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Pearson v. Pearson

August 18, 2009

ROBERT SCOTT PEARSON, PLAINTIFF AND APPELLEE
v.
LOIS ELAINE PEARSON, DEFENDANT AND APPELLANT



Appeal from the District Court of Grand Forks County, Northeast Central Judicial District, the Honorable Lawrence E. Jahnke, Judge.

The opinion of the court was delivered by: Crothers, Justice

AFFIRMED IN PART AND REMANDED.

[¶1] Lois Pearson appeals from the district court's divorce judgment awarding her rehabilitative spousal support for twenty-four months. We affirm the district court's judgment awarding rehabilitative spousal support and remand for further proceedings after concluding the district court's judgment awarding Lois Pearson rehabilitative spousal support but not awarding, and not articulating any reasons for not awarding, permanent spousal support prevents us from fulfilling our reviewing function.

I.

[¶2] Robert Pearson and Lois Pearson were married in 1980. The parties separated in July 2007. Two children were born of the marriage, and both are now adults. At the time of trial, both parties were fifty years old. Robert Pearson has a bachelor's degree in business administration and a pilot's license. He is the vice president of Home of Economy, his family's business, which has six stores located in North Dakota. Lois Pearson attended three and a half years of college, but she did not complete a bachelor's degree. Prior to 1989, Lois Pearson worked various part-time jobs, but mainly stayed home caring for the parties' children. Since 1989, Lois Pearson has been employed by Home of Economy. At the time of trial, each party had an ownership interest in Home of Economy with Robert Pearson having a 20 percent interest and Lois Pearson having a .54 percent interest. Robert Pearson and his brother have exercised an option, under his grandmother's will, to purchase their siblings' interest in the Home of Economy business. With the additional stock purchased from his siblings, Robert Pearson will own approximately 30 percent interest in Home of Economy.

[¶3] Robert Pearson sought a divorce in February 2008. In July 2008, Lois Pearson requested interim spousal support of $750 per month. The district court granted Lois Pearson interim spousal support of $450 per month beginning July 1, 2008. A trial was held in September 2008. The district court divided the parties' marital estate equally, awarding Robert Pearson and Lois Pearson each property with a net value of $409,930. The district court also ordered Robert Pearson to pay Lois Pearson spousal support in the amount of $1,400 for twenty-four months and expressly retained "jurisdiction over the spousal support issue post-judgment for further review as may be requested as the obligation set forth above approaches termination."

II.

[¶4] Robert Pearson initiated this action and requested that the court award spousal support obligations to neither party. Lois Pearson answered and requested permanent spousal support only. The district court did not specifically address the request for permanent spousal support. Lois Pearson argues the district court's award of rehabilitative spousal support is clearly erroneous because an analysis of the Ruff-Fischer factors favors an award of permanent spousal support. Lois Pearson also contends an award of permanent spousal support is required because at trial, Robert Pearson agreed she would need "long-term support." Lois Pearson appeals only the duration of the spousal support award, and not the amount of the spousal support award.

[¶5] "Under N.D.C.C. § 14-05-24.1, a trial court in a divorce case `may require one party to pay spousal support to the other party for any period of time.'" Reineke v. Reineke, 2003 ND 167, ¶ 6, 670 N.W.2d 841 (quoting Sommers v. Sommers, 2003 ND 77, ¶ 15, 660 N.W.2d 586). An award of spousal support is a "finding of fact which will not be set aside on appeal unless clearly erroneous." Solem v. Solem, 2008 ND 211, ¶ 5, 757 N.W.2d 748. "A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, after a review of the entire record, we are left with a definite and firm conviction a mistake has been made." Krueger v. Krueger, 2008 ND 90, ¶ 7, 748 N.W.2d 671.

[¶6] The district court must consider the relevant factors under the Ruff-Fischer guidelines when determining if an award of spousal support is appropriate. Overland v. Overland, 2008 ND 6, ¶ 16, 744 N.W.2d 67; Fischer v. Fischer, 139 N.W.2d 845 (N.D. 1966); Ruff v. Ruff, 78 N.D. 775, 52 N.W.2d 107 (1952). Factors to consider under the Ruff-Fischer guidelines include:

"the respective ages of the parties, their earning ability, the duration of the marriage and conduct of the parties during the marriage, their station in life, the circumstances and necessities of each, their health and physical condition, their financial circumstances as shown by the property owned at the time, its value at the time, its income-producing capacity, if any, whether accumulated before or after the marriage, and such other matters as may be material."

Krueger, 2008 ND 90, ¶ 8, 748 N.W.2d 671 (citing Sommer v. Sommer, 2001 ND 191, ¶ 9, 636 N.W.2d 423). When making a spousal support determination, "the district court is not required to make specific findings on each factor, provided we can determine the reasons for the court's decision." Krueger, at ¶ 8. "Spousal support awards must also be made in consideration of the needs of the spouse seeking support and of the supporting spouse's needs and ability to pay." Overland, at ¶ 16.

