Opinion
No. C4-02-382.
Filed November 26, 2002.
Appeal from the District Court, Hennepin County, File No. 104554.
Lawrence D. Olson, Ramsay, Devore Olson, P.A., (for respondent)
Maria R. Boley, (pro se appellant)
Considered and decided by Minge, Presiding Judge, Toussaint, Chief Judge, and Willis, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
In this proceeding for modification of spousal maintenance, appellant-wife challenges the district court's reduction of respondent-husband's spousal-maintenance obligation. We affirm.
FACTS
The 24-year marriage of appellant Maria Boley and respondent Michael Boley was dissolved in 1984. In 1992, the district court ordered respondent to pay $2,500 per month in spousal maintenance, which has since been adjusted upward for inflation, and to secure this obligation with a life-insurance policy.
Respondent, who has since remarried, was laid off by the Motorola Corporation in 1999, when he was 62 years old. As a result, respondent lost the life-insurance benefit that Motorola provided. Unable to find employment and suffering from degenerative disk disease, he decided to retire. Respondent then petitioned the district court for a reduction or termination of his spousal-maintenance obligation. Appellant opposed any reduction in maintenance.
The district court set a hearing date for the petition, and the parties began discovery on the matter. Appellant, who initially appeared pro se, contends that respondent's refusal to cooperate with her discovery requests required her to hire an attorney to force him to comply. Later in the proceeding, appellant moved for attorney fees.
The parties prepared affidavits and exhibits in support of their respective positions. Hearings on the petition were held on May 22 and August 9, 2001. On both occasions, appellant attempted to submit an affidavit in response to respondent's affidavit at the hearing, and on both occasions, the referee refused to admit appellant's responsive affidavit as untimely.
The district court ultimately found that respondent had a net monthly income of $4,065.65 and reasonable monthly expenses of between $2,700 and $2,800. The district court also found that appellant had a "gross monthly income" from employment of $2,387, received $660 in monthly social-security benefits, and had reasonable monthly expenses of $3,200.
In light of these findings, the district court granted respondent's petition and reduced his spousal-maintenance obligation to $1,500 per month. The district court also ordered respondent to secure this obligation with a $100,000 life- insurance policy and to pay appellant $3,500 in attorney fees.
On appeal, appellant argues that the district court abused its discretion by (1) refusing to allow her to submit her responsive affidavit, (2) reducing respondent's spousal-maintenance obligation, (3) not requiring respondent to secure his obligation with a larger life-insurance policy, and (4) not ordering respondent to pay appellant the full amount of her attorney fees.
DECISION I.
Appellant argues that the district court improperly refused to admit her affidavit in opposition to respondent's petition for a spousal-maintenance modification. Motion practice in family court is governed by Minn.R.Gen.Pract. 303.03. Interpretation of court rules is a question of law, which we review de novo. Van Slooten v. Estate of Schneider-Janzen, 623 N.W.2d 269, 270-71 (Minn.App. 2001).
A party responding to a motion must file with the district court, and serve on opposing counsel, any memoranda of law or supporting affidavits at least five days before a hearing on the motion. Minn.R.Gen.Pract. 303.03(a)(3). If a party fails to comply with the rule, then "[t]he court, in its discretion, may refuse to permit oral argument by the party not filing the required documents, may consider the matter unopposed, * * * or may take other appropriate action." Minn.R.Gen.Pract. 303.03(b).
In this case, the district court scheduled a hearing on respondent's petition for May 22, 2001. Appellant offered her affidavit on the day of the hearing, even though her attorney admitted on the record that the affidavit was untimely. The presiding referee refused to accept the affidavit. The hearing on respondent's petition was continued until August 9, when appellant again attempted to submit the affidavit. But the referee again refused to accept the affidavit as untimely. Because appellant had twice failed to meet the five-day advance-filing deadline of rule 303.03(a)(3), it was within the district court's discretion to refuse to admit the affidavit. Therefore, the decision to proceed without appellant's affidavit was not improper.
II.
Appellant next challenges the district court's reduction of respondent's spousal-maintenance obligation. This court reviews a district court's modification of a maintenance award under an abuse-of-discretion standard. Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997). But a district court's findings of fact supporting an award will not be set aside unless clearly erroneous. Minn.R.Civ.P. 52.01.
