Grothen v. Grothen , 308 Neb. 28 ( 2020 )

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www.nebraska.gov/apps-courts-epub/
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Nebraska Supreme Court Advance Sheets
308 Nebraska Reports
GROTHEN v. GROTHEN
Cite as 308 Neb. 28Timothy Ray Grothen, appellant, v.
Martha Sue Grothen, appellee.
___ N.W.2d ___
Filed December 31, 2020. No. S-19-472.
1. Statutes. Statutory interpretation presents a question of law.
2. Appeal and Error. On a question of law, an appellate court is obligated
to reach a conclusion independent of the determination reached by the
court below.
3. Modification of Decree: Appeal and Error. Modification of a dis-
solution decree is a matter entrusted to the discretion of the trial court,
whose order is reviewed de novo on the record, and will be affirmed
absent an abuse of discretion by the trial court.
4. Judges: Words and Phrases. A judicial abuse of discretion exists if the
reasons or rulings of a trial judge are clearly untenable, unfairly depriv-
ing a litigant of a substantial right and denying just results in matters
submitted for disposition.
5. Statutes. A court will construe statutes relating to the same subject mat-
ter together so as to maintain a consistent and sensible scheme, giving
effect to every provision.
6. Modification of Decree: Alimony: Property Settlement Agreements.
Where the parties have not expressly precluded or limited modification
of alimony pursuant to Neb. Rev. Stat. § 42-366(7) (Reissue 2016), an
alimony provision that was agreed to by the parties as part of a property
settlement agreement may later be modified in accordance with Neb.
Rev. Stat. § 42-365 (Reissue 2016).
7. Modification of Decree: Alimony: Good Cause: Words and Phrases.
Under Neb. Rev. Stat. § 42-365 (Reissue 2016), alimony may be modi-
fied for good cause shown, and “good cause” means a material and sub-
stantial change in circumstances and depends upon the circumstances of
each case.
8. Divorce: Alimony. In determining alimony, a court should consider the
income and earning capacity of each party and the general equities of
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GROTHEN v. GROTHEN
Cite as 308 Neb. 28the situation. Alimony is not a tool to equalize the parties’ income, but
a disparity of income or potential income might partially justify an ali-
mony award.
9. Alimony. There is no mathematical formula by which alimony awards
can be precisely determined.
10. Modification of Decree: Words and Phrases. A material change of cir-
cumstances constituting grounds for modification of a dissolution decree
means the occurrence of something which, had it been known to the
dissolution court at the time of the initial decree, would have persuaded
the court to decree differently.
11. Modification of Decree: Alimony: Good Cause. While good cause is
demonstrated by a material change in circumstances, any changes in
circumstances which were within the contemplation of the parties at the
time of the decree, or that were accomplished by the mere passage of
time, do not justify a change or modification of an alimony order.
12. Modification of Decree. To determine whether there has been a material
and substantial change in circumstances warranting modification of a
divorce decree, a trial court should compare the financial circumstances
of the parties at the time of the divorce decree with their circumstances
at the time the modification at issue was sought.
Petition for further review from the Court of Appeals, Moore,
Riedmann, and Welch, Judges, on appeal thereto from the
District Court for Adams County, Stephen R. Illingworth,
Judge. Judgment of Court of Appeals affirmed.
Richard L. Alexander, of Richard Alexander Law Office, for
appellant.
Robert J. Parker, Jr., of Seiler & Parker, P.C., L.L.O., for
appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Miller-Lerman, J.
NATURE OF CASE
On appeal to the Nebraska Court of Appeals, Timothy Ray
Grothen claimed that the district court for Adams County erro-
neously denied his application for modification of his alimony
obligation in the decree dissolving his marriage to Martha
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GROTHEN v. GROTHEN
Cite as 308 Neb. 28Sue Grothen. The Court of Appeals affirmed the district court’s
order denying modification and reasoned, in part, that because
the original alimony award was agreed to by the parties as
part of a property settlement agreement, the alimony provision
could not be modified in the absence of fraud or gross inequity,
which Timothy had failed to show. See Grothen v. Grothen, 28
Neb. App. 505, 945 N.W.2d 902 (2020). We granted Timothy’s
petition for further review.
