Court Opinion

ID: 931731
Source: CourtListenerOpinion
Date Created: 2013-06-26 00:02:53.44774+00
Date Added: 2024-06-11T12:35:31.428812
License: Public Domain

Decisions     of the    Nebraska Court of Appeals
	                              JOHNSON v. JOHNSON	895
	                              Cite as 20 Neb. Ct. App. 895

                   Benjamin D. Johnson, appellant, v.
                     Vanessa R. Johnson, appellee.
                                    ___ N.W.2d ___

                        Filed June 25, 2013.     No. A-12-587.

 1.	 Modification of Decree: Child Support: Appeal and Error. An appellate court
      reviews proceedings for modification of child support de novo on the record and
      will affirm the judgment of the trial court absent an abuse of discretion.
 2.	 Judges: Words and Phrases. A judicial abuse of discretion exists when the
      reasons or rulings of a trial judge are clearly untenable, unfairly depriving
      a litigant of a substantial right and denying just results in matters submitted
      for disposition.
 3.	 Motions to Dismiss: Directed Verdict: Appeal and Error. For purposes of
      appellate review, a motion to dismiss and a motion for directed verdict are
      treated similarly.
 4.	 Motions to Dismiss: Proof. In the context of a motion to dismiss made at the
      close of all of the evidence in a proceeding on an application to modify a dis-
      solution decree, in a court’s review of evidence on a motion to dismiss, the
      nonmoving party is entitled to have every controverted fact resolved in his or her
      favor and to have the benefit of every inference which can be reasonably drawn
      therefrom, and where the plaintiff’s evidence meets the burden of proof required
      and the plaintiff has made a prima facie case, the motion to dismiss should
      be overruled.
 5.	 Motions to Dismiss. If, on a motion to dismiss, there is any evidence in favor of
      the nonmoving party, the case may not be decided as a matter of law.
  6.	 ____. When a trial court sustains a motion to dismiss, it resolves the controversy
      as a matter of law and may do so only when the facts are such that reasonable
      minds can draw only one conclusion.
 7.	 Modification of Decree: Child Support: Proof. A party is entitled to a modi-
      fication of an award of child support if he proves a material change in circum-
      stances which has occurred since the entry of the decree or a previous modifica-
      tion and if such change was not contemplated when the decree was entered.
 8.	 Child Support: Evidence. Earning capacity should be used in determining a
      child support obligation only when there is evidence that the parent can realize
      that capacity through reasonable efforts.
  9.	 ____: ____. When the evidence demonstrates that a parent is unable to realize a
      particular earning capacity by reasonable efforts, it is clearly untenable for the
      trial court to attribute that earning capacity to the parent for purposes of deter-
      mining child support.
10.	 Modification of Decree: Child Support: Rules of the Supreme Court.
      Changes in career or occupation which reduce the ability to provide child sup-
      port are allowed, so long as they are made in good faith, and future support
      obligations should generally be based on present income and the Nebraska Child
      Support Guidelines.
11.	 Modification of Decree: Child Support: Evidence. The decision of whether to
      modify a child support obligation must be based upon the evidence presented by
   Decisions of the Nebraska Court of Appeals
896	20 NEBRASKA APPELLATE REPORTS

     the parties, and it would be improper for the court to focus on anything but the
     most recent circumstances ascertainable from the evidence.
12.	 Modification of Decree: Child Support. Among the relevant factors to be
     considered in determining whether a material change of circumstances has
     occurred is any change in the financial position of the parent obligated to pay
     child support.

  Appeal from the District Court for Douglas County: W.
Russell Bowie III, Judge. Reversed and remanded for further
proceedings.

  Benjamin M. Belmont and Amanda M. Phillips, of Brodkey,
Peebles, Belmont & Line, L.L.P., for appellant.

  Brent M. Kuhn, of Harris Kuhn Law Firm, L.L.P., for
appellee.

   Inbody, Chief Judge, and Irwin and Moore, Judges.

   Irwin, Judge.
                      I. INTRODUCTION
   Benjamin D. Johnson appeals an order of the district court
for Douglas County, Nebraska, granting a directed verdict at
the close of Benjamin’s evidence on his complaint for modi-
fication of a marital dissolution decree. On appeal, Benjamin
asserts that the court erred in granting the directed verdict, in
finding that he did not demonstrate a material change of cir-
cumstances, and in denying his proffer of evidence of his liv-
ing expenses. We find that the court erred in denying relevant
evidence, in finding that Benjamin had failed to demonstrate
a material change of circumstances, and in granting a motion
for directed verdict. As such, we reverse, and remand for fur-
ther proceedings.

