FILED: July 21, 1999
In the Matter of the Marriage of
JERALD E. ALBRICH,
Respondent,
and
KAREN R. ALBRICH,
Appellant.
Appeal from Circuit Court, Clackamas County.
Robert J. Morgan, Judge.
Argued and submitted February 4, 1999.
Jack L. Kennedy argued the cause for appellant. With him on the brief were Susan E. Watts and Kennedy, Watts, Arellano & Ricks LLP.
Helen T. Dziuba argued the cause and filed the brief for respondent.
Before De Muniz, Presiding Judge, and Haselton and Linder, Judges.
DE MUNIZ, P. J.
Affirmed.
DE MUNIZ, P. J.
Wife appeals the judgment reducing her spousal support from $5,000 to
$2,000 per month. On de novo review, ORS 19.415(3), we affirm.
Because this case concerns only a modification of spousal support, it
centers on whether there has been "a substantial change in economic circumstances of a
party * * * sufficient for the court to reconsider its order of support." Or Laws 1997, ch
746, § 116(2)(a), compiled as note after ORS 107.135 (1997).(1) Accordingly, in reciting
the facts, we focus principally on the circumstances that inform that inquiry. In 1989,
when the parties ended their 23-year marriage, husband, 48 years old, was employed as a
radiation oncologist and earned $19,130 per month; wife, 47 years old, did not work
outside the home. They have three children, who were 23, 17 and 15 at the time of the
dissolution trial. In the dissolution judgment, the trial court awarded wife spousal
support in the amount of $6,000 per month for five years and $5,000 per month
thereafter.(2) The court also divided husband's pension and profit sharing plan equally
between the parties, awarding each party $308,000.
Presently, husband no longer works as an oncologist because he suffers
from a neurological disorder that causes uncontrollable neck spasms and cognitive
problems that prevent him from effectively working with patients. He has retired from
the practice of medicine and receives $7,500 in monthly income from a disability
insurance benefit. Based on his retirement from his medical practice and the attendant
decrease in monthly income, husband sought a modification of spousal support,
contending that that reduction in income constituted a "substantial change in economic
circumstances" sufficient to justify a reduction in his support obligation. The trial court
agreed, entering a judgment of modification reducing wife's permanent support award to
$2,000 per month. The trial court reduced the amount of support based on a ratio equal
to the percentage decrease in husband's monthly income.
On appeal, and as she did below, wife does not dispute the legitimacy of
husband's disability; rather, wife urges that, in determining whether husband's economic
circumstance had changed substantially, the court erroneously failed to consider
husband's retirement account, and other investment accounts jointly held by husband and
his new wife, as potential income opportunities when it concluded that husband's
economic circumstance had changed.(3) Wife urges that the plain language of Oregon
Laws 1997, chapter 746, section 116(3), requires that the court do so. That law provides:
"(3) In considering * * * whether a change in circumstances exists
sufficient for the court to reconsider spousal or child support provisions of
a decree, the following provisions apply:
"(a) The court shall consider income opportunities and benefits of the
respective parties from all sources, including but not limited to:
"(A) The reasonable opportunity of each party * * * to acquire future
income and assets.
"(B) Retirement benefits available to the obligor and to the obligee[.]"
Husband argues that it would be unfair to adopt wife's position for two
reasons. First, as to husband's retirement account that was part of the original property
division, husband urges that, if wife's position is adopted, it would result in an unlawful
modification of that property division. That is so, husband contends, because the source
of a portion of those investment accounts comes from husband's half of his pension and
profit sharing plan, which was divided in the dissolution judgment. Thus, husband
argues, if spousal support is maintained at its current level based on his unrealized gains
from those accounts, he would, in effect, be forced to liquidate his assets and that forced
liquidation, he contends, would constitute an unlawful modification of the original
property distribution.(4) See Prime v. Prime, 172 Or 34, 49-50, 139 P2d 550 (1943)
(property divisions are not subject to subsequent modifications, irrespective of any future
changes in the financial condition of either party). As to the accounts husband holds
jointly with his new wife, husband argues that such a forced liquidation would be unfair
to husband's new wife because it would require, in effect, that she use her income to
support husband's former wife.
As explained below, we disagree with husband's analysis as it relates to
what the court may consider because the controlling statutory provisions expressly render
husband's retirement benefits, as well as his income from the jointly held accounts,
lawful considerations. However, as we will explain, we agree that, in this instance,
those assets are not a sufficient basis to ignore the substantial decrease in husband's
monthly income due to his impairment.
In this support modification proceeding, the trial court's authority is
governed by Oregon Laws 1997, chapter 746, section 116. Generally, that law limits the
court's power to a review of the amount of the support award and dictates that a
modification is proper only where there has been substantial change either in the
obligor's ability to pay or the obligee's need, "sufficient for the court to reconsider its
order of support." Or Laws 1997, ch 746, § 116(2)(a).
Because section 116 governs the modification inquiry here, we construe
that law to determine what factors the court may consider in analyzing the "change of
circumstances" question. In construing a statute, we first examine its text and context
because a statute's wording "is the best evidence of the legislature's intent." PGE v.
Bureau of Labor and Industries, 317 Or 606, 610, 859 P2d 1143 (1993). As relevant
here, context includes other provisions of the same statute and other related statutes. Id.
at 610-11. If, after examining the text and context of a statute, the legislature's intent is
clear, our analysis ends. Id.
Turning to the relevant text, we begin with the general provision governing
the court's review authority, which is found in subsection (3)(a):
"The court shall consider income opportunities and benefits of the
respective parties from all sources[.]"