We conclude that the district court properly used the good
cause standard set forth in Neb. Rev. Stat. § 42-365 (Reissue
2016) and that it did not err when it determined that, under
that standard, modification of alimony was not appropriate. We
further conclude that although the Court of Appeals errone-
ously applied a fraud or gross inequity standard to modification
of alimony, it nevertheless reached the correct result when it
affirmed the denial of modification of alimony. We therefore
affirm the decision of the Court of Appeals, which affirmed the
district court’s order denying modification.
STATEMENT OF FACTS
In August 2012, the district court filed a decree dissolv-
ing Timothy and Martha’s marriage. The decree incorporated
the parties’ property settlement agreement, pursuant to which
they agreed, inter alia, that Timothy would be awarded farm-
land that was the bulk of the marital estate and that he would
pay Martha $600,000 in cash. The parties also agreed that
Timothy would pay Martha alimony of $2,500 per month for
15 years.
In April 2018, Timothy filed an application to modify his
alimony obligation. He alleged that his income, which came
mainly from growing corn and soybeans on the farmland
he owned and on other farmland he rented, had decreased
significantly since 2012. At a hearing on the application in
March 2019, Timothy presented evidence that he was no longer
farming two of four rented quarter sections he had farmed in
2012, that rent he paid on the two quarter sections he was still
farming had doubled since 2012, and that crop prices for corn
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GROTHEN v. GROTHEN
Cite as 308 Neb. 28and soybeans in 2018 were half of what they had been in 2012.
The property settlement in 2012 had been determined based in
part on Timothy’s 2011 tax return which reported farm income
of $167,955; Timothy’s 2018 tax return reported a farm loss
of $3,973. Conversely, Timothy’s annual financial statements
showed that his net worth in 2012 was $1.553 million and that
by 2018, it had increased to $1.82 million, the bulk of which
was farmland valued at $1.76 million.
Martha cross-examined Timothy regarding efforts he could
undertake to continue making alimony payments, such as find-
ing additional farmland to rent or obtaining an operating loan
using the farmland he owned as collateral. Timothy testified
that he always kept his “radar out” but had not specifically
sought to replace the rented quarter sections, and although he
admitted he had not asked the bank about a loan, he testified
that it was the bank’s policy to give loans based only on abil-
ity to repay and not on assets or equity. Timothy also testified
that he had not been able to save his earnings from the “boom”
years of 2011 and 2012 because he had taken out a loan to pay
the $600,000 property settlement obligation to Martha and that
the money he might otherwise have saved had been applied to
that loan.
Martha also presented evidence regarding her current finan-
cial circumstances. Martha had stayed home during the mar-
riage to raise the parties’ three children, but at some point,
she had begun working at a small gift shop the parties owned.
She continued working at the gift shop after the divorce, but
she testified that the business was not profitable. She also testi-
fied that since the divorce, she had had various medical issues
that increased her expenses and limited her ability to obtain
employment other than working in the gift shop where she had
more control over her activities.
After the hearing, the court entered an order denying
Timothy’s application for modification of alimony. The court
began its analysis by citing § 42-365, which provides in part
that alimony may be modified or revoked for “good cause”
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Cite as 308 Neb. 28shown. The court cited Metcalf v. Metcalf, 278 Neb. 258,
265, 769 N.W.2d 386, 391 (2009), for the proposition that for
purposes of § 42-365, “[g]ood cause means a material and
substantial change in circumstances and depends upon the cir-
cumstances of each case.” The court noted that Martha argued
that because the decree of dissolution in this case incorporated
a property settlement agreement, it was a “consent decree
[that] is accorded greater force than ordinary judgments and
ordinarily will not be modified over [the] objection[s] of
one of the parties.” However, the court’s modification analy-
sis focused on whether there had been a material change
in circumstances.
The court concluded that Timothy had not shown a mate-
rial change in circumstances that warranted modification of
alimony. In reaching this conclusion, the court cited precedent
regarding factors that should be considered with regard to a
request to modify alimony. Factors the court stated it consid-
ered were as follows: that a change in circumstances does not
warrant modification if the change was in the contemplation of
the parties at the time of the decree (citing Metcalf v. Metcalf,
supra); that in determining whether there has been a material
change in circumstances, the court should compare the financial
circumstances of the parties at the time of the decree with their
financial circumstances at the time modification is requested
(also citing Metcalf v. Metcalf, supra); and that in determining
whether alimony is appropriate, a court should consider the
fact that one of the parties has been awarded all the income-
producing property from the marriage (citing Grams v. Grams,
9 Neb. App. 994, 624 N.W.2d 42 (2001)). The court determined
that each of these considerations weighed against modification
of alimony in this case.
The court stated that Timothy relied on changes in the farm
economy to argue that there had been a material change in
circumstances with respect to his income, but the court rea-
soned that an experienced farmer would know that farm prices
are cyclical and that therefore, a fluctuation in commodity
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Cite as 308 Neb. 28prices was something that would have been in the contem-
plation of the parties at the time the decree was entered in
2012. The court rejected Timothy’s contention that because of
decreased income, he could not make the alimony payments.
The court reasoned that Timothy could borrow $30,000 to pay
the alimony. Noting Timothy’s net worth of $1.82 million, the
court specifically discredited Timothy’s testimony that he could
not borrow $30,000.
Regarding the parties’ comparative financial circumstances,
the court noted that Timothy was awarded the bulk of the
marital estate and that his net worth was much greater than
Martha’s. The court determined that the $600,000 payment
from Timothy to Martha was not sufficient to equalize the par-
ties’ relative financial circumstances and that therefore, it was
clear that alimony was awarded to Martha to make the equities
as between the parties closer to a 50-50 split. The court finally
reasoned that if it were to reduce or terminate Timothy’s ali-
mony obligation, it would be unfair to Martha and a windfall
to Timothy because Timothy’s net worth was substantially
greater than Martha’s and Timothy had been awarded the main
income-producing property in the dissolution.
In its order, the district court also cited precedent to the
effect that the doctrine of unclean hands will bar an application
for modification of child support or alimony if the applicant
has not satisfied existing obligations and the failure to pay is
found to be willful. The court stated that Timothy had failed to
pay monthly alimony since April 2018, when he filed his appli-
cation for modification, and the court found that Timothy’s
failure to pay alimony was “willful because he had the finan-
cial ability to borrow the money and chose instead to pay noth-
ing for a year after having previously been found in contempt.”
In addition to denying Timothy’s application for modification,
the court ordered Timothy to pay Martha’s attorney fees and to
pay costs of the action.
Timothy appealed the denial of his application for modi-
fication of alimony to the Court of Appeals. He claimed that
the district court erred when it (1) denied his application
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GROTHEN v. GROTHEN
Cite as 308 Neb. 28to modify alimony, (2) determined that his failure to pay ali-
mony was willful and therefore the doctrine of unclean hands
precluded him from obtaining a modification of alimony, and
(3) awarded attorney fees to Martha. The Court of Appeals
concluded that the district court did not abuse its discretion
when it denied the application for modification on its mer-
its. Because of this conclusion, the Court of Appeals stated
that it need not consider the alternative basis for denying the
application based on the unclean hands doctrine. The Court of
Appeals also concluded that the district court did not abuse its
discretion when it awarded attorney fees to Martha. The Court
of Appeals therefore affirmed the district court’s order, which
denied Timothy’s application to modify alimony and awarded
attorney fees to Martha.
With regard to the merits of the application for modifica-
tion, the Court of Appeals began its analysis by noting that the
original alimony award was entered pursuant to the parties’
property settlement agreement. The Court of Appeals then cited
this court’s decision in Carlson v. Carlson, 299 Neb. 526, 909
N.W.2d 351 (2018), for the proposition that
where parties to a divorce action voluntarily execute a
property settlement agreement which is approved by the
dissolution court and incorporated into a divorce decree
from which no appeal is taken, its provisions as to real
and personal property and maintenance will not there-
after be vacated or modified in the absence of fraud or
gross inequity.
Grothen v. Grothen, 28 Neb. App. 505, 511, 945 N.W.2d 902,
907 (2020). The Court of Appeals stated that because there was
no allegation of fraud in the present case, the only issue was
whether modification of alimony was necessary to prevent a
gross inequity.
