Filed April 16, 2002.
Appeal from the District Court, Washington County, File No. F7982231.
James Richard Huntsman, (pro se appellant)
Brad C. Eggen, (for respondent)
Considered and decided by Harten, Presiding Judge, Anderson, Judge, and Stoneburner, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
Appellant James Huntsman argues that the district court abused its discretion or erred by (1) awarding permanent spousal maintenance to respondent Zenith Annette Huntsman; (2) miscalculating appellant's net income; (3) ruling that his proposed findings of fact were untimely and declining to consider them; (4) imposing child-support obligations on him in excess of the child-support guidelines; (5) understating his monthly mortgage expense; and (6) requiring the parties to alternate the tax-dependency exemption for the parties' minor child. We affirm the district court on all issues except for calculation of appellant's net income. On that issue, we reverse and remand for calculation consistent with statutory requirements.
Appellant James Huntsman petitioned to dissolve a 31-year marriage to respondent Zenith Annette Huntsman. At the time, appellant was 53 years old and respondent was 52; the parties had three children, one of whom was still a minor. The parties agreed that they would share joint legal custody of the child, and that respondent would have sole physical custody. The only issue at trial was spousal maintenance. Trial testimony addressed appellant's income, assets, and future expenses; respondent's work history, professional prospects, and future expenses; and the parties' marital lifestyle.
During their marriage, the parties enjoyed an upper-middle-class lifestyle. They spent the majority of their discretionary income and free time restoring their Victorian home, which was listed for sale at the time of trial at $589,000. Appellant testified that the family rarely traveled together or took extended vacations. Aside from home improvements, the parties did not save or invest any money; at the time of trial, they had no savings, stocks, or mutual funds.
Appellant is currently a senior intellectual-property analyst at 3M, where he has worked since 1973. He holds a Ph.D. in physical chemistry and an MBA in management. In 1998, he passed the patent bar and became a certified patent agent. His gross annual income, which consists of monthly base payments and quarterly profit-sharing payments, is approximately $100,000.
Throughout the marriage, respondent was a homemaker and the primary caretaker of the parties' three children. She cooked and shopped for the family and cleaned and decorated the house. She holds a bachelor's degree in secondary education and medical technology, and at one point held a realtor's license. She has not worked full-time since 1976. Between 1976 and 1999, she had part-time jobs as a medical technologist, a realtor, a doll-shop owner, a substitute teacher, and a cleaning woman.
Respondent testified that she would like to attend the University of Minnesota to get an elementary teaching credential, which would require her to complete a two-year, $12,000 graduate program.
There was extensive testimony at trial concerning the poor state of respondent's mental health. Dr. John Cronin, a psychologist and vocational expert who examined respondent, testified that respondent is "extremely depressed" and "in need of some type of psychological or psychiatric treatment." He noted that while appellant has "significant vocational and personal challenges ahead of her," and while her vocational outlook is "unclear," she would likely be able to work full-time. Dr. Cronin nonetheless observed that, at the time of trial, respondent did not have much potential for earning capacity due to her physical and psychological problems.
On January 12, 2000, the district court made findings relative to the parties' monthly incomes and expenses and (1) awarded respondent permanent maintenance; (2) awarded respondent additional temporary maintenance to obtain a teaching credential; (3) ordered that appellant pay respondent's health insurance and the child's health insurance; (4) ordered that appellant share the costs of the child's non-deductible and non-insured medical costs with respondent; and (5) ordered that appellant maintain life insurance as security for his child support.
Both parties filed motions for amended findings of fact and conclusions of law. After the hearing on the motions, appellant filed supplemental proposed amended findings of fact. The district court's August 30, 2000 amended order (1) increased respondent's maintenance obligations; (2) rejected as untimely appellant's supplemental proposed amended findings of fact; and (3) ordered the parties to alternate the tax-dependency exemption for the parties' minor child. This appeal followed.
