Barton v. Barton

#25965-r-GAS

2012 S.D. 44

IN THE SUPREME COURT

OF THE

STATE OF SOUTH DAKOTA

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JEANNINE ANN BARTON, Plaintiff and Appellee,

v.

DONALD L. BARTON, Defendant and Appellant.

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APPEAL FROM THE CIRCUIT COURT OF
THE SEVENTH JUDICIAL CIRCUIT
PENNINGTON COUNTY, SOUTH DAKOTA

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THE HONORABLE JOHN J. DELANEY
Retired Circuit Judge

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PATRICIA A. MEYERS
Rapid City, South Dakota Attorney for plaintiff
and appellee.

BARTON R. BANKS of
Banks, Johnson, Colbath,
Kappelman & Becker, PLLC
Rapid City, South Dakota Attorneys for defendant
and appellant.

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CONSIDERED ON BRIEFS
ON MARCH 20, 2012

OPINION FILED 06/06/12
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SEVERSON, Justice

[¶1.] Jeannine Barton and Donald Barton divorced and the circuit court

awarded Jeannine permanent alimony, a monetary judgment, and attorney fees.

After Donald filed for bankruptcy, the court issued an order clarifying the nature of

the monetary judgment. After an appeal of this order, Jeannine and Donald

entered into a settlement agreement regarding the judgment. The agreement,

which was not incorporated into the divorce decree, resolved a dispute regarding the

judgment and released all present and future claims between the parties. Nine

years later, Jeannine moved to modify alimony. The circuit court granted

Jeannine’s motion, increasing Jeannine’s monthly alimony award. The court also

extended Donald’s alimony obligation beyond Donald’s death. Donald appeals. We

reverse.

BACKGROUND

[¶2.] Jeannine and Donald divorced in 1993. The circuit court awarded

Jeannine: (1) $700 per month in permanent alimony until her remarriage or death

or until Donald’s death; (2) a judgment against Donald for $150,000 as an

equalizing property distribution; and (3) attorney fees.

[¶3.] Later in 1993, Donald filed for relief in federal bankruptcy court.

Jeannine moved for an order to show cause in South Dakota circuit court as to why

the $150,000 judgment and all attorney fees should not be considered alimony or

support and thus, non-dischargeable in bankruptcy proceedings. In February 1994,

the circuit court clarified its order and ruled that $40,000 of the $150,000 award

and all of the attorney fees were in the nature of maintenance and support. Donald

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appealed the court’s decision to this Court. This Court affirmed. Barton v. Barton,

534 N.W.2d 48, 52 (S.D. 1995).

[¶4.] Following the appeal, Jeannine and Donald entered into a “post-

appeal settlement agreement” (Agreement). The Agreement was not incorporated

into the divorce decree. The Agreement’s purpose was to “settle all questions,

including dischargeability, as to their respective rights and obligations under the

terms of [the $150,000 judgment].” Under the Agreement, Donald would pay

Jeannine just over $66,000 by certain dates. Donald would also pay Jeannine’s

attorney $13,991.20 in attorney fees. Donald waived “any and all legal defenses to

the payments required within [the Agreement] including the protection that may be

available to him pursuant to U.S.C. Title 11[.]” The Agreement also provided that

Donald’s “obligation to pay [Jeannine] permanent alimony in the sum of . . . $700

per month, until her remarriage or death, or the death of [Donald], shall remain

undisturbed.”

[¶5.] In exchange, Jeannine released Donald from “any and all other claims,

demands, causes of action or suits of any kind or nature whatsoever, which have

resulted in the past or may in the future develop as a result of the contacts,

transactions and dealings by and between [Jeannine] and [Donald] in connection

with the marriage of [Jeannine] and [Donald].” The Agreement also provided that

“[s]o long as [Donald] is in full compliance with the alimony payments and the two

remaining agreed upon property payments on the [$150,000] Judgment, [Jeannine]

agrees not to proceed with any collection efforts.” Jeannine was represented by

counsel when negotiating this Agreement.

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[¶6.] Donald made all required payments for the $66,000 and Jeannine

recorded a satisfaction of judgment. Donald has also timely made all monthly

alimony payments to Jeannine. Since the divorce, Jeannine obtained her teaching

degree, secured fulltime employment, purchased a home, a car, and established a

$140,000 retirement savings.

[¶7.] In October 2009, Jeannine moved to modify alimony. Jeannine

claimed that she was forced to leave her employment to care for her aging parents.

Jeannine also claimed that her health was failing and that Donald’s financial

position had steadily improved since the divorce. Donald stipulated to his ability to

pay. In March 2011, the court concluded that Jeannine demonstrated a change in

circumstances and granted Jeannine’s motion. The court ordered Donald to pay

$1,500 per month in alimony. The court also ordered that the alimony terminate

only upon Jeannine’s death or remarriage. Thus, the alimony obligation would

continue beyond Donald’s death.

