
credits; and
b. An obligor is ‘underemployed’ if the obligor’s gross income from
earnings is significantly less than this state’s statewide average
earnings for persons with similar work history and occupational
qualifications.”
Under N.D. Admin. Code § 75-02-04.1-07(3), “gross income based on earning
capacity equal to the greatest of subdivisions a through c, less actual gross
earnings, must be imputed to an obligor who is unemployed or
underemployed”:
“a. A monthly amount equal to one hundred sixty-seven times the
hourly federal minimum wage.
b. An amount equal to six-tenths of this state’s statewide average
earnings for persons with similar work history and occupational
qualifications.
c. An amount equal to ninety percent of the obligor’s greatest
average gross monthly earnings, in any twelve consecutive months
included in the current calendar year and the two previous
calendar years before commencement of the proceeding before the
court, for which reliable evidence is provided.”
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See also N.D. Admin. Code § 75-02-04.1-07(2) (“An obligor is presumed to be
underemployed if the obligor’s gross income from earnings is less than the
greater of: a. Six-tenths of this state’s statewide average earnings for persons
with similar work history and occupational qualifications; or b. A monthly
amount equal to one hundred sixty-seven times the federal hourly minimum
wage.”).
[¶21] The district court made findings regarding its child support calculations.
The court found Gifford’s presumptively correct guideline child support
amount was $669 per month. For Woelfel, the court relied on his tax returns
from 2016 through 2018 and found he was underemployed. The court applied
N.D. Admin. Code § 75-02-04.1-07(3)(b) to impute income to him of $24,210,
using 60 percent of the statewide average earnings of a similarly suited
construction laborer. This resulted in a presumptively correct guideline
amount of $384 per month. Because the court awarded equal residential
responsibility, under N.D. Admin. Code § 75-02-04.1-08.2 the court offset the
amounts and ordered Gifford to pay $285 per month for child support.
[¶22] In her post-trial brief, Gifford argued Woelfel’s tax returns show he is
underemployed and his returns are unreliable for computing child support.
She argued the “construction manager” occupational profile most closely
matched his duties and responsibilities at his contracting business, and the
court should use the statewide average for a construction manager with a mean
experience level. She asserted the court should impute income of $65,784,
constituting six-tenths of the prevailing rate. After considering a tax credit,
she claimed Woelfel’s monthly child support obligation should be $812.
[¶23] On appeal, Gifford is critical of the district court’s child support
calculations but her legal arguments are less than clear. She argues the district
court erred by imputing to Woelfel the wage of a construction laborer. She
contends the court erred in applying N.D. Admin. Code § 75-02-04.1-07,
because he is not a “laborer” but rather owns and manages Woelfel
Construction, LLC. She argues the court did not consider in-kind income he
receives from his business. See N.D. Admin. Code § 75-02-04.1-07(1)(a). She
also asserts that Woelfel’s monthly budget exceeds the amount he is
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purportedly making from his business and that he did not provide reliable
information for establishing his income for child support calculations.
[¶24] While not specifically making the argument, Gifford suggests the district
court erred in determining Woelfel’s net income from self-employment, which
would involve application of N.D. Admin. Code § 75-02-04.1-05. Without
deciding whether an error was made, “[i]f the tax returns do not reasonably
reflect self-employment income, the guidelines require use of profit and loss
statements.” Thompson, 2018 ND 142, ¶ 16 (citing N.D. Admin. Code § 75-02-
04.1-05(3)). Because we are reversing the residential responsibility finding
which may alter the child support obligation, the district court is not
constrained by law of the case and may address Gifford’s arguments regarding
the proper child support calculation on remand.
V
[¶25] The judgment is reversed, and the case is remanded for further
proceedings.
[¶26] Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
Gerald W. VandeWalle
Jon J. Jensen, C.S.
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