                      II. BACKGROUND
   This is the second appeal related to Benjamin’s complaint
for modification of the decree dissolving his marriage to
Vanessa R. Johnson. See Johnson v. Johnson, No. A-10-849,
2011 WL 2427055 (Neb. App. June 14, 2011) (selected for
posting to court Web site). We dismissed the prior appeal for
lack of jurisdiction. Much of the relevant factual background
        Decisions   of the  Nebraska Court of Appeals
	                      JOHNSON v. JOHNSON	897
	                      Cite as 20 Neb. Ct. App. 895

concerning this case is set forth in our memorandum opinion in
the prior appeal and recounted as necessary here.
   In October 2006, the district court entered an order dis-
solving the parties’ marriage, providing the parties with joint
legal custody of their two children and providing Vanessa
with primary physical possession, and ordering Benjamin to
pay child support and alimony. In June 2009, Benjamin filed
a complaint to modify, seeking to reduce his child support and
alimony obligations and to modify his responsibility for non-
reimbursed medical expenses. Vanessa denied that there had
been a material change of circumstances, but cross-petitioned
for other modifications.
   On May 14, 2010, the parties appeared before a district court
referee. At the outset of the hearing, it was determined that
the issues to be heard before the referee were limited to those
raised by Benjamin and that the issues raised by Vanessa would
be heard by the district court judge at a later time.
   At the hearing before the referee, Benjamin was the only
witness to testify. Benjamin testified that his complaint for
modification was based upon a substantial decrease in his
income compared to his earning capacity at the time of the
dissolution decree. Benjamin testified that prior to the dissolu-
tion trial, he had been employed in a job where he was earn-
ing approximately $140,000 per year. He testified that he had
left that employment prior to the dissolution trial because of a
hostile workplace environment and had started his own busi-
ness. He testified that at the time of the dissolution trial and
decree, he had anticipated he would be able to continue earning
income at the same rate as his prior employment and that the
child support and alimony awards had been based on his earn-
ing capacity, because he had no monthly income at the time of
the decree. According to Benjamin, he testified at the dissolu-
tion trial concerning the fact that he had left his employment
prior to the dissolution trial.
   Benjamin testified that between October 2006 and June
2009, his business actually resulted in no earned income. He
testified that during that time, he exhausted his severance from
his prior employment and liquidated his retirement account
of more than $200,000 in order to satisfy his obligations
   Decisions of the Nebraska Court of Appeals
898	20 NEBRASKA APPELLATE REPORTS

under the dissolution decree. He testified that because of the
economic recession during that time, his business venture
failed. He testified that he had sought comparable employment
and had applied for jobs consistent with the earning capac-
ity used in the dissolution decree, including applications for
employment with “Kiewit,” “Mutual of Omaha,” and “Cox
Communications.” He eventually secured employment, but
was earning only $75,000 per year.
   During the hearing before the referee, Benjamin offered
an exhibit detailing his monthly expenses. He testified that
the failure of his business venture and his inability to secure
employment commensurate with the earning capacity he had
anticipated at the time of the dissolution decree had resulted in
an accumulation of debt and related monthly expenses.
   Benjamin also testified that Vanessa had been unemployed
at the time of the dissolution decree, but had since succeeded
in running a daycare business and earning income of approxi-
mately $60,000 per year. Benjamin offered tax returns to sup-
port his testimony.
   After Benjamin’s testimony, he rested and Vanessa moved
for a directed verdict. Vanessa asserted to the referee that
Benjamin had failed to establish a prima facie case demonstrat-
ing a material change of circumstances, because Benjamin’s
change of employment and decrease in income had occurred
prior to the entry of the dissolution decree. Benjamin argued
that the motion should be overruled because, at the time of the
dissolution trial, he had expected to keep earning at the same
rate as his prior employment, but had not actually been able to
do so.
   The referee recommended that the directed verdict be
granted. The referee found that there had been no change of
circumstances and that, if anything, Benjamin was actually
earning more at the time of the hearing than at the dissolu-
tion trial, because he had no actual income at the time of the
dissolution trial. The referee also found that Benjamin had
voluntarily left his former employment, making it appropriate
to base his support obligations on earning capacity instead of
actual earnings.
         Decisions   of the  Nebraska Court of Appeals
	                       JOHNSON v. JOHNSON	899
	                       Cite as 20 Neb. Ct. App. 895

