Opinion
No. C4-98-1249.
Filed December 15, 1998.
Appeal from the District Court, Hennepin County, File No. 104619.
Ronald L. Snelling, Jill N. Moeller, Snelling, Christensen Laue, P.A., (for appellant)
Michael Ormond, Ormond Law Offices, (for respondent)
Considered and decided by Klaphake, Presiding Judge, Davies, Judge, and Amundson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
In this proceeding to modify maintenance, appellant Curtis Hattstrom challenges the findings of monthly living expenses for himself and for respondent Carolann Hattstrom. We affirm in part, but reverse the finding of appellant's expenses and remand for the district court to address both appellant's expenses and the maintenance obligation. Respondent's motion for attorney fees is denied.
FACTS
The judgment dissolving the parties' marriage awarded respondent maintenance until April 1989, reserved maintenance thereafter, and awarded appellant his interests in a dental practice and retirement account. In 1993, the district court awarded respondent $2,000 permanent monthly maintenance, after imputing $500 monthly income to her. Appellant became disabled in 1997, but received only partial disability insurance benefits at the time of the determination now appealed from. In June 1998, the district court denied appellant's motion to terminate or reduce maintenance. This appeal followed.
DECISION
Whether to modify maintenance is discretionary with the district court. Claybaugh v. Claybaugh , 312 N.W.2d 447, 449 (Minn. 1981). Absent an abuse of its "wide discretion" in awarding maintenance, "the trial court's determination is final." Erlandson v. Erlandson , 318 N.W.2d 36, 38 (Minn. 1982). Minn. Stat. § 518.552 (1996) lists factors to be considered in setting the amount and duration of maintenance; no single factor is dispositive and the issue is basically the recipient's need balanced against the obligor's financial condition. Id. at 39-40. Maintenance-related findings of fact are not set aside unless clearly erroneous. McCulloch v. McCulloch , 435 N.W.2d 564, 566 (Minn.App. 1989).
Appellant challenges the finding that respondent's monthly expenses are more than $2,000. He argues that respondent, although unemployed, has survived on her $2,000 monthly maintenance award without liquidating assets. The district court rejected this argument by distinguishing respondent's actual expenses from those that would be consistent with her higher standard of living while married. See Minn. Stat. § 518.552, subds. 1(a) 2(c) (1996) (need for, and amount of, maintenance to be based, in part, on recipient's marital standard of living); Rosenberg v. Rosenberg , 379 N.W.2d 580, 586 (Minn.App. 1985) (holding maintenance recipient who enjoyed "affluent" marital standard of living could not be "forced to subsist at a survival level"), review denied (Minn. Feb. 19, 1986). On this record, the district court's finding that respondent's expenses are "reasonable" is not clearly erroneous.
The district court found appellant had a monthly surplus after paying the remaining expenses for his current household and $2,000 maintenance to respondent. Appellant argues that it was improper for the district court, in making this finding, to have reasoned that some of his current household expenses should be deemed paid by his current spouse. The district court based that finding on an affidavit of appellant's current spouse stating that she had paid some of the expenses of appellant's household during an earlier period when she was employed. To adopt appellant's argument would be inconsistent with the dissolution-judgment provision stating that a party who remarries accepts any additional obligations of the new marriage "with full knowledge" of prior obligations under the judgment.
But the affidavit of appellant's current spouse actually states that when employed she had contributed $1,200 per month to cover expenses. The district court erroneously found the amount was $2,100. Respondent alleges that use of this incorrect figure is harmless. See Minn.R.Civ.P. 61 (harmless error to be ignored). Respondent first claims correction is unnecessary because the $500 monthly income imputed to her is excessive because she has not worked since 1994. She next claims appellant will have more money to pay maintenance when his expenses decrease after he sells his house (currently for sale or recently sold) and that appellant's income will increase when he receives full disability payments.
None of respondent's arguments justifies ignoring the district court's error. As to the first argument, the fact that respondent is not earning the income imputed to her does not necessarily mean imputation should not continue. See Hecker v. Hecker , 568 N.W.2d 705, 710 (Minn. 1997) (affirming maintenance awarded in amount that, with income imputed to her, would cover recipient's monthly expenses). The next argument assumes that uncertain future events will have a positive impact on appellant's finances. We will not engage in such speculation. See Carrick v. Carrick , 560 N.W.2d 407, 412 (Minn.App. 1997) (stating "[payor's] maintenance obligation should have been calculated based upon his income at the time of trial"); Schreck v. Schreck , 445 N.W.2d 861, 863 (Minn.App. 1989) (speculation regarding future events is inappropriate in maintenance context), review denied (Minn. Nov. 15, 1989). Because the finding that husband's current wife contributed $2,100 per month when employed is clearly erroneous, we reverse that finding, and hence the finding of husband's reasonable monthly expenses. We remand for the district court to make new expense findings and reevaluate the propriety of husband's maintenance award in light of those findings.
Another part of the rationale for the district court's ruling was that appellant had surplus income. We believe a correct reading of the affidavit of appellant's current spouse shows that appellant would have a deficit. We remand for the district court to re-examine the maintenance award on that basis as well.
Appellant further alleges that, except for disability benefits, all of his income is from his property award and he should not have to pay maintenance from those assets. Generally, however, maintenance obligors are not required to liquidate property to meet expenses. See Zagar v. Zagar , 396 N.W.2d 98, 101 (Minn.App. 1986) ("We find no authority to support appellant's suggestion that an award [of maintenance] be preserved based on an expectation that the obligor liquidate assets to make payments."). This rule does not, however, preclude a maintenance payor from being required to pay maintenance with income generated from assets. See Minn. Stat. § 518.54, subd. 3 (1996) (defining "maintenance" as payment from "future income or earnings"); subd. 6 (Supp. 1997) (defining "income" as "any form of periodic payment to an individual").
The district court also based its ruling, in part, on Kruschel v. Kruschel , 419 N.W.2d 119, 123 (Minn.App. 1988), which held that, while a maintenance obligor should not be required to liquidate assets to pay maintenance, an obligor's "total financial resources," including retirement accounts, may be considered in setting the amount of a maintenance award to be paid from the obligor's other income. We are uncertain whether the district court properly applied the Kruschel exception to the general rule that maintenance obligors not be required to liquidate assets to meet expenses when it ruled appellant should use his deferred compensation funds (his property) to meet his non-maintenance expenses, freeing his disability funds (his income) to pay maintenance. If, on remand, the district court concludes that the Kruschel exception is applicable, it should explain its rationale for that conclusion.
On remand, the district court has discretion to reopen the record. The record shows that, when this appeal was taken, the parties' circumstances were expected to change at any moment. Appellant expected to sell his house and also to adjust his disability benefit. The district court, if it reopens the record, has discretion to take evidence on the parties' new circumstances and to adjust its maintenance award accordingly. Any maintenance adjustment resulting from the district court's re-evaluation of events involved in the original modification motion may be made effective as of the date of the original motion. Minn. Stat. § 518.64, subd. 2(d) (Supp. 1997). Any maintenance adjustments resulting from events occurring after the original hearing should be made effective as of a date that would be equitable.
Respondent's motion for attorney fees and expenses incurred in defense of this appeal is denied.