Case Name: Michael L. GUNN, Plaintiff and Appellant, v. Lore E. GUNN, Defendant and Appellee
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1993-09-08
Citations: 505 N.W.2d 772
Docket Number: No. 17953
Parties: Michael L. GUNN, Plaintiff and Appellant, v. Lore E. GUNN, Defendant and Appellee.
Judges: MILLER, C.J., and WUEST, J., concur.
Reporter: North Western Reporter 2d
Volume: 505
Pages: 772–778

Head Matter:
Michael L. GUNN, Plaintiff and Appellant, v. Lore E. GUNN, Defendant and Appellee.
No. 17953.
Supreme Court of South Dakota.
Considered on Briefs May 26, 1993.
Decided Sept. 8, 1993.
Rehearing Denied Oct. 15, 1993.
Cecelia A. Grunewaldt, Sioux Falls, for plaintiff and appellant.
Dennis C. McFarland of McFarland & Nicholson, Sioux Falls, for defendant and appel-lee.

Opinion:
AMUNDSON, Justice.
Michael L. Gunn (Michael) appeals from a judgment awarding Lore E. Gunn (Lore) past alimony and holding Michael in contempt for failure to make alimony payments previously ordered by the court. We affirm.
FACTS
Michael and Lore were divorced by entry and decree of divorce on July 7, 1982. The judgment provided that Michael was to pay Lore $65.00 per week in alimony "until [Lore] becomes deceased or remarries[.]" The alimony agreement was based upon circumstances that were dictated into the record at the time the parties presented their stipulation and agreement to the court for its approval. Unfortunately, no transcript of the divorce proceedings could be located and thus there 'is no record of what the circumstances for the alimony agreement were.
Michael paid Lore $65.00 a week in alimony from the time of divorce until mid-June 1986 when he became unemployed due to a strike at John Morrell's. The court entered a contempt order against Michael in October 1986 for past-due alimony. Michael borrowed money from his mother and sister and expunged himself of contempt by paying the past-due amount.
Following the contempt order, Michael resumed making weekly $65.00 payments to Lore through April 27, 1987. At that time, Michael believed that Lore was cohabitating and he was under the mistaken impression that he could cease alimony payments for that reason. Michael has never resumed making alimony payments.
Michael returned to work at Morrell's in May 1988 and continued to work there until his retirement on November 30, 1988. Michael had made plans to begin a job building hog confinement buildings upon his retirement but, as the result of a stroke suffered on December 10, 1988, was unable to start the job. Michael attempted to work at several jobs until he was declared disabled by the Social Security Administration on September 20,1990, as the result of his illiteracy and physical disabilities.
In late 1991, Michael sold one of two properties he owned. Michael attempted to obtain clear title in 1992 by having the court satisfy the October 1986 alimony judgment which he had paid. Michael contemporane ously filed a motion to modify the judgment and decree of divorce based on a change in circumstances. Lore responded by filing a motion to show cause as to why Michael should not be held in contempt for failure to pay alimony since April 1987.
The court entered an order for satisfaction of the October 1986 judgment, but held the proceeds from the sale of Michael's property in escrow. The court further denied Michael's motion for a change in circumstances, entered a judgment for Lore for past-due alimony, and held Michael in contempt. Michael appeals.
ISSUES
1. Whether the trial court abused its discretion in denying Michael a modification of alimony and holding him in contempt for failure to pay alimony past due?
2. "Whether the trial court erred in holding jurisdiction over Michael's homestead proceeds?
ANALYSIS
Modification and Past-Due Alimony
Michael asserts that the trial court abused its discretion when it refused to modify his alimony obligation and held him in contempt for his failure to make alimony payments since 1987. A trial court may modify support orders from time to time. SDCL 25^4-41. However, an alimony award may not be modified unless there is a change of circumstances from those that existed at the time of the original decree. Foley v. Foley, 429 N.W.2d 42, 45 (S.D.1988). The party seeking modification bears the burden of proving the change in circumstances. Id. We review the trial court's decision to modify an alimony award under the abuse of discretion standard. Id. "An 'abuse of discretion' is discretion exercised to an end or purpose not justified by, and clearly against, reasoning and evidence." Horr v. Horr, 445 N.W.2d 26, 28 (S.D.1989).
In assessing a change in circumstances, we consider a change in the necessities of the recipient and the financial ability of the obli-gor. Id. Michael asserts that his circumstances have changed in that he has retired, suffered a stroke, been declared disabled by the Social Security Administration and, accordingly, suffered a change in his income. He likewise asserts that Lore has a higher income than she did at the time of the divorce and thus does not have as great of a need for alimony.
The record indicates at the time of the divorce that Lore worked only sporadically due to health problems. Following the divorce, Lore moved to the state of Washington and obtained employment. She has reported adjusted incomes of $25,490.00 for 1990 and $32,246.00 for 1991. The court found, however, that there was a substantial likelihood that Lore would be laid off from her job at Boeing in the near future due to projected layoffs. In addition, Lore continues to suffer from a number of health problems, including pulmonary and cardiac diseases which often impair her ability to work. With the evidence of the likelihood of Lore's job terminating in the near future and her continuing health problems, we do not find that the trial court abused its discretion in finding that her need for . alimony had not changed. See Lampert v. Lampert, 388 N.W.2d 899, 902-03 (S.D.1986).