Modification of spousal maintenance is appropriate only on
a showing of one or more of the following: (1) substantially increased or decreased earnings of a party; (2) substantially increased or decreased need of a party * * * ; * * * [or] (4) a change in the cost of living for either party as measured by the federal bureau of statistics, any of which makes the terms [of the decree] unreasonable and unfair * * * .
Minn. Stat. § 518.64, subd. 2 (2002). The statute requires the party requesting modification to demonstrate both a substantial change in circumstances and unfairness of the existing obligation as a result of that change. Tuthill v. Tuthill, 399 N.W.2d 230, 232 (Minn.App. 1987).
Here, the district court found that respondent had a monthly surplus of at least $1,265 ($4,065 — $2,800) and that appellant had a monthly deficit of $153 (($2,387 + $660) — $3,200). In light of the district court's findings, the $1,500 monthly spousal-maintenance payment that the court awarded appellant is approximately ten times the amount of her monthly deficit. Nonetheless, appellant challenges the district court's reduction of respondent's spousal-maintenance obligation on several grounds.
A. Failure to Consider Standard of Living
Appellant argues that the district court improperly understated her expenses. She specifically contends that the district court did not consider, as the statute requires, her marital standard of living in calculating her reasonable monthly expenses. See Minn. Stat. §§ 518.552, subd. 2(c), .64, subd. 2(c) (2002). We cannot discern whether the district court properly considered appellant's marital standard of living because the district court's order makes only an oblique reference to a 1992 finding that the parties enjoyed an upper-middle-class lifestyle during their marriage. But to the extent that the district court erred in failing to consider appellant's marital standard of living, it is harmless error.
Appellant maintains that her reasonable monthly expenses are $4,250, not $3,200, as the district court found. Assuming her expenses are what she claims, she would have a monthly deficit of $1,203. After receiving a monthly spousal-maintenance payment of $1,500, appellant would still have a monthly surplus of $297. Thus, any understatement of appellant's expenses is harmless error. See Minn.R.Civ.P. 61.
B. Failure to Impute More Income from Respondent's 401(k) Account
Each month respondent withdraws $2,500 from an IRA account into which he rolled proceeds from his Motorola 401(k) plan. Respondent claims that his financial planner advised him to withdraw only that amount, and the district court used the $2,500 figure in calculating respondent's net monthly income. Appellant argues that the district court should have imputed more income from the IRA account to respondent because he could withdraw more each month. The record supports respondent's claim that his financial planner advised him to withdraw only $2,500 in light of current market conditions. Considering that respondent is retired and must provide for himself and his current wife on a fixed income, we cannot say that the district court abused its discretion in not imputing greater income to respondent. Even if we assume that appellant's reasonable monthly expenses are $4,250, because those expenses are more than covered by the maintenance award as modified, it is not clear that imputing additional income to respondent from his IRA account would entitle appellant to any additional income. See Lyon v. Lyon, 439 N.W.2d 18, 22 (Minn. 1989) (stating that maintenance depends on a showing of need). Furthermore, if and when respondent does withdraw more from the account each month, appellant can petition for increased spousal maintenance under section 518.64, and the district court can address the propriety of the request at that time.
C. Failure to Impute More Income from Pension Benefits
Appellant also argues that the district court should have imputed additional income to respondent from his pension. Respondent is entitled to a monthly pension from Motorola and has chosen to receive $392 less than the maximum possible monthly pension benefit in exchange for his current wife being able to receive the benefit after his death. The district court used the monthly payment respondent elected to receive in calculating his net monthly income.
Appellant argues that Walker v. Walker, 553 N.W.2d 90 (Minn.App. 1996), requires a reversal on this issue. In Walker, this court held that a district court did not abuse its discretion when it considered the maximum possible pension benefit available, and not the lesser payment elected in return for a survivor benefit, in calculating a payor spouse's net monthly income. Id. at 94. But Walker does not stand for the proposition that using the lesser amount is an abuse of discretion. Therefore, Walker does not provide guidance here.
