Schulte v. Kramer, 820 N.W.2d 318

Background

Kramer and Schulte married in 1973; separation agreement in 2002; divorce judgment in 2005 incorporated the agreement and required Kramer to pay $500 monthly spousal support until Schulte remarried or died, plus health insurance and non-covered medical costs.
Kramer was terminated from Bobcat in July 2010 for policy violations; he subsequently worked at Trail King starting August 2010, with a substantial drop in earnings from about $60,000 to about $30,000 annually.
In November 2010 Kramer moved to modify the divorce judgment to eliminate or reduce spousal support and to eliminate or share health-insurance and non-covered medical costs; Schulte opposed.
The trial court, in July 2011, granted elimination of spousal support, health insurance, and non-covered medical costs, and Schulte appealed arguing improper modification standards and lack of proper findings.
On appeal, the court held there was a material change in circumstances but erred in eliminating spousal support entirely; health-insurance obligations were properly characterized as spousal support, and the court remanded for redetermination of spousal support and for attorney’s-fees findings.
The panel affirmed in part, reversed in part, and remanded for proceedings consistent with the opinion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether there was a material change in circumstances warranting modification of spousal support.	Kramer argues the income drop justifies modification.	Schulte contends no sufficient change justifying modification.	Material change existed, but elimination of support was improper; remand for proper modification.
Whether health insurance and non-covered medical costs are spousal support or property division.	Schulte contends these are property;	Kramer contends they are part of property division or other arrangement.	Health insurance and related costs are spousal support, not property; remand to address them in light of modification.
Whether the trial court made adequate findings to support modification of spousal support.	Kramer asserts adequate changes support modification.	Schulte argues findings were insufficient to support elimination.	Trial court failed to make adequate findings; remand to compute appropriate reduced support with full criteria.
Whether Kramer’s income decline was voluntary/self-induced or caused by circumstances beyond his control.	Kramer argues reduction was not self-induced; employer action was unforeseeable.	Schulte argues the reduction was self-induced due to Kramer’s conduct.	Court erred in treating it as non-self-induced; the reduction was self-induced, requiring further equitable analysis.
Whether attorney’s fees should be awarded to Schulte on remand.	Schulte seeks fees given fund squeeze and necessity.	Kramer disputes entitlement and sufficiency of findings.	Trial court must make explicit findings under § 14-05-23 on attorney’s fees on remand.

Key Cases Cited

Rothberg v. Rothberg, 2007 ND 24 (ND) (modification standard for spousal support; material change not automatically justify elimination)
Muehler v. Muehler, 333 N.W.2d 432 (N.D. 1983) (equitable inquiry after change in circumstances; self-induced income change requires weighing good faith/cause)
Koch v. Williams, 456 N.W.2d 299 (N.D. 1990) (self-induced income loss generally not a basis for modification unless exceptional reasons)
Huffman v. Huffman, 477 N.W.2d 594 (N.D. 1991) (original agreement-based awards require reluctance to modify)
Wheeler v. Wheeler, 548 N.W.2d 27 (N.D. 1996) (voluntary changes in income are relevant to modification analysis)
Toni v. Toni, 2001 ND 193 (N.D.) (spousal support awards from agreements should be modified with great reluctance)
Lipp v. Lipp, 355 N.W.2d 817 (N.D. 1984) (consider earning capacity and disparity at time of decree in modification analysis)