Filed May 22, 2007.
Appeal from the District Court, Anoka County, File No. F0036122.
Virginia K. Ekola, (for respondent).
Jeffrey P. Hicken, Hicken, Scott Howard, (for appellant).
Considered and decided by Wright, Presiding Judge; Stoneburner, Judge; and Minge, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
In this dissolution proceeding, appellant-husband argues that (1) the district court made a mathematical error resulting in an unintended unequal property division; (2) the district court clearly erred in failing to find that respondent-wife improperly used marital assets; (3) the spousal maintenance award is excessive because the district court erroneously overstated his income and wife's needs; and (4) the district court abused its discretion in denying his motion to reopen the record to allow him to present newly discovered evidence of a non-marital claim to the homestead. We affirm the district court's exercise of discretion not to reopen the record, but we reverse and remand for additional findings regarding the division of property, wife's use of marital funds during the dissolution, and the amount of maintenance awarded.
Appellant Cyril Max Larson (husband) and respondent Donna Faye Larson (wife) were married in May 1979 and separated in May 2003. Their marriage was dissolved in December 2005. At the time of the dissolution, husband was 62 years old, and wife was 56 years old.
Wife worked full time for most of the marriage but became unemployed in 2001 and has since been unable to find full-time work. At the time she was laid off, her annual gross income was $48,095. At the time of the dissolution, wife was employed part-time, earning $8.53 per hour and working approximately 24 hours per week for an average net monthly income of $822.11. The district court found that wife, who did not receive temporary maintenance, reasonably used funds from a joint savings account and funds from agricultural programs to pay for marital obligations and living expenses, which the district court found to be $3,563.24 per month during the 30-month dissolution proceedings.
The district court found wife's ongoing reasonable monthly expenses, based on the lifestyle wife enjoyed during the marriage, to be $2,466.48. This amount includes $502.50 per month for medical and dental insurance, although husband was ordered to maintain medical and dental insurance for wife through his employment so long as both parties remain unmarried and husband remains employed by his current employer.
Husband is employed and earns $17.23 per hour straight time, but throughout the marriage and dissolution proceeding, husband consistently worked overtime. The district court found husband's testimony that he intended to stop working overtime after the dissolution not credible. The district court made findings on husband's gross, but not net, income from employment from 1996 to 2003. The exhibits relied on by the district court to support its finding of husband's gross income from employment show that his net monthly income in 2003 was $4,297 and in 2004 (based on the only two 2004 pay stubs husband placed into evidence) was approximately $5,000. The district court found that husband made, and continues to make, additional, unreported, substantial income from his sale of collectibles. The district court found that husband's reasonable monthly living expenses are $2,276.67.
Based on its analysis of the statutory factors found at Minn. Stat. § 518.552, subds. 1-2 (2006), regarding maintenance as well as the tax consequences of maintenance, the district court concluded that husband has the ability to pay wife permanent maintenance in the amount of $1,800 per month, until husband retires from his employment and that wife is in need of maintenance in this amount.
The district court found that the parties enjoyed a "very good" standard of living during the marriage, including trips to Mexico and Hawaii, and they acquired little debt. The district court found the net value of their assets to be approximately $1,500,000 at the time of the dissolution, including a homestead, a farm in North Dakota, a farm in Mentor, retirement accounts, investment accounts, and collectibles. The precise value of the collectibles was disputed, but the parties agreed to a non-judicial process to divide the collectibles.
The district court rejected husband's non-marital claim to a portion of the homestead based on his unsubstantiated testimony that he traded part of his gun collection to the builder for a reduction in the cost of the homestead. The district court ordered the farms to be sold and ordered that the first $146,623.50 of profit from the sale of the farms be paid to husband "to equalize" the court's distribution of the remaining property.
Both parties moved for amended findings of fact, conclusions of law, and judgment, or, in the alternative, a new trial. Husband also moved to reopen the record to allow him to present evidence of the homestead builder's newly recovered recollection that he reduced the price of the homestead between $10,000 and $30,000 as consideration for part of husband's gun collection. The district court granted wife's motions for correction of several clerical errors and to award both of the parties' dogs to her and denied husband's motions. This appeal followed.