Spousal maintenance is based on the need of the recipient. See Lyon, 439 N.W.2d at 22. Here, the district court awarded appellant maintenance in an amount more than sufficient to meet her monthly expenses, even if it did undervalue respondent's monthly pension income. Thus, any error in calculating respondent's monthly pension income is harmless. See Minn.R.Civ.P. 61.
D. Failure to Find that Respondent Retired in Bad Faith
The district court found that respondent's retirement at age 62 was appropriate. Appellant argues that respondent acted in bad faith by retiring early, thereby reducing his income for spousal-maintenance purposes. Factors to be considered when determining if an obligor's early retirement was in bad faith include the obligor's health, his employment history, and economic conditions at the time of retirement. Walker, 553 N.W.2d at 95. The record supports the finding that respondent's retirement after being laid off was reasonable in light of his age, poor health, and lack of a college degree. Thus, the district court's determination was not clearly erroneous.
E. Failure to Consider the Tax Consequences of Modification
Appellant contends that the district court failed to consider the tax consequences of respondent's spousal-maintenance obligation in calculating respondent's net monthly income. The payor spouse can deduct from his or her federal income taxes the amount of spousal maintenance paid, thereby increasing the payor spouse's income. See 26 U.S.C. § 215 (2000). But here, the district court explicitly stated that it considered "the [appellant's] tax liability upon receipt of the spousal maintenance award and the deductibility of spousal maintenance paid by the [respondent]" in setting spousal maintenance at $1,500 per month.
Thus, we decline to set aside the district court's modification of respondent's spousal-maintenance obligation.
III.
Appellant contends that the district court ordered respondent to secure his obligation with an insufficient amount of life insurance. The district court has discretion to consider whether the circumstances justifying an award of maintenance also justify securing it with life insurance. Laumann v. Laumann, 400 N.W.2d 355, 360 (Minn.App. 1987), review denied (Minn. Nov. 24, 1987). Here, the district court has ordered respondent to secure with life insurance the equivalent of 66 months (more than five years) of spousal-maintenance payments to appellant. In light of the discretion afforded the district court, we decline to reverse the decision not to require respondent to purchase more life insurance.
IV.
Appellant challenges the district court's award of attorney fees to her in an amount less than she requested. An award of attorney fees in a spousal-maintenance proceeding "rests almost entirely within the discretion of the trial court and will not be disturbed absent a clear abuse of discretion." Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn.App. 1998) (quotation omitted), review denied (Minn. Feb. 18, 1999). Also, it is only in a "rare case" that an appellate court will increase a fee award. Nemmers v. Nemmers, 409 N.W.2d 225, 228 (Minn.App. 1987).
In a spousal-maintenance-modification proceeding, the district court shall award attorney fees to a party if it finds
(1) that the fees are necessary for the good-faith assertion of the party's rights in the proceeding and will not contribute unnecessarily to the length and expense of the proceeding;
(2) that the party from whom fees * * * are sought has the means to pay them; and
(3) that the party to whom fees * * * are awarded does not have the means to pay them.
Minn. Stat. § 518.14, subd. 1 (2002).
In challenging the district court's attorney-fee award, appellant relies on Kohner v. Kohner, 358 N.W.2d 721 (Minn.App. 1984), review denied (Minn. Feb. 27, 1985). There, this court held that when the party from whom fees are sought has extensive financial resources, and the party to whom fees are awarded has no independent means of support, it is an abuse of discretion to award only half the amount of fees requested. Id. at 724. But Kohner predates the 1990 amendment to section 518.14, subdivision 1, which added the current three-part standard for awarding fees. Thus, to the extent that Kohner is inconsistent with the amended statute, it has been superseded by the amended statute. Geske v. Marcolina, 624 N.W.2d 813, 817 n. 2 (Minn.App. 2001).
Here, the district court found that appellant needed assistance in paying the attorney fees she incurred in opposing respondent's petition. The district court also found that respondent had the means to pay some, but not all, of appellant's fees. Ultimately, the district court ordered respondent to pay appellant $3,500, less than half of the $8,253.29 in attorney fees she requested. Thus, in light of the district court's broad discretion on this issue, we find no reason to disturb the attorney-fee award.