Court Opinion

ID: 9670615
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:23:30.328567+00
Date Added: 2024-06-11T18:16:05.641583
License: Public Domain

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 *839that the bar and restaurant generated before the divorce, but with only one of the parties there to run the business, the economic security provided by this asset may be tenuous.
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 NDAC 75-02-04.1-01(2) for “income imputed from assets.” Sensibly, that was the law before agency regulations governed the process.
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. NDAC 75-02-04.1-04 specifies that a parent has a duty “to support children to the extent of the parent’s ability.”
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.