IN COURT OF APPEALS
In re the Marriage of:
Catherine M. Kampf, petitioner,
Mark N. Kampf,
Filed June 12, 2007
Affirmed in part, reversed in part, and remanded
Dakota County District Court
File No. F2-04-9269
Lisa Meier, Honsa & Michaels, P.A., 5500 Wayzata Blvd., Suite 1075, Minneapolis, MN 55416 (for respondent)
Christopher D. Johnson, Rebecca A. Chaffee, Best & Flanagan LLP, 225 South Sixth Street, Suite 4000, Minneapolis, MN 55402 (for appellant)
Considered and decided by Shumaker, Presiding Judge, Kalitowski, Judge; and Willis, Judge.
S Y L L A B U S
1. The district court did not abuse its discretion by including amounts for savings and retirement in a spousal-maintenance award when the savings were an integral part of the parties’ standard of living during marriage.
2. The district court abused its discretion by applying the “exceptional case” standard and by not requiring the spousal-maintenance obligor to maintain life insurance to secure a permanent maintenance award when the parties were married 28 years and the 50-year-old obligee has a high-school education, little work experience, and a limited ability to support herself.
O P I N I O N
Appellant husband challenges the district court’s dissolution judgment and decree, arguing that the district court abused its discretion by awarding spousal maintenance in excess of respondent wife’s needs. On notice of review, respondent argues that the district court abused its discretion by not requiring appellant to maintain life insurance to secure the maintenance award. Because the district court did not abuse its discretion in determining the amount of spousal maintenance, but abused its discretion by not requiring life insurance to secure the award, we affirm in part, reverse in part, and remand.
Appellant Mark N. Kampf and respondent Catherine M. Coryell (f/k/a Catherine M. Kampf) married in 1976. The parties have two children together, both of whom are now adults. Coryell did not work outside the home after 1983 and before that earned a modest salary working as a bank teller, secretary, and receptionist. Kampf was the primary wage earner during the marriage, working as a successful executive earning an average annual income of $656,207 from 2002 to 2004. The parties amassed substantial savings and retirement accounts during the marriage.
The parties separated in early 2004, and Coryell filed for dissolution in July 2004. After a five-day bench trial, the district court found that Coryell’s reasonable and necessary monthly expenses are $9,005. The calculation included $360 for Coryell’s savings and $333 for her retirement savings.
The district court ordered Kampf to pay Coryell $14,240 per month in temporary spousal maintenance through June 2008, and $13,000 in permanent spousal maintenance starting July 2008. Both parties moved the district court for amended findings or a new trial on various grounds. Kampf argued that Coryell’s reasonable and necessary monthly expenses are overstated by including savings and that her actual income would be higher if she itemized her tax deductions and claimed a head-of-household filing status. Coryell also requested a new trial on the ground that the district court improperly failed to require Kampf to maintain life insurance as security for her spousal maintenance.
The district court issued amended findings, but did not modify the spousal-maintenance award or require Kampf to maintain life insurance as security for the award. The district court explained that it found Coryell’s reasonable and necessary monthly expenses to be $9,005, excluding taxes, and that it “considered federal and state income tax withholding when determining the appropriate amount of spousal maintenance.” The district court denied Kampf’s request to itemize Coryell’s deductions and to require a certain filing status because “[c]alculating . . . net income assuming a head of household filing status, adult dependents and itemized deductions is speculative as these assumptions change from year to year.” The district court also concluded that Coryell did not show “exceptional circumstances to warrant the requirement that [Kampf] carry life insurance to cover his spousal maintenance obligation.” This appeal followed.
1. Did the district court abuse its discretion when calculating Coryell’s reasonable expenses by including amounts for savings and retirement in the spousal-maintenance award?
2. Did the district court abuse its discretion by awarding Coryell $14,240 in monthly temporary spousal maintenance and $13,000 in monthly permanent spousal maintenance and not requiring Coryell to itemize her tax deductions and file as a head-of-household?
3. Did the district court abuse its discretion by not requiring Kampf to maintain life insurance as security for the spousal-maintenance award because Coryell did not prove exceptional circumstances?
We review a district court’s spousal-maintenance award
under an abuse-of-discretion standard. Dobrin v. Dobrin, 569 N.W.2d 199, 202 (
Spousal maintenance is
awarded when a party shows sufficient, reasonable need. See
Snyder v. Snyder, 298
1. Savings and Retirement Savings
Kampf argues that the district court abused its discretion by including savings as a part of Coryell’s spousal maintenance. Kampf contends that the monthly combined $693 in savings and retirement savings are not reasonable or necessary expenses and improperly provide Coryell with a share of his future earnings. We disagree.
Kampf cites three cases to support
his argument, all of which are distinguishable from this case. First, he cites Rask v. Rask, 445 N.W.2d 849, 854 (Minn. App. 1989), in which the
court of appeals excluded a speculative mortgage payment from a maintenance
award. But the obligee in Rask “merely ‘estimated’ that a $610
monthly payment would be required to purchase the type of home she wants . . . .” Id. Thus, the disputed mortgage expense in Rask was not the product of the marital
standard of living, unlike the savings at issue here. The same is true of Kemp v. Kemp, 608 N.W.2d 916, 922 (
Finally, Kampf’s reliance on Sefkow v. Sefkow, 427 N.W.2d 203, 216 (
Here, the record shows that the parties accumulated substantial savings, investment, and retirement accounts in excess of $340,000 throughout their 28-year marriage. On this record, we hold that the parties’ savings and retirement planning were an integral part of their standard of living during the marriage. Accordingly, the district court did not abuse its discretion by including savings expenses in Coryell’s reasonable monthly expenses. Further, because the record supports the amount of the savings expenses allowed by the district court, the figure of $693 per month is not clearly erroneous.
2. Tax Consequences
Kampf also argues that the district court overstated Coryell’s reasonable needs because it failed to require Coryell to itemize her tax deductions and claim a head-of-household filing status. Kampf contends that forcing Coryell to itemize her deductions and claim a head-of-household status would increase her cash flow, thereby decreasing her needs.
The district court, after considering the tax consequences of the award, determined that itemizing Coryell’s tax deductions with a certain filing status would be unreasonable as one’s tax liabilities and status can vary year-to-year. On this record, and given the arguments made in this appeal, the district court acted within its discretion when it considered the tax consequences of the maintenance award.
Although both parties presented
evidence regarding the tax consequences if Coryell itemizes her deductions,
there is also evidence of the marginal federal and state tax rates. The district court applied a tax rate of
36.7% to Coryell’s income, which is well within the limits of the marginal
rates set forth in the record. The
district court acted within its discretion by applying the marginal tax rates,
and it had a “reasonable and supportable basis for making an informed judgment
as to [the] probable liability.” Maurer v. Maurer, 623 N.W.2d 604, 608 (
3. Life Insurance
On notice of review, Coryell challenges the district court’s finding that she failed to prove “exceptional circumstances” warranting Kampf to maintain life insurance as security for her spousal maintenance. She argues that the district court abused its discretion by applying the “exceptional case” standard, which she contends no longer applies since the 1985 amendments to the spousal-maintenance statutes. We agree.
The district court “has discretion
to consider whether the circumstances justifying an award of maintenance also
justify securing it with life insurance.”
Laumann v. Laumann, 400 N.W.2d
355, 360 (
The district court applied the
exceptional-case standard to Coryell’s request, but that rule applied to requests
for permanent maintