may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Irene Beatrice LeRoy, petitioner,
Russell Robert LeRoy,
Dissenting, Randall, Judge
Washington County District Court
File No. F0955151
John G. Westrick, Kim M. Bottoni, Westrick & McDowall-Nix, PLLP, 46 East Fourth Street, 400 Minnesota Building, St. Paul, MN 55101 (for appellant)
Considered and decided by Schumacher, Presiding Judge, Randall, Judge, and Kalitowski, Judge.
Appellant Russell Robert LeRoy (husband) contends the trial court abused its discretion when it denied his motion to reduce his maintenance obligation. The trial court found that husband had acted in bad faith by voluntarily terminating his employment, thereby making himself unable to pay spousal maintenance. We affirm.
The parties terminated their 30-year marriage by stipulation in May 1996. At that time, husband was a corporate general manager with a gross annual income of $49,790. Respondent Irene Beatrice LeRoy (wife) was unemployed, but agreed to attend school and exercise good faith to obtain credentials that would maximize her earning potential. At the time of dissolution, wife's reasonable monthly expenses were $1,862.50; husband's were $1,378. The trial court awarded wife permanent spousal maintenance of $1,700 per month. The parties agreed that the amount of maintenance would be subject to de novo review on or about November 1, 1998, at which point wife is expected to have completed her schooling.
In April 1997, after 24 years of work, husband resigned his employment during a heated discussion with his bosses. Husband secured new employment in July 1997 as a manager, earning $26,000 per year.
For six months after his resignation, husband continued to meet his spousal maintenance obligation. He then unilaterally reduced his maintenance obligation to $400. Wife moved for an order to show cause requiring husband to explain lack of payment. He moved for modification, reporting a gross monthly income of $2,166.66, a net monthly income of $1,452.92, and monthly expenses of $1,639.
After a hearing, the trial court found husband in constructive civil contempt for having voluntarily terminated his employment in bad faith and having failed to meet his spousal maintenance obligation. The court gave husband conditions by which he could purge the contempt and denied his motion for modification. Husband appeals.
Husband contends the trial court abused its discretion in denying his motion for reduction in spousal maintenance based on its determination that he had terminated his employment in bad faith. The trial court may modify a spousal maintenance obligation when a substantial change in circumstances has occurred so as to render the existing order unreasonable and unfair. Minn. Stat. § 518.64, subd. 2(a) (Supp. 1997). Absent an abuse of discretion, this court should not disturb the trial court's decision to grant or deny modification of spousal maintenance. Garcia v. Garcia, 415 N.W.2d 702, 704-05 (Minn. App. 1987).
When an individual seeks to modify spousal maintenance on the basis of a career change, the court evaluates the party's motives to determine whether the change was made in good or bad faith. Giesner v. Giesner, 319 N.W.2d 718, 720 (Minn. 1982); In re Marriage of Richards, 472 N.W.2d 162, 164 (Minn. App. 1991). The trial court must consider the obligor's subjective intent behind his employment decision, by looking beyond the difference in his actual decreased income and his earning capacity. Garcia, 415 N.W.2d at 705.
The obligor must prove he acted in good faith. Schneider v. Schneider, 473 N.W.2d 329, 332 (Minn. App. 1991). The obligor has no defense if he has the capacity to comply with the court-ordered obligation, but has not made reasonable efforts on his own to do so. Giesner, 319 N.W.2d at 719-20. We defer to the trial court's factual determination of whether or not a party's employment decisions exhibited bad faith. See Devault v. Waller, 494 N.W.2d 92, 94 (Minn. App. 1992) (trial court's finding that obligee's employment choices exhibited no bad faith was not abuse of discretion); Minn. R. Civ. P. 52.01 (this court will not reverse trial court's findings of fact unless clearly erroneous).
Husband likens his case to Giesner, where the court reversed and remanded an order refusing to modify because the court had not evaluated the obligor's subjective intent in starting a new business rather than seeking other employment. 319 N.W.2d at 720. In contrast to husband, however, the obligor there had been terminated involuntarily from his job and later began his own business. Id. at 719.
This court has consistently held obligors in bad faith when they have voluntarily left steady employment without alternate plans for income or with alternatives that are less-than-likely to provide sufficient income. See Curtis v. Curtis, 442 N.W.2d 173, 177-178 (Minn. App. 1989) (holding obligor acted in bad faith when he voluntarily left his employment of 10 years without alternate employment plans); Warwick v. Warwick, 438 N.W.2d 673, 678 (Minn. App. 1989) (holding obligor acted in bad faith by resigning from his job and unjustifiably limiting his income); Juelfs v. Juelfs, 359 N.W.2d 667, 670 (Minn. App. 1984) (holding obligor acted in bad faith by voluntarily terminating longtime employment in favor of running business that had little chance of producing similar income), review denied (Minn. Mar. 29, 1985).
Like Jeulfs, 359 N.W.2d at 670, husband knew he had a maintenance obligation when he impulsively decided to resign and become unemployed. Like Curtis, 442 N.W.2d at 177, husband did not have alternate employment arranged before he resigned. Nor did he consult wife to see if she could weather any reduction in maintenance in the unfortunate circumstance that he could not find other work at a similar salary; he simply decided unilaterally to resign his employment. The record supports the trial court's finding that husband acted in bad faith by terminating his employment and limiting his income without regard to his maintenance obligation or wife's financial needs. See Garcia, 415 N.W.2d at 705 (requiring court to evaluate obligor's subjective intent behind employment decision).