Michael's income tax returns indicate that he has had adjusted income of $12,-982.66 for 1987, $19,676 for 1988, $4,173.00 for 1989, $6,352.00 for 1990, and $3,956.00 for 1991. The incomes for 1988 through 1991, however, are somewhat misleading, as they include losses of between $2,500.00 and $7,800.00 on rental property that Michael rented to his son. In addition, the 1990 and 1991 incomes do not include Michael's monthly social security disability payments of $974.00 ($11,698 annually). Therefore, while Michael's income has been effected by his retirement, his income tax returns are not an entirely accurate reflection of his income. Michael's current income comes from his pension and social security payments as opposed to wages. His annual income is still approximately $16,858.00 ($5,160.00 annual pension + $11,698.00 annual disability). In addition, Michael has $32,000 in net proceeds from the sale of real estate (more thoroughly discussed in Issue 2) and has .managed to accumulate $5,000 in bonds since the divorce. Despite his change in circumstances, Michael still has sufficient funds to pay his alimony obligation. Under the established precedent of this court, we cannot say that the trial court abused its discretion in finding that Michael had the financial ability to make the weekly $65.00 alimony payments. See Lampert, 388 N.W.2d at 903.
Furthermore, Michael was accordingly in contempt for his almost five years of nonpayment of alimony. In 1987, Michael, of his own accord, quit making the alimony payments dictated by the divorce decree. Michael took no action to petition the court for any type of modification until he had accumulated nearly five years of arrearages and needed to obtain a clear title to sell some real estate. Past-due support obligations are modifiable only as to the date of filing of a petition for modification. SDCL 25-7-7.3. Michael cannot come before this court now and expect five years of nonpayment of his support obligation to be erased. The trial court did not abuse its discretion in holding Michael in contempt for alimony arrearages beginning in April 27, 1987.
Homestead Proceeds
In 1992, Michael sold one of two pieces of real estate that he owned for $32,000.00. The court held the proceeds from the sale in escrow pending resolution of the modification and alimony dispute. After the trial court entered its judgment against Michael for ar-rearages, Michael was required to deposit the judgment amount with the trial court before he could obtain the balance of the real estate proceeds. Michael asserts that the proceeds from the sale were homestead proceeds and thus exempt from judgment.
South Dakota law provides protection from attachment, liens, and other final process ordered by the court for homesteads and the proceeds from the sale of the homesteads.
A homestead:
(1) As defined and limited in chapter 43-31, is absolutely exempt; or
(2) In the event such homestead is sold under the provisions of chapter 21-19, or is sold by the owner voluntarily, the proceeds of such sale, not exceeding the sum of thirty thousand dollars, is absolutely exempt for a period of one year after the receipt of such proceeds by the owner....
SDCL 43-45-3. Judgment creditors are similarly prevented from obtaining liens on the homestead. SDCL 15-16-7.
The purpose of the homestead exemption is to provide the security of a home to a family against the claims of creditors. Speck v. Anderson, 318 N.W.2d 339, 343 (S.D.1982). "The spouse and any children are not outside creditors, but are the family. The exemption cannot be used to harm the ones it is designed to protect." In re Application of Jensen, 414 N.W.2d 742, 745-46 (Minn.Ct.App.1987).
A divorce court, being a court of equity, possesses the power to impose a lien upon a homestead for purposes of spousal or child support. Kerr v. Kerr, 74 S.D. 454, 459, 54 N.W.2d 357, 360 (1952) (quoting Harding v. Harding, 16 S.D. 406, 412-13, 92 N.W. 1080, 1082 (1902)). In neither Harding nor Kerr, did the original divorce decree provide a lien upon the husband's property for alimony or support. Rather, the court found that "both under the liberal provisions of our statute and the general powers invested in courts of equity, it was perfectly competent for the circuit court to so far modify the original judgment as to make the alimony a lien upon the homestead in the possession of the defendant." Harding, 16 S.D. at 412-13, 92 N.W. at 1082; Kerr, 74 S.D. at 459, 54 N.W.2d at 360 (quoting Harding). The Minnesota Court of Appeals has similarly stated: "The court's equitable powers override the application of the homestead exemption." Jensen, 414 N.W.2d at 746.
We do not find that the trial court abused its discretion in escrowing the proceeds from the sale of Michael's real estate for a judgment of alimony arrearages. Michael owned two pieces of real estate: one in which he lived and one which he rented to his son. Michael planned to use the proceeds from the sale of the property on which he was living to pay off the remaining mortgage on his second property to which he was moving. Escrowing the sale proceeds did not deprive Michael of a home; permitting Michael the use of the homestead exemption deprives Lore of five years of alimony to which she was entitled. Michael made an independent, inappropriate decision to terminate his alimony payments in 1987 notwithstanding his knowledge of the divorce decree in this matter. Equity will not afford Michael the luxury of paying off the mortgage on a second property he owns with proceeds from the sale of the first when he has an outstanding judgment for alimony arrearag-es. The trial court did not abuse its discretion in placing in escrow the amount of money from the proceeds of his real estate sale necessary to cover alimony arrearages.
The order of the trial court is accordingly affirmed.
MILLER, C.J., and WUEST, J., concur.
SABERS, J., concurs in part and dissents in part.
HENDERSON, J., dissents.
. The losses on the rental property are a result of mortgage payments and property taxes which exceed rental income. In addition, Michael was able to deduct depreciation on the rental property from his income.
. In 1987, the Minnesota Legislature revised its homestead statute to exempt out judgments for child support or maintenance arrears. Minn. Stat. § 510.07.