Opinion
No. A04-1714.
Filed May 24, 2005.
Appeal from the District Court, Steele County, File No. F8-95-1009.
Maury D. Beaulier, Hellmuth Johnson, Pllc, (for appellant)
Paula Smoot Ogg, (for respondent)
Considered and decided by Hudson, Presiding Judge; Schumacher, Judge; and Halbrooks, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
Appellant challenges the district court's affirmance of a child-support magistrate's order denying a motion to modify her child-support obligation, arguing that the district court (1) applied the incorrect standard of review by failing to review the magistrate's order de novo and (2) abused its discretion by determining that appellant was voluntarily underemployed and imputing income based on appellant's former salary without analyzing her present estimated earning ability. Because the district court conducted a de novo review and did not clearly err by finding that appellant was voluntarily underemployed, we affirm in part. But because the district court failed to properly calculate appellant's support obligation based on a determination of imputed income under Minn. Stat. § 518.551, subd. 5b(d) (2004), we reverse in part and remand.
FACTS
In January 2003, a child-support magistrate (CSM) granted respondent Kevin Kozel's motion to modify child support. Finding that there had been a "substantial change in circumstances requiring a modification" of support, the CSM ordered appellant Leslie Kozel (n/k/a Leslie Kurzontkowski) to pay respondent $1,211 per month in child support (plus $66 per month for daycare expenses and $10 per month for medical support), based on her net monthly income of $4,035. At that time, appellant reported monthly living expenses of $4,433, which included "a $1,000.00 per month horse payment and $150.00 for pet care."
At the time of the modification, appellant was employed as director of legal services at Cybex International, Inc. (Cybex) in Owatonna and was married to its senior vice president of manufacturing and service operations. In her position as director of legal services, appellant had a number of responsibilities managing products-liability issues for the company. In 2002, she reported a salary of $71,999.72. As appellant explained, "To say the least, this was a very unique job for me, considering I do not have a law degree." In April 2003, appellant learned that Cybex had plans to "restructure" her position. After learning that she would lose her position, appellant inquired about comparable positions with her colleagues at Cybex, who were unable to assist her. Upon appellant's termination on May 30, she received a severance package "consist[ing] of salary continuation for a period equal to 19 weeks pay at a weekly rate of $1,384.61."
Appellant holds a bachelor of arts in organizational management and communication from Concordia College and a paralegal certificate from the American Institute for Paralegal Studies, although she is not a certified paralegal.
Between April and September 2003, appellant applied for positions with Federated Insurance Companies, Allina Hospitals, Telex Communications, and Polaris. All four applications were rejected. Unable to find a comparable position in the legal profession, appellant decided to make a career change. She testified:
When my severance ended [in] the middle of October, and obviously without success in finding . . . a comparable position, I made a decision at that point to return to school.
. . . .
I applied for graduate school at Minnesota State, to become a special education teacher and I was accepted. So that's what my plans are now.
Between October 2 and November 17, appellant applied for approximately 20 positions, about half of which were in the education field. She was eventually hired by Blooming Prairie School as a full-time, special-education paraprofessional and paid a salary of $7.71 per hour, earning an average net monthly income of $654. After completing graduate studies and obtaining her license in the field, appellant expects to earn between $28,000 to $40,000 per year.
In the midst of her job search, appellant moved to modify her child-support obligation pursuant to Minn. Stat. § 518.64 (2004). In support of her motion, appellant attached an affidavit with approximately 170 pages of exhibits, including many cover letters and employment postings reflecting her job-search efforts. But in concluding that appellant "ha[d] not demonstrated that there has been a substantial change in circumstances which renders the existing order unreasonable and unfair," the CSM made the following findings:
22. [Appellant's] job search was at best a token one, with most of the job search activity occurring after she had already committed herself to graduate school.
. . . .
24. Given the lack of any real job seeking activities prior to returning to graduate school it is clear that graduate school, not a new job, was [appellant's] real goal.
. . . .
29. [Appellant's] monthly living expenses are almost $8000. These expenses cover [appellant] and her spouse. [Appellant's] spouse is currently covering all of the family's expenses.
30. Though [appellant] alleges that she cannot afford to pay child support at the current level, her lifestyle is at odds with that claim.
. . . .
40. [Appellant] did nothing to hide the fact that she enjoys a very comfortable lifestyle or that that lifestyle is paid for by her spouse. Beyond his contribution to [appellant's] living expenses, which affect her needs, [appellant's] spouse's income and expenses are irrelevant to this proceeding.
The CSM specifically found that appellant's "current voluntary reduction in income is voluntarily underemployment." Appellant moved for further review with the district court.
After reviewing the record before it, the district court denied appellant's motion and affirmed the CSM's order in its entirety. The district court found that "the CSM did not abuse her discretion by essentially imputing income to [appellant] by affirming the previous order; [and] that the CSM's findings . . . support the fact that [appellant] did not demonstrate that her voluntary decision to change her career and reduce her income did not constitute voluntary underemployment." This appeal follows.