The Court of Appeals analyzed this case under the gross
inequity standard. The Court of Appeals acknowledged that
the decrease in income alleged by Timothy was a circum-
stance that could be considered in determining whether ali-
mony should be modified. But the Court of Appeals also
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GROTHEN v. GROTHEN
Cite as 308 Neb. 28noted precedent to the effect that a change in one party’s
financial circumstances should be considered in conjunction
with changes in the other party’s situation and that such con-
sideration was not limited to comparing the parties’ respective
incomes, but also included consideration of property owned by
the parties. In this regard, the Court of Appeals noted that in
addition to considering the decrease in Timothy’s income, the
district court also considered the following factors: that since
the decree was entered, Timothy’s net worth had increased
approximately $300,000 to $1.8 million; that Timothy had
been awarded the income-producing marital property; and
that Timothy had the ability to borrow funds should it be
necessary. The Court of Appeals noted that in comparing the
parties’ circumstances, the district court had observed that
although Martha had received a $600,000 equalization pay-
ment pursuant to the decree of dissolution, her net worth had
decreased, partially due to Timothy’s failure to pay alimony,
and that Martha had health issues that made it difficult for her
to obtain employment.
In summation, the Court of Appeals acknowledged that,
whether changes in Timothy’s farm income were foreseeable
in 2012, Timothy’s financial circumstances had changed since
the entry of the decree. However, the Court of Appeals again
cited our decision in Carlson v. Carlson, supra, to state that
“because alimony was originally ordered pursuant to an agree-
ment between the parties, the issue is not whether there has
been a material change in circumstances, but, rather, whether
the continued alimony results in a gross inequity.” Grothen v.
Grothen, 28 Neb. App. at 513, 945 N.W.2d at 909. The Court
of Appeals read the district court’s reasoning that modifica-
tion of alimony would be unfair to Martha and a windfall to
Timothy as a recognition by the district court that declining
to modify alimony would not result in a gross inequity. The
Court of Appeals therefore concluded that the district court did
not abuse its discretion when it denied Timothy’s application
for modification of alimony.
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GROTHEN v. GROTHEN
Cite as 308 Neb. 28We granted Timothy’s petition for further review of the
Court of Appeals’ decision.
ASSIGNMENTS OF ERROR
Timothy claims that the Court of Appeals erred when it
applied a “‘gross inequity’” standard rather than the “‘good
cause’” standard set forth in § 42-365 for modification of an
award of alimony. He also claims that the Court of Appeals
erred when it affirmed the district court’s determination that
the change in his income since the entry of the decree did not
justify a modification of alimony. Timothy specifically claims
that the Court of Appeals and district court both erred when
they failed to evaluate alimony as being determined primarily
by a party’s income rather than his or her assets.
STANDARDS OF REVIEW
[1,2] Statutory interpretation presents a question of law.
Benjamin M. v. Jeri S., 307 Neb. 733, 950 N.W.2d 381 (2020).
On a question of law, an appellate court is obligated to reach
a conclusion independent of the determination reached by the
court below. Id.[3,4] Modification of a dissolution decree is a matter
entrusted to the discretion of the trial court, whose order is
reviewed de novo on the record, and will be affirmed absent
an abuse of discretion by the trial court. Jones v. Jones, 305
Neb. 615, 941 N.W.2d 501 (2020). A judicial abuse of discre-
tion exists if the reasons or rulings of a trial judge are clearly
untenable, unfairly depriving a litigant of a substantial right
and denying just results in matters submitted for disposi-
tion. Id.ANALYSIS
Court of Appeals Erroneously Applied Gross
Inequity Standard to Modification
of Alimony Provision.
Timothy first claims that the Court of Appeals erred when
it applied a gross inequity standard to modification of the
award of alimony. Timothy asserts that the proper standard
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Cite as 308 Neb. 28is that set forth in § 42-365, which allows modification of ali-
mony for “good cause.” We have interpreted “good cause” to
mean a material and substantial change in circumstances, and
it depends upon the circumstances of each case. See Metcalf
v. Metcalf, 278 Neb. 258, 769 N.W.2d 386 (2009). We con-
clude that the Court of Appeals misread our precedent when
it determined that a gross inequity standard should be applied
to modification of alimony when the alimony provision in the
original decree of dissolution was agreed to by the parties as
part of a property settlement agreement and the alimony provi-
sion has not been designated as nonmodifiable under Neb. Rev.
Stat. § 42-366(7) (Reissue 2016). That is, unless the parties’
agreement specifically provides that alimony may not be modi-
fied, modification of alimony is governed by the “good cause”
provision in § 42-365.
