Filed August 5, 2003.
Appeal from the District Court, Koochiching County, File No. FX00509.
Steven A. Nelson, (for respondent)
Daniel L. Griffith, Griffith Law Office, (for appellant)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
On appeal from an amended marital-dissolution judgment, James Knutson raises procedural challenges to the modification of the property division and contests the district court's determination that certain property is partially marital. By notice of review, Laura Knutson challenges aspects of the property division and the district court's failure to order spousal maintenance. Because the record supports the district court's division of property, we affirm its decision on that issue. But because the findings on spousal maintenance are insufficient for reasoned review, we remand for further findings on that issue.
Laura Knutson and James Knutson were married from 1995 until 2002. Following a contested hearing, the district court dissolved the parties' marriage, divided their marital property, and ordered James Knutson to pay monthly spousal maintenance of $1,000 for five years. On Laura Knutson's posttrial motions for reconsideration of findings and a new trial, the district court modified the initial property division by determining that twenty-five percent of the future proceeds of a land lease on James Knutson's nonmarital real property qualified as marital property to be divided equally, and by allocating half of the equity in the marital homestead to Laura Knutson in the form of monthly payments of $647.39. As a consequence of these adjustments to the property division, the district court eliminated James Knutson's obligation for spousal maintenance.
In this appeal, James Knutson raises procedural challenges to the modification of the property division and argues that the district court erred in classifying certain property as partially marital property. By notice of review, Laura Knutson challenges parts of the property-division modification and the district court's failure to order spousal maintenance.
James Knutson argues that the district court committed two procedural errors in granting Laura Knutson partial relief on her motions for new trial and reconsideration of the findings. Knutson contends, first, that the district court's amended findings and conclusions constitute an impermissible grant of Laura Knutson's motion to reconsider because she failed to support her motion with evidence of compelling circumstances, as required by the rules of general practice. See Minn.R.Gen.Pract. 115.11 (stating that "[m]otions to reconsider are prohibited except by express permission of the court, which will be granted only upon a showing of compelling circumstances"). Second, he argues that the district court erred in permitting Laura Knutson to raise matters at the posttrial hearing that were beyond the scope of her motion for reconsideration.
James Knutson fully participated in the posttrial motion procedure without objecting to these procedures. Failure to object results in waiver, and we decline to consider these procedural issues on appeal. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (holding that claims not presented to and decided by the district court are waived on appeal).
Both parties challenge the district court's determination that the future proceeds of a land lease entered into during the marriage are twenty-five percent marital property. Laura Knutson contends that the lease proceeds are entirely marital property, while James Knutson argues that they are entirely nonmarital property. Whether property is marital or nonmarital is a question of law, but a reviewing court must defer to the district court's underlying findings of fact. Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn. 1997). Those findings will be affirmed unless they are clearly erroneous. Freking v. Freking, 479 N.W.2d 736, 739 (Minn.App. 1992).
The district court initially concluded that the future proceeds of the lease were nonmarital property. Following posttrial motions, the court amended its factual findings to include a finding that Laura Knutson had helped maintain the property during the Knutsons' marriage and had been active in counseling and advising James Knutson in the lease of the property. The court also found that twenty-five percent of the value of the lease was attributable to the Knutsons' joint marketing and negotiating efforts. The court therefore concluded that twenty-five percent of the future proceeds of the lease was marital property and that Laura Knutson was accordingly entitled to one-half of that twenty-five percent.
We note at the outset that Laura Knutson's contention that all of the future lease proceeds are marital property is inconsistent with her concession that the real estate itself is James Knutson's nonmarital property. As the district court correctly observed, the property had an inherent lease value, based on its location, prior to the parties' efforts to increase that value. Therefore, even if the lease value appreciated significantly during the marriage, some portion of that value would remain nonmarital. Thus Laura Knutson's contention that the future lease proceeds are entirely marital property is refuted by James Knutson's ownership of the nonmarital real estate.
Laura Knutson's second argument, that the future lease proceeds should be treated as marital income, is equally flawed. The cases on which she grounds her argument all involve the division of rental or other asset-derived income earned during the marriage, and not the value of income to be earned from a nonmarital asset going forward, after the marriage has been dissolved.
James Knutson supports his contention that lease proceeds are entirely nonmarital by pointing to testimony suggesting he played the main role in negotiating the lease. But the district court also heard testimony that both of the Knutsons spent time maintaining the property in order to attract a potential lessee, that Laura Knutson contacted the real estate department of numerous fast-food companies about leasing the property, that both spouses attended several meetings to negotiate the terms of the lease, and that the spouses worked together in the financial planning surrounding the lease negotiations. This evidence supports the district court's determination crediting Laura Knutson's participation in securing the lease. Because this court defers to the district court's credibility assessments, Novack v. Northwest Airlines, Inc., 525 N.W.2d 592, 598 (Minn.App. 1995); Minn.R.Civ.P. 52.01, we decline to consider James Knutson's challenge to the weight of the evidence supporting the district court's determination that the future lease proceeds are twenty-five percent marital.
