Opinion
No. A03-1115.
Filed March 9, 2004.
Appeal from the District Court, Hennepin County, File No. DC210308.
Carole M. Megarry, Law Office of Carole M. Megarry, (for respondent)
Craig A. Goudy, Cox, Goudy, McNulty Wallace, P.L.L.P., (for appellant)
Considered and decided by Schumacher, Presiding Judge; Willis, 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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION
Appellant-father David John Petersen challenges the district court's decisions to make his modified support and maintenance obligations effective as of a date before service of respondent-mother Valerie Juliana Petersen's motion to modify those obligations, to impute income to him, and to award mother attorney fees exceeding the amount found to be reasonable. We affirm the district court's rulings regarding support and maintenance but modify the fee award, reducing it to the amount found to be reasonable.
FACTS
The stipulated judgment dissolving the parties' marriage awarded mother custody of the parties' children, noted father was employed by a TV station with a gross income of $197,273 and set his maintenance and support obligations. Later, father involuntarily terminated his job and moved to modify his obligations. A referee temporarily suspended father's maintenance obligation, temporarily reduced his support obligation, and noted mother's allegations that father owned more property than he admitted owning, but stated mother had produced no evidence to support her assertions on this point and refused to impute income to father. Shortly thereafter, father acquired a Montana realtor's license, and mother sought review of the referee's order. On review, mother tried to submit additional evidence to the district court. The district court affirmed the referee, noting that its review was conducted on the record before the referee and that mother had not shown good cause to reopen the record.
Shortly thereafter, mother moved to have father's obligations set based on his resources and earning capacity. A report by mother's vocational expert estimated father could earn $75,000-$150,000 annually. Father then started a new commission-based job as a movie executive in Minnesota, and mother moved to have father's support and maintenance obligations increased retroactively to July 15, 2001, and for attorney fees.
The same referee who heard the prior proceeding noted that the primary use to which father had put his Montana realtor's license was to locate and develop properties for himself, and ruled that while father had not made adequate efforts to reemploy himself, he had increased his net worth by $300,000 since the dissolution. The referee imputed gross-annual and net-monthly incomes to father of $112,500 and $6,000, set father's monthly maintenance and support obligations at $1,000 and $1,800, respectively, and made those obligations effective as of July 1, 2001. The referee also found that a reasonable contribution to mother's attorney fees was $5,000, but awarded mother $6,000 in fees. Father appeals from the district court's order affirming the referee's order.
DECISION
1. Generally, modification of existing child support and maintenance obligations can be retroactive to a date before service of the motion to modify the obligations if the district court "express[ly] find[s]" at least one of several circumstances listed in Minn. Stat. § 518.64, subd. 2(d) (2002). Father argues that modifying his obligations retroactively to a date before mother served her motion to modify on March 29, 2002 is improper because the district court made no findings to support such an effective date.
Father's argument incorrectly assumes that Minn. Stat. § 518.64, subd. 2(d), applies here. The prior order noted both that father was unemployed and that "[mother] alleges that [father] owns more properties than he has claimed." It then " temporarily suspended" father's maintenance obligation, directed father to "pay temporary child support[,]" and ordered father to notify mother when he was reemployed, stating that if the parties could not agree on his new obligations the matter could be set for hearing, and that "[m]odification of the temporary support obligations shall be made retroactive to the date of [father's] new employment." (Emphasis added.) Similarly, after setting father's temporary obligations, the same referee who conducted the prior proceeding issued an order in the current proceeding. That order, which was adopted by the district court, described the prior order as "[t]emporarily suspend[ing]" father's maintenance obligation, "[t]emporarily reduc[ing]" father's child support obligation and notes that the "court can modify a temporary order at any time." Thus, the prior order contemplates both that it was setting only temporary support and maintenance obligations and the future final resolution of those questions would be "retroactive," albeit only to the date father started his new job. The current order, however, addresses a motion to make the modifications effective as of a date before father got his new job and explicitly recognizes the temporary nature of the prior order.
Admitting that temporary support and maintenance orders are authorized by Minn. Stat. § 518.131, subd. 1(c), (b) (2002), father argues that the prior order cannot be a temporary order because temporary orders cannot be issued where, as here, a dissolution judgment has already been entered. Father is incorrect. After a dissolution judgment is entered, a district court may issue a temporary order pending resolution of a motion to modify an obligation in an otherwise final judgment. See DonCarlos v. DonCarlos, 535 N.W.2d 819, 821 (Minn. App. 1995) (awarding temporary maintenance under Minn. Stat. § 518.131, subd. 1(b), pending 1994 motion to modify maintenance awarded in 1989 stipulated judgment), review denied (Minn. Oct. 18, 1995). And temporary orders "[s]hall not" prejudice resolution of the questions put to the court for decision. Minn. Stat. § 518.131, subd. 9(a) (2002). Thus, because the prior order was a temporary order, its content did not restrict the district court from addressing support and maintenance back to the date of the service of the motion generating the prior order. Here, that motion was served on July 11, 2001, and the district court made its ruling retroactive to July 1, 2001. Father does not specifically challenge the 10 days by which the effective date of the current order predates the service of his motion and we decline to remand on this basis. See Wibbens v. Wibbens, 379 N.W.2d 225, 227 (Minn. App. 1985) (refusing to remand for de minimis technical error); see also Minn. R. Civ. P. 61 (requiring harmless error to be ignored).
