Opinion
No. CX-02-2010.
Filed August 12, 2003.
Appeal from the District Court, Hennepin County, File No. DW264437.
Alan T. Tschida, (for appellant)
Gerald O. Williams, (for respondent)
Considered and decided by Peterson, Presiding Judge, Lansing, Judge, and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
On appeal from an amended dissolution judgment, Rita Faiks-Youngs argues that the district court abused its discretion by converting permanent maintenance to temporary maintenance, by providing an inadequate maintenance amount, by imputing income, and by failing to make findings on the marital standard of living. Although the record supports the district court's determination on the amount of maintenance and refutes the claims of imputed income and inadequate findings on the marital standard of living, neither the evidence nor the law supports the court's decision to convert permanent maintenance to temporary maintenance, and we therefore affirm in part, reverse in part, and remand to reinstate the order for permanent maintenance.
FACTS
Rita Faiks-Youngs and Perry Youngs dissolved their twenty-four-year marriage in July 2002. Youngs and Faiks-Youngs divided most of their property by stipulation, leaving spousal maintenance as the primary issue for the contested hearing. Following the hearing, the district court issued a judgment providing Faiks-Youngs permanent maintenance of $1,500 a month.
Faiks-Youngs moved the district court for a new trial or an amended judgment, and Youngs also moved for posttrial relief. The district court issued an amended judgment in which it denied Faiks-Youngs's motion for a new trial and amended findings, except to set forth more specifically findings on Faiks-Youngs's reasonable monthly expenses. The court denied Youngs's posttrial motion except to convert Faiks-Youngs's maintenance award from permanent to temporary maintenance that will terminate in five years. The district court did not amend its findings on Faiks-Youngs's need for maintenance, but concluded that temporary rather than permanent maintenance was required in order to hold Faiks-Youngs to an obligation to rehabilitate. This appeal followed.
DECISION
A district court has broad discretion in determining spousal maintenance, and we will uphold a maintenance decision absent an abuse of the court's discretion. Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). This exercise of discretion must be viewed in light of the statutory criteria for spousal maintenance contained in Minn. Stat. § 518.552, subd. 1(b) (2002). See Erlandson, 318 N.W.2d at 38-39 (applying earlier version of statute). Before this court may determine there has been an abuse of discretion, it must find that there was a clearly erroneous conclusion against logic and the facts on the record. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
A district court may provide for maintenance if it finds that a spouse is unable to support himself or herself adequately through appropriate employment in view of the standard of living established during the marriage. Minn. Stat. § 518.552, subd. 1(b). The statutory factors that the court is required to consider in determining the amount and duration of spousal maintenance include (1) the financial resources of the party seeking maintenance, (2) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment and the probability of that party becoming fully or partially self-supporting, (3) the standard of living established during the marriage, (4) the duration of the marriage, (5) the age, and the physical and emotional condition of the spouse seeking maintenance, and (6) the obligor spouse's ability to meet his or her needs while meeting those of the spouse seeking maintenance. Minn. Stat. § 518.552, subd. 2(a)-(d), (f)-(g) (2002). In considering these factors, the recipient's needs should be balanced against the obligor's ability to pay. Erlandson, 318 N.W.2d at 39-40.
In the dissolution judgment in this case, the district court made detailed findings on the relevant circumstances relating to spousal maintenance. The court found that although Faiks-Youngs does not have financial resources to meet her needs independently, she can reasonably be expected to increase her income substantially in the next three to five years, but this increase may still be short of her reasonable expenses. The court considered Faiks-Youngs's age, the length of marriage, the standard of living established during the marriage, her medical condition, and Youngs's ability to meet his own needs while paying spousal maintenance. The district court also found that Faiks-Youngs's reasonable monthly expenses are $2,740 and that her net income is $1,464 a month. Based on all of these findings, the court provided that Faiks-Youngs should receive $1,500 a month in permanent spousal maintenance. Following posttrial motions the district court, on these same findings, determined that the permanent maintenance should be converted to temporary maintenance for five years with a reservation that Faiks-Youngs does not lose her right to seek modification.
In this appeal Faiks-Youngs raises eight issues on which she contends the district court abused its discretion in determining maintenance. We reject seven of those arguments.