   On August 12, 2010, the district court adopted the referee’s
recommendation in all respects. Benjamin perfected an appeal
to this court, which appeal we dismissed because we found that
the district court’s order adopting the referee’s recommendation
did not dispose of the issues that the parties had agreed would
not be addressed by the referee. On remand, Vanessa withdrew
her requests for relief and the district court specifically dis-
missed her cross-complaint for modification. The district court
then, again, adopted and confirmed the report and recommen-
dation of the referee. This appeal followed.
               III. ASSIGNMENTS OF ERROR
   On appeal, Benjamin has assigned that the district court
erred in dismissing his complaint for modification of child
support and alimony by finding that he had not proven a prima
facie case demonstrating a material change of circumstances
and erred in not admitting proffered evidence of his liv-
ing expenses.
                          IV. ANALYSIS
    Benjamin challenges the findings that he failed to prove a
prima facie case demonstrating a material change of circum-
stances and that proffered evidence of his living expenses was
not relevant. Both of these were findings recommended by
the referee and adopted by the district court. We find both to
be erroneous.
    [1,2] An appellate court reviews proceedings for modifica-
tion of child support de novo on the record and will affirm
the judgment of the trial court absent an abuse of discretion.
Collins v. Collins, 19 Neb. Ct. App. 529, 808 N.W.2d 905 (2012).
A judicial abuse of discretion exists when the reasons or rul-
ings of a trial judge are clearly untenable, unfairly depriving a
litigant of a substantial right and denying just results in matters
submitted for disposition. Id.
               1. Granting of Directed Verdict
   In the present case, it is first worth noting that the referee
stopped the hearing at the conclusion of Benjamin’s evidence,
concluding that Vanessa’s motion for directed verdict should
   Decisions of the Nebraska Court of Appeals
900	20 NEBRASKA APPELLATE REPORTS

be sustained. As such, the referee never heard any evidence
from Vanessa and the only evidence before the referee was
that adduced by Benjamin. We conclude that the district court
abused its discretion in adopting the referee’s recommenda-
tion of a directed verdict at the close of Benjamin’s evidence.
Benjamin clearly adduced sufficient evidence to demonstrate a
prima facie case of a material change of circumstances.
   [3-6] For purposes of appellate review, a motion to dismiss
and a motion for directed verdict are treated similarly. See
American Central City v. Joint Antelope Valley Auth., 281 Neb.
742, 807 N.W.2d 170 (2011) (motion to dismiss at close of
evidence has same legal effect as motion for directed verdict).
In the context of a motion to dismiss made at the close of all
of the evidence in a proceeding on an application to modify
a dissolution decree, the Nebraska Supreme Court has noted
that in a court’s review of evidence on a motion to dismiss,
the nonmoving party is entitled to have every controverted fact
resolved in his or her favor and to have the benefit of every
inference which can be reasonably drawn therefrom, and where
the plaintiff’s evidence meets the burden of proof required and
the plaintiff has made a prima facie case, the motion to dismiss
should be overruled. See Knaub v. Knaub, 245 Neb. 172, 512
N.W.2d 124 (1994). If, on a motion to dismiss, there is any
evidence in favor of the nonmoving party, the case may not
be decided as a matter of law. Id. When a trial court sustains
a motion to dismiss, it resolves the controversy as a matter of
law and may do so only when the facts are such that reasonable
minds can draw only one conclusion. Id.
   [7] In the present case, the referee essentially concluded at
the end of Benjamin’s evidence that, as a matter of law, he
had failed to present any evidence demonstrating that he was
entitled to a modification of his child support award. A party
is entitled to a modification of an award of child support if he
proves a material change in circumstances which has occurred
since the entry of the decree or a previous modification and
if such change was not contemplated when the decree was
entered. Id.
   In finding that Benjamin had failed to adduce any evi-
dence demonstrating a material change of circumstances,
        Decisions   of the  Nebraska Court of Appeals
	                      JOHNSON v. JOHNSON	901
	                      Cite as 20 Neb. Ct. App. 895

