Rudy SCHATKE, Plaintiff and Appellant, v. Gail SCHATKE, Defendant and Appellee.
Civ. No. 930367
Supreme Court of North Dakota.
Aug. 24, 1994.
522 N.W.2d 833
The trial court instructed the jury:
“CHARGE TO JURY
“This is a criminal action brought to this Court by the filing of an Information charging the Defendant, Michael Wayne Whalen, with having committed the offenses of Attempted Murder, Reckless Endangerment, Terrorizing, and Carrying a Concealed Dangerous Weapon within Cass County, North Dakota, on the 7th day of April, 1993. The Information charges the offenses to have been committed as follows, to-wit:
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“Count 2: RECKLESS ENDANGERMENT in violation of Section 12.1-17-03, N.D.C.C. in that on or about April 7, 1993, said defendant, MICHAEL WAYNE WHALEN, created a substantial risk of serious bodily injury or death to Melissa Ness by pointing and holding a Davis .380 caliber semi-automatic handgun against her neck and collarbone area....”
The trial court‘s instructions also quoted Count 3 of the Information, which charged Whalen with terrorizing Ness by placing her “in fear for the safety of Kevin Gelinske when the defendant stated ‘I‘m going to shoot him‘, while holding a handgun.” The instructions also quoted Count 5 of the Information, which charged Whalen with carrying a concealed dangerous weapon by concealing “in his jacket pocket a Davis .380 caliber semi-automatic handgun.” The jury returned separate verdicts finding Whalen “GUILTY of the offense of Reckless Endangerment as charged in Count 2 of the Information;” “GUILTY of the offense of Terrorizing as charged in Count 3 of the Information;” and “GUILTY of the offense of Carrying a Concealed Dangerous Weapon as charged in Count 5 of the Information.”
Count 2 of the Information specifically charged Whalen with committing reckless endangerment by pointing and holding a handgun against Ness‘s neck and collarbone area. Whalen could not have pointed or held a handgun to Ness‘s neck and collarbone area without being in possession of the gun. Therefore, the jury‘s verdict finding Whalen “GUILTY of the offense of Reckless Endangerment as charged in Count 2 of the Information” is a “special finding that in the course of committing the offense the accused was in possession of a ... firearm” (State v. Sheldon, supra, 312 N.W.2d at 370). The same reasoning applies to the other counts of which Whalen was found guilty. We conclude, therefore, that the trial court did not err in applying
Affirmed.
VANDE WALLE, C.J., and NEUMANN, SANDSTROM and MESCHKE, JJ., concur.
Wefald Law Office, Ltd., Bismarck, for plaintiff and appellant; argued by Robert O. Wefald. Appearance by Rudy Schatke.
Spaeth, Thelen, Dearstyne & Van Voorhis, Grand Forks, for defendant and appellee. No appearance. Submitted on brief.
Rudy Schatke appealed from an order denying his motion to amend a divorce judgment dividing the marital estate and awarding child support. We conclude the trial court abused its discretion in refusing to amend the judgment, and we reverse and remand for further proceedings.
Rudy and Gail were married in 1980 and have three children. They purchased a home in Michigan, North Dakota. After Rudy retired from the Army, he and Gail purchased a business, Schatke Enterprises, Inc., a combination bar and restaurant, which they have operated together for two years. During that time it has been their primary source of income.
In 1993 the court dissolved Rudy and Gail‘s marriage on the ground of irreconcilable differences. The trial was divided into two hearings, the first on November 13 and 24, 1992, following which the court found that both parties had the capacity and disposition
The second part of the parties’ divorce trial was conducted on May 12, 1993. By memorandum dated July 13, 1993, and judgment entered August 10, 1993, the court awarded Gail property totaling $99,448 including the parties’ home and business. The court awarded Rudy property with a value of about $59,114. The court also ordered “to more closely approximate the division of property” that Rudy receive a two year credit against paying child support. The court valued the credit at $600 per month ($200 per month per child) for a total credit of $14,400 over the two year period. The court further ordered that Rudy would be obligated to pay child support commencing in July 1995 “at the amount then applicable under the North Dakota Child Support Guidelines.”
Acting pro se, Rudy filed a motion to amend the final judgment. The trial court treated it as a timely motion under
The decision on a motion to amend a judgment under
Rudy asserts on appeal that the trial court‘s valuations of the parties’ home and business are too low and that it was inequitable for the trial court to award Gail 63 percent, but Rudy only 37 percent, of the marital estate. Rudy also asserts that the child support credit was not computed in accordance with the child support guidelines. Rudy argues the credit is an erroneous attempt by the trial court to soften the disparity of the inequitable property division.
In dividing marital property the trial court must equitably distribute the parties’ assets, and an equitable distribution can only be made if the trial court first determines the net worth of the assets. McAdoo v. McAdoo, 492 N.W.2d 66 (N.D.1992). Rudy contests the trial court‘s valuation of the parties’ home and business.
The court valued the parties’ home at $41,500, with an outstanding contract for deed balance of $10,954, resulting in a net value of $30,546. The court valued the business at $87,000, with a debt against the business of $47,000, for a total net value of $40,000. These values are clearly supported by the evidence in the record and will not be disturbed on appeal.
Rudy also complains that the property division is inequitable, because the property Gail received has substantially higher total value than the property awarded to Rudy. A property division need not be equal to be equitable, but a substantial disparity must be explained by the trial court. Gaulrapp v. Gaulrapp, 510 N.W.2d 620 (N.D.1994). The trial court‘s net property award to Gail of $99,448 compared to Rudy‘s net award of $59,114 constitutes a substantial, not a de minimis, disparity. See Sateren v. Sateren, 488 N.W.2d 631 (N.D.1992). The trial court offered the following explanation for the disparity:
“The above division of property gives the Defendant a greater proportion of the property, but she is awarded the property with the most speculative values, including a home and business in a small town, which may or may not be readily saleable in the future. Moreover, the success of the business will depend upon her own efforts to keep it going.
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“On the other hand, the Plaintiff is receiving almost all of the liquid cash assets. There is little or no risk of loss of these assets. The Plaintiff is an astute business person and he should be able to reinvest these funds....”
Our difficulty with this explanation is that the earning potential, risk of loss, and saleability of an asset normally is already included in the determination of the asset‘s value. The appraisal and evaluation of property is
In this case, however, there is more; there are the additional factors of Rudy‘s child support obligation and his plan to obtain additional education and training. The trial court stated:
“In order to more closely approximate the division of property, the Court will grant [Rudy] a credit for child support for the next two (2) years, commencing in July, 1993 and extending through the month of June, 1995. During that time, he shall not be required to pay any child support (or spousal support) to [Gail]. During each month of the two years, he shall be credited with a payment of child support equivalent to $200.00 per month per child, or a total of $600.00 per month. Over two years, that would amount to $14,400.00. Child support will be payable, commencing in July, 1995, at the amount then applicable under the North Dakota Child Support Guidelines. Either party may schedule a motion at that time for the setting of child support so that the Judgment may be amended accordingly.”
Gail claims on appeal that this “credit for child support” is not a form of property division or child support, but simply a “deferment” that does not have to be reduced to present value or computed according to the child support guidelines. We disagree. In effect, the trial court ordered Gail to pay $600 for 24 months to Rudy as property distribution installments, and ordered Rudy to pay an offsetting amount to Gail for child support.1
Standing alone, these property installments, totalling $14,400, would greatly reduce the disparity in the property division. See Heley, 506 N.W.2d at 718 (offsetting monetary award). However, because these payments were treated as prepayment of child support and never sent to Rudy, we must also determine whether Rudy‘s child support obligation was properly computed.
