In re the Marriage of Ronald L. Thorstad, Appellee, and Randie J. Thorstad, n/k/a Randie J. Randell, Appellant.
Jefferson County District Court No. 01DR2710 Honorable Dennis
J. Hall, Judge.
Elizabeth Henson, Attorney Mediator P.C., Elizabeth Henson,
Greenwood Village, Colorado, for Appellee
Schaffner Law LLC, Jennifer A. Schaffner, Denver, Colorado,
for Appellant
OPINION
BERNARD CHIEF JUDGE
I.
Introduction
¶
1 Colorado statutes establish how courts set, modify, and
terminate maintenance orders. The decision to modify or to
terminate a maintenance order is often governed by the effect
of changed circumstances on the payor spouse's ability to
pay.
¶
2 More specifically, section 14-10-122(1)(a), C.R.S. 2018,
states that, subject to certain enumerated exceptions,
"the provisions of any decree respecting maintenance may
be modified . . . only upon a showing of changed
circumstances so substantial and continuing as to make the
terms unfair." When deciding whether changes have been
sufficiently substantial and continuing as to render a
maintenance order unfair, "the court is required to
examine all circumstances pertinent to awarding
maintenance" under section 14-10-114, C.R.S. 2018.
In re Marriage of Nelson, 2012 COA 205, ¶ 26.
¶
3 This case examines the statutory structure that courts
apply when dealing with the effect of one potential
substantial and continuing changed circumstance upon a
maintenance order: a payor's decision to retire. We
recognize that, in some cases, there could be an ulterior
motive behind this decision: to reduce or to eliminate the
obligation to pay maintenance by reducing or eliminating the
payor's income. The law gives a name to such an ulterior
motive: "voluntary underemployment or
unemployment."
¶
4 Courts frown on voluntary underemployment and unemployment
because these stratagems constitute an attempt to avoid
paying maintenance. They may counter such stratagems by, for
example, considering "whether [a payor] spouse is
voluntarily underemployed in determining whether reduced
income is a substantial and continuing circumstance that
would justify modification or termination of his [or her]
maintenance obligation." In re Marriage of
Swing, 194 P.3d 498, 500 (Colo.App. 2008); see also
In re Marriage of Barnthouse, 765 P.2d 610, 613
(Colo.App. 1988)("[W]e find no error in the court's
[finding] that the father . . . was voluntarily earning less
than he was capable of earning. Therefore, there is no merit
to the father's contention that the . . . maintenance
award[] [was] erroneous.").
¶
5 There is also the prospect that a payor's decision to
retire was not the product of an ulterior motive, but was,
instead, a product of good faith. See §
14-10-114(8)(c)(V)(B) ("[A] party shall not be deemed
'underemployed if . . . [t]he employment is a good faith
career choice . . . ."); cf. §
14-10-115(5)(b)(III)(B), C.R.S. 2018 ("[A] parent shall
not be deemed 'underemployed' if . . . [t]he
employment is a good faith career choice that is not intended
to deprive a child of support and does not unreasonably
reduce the support available to a child . . . ."). In
those situations, the decision to retire may nonetheless pose
a dilemma for the payor - which we shall call the
"payor's dilemma" - prompting him or her to
worry, "If I decide to retire, thus reducing my income,
will a court view my retirement as voluntary underemployment
or unemployment when deciding whether to grant my motion to
modify or to terminate my maintenance obligation?" This
dilemma may be especially problematic when decisions to
retire are irrevocable.
¶
6 Swing addressed this concern. The division first
recognized the payor's dilemma: "Unless the effect
of retirement on maintenance has been addressed in the
parties' separation agreement, a spouse contemplating
retirement who is either paying or receiving maintenance
faces considerable uncertainty." Swing, 194
P.3d at 500. The uncertainty is generated, on the one hand,
by the reduction in income that almost
"irrevocably" accompanies retirement, and, on the
other hand, by the lack of Colorado law "assur[ing] that
maintenance will be modified based on the retiree's lower
wage income." Id.