the referee relied on two somewhat contradictory conclu-
sions. First, the referee concluded that Benjamin had not
demonstrated a change in his actual earnings and that, if
anything, his actual earnings had increased because he had
no earnings at the time of the dissolution trial and had now
secured employment. Second, the referee concluded that it
was appropriate to base Benjamin’s support obligation on his
earning capacity, because he had voluntarily chosen to leave
his prior employment.
   The record is clear, and the parties clearly agree, that
Benjamin had left the employment he had throughout the mar-
riage prior to the dissolution proceedings and entry of the dis-
solution decree. At the time of the dissolution proceedings and
entry of the dissolution decree, he had no income. At that time,
he agreed to base his support obligation on his prior earning
capacity, because he anticipated and believed that he would
be able to earn a comparable income through a business he
was starting.
   At the time of the dissolution proceeding and the dissolu-
tion decree, Benjamin’s earning capacity was the basis for his
support obligation. This was because Benjamin had no actual
earnings but the parties contemplated that he would be able
to continue earning income approximating the $140,000 per
year that he had earned during the marriage. Unfortunately,
that did not happen. Benjamin testified that his business failed
and that he was not able to earn any income between October
2006 and June 2009. He also testified that he made efforts to
secure employment that would have allowed him to realize that
earning capacity, but was unsuccessful. He also took a variety
of steps to continue meeting his support obligations despite a
lack of income, including exhausting his retirement account.
He eventually was able to secure employment earning approxi-
mately $75,000 per year.
   Benjamin’s unrefuted testimony, in light of the standards for
granting a directed verdict, clearly constitutes evidence dem-
onstrating a material change of circumstances. The material
change of circumstances is that Benjamin has not been able
to realize the earning capacity which the parties contemplated
at the time of trial and which he had realized throughout the
   Decisions of the Nebraska Court of Appeals
902	20 NEBRASKA APPELLATE REPORTS

marriage. There is nothing in the record to suggest that, since
the time of the decree, he has voluntarily failed to realize that
earning capacity or failed to make reasonable and good faith
efforts to realize it.
   [8,9] This court has noted that earning capacity should be
used in determining a child support obligation only when there
is evidence that the parent can realize that capacity through
reasonable efforts. Collins v. Collins, 19 Neb. Ct. App. 529, 808
N.W.2d 905 (2012). When the evidence demonstrates that the
parent is unable to realize a particular earning capacity by
reasonable efforts, it is clearly untenable for the trial court to
attribute that earning capacity to the parent for purposes of
determining child support. See id.
   In addition, while it is true that Benjamin voluntarily chose
to leave the employment through which he had realized the
$140,000-per-year earning capacity throughout the marriage,
the record is clear that he did so prior to the dissolution pro-
ceedings and the dissolution decree. This is not a case where
a parent has voluntarily left employment after a support order
was entered and has sought to reduce his or her obligation as a
result. Rather, Benjamin left that employment and then agreed
to a support order based on the contemplation that he would
continue to realize the same earning capacity. He also took
steps to continue meeting his obligations for a period of years
despite not realizing that earning capacity.
   [10] Changes in career or occupation which reduce the
ability to provide child support are allowed, so long as they
are made in good faith, and future support obligations should
generally be based on present income and the Nebraska Child
Support Guidelines. See Sabatka v. Sabatka, 245 Neb. 109, 511
N.W.2d 107 (1994). Remembering that the referee chose to
recommend granting a directed verdict and ended the hearing
after Benjamin’s evidence, there is no evidence in the record
to demonstrate that Benjamin’s voluntarily leaving his prior
employment was not done in good faith, and his willingness to
contemplate continuing the same earning capacity and exhaust
his retirement account to keep his obligations current despite
a lack of income for several years suggests that there was no
bad faith.
        Decisions   of the  Nebraska Court of Appeals
	                      JOHNSON v. JOHNSON	903
	                      Cite as 20 Neb. Ct. App. 895

   In addition to the evidence Benjamin adduced to demon-
strate that despite the parties’ contemplation at the time of
the dissolution decree he would be able to realize an earning
capacity of $140,000 per year, his circumstances have changed
and he has been unable to do so, he also adduced evidence
suggesting that Vanessa’s financial situation has changed sub-
stantially since the time of the dissolution decree. Benjamin
testified that at the time of the dissolution proceeding, Vanessa
was unemployed, but that since the entry of the dissolution
decree, she has earned as much as $60,000 per year running a
daycare operation. He introduced tax documents to further sup-
port his assertion. Because the referee recommended granting
the motion for directed verdict at the conclusion of Benjamin’s
evidence, Benjamin’s testimony and evidence on this matter
were unrefuted.
   In short, Benjamin adduced evidence indicating that at the
time of the dissolution decree, both he and Vanessa were with-
out income, he had already left the employment through which
he had earned $140,000 per year during the marriage, he was
in the process of starting his own business venture, and the
parties contemplated he would be able to realize an earning
capacity comparable to his prior employment. Those circum-
stances and the parties’ contemplation about his earning capac-
ity resulted in the support entered as part of the decree. After
that time, his business failed, he was unable to earn income at
all for several years, he sought employment that would allow
him to realize an earning capacity consistent with the parties’
contemplation, and he was unsuccessful. He eventually secured
employment at a substantially lower income. At the same time,
Vanessa’s income went from nothing to as much as $60,000
per year.
   Based on this evidence, it was clearly untenable for the
referee to conclude that Benjamin had failed to adduce any
evidence that would support a conclusion that there was a
material change of circumstances. Giving Benjamin the benefit
of all inferences based upon his evidence, he clearly adduced
sufficient evidence to prevent a ruling that, as a matter of law,
there was no material change of circumstances. The district
   Decisions of the Nebraska Court of Appeals
904	20 NEBRASKA APPELLATE REPORTS

