Filed 8/18/11 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
Karen K. Leverson, Plaintiff and Appellee
v.
Daniel W. Leverson, Defendant and Appellant
No. 20100396
Appeal from the District Court of Burleigh County, South Central Judicial District, the Honorable Robert O. Wefald, Judge.
REVERSED AND REMANDED.
Opinion of the Court by Kapsner, Justice.
Irvin B. Nodland, P.O. Box 640, Bismarck, N.D. 58502-0640, for plaintiff and appellee.
Rodney Ervin Pagel, 1715 Burnt Boat Drive, Madison Suite, Bismarck, N.D. 58503, for defendant and appellant.
Leverson v. Leverson
No. 20100396
Kapsner, Justice.
[¶1] Daniel W. Leverson appeals from аn order denying his motion to terminate or reduce his spousal support obligation to Karen K. Leverson. We conclude the district court erred in ruling an award of spousal support to Karen Leverson under the parties’ settlement agreement incorporated into thе divorce judgment was part of the marital property distribution which could not be modified. We reverse the order and remand to the district court to address whether Daniel Leverson established that a material change of circumstances has occurred to justify modificatiоn of his spousal support obligation.
I
[¶2] Daniel and Karen Leverson divorced in 2005 after a nearly 34-year marriage. The divorce judgment incorporated the terms of the parties’ settlement agreement. As part of the division of marital property, Karen Leverson was awarded a daycare building in Mandan the parties were purchasing on a contract for deed, and she was given the responsibility for the debt remaining on the contract for deed. Daniel Leverson was also ordered to pay Karen Leverson $30,000. Daniel Leverson was аwarded the parties’ family home in Bismarck and a parcel of property in Fargo, and he was given responsibility for the debts remaining on the two mortgages. Daniel Leverson was also awarded the parties’ interests in two successful restaurant businesses in Bismarck and Fargo, subject to all debts on the businesses.
[¶3] Section 9 of the divorce judgment addresses spousal support and provides:
9. Spousal Support . Upon entry of Judgment, Dan shall pay Karen $3,000 per month for spousal support until she dies or remarries, whichever comes first. Karen agrees payment of said amount may be split equally between one payment on the first day of each month and the other on the 15th. At the time that Karen begins to draw Social Security or is age 65, whichever comes first, the $3,000 will be reduced by the amount of her Social Security payment. Dan shall pay the cost of thе premium for Karen’s health insurance until she dies or remarries or if it becomes available to Karen at no cost or nominal cost, whichever comes first.
Dan’s income shall be subject to immediate income withholding pursuant to N.D.C.C. § 14-05-25.2. All spousal support payments shall be madе payable to the State Disbursement Unit, P.O. Box 7280, Bismarck, ND 58507-7280, as trustee for remittance to Karen, and shall be paid in a form acceptable to the State Disbursement Unit.
[¶4] After Karen Leverson sought and ultimately obtained a $41,621.33 money judgment in November 2009 against Daniel Leverson for unpaid sрousal support, Daniel Leverson moved to reduce his spousal support obligation. Daniel Leverson claimed he could no longer pay the ordered spousal support because the profitability of his restaurants had been substantially reduced by increased competition and a poor economy. In denying the motion in March 2010, the district court noted, “[i]n exchange for surrendering all of her interest in both businesses and all real and personal property associated with them, Daniel agreed to pay Karen $3,000 per month in spousal support offset by any amount of Social Security Karen receives when she begins to draw Social Security.” The court found, “[w]hile there is a material change of circumstances in the business tax revenues for his two businesses, he has not met his burden of proof as to any negative personal change of circumstances.” Daniel Leverson did not appeal the court’s order denying his motion.
[¶5] In July 2010, Karen Leverson filed a motion to hold Daniel Leverson in contempt for his continued failure to remain current on his spousal support obligation. In August 2010, Dаniel Leverson, through a different attorney, moved to terminate or reduce his spousal support obligation. Daniel Leverson presented additional evidence in an attempt to establish that his restaurant businesses were losing money because of “[d]ecreased volume” and “increased competition.” Daniel Leverson presented a recent personal financial statement and testified the Fargo restaurant had closed and the Bismarck restaurant was “currently up for sale and there is a sale pending on the propеrty.” After expressing displeasure at Daniel Leverson’s initiation of another motion rather than an appeal of the earlier order, the district court denied the motion and held him in contempt. The court stated:
The Court finds that in their property division Daniel got the income producing assets, and that Karen received as her share of the marital estate health insurance and $3,000 per month until she died or remarried.