DECISION 1. Permanent Spousal Maintenance
Appellant argues the district court abused its discretion by awarding appellant permanent maintenance of $1,100 a month. Appellant argues that permanent maintenance is unsupported by the law or by the record and that the amount of maintenance awarded is excessive because respondent presented insufficient evidence of need. We disagree, and now hold that the award of permanent maintenance was appropriate.
We will not reverse a district court's determination of a spousal maintenance award absent an abuse of discretion. Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). A district court abuses its discretion by reaching a "clearly erroneous conclusion that is against logic and the facts on record." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984) (citation omitted). The district court does not abuse its discretion simply because the record could support a different result, or because we might have reached a different result on the same record. Chamberlain v. Chamberlain, 615 N.W.2d 405, 412 (Minn.App. 2000), review denied (Minn. Oct. 25, 2000).
In reviewing the permanent maintenance issues in this appeal, we consider (1) whether the record warrants permanent maintenance; and (2) whether the record warrants the amount of maintenance awarded. Chamberlain, 615 N.W.2d at 411-12.
A. The award of maintenance
Spousal maintenance is an award "of payments from the future income or earnings of one spouse for the support and maintenance of the other." Minn. Stat. § 518.54, subd. 3 (2000). Maintenance may be granted if the spouse seeking maintenance demonstrates that he or she:
(a) lacks sufficient property, including marital property apportioned to the spouse, to provide for reasonable needs of the spouse considering the standard of living established during the marriage, especially, but not limited to, a period of training or education, or
(b) is unable to provide adequate self-support, after considering the standard of living established during the marriage and all relevant circumstances, through appropriate employment * * *.
Minn. Stat. § 518.552, subd. 1 (2000).
When determining the amount and duration of maintenance, district courts must consider all relevant statutory factors, including the financial resources of the spouse seeking maintenance to provide for his or her needs independently; the time necessary to acquire education to find appropriate employment; the age and physical and emotional condition of the recipient spouse; the standard of living established during the marriage; the length of the marriage; the contribution and economic sacrifices of a homemaker; and the resources of the spouse from whom maintenance is sought. Minn. Stat. § 518.552, subd. 2(a)-(h).
Here, the district court's January 12, 2000 order includes a meticulous and thoughtful application of each factor listed in Minn. Stat. § 518.552, subd. 2(a)-(h), to the facts. The district court found that respondent was 52 years old, had been out of the full-time labor market for 26 years, and lacked the resources to provide for her needs. The court found that the parties had enjoyed an upper-middle-class standard of living and noted that, as is often the case in divorces, it would be impossible for either party to continue to enjoy the same standard of living. The court found that respondent had lost earning potential and foregone employment opportunities during the marriage, and that her work as a homemaker had furthered appellant's career. The court found that respondent had contributed to the acquisition and appreciation of the marital property, especially the house. The court considered respondent's health and emotional state, and found that although she certainly needed treatment, her various ailments would not prevent her from pursuing a career or getting a teaching credential.
Finally, the court found that although it seemed "likely" that respondent would complete her secondary teaching degree and become independent, it stated that "these findings are uncertain." "Where there is some uncertainty as to the necessity of a permanent award," the statute directs that the district court order permanent maintenance, leaving the order open for later modification. Minn. Stat. § 518.552, subd. 3. The district court appropriately awarded maintenance, and noted that appellant could move for a modification of maintenance once respondent finds a job or finishes her education.
Appellant's argument against maintenance relies heavily on Gales v. Gales, 553 N.W.2d 416 (Minn. 1996), which he imprecisely quotes for the proposition that permanent maintenance requires "an older, dependent spouse who has little likelihood of achieving self-sufficiency." Id. at 421. This is not the law. Dobrin v. Dobrin, 569 N.W.2d 199, 201 (Minn. 1997); see also Chamberlain, 615 N.W.2d at 411 (noting that Dobrin "dispels" any suggestion that the "exceptional-case" standard for permanent maintenance is currently viable). Appellant challenges the district court's finding that the likelihood of respondent becoming independent is uncertain. Maintenance-related findings of fact are not set aside unless clearly erroneous. McCulloch v. McCulloch, 435 N.W.2d 564, 566 (Minn.App. 1989). There is no indication here that the finding of uncertainty was erroneous or that the decision to award permanent maintenance to respondent, a homemaker during a long, traditional marriage, was against logic and the facts on record.
B. The amount of maintenance
Appellant challenges the amount of maintenance awarded as excessive, arguing that respondent did not show sufficient need or adequately disclose her financial information to allow the district court to determine realistic monthly expense allowances. Appellant argues that respondent improperly used her share of the marital-property sale proceeds to make substantial down payments on home and car purchases while the parties' post-trial motions were pending, thereby reducing her monthly mortgage and automobile expenses. According to appellant, respondent's failure to disclose her reduced monthly expenses warrants reversal of respondent's $1,100 maintenance award. We disagree.
By claiming that money spent out of respondent's property award should in effect be deducted from her maintenance award, appellant would have us require respondent to choose between her property award and her maintenance award. It is inappropriate to force such a choice. See Fink v. Fink, 366 N.W.2d 340, 342 (Minn.App. 1985) (stating that parties are not normally expected to use their property to meet their monthly expenses); see also Duffey v. Duffey, 432 N.W.2d 473, 477 (Minn.App. 1988) (affirming district court's refusal to reduce wife's maintenance once she had received her entire property award).
The district court thoroughly analyzed the evidence under Minn. Stat. § 518.552, subd. 2(a)-(h), and did not, as appellant alleges, make "no findings as to how it arrived at an amount of maintenance." The district court heard extensive testimony on the parties' lifestyle while married and meticulously charted the parties' reasonable projected monthly expenses.
But these projected expenses were not directives from the district court that the parties tailor their spending to match the court's estimates. We decline to penalize respondent for reducing her monthly expenses by liquidating a portion of her marital property award. Appellant has not presented evidence sufficient to overcome the "presumption in favor of awarding permanent maintenance" that arises once the district court determines that specific statutory factors are present, as was the case here. Gales, 553 N.W.2d at 419. The decision to award permanent maintenance was appropriate in light of respondent's demonstrated needs.
2. Appellant's Net Income
Appellant challenges as a miscalculation and as excessive the district court's determination that his net monthly income was $5,700 after statutory deductions. Appellant argues that the miscalculation of his income and the excessive maintenance award based on that income unjustly render him unable to meet his monthly expenses. See Minn. Stat. § 518.552, subd. 2(g) (directing courts to consider obligor's ability to meet expenses when ordering maintenance).
Appellant's argument concerning the calculation of his income is convincing. It appears from the record that the district court calculated appellant's net monthly income using his net monthly base income and his gross monthly profit-sharing income, instead of his net monthly profit-sharing income. In light of the importance of accurately determining appellant's net monthly income to the determination of his support obligations, we remand this issue to the district court for a clear calculation of appellant's net income as required by Minn. Stat. § 518.551, subd. 5(b) (2000).
Appellant also challenges as excessive the amount of his maintenance obligation, arguing that his monthly expenses, including maintenance payments, will exceed his monthly income. "Courts normally do not expect spouses to invade the principal of their investments to satisfy their monthly financial needs." Fink, 366 N.W.2d at 342 (citation omitted).
Appellant's argument that the maintenance award is per se impermissible because it causes his expenses to exceed his earnings is not compelling. The fact that a maintenance award creates a deficit for the obligor is not automatically fatal to the award. See Ganyo v. Engen, 446 N.W.2d 683, 687 (Minn.App. 1989) (holding that district court did not abuse its discretion by ordering husband to pay wife maintenance of $900 per month even though his maintenance obligations and expenses exceed his income).
