Varty v. Varty , 2019 ND 49 ( 2019 )

Filed 2/21/19 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2019 ND 49
Thomas D. Varty, Plaintiff and Appellee
v.
Kathleen A. Varty, Defendant and Appellant
No. 20180279
Appeal from the District Court of Williams County, Northwest Judicial
District, the Honorable Joshua B. Rustad, Judge.
AFFIRMED.
Opinion of the Court by Crothers, Justice.
Thomas J. Corcoran, Williston, ND, for plaintiff and appellee.
Thomas E. Kalil (argued), H. Malcolm Pippin (on brief), and Kaitlin A.
DeCrescente (on brief), Williston, ND, for defendant and appellant.
Varty v. Varty
No. 20180279
Crothers, Justice.
[¶1] Kathleen Varty appeals from an amended divorce judgment, arguing the
district court erred in reducing Thomas Varty’s spousal support obligation. We
affirm.
I
[¶2] The parties were married in 1981 and have two adult children. In 2011
Thomas Varty commenced an action seeking a divorce. In November 2011 the parties
executed a marital termination agreement dividing their property and awarding
Kathleen Varty spousal support of $3,175 per month for eight years and $1,500 per
month for four additional years. In December 2011 the district court entered
judgment incorporating the parties’ agreement. The judgment’s spousal support
provision states:
“Plaintiff will pay Defendant spousal support in the amount of $3,175
per month for eight years and $1,500 per month for four years. There
will be spousal support for a total of twelve years (144 months).
Spousal support will be payable on the first of each month until
Defendant dies or remarries, whichever happens first. Spousal support
will not increase but may be reduced because of, but not limited to, the
following:
1. Plaintiff’s income is reduced at no fault of his own[.]”
[¶3] In August 2017 Thomas Varty moved to terminate spousal support, claiming
his oil field related income was reduced through no fault of his own. In support of his
motion, Thomas Varty argued his job history shows he left employment at Sun Well
Services in June 2012 for Magna Energy, where he made about $132,000 a year.
Ranger Energy purchased Magna in January 2017 and eliminated his position in May
2017. He found employment with Calfrac in August 2017, and he later accepted
employment at American Well Service making $75,000 per year.
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[¶4] At a hearing on March 21, 2018, the district court received the parties’
testimony and evidence regarding modification of the spousal support obligation. In
May 2018 the court issued its findings of fact, conclusions of law and order for
judgment. The district court subsequently entered an amended judgment reducing
Thomas Varty’s spousal support obligation to $500 per month.
II
[¶5] Kathleen Varty argues the district court erred in finding a material change of
circumstances and in reducing Thomas Varty’s spousal support obligation.
[¶6] Our standard of review for a district court decision modifying spousal support
is well established:
“When the original divorce judgment includes an award of
spousal support, the district court retains jurisdiction to modify the
award. The party seeking modification of spousal support bears the
burden of proving there has been a material change in the financial
circumstances of the parties warranting a change in the amount of
support. The district court’s determination whether there has been a
material change in circumstances warranting modification of spousal
support is a finding of fact and will be set aside on appeal only if it is
clearly erroneous.
“A material change is a change that substantially affects the
financial abilities or needs of the parties and that was not contemplated
by the parties at the time of the original decree. In assessing whether
a material change has occurred, the reasons for changes in the parties’
income or needs must be examined, as well as the extent to which the
changes were contemplated by the parties at the time of the initial
decree.”
Rothberg v. Rothberg, 2006 ND 65, ¶¶ 10-11, 711 N.W.2d 219 (internal citations
omitted); see also N.D.C.C. § 14-05-24.1; Lind v. Lind, 2014 ND 70, ¶ 8,
844 N.W.2d 907; Schulte v. Kramer, 2012 ND 163, ¶ 10, 820 N.W.2d 318. “Not
every change in the parties’ financial circumstances justifies modification of spousal
support, and no modification is warranted when the change is self-induced.”
Rothberg, at ¶ 11. “This Court encourages agreements between divorcing parties, and
stipulated spousal support awards should be changed only with great reluctance.” Id.