A transcript of the hearing before the CSM was presented to the district court, but a new hearing was not held. See Minn. Stat. § 518.64, subd. 2(f) (2004) ("The court need not hold an evidentiary hearing on a motion for modification of . . . support.").
DECISION
We review a district court's decision affirming a CSM's order under an abuse-of-discretion standard. Davis v. Davis, 631 N.W.2d 822, 826 (Minn.App. 2001). A district court abuses its broad discretion if it draws "a clearly erroneous conclusion that is against the logic and the facts on [the] record." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
I.
As a threshold matter, appellant argues that the district court failed to review the CSM's order de novo. Appellant supports this argument based on "the language of the [o]rder, the [d]istrict [c]ourt's omissions with regard to its independent review of the facts, and the [district] [c]ourt's clear reliance on the [CSM's] discretion[.]" Appellant requests a remand "for the purpose of considering all of the evidence" and ensuring that a de novo review occurs.
It is well established that a district court reviews a CSM's decision de novo. Davis, 631 N.W.2d at 825. As Minn. R. Gen. Pract. 377.09, subd. 2(b), instructs:
The . . . district court judge shall make an independent review of any findings or other provisions of the underlying decision and order for which specific changes are requested in the motion. The . . . district court judge shall affirm the order unless the court determines that the findings and order are not supported by the record or the decision is contrary to law. . . .
. . . .
. . . If any findings or other provisions of the . . . district court judge's decision and order are approved without change, the . . . district court judge shall specifically state in the order that those findings and other provisions are affirmed but need not make specific findings or conclusions as to each point raised in the motion.
Id. (emphasis added). In this context, de novo means "[a]n appeal in which the [district] court uses the [CSM's] record but reviews the evidence and law without deference to the [CSM's] rulings." Black's Law Dictionary 94 (7th ed. 1999). As we have previously explained, "the district court [is] to make its review free from the influence, guidance, or control of the [CSM]." Blonigen v. Blonigen, 621 N.W.2d 276, 280 (Minn.App. 2001), review denied (Minn. Mar. 13, 2001).
Appellant directs us to nothing other than certain language employed by the district court to uphold her assertion that the district court did not conduct a de novo review. See Loth v. Loth, 227 Minn. 387, 392, 35 N.W.2d 542, 546 (1949) (stating appellate courts cannot assume district court error); Luthen v. Luthen, 596 N.W.2d 278, 283 (Minn.App. 1993) (applying Loth, stating appellate court "cannot assume that the district court will neglect its duty to independently evaluate the proposed judgment or will abuse its discretion in performing that evaluation"). While the district court liberally refers to the CSM's order, this does not mean that it failed to conduct a de novo review. The district court explained that it conducted its review based on "the file presented, including the CSM [f]indings of [f]act, [c]onclusions of [l]aw, and [o]rder [of] the [c]ourt [and] . . . the moving papers and transcript of the hearing before the CSM." According to the rules regarding motions for review of child-support obligations, this is the proper procedure. On review, a district court need not make specific findings as to each point raised in appellant's motion. See Minn. R. Gen. Pract. 377.09, subd. 2(b) (explaining that if the findings of a CSM are approved without change, the district court need only "specifically state in the order that those findings . . . are affirmed"). Moreover, the district court is instructed to "affirm the order unless [it] determines that the findings and order are not supported by the record or the decision is contrary to law." Id.
Here, in its de novo review, the district court concluded that the CSM's decision to deny appellant's motion to modify child support was supported by the record before it. Whether that decision was in error remains to be addressed. But it cannot be said that the district court failed to conduct a de novo review of the CSM's order.
II.
Appellant's principal argument is that the district court abused its discretion by affirming the CSM's decision to deny appellant's motion to modify child support. Again, modification of child support is reviewed under an abuse-of-discretion standard. Rutten, 347 N.W.2d at 50. This court "will reverse a district court's order regarding child support only if [it is] convinced that the district court abused its broad discretion by reaching a clearly erroneous conclusion that is against logic and the facts on record." Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002). But the district court must exercise its discretion within the limits set by the legislature. Id. Child support may be modified if the moving party shows (1) a substantial change in circumstances that (2) makes the existing award unreasonable and unfair. Minn. Stat. § 518.64, subd. 2(a) (2004); Bormann v. Bormann, 644 N.W.2d 478, 480-81 (Minn.App. 2002).
A. Voluntary Underemployment
Appellant first argues that the district court abused its discretion by determining that appellant is voluntarily underemployed. By affirming the decision of the CSM to deny appellant's motion to modify her child-support obligation, the district court determined that the CSM "essentially imput[ed] income to [appellant] by affirming the previous order" and that appellant "did not demonstrate that her voluntary decision to change her career and reduce her income did not constitute voluntary underemployment." In analyzing the findings of the CSM, the district court further found that appellant "acted in bad faith in deciding not to seek employment for which she is qualified, at a level of compensation commensurate with what she earned at Cybex; and, [appellant's] current position is consistent with her newly chosen career and is not likely to lead to increased income."