Appellant is not able to meet his monthly expenses. But neither is respondent. Each party is experiencing a monthly shortfall as a consequence of the dissolution. The district court correctly observed that one frequent effect of a divorce is that it is impossible for the parties to enjoy the same standard of living they enjoyed while they were married. The district court acted well within its broad discretion by awarding maintenance such that each party experiences a monthly deficit proportional to its income and expenses. Such an award is simply a recognition that the parties' aggregate expenses are greater than their aggregate incomes and that they will have to invade their assets if they wish to continue a lifestyle that costs more to maintain than their incomes can support. See id.
Because the district court appears to have incorrectly determined appellant's net income, we reverse and remand for a clear and correct calculation of respondent's net income and an associated appropriate adjustment of appellant's maintenance obligation, if necessary. We stress that the district court is not obligated to reduce appellant's maintenance obligation solely because it creates a deficit for appellant.
3. Health Insurance Payments as Maintenance
Appellant challenges finding of fact XXX in the district court's August 30, 2000 amended order, which states that "[t]he payment of health insurance by [appellant] for [respondent] is not spousal maintenance." We agree with the parties that it is unclear whether this finding means that appellant's health-insurance payment may not be deducted from his gross income to determine his net income, or that the cost of respondent's health insurance shall not be deducted from his other maintenance obligations toward respondent.
Minn. Stat. § 518.551, subd. 5(b)(vi) states that "cost of dependent health insurance coverage" shall be deducted from total monthly income to determine net income. To ensure the correct calculation of appellant's net income, we remand this issue and order that the district court amend finding of fact XXX in the August 30, 2000 order to clearly state the appropriate statutory deductions available to appellant.
4. Court-Ordered Insurance Costs
Appellant challenges the district court's requirement that, in addition to paying maximum guidelines child support, he pay the child's health insurance, pay half of the child's non-insured medical, dental, orthodontic, and orthopedic expenses, and maintain a life insurance policy as security for his child support obligation. Appellant argues that these health and insurance costs must be applied toward the maximum guidelines amount.
We cannot approve appellant's attempt to deduct these health and insurance costs once from his gross income, in order to determine his support obligation, and then again from the support obligation itself. A noncustodial parent's insurance payments on behalf of a minor child are properly deducted from a support obligor's gross income, not from the parent's support obligation, and certainly not from both, as appellant would have it. See Minn. Stat. § 518.551, subd. 5(b).
[Minn. Stat. § 518.551] does not provide alternative methods for deducting this amount such as including it as part of the child support obligations. Therefore, the medical insurance premium must be considered an obligation separate from the child support obligation provided for in the child support guidelines.
Thompson v. Newman, 383 N.W.2d 713, 717 (Minn.App. 1986) (footnote omitted).
The district court appropriately ordered appellant to pay maximum guidelines support in addition to the child's health-insurance costs, the child's non-insured medical costs, and the cost of securing appellant's support obligation with a life-insurance policy.
5. Reduction of Appellant's Monthly Mortgage Allowance
Appellant argues that the district court abused its discretion when it reduced his monthly mortgage expense in the August 30, 2000 amended order, thereby equalizing the parties' monthly mortgage allowance. We disagree.
The January 14, 2000 order found that appellant's reasonable monthly mortgage expense was $1,000, while respondent's was $800. Respondent's post-trial motion questioned the mortgage disparity in light of the parties' equal standard of living during the marriage and respondent's equal, or greater, need for housing after dissolution. Respondent also challenged the disparity between the parties' monthly expenses as found by the court, noting that although her expenses exceeded her income, the opposite was true of appellant. The August 30, 2000 amended order found that each party's reasonable monthly mortgage expense was $800.
The district court's amended judgment found that the parties should have the same mortgage expense. The district court's findings of fact shall not be set aside unless clearly erroneous. Minn.R.Civ.P. 52.01. The district court here weighed the parties' arguments and concluded the disparity between the mortgages was inappropriate in light of the parties' equal standard of living during the marriage, respondent's custody of the child, and the parties' current limited resources. Appellant has not shown that a finding of an $800 mortgage expense is, on this record, clearly erroneous.