After arriving at a child support amount determined through application of the guidelines, the court may find from a preponderance of the evidence, applying criteria referred to in
In this case, the trial court, finding that Rudy was attempting to rehabilitate his earning potential by enrolling in a two year respiratory care training program at St. Alexius in Bismarck, tried to help Rudy by not requiring him to make child support payments for two years. Unfortunately, the trial court, in its attempt to coordinate the property division and Rudy‘s child support obligation to fit the circumstances, failed to properly explain how it applied the child support guidelines to arrive at the $600 per month child support obligation.
An obligor must have a net income between $1,700 and $1,800 per month to owe that amount of support for three children.
Rudy argues that his child support obligation can only be based on his actual income. He claims that “the Trial Court has to take RUDY the way it finds him, and that is as a person who is unemployed and going to school.” We disagree. The guidelines generally do not provide for imputing wages 2 to an unemployed obligor. See Heley, 506 N.W.2d at 722; Guskjolen v. Guskjolen, 499 N.W.2d 126, 128 (N.D.1993); Spilovoy v. Spilovoy, 488 N.W.2d 873, 878 (N.D.1992). However, “a spouse may not voluntarily place himself in a position which does not allow him to comply with the support provisions of a divorce decree, or voluntarily remain in such a position where the record indicates that he could find employment which would enable him to meet his support obligations.” Hanson v. Hanson, 404 N.W.2d 460, 466 n. 3 (N.D.1987), citing Perry v. Perry, 382 N.W.2d 628 (N.D.1986). Implied in the guideline schedule and a parent‘s duty to support their children is the assumption that an obligor with a demonstrated ability to earn income and support his children at a certain level will continue to do so unless he can establish legitimate reasons for a change. Olson v. Olson, 520 N.W.2d 572 (N.D.1994).2
In an opinion filed today, we adopt a “rule of reason” for determining if an obligor‘s actual income is “reasonable under all of the circumstances,” or if additional income should be imputed based on the obligor‘s earning capacity. Olson, 520 N.W.2d at 574. There is no question that Rudy could not return to work at the bar after it was distributed to Gail. The parties disagreed at trial, however, on whether Rudy voluntarily returned to school instead of obtaining suitable employment. With no evidence or findings on Rudy‘s reasonable earning capacity, including his actual earning capacity while attending school full-time, or whether Rudy‘s continued unemployment was voluntary or intentional, it was inappropriate for the court to order child support based on a monthly income of $1,700.
The court said it was giving Rudy a two year child support credit “to more closely approximate the division of property.” The court‘s statement implies that the amount of
Rudy also asserts on appeal that the trial court should reconsider its custody decision, because Gail is continuing a relationship with a male friend whose presence the court found was not in the children‘s best interests. At the second half of the bifurcated trial in this matter Rudy attempted to introduce incompetent hearsay evidence regarding the alleged relationship, but when asked, declined to move for a change of custody. By declining to make the motion, Rudy failed to raise the issue below and cannot raise it now for the first time on appeal.
The order of the court denying the motion to amend judgment is reversed, and the case is remanded for further proceedings.
VANDE WALLE, C.J., and SANDSTROM, J., concur.
MESCHKE, Justice, concurring.
I largely agree with the majority opinion, but I write separately to mark some differences. In my opinion, the only question to be resolved on remand should be Rudy‘s child support obligation while he chooses to attend school full-time, considering both his earning potential and substantial property resources. Only if his support obligation is below $600 per month need the trial court tinker with the property division.