Income may be imputed to or estimated for a child-support obligor if the obligor is voluntarily underemployed. Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 240 (Minn.App. 2003), review denied (Minn. Nov. 25, 2003). Under Minnesota law, a parent is not considered voluntarily underemployed "upon a showing by the parent that the . . . underemployment: (1) is temporary and will ultimately lead to an increase in income; or (2) represents a bona fide career change that outweighs the adverse effect of that parent's diminished income on the child." Minn. Stat. § 518.551, subd. 5b(d) (2004).
The record reflects that the district court did not clearly err by finding that appellant is voluntarily underemployed. It remains appellant's burden to prove that she is not. Id. She has failed to meet that burden here. For example, appellant lost her position at Cybex on May 30, 2003, after becoming aware of the company's restructuring plan several weeks earlier. Despite that, over the course of four months, appellant applied for only four jobs. See Murphy v. Murphy, 574 N.W.2d 77, 82 (Minn.App. 1998) (explaining that a finding of voluntary underemployment involves some evidence of choice).
Appellant's "career change" also supports a finding of voluntary underemployment. While a parent is certainly permitted to make a bona fide career change, in the child-support context the change must "outweigh the adverse effect of that parent's diminished income on the child." Minn. Stat. § 518.551, subd. 5b(d). This is simply not the case here. Appellant has more than a decade's worth of legal experience as a corporate products-liability specialist. The majority of appellant's job search focused on positions in the education field, while her demonstrated expertise clearly lies elsewhere. Between October and November, appellant applied for just a handful of corporate or legal positions. While there is general agreement that appellant held a unique position for someone without a law degree, she undisputedly is qualified to work as a legal assistant. There is nothing in the record to suggest that the fact that she is not certified would prevent her from obtaining a legal-assistant position. Yet her efforts to obtain one were minimal. Based on this record, the finding that appellant is voluntarily underemployed is not "against logic and the facts on record" and is affirmed. Putz, 645 N.W.2d at 347.
B. Imputation of Income
Appellant next argues that the district court abused its discretion by imputing income to her based on the original child-support-modification order without addressing appellant's present estimated earning ability. Appellant maintains that the district court erred by maintaining child support based on her wages when she was director of legal services for Cybex and that the court "made no attempt to analyze whether that was in fact in line with her present earning capacity." We agree.
Under the governing statute, "[i]f the court finds that a parent is voluntarily . . . underemployed," as it did here, "support shall be calculated based on a determination of imputed income." Minn. Stat. § 518.551, subd. 5b(d) (emphasis added); see also Minn. Stat. § 645.44, subd. 16 (2004) (stating "`shall' is mandatory"). Imputed income means, "the estimated earning ability of a parent based on the parent's prior earnings history, education, and job skills, and on availability of jobs within the community for an individual with the parent's qualifications." Minn. Stat. § 518.551, subd. 5b(d). In order to impute income, these factors must be considered by the district court. Kuchinski v. Kuchinski, 551 N.W.2d 727, 729 (Minn.App. 1996).
Although the district court found that appellant chose voluntary underemployment by her career change from a corporate products-liability specialist to a special-education paraprofessional, there are not sufficient findings to support the district court's determination that appellant had the potential to earn an average net monthly income of $4,035 after losing her position at Cybex.
The district court did not calculate the estimated earning ability of appellant "based on [her] prior earnings history, education, and job skills, and on availability of jobs within the community for an individual with [her] qualifications." Minn. Stat. § 518.551, subd. 5b(d). For example, the record reflects that appellant's annual income increased precipitously from $39,767.39 to $71,999.72 between 1999 and her termination from Cybex in May 2003.
Appellant reported income of $39,767.39 in 1998; $45,126.85 in 1999; $50.579.65 in 2000; $66,005.57 in 2001; and $71,999.72 in 2002.
In Kuchinski, an obligor terminated her employment as a legal secretary in Minnesota and moved to Kentucky because of "significantly greater career opportunities for her new husband there." 551 N.W.2d at 728. After finding voluntary unemployment, the district court in that case — as here — was required to impute income to appellant. Id. at 729. In Kuchinski, "the district court continued [obligor's child support] obligation ordered under the very different circumstances of her employment in Minnesota." Id. We reversed and remanded "for the taking of additional evidence on the appropriate imputed income, including the availability of jobs in Kentucky, her new `community,' and calculating child support under Minn. Stat. § 518.551." Id. While the factual circumstances in Kuchinski are different from the situation before this court, the case is nevertheless instructive.
On this record, the district court abused its discretion by basing appellant's child-support obligation on an imputed income of $4,035 per month, which represented the apex of appellant's salary at Cybex at the time of respondent's original motion to modify child support. Because the district court abused its discretion by not analyzing the basis for the amount of income it imputed to appellant, we reverse and remand to the district court for findings and a determination as to what amount of income can be appropriately imputed to appellant pursuant to Minn. Stat. § 518.551, subd. 5b(d). See Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989) (remanding when appellate court unable to determine whether statutory requirements were properly met).
III.
In his brief, respondent requests an award of attorney fees on appeal. But we decline to consider the request because respondent has not filed a proper motion for an award of attorney fees pursuant to Minn. R. Civ. App. P. 139.06, subd. 1.