Conzemius v. Conzemius

KAPSNER, Justice,

concurring in part and dissenting in part.

[¶ 55] I concur in Parts II, III, IV, V, and VII of the majority opinion. I respectfully dissent from Part VI of the majority opinion. Because I believe that the district court’s analysis of spousal support is based upon a legal error, I would reverse and remand this issue for a correct analysis.

[¶ 56] Trista Conzemius requested permanent spousal support, and the district court denied any spousal support. The Ruff-Fischer guidelines are the basis for providing spousal support under our current law. See Ruff v. Ruff 78 N.D. 775, 784, 52 N.W.2d 107, 111 (1952); Fischer v. Fischer, 139 N.W.2d 845, 852 (N.D.1966). In paragraph 43, the majority opinion sets out many of the findings which the district court made under the Ruff-Fischer guidelines.

[¶ 57] There are several other findings relative to Chad Conzemius’s income that appear in the district court’s findings: Although “Chad receives an annual draw or salary from Wayne’s Electric[,]”

The bookkeeping system employed by Wayne’s Electric is lacking to non-existent. Like most small business owners, Chad does derive benefits in addition to his direct compensation. The vehicles he uses for business purposes are also available for his personal use. The lines between business and personal expenses are not always bright. To some extent, Chad clearly does use business accounts to pay non-business expenses. On occasion, he is also able to barter by trading services for non-monetary compensation.

In other words, Chad Conzemius controls the flow of income and other benefits from his primary source of income, and the amount appearing on his tax return is not reflective of his total compensatory package.

[¶58] The most serious problem with the district court’s analysis is the failure to consider an entire income stream from Schiele Mobility. As the court noted, “This is a long-term marriage. Almost everything of value was accumulated during that marriage, including Wayne’s Electric and Schiele Mobility.” Instead of recognizing the income stream that Schiele Mobility had been generating since its inception for purposes of spousal support, the district court compared only Trista Conzemius’s income as a professor to Chad Conzemius’s income as an electrician. “Chad’s future earning potential is higher only if continued distributions from Schiele Mobility are projected.” It is legal error under the Ruff-Fischer guidelines, which direct the court to consider the income-*730producing capacity of property, to assume that an established stream of income will not exist.

[¶ 59] The district court cites, as support for ignoring an income stream, a 1951 case dealing with the measure of damages in a negligence case, an error repeated by the majority opinion. See Truscott v. Peterson, 78 N.D. 498, 518, 50 N.W.2d 245, 257 (1951). The Truscott case is simply irrelevant to the consideration of spousal support where the Rujf-Fischer guidelines require consideration of the parties’ earning abilities and the income-producing capacities of the parties’ property. See Becker v. Becker, 2011 ND 107, ¶ 28, 799 N.W.2d 53.

[¶ 60] For child support purposes, the district court made the following findings. “Chad receives income from two sources: Wayne’s Electric and Schiele Mobility.” “At least in recent years, Chad has been receiving cash distributions as a result of the 20 percent interest he holds in Schiele Mobility. This entity is a subchapter S corporation, so income is generally passed through to shareholders in proportion to their ownership interests. In 2011, Chad received distributions totaling $34,000.... As of August 31, 2012, Chad had received additional distributions totaling $40,500.”

[¶ 61] “With such a short track record, predicting the future of Schiele Mobility is inherently difficult. In the long term, it may thrive or it may fail. For child support purposes, however, it is reasonable to assume the next several years will be comparable to the past.... $40,000 is a reasonable estimate of the annual income Chad is likely to receive in the near future from Schiele Mobility.”

[¶ 62] In Becker, 2011 ND 107, ¶15, 799 N.W.2d 53, this Court indicated that a party’s net income for child support will not necessarily be the same as earning ability for spousal support. The calculations may be different, but none of the cases cited in the majority opinion are support for entirely ignoring the income-earning capacity of property assigned to one of the spouses. This is an error of law under the Rujf-Fischer guidelines.

[¶ 63] The majority opinion quotes from the district court’s opinion, which seems to confirm that the district court is not willing to consider income-producing capacity of property under the Rujf-Fischer guidelines for purposes of spousal support:

[E]ven if there was a reasonably certain basis for estimating further distributions over the long haul, it would not follow Trista is entitled to half the present value plus a lifetime of future payments. This violates the adage you can not have your cake and eat it too. If Chad now pays fair value for Trista’s share, he should stand to realize any future profits, just as he will suffer any future losses, divestitures or failures.

The Rujf-Fischer guidelines are not alternative guidelines to be applied to either property or to spousal support. They are guidelines to be applied by the district court to both property division, Donlin v. Donlin, 2007 ND 5, ¶ 11, 725 N.W.2d 905, and to spousal support. Id. at ¶ 15.

[¶ 64] If there is a reasonably certain basis for estimating further distributions from income-producing property over the long haul, a divorce court must consider that information under the Rujf-Fischer guidelines in deciding whether to award spousal support, in what amount, and over what duration.

[¶ 65] Either Wayne’s Electric or Schiele Mobility may thrive and flourish or may fail in the future. However, that is not an appropriate basis to fail to grant spousal support when both have established income streams in the recent past. *731Instead, if an award of spousal support is granted, and if the future proves less successful, the court may modify its order under N.D.C.C. § 14-05-24.1, when there is a material change in circumstances. Rothberg v. Rothberg, 2007 ND 24, ¶ 6, 727 N.W.2d 771.

[¶ 66] The majority opinion is misleading when it says that the court awarded Trista Conzemius one-half the value of Chad Conzemius’s ownership interest in Schiele Mobility. This is no more accurate than saying it awarded Chad Conzemius one-half the value of Trista Conzemius’s pension. The district court awarded the entire interest in Schiele Mobility to Chad Conzemius. The district court did order a cash payment to Trista Conzemius to try to equalize distribution of the net marital estate. But that does not change the requirement under the Rujf-Fischer guidelines that both the earning ability of the parties and the income-producing capacity of the distributed property be considered for spousal support.

[¶ 67] Because the district court made a legal error in its analysis of spousal support, I would reverse and remand for consideration of this issue.

[¶ 68] MARY MUEHLEN MARING, S.J., concurs.