Two important textual clues are found in that provision: the word "opportunities" and
the phrase "all sources." With respect to the former, "opportunities" refers to a condition
that has not yet come to pass but could occur under the prevailing circumstances.
Webster's Third New Int'l Dictionary, 1385 (unabridged ed 1993). As to the latter, "all
sources" plainly implies no limits. It therefore follows that subsection (3)(a), when read
in a commonsense manner, compels an expansive review of a party's ability to pay and of
a party's need. Significantly, subsection (3)(a) does not restrict the court's consideration
to income that either party is presently receiving and makes no distinction between
income opportunities derived from previously divided marital property and those
opportunities derived elsewhere. Put simply, under section 116(3)(a), the breadth of the
court's consideration of the parties' income is without limits.
Turning now to one of the specifically listed considerations, subsection
(3)(a)(B) directs the court to consider "[r]etirement benefits available to the obligor and
to the obligee[.]" Again, and in a manner consistent with the general provision described
above, there is nothing in the text demarcating a distinction between retirement benefits
previously subject to the marital property division and benefits accrued after the
dissolution. When section (3)(a) and (3)(a)(B) are read together, only one conclusion
reasonably follows: Section 116(3) not only permits the court to consider retirement
benefits and other income opportunities, whatever their source, but compels the court to
do so. See Or Law 1997, ch 746, § 116(3)(a) ("[t]he court shall consider * * *")
(emphasis added).
A related statute supports that conclusion. In describing what may be
considered in the initial property division, ORS 107.105(1)(f) expressly declares that "[a]
retirement plan or pension or an interest therein shall be considered as property." That
phrase shows the legislature's awareness that a retirement asset may be part of the
property division, which, in turn, leads reasonably to the conclusion that, if the
legislature intended to exclude potential income from such assets from the modification
inquiry, it would have expressly done so. Accordingly, we hold that section 116 requires
the court to consider each party's income opportunities from all sources, irrespective of
whether the opportunity derives from property awarded in the marital property division.
Accord DeNotta and DeNotta, 147 Or App 149, 154, 935 P2d 475 (1997). For purposes
of clarity, however, we further note that, although section 116(3) mandates an expansive
consideration, it does not compel a particular result.
We turn now to the trial court's analysis to determine if it properly
considered the factors as mandated by section 116(3). At trial, in determining whether to
reconsider the spousal support, the court reasoned as follows:
"So I guess the uniqueness of this case is should we penalize the petitioner
for this course of action, for frugality, saving, and so forth and so on? And
it cries out: Is it fair? Is it fair?
"* * * * *
"That's the uniqueness of this case. The money came after the curtain came down,
after the guillotine came down and the marriage was sliced. It came after, as a
practical matter. That's the uniqueness of this case[.]"
Wife argues that the court's analysis must be construed as violating the directives of
section 116(3) because the court failed to consider the current value of husband's
retirement and jointly-held accounts as potential income opportunities to fund his spousal
support obligation. We agree with wife that the court failed properly to "consider"
husband's retirement and investment accounts pursuant to section 116(3)(a).
Nevertheless, we affirm the judgment modifying husband's spousal support obligation
for the reasons that follow.
On de novo review, we find that husband's economic circumstances have
changed substantially in that his medical condition has caused his unanticipated
retirement from medical practice. Although we find that husband's retirement and
investment accounts are a potential source of income that must be "considered," we
nevertheless conclude that consideration of those accounts does not, as argued by wife,
mandate that husband's support obligation remain at the level set in the original
dissolution judgment.
The overriding consideration in determining the appropriate amount of
spousal support is what is "just and equitable," ORS 107.105(1)(d), under the totality of
the circumstances. Here, we find that it was not anticipated at the time of the dissolution
that husband would have no income from employment or that his retirement and
investment accounts would be a necessary source of income to fund his spousal support
obligation. In that same vein, we find it significant that husband's retirement and
investment accounts were originally the subject of the property division in which wife
also received a substantial share. See Tiley v. Tiley, 147 Or App 262, 266, 936 P2d 367,
rev den 325 Or 491 (1997) (retirement benefits that accrue during the marriage are assets
that are subject to division as marital property). In fact, wife's retirement account,
awarded to her in the dissolution proceeding, also has increased significantly since the
dissolution. The substantial income potential from wife's assets also militates against
relying on the increase in husband's accounts as a source to fund spousal support at the
original level. Under these circumstances, even "considering" the potential income from
husband's retirement and investment accounts, we conclude that it is "just and equitable"
to reduce husband's spousal support obligation based on his loss of employment income.
We agree with the trial court that a reduction to $2,000 per month is appropriate.
Affirmed.
1. The provisions of section 116 that are relevant here, sections (2)(a) and
(3)(a), are identical to the same provisions of ORS 107.135. However, in 1997, the
legislature declared that ORS 107.135 was inoperative until December 31, 2001 and that
Oregon Laws 1997, chapter 746, section 116, would operate in lieu thereof. See Or
Laws 1997, ch 746, § 116, compiled as note after ORS 107.135.
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2. The dissolution judgment also awarded wife custody of the two minor children, child support, certain insurance support and, essentially, an equal division of the marital property.
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3. The dissolution judgment evenly divided husband's pension and profit sharing plan, which resulted in each party receiving a retirement account worth $308,267. At the time of the modification, husband had retirement and investment accounts totaling $2,597,449. Wife's expert testified at trial that, if husband invested all of those investment accounts for income rather than for growth, he could earn approximately $21,000 per month without invading the principal. In addition, husband's current wife has securities and cash accounts estimated at $619,783. At the time of the modification, wife's retirement account had grown to $800,000.
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4. Modifications to property distributions are permitted only if the property award was based on the enhanced earning capacity statute, ORS 170.135(1)(e).
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