[¶7] "We have frequently recognized a preference for rehabilitative spousal support, rather than permanent spousal support." Krueger, at ¶ 9. Permanent spousal support may be appropriate "when there is substantial disparity between the spouse's incomes that cannot be readily adjusted by property division or rehabilitative support." Id. (quoting Ingebretson v. Ingebretson, 2005 ND 41, ¶ 9, 693 N.W.2d 1). Rehabilitative spousal support should be awarded when "it is possible to restore an economically disadvantaged spouse to independent economic status," or when the burden of the divorce can be equalized by increasing the disadvantaged spouse's earning capacity. Krueger, at ¶ 9.

[¶8] The district court ordered Robert Pearson to pay Lois Pearson $1,400 per month in spousal support for twenty-four months. Lois Pearson argues the district court misapplied the Ruff-Fischer guidelines when analyzing the factors regarding Robert Pearson's conduct during the marriage and regarding the parties' health and physical condition. She also claims the court erred in awarding her rehabilitative spousal support for twenty-four months because proper application of the Ruff- Fischer factors requires an award of permanent spousal support. She further argues Robert Pearson agreed on cross-examination that she was entitled to permanent spousal support so the district court erred in not awarding it.

[¶9] The district court analyzed each of the Ruff-Fischer factors and made the following findings:

6. With regard to the Ruff-Fischer guidelines:

Ages of the parties: Both parties are now 50 years old.

Duration of marriage: As indicated above, the parties married in January 1980, but have lived apart since July 2007.

Earning ability of the parties: As indicated in Findings of Fact 1 and 2 above, there is obviously a very wide chasm between the current earning capacities of the parties. In 2007, the Defendant's gross salaried income from employment at the Home of Economy approximated $28,250.00. During the same year, the Plaintiff's gross salaried income approximated $62,750.00. The parties also received interest payments totaling $9,654.00 in 2007 from the Home of Economy. Effective March 2008, the Plaintiff's annual salary was increased to $82,000.00. As indicated above, the vocational evaluation presented during trial indicated that the [Defendant's] annual earning capacity following divorce would approximate $20,800.00. The gap in the parties' respective earning capacities will never be, in this trial court's opinion, much closer.

Conduct of parties: The conduct of neither party is being considered by the court as an issue in this action.

The parties' station in life: The Plaintiff has secure, well- paying employment; the Defendant will, in all probability, no longer be employed in the family business of the Plaintiff post-divorce. In such event, she obviously will need additional training or education to obtain comparable-paying employment in the local area.

Circumstances and necessities of each party: From the financial affidavits filed and testimony presented in this matter, it appears that both parties will have to have a "no frill" monthly budget of approximately $3,000.00 post-divorce. The largest post-divorce monthly financial obligations for the Plaintiff will be his credit card debt, monthly payments on the vehicle for the parties' daughter, rent/utility expenses and maintaining the trailer at the Lake of the Woods, and his attorneys' fees incurred in this action. The largest post- divorce monthly financial obligations for the Defendant will be her credit card debt, monthly payments on her vehicle, rent/utility expenses and maintenance expense on the marital home, and her attorney fees.

Health or physical problems: Neither party appears to have lingering mental health or physical problems which affect their abilities to function day to day or to continue gainful employment after divorce. The Plaintiff has been seeking some therapeutic assistance with issues arising out of this action, and the Defendant has needed the same. The Defendant also has a vision-related problem which is not presently debilitating.

Financial circumstances as shown by property owned at time of divorce/value and income producing capacity: The parties have a joint net worth of approximately $820,000.00. The Home of Economy stock and the marital property near Manvel, North Dakota produce no income presently. A Home of Economy note held by the Plaintiff bears annual interest of 8%.

Whether property was accumulated before or after marriage: The Manvel, North Dakota real property and the majority, if not all, of the parties' respective interest in the Home of Economy business were accumulated during the parties' marriage.

Other factors: It is readily apparent that the Plaintiff has provided most of the monetary support throughout the parties' marriage. Fortunately for him, it also appears that he will be able to continue to have secure and well-paying employment post-divorce. Unfortunately for the Defendant, her current earning capacity is roughly one-fourth that of the Plaintiff, and she will need financial assistance while she seeks financial independence through additional vocational training and/or education. The Defendant is not presently capable of being self-supporting with the income she is presently capable of earning through employment and with the income-producing portion of her property distribution as directed below. Simply put, and although a specific finding in this regard is no longer required, she is a "disadvantaged spouse" following divorce as the North Dakota Supreme Court has defined the term in the past.

A.

