Angela Jean Strunsee v. Jeffrey Alan La Bri

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
September 25, 2019
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2018AP1855 Cir. Ct. No. 2011FA351

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

IN RE THE MARRIAGE OF:

ANGELA JEAN STRUNSEE P/K/A ANGELA JEAN LA BRI,

PETITIONER-APPELLANT,

V.

JEFFREY ALAN LA BRI,

RESPONDENT-RESPONDENT.

APPEAL from an order of the circuit court for Washington County:
MICHAEL O. BOHREN, Judge. Affirmed.

Before Neubauer, C.J., Reilly, P.J., and Brash, J.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2018AP1855

¶1 PER CURIAM. In this postdivorce judgment case, Angela Strunsee
p/k/a Angela La Bri appeals from an order reducing maintenance and child support
from her former husband, Jeffrey La Bri, as the circuit court held that a decrease in
Jeffrey’s income constituted a substantial change in circumstances. We conclude
that the court did not erroneously exercise its discretion, as its decision was one a
reasonable judge could make. We affirm.

¶2 Jeffrey owns the La Bri Group, LLC, an investment management
firm. Angela has been a homemaker since the birth of their child in 2001. Angela
petitioned for divorce in 2011. After a lengthy trial to settle property division,
legal custody and physical placement of the parties’ minor child, and the family
support Jeffrey would pay to Angela, the divorce was finalized in May 2017.

¶3 At the time of the divorce judgment, the court found Jeffrey’s
income to be $793,000: $300,000 in earned income and $493,000 in investment
income. The court imputed to Angela income of $160,000: $60,000 in earned
income, per a vocational evaluation, and $100,000 in investment income from a
portion of her share of the property division. The court set monthly family support
at $19,050, of which $11,728 represented maintenance and $7322 represented
child support.

¶4 The court also awarded Jeffrey the parties’ rental real estate assets,
eight apartment complexes. The court declined to award half of them to Angela,
as she requested, and instead ordered a $3.88 million equalization payment to her.
The court reasoned that Angela did not have the experience necessary to manage
real estate of that complexity and that awarding the properties to Jeffrey would
allow him to generate the cash needed for support payments. It ordered that
Jeffrey pay Angela $3 million within ninety days and the remaining $880,000 in

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four equal annual installments.1 Jeffrey appealed and Angela cross-appealed; this
court affirmed.

¶5 A week after entry of the divorce judgment, Jeffrey moved, as is
relevant here, to reconsider or to modify the family support order on grounds that
his investment income was roughly $300,000, not $493,000 and that Angela soon
would receive her property-division payment. Jeffrey did not appear at the motion
hearing held on September 26, 2017. His counsel, retained in a limited capacity to
assist at trial and to help him navigate specific legal issues, told the court that she
had received no instructions from Jeffrey on representing his interests at the
hearing as to family support. Finding Jeffrey in default, the court denied his
motion.

¶6 Jeffrey then sought to secure loans using the apartment complexes as
collateral. He succeeded in getting the loans after agreeing to the banks’
requirements that he borrow enough to satisfy the entire $3.88 million equalization
payment in a lump sum and to escrow additional funds sufficient to pay for any
work the apartments might require. He borrowed approximately $5.4 million.2

¶7 In November 2017, Jeffrey moved to modify family support on the
grounds that his gross revenues had decreased, as the La Bri Group no longer
received commissions on certain investment products due to new Department of
Labor regulations, his real estate mortgage payments had increased, he lost a

1
The court ordered that Angela receive $1 million of the $3 million to do with as she
chose. It then based the imputed $100,000 investment income on the presumption that she would
invest the remaining $2 million and receive a five-percent return.
2
Jeffrey testified that after making the equalization payment to Angela, paying his legal
fees, paying off his credit cards, and escrowing $500,000, he was left with $206,179.

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business partner who took a portion of the La Bri business with her, and he had
fully prepaid $880,000 of the equalization payment to Angela. In a series of two
hearings—May 3 and May 24, 2018—the court found that Jeffrey’s 2017 income
for support purposes now was $638,565 and reduced what Jeffrey was to pay
monthly. As the parties this time did not agree to family support, the court
ordered $6031 in child support and $1660 in maintenance, for a total payment of
$7691. Angela appeals from this order.

¶8 Like an initial support order, a request for modification is addressed
to the court’s discretion. Haeuser v. Haeuser, 200 Wis. 2d 750, 764, 548 N.W.2d
535 (Ct. App. 1996). Discretion is properly exercised “if the record demonstrates
that the trial court undertook a reasonable inquiry and examination of the facts and
had a reasonable basis for its decision.” Id. at 765.

¶9 A revision of an order as to the amount of family support may be
made only upon a finding of a substantial change in circumstances. WIS. STAT.
§ 767.59(1f)(a) (2017-18);3 Haeuser, 200 Wis. 2d at 764. The burden rests with
the party seeking the change. Haeuser, 200 Wis. 2d at 764. A court reviewing a
previous award of maintenance must consider both support and fairness to each of
the parties. Rohde-Giovanni v. Baumgart, 2004 WI 27, ¶31, 269 Wis. 2d 598,
676 N.W.2d 452. The circuit court’s findings of fact regarding the parties’
circumstances and whether a change has occurred will not be disturbed unless
clearly erroneous, but whether the change is substantial is a question of law that
we review de novo. Dahlke v. Dahlke, 2002 WI App 282, ¶8, 258 Wis. 2d 764,
654 N.W.2d 73.