I. Property division
Husband argues that the district court made a mathematical error in the amount and method of the payment that the district court stated was to "equalize" the property division, resulting in an unequal division in favor of wife. As a threshold matter, wife contends that husband has waived this issue on appeal because he did not specifically allege that there was a mathematical error in his motion for amended findings or a new trial. Wife concedes that husband argued the issue orally at the motion hearing, but she argues that the oral motion was untimely under Minn. R. Civ. P. 52.02 and 59.03.
"On appeal from the denial of a motion for a new trial, only those matters specifically alleged in the motion to constitute error may be reviewed." Waldner v. Peterson, 447 N.W.2d 217, 219 (Minn.App. 1989). The purpose of a motion for a new trial is to allow the trial court an "opportunity to correct its own errors without subjecting the parties and the appellate courts to the time, expense and inconvenience involved in an appeal." Sauter v. Wasemiller, 389 N.W.2d 200, 202 (Minn. 1986).
We conclude that husband's argument at the motion hearing, to which wife had an opportunity to respond, sufficiently preserved the issue for appeal. The district court specifically addressed husband's argument in denying his motion, stating that "there was no conceptual error" in the property division.
The district court has broad discretion in dividing property in a dissolution matter, and even if the reviewing court might have taken a somewhat different approach, it will not reverse the district court's decision absent a clear abuse of that discretion. Miller v. Miller, 352 N.W.2d 738, 741-42 (Minn. 1984). In a dissolution proceeding, the district court "shall make a just and equitable division of the marital property of the parties." Minn. Stat. § 518.58, subd. 1 (2006). The district court shall make findings on a number of factors to support its division of the property, including "the length of the marriage, any prior marriage of a party, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, needs, opportunity for future acquisition of capital assets, and income of each party." Id. "The court shall also consider the contribution of each in the acquisition, preservation, depreciation or appreciation in the amount or value of the marital property, as well as the contribution of a spouse as a homemaker." Id.
"[T]he overriding requirement of the statute governing the division of marital property is that the division be equitable." Oberle v. Oberle, 355 N.W.2d 210, 212 (Minn.App. 1984). "Equity does not require an equal division." Olness v. Olness, 364 N.W.2d 912, 915 (Minn.App. 1985). But an "equal division of the wealth accumulated through the joint efforts of the parties is appropriate on dissolution of a long term marriage." Miller, 352 N.W.2d at 742. The district court is required by Minn. Stat. § 518.58, subd. 1, to make findings regarding the division of property, and we have stated that findings are necessary "to aid the appellate court by providing a clear understanding of the basis and grounds for the decision." Putbrese v. Putbrese, 386 N.W.2d 849, 850 (Minn.App. 1986) (quotation omitted).
In this case, by ordering that husband be paid "the first $146,623.50 out of the net proceeds from the sale of the farms" before the profit is equally divided, rather than ordering that husband be paid from wife's half of the profit, the district court awarded wife substantially more marital assets than were awarded to husband.
Wife does not dispute that she was awarded more property than husband and advances several arguments to explain why the district court may have made an unequal division of the property. But without findings by the district court to explain the unequal division, we are unable to adequately review the property division. We therefore remand to the district court for additional or amended findings explaining, or if appropriate, correcting the unequal property division.
II. Use of marital assets during dissolution proceedings
Husband also argues that the district court abused its discretion by finding that wife's use of $112,541 in marital funds during the dissolution proceedings was justified. Husband argues that those assets should have been added back to the marital estate. The funds came from a joint savings account in the amount of $60,000, CRP (Conservation Reserve Program) and wildlife payments in the amount of $47,171, a checking account, and an eBay PayPal account.
