All in the Family: A reversal in modification of spousal maintenance

MINNEAPOLIS, MN — On Dec. 10, 2018, the Minnesota Court of Appeals issued an opinion reversing a District Court’s modification of spousal maintenance. The decision in Wells v. Wells, although unpublished, has some interesting twists.

Husband and Wife were married for 24 years. In 2010, at the time of the dissolution of the parties’ marriage, Wife was 46 years old and had not worked outside the home for 20 years. Husband was earning an average gross annual income of $450,000.

At the time of trial, the District Court found that Wife’s reasonable monthly expenses totaled $7,572. The court found that, although Wife had “no plans to find employment,” she was able to work because she previously earned a business degree and had computer skills.

The District Court determined that Wife was entitled to permanent spousal maintenance, but ordered Husband’s payments to Wife to decrease over time. Payments started at $10,667 per month and gradually dropped to $6,000 per month as employment opportunities were anticipated to arise.

In August 2016, Husband moved to modify his maintenance obligation, claiming that, among other things, Wife was no longer in need of spousal maintenance because she was able to obtain employment. Wife argued that Husband failed to show a substantial change in circumstances rendering the original award unreasonable.

The District Court granted Husband’s motion to modify, finding that Wife opted to remain unemployed and live on maintenance. The court determined that Wife’s current monthly expenses decreased 14 percent from the time of entry of the divorce decree.

Because the court determined that the decrease constituted a substantial change in Wife’s circumstances, it found Husband’s $6,000.00 maintenance obligation “unreasonable and unfair.”

The District Court concluded that Wife opted to remain unemployed and live on maintenance by reducing her expenses. It held that maintenance was intended to be “supplemental to the $40,000.00 of imputed income,” and that if Wife had sought employment, she would have been able to afford her expenses.

Ultimately, the lower court ordered Husband to pay $4,696.00 per month in permanent spousal maintenance.

Wife moved for amended findings, arguing that the court erred in finding a 14 percent reduction in monthly expenses constituted a substantial change in circumstance. The District Court amended its order and increased maintenance to $4,740.00 per month.

Wife appealed, arguing that the District Court abused its discretion by modifying her spousal maintenance award.

Judge Renee Worke noted that spousal maintenance may be modified based on a substantial change in circumstances if the change makes the existing award unfair or unreasonable. The Court of Appeals acknowledged that a substantial change in circumstance may be the “decreased need of the obligee.”

In this instance, the Court of Appeals found that “Wife’s decreased expenses, however, do not constitute a substantial change in circumstances because wife reduced her expenses in accord with the final step-down amount of the permanent maintenance award.”

Judge Worke further opined that “the District Court abused its discretion by modifying the spousal maintenance award because the record does not include ‘facts showing that the circumstances of the parties are markedly different from those…when the decree was rendered.’”

Five distinct points were raised by the Court of Appeals.

First, the court noted that Husband’s ability to pay Wife $6,000.00 per month in permanent maintenance was not at issue.

Second, the Court of Appeals determined that the step-down amounts in the judgment and decree served as a mere “incentive” for Wife to secure employment. She was not “ordered” to find employment. Wife reduced her expenses to coincide with the reduced spousal maintenance award. In essence, she voluntarily maintained a budget below the marital standard of living so she would not have to work.

Third, Worke suggested that “wife persuasively argues that if husband’s obligation is reduced based on her reducing expenses to live on the amount she receives each month, he will continue to move to modify maintenance based on her continuing to reduce her expenses.” Of course, that position assumes that Wife continues to remain unemployed.

Fourth, the Court of Appeals scrutinized the District Court’s reduction in Wife’s monthly budget, suggesting that the “District Court’s reductions in wife’s expenses are not in accord with the judgment and decree’s design to have maintenance ‘approximate’ the marital standard of living.”

Finally, Worke opined that “a spousal maintenance recipient has some leeway in allocating monthly amounts…not every monthly expense is stagnant and going to match up identically after six years.” Accordingly, she suggested that a “District Court acts beyond its discretion by reducing line items in a budget when the budget as a whole is less than the marital standard of living.”

In essence, the Court of Appeals determined that the judgment and decree reduced Husband’s spousal maintenance obligation, and Wife reduced her expenses accordingly, in light of her decision not to seek employment.

The pivot point of the Wells decision involves the differing view of the District Court and appellate court concerning Wife’s obligation to obtain employment.

At first glance, it seems reasonable to expect someone with a step-down maintenance to seek employment. They are, after all, receiving the benefit of a higher monthly figure on the assumption that they will not have an income stream as they re-train, or search for work.

It seems Husband should have filed his motion to reduce when Wife was not actively seeking employment during those first five years, instead of at the point when he was forever locked into $6,000.00 per month.

Furthermore, if the District Court was operating under the presumption that wife “must” obtain employment, perhaps it could have conditioned the higher maintenance amounts on Wife providing verification of job search or re-training efforts. Still, it does not appear as though Wife’s efforts, even if verified, would have been genuine.

Concurrently, the lower monthly figure was not conditional in any way. The District Court made a Passolt determination of “appropriate income” for Wife, and then layered the permanent award of $6,000.00 per month. Whether Wife chose to work, enabling her to maintain a higher standard of living, was (and should have been) completely up to her.

Jason and Cynthia Brown, husband and wife, are the founding shareholders in the Brown Law Offices, P.A., a northwest Twin Cities divorce and family law firm.