3
All references to the Wisconsin Statutes are to the 2017-18 version unless noted.

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No. 2018AP1855

¶10 Angela asserts that the circuit court erred in its redetermination of
Jeffrey’s income available for support. She contends Jeffrey’s diminished income
is due to his having to service the debts on the large loans he took out, which were
only in part to make the equalization payment and, further, were a fully anticipated
consequence he brought on himself. She also suggests the court did an about-face
between the two May 2018 hearings at which it made rulings on Jeffrey’s
November 2017 modification motion. She points out that at the May 3 hearing,
the court said it did not view Jeffrey’s borrowing as a substantial change in
circumstances, as debt service “was part of the underlying assumptions in the
case,” but then, at the May 24 hearing, found a substantial change in
circumstances overall.

¶11 The court did conclude at the May 3 hearing that servicing the debt
on the loans did not by itself constitute a substantial change in circumstances, and
the court did not reduce Jeffrey’s income available for support solely because of
it.4 Rather, it appropriately factored it in to its analysis and carefully spelled out
the various factors it considered in determining his income available for support.5

4
“Debt service” is the amount of money required to make payments on the principal
and interest on outstanding loans. Debt service, THE FREE DICTIONARY, https://financial-
dictionary.thefreedictionary.com/debt+servicing (last visited Sept. 5, 2019).
5
We disagree with Angela that Derr v. Derr, 2005 WI App 63, 280 Wis. 2d 681, 696
N.W.2d 170, applies. In Derr, the former husband asked the circuit court to reconsider his
monthly income in light of a loan he took out to make a $157,417 equalizing payment to his
former wife, as the monthly payments on the new debt would reduce his monthly income by
$845. Id., ¶68. The court declined to do so because the former husband had been less than
forthcoming in supplying financial information, such that the court could only approximate his
true gross income. Id., ¶69. Here, the circuit court was able to determine the parties’ incomes
and did not address how monthly payments on Jeffrey’s new loans impacted his monthly income.

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No. 2018AP1855

¶12 The court accepted as accurate the rental real estate net income
stated on Schedule E of Jeffrey’s 2017 tax return; specified the income amounts it
included from the La Bri Group and other sources; and, based on the analyses of
two of his property managers in evaluating his multi-unit apartment building
investments in light of refinancing and the buildings’ current conditions, it
accepted their conclusions that the apartments will operate at a loss.

¶13 In addition, contrary to Angela’s expert who used rental income
projections, the court concluded that it must look at the actual money available
based on the life and operation of the buildings. The court also added back
depreciation deductions as cash available for support and detailed other
expenditures it did and did not consider business expenses such that the money
was or was not income available for support purposes. Based on all of those
considerations, it concluded that Jeffrey’s annual income now was $638,565 and
constituted a substantial change in circumstances.

¶14 The court also adjusted Angela’s annual income upward to
$204,000. As before, it imputed to her $60,000 in earned income. But now,
Angela having received the full $880,000 in a lump sum instead of in four yearly
installments, the court imputed an additional $44,000 in investment income
because, as with the $2 million portion of the property division, the court also
deemed the $880,000 to be an income-generating asset at five percent earnings.

¶15 The court thoroughly reviewed the parties’ big financial picture, of
which debt servicing of outstanding loans was an indispensable part. On the one
hand, paying interest on them necessarily reduced Jeffrey’s income; on the other,
the loans gave Angela millions of dollars in investment assets, thus increasing her
income. We see no error.

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¶16 Angela next asserts that the circuit court erred when comparing
Jeffrey’s current financial circumstances with those as of the date of divorce rather
than those at the time of the most recent family support order in September 2017.
“[F]or purposes of evaluating a substantial change in the parties’ financial
circumstances in a maintenance modification proceeding, the appropriate
comparison is to the set of facts that existed at the time of the most recent
maintenance order, whether that is the original divorce judgment or a previous
modification order.” Kenyon v. Kenyon, 2004 WI 147, ¶27, 277 Wis. 2d 47, 690
N.W.2d 251.

¶17 The parties did not present testimony or evidence at the
September 26, 2017 hearing as to their financial positions. Jeffrey did not appear
and his limited-scope attorney was not authorized to represent his interests in
regard to family support. The denial of Jeffrey’s motion thus was not based on its
merits but was due to his default. The court therefore did not erroneously exercise
its discretion when it compared the parties’ current financial situations with those
existing at the time of the judgment of divorce.

¶18 In sum, the circuit court gave numerous reasons, not all detailed
here, for its conclusion that there was a substantial change in circumstances. Its
findings and reasons have record support. Accordingly, we agree with the court’s
legal conclusion. Angela’s dissatisfaction with the court’s thoroughly explained
decision is not grounds for this court to overturn it as an erroneous exercise of
discretion. There was sufficient evidence from which the court reasonably could
find a substantial change in the parties’ circumstances, such that modification of
family support was fair and appropriate.

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No. 2018AP1855

By the Court.—Order affirmed.

This opinion will not be published. See WIS. STAT. RULE
809.23(1)(b)5.

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