Change in Circumstances Needed to Modify Awards of Spousal Maintenance

Change in Circumstances Needed to Modify Awards of Spousal Maintenance

Under Minnesota law, Minn. Stat. 518A, Section 39, subd. 2., a court may order a modification in a spousal maintenance order if there has been a change in circumstances that makes the order now unreasonable. The court may do this because of any of the following:

  1. Increased or decreased gross income of the obligor or obligee;
  2. Substantially increased or decreased need of the obligor or obligee;
  3. Receipt of welfare benefits;
  4. Change in the cost of living, based on the Bureau of Labor Statistics;
  5. A child’s extraordinary medical costs;
  6. A change in the availability of health insurance coverage or a substantial increase in its cost;
  7. The addition or an increase or decrease in work-related or education-related child care expenses; or
  8. Emancipation of a child.

It is important to note that an ex-spouse’s refusal to obtain employment is not a change in circumstances that requires making a temporary award of spousal maintenance permanent.  

In Van Steenburgh v. Clyma, A13-1318 (Minn. Ct. App. Mar. 3, 2014), the Court of Appeals rejected an ex-spouse’s motion to make a temporary spousal award of $10,000 per month permanent. The court noted the dissolution court had determined that his reasonable monthly budget was substantially less at $7691.35.

The court also found that evidence showing that the ex-husband had refused to rehabilitate himself and find employment was sufficient to support the denial of the motion. An ex-spouse who receives temporary maintenance is required to make a good faith effort to rehabilitate and find employment. Here, an employment expert had opined that the ex-spouse could be earning a salary of $80,000 or more after three or five years of employment. Also, he had received $138,000 more than his expenses as temporary maintenance, and, with the assets that had been distributed following the divorce, he had the resources to support himself.

The evidence that he had not sufficiently tried to rehabilitate himself included: (1) a long time period when he did not apply for any jobs; (2) taking just one community college course during the period of temporary spousal support; (3) only focusing on a narrow set of jobs and refusing retraining and not considering employment opportunities outside his area of expertise.

An ex-spouse’s decrease in housing expenses, based on the sale of the former marital home and purchase of a less expensive home, is not a substantial change in circumstances that requires modification of a spousal maintenance order.

In Thomas v. Thomas, A13-905 (Minn. Ct. App. Mar. 3, 2014), the original divorce decree provided that the ex-husband, a self-employed dentist, would pay his ex-wife permanent spousal maintenance of $7,440 per month, which was to be lowered to $5,200 when the parties’ youngest child was emancipated. After the youngest child was emancipated in June 2012, the ex-wife sold the former marital residence (which had become her property) and relocated to a condominium in Florida.

After losing in the district court, the ex-husband appealed, arguing that the substantial decrease in housing expenses and increase in voluntary expenses, such as vacations and a car payment, made the spousal-maintenance agreement unfair because it made him support her in a lifestyle that was higher than the marital standard of living. The Minnesota Court of Appeals found his argument that the expenses did not reflect the marital standard of living lacked merit, as the parties lived very well on his income during the marriage, driving nice cars and taking vacations. Furthermore, the court emphasized that the parties had agreed on the permanent spousal maintenance obligation, and that agreement is given great weight in motions to modify maintenance. The court emphasized that the ex-husband receives a tax benefit from paying spousal-maintenance. Even though the wife was relatively young and cohabitating with a significant other, the court found that there was no change in circumstances that required modification of spousal maintenance.

If you believe that a change in spousal maintenance is needed, whether an increase or a decrease, you should consult Jeffrey R. Arrigoni Attorney at Law immediately.

Dividing a House Can Create Problems

Dividing a House Can Create Problems

Dividing the family home, usually the family’s largest asset, after the divorce can result in years of conflict and litigation, as noted by a recent article in the Minnesota Lawyer. The court order that divides the property is final and, therefore, cannot be modified. Thus, all the court can do with an order dividing property is “implement, enforce or clarify the provisions of the decree, as long as it does not change the parties’ substantive rights.” Redmond v. Redmond, 594 N.W.2d 272, 275 (Minn. Ct. App. 1999).

Permissible court orders to implement property division may include orders:

  • Granting one partner the power to choose the real estate agent;
  • Putting one partner in control of the sale;
  • Setting the listing price if a party has not sold the home by a deadline set in the order dividing the property;
  • Reducing the listing price to attract buyers;
  • Requiring a party to accept an offer within a specific price range;
  • Directing a party to vacate the home where that party’s presence in the home has obstructed efforts to sell the property; and
  • Transferring title from one party to another.

But once a court order has divided property, a court cannot modify that division, and even orders that are otherwise permissible cannot alter the division of the property.

Thus, in Alexandra-Knight v. Knight, A07-2181 (Minn. Ct. App. Nov. 25, 2008), the Minnesota Court of Appeals held that the district court abused its discretion in ordering the title to the marital home be transferred from the ex-husband to the ex-wife so that she could sell the house. In that case, the divorce decree granted the ex-husband title to the marital home with a lien in favor of the ex-wife, and the lien was to be paid within 75 days of entry of judgment, with interest accruing after the 75th day. The ex-husband was also required to refinance or release the ex-wife’s name from the mortgage within eight months after the divorce decree was entered, and if he failed to meet his obligations, he was required to sell the home “immediately.”