6. Tax-Dependency Exemption
Appellant challenges the district court's decision to award the parties the tax-dependency exemption for their minor child in alternating years. Appellant argues that he alone should have the exemption because he alone has a substantial income and would benefit from the exemption, while respondent would not.
The Internal Revenue Code states that upon dissolution of a marriage, the parent with primary custody of a minor child is entitled to claim the child as a dependent. 26 U.S.C. § 152(e)(1). The district court has discretion in awarding tax exemptions. Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn.App. 1998), review denied (Minn. Feb. 18, 1999). As a general rule, the custodial parent is entitled to the tax exemption. Gerardy v. Gerardy, 406 N.W.2d 10, 14 (Minn.App. 1987).
The [Internal Revenue] code does not preclude state district courts from allocating tax dependency exemptions to a noncustodial parent incident to the determination of child support and physical custody.
Rogers v. Rogers, 622 N.W.2d 813, 823 (Minn. 2001). If the custodial parent waives the exemption, the parent paying child support may claim it. See Biscoe v. Biscoe, 443 N.W.2d 221, 224 (Minn.App. 1989).
Here, the district court found that the facts of this case justified alternating the tax-dependency exemption. The record indicates that respondent is currently unemployed, has no income, and would receive no financial benefit from the exemption. Because respondent currently lacks the income to take advantage of the exemption, we remand this issue to the district court to consider the propriety of allowing respondent full benefit of the exemption given the employment status of the parties. At that time, the district court, on motion by a party, if any, shall revisit the exemption question.
7. Appellant's April 7, 2000 Motion
Appellant argues that the district court erred by refusing to consider as untimely filed, and summarily denying, appellant's "Supplemental Proposed Amended Findings of Fact," submitted April 7, 2000. We hold the district court did not err.
On January 14, 2000, the district court issued its first order in this matter. On February 23, 2000, the district court issued an order correcting clerical errors in the first order. On February 28, appellant filed a notice of filing of the February 23 order.
A district court may amend findings or make additional findings and may amend the judgment upon motion "made not later than the time allowed for a motion for new trial pursuant to Rule 59.03." Minn.R.Civ.P. 52.02.
A notice of motion for a new trial shall be served within 15 days after a general verdict or service of notice by a party of the filing of the decision or order.
This rule has subsequently been amended, effective March 1, 2001, to provide 30 days to serve a notice of motion for new trial. See Minn.R.Civ.P. 59.03 (2002).
The deadline for service by mail was therefore March 18. Appellant served his motion for amended findings on March 14; respondent served her motion for amended findings and a new trial on March 17. The hearing was held on March 24. On April 7, appellant filed a motion for "Supplemental Proposed Amended Findings of Fact."
"The purpose of the notice [of filing] is * * * to fix, definitely and unambiguously, the time in which post-trial motions can be made." Rieman v. Joubert, 376 N.W.2d 681, 684 (Minn. 1985). The time limits imposed by Rule 59.03 "have been uniformly treated as absolute by decisions of both this court and Federal courts." Bowman v. Pamida, Inc., 261 N.W.2d 594, 597 (Minn. 1977). Failure to meet the time limit of Rule 59.03 deprives the district court of jurisdiction to hear and rule on the post-trial motion. Id.
Appellant argues that because his filing was a response to respondent's post-trial motion, it was not subject to the same timeliness rules as a regular post-trial motion. There is no such distinction in the rules, which plainly apply the timeliness requirement to all "motions." Respondent also notes, correctly, that appellant's April 7, 2000 filing presents a number of issues not previously raised in either party's post-trial motion, and as such was inappropriate in scope.
Because appellant's April 7, 2000 motion was filed after the March 18, 2000 deadline, it was not timely. The district court therefore lacked jurisdiction to hear it, and properly denied it without consideration.