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[¶7] A finding of fact is clearly erroneous if it is induced by an erroneous view of
the law, if no evidence supports it, or if, after reviewing the entire record, we are left
with a definite and firm conviction the district court made a mistake. Krueger v.
Krueger, 2013 ND 245, ¶ 7, 840 N.W.2d 613. The district court’s findings of fact and
conclusions of law should be stated with sufficient specificity to assist the appellate
court’s review and afford a clear understanding of its decision. Rothberg,
2006 ND 65, ¶ 14, 711 N.W.2d 219. Findings are adequate if this Court can discern
the factual basis for the district court’s decision. Id.
A
[¶8] Kathleen Varty claims the district court erred in concluding the stipulated
divorce dispensed with Thomas Varty’s need to establish a material change in
circumstances. She contends their agreement merely contemplates spousal support
will continue for twelve years and may be reduced if Thomas Varty’s income is
reduced at no fault of his own. She argues Thomas Varty should be required to prove
a material change in circumstance. She further contends the district court’s
conclusory statement that a material change in circumstances was established is not
supported by the record. She asserts that the court did not consider his full financial
situation and that his average income since 2012 was $127,202.65, even assuming he
made only $75,000 in 2018. She also claims the findings lack sufficient specificity
showing a material change.
[¶9] Thomas Varty argues the district court correctly concluded the judgment
entered on stipulated divorce dispensed with his burden to establish a material change
in circumstances because the spousal support provision allows him to seek a reduction
for any no-fault reduction in his income, regardless of how small. He argues in the
alternative that his separation from Ranger Energy was a change which significantly
and materially affected his financial ability to pay living expenses and spousal
support, because his income went from $132,000 a year to zero. He contends the
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district court’s finding he established a material change was supported by the record
when Ranger terminated his safety manager position.
[¶10] The district court retains jurisdiction under N.D.C.C. § 14-05-24.1 to modify
a spousal support award. See Rothberg, 2006 ND 65, ¶ 10, 711 N.W.2d 219.
Generally, the party seeking modification of spousal support must prove a material
change in the financial circumstances of the parties warranting a change in support.
Gibb v. Sepe, 2004 ND 227, ¶¶ 7-8, 690 N.W.2d 230; Schmalle v. Schmalle,
1998 ND 201, ¶ 12, 586 N.W.2d 677.
[¶11] Here, the district court found both that the marital termination agreement
dispensed with the need to establish a material change of circumstances and that
Thomas Varty adequately proved a material change of circumstances. Because the
district court made findings adequate to support the conclusion a material change of
circumstances was established, we do not reach the question whether it was necessary
for Thomas Varty to make that showing.
[¶12] The district court made the following findings supporting that a material
change in circumstances had occurred:
# Thomas Varty was earning $117,000 a year when judgment was
entered.
# Thomas Varty “made a series of employment changes seeking
greater opportunities, as is common in the oil field industry.
[Thomas Varty] worked for Sunwell [sic] Oil Service from June
2008 to June 2012, the[n] worked for Magna Energy Services
from June 2012 to January 2017 (where he made $145,000 per
year, then dropped to $130,000 per year).”
# “In January of 2017, Ranger Energy Services bought out Magna
Energy Services. [Thomas Varty] earned $132,000 per year.”
# “In May of 2017, Ranger Energy Services terminated the
employment of all of Magna’s management, including [Thomas
Varty]. This was through no fault of [Thomas Varty].”
# “[Thomas Varty] obtained unemployment benefits from June to
August of 2017.”
# “In August of 2017, [Thomas Varty] obtained an hourly position
at Calfrac, where he made $4,680 gross per month.”
# “In November of 2017, [Thomas Varty] obtained a salaried
position at America [sic] Well Service as a safety director,
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where he currently earns $75,000 per year. He receives no
overtime or additional benefits.”
# “[Thomas Varty’s] income reduction occurred through no fault
of his own.”
These findings are supported by evidence from the hearing and are not clearly
erroneous. Therefore, the district court did not err in finding a material change of
circumstance.