The Court finds that on its face this property division is unequal and inequitable, UNLESS the $3,000 per month payment to Karen constitutes her share of the mаrital estate. She asserts she gave up these businesses and her home based on Daniel’s agreement to pay her $3,000 for the rest of her life (until she died or remarried). The Court finds that what is stated to be “spousal support” in the Judgment is in fact a division to Karen of her share of the maritаl estate. Thus, under
Baker [v. Baker
,
II
[¶6] Daniel Leverson challenges only the district court’s denial of his motion to terminate or reduce his spousal support obligation. He argues the court erred in denying the motion because the spousal support award was not part of the property division and he has established that a material change of circumstances has oсcurred since the divorce.
[¶7] In
Ebach v. Ebach
,
“The party seeking modification of spousal support bears the burden of proving there has been a material change in the financial circumstances of the parties warranting a change in the amount of support.”
Rothberg v. Rothberg
,
A
[¶8] In response to Daniel Leverson’s argument that the court erred in ruling the spousal support award was part of the parties’ property division, Karen Leverson contends the law of the case doctrine precludes Daniel Leverson from challenging the court’s ruling on the issue. She argues the court ruled in March 2010 that the spousal support award was part of the parties’ property division when it said, “[i]n exchange for surrendering all of her interest in both businesses and all real and personal property associated with them, Daniel agreed to pay Karen $3,000 per month in spousal support offset by any amount of Social Security Karen receives when she begins to draw Social Security.” According to Karen Leverson, Daniel Leverson’s failure to appeal the court’s March 2010 ruling precludes him from challenging the court’s ruling in this appeal.
[¶9] “Under the law of the case doctrine, a court’s dеcision on legal issues should govern the same issues in later stages of the same case.”
Bertsch v. Bertsch
,
B
[¶10] Daniel Leverson argues the district court erred in ruling the spousal support award was part of the parties’ division of marital property which is not subject to modification.
[¶11] In
Kannianen v. White
,
When a settlement agreement is incorporated and merged into a judgment, we interpret and enforce only the final judgment, not the underlying contract between the parties.
Serr v. Serr
,
[¶12] The divorce judgment is not ambiguous on the question whether the $3,000 monthly payments were intended as spousal support or property distribution. Section 9 of the divоrce judgment is captioned “Spousal Support” and the term “spousal support” is used twice in the text to describe the purpose of the payments. The text references N.D.C.C. § 14-05-25.2, which addresses the enforcement of spousal and child support orders. The $3,000 monthly paymеnts contain all the attributes of a spousal support award. “The attributes of spousal support, rather than property division, are indicated if the divorce payments are directed to be monthly, unsecured, and terminable upon designated events, like death or remarriage of the obligee.”
Baker
,
[¶13] The district court noted the property division would be “unequal and inequitable” unless the $3,000 monthly payments were considered part of her share of the marital estate. Karen Leverson did not argue in the district court and has not argued on appeal that the parties’ settlement agreement is unconscionable.
See, e.g.
,
Praus v. Praus
,
[¶14] We conclude the district court erred in ruling the $3,000 monthly payments constituted a part of the parties’ property distribution which is not subject to modification. The payments constitute spousal support which are subject tо modification. Because the district court did not reach the issue in this case, we reverse the order and remand for the preparation of findings of fact addressing whether Daniel Leverson has established that a material change of circumstances has occurrеd to justify modification of his spousal support obligation. “Because the initial spousal support award has never been modified, the district court must compare the parties’ financial circumstances at the time of the initial divorce decree with their current cirсumstances to determine whether there has been a material change in circumstances.”
Ebach
,
[¶15] We recognize the district court’s frustration with Daniel Leverson’s use of a new motion to modify his spousal support rather than an appeal from the March 2010 denial of his first motion. Hоwever, Daniel Leverson did present more recent evidence of his financial circumstances at the hearing on the second motion. A court may remedy the potential abuse of successive motions by awarding the responding party attorney fees and costs undеr N.D.C.C. § 14-05-23, or if appropriate, under N.D.C.C. § 28-26-01(2) and N.D.R.Civ.P. 11.
III
[¶16] We reverse the order and remand to the district court to address whether Daniel Leverson established that a material change of circumstances has occurred to justify modification of his spousal support obligation. Becаuse the district court judge who presided over the motion has retired, the case must be reassigned on remand, and the successor judge must comply with the requirements of N.D.R.Civ.P. 63. We deny Karen Leverson’s request for an award of attorney fees and costs for the appeal.
[¶17] Carol Ronning Kapsner
Mary Muehlen Maring
Daniel J. Crothers
Gerald W. VandeWalle, C.J.
Sandstrom, Justice, concurring specially.
[¶18] I am сoncerned that the majority opinion, at ¶ 15, seems to suggest that a judge’s “frustration” may justify a decision clearly contrary to law. I am further troubled by what may be interpreted as a majority suggestion that it may be appropriate on remand to sanction an appellant who had to appeal to secure compliance with the law.
[¶19] Dale V. Sandstrom