I have not found a single case where this court has held that the “earning potential” or “liquidity” of an asset cannot be separately considered, besides for valuation, when equitably distributing marital property. To the contrary, we have repeatedly asked trial courts to consider all of the Ruff-Fischer factors when dividing property. See Gaulrapp v. Gaulrapp, 510 N.W.2d 620, 621 (N.D. 1994); Heley v. Heley, 506 N.W.2d 715, 718 (N.D.1993), citing Ruff v. Ruff, 78 N.D. 775, 52 N.W.2d 107 (1952) and Fischer v. Fischer, 139 N.W.2d 845 (N.D.1966); Pfliger v. Pfliger, 461 N.W.2d 432, 437 (N.D.1990). These factors expressly include the parties’ “financial circumstances as shown by the property owned at the time, its value at the time, [and] its income-producing capacity....” McAdoo v. McAdoo, 492 N.W.2d 66, 71 n. 1 (N.D.1992) (emphasis added), quoting Weir v. Weir, 374 N.W.2d 858, 862 (N.D.1985). The Ruff-Fischer factors contemplate that the characteristics of different kinds of property can properly be considered. See also Wiege v. Wiege, 518 N.W.2d 708, 711 (N.D. 1994) (Ruff-Fischer factors “include ... the liquidity or income-producing nature of the property distributed“); Steckler v. Steckler, 519 N.W.2d 23 (N.D.1994) (risks assumed under valuation of future pension benefits are properly considered); Pankow v. Pankow, 371 N.W.2d 153, 157 (N.D.1985) (“courts should avoid a property distribution which will destroy or damage the ability of one of the parties to earn a livelihood or which will destroy the value of the property“).
In this case, I believe the trial court properly considered the nature of the property in making the division. In particular, the trial court was justified in recognizing that the business would no longer be operated by two owners and that a single owner would have more expense, less earnings, and consequently a potentially depressed value.
The trial court explained further:
While [Rudy] is rehabilitating his earning capacity, it is unknown whether [Gail] will stay in Michigan until the children have graduated from high school, and even beyond that date. Because of the property award made to [Gail], the Court will not award spousal support to the Plaintiff [sic], but will reserve jurisdiction over that question in the event that circumstances change in the future. Changed circumstances may occur in the event of a business failure or other economic hardship that may befall [Gail]. This is not anticipated at the present time since she is making approximately the same income
That was a reasonable explanation.
On this record, Rudy‘s choice to return to college and remain unemployed, at his age, is voluntary. There is no evidence that he was unable to find employment. The trial court‘s carefully reasoned decision frees him to return to college to improve his earning potential, a worthy goal. But Rudy‘s complaint is that he should not be forced to support his three children, even if he has the earning ability and adequate resources to do so, because he is not working. I agree with the majority in rejecting this argument and in authorizing the trial court to apply the “rule of reason” that we adopted today in Olson v. Olson. Under that formulation, the trial court must make specific findings on whether the obligor‘s actual income is “reasonable under all of the circumstances,” and on whether additional income should be imputed based on the obligor‘s earning capacity, as well as his earnings from marital property distributed to him.
In a case like this, I would go further and authorize the trial court to take into account, under the Olson “rule of reason,” the amount of property available to Rudy while he attends college, beyond the direction of
We have stated that the ability to pay [child] support is not necessarily determined solely on the basis of income earned. The court must consider a party‘s net worth, including the extent of his physical assets and his earning ability as demonstrated by past income. Burrell v. Burrell, 359 N.W.2d 381, 383 (N.D. 1985) (citation omitted). See also Skoglund v. Skoglund, 333 N.W.2d 795, 796 (N.D.1983); Cook v. Cook, 364 N.W.2d 74, 76 (N.D.1985); Gronneberg v. Gronneberg, 412 N.W.2d 84, 95 (N.D.1987); Gabel v. Gabel, 434 N.W.2d 722, 724 (N.D.1989); Illies v. Illies, 462 N.W.2d 878, 881 (N.D.1990). After all, even wealthy dilettantes, who have never worked and don‘t plan to do so, should owe as great an obligation of support to their children as working persons do.
In my opinion, therefore, on remand, the trial court need only determine Rudy‘s reasonable earning potential and make specific findings about the proper level of support under the “rule of reason,” balancing the needs of the children with Rudy‘s ability and resources to support his children. In my view, only if the resulting support level is below the $600 per month already decreed must the trial court adjust the property distribution.
LEVINE, J., concurs.
Roger Keith PERALA, Plaintiff and Appellant, v. Nancy Patricia CARLSON, Defendant and Appellee.
Civ. No. 930392.
Supreme Court of North Dakota.
Aug. 24, 1994.