B
[¶13] Kathleen Varty argues the district court’s findings are inadequate to reduce her
spousal support from $3,175 per month to $500 per month, and the record does not
support its decision. She contends the court did not analyze Thomas Varty’s net
worth and earning ability and provided no rationale for reducing the spousal support
obligation to $500, which is arbitrary and significantly lower than the stipulated
spousal support. Thomas Varty claims the district court’s findings were adequate and
supported by the record. He argues evidence supports the court’s findings on the
Ruff-Fischer guidelines. He contends that, while the court did not make findings on
every Ruff-Fischer factor, the findings explain the rationale for its decision.
[¶14] “The district court must consider the relevant factors under the Ruff-Fischer
guidelines when determining if an award of spousal support is appropriate.” Pearson
v. Pearson, 2009 ND 154, ¶ 6, 771 N.W.2d 288. “[T]he district court is not required
to make specific findings on each factor, provided we can determine the reasons for
the court’s decision.” Krueger v. Krueger, 2008 ND 90, ¶ 8, 748 N.W.2d 671.
“Spousal support awards must also be made in consideration of the needs of the
spouse seeking support and of the supporting spouse’s needs and ability to pay.”
Overland v. Overland, 2008 ND 6, ¶ 16, 744 N.W.2d 67; see also Lee v. Lee,
2007 ND 147, ¶¶ 15-16, 738 N.W.2d 479 (applying Ruff-Fischer guidelines in
proceeding to modify spousal support obligation); Lucier v. Lucier, 2007 ND 3, ¶ 17,
725 N.W.2d 899 (“In determining a modified support obligation, the court must
evaluate the obligor’s current ability to pay along with the recipient’s current need for
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support and award support in an amount that is adequately proportional to the
reduction in the obligor’s income, taking into consideration the recipient’s need for
support.”).
[¶15] The Ruff-Fischer guidelines include the following considerations:
“[T]he respective ages of the parties, their earning ability, the duration
of the marriage and conduct of the parties during the marriage, their
station in life, the circumstances and necessities of each, their health
and physical condition, their financial circumstances as shown by the
property owned at the time, its value at the time, its income-producing
capacity, if any, whether accumulated before or after the marriage, and
such other matters as may be material.”
Rebel v. Rebel, 2016 ND 144, ¶ 7, 882 N.W.2d 256 (internal citation omitted).
[¶16] Here, the district court considered Thomas Varty’s past and current income,
his earning ability, the circumstances and necessities of each party, and Kathleen
Varty’s health and physical condition. The court found Thomas Varty’s “current
salary of $75,000 is a significant reduction in salary from the time of the divorce of
the parties,” and that he “provided credible evidence of his current expenses, which
results in a net monthly disposable income of only $1,200.00.” The court found
Thomas Varty “does not have significant funds that would allow him to comply with
the original support order” and he “is unable to provide spousal support at the current
level mandated by the Judgment.”
[¶17] The district court found Kathleen Varty is 55 years old and “presented
absolutely no evidentiary proof to support her contention that she cannot work to
support herself.” The court found she provided evidence of numerous medical visits,
but provided no medical documentation to support her claim she could not perform
even light duty work. “Specifically, Defendant presented no medical records, no
witnesses, and no doctor[’]s notes. Further, Defendant testified that she does not
collect disability, nor has she applied.”
[¶18] The district court found Kathleen Varty “admitted that she is healthy enough
to routinely visit and traverse nearby casinos, where she also spends the money that
she claims she needs for living expenses.” The court found she “admitted that she
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depleted $67,000 to $12,000 between September, 2017 and the March 2018
(6 months), yet provided budget estimates that show her total living expenses should
have been less than $15,000 during that time frame.” From this the district court
stated, “This Court finds that Defendant failed to prove that she is unable to work and
provide for herself, even if it be in a light duty capacity” and “failed to show a need
for spousal support to continue at current levels.”
[¶19] The evidence supports the facts recited by the district court. The court did not
misapply the law. Therefore, the court’s findings are not clearly erroneous, and we
affirm the amended judgment reducing Thomas Varty’s spousal support obligation.
III
[¶20] The amended judgment is affirmed.
[¶21] Daniel J. Crothers
Lisa Fair McEvers
Jon J. Jensen
Jerod E. Tufte
Gerald W. VandeWalle, C.J.
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