The Court of Appeals’ decision in this case relied largely on
Carlson v. Carlson, 299 Neb. 526, 909 N.W.2d 351 (2018). In
Carlson, we stated the proposition regarding modification of
provisions of a property settlement agreement as follows:
[W]here parties to a divorce action voluntarily execute a
[property settlement agreement] which is approved by the
dissolution court and incorporated into a divorce decree
from which no appeal is taken, its provisions as to real
and personal property and maintenance will not there-
after be vacated or modified in the absence of fraud or
gross inequity.
299 Neb. at 543, 909 N.W.2d at 363 (emphasis supplied). The
Court of Appeals understandably relied on the inclusion of
the word “maintenance” in this standard when it understood
“maintenance” to include “alimony” and conclude that an
alimony provision that is agreed to by the parties as part of a
property settlement agreement cannot be vacated or modified
in the absence of fraud or gross inequity.
However, Carlson was not a case involving alimony, and
we have not in modern times applied a fraud or gross ineq-
uity standard in a case involving modification of alimony. But
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Cite as 308 Neb. 28see Williams v. Williams, 119 Neb. 8, 226 N.W. 798 (1929)
(referring in syllabus of court to fraud and also change in cir-
cumstances). The present case requires us to clarify the proper
standard to review an application for modification of an ali-
mony provision that was agreed to by the parties in connection
with a property settlement agreement. As explained below, we
conclude that statutory and case law authority does not support
a fraud or gross inequity standard and instead the statutory
“good cause” standard set forth in § 42-365 for modification of
alimony and cases thereunder such as Metcalf v. Metcalf, supra,should apply. Our use of the word “maintenance” in Carlson
v. Carlson, supra, should not be read as having changed our
standard for evaluating requests to modify alimony.
In cases discussing the fraud and gross inequity proposi-
tion in connection with modification, we have also referred
to § 42-366, which controls the initial decree and contains the
requirement that real and personal property and maintenance in
the initial decree must not be unconscionable. E.g., Reinsch v.
Reinsch, 259 Neb. 564, 611 N.W.2d 86 (2000). In some cases,
we set forth the proposition as applying to provisions of a
property settlement agreement without further specifying the
nature of those provisions within the proposition. See, Ryder
v. Ryder, 290 Neb. 648, 861 N.W.2d 449 (2015); Whitesides
v. Whitesides, 290 Neb. 116, 858 N.W.2d 858 (2015). In other
cases, we have specified that the proposition applies to “‘pro-
visions dealing with division of real and personal property,
division of pension benefits, and division of stock.’” See Peter
v. Peter, 262 Neb. 1017, 1027, 637 N.W.2d 865, 874 (2002).
See, also, Davis v. Davis, 265 Neb. 790, 794, 660 N.W.2d 162,
165 (2003) (referring only to “‘property provisions’”); Gruber
v. Gruber, 261 Neb. 914, 919, 626 N.W.2d 582, 586 (2001)
(referring only to “provisions dealing with division of pension
benefits”). Regardless of the language in which the standard
has been articulated, the cases in which we applied the fraud
or gross inequity standard involved provisions to divide prop-
erty or provisions related to the division of property. As noted,
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Cite as 308 Neb. 28this was true even when we stated the proposition as applying
generally to “provisions” without specifying “property provi-
sions.” See, Ryder v. Ryder, supra (provision requiring one
former spouse to assist other former spouse in obtaining loan to
buy new residence); Whitesides v. Whitesides, supra (provision
regarding division of one former spouse’s interest in partner-
ship); Strunk v. Chromy-Strunk, 270 Neb. 917, 708 N.W.2d
821 (2006) (provision requiring one former spouse to pay other
spouse additional $75,000 if certain conditions met).
As noted above, Carlson v. Carlson, 299 Neb. 526, 909
N.W.2d 351 (2018), did not involve alimony; instead, it
involved post-majority child support. We reasoned that, as
compared to support for minor children, post-majority child
support was not statutorily mandated and, therefore, the appro-
priate standard for a request to modify a provision for post-
majority child support should be the fraud or gross inequity
standard we apply to property provisions of an agreed-upon
property settlement agreement. Although we used the gen-
eral term “maintenance” in the proposition, the holding in
Carlson should be read as applying to the facts of the case
concerning post-majority child support and not be read as
governing modification of other types of “maintenance” such
as alimony.