¶
7 To ameliorate the payor's dilemma, the division
surveyed decisions from other states, and it discovered a
majority rule: "[R]educed income due to a spouse's
objectively reasonable decision to retire, made in good faith
and not with the intention of depriving the other spouse of
support, should be recognized as a basis for modifying
maintenance." Id. at 501. The division then
concluded that a court should not find a payor to be
voluntarily underemployed if the payor's decision to
retire (1) "was made in good faith, meaning not
primarily motivated by a desire to decrease or eliminate
maintenance," id.; and (2) "was
objectively reasonable based on factors such as the
[spouse's] age . . . [and] health, and the practice of
the industry in which the [spouse] was employed,"
id.
¶
8 Apparently following the division's lead, the
legislature took a similar approach to solving the
payor's dilemma when, in 2013, it amended section
14-10-122(2)(a), (b), and (c). Ch. 176, sec. 2, §
14-10-122(2)(a), (b), (c), 2013 Colo. Sess. Laws 652.
¶
9 As a result of the amendments, subsection 122(2)(a) now
states that,
[u]nless otherwise agreed in writing or expressly provided in
the decree, the obligation to pay future maintenance is
terminated upon the earlier of:
(I) The death of either party;
(II) The end of the maintenance term, unless a motion for
modification is filed prior to the expiration of the term;
(III) The remarriage of or the establishment of a civil union
by the party receiving maintenance; or
(IV) A court order terminating maintenance.
¶
10 Subsection 122(2)(b) adds that "[a] payor spouse
whose income is reduced or terminated due to his or her
retirement after reaching full retirement age is entitled to
a rebuttable presumption that the retirement is in good
faith." Subsection 122(2)(c) defines the term "full
retirement age" to be "the payor's usual or
ordinary retirement age when he or she would be eligible for
full United States social security benefits, regardless of
whether he or she is ineligible for social security benefits
for some reason other than attaining full retirement
age." But, according to subsection 122(2)(c),
"'[f]ull retirement age' shall not mean
'early retirement age' if early retirement is
available to the payor spouse, nor shall it mean 'maximum
benefit retirement age' if additional benefits are
available as a result of delayed retirement."
¶
11 We must next make a point about the statutes that we
consider in this appeal. In 2013, section 14-10-114 was
repealed and reenacted. Ch. 176, sec. 1, 14-10-114, 2013
Colo. Sess. Laws 639-52. The considerations relevant to
determining maintenance in this case used to appear in
subsections (3) and (4) before the 2013 amendments, but they
now appear in subsection (3).
¶
12 The petition for dissolution of marriage in this case was
filed on September 17, 2001, so the new version of section
14-10-114 applicable to petitions filed on or after January
1, 2014, does not apply. See § 14-10-114(9).
Rather, "[a]ctions filed before January 1, 2014, are
determined pursuant to the provisions of this section as it
existed at the time of the filing of the action."
Id. This means that from this point on, unless
otherwise noted, when we refer to any of the subsections of
section 14-10-114, we are referring to those that existed in
September 2001.
¶
13 Section 14-10-122 does not contain similar language. So,
when we discuss any of the subsections of section 14-10-122,
we are concerned with those in existence when husband filed
his motion to terminate his maintenance obligation in May
2017.
¶
14 Turning to this case, a former husband, Ronald L.
Thorstad, suffered from some health problems, which
contributed to his decision to retire from his job. He
therefore asked a magistrate to terminate his maintenance
obligation to his former wife, Randie J. Thorstad, who is now
known as Randie J. Randell. (For readability purposes, we
shall dispense with the adjective "former" and
simply call the parties to this appeal "husband"
and "wife.") The magistrate granted husband's
request; wife sought the district court's review; and the
district court denied her petition. (Because the district
court denied wife's petition, essentially affirming the
magistrate's decision, ...