[¶10] Lois Pearson argues the district court erred when it analyzed the parties' conduct under the Ruff-Fischer factors because the court failed to consider Robert Pearson's conduct during the marriage. In analyzing the parties' conduct, the district court stated, "The conduct of neither party is being considered by the court as an issue in this action." The district court's finding is not clearly erroneous because the only evidence presented at trial concerning the parties' conduct was a statement made by Lois Pearson alleging that the reason the parties' marriage failed was because of the lack of time and attention Robert Pearson gave to the marriage and because of "the attention [Robert Pearson] would give other women." Although there is evidence to support Lois Pearson's explanation for the marriage's failure, her explanation is not the only reason given for the dissolution of the marriage. A district court's choice "between two permissible views of conflicting evidence is not clearly erroneous." Barth v. Barth, 1999 ND 91, ¶ 13, 593 N.W.2d 359. Therefore, we conclude the district court's determination that the parties' conduct was not relevant is not clearly erroneous.

B.

[¶11] When the district court analyzed the parties' health and physical condition, the court found that "[n]either party appears to have lingering mental health or physical problems which affect their abilities to function day to day or to continue gainful employment after divorce." Lois Pearson argues the district court erred because it ignored Lois Pearson's fragile mental health and because it failed to consider how her mental health would impact her ability to go back to school. Lois Pearson did not present any evidence indicating her mental health would inhibit her ability to work or to further her education. Rather, Lois Pearson testified she wanted to go back to school. Lois Pearson stated she had been seeing a psychiatrist monthly and was diagnosed with depression, anxiety, panic attacks and stubbornness. Robert Pearson also testified he had been seeing a psychiatrist weekly. The district court acknowledged that both parties were seeking assistance in dealing with the divorce when it analyzed the parties' health and physical condition. The evidence supports the district court's finding that neither party's mental health or physical condition would inhibit them from functioning day to day or continuing gainful employment and, therefore, is not clearly erroneous.

C.

[¶12] Lois Pearson argues the district court's finding that "[t]he gap in the parties' respective earning capacities will never be, in this trial court's opinion, much closer," required the court to award her permanent spousal support. In analyzing the earning ability of the parties, the district court found that there is a "wide chasm between the current earning capacities of the parties." The court found that in 2007 the parties received interest payments from the Home of Economy note in the amount of $9,654. The court stated that Robert Pearson's gross salary for 2007 was $62,750, but that "[e]ffective March 2008, [Robert Pearson's] annual salary was increased to $82,000.00." The court found Lois Pearson's gross salary for 2007 from Home of Economy was $28,250, but stated this number would change because Lois Pearson would likely not be employed by Home of Economy after the divorce. Based upon Lois Pearson's vocational evaluation, the district court determined Lois Pearson's post-divorce annual earning capacity would be reduced to approximately $20,800. The district court concluded its findings regarding the parties' earnings by stating:

"It is readily apparent that the Plaintiff has provided most of the monetary support throughout the parties' marriage. Fortunately for him, it also appears that he will be able to continue to have secure and well-paying employment post-divorce. Unfortunately for the Defendant, her current earning capacity is roughly one-fourth that of the Plaintiff, and she will need financial assistance while she seeks financial independence through additional vocational training and/or education. The Defendant is not presently capable of being self- supporting with the income she is presently capable of earning through employment and with the income-producing portion of her property distribution as directed below. Simply put, and although a specific finding in this regard is no longer required, she is a `disadvantaged spouse' following divorce as the North Dakota Supreme Court has defined the term in the past."

[¶13] "We must understand the basis for the district court's decision before we can decide whether the findings of fact are clearly erroneous." Lorenz v. Lorenz, 2007 ND 49, ¶ 9, 729 N.W.2d 692. "The district court must adequately explain the basis for its decision, but `we will not reverse a district court's decision when valid reasons are fairly discernable, either by deduction or by inference.'" Id. (quotations omitted). Our law allows for an award of both rehabilitative spousal support and permanent spousal support. Rustand v. Rustand, 379 N.W.2d 806, 807 (N.D. 1986). Here, we understand the basis for the district court's findings and conclusion for awarding rehabilitative spousal support. But the district court also stated it would "retain jurisdiction over the spousal support issue post-judgment for further review as may be requested as the obligation set forth above approaches termination." This statement suggests the district court has not foreclosed the possibility of awarding additional rehabilitative spousal support or permanent spousal support after the initial twenty-four-month period expires. However, the district court's retention of jurisdiction without an award of permanent spousal support seemingly contradicts its findings that the gap between the parties' earning capacities will never be much closer than it was at the time of trial. Moreover, if the district court intended to not award permanent spousal support, we have not been provided with sufficient information to understand the basis for that decision. The basis for the decision regarding permanent spousal support must be articulated so that we can perform our review function in a meaningful manner. Lorenz, at ¶ 9.

D.

[ΒΆ14] Lois Pearson argues the district court was required to award her permanent spousal support because at trial, Robert Pearson agreed she would need long-term support. However, that argument does not accurately depict the testimony. On cross-examination, Robert Pearson was ...


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