The parties contest specific elements of the district court's division of marital property. James Knutson challenges the district court's division of the equity in the marital homestead and Laura Knutson contends that the district court abused its discretion in dividing the parties' joint bank account. A district court has broad discretion in evaluating and dividing property in a marital dissolution, and its decisions will not be overturned except for abuse of discretion. Maranda v. Maranda, 449 N.W.2d 158, 164 (Minn. 1989). Equitable, not equal, division of marital property is required. Stassen v. Stassen, 351 N.W.2d 20, 23 (Minn.App. 1984). The appellate courts will affirm the district court's division of property if it has an acceptable basis in fact and principle. Servin v. Servin, 345 N.W.2d 754, 758 (Minn. 1984). This court defers to the district court's findings of fact and will not set them aside unless they are clearly erroneous. Maurer v. Maurer, 623 N.W.2d 604, 606 (Minn. 2001).
In focusing solely on constituent elements of the property settlement, both parties overlook the fact that this court's review centers not on the disposition of individual items of marital property, but rather on the equity of the overall property division. See, e.g., Prahl v. Prahl, 627 N.W.2d 698, 705 (Minn.App. 2001) (rejecting assignment of error with respect to one item of marital property because overall property settlement did not constitute an abuse of discretion). In this case, the district court based its overall settlement on detailed findings on the parties' financial circumstances. The court found that Laura was thirty-eight years old and had worked primarily within the home and at a business run by the parties during the marriage; that at the time of the dissolution she was employed in a convenience store and earned $910 per month; that she has insufficient marketable skills to maintain the living standard she enjoyed during the marriage; that she intends to pursue a course in nursing at a cost of $63,000 over the next four years; and that she has a minor child from a previous marriage for whom she receives child support. James Knutson, the court found, was fifty-three years old and has relatively substantial investments but, because of a physical disability, can no longer work. Because the court's findings adequately support the overall property division, and because the parties present no argument that the district court abused its discretion in determining that division, their challenges to individual components of the property settlement provide no grounds for relief.
Laura Knutson challenges the district court's failure to order spousal maintenance in its amended judgment. She contends that temporary rehabilitative maintenance is necessary to allow her to complete her education and re-enter the job market.
The district court initially awarded Laura Knutson $1,000 in monthly spousal maintenance for five years. After amending its decree to allocate to Laura Knutson half of the equity in the homestead and a portion of the land-lease proceeds, the court eliminated the maintenance award. The court concluded that the sum of the additional assets was "sufficient * * * [for Laura Knutson] to meet her future plans" and thus would "eliminate the need for maintenance."
A district court's decision on spousal maintenance will not be reversed on appeal absent an abuse of discretion. Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). But effective appellate review of the district court's exercise of discretion is possible only when the court has made sufficiently detailed findings of fact to demonstrate it considered all factors relevant to a determination on maintenance. Stevens v. Stevens, 501 N.W.2d 634, 636 (Minn.App. 1993); Minn. Stat. § 518.552, subd. 2 (2002) (listing factors to be considered when ordering maintenance). These necessary findings include findings on the parties' expenses. See Gillis v. Gillis, 400 N.W.2d 775, 777 (Minn.App. 1987) (remanding for further findings after district court ordered maintenance based on need without making any findings on the parties' expenses); see also Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989) (reversing determination on permanent maintenance when district court failed to make specific findings on the parties' expenses and obligor's ability to pay).
The district court determined the parties' monthly income, as well as the sum needed by Laura Knutson to complete her education, but failed to make any findings on the parties' expenses. It found only that "[Laura Knutson] enjoyed a much more lavish standard of living [while married] than she currently enjoys," that "[s]he is currently unable to meet her needs fully without the assistance of [James Knutson]," and that she intended to complete her nursing studies at a cost of $63,000 over four years. Because the district court made no determination of the parties' necessary expenses, we must remand the issue of spousal maintenance for further fact-finding.
In assessing Laura Knutson's need for maintenance, the district court is to look at her income, including income from marital property, but not at the property division itself. See Bury v. Bury, 416 N.W.2d 133, 138 (Minn.App. 1987). To the extent any monthly payment she receives from James Knutson constitutes marital property rather than income from marital property, it should not be considered in determining the necessity of maintenance. See Fink v. Fink, 366 N.W.2d 340, 342 (Minn.App. 1985) (stating "[c]ourts normally do not expect spouses to invade the principal of their investments to satisfy their monthly financial needs").
Laura Knutson asks this court to remand for a determination of attorneys' fees. To the extent that her request is grounded on disparities in the parties' respective income levels and in amounts the district court permitted the parties to draw from a joint bank account prior to trial, this request for relief appears to be little more than a restatement of her challenge to the division of funds in the bank account. This indirect challenge is unavailing because Laura Knutson has failed to demonstrate that the court's overall property settlement constitutes an abuse of discretion or lacks adequate support in the record.
Laura Knutson does not specify the phase of the proceedings for which she seeks attorneys' fees, but to the extent her request pertains to the appellate phase, we note that Minn.R.Civ.App.P. 139.06 requires that a request for attorneys' fees be made by motion. Because Laura Knutson has not made the required motion, we are unable to consider her request.