Appellant argues he had to pay out of his income what wife was allowed to pay with marital assets, and the amount expended by wife exceeded her needs. The district court found that of the $47,171 in CRP and wildlife fund proceeds wife received, wife spent $43,656.35 for appraisals, attorney fees for each party, car insurance for both parties, homeowner's insurance, real-estate taxes, expenses for the farms, past-due utility bills, expenses related to the dissolution, and miscellaneous repairs. The district court found that all of these expenses were mutual expenses, payment of which benefited both parties. The district court found that the remaining agricultural funds were also used for mutual expenses in the dissolution. Because the record supports the district court's finding regarding wife's use of the CRP and wildlife funds, the finding is not clearly erroneous, and we affirm the district court's treatment of the assets. See Minn. Stat. § 518.58, subd. 1a (2006) (providing that the parties to a dissolution owe a fiduciary duty to one another, but when funds are used by one party during the dissolution in the usual course of business or for the necessities of life, the other spouse is not entitled to compensation for such use of marital funds).
The district court found that wife, who was not receiving temporary maintenance during the dissolution, reasonably used $60,000 from a joint account to meet her living expenses, which were $3,563.24 per month during the dissolution proceeding. But the record shows that $590.44 per month of these living expenses was for property taxes and insurance expenses, which were paid from the CRP/wildlife funds. Additionally, $502.50 per month of the living expenses was for health insurance that was provided by husband. Without these expenses, wife's monthly living expenses were $2,470.30. This includes $150 for personal savings and additional funds that, while they might be justified expenses based on the lifestyle established during the marriage, can hardly be classified as "necessities of life." Even with these expenses, the shortfall between wife's expenses and earning was only $1,648.19 per month for a total of $49,445.70 over the 30 months of the dissolution proceeding. Because the record does not support the district court's finding that wife needed $60,000 of marital funds to meet her living expenses during the 30 months of the dissolution proceedings, that finding is clearly erroneous. We reverse the district court's finding that wife did not improperly expend marital funds from the joint bank account and remand for a reconsideration of wife's use of these funds consistent with the evidence.
Husband also challenges wife's use of $3,000 from a Wells Fargo checking account and $2,370 from a PayPal account that the district court failed to address in its findings. Because we are remanding on other issues, we direct the district court, on remand, to address husband's claim that wife should reimburse the marital estate for these funds.
Husband argues that the district court abused its discretion by ordering him to pay spousal maintenance of $1,800 per month to wife. "The standard of review on appeal from a trial court's determination of a maintenance award is whether the trial court abused the wide discretion accorded to it." Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). A district court abuses its discretion regarding maintenance if its findings of fact are unsupported by the record or if it improperly applies the law. Dobrin v. Dobrin, 569 N.W.2d 199, 202 n. 3 (Minn. 1997). "Findings of fact concerning spousal maintenance must be upheld unless they are clearly erroneous." Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn.App. 1992).
In determining maintenance, a district court is to consider whether the spouse seeking maintenance
(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, or is the custodian of a child whose condition or circumstances make it appropriate that the custodian not be required to seek employment outside the home.
Minn. Stat. § 518.552, subd. 1 (2006). No single factor is dispositive, and a district court must weigh the facts of each case to determine whether the award of maintenance is appropriate. Weikle v. Weikle, 403 N.W.2d 682, 687 (Minn.App. 1987), review denied (Minn. June 30, 1987).
Husband argues, without citing specific evidence in the record, that the district court failed to properly consider wife's income from the marital property award. Husband cites Rask v. Rask, 445 N.W.2d 849, 853-54 (Minn.App. 1989), in which this court held that the $2,000 monthly maintenance award to wife was excessive where the district court failed to consider interest income that would be generated by a marital property award valued between approximately $125,000 to approximately $169,000.
The district court correctly noted that wife is not required to invade the principal of marital property awarded to her to meet her living expenses. See Fink v. Fink, 366 N.W.2d 340, 342 (Minn.App. 1985) (stating that spouses are normally not expected "to invade the principal of their investments to satisfy their monthly financial needs"). The district court specifically considered the availability of income from the property award to offset wife's increased tax liability from the maintenance award. We find no merit in husband's argument that the district court failed to consider income from the property division in the maintenance determination.
Husband next argues that the district court failed to consider wife's ability to support herself. But the district court found that although wife "has marketable skills that would allow her to enter the work force and become self supportive," she has been unsuccessful in finding a job in her area of skill. The district court further found that it was not appropriate, given wife's age and length of time in her current job, that she begin retraining for a new career. Husband does not argue or point to any evidence that wife is underemployed in bad faith. If wife obtains full-time employment in the future, husband will be able to seek a modification of maintenance based on changed circumstances, but given the current circumstances, we cannot say that the district court erroneously failed to consider wife's ability to support herself.