[¶8.] Donald appeals, arguing that: (1) Jeannine waived the right to claim

additional alimony and should be estopped from doing so because of her release of

claims under the Agreement; (2) Jeannine failed to demonstrate a change in

circumstances for a modification of alimony; and (3) the court erred in extending

Donald’s alimony obligation beyond his death.

STANDARD OF REVIEW

[¶9.] “Statutory interpretation is a question of law, reviewed de novo.” State

ex rel. Dep’t of Transp. v. Clark, 2011 S.D. 20, ¶ 5, 798 N.W.2d 160, 162. We review

a circuit court’s modification of an alimony award under the abuse of discretion

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standard. Moore v. Moore, 2009 S.D. 16, ¶ 10, 763 N.W.2d 536, 539. “An abuse of

discretion is a discretion exercised to an end or purpose not justified by, and clearly

against, reason and evidence.” Id. “We review the circuit court’s findings of fact

under the clearly erroneous standard and conclusions of law de novo.” Id.

DISCUSSION

[¶10.] 1. Whether the circuit court had jurisdiction to modify
Jeannine’s alimony award.

[¶11.] “Where a divorce is granted, the court may compel one party to make

such suitable allowance to the other party for support during the life of that other

party or for a shorter period, as the court may deem just, having regard to the

circumstances of the parties represented; and the court may from time to time

modify its orders in these respects.” SDCL 25-4-41 (emphasis added). “This Court

has been very clear about a trial court’s ability to modify an alimony award.” Oman

v. Oman, 2005 S.D. 88, ¶ 9, 702 N.W.2d 11, 14. “[O]nce a court approves an alimony

award, it can modify it.” Id. Thus, circuit courts have continuing jurisdiction to

modify a permanent alimony award. SDCL 25-4-41; Moore, 2009 S.D. 16, ¶ 12, 763

N.W.2d at 539-40.

[¶12.] Here, the circuit court granted Jeannine permanent alimony as part of

a divorce proceeding. Therefore, despite the Agreement, the court was authorized

under SDCL 25-4-41 to modify the alimony award.

[¶13.] 2. Whether Jeannine demonstrated a change in
circumstances warranting modification of alimony.

[¶14.] A party seeking modification of an alimony award must establish a

change in circumstances. Moore, 2009 S.D. 16, ¶ 13, 763 N.W.2d at 540.

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When the trial court considers evidence as to a change in
circumstances, it must be careful to confine its review to changes
occurring since the time of the divorce. The court is not to reflect
on whether the decree was “equitable” when entered, but only
whether the economic circumstances of the parties have changed
since the award such that the original award is now either
insufficient or excessive. The role of trial courts in modification
proceedings is not to relieve a party of his or her bad bargain.
The original decree is res judicata except in cases of changed
circumstances subsequently arising, and proceedings for
modification cannot be used to review the equities of the original
decree.

Id. ¶ 12. “Although the change need not be substantial, mere proof of a change is

insufficient to mandate modification.” Id. ¶ 13.

[¶15.] “The change in circumstances refers to a change in the necessities of

the recipient and the financial ability of the obligor.” Id. “[B]oth income and

expenses of the parties must be considered.” Id. ¶ 14. Courts may evaluate the

following factors: “the intentional reduction of gross income; an inquiry into earning

potential when a party is under- or unemployed; the intentional inflation of

expenses; and the offsetting effect of cohabitation on expenses.” Id. “Just as courts

must be wary of an alimony obligor’s efforts to minimize his or her ability to pay

through under- or unemployment, courts must also consider conduct by the alimony

recipient to maximize his or her unmet needs through speculative expenses and the

minimization of support provided by their live-in cohabitants.” Id. ¶ 15.

[¶16.] Here, the health concerns asserted by Jeannine are primarily the same

health concerns discussed at the time of the divorce. A court must consider only

changes in Jeannine’s health conditions since the time of the divorce. In addition,

Jeannine admitted she voluntarily retired in 2005 to care for her parents and that

she did not suffer from any health issues that prevented her from working. The

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record demonstrates that Jeannine voluntarily left employment, declined other

employment, and acquired many assets since the divorce. We also note that while

Jeannine identified many home improvement and repair projects when requesting

alimony modification, Jeannine later testified that the projects are either completed

and paid for in full, or merely anticipatory in nature.

[¶17.] In addition, regarding Jeannine’s monthly income, the court found that

Jeannine “relies on her retirement from SDRS of $608, $700 in alimony and what

she earns from substitute teaching to meet her monthly expenses. In 2009 she

earned $15,000 substitute teaching and had gross income of $30,839.” The court

concluded that Jeannine “has current financial needs of $2,602 per month and

current income of $608 from SDRS, $700 from alimony and various amounts earned

by substitute teaching. Her average net income is less than $2,000.” The court’s

findings relating to Jeannine’s monthly income are erroneous for several reasons.

First, the court failed to include the $881 per month that Jeannine receives in social

security. The court also used the $608 figure for retirement income, when Jeannine

testified that she was now getting $675 per month in retirement benefits.

