Opinion ID: 2061259
Heading Depth: 1
Heading Rank: 2

Heading: Property Division and Spousal Support

Text: [¶ 14] The trial court distributed property valued at $87,000 to Kathy and valued at $12,933 to Bruce, while allocating $48,533 of debt to Kathy and $25,218 of debt to Bruce. The trial court denied Kathy any spousal support. [¶ 15] On appeal, Kathy argues the allocation of debts is clearly erroneous because the trial court did not adequately consider Bruce's economic fault. She also contests the trial court's finding she was not disadvantaged by the marriage, and she argues she is entitled to spousal support. [¶ 16] We recently summarized our standard of review for property division in Zuger, 1997 ND 97 at ¶ 6 (citations omitted): The trial court must make an equitable distribution of the marital property, based upon the facts and circumstances of each individual case. The court's determinations on valuation and division of property are findings of fact that will only be reversed on appeal if they are clearly erroneous. A finding is clearly erroneous only if the reviewing court on the entire record is left with a definite and firm conviction that a mistake has been made. Similarly, in Beals v. Beals, 517 N.W.2d 413, 415-16 (N.D.1994), we explained a trial court's findings of fact about spousal support will not be set aside unless clearly erroneous. As Heley v. Heley, 506 N.W.2d 715, 718 (N.D.1993), and Glander v. Glander, 1997 ND 192, ¶ 7, 569 N.W.2d 262, explain, property division and spousal support are interrelated, and often must be considered together. [¶ 17] The trial court tried to explain this property and debt division without spousal support: ... the Court, by not including a spousal support award, has left, on balance, the home and a future positive cash flow to the wife, while assigning most of the debt and very little of the property to the husband. He is presently employable at a substantial income. This disparity in division is also justified because of the conduct of the husband during the marriage. Bruce argues, although the distribution is unequal, really unequal, it is equitable. (emphasis original). We are not persuaded. The trial court's basic assumption, that the debt amassed, directly or indirectly, [has inured] to the benefit of the entire family, is not supported by the record. Also, the trial court's finding Kathy was not disadvantaged by the marriage is not supported by the record. [¶ 18] This family's financial instability was largely attributable to Bruce's actions. Bruce had gone through at least ten employers in the past few years. His frequent changes in employment resulted from alcohol abuse and overspending. He had had career-high earnings in excess of $72,000 annually, but he was earning only $50,000 currently. A significant portion of the family's assets have been used to fund Bruce's alcoholic treatments and to pay off credit-card debts he accumulated during the separations. A $37,000 IRA was cashed to pay such debts, and that resulted in a lingering federal income tax liability of over $10,000 with an associated state income tax debt of $1,446. As a result, the IRS has threatened to levy against the home distributed to Kathy. [¶ 19] The trial court divided the tax debts equally between Bruce and Kathy. Although there is conflict in the testimony on how these tax liabilities came about, it appears they were the result of a joint decision to cash the IRA. Accordingly, we affirm allocation of the tax debts as appropriate. [¶ 20] However, the record does not support the allocations of other debts. Of the $13,300 balance on a MBNA credit card, Bruce was ordered to pay $9,650 and Kathy $3,650. Yet, at trial, Bruce admitted these charges, as well as credit card debts of $4,700 to Discover and $4,500 to Citibank, were his alone. He stated these debts arose during the separations to meet [my] needs and the needs including payment of support. [¶ 21] Where one spouse has accumulated debt for his own personal benefit and to pay court-ordered support to a separated spouse, that debt should not be shifted to the supported spouse. The trial court's debt allocation had the effect of requiring Kathy to reimburse Bruce for part of his support payments to her. This was error. On remand, we direct the entire MBNA debt of $13,300 be assigned to Bruce. [¶ 22] Because none of the Discover and Citibank debts were allocated to Kathy, we do not disturb those allocations to Bruce. Those credit cards were in Bruce's name alone, and were clearly for Bruce's personal use and obligations during the last separation. These debts have little or no bearing on the property division or on spousal support in this case. [¶ 23] The trial court made Kathy solely responsible for the $10,000 balance due on her education loans. Because Kathy was close to graduating, the trial court also found she has not been disadvantaged by this divorce and denied her spousal support. Kathy's return to school and completion of her degree have worked to Bruce's advantage, yet it resulted from Kathy's own initiative, hard work, and frugality while separated. Even with her imminent nursing degree, the trial court was clearly erroneous in finding Kathy was not disadvantaged by this marriage. She was saddled with family debts from Bruce's financial