Our rationale for extending the fraud or gross inequity
standard to post-majority child support in Carlson was that
“the court could not have imposed the post-majority child
support obligation in the first instance, so it lacks the author-
ity to modify it as a child support obligation.” 299 Neb. at
543, 909 N.W.2d at 362 (citing rationale from other states that
held similarly with regard to modification of post-majority
child support). That same rationale does not apply to alimony,
which the court could impose in the first instance and which
a court could later vacate or modify under the authority of
§ 42-365. In this regard, alimony is more similar to child
support for minor children, and in Reinsch v. Reinsch, 259
Neb. 564, 569, 611 N.W.2d 86, 90 (2000), we held that the
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Cite as 308 Neb. 28“‘fraud or gross inequity’” standard did not apply to modifica-
tion of child support, and we noted instead that “we have con-
sistently held that a party seeking to modify a child support
order must show a material change in circumstances which
has occurred subsequent to the entry of the original decree or
a previous modification and was not contemplated when the
decree was entered.”
Property settlement agreements in a dissolution action are
authorized by § 42-366. Although § 42-366 authorizes property
settlement provisions for disposition of property owned by the
parties, neither § 42-366 nor another statute appears to set forth
standards for modifying such property terms at a later date.
Instead, the fraud or gross inequity standard set forth above for
modification of property terms agreed to as part of a property
settlement was developed in case law.
[5] In contrast to modification of property, § 42-365 not
only authorizes an order of alimony in a decree of dissolu-
tion, but it further provides for modification of alimony for
“good cause” shown. Section 42-366(1) allows for a property
settlement agreement to include, inter alia, “provisions for the
maintenance of either [party],” and § 42-366(6) provides that
“[a]limony may be ordered in addition to a property settle-
ment award.” (Emphasis supplied.) Thus, both § 42-365 and
§ 42-366 pertain to alimony. A court will construe statutes
relating to the same subject matter together so as to maintain
a consistent and sensible scheme, giving effect to every pro-
vision. Archer Daniels Midland Co. v. State, 290 Neb. 780,
861 N.W.2d 733 (2015). We therefore read §§ 42-365 and
42-366 together and give each statute effect when determining
the proper standard for modification of an alimony provision
that was agreed to by the parties as part of a property settle-
ment agreement.
We addressed the interplay between §§ 42-365 and 42-366
in Euler v. Euler, 207 Neb. 4, 295 N.W.2d 397 (1980). In
Euler, one party argued that § 42-365 was not applicable where
the parties had entered into a property settlement agreement
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Cite as 308 Neb. 28under § 42-366. We disagreed and noted § 42-366(7), which
provides, “Except for terms concerning the custody or support
of minor children, the decree may expressly preclude or limit
modification of terms set forth in the decree.” We concluded
that where there was no provision expressly precluding or
limiting modification of the terms of the decree, the provisions
of § 42-366(7) can and should be read in conjunction with the
provisions of § 42-365, with effect being given to each statute.
We concluded that “dissolution decrees may be modified with
reference to alimony by the plain language of the statutes even
if they are based on property settlement agreements, so long
as the parties or the court have not provided otherwise in writ-
ing.” Euler v. Euler, 207 Neb. at 9-10, 295 N.W.2d at 400.
Consistent with Euler, we stated in Cooper v. Cooper, 219
Neb. 64, 67, 361 N.W.2d 202, 204 (1985), that “this court’s
power to modify the alimony award is not affected by the
fact that the decree is based on an agreement of the parties.”
See, also, Annot., 166 A.L.R. 675, § II at 676 (1947) (stat-
ing that majority of courts hold that “‘where a court has the
general power to modify a decree for alimony or support,
the exercise of that power is not affected by the fact that the
decree is based on an agreement entered into by the parties to
the action’”).
We recognize that in Desjardins v. Desjardins, 239 Neb.
878, 881, 479 N.W.2d 451, 454 (1992), a case involving a
request for modification of the alimony provision in a consent
decree, we cited authority for the proposition that a “‘“consent
decree is usually treated as an agreement between the parties
[and] is accorded greater force than ordinary judgments and
ordinarily will not be modified over objection of one of the
parties.”’” However, notwithstanding our narrative regarding
consent decrees generally, in Desjardins, we did not apply
the fraud or gross inequity standard; instead, we adhered to
statute and stated that “[a]limony awards entered pursuant
to a consent decree may be modified pursuant to § 42-365,
which provides that such orders may be revoked or modified
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Cite as 308 Neb. 28‘for good cause shown,’” which we stated was “demonstrated
by a material change in circumstances.” 239 Neb. at 880, 479
N.W.2d at 453.