Furthermore, the court summarily concludes that Jeannine’s net monthly income is

less than $2,000. However, using Jeannine’s 2009 earnings for substitute teaching

($15,000) as a guide, Jeannine’s monthly income would be approximately: $675

(retirement) plus $881 (social security) plus $700 (alimony) plus $1,250 (substitute

teaching), equaling just over $3,500. The circuit court did not delineate how it

calculated the net earnings and the record does not support the court’s findings

regarding Jeannine’s monthly income.

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[¶18.] Finally, we find Jeannine’s argument that she did not receive the

entire $150,000 judgment unpersuasive. Jeannine voluntarily settled with Donald

to receive less than the full judgment and was represented by counsel when doing

so. We also agree with Donald that the circuit court considered the change in

property division when it clarified the $150,000 judgment in 1994 and ordered that

$40,000 of the $150,000 award was in the nature of alimony. Upon this record, we

conclude that the court abused its discretion in modifying Jeannine’s alimony

award.

[¶19.] 3. Whether the circuit court erred in extending Donald’s
alimony obligation beyond his death.

[¶20.] Here, Donald argues that alimony is a personal obligation that cannot

be extended beyond the obligor’s death. Donald alternatively argues that even if

this Court affirms the circuit court’s decision to extend Donald’s alimony obligation

beyond his death, Jeannine has not demonstrated a change in circumstances and

thus, the alimony modification was an abuse of discretion. Jeannine responds that

her needs will not terminate upon Donald’s death.

[¶21.] In Lodde v. Lodde, 420 N.W.2d 20, 21 (S.D. 1988), this Court

acknowledged that “[g]enerally, in the absence of an agreement between the

spouses, the obligation to pay alimony ceases on the death of the obligor spouse.”

However, we need not determine whether a court may, under any factual

circumstances, extend an alimony obligation beyond the obligor’s death.

[¶22.] Jeannine’s request that Donald’s alimony obligation extend beyond his

death was a request for a modification of alimony award as the original Divorce

Judgment provided for alimony to be paid until “the death of the Defendant

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[Donald].” Thus, under our case law, Jeannine carried the burden of demonstrating

a change in circumstances since the time of the divorce to warrant the modification.

Moore, 2009 S.D. 16, ¶ 13, 763 N.W.2d at 540. The circuit court found that “without

the continued alimony, [Jeannine] would be unable to adequately support herself in

her old age.” The court also found that Donald’s assets would allow for a continued

alimony obligation beyond his death. The court then concluded as a matter of law

that Jeannine’s need for support will not diminish as she ages and ordered that the

alimony award will terminate only upon Jeannine’s death. However, these findings

and conclusions are not supported by the record. Jeannine did not show how her

need for support beyond Donald’s death is a change in circumstance since the time

of the divorce.

[¶23.] “The change in circumstances refers to a change in the necessities of

the recipient and the financial ability of the obligor” and that “both income and

expenses of the parties must be considered.” Id. ¶¶ 13-14. In addition, the record

demonstrates that Donald was significantly more financially stable than he was at

the time of the divorce. However, the record does not support the circuit court’s

findings regarding Jeannine’s need for support beyond Donald’s death and thus, the

court abused its discretion in extending the alimony award beyond Donald’s death.

[¶24.] 4. Whether either party is entitled to appellate attorney
fees.

[¶25.] Both parties moved for appellate attorney fees and submitted itemized

statements of legal services. We may award appellate attorney fees in cases

involving alimony. SDCL 15-26A-87.3 and 15-17-38. “To determine whether

attorney fees are proper in domestic relation cases, we consider the property owned

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by each party, the relative incomes, the liquidity of the assets and whether either

party unreasonably increased the time spent on the case.” Larson v. Larson, 2007

S.D. 47, ¶ 22, 733 N.W.2d 272, 278. We deny both Jeannine’s and Donald’s request

for appellate attorney fees.

CONCLUSION

[¶26.] Mere proof that a change has occurred does not mandate a

modification of alimony. Moore, 2009 S.D. 16, ¶ 13, 763 N.W.2d at 540. Clearly

Donald’s financial situation has changed. However, the amount of alimony

established in the original divorce decree was not predicated solely on Donald’s

ability to pay. The divorce court also originally considered Jeannine’s need. Based

on the record presently before this Court, the circuit court’s findings when it

considered modification do not support a change in circumstances justifying a

modification of alimony. Thus the circuit court is reversed. However, under SDCL

25-4-41, the circuit court retains jurisdiction to modify its order regarding alimony

upon sufficient proof establishing a change in circumstances since the time of

divorce, considering a change in the necessities of the recipient and the financial

ability of the obligor.

[¶27.] Reversed.

[¶28.] GILBERTSON, Chief Justice, and ZINTER and WILBUR, Justices,

and GERING, Circuit Court Judge, concur.

[¶29.] GERING, Circuit Court Judge, sitting for KONENKAMP, Justice,

disqualified.

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