First, we conclude that the district court acted within its discretion in determining that Faiks-Youngs's car payment is not a reasonable monthly expense. After dissolution proceedings began, Faiks-Youngs traded in her 1994 Honda Accord that was unencumbered and purchased a 2001 Honda Accord by obtaining a two-year loan with a monthly payment of $639. This payment constitutes two-thirds of Faiks-Youngs's net monthly income. Faiks-Youngs testified that she obtained a short-term loan because she was afraid of being in debt. But voluntarily obtaining a short-term loan with a significant monthly payment, considering Faiks-Youngs's limited income, may, as the court concluded, have been for the purposes of increasing expenses to receive additional maintenance.
Furthermore, Faiks-Youngs and Youngs stipulated that each of them would retain his or her respective motor vehicle, free and clear of the other party's respective claim and without factoring into the property division any disparity in the value of the vehicles. Because the parties provided for the disposition of their vehicles as part of the stipulated property division, the court did not err in declining to include Faiks-Youngs's car payment in her reasonable monthly expenses.
Second, the court acted within its discretion in concluding that Faiks-Youngs's furniture-loan payments should not be included in her reasonable monthly expenses. Shortly before purchasing her new car, Faiks-Youngs also purchased $5,720 worth of new furniture. Her monthly payment for this furniture equals one-half of her net monthly income. This purchase is excessive in light of the parties' frugal lifestyle during their marriage, and the district court could reasonably disallow this expense as unreasonable. The court, therefore, did not abuse its discretion in refusing to include the furniture loan payments in Faiks-Youngs's reasonable monthly expenses.
Third, Faiks-Youngs is incorrect in her assertion that the district court failed to consider and account for the taxes she will be assessed on her maintenance income. The record shows that the court did consider these taxes, and deducted them from Faiks-Youngs's gross monthly income when it calculated her net monthly income.
Fourth, we disagree with Faiks-Youngs's contention that the district court abused its discretion by failing to include health and dental insurance premiums in her reasonable monthly expenses. The parties submitted conflicting evidence on how much Faiks-Youngs's medical and dental insurance would cost after the marriage was dissolved. The evidence in the record supports the district court's award to Faiks-Youngs of $13.79 a month for uninsured medical expenses, $29.60 a month for uninsured dental expenses, $15.00 a month for medication expenses, and $175.00 a month for medical and dental insurance payments.
Fifth, Faiks-Youngs argues that the court abused its discretion in failing to include retirement savings as one of her reasonable monthly expenses. Faiks-Youngs received retirement savings in excess of $300,000 in her property settlement with Youngs. Based on these retirement savings, the court found that Faiks-Youngs's retirement assets "would generate estimated monthly income for [her] in the amount of $4,191 a month beginning at age sixty-five (65)." This amount does not include pension payments that Faiks-Youngs will also receive. Because Faiks-Youngs will have substantial monthly income once she retires, the district court did not abuse its discretion in excluding retirement savings from her reasonable monthly expenses.
Sixth, Faiks-Youngs argues that the district court improperly imputed income to her. A district court may not impute income to a party for the purposes of setting maintenance unless it first finds that the party was underemployed in bad faith. See Carrick v. Carrick, 560 N.W.2d 407, 410 (Minn.App. 1997) (declining to impute income as earnings capacity for purposes of setting maintenance, when party continued to work part-time, was employed in same type of position as during marriage, and there was no evidence of her intent to reduce income to obtain maintenance). Faiks-Youngs argues that the court improperly attributed a $25,000 salary to her when it calculated her maintenance award because she only makes approximately $18,000 a year, and the court did not find that she is underemployed in bad faith. The record does show that Faiks-Youngs only earns $18,000 a year and that the district court indicated in its original judgment that her maintenance provision was based on a $25,000 annual salary, which was her "goal" salary. But the record also shows that the court did not impute income to Faiks-Youngs. In the amended order, the court found that Faiks-Youngs "is presently earning a net monthly income of $1,464." This is the only income the court attributes to Faiks-Youngs in the amended order, which shows that the court made its determination on her current $18,000 annual salary.