Because he did not meet his obligations or sell the home, the district court had ordered the title transferred to the ex-wife for her to sell the house. The Court of Appeals found that that order significantly changed the ex-husband’s property rights in several ways, including (1) having an unidentified realtor, rather than the parties, set the sales price; (2) not requiring that proceeds in excess of the lien be provided to the ex-husband; and (3) denying the ex-husband his title to the home and any equity he was entitled to. Thus, the court said that an order for title transfer and sale could be an appropriate means to implement a divorce decree, but, in this case, the court order did not preserve the ex-husband’s equity in the home and, therefore, the order was an abuse of discretion.

Contact a Family Law Attorney for Help

If you and your spouse own a home or other property together, you should consult a family law attorney to assist in drafting a settlement agreement that will reduce the opportunities for mischief in dividing the property. And if you have an order dividing property and your ex-spouse is not complying with the order, you should consult Jeffrey R. Arrigoni Attorney at Law for help today.

KARON WAIVERS DIVEST COURTS FROM JURISDICTION TO MODIFY SPOUSAL MAINTENANCE

KARON WAIVERS DIVEST COURTS FROM JURISDICTION TO MODIFY SPOUSAL MAINTENANCE

In a recent case, the Minnesota Court of Appeals made clear that Karon waivers divest courts from jurisdiction over motions to modify spousal maintenance. Thus, in Gossman v. Gossman, A13-1095 (Minn. Ct. App. June 2, 2014), the court held that once an agreement includes a Karon waiver, any subsequent order that attempts to change spousal maintenance is void and unenforceable.

Specifics of the Case

In the Gossman case, the parties agreed that the ex-husband would pay his former spouse $5,000 per month for five years, and the district court would lack jurisdiction to modify that award. Nonetheless, the parties agreed to modify the maintenance award, and the district court, pursuant to their agreement, issued orders that stated that the maintenance award would be changed. The ex-wife later moved to vacate the modification orders; she wanted to enforce the original maintenance award. The Court of Appeals held that the motion to vacate the modification orders was correctly granted by the district court but that the district court should have also fully enforced the original maintenance award.

In this case, the ex-wife had been represented by counsel at the time of the divorce while the ex-husband was unrepresented. The parties’ marital termination agreement included a Karon waiver; that waiver stated “Except as provided above, neither party is awarded spousal maintenance (alimony) from the other past, present, or future, and that the same is hereby forever waived. The Court is divested of jurisdiction to modify the maintenance provisions herein.”

In approving the marital termination agreement, the district court specifically found that the written agreement disclosed the parties’ financial situations finally and that the agreement was fair and equitable and supported by adequate consideration.

Despite the parties’ agreement in this case, five months after the dissolution and degree, the parties agreed to reduce the ex-husband’s maintenance obligation by $1,600, to $3,400 per month. Neither party was represented by counsel, although the court opined that the stipulated order appeared to have been prepared by a legal professional.

About nine months later, the parties agreed to reduce the ex-husband’s spousal maintenance obligation by $1000, to $2,400 per month, although the order apparently was not entered due to inadvertence. Then, four months later, the parties agreed to reduce the ex-husband’s maintenance to $1,360 per month for seven months, and $1,160 for the remainder of the five years.

Change in Heart

About seven months later, the ex-wife moved to vacate the orders, asserting they were void because the original judgment and decree included a valid Karon waiver, so the district court did not have jurisdiction to modify the original award, even though the parties had agreed to the modifications. She asked for the original maintenance to be reinstated and for her ex-husband to pay the unpaid balance, which by then totaled $59,170.

Although by statute, each party has a right to seek modification of a spousal maintenance award at a future date, Minn. Stat. Section 518A.39, the courts are without jurisdiction to award a future modification if the parties have waived their rights to them. A valid Karon waiver must satisfy four factors: (1) there must be a contractual waiver of the parties’ rights to modify maintenance; (2) the agreement must expressly divest the district court of jurisdiction over maintenance modifications; (3) the agreement must be incorporated into the final judgment and decree; and (4) the court must find that the agreement is both fair and equitable and is supported by consideration and that the parties have fully disclosed their finances.

The court held that, because the Karon agreement divested the court of jurisdiction, the parties cannot modify the Karon agreement. The court stated, “II]f a district court has divested itself of jurisdiction over a particular matter, the district court’s jurisdiction may not be restored by the parties’ mutual agreement.”

The court also held that the district court was required to enforce the ex-husband’s maintenance obligation because failing to enforce the maintenance obligation was the same as modifying the original maintenance agreement. Thus, even though the ex-wife had agreed to reduced maintenance for an extended period of time, the court rejected the argument that she waived the right to collect the full amount of spousal maintenance. As a result, the ex-husband will now need to pay the balance of the original maintenance amount.

This case illustrates the importance of consulting with an experienced family law attorney before entering into an agreement to waive rights regarding maintenance.