court clearly abused its discretion in adopting the referee’s rec-
ommendation to grant Vanessa a directed verdict.
                2. Denial of P roffered Evidence
   Benjamin also asserts that it was error to deny his proffer of
evidence concerning his living expenses. We agree.
   [11,12] We have noted that the decision of whether to
modify a child support obligation must be based upon the evi-
dence presented by the parties and that it would be improper
for the court to focus on anything but the most recent circum-
stances ascertainable from the evidence. Collins v. Collins, 19
Neb. Ct. App. 529, 808 N.W.2d 905 (2012). Among the relevant
factors to be considered in determining whether a material
change of circumstances has occurred is any change in the
financial position of the parent obligated to pay child support.
See id.
   In the present case, as noted extensively above, Benjamin
adduced evidence indicating that his income was not, and had
not been at any time since entry of the decree, consistent with
the earning capacity that was used for the initial determina-
tion. He also testified that in an attempt to remain current
on his obligations, he had exhausted his retirement account
and had accumulated debt, which had influenced his monthly
expenses. He offered an exhibit to demonstrate his monthly
living expenses so that the court could, when considering both
his income level and expenses, determine whether his finan-
cial situation had materially changed since the entry of the
decree. The referee, however, concluded that evidence of living
expenses was not relevant and that the only relevant consider-
ation was his earning capacity.
   Even if Benjamin’s earning capacity, as opposed to actual
income, was the key factor when determining his income, his
monthly expenses would clearly be relevant to determining his
ability to pay a support award. Even if he had, in fact, been
able to realize the earning capacity contemplated by the par-
ties at the time of the dissolution decree, if his monthly living
expenses had reasonably changed substantially, then he might
have been able to demonstrate a material change of circum-
stances and evidence of his living expenses would clearly be
            Decisions     of the    Nebraska Court of Appeals
	                               STATE v. DALLAND	905
	                              Cite as 20 Neb. Ct. App. 905

relevant evidence. The referee erred in excluding evidence
of expenses, and the district court abused its discretion to the
extent it adopted the referee’s findings.
                       V. CONCLUSION
   We conclude that the referee who conducted the hearing in
this case erred in granting Vanessa’s motion for directed ver-
dict, because there was clearly sufficient evidence adduced to
prevent judgment as a matter of law. We also conclude that the
referee erred in excluding clearly relevant evidence. As such,
the district court abused its discretion in adopting the referee’s
recommendations and dismissing Benjamin’s application for
modification on the basis of a motion for directed verdict. We
reverse, and remand for further proceedings.
	R eversed and remanded for
	                                  further proceedings.

                     State of Nebraska, appellee, v.
                      Roger L. Dalland, appellant.
                                    ___ N.W.2d ___

                        Filed June 25, 2013.     No. A-12-615.

 1.	 Constitutional Law: Search and Seizure: Motions to Suppress: Appeal and
     Error. In reviewing a trial court’s ruling on a motion to suppress based on a
     claimed violation of the Fourth Amendment, an appellate court applies a two-part
     standard of review. Regarding historical facts, an appellate court reviews the trial
     court’s findings of fact for clear error, but whether those facts trigger or violate
     Fourth Amendment protections is a question of law that it reviews independently
     of the trial court’s determination.
 2.	 Constitutional Law: Search and Seizure. The Fourth Amendment to the U.S.
     Constitution and article I, § 7, of the Nebraska Constitution protect individuals
     against unreasonable searches and seizures.
 3.	 Motor Vehicles: Warrantless Searches: Probable Cause. A warrantless search
     of a vehicle is permissible upon probable cause that the automobile contains
     contraband.
 4.	 Police Officers and Sheriffs: Probable Cause. A law enforcement officer has
     probable cause to search when it is objectively reasonable.
 5.	 Search and Seizure. A search is objectively reasonable when known facts and
     circumstances are sufficient to warrant a person of reasonable prudence in the
     belief that he will find contraband or evidence of a crime.