irresponsibility as well as for her own education. She had yet to begin employment at the age of 42. Without other property to distribute to equalize the burdens and disadvantages of this marriage to Kathy, spousal support is critical. [¶ 24] Rehabilitative spousal support is intended to restore an economically disadvantaged spouse to an independent status or to equalize the burden of the divorce. Lill v. Lill, 520 N.W.2d 855, 856 (N.D.1994). Here, since Kathy's rehabilitation is being accomplished at her own expense, she should receive some rehabilitative spousal support to help retire her educational debt and to embark on employment. [¶ 25] A trial court must consider all of the relevant factors under the Ruff-Fischer guidelines when deciding spousal support, as well as in dividing marital property. See Ruff v. Ruff, 78 N.D. 775, 52 N.W.2d 107 (1952); Fischer v. Fischer, 139 N.W.2d 845 (N.D.1966). We have approved spousal support to enable a disadvantaged spouse to obtain a college degree. Pfliger v. Pfliger, 461 N.W.2d 432, 436 (N.D.1990). In another case, we also reversed a denial of spousal support where the trial court had concluded a spouse was not disadvantaged by divorce because she received education during the marriage, has an adequate salary and is self supporting. Van Klootwyk v. Van Klootwyk, 1997 ND 88, ¶ 14, 563 N.W.2d 377. There, we pointed out rehabilitative spousal support is often still important even where the disadvantaged spouse was already working. See also Wiege v. Wiege, 518 N.W.2d 708, 710 (N.D.1994); Wahlberg v. Wahlberg, 479 N.W.2d 143, 145 (N.D.1992); Williams v. Williams, 302 N.W.2d 754, 758 (N.D.1981). Paraphrasing Van Klootwyk at ¶ 18, we conclude, having begun her rehabilitation on her own during the marriage, Kathy should not be denied rehabilitative spousal support, especially when the cost of going from financially dependent to adequately self-supporting has not been equitably shared by her former spouse. [¶ 26] Bruce contends spousal support is inappropriate because his current income less his current child support obligation and Kathy's potential total income as a nurse, with the addition of his child support, would be nearly the same. However, her beginning pay would no doubt reflect lack of experience, and she would still be saddled with educational debts as well as family debts. Bruce's argument also ignores that Kathy was not yet employed at the time of the divorce, and her child support will soon drop drastically as two of the three supported children reach majority. Correspondingly, reduced child support will leave Bruce well ahead of Kathy in spendable income. [¶ 27] Other Ruff-Fischer factors support an order of spousal support here. Assets of this lengthy marriage are minimal. While Kathy has the house, it is still encumbered by a significant mortgage. Kathy's years of caring for the children and homemaking have enabled Bruce to improve his economic status, although he has squandered much of that advantage through alcohol. Bruce admittedly engaged in an extra-marital affair, and his marital misconduct broke this marriage. We are left with a definite and firm conviction that a mistake has been made in saddling Kathy with her entire educational debt and denying her any spousal support. [¶ 28] Spousal support is particularly appropriate here as an obligation that will survive, even if Bruce's overspending should eventually lead to his personal bankruptcy. See Redlin v. Redlin, 436 N.W.2d 5, 8 (N.D.1989)([P]roperty payments are dischargeable in bankruptcy, unlike spousal-support payments.); 11 U.S.C.A. § 523(a)(5) (1990)(A discharge under ... this title does not discharge an individual debtor from any debt ... to a ... former spouse ... for ... support of such spouse.). We reverse the denial of spousal support and remand for a determination of Kathy's educational expenses to frame an appropriate award of rehabilitative spousal support. [¶ 29] We also instruct the trial court to retain jurisdiction of spousal support to permit modification for a significant change of circumstances. See van Oosting v. van Oosting, 521 N.W.2d 93, 101 (N.D.1994); Lucy v. Lucy, 456 N.W.2d 539, 544 (N.D. 1990); Branson v. Branson, 411 N.W.2d 395, 398 (N.D.1987). Two circumstances may warrant additional spousal support later. First, Kathy was infected with HPV as a result of an extra-marital affair by Bruce. See McAdoo v. McAdoo, 492 N.W.2d 66, 69 (N.D.1992)(HPV can be a chronic viral infection that sometimes develops into cancer). Retention of jurisdiction over spousal support will protect Kathy should her HPV infection bring her greater problems. [¶ 30] Another reason to retain jurisdiction over spousal support arises from the circumstance that Bruce may one day inherit a portion of his parent's sizeable estate. Since this future inheritance was not a vested present interest and is speculative, it could not be considered by the trial court for property division, though Kathy asked for a share. Yet, should this inheritance be realized, it may have a significant bearing on future spousal support. [¶ 31] We affirm the visitation as ordered by the trial court. We reverse and remand debt allocations and spousal support for modifications consistent with this opinion. [¶ 32] VANDE WALLE, C.J., and MARING, J., concur.