[6,7] We conclude that our statutory and case law sup-
ports the conclusion that where the parties have not expressly
precluded or limited modification of alimony pursuant to
§ 42-366(7), an alimony provision that was agreed to by the
parties as part of a property settlement agreement may later
be modified in accord­ance with § 42-365. Under § 42-365,
alimony may be modified for good cause shown, and “good
cause” means a material and substantial change in circum-
stances and depends upon the circumstances of each case.
Metcalf v. Metcalf, 278 Neb. 258, 769 N.W.2d 386 (2009). The
Court of Appeals therefore erroneously determined that a gross
inequity standard applied to Timothy’s request for modification
of the alimony provision in this case.
District Court Applied Proper Standard and Did
Not Abuse Its Discretion, and Court of Appeals
Did Not Err When It Affirmed District Court’s
Order Denying Modification.
Timothy next claims that the Court of Appeals erred when
it affirmed the district court’s determination that the change
in his income did not justify a modification of the alimony
provision. We determine that the district court properly applied
the standard under § 42-365 to its consideration of Timothy’s
request for modification of the alimony provision and that
the district court did not abuse its discretion when it rejected
his request. We therefore conclude that although the Court
of Appeals erroneously applied a gross inequity standard, it
did not err when it affirmed the district court’s order which
denied Timothy’s request for modification of the alimony
provision.
Timothy argues that the district court and the Court of
Appeals both erroneously determined the propriety of his ali-
mony obligation based on his assets rather than his income.
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portion of § 42-365 that provides as follows:
While the criteria for reaching a reasonable division of
property and a reasonable award of alimony may overlap,
the two serve different purposes and are to be considered
separately. The purpose of a property division is to dis-
tribute the marital assets equitably between the parties.
The purpose of alimony is to provide for the continued
maintenance or support of one party by the other when
the relative economic circumstances and the other criteria
enumerated in this section make it appropriate.
Timothy argues that this portion of § 42-365 indicates that con-
sideration of alimony should focus on income rather than assets
because assets are the focus of a property division. Timothy
contends that because he showed a significant decrease in his
income, his alimony obligation should have been reduced.
In support of his argument that alimony should be deter-
mined based on income without regard for assets, Timothy
quotes a portion of Hotz v. Hotz, 301 Neb. 102, 111, 917
N.W.2d 467, 475 (2018), in which we stated that “the relative
economic circumstances of the parties are to be tested based
on the income available after child support obligations, if any,
have been accounted for.” Timothy reads this to mean that
determinations regarding alimony should focus on income to
the exclusion of other aspects of the parties’ economic circum-
stances. Timothy reads Hotz too broadly. The focus of Hotz
was calculation of child support, and we held that the Nebraska
Child Support Guidelines exclude “alimony between parents
from their total monthly incomes for the purpose of calculat-
ing child support obligations for their children in modification
proceedings.” 301 Neb. at 111, 917 N.W.2d at 475. We were
not concerned with determination or modification of alimony
in Hotz, and we merely noted that to the extent income is a
consideration in determining alimony, a court considers only
“income available after child support obligations” and that
“alimony [is] determined with [child support] obligations in
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misreads Hotz as limiting the consideration of “economic cir-
cumstances” under § 42-365 to a consideration of income, and
we reject his reading.
We further note that Timothy’s assertion that only income
should be considered in determining alimony is inconsistent
with both the language of § 42-365 and our precedent apply-
ing it. Although § 42-365 makes a distinction between the
purposes of property division and alimony, it does not state
that alimony is to be determined based solely on the parties’
respective incomes. To the contrary, as quoted above, § 42-365
states that the purpose of alimony is to provide for support and
maintenance of one party by the other when circumstances,
including “the relative economic circumstances” of the parties,
make it appropriate. Section 42-365 therefore contemplates
that economic circumstances other than income are relevant to
the determination of alimony.