Seventh, Faiks-Youngs contends that the court abused its discretion by "refusing to make findings on the parties' standard of living." District courts should consider the standard of living established during the marriage when determining a maintenance award. Minn. Stat. § 518.552, subd. 2(c) (2002). Appellate courts may treat statutory factors for determination of spousal maintenance as addressed when they are implicit in a trial court's findings of fact in a dissolution case. Dobrin v. Dobrin, 569 N.W.2d 199, 201-02 (Minn. 1997). In the original and amended judgment, the court stated that it considered the marital standard of living in determining Faiks-Youngs's maintenance award. In addition, the record shows that the court considered the parties' lifestyle which included savings for retirement, investing, gifts, and travel. Because the court stated that it considered the marital standard of living, and because the record shows that the court considered how the parties spent their money during the marriage, the court did not abuse its discretion by failing to determine more specifically the parties' standard of living.
Eighth, and finally, Faiks-Youngs argues that the district court erred in providing only temporary maintenance. When uncertainty exists on the necessity of permanent maintenance, the court is required to provide that maintenance be permanent, leaving its order open for later modification. Minn. Stat. § 518.552, subd. 3 (2002). No bright-line rule determines when permanent maintenance is appropriate; rather, each case must be determined on its facts. Dobrin, 569 N.W.2d at 201.
The court originally provided Faiks-Youngs permanent maintenance. In the amended judgment, however, the court modified Faiks-Youngs's $1,500 monthly maintenance from permanent to temporary, stating:
[Faiks-Youngs's] entitlement to permanent maintenance is diminished by the fact that it is appropriate for [her] to engage in rehabilitative efforts to earn income in accord with her earning capacity. [Youngs] could be prejudiced by this court's award to [Faiks-Youngs] of permanent maintenance, if [she] were not thereafter held to an obligation to rehabilitate. By awarding [Faiks-Youngs] rehabilitative maintenance, the court's jurisdiction is reserved. [Faiks-Youngs] does not lose her right to seek modification in accord with a change of circumstances, and neither party is prejudiced.
The record shows that in the original judgment the court ordered permanent maintenance, finding that because "under no scenario will [Faiks-Youngs] become self-supporting, and her medical problems may prevent her from reaching her expected maximum income, [Youngs] makes enough income to pay maintenance, and this is a long-term marriage, [Faiks-Youngs] is entitled to permanent maintenance of $1,500 a month." Although these circumstances had not changed, the court modified Faiks-Youngs's maintenance award to encourage her to become self-sufficient.
Section 518.552 provides that when there is some uncertainty on the necessity of a permanent maintenance award, the court shall order permanent maintenance leaving its order open for later modification. Minn. Stat. § 518.552, subd. 3. Retaining jurisdiction over temporary maintenance "does not make temporary maintenance an acceptable alternative when it is uncertain that the spouse seeking maintenance can ever become self-supporting." Nardini v. Nardini, 414 N.W.2d 184, 198 (Minn. 1987). The statute does not justify a conversion from permanent maintenance to temporary maintenance when the need for permanent maintenance is in question. Reinke v. Reinke, 464 N.W.2d 513, 516 (Minn.App. 1990); see also Kemp v. Kemp, 608 N.W.2d 916, 921 (Minn.App. 2000) (stating that while permanent maintenance does not compel future self-sufficiency by the recipient, an obligor is not precluded from subsequently demonstrating that a recipient has become self-sufficient). Thus, the record does not support the district court's amendment to change maintenance from permanent to temporary.
Importantly, the reason the district court gave for changing the maintenance from permanent to temporary — that permanent maintenance removes an obligation to rehabilitate — is not supported by applicable law. The supreme court has specifically recognized the obligation of a permanent-maintenance recipient to make suitable efforts to rehabilitate to attain a reasonable level of self-sufficiency. See Hecker v. Hecker, 568 N.W.2d 705, 708-9 (Minn. 1997). In Hecker the court held that if a permanent-maintenance recipient did not make credible efforts to rehabilitate, it was within the district court's discretion to attribute to that individual an income that reasonable efforts would have produced. Id. at 710. For these reasons, we reverse and remand to reinstate permanent spousal maintenance in the amount of $1,500 a month, subject to later modification when a change in circumstances has been shown.