Husband also asserts that the district court should have based his ability to pay maintenance only on his income from 40-hours of employment and that because the maintenance award is 60.2% of these gross wages, the award is excessive. Husband offers no argument, authority, or support in the record for his implied argument that his long-established overtime income and income from the sale of collectibles should not have been considered by the district court for purposes of determining his ability to pay maintenance. Considering overtime alone, the award is approximately 35% of husband's net income from employment, and the district court did not err or abuse its discretion in finding that husband has the ability to pay the amount awarded.
Husband correctly notes that ability to pay maintenance must be based on net, and not gross income, and the district court failed to make a specific finding on husband's net monthly income. But husband did not produce any evidence on the amount of his income from dealing in collectibles other than his testimony that it was substantial and allowed the parties to pay off real estate mortgages on the homestead and farms. A party has a duty to supply financial information in a proper fashion to the trial court. Failure to do so justifies adverse inferences. Solon v. Solon, 255 N.W.2d 395, 396 (Minn. 1977). Furthermore, evidence of husband's net income from his employment demonstrates husband's ability to pay maintenance awarded and meet his monthly expenses.
There is merit, however, in husband's argument that the district court overstated wife's reasonable monthly expenses by including $502.50 for medical and dental insurance premiums while ordering husband to provide medical and dental insurance coverage for wife. The district court's finding of wife's reasonable expenses is clearly erroneous because it includes an expense that wife does not have at this time. Wife's reasonable monthly expenses, reduced by the $502.50, are $1,963.98, making the shortfall between her net earnings and reasonable expenses $1,141.87, and the award of $1,800 per month in maintenance excessive. We therefore reverse the maintenance award and remand for reconsideration of the amount of wife's need in light of her actual expenses and for findings to support any maintenance award that, together with her income, exceeds the expenses found by the district court to be reasonably necessary to maintain the lifestyle she enjoyed during the marriage.
IV. Denial of motion to reopen the record
At trial, husband asserted a non-marital claim to a portion of the homestead based on his testimony that he traded part of his extensive gun collection for the builder's substantial discount in the price of the homestead. Husband asserts that, at the time of trial, the builder did not have any recollection of this transaction and therefore was not called to testify. Shortly after the conclusion of the trial, however, the builder told husband that he now recalled the transaction. Husband moved to reopen the record to add the builder's testimony, supported by the builder's affidavit that he now recalled the transaction and the value of the exchange was between $10,000 and $30,000. The district court denied the motion.
Denial of a motion to reopen a judgment will not be reversed absent an abuse of discretion. Harding v. Harding, 620 N.W.2d 920, 922 (Minn.App. 2001), review denied (Minn. Apr. 17, 2001). The district court may reopen the evidence if there is "[m]aterial evidence newly discovered, which with reasonable diligence could not have been found and produced at the trial." Minn. R. Civ. P. 59.01(d).
At the hearing on husband's motion, the district court appeared skeptical of the builder's recovered recollection, stating that the claimed newly discovered evidence was "strange," and asking if the builder had gone "through some sort of séance or something to stimulate his memory." In its order denying husband's request to reopen the record, the district court stated that "[n]o material evidence has been newly discovered that with reasonable diligence could not have been found and produced at the time of trial." We agree and further conclude that the evidence would have been cumulative of husband's extensive testimony on this issue and would not likely have produced a different result. See Bolander v. Bolander, 703 N.W.2d 529, 553 (Minn.App. 2005) (holding no abuse of discretion by denying motion to reopen the record to present cumulative evidence), review dismissed (Minn. Nov. 15, 2005). A district court may refuse to accept testimony "if the surrounding facts and circumstances afford reasonable grounds for doubting its credibility." Varner v. Varner, 400 N.W.2d 117, 121 (Minn.App. 1987). We conclude that the district court did not abuse its discretion by denying husband's motion to reopen the record on this issue, and we reject husband's assertion that his motion should have been granted in the interests of justice.