[8,9] In case law, we have stated that consideration of the
relative economic circumstances of the parties includes consid-
eration of not only income, but also other relevant factors. We
have said that in determining alimony, “a court should consider
the income and earning capacity of each party and the general
equities of the situation. Alimony is not a tool to equalize the
parties’ income, but a disparity of income or potential income
might partially justify an alimony award.” Dooling v. Dooling,
303 Neb. 494, 515, 930 N.W.2d 481, 500 (2019) (emphasis
supplied). We have further stated that in contrast to the calcula-
tion of child support under the governing guidelines, “there is
no mathematical formula by which alimony awards can be pre-
cisely determined.” Binder v. Binder, 291 Neb. 255, 261, 864
N.W.2d 689, 694 (2015). This precedent and the requirement in
§ 42-365 to consider “relative economic circumstances” of the
parties contradict Timothy’s assertion that alimony should be
determined based solely on the income of the parties. Instead,
income is an important, but not an exclusive, consideration,
and alimony should be based not only on income, but also
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economic circumstances of the parties.
[10,11] The district court in this case considered income and
other relevant economic circumstances when it determined that
Timothy had not shown a material change in circumstances jus-
tifying modification of alimony. The district court first deter-
mined that the change in Timothy’s income was contemplated
at the time of the original decree, because as an experienced
farmer, Timothy would have known that farm prices are cycli-
cal and a fluctuation in commodity prices was to be expected.
We have said that a material change of circumstances consti-
tuting grounds for modification of a dissolution decree means
the occurrence of something which, had it been known to the
dissolution court at the time of the initial decree, would have
persuaded the court to decree differently. Collett v. Collett,
270 Neb. 722, 707 N.W.2d 769 (2005). We have also said that
while good cause is demonstrated by a material change in cir-
cumstances, any changes in circumstances which were within
the contemplation of the parties at the time of the decree, or
that were accomplished by the mere passage of time, do not
justify a change or modification of an alimony order. Metcalf
v. Metcalf, 278 Neb. 258, 769 N.W.2d 386 (2009). Therefore,
the district court did not abuse its discretion in this case when
it determined that future fluctuations in Timothy’s farm income
were within the contemplation of the parties at the time of the
original decree and that the decrease in farm income was not
a potential occurrence that was not known at the time of the
initial decree.
[12] The district court also considered the relative financial
circumstances of both Timothy and Martha when it determined
that modification of alimony was not warranted. As we stated
above, the determination of alimony is not based solely on
income and instead focuses on the relative economic circum-
stances of the parties. We have further said that to determine
whether there has been a material and substantial change in
circumstances warranting modification of a divorce decree,
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the parties at the time of the divorce decree with their cir-
cumstances at the time the modification at issue was sought.
See Metcalf v. Metcalf, supra. Therefore, it was appropriate
for the district court to consider that although Timothy had
experienced a change in income, Martha had also experienced
changes in her economic circumstances. The court appro-
priately considered that Timothy’s net worth at the time of
the request for modification was substantially greater than
Martha’s, even after the equalization payment that was part
of the property division. Because the parties’ relative earning
capacity is part of the evaluation of relative economic cir-
cumstances, the court properly noted that Timothy’s net worth
included significant income-producing property. We therefore
conclude that the district court did not abuse its discretion
when it concluded that although Timothy had experienced a
change in income, a modification of his alimony obligation
was not justified when considering the relative economic cir-
cumstances of the parties.
We conclude that the district court applied the correct stan-
dard for modification of alimony under § 42-365, and we fur-
ther conclude that the district court did not abuse its discretion
when it determined that Timothy had not shown a material
change in circumstances that justified modification of alimony.
Therefore, although the Court of Appeals applied an incorrect
standard to review the district court’s decision, we conclude
that the Court of Appeals did not err when it affirmed the
district court’s denial of Timothy’s request for modification
of alimony.
CONCLUSION
We conclude that when the parties have not agreed that an
alimony provision may not be modified, an alimony provi-
sion that was agreed to by the parties as part of a property
settlement agreement may later be modified for “good cause”
in accordance with § 42-365, which allows for modification
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cumstances that justifies modification. We further conclude
that the district court applied the correct standard and that it
did not abuse its discretion when it concluded that Timothy had
not shown a material change in circumstances justifying modi-
fication of alimony. Therefore, although the Court of Appeals
erroneously reviewed the district court’s decision under a gross
inequity standard, the Court of Appeals did not err when it
affirmed the district court’s order denying modification. We
therefore affirm the decision of the Court of Appeals.
Affirmed.