Husband contends, however, that he subjectively acted in good faith when he quit his job due to stress. But job stress alone does not overcome an obligor's need to consider his obligations before quitting employment in good faith. See Warwick, 438 N.W.2d at 674, 678 (holding husband unjustifiably limited his income when he quit his job due to burn-out, sought to work independently, and ceased paying support and maintenance); Resch v. Resch, 381 N.W.2d 460, 461 (Minn. App. 1986) (where obligor machinist quit job due to stress and became carpenter, court imputed income at level he could earn if employed in his trained occupation).
Based on this record, we conclude the trial court did not abuse its discretion when it denied husband's motion for modification and upheld his maintenance obligation based on his prior income, given that he was fully capable of maintaining that income, had he not resigned. See Resch, 381 N.W.2d at 462 (once court determines that obligor voluntarily put self in position where unable to pay maintenance, court may look beyond obligor's earnings to his earning capacity).
RANDALL, Judge (dissenting).
I respectfully dissent. Appellant is guilty of, at most, poor judgment by leaving a good job with the hope, later unfulfilled, that he could replace it with a job at a comparable salary scale. This does not equate to bad faith, nor do any facts in the record point toward appellant intentionally quitting to harm his ex-wife. He harmed himself as much or more than he harmed his former wife, respondent.
Appellant paid the full maintenance obligation as long as he could and finally took a $26,000 job because he had run out of discretionary money (see appellant's uncontested affidavit to this effect). His gross salary is now $26,000 and his take-home pay is $1453 a month. The record shows no availability of overtime or imminent raise. At the divorce it was found his reasonable monthly living expenses were approximately $1378 a month. Today he claims approximately $1639. Go back all the way to the divorce and assume his expenses did not increase $300 a month (a modest enough increase), and assume they are still only $1378. That leaves him about $75 a month. He offered to pay approximately $363 every two weeks until he can do better. The trial court ordered him to continue to pay $1700 a month, which is approximately $250 a month more than his total take-home pay.
A party seeking modification of maintenance must demonstrate that a substantial change in circumstances has occurred and that this change makes the original maintenance award unreasonable and unfair. Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997) (emphasis added). There is no question here that appellant's net income has been substantially reduced and that there has therefore been a substantial change in circumstances. See Minn. Stat. § 518.64, subd. 2(a) (Supp. 1997) (listing "substantially increased or decreased earnings" as permitted reason for modification). At the time of the parties' dissolution, appellant's gross income was $49,790. When he brought his motion for modification, appellant's gross income had fallen to $26,000.
The current maintenance award is unreasonable and unfair. The trial court's order denying modification requires appellant to continuing paying respondent $1,700 a month in maintenance. As stated, that is approximately $250 more than appellant's entire net income. The record does not show that appellant has any "hidden" savings to draw upon for himself. Instead the record indicates that he did the best he could by depleting his own assets in an attempt to provide the $1,700 monthly maintenance as long as possible. The overriding principle in dissolution decrees in this state is that it must be equitable and fair. Cf. Ruzic v. Ruzic., 281 N.W.2d 502, 505 (Minn. 1979) (quoting a portion of Minn. Stat. § 518.58 (1976), which has remained substantially the same and which states property division in marital dissolution shall be "just and equitable"). That fundamental principle which governs all interaction between courts and litigants also must permeate modifications, motions to increase, and motions to decrease. This present situation is so fundamentally unfair as to be untenable, let alone unenforceable. Respondent's attorney, with candor, agreed that if nothing changes, appellant could be literally forced to sell his home and all his assets to continue to both live and pay $1700 a month. His living expenses plus $1700 a month equate to over twice what he takes home!
The result in this case is gender based, and that is impermissible. Assume that 100% of the facts, including the job shift, the money, and everything else pertinent, remained identical except that the gender was reversed and respondent was being required to pay her ex-husband $1700 a month maintenance. Now assume that she had a good job, but because of job-related stress, she gave notice and then went into the job market trying to find a comparable job. Assume that she did keep up her full maintenance payments as long as she could, but when she ran out of money, found herself forced to take the best job available, one with a take-home pay of $1400 or $1500 a month, meaning, as stated, the exact same facts we are dealing with. You are not going to find Minnesota courts requiring a woman in that situation to pay more than her total take-home pay in maintenance to an ex-husband. She would be given some kind of relief, and the reason she would be given some kind of relief is that, on these facts, she would deserve relief. The same needs to be true of men in order to bring any real spirit of equality into family law.
A maintenance award and motions to modify that award require the court to consider both the obligee's needs and the obligor's ability to pay. See Minn. Stat. § 518.552, subd. 2(a), (g) (1996) (listing factors considered in awarding maintenance, including financial resources of party seeking maintenance and ability of other party to meet own needs while providing maintenance); Minn. Stat. § 518.64, subd. 2(c) (Supp. 1997) (requiring court to consider Minn. Stat. § 518.552 factors on motion to modify). Both are essential; both are equally important.
Appellant may have used questionable judgment in deciding to leave because of job-related stress. He left a good job knowing he had both himself and his former spouse to support. But the record is satisfactory that he thought he could find work in a comparable salary range, and when that did not turn out to be true, took the best paying job available, which is the present job he has, in which he takes home about $1453 a month, but has, somehow, been required to pay maintenance of $1700 a month.
With hindsight, appellant might have withstood the stress at work until he had safely secured another job in a comparable salary range. But the law must recognize, as life does, that "if ifs and buts were candy and nuts, every day would be Christmas."
Appellant is guilty only of marginal judgment. He is not guilty of bad faith; he is not guilty of intentionally trying to impoverish his ex-wife by the unique method of impoverishing himself.
I would reverse and remand to the trial court with direction to combine a realistic and objective overview of appellant's financial condition, along with the already scheduled November 1998 review of appellant's obligations.
1 A special term order dismissed the portions of husband's appeal addressing contempt and award of attorney fees. This appeal continues only on the issue of modification of spousal maintenance.