923 N.W.2d 131
N.D.2019Background
- Thomas and Kathleen Varty divorced in 2011 by stipulated marital termination agreement incorporated into judgment; spousal support was set at $3,175/month for eight years and $1,500/month for four more years (total 12 years), with an express clause allowing reduction if Plaintiff’s income is reduced through no fault of his own.
- At the time of judgment Plaintiff earned about $117,000/year; he later worked for Magna/Ranger (earning about $130–$145k), was terminated in May 2017 when Ranger bought Magna, and subsequently had periods of unemployment and lower-paying jobs.
- After termination Plaintiff obtained unemployment, then an hourly job at Calfrac (Aug 2017) and later a salaried safety director position at American Well Service at $75,000/year (no OT/benefits).
- Plaintiff moved in Aug 2017 to reduce/terminate spousal support, arguing his income fell through no fault of his own; the district court held a hearing and found a material change and reduced support to $500/month.
- District court made findings about parties’ incomes, Plaintiff’s net monthly disposable income (~$1,200), lack of significant liquid funds for Plaintiff, and that Defendant presented insufficient medical evidence or proof of inability to work and had depleted savings while gambling.
- Kathleen appealed, arguing the court erred in (1) dispensing with the usual material-change burden and (2) inadequately justifying and supporting the substantial reduction to $500/month.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiff had to prove a material change in circumstances to obtain a reduction | Judgment’s no-fault reduction clause allowed reduction without proving material change | Stipulation did not eliminate the statutory burden; Plaintiff still must prove material change | Court found adequate findings that a material change occurred and therefore did not decide whether proof was required by the agreement |
| Whether Plaintiff established a material change in financial circumstances | Job loss due to Ranger purchase and termination was no-fault and caused substantial income reduction (from ~$132k to $0 then to $75k) | Loss argued not sufficiently material given Plaintiff’s average post-2012 income and overall finances | Court’s factual findings (termination, unemployment, lower salary) were supported and not clearly erroneous — material change found |
| Whether district court adequately considered Ruff–Fischer factors in reducing support | Court considered income, earning ability, needs, and disposable income; reduction reflects obligor’s diminished ability to pay | Court failed to analyze net worth, earning capacity fully, and provided no rationale tying support amount to factors; $500 is arbitrary | Court considered relevant factors (age, earning ability, needs, health) sufficiently for appellate review and findings supported reduction |
| Whether Defendant proved need to maintain prior support level | N/A | Defendant lacked medical documentation, did not apply for disability, testified she could visit casinos and spent savings; failed to prove inability to work | Court found Defendant failed to show need for continued original support level; reduction affirmed |
Key Cases Cited
- Rothberg v. Rothberg, 711 N.W.2d 219 (N.D. 2006) (party seeking modification bears burden to show material change; stipulated awards should be changed only with reluctance)
- Krueger v. Krueger, 840 N.W.2d 613 (N.D. 2013) (standard for clear-error review of findings of fact)
- Pearson v. Pearson, 771 N.W.2d 288 (N.D. 2009) (district court must consider Ruff–Fischer factors when awarding spousal support)
- Lucier v. Lucier, 725 N.W.2d 899 (N.D. 2007) (modification requires evaluating obligor’s current ability to pay and recipient’s current need)