2. Whether to impute income to child support and maintenance obligors is discretionary with the fact finder. See Putz v. Putz, 645 N.W.2d 343, 353-54 (Minn. 2002) (child support); Walker v. Walker, 553 N.W.2d 90, 97 (Minn. App. 1996) (noting district court did not abuse its discretion by imputing income in maintenance context). Regarding the propriety of imputing income to himself, father argues that "neither [mother] nor her expert claim that [his] current employment is inappropriate." But mother's expert notes numerous defects in father's job search, and the expert's report concludes by observing that "[father] has by my evaluation been voluntarily under and unemployed." The current order adopts much of this analysis, noting "[t]he primary use of [father's] realtor's license has been to locate and develop properties for himself."
Father also argues that bad faith is required to impute income to him. Bad faith is not required to impute income to a child-support obligor, but it is required to impute income to a maintenance obligor. Walker, 553 N.W.2d at 95 n. 1; see Putz, 645 N.W.2d at 351 (stating "section 518.551, subd. 5b(d) [regarding imputation of income to voluntarily unemployed and underemployed support obligors], does not limit" court's power "to consider" whether obligor's unemployment or underemployment "is in bad faith toward his or her support obligation"). Here, while there is no express finding of bad faith, the current order states that father "has expended the majority of his economic efforts in increasing his personal wealth in the form of real estate and income producing properties" and "has spent his months of unemployment increasing his own worth." The current order goes on to state that during this time, mother "has had to borrow from her sister to meet her and the children's needs[.]" These findings are sufficient to infer the bad faith necessary to impute income to a maintenance obligor. See Warwick v. Warwick, 438 N.W.2d 673, 677-78 (Minn. App. 1989) (inferring, on clear record, bad faith, despite lack of explicit finding thereof). On this record, father has not shown that the district court abused its discretion by imputing income to him for support or for maintenance purposes.
Father alleges that imputing annual income to him of $112,500 was improper and that the amount should have been $62,500, half way between the $50,000 and $75,000 he estimated he could earn. This testimony was rejected, however, in favor of the estimate of mother's expert, who indicated that father could earn $75,000 to $150,000 annually. Because $112,500 is midway between the figures proffered by mother's expert, the record contains evidence to support the amount of income imputed to father, and that amount is not clearly erroneous. See Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 243 (Minn. App. 2003) (reviewing amount of income imputed to support obligor for clear error), review denied (Minn. Nov. 25, 2003); Schreifels v. Schreifels, 450 N.W.2d 372, 373-74 (Minn. App. 1990) (reviewing amount of income imputed to maintenance obligor for clear error). Moreover, the imputation of significant income to father is consistent with the findings indicating that father's standard of living has not been impacted by his unemployment and that he has increased his net worth by about $300,000 since he lost his job. Indeed, here the district court made its findings regarding father's income despite admitting that "[father] did not voluntarily terminate his [prior job] and [that] the court is aware that [father's] age acts against him in finding new employment."
Father also argues that the district court erroneously considered his assets in setting his maintenance and support obligations where those assets are titled in the names of himself and his current wife and where they are not producing sufficient income or cash flow to pay the maintenance and support obligations at issue. But requiring support and maintenance to be paid from sources other than income when the obligor has improperly reduced his income is allowed by the relevant authorities. See Minn. Stat. § 518.551, subd. 5b(d) (requiring income to be imputed to voluntarily unemployed or underemployed support obligor); Richards v. Richards, 472 N.W.2d 162, 165 (Minn. App. 1991) (noting property may be invaded where maintenance obligor limited income in bad faith).
3. Without citing any authority for its award of attorney fees, the district court ruled that mother lacks the ability to pay her own fees, that father has the ability to contribute to mother's fees, and that father's "reasonable contribution" to mother's attorney fees is $5,000. It then awarded mother attorney fees of $6,000 without explanation. Father challenges the award. The award appears to be an award of need-based attorney fees under Minn. Stat. § 518.14, subd. 1 (2002). Such awards are reviewed for an abuse of discretion. Gully v. Gully, 599 N.W.2d 814, 826 (Minn. 1999). Because the award exceeded the amount the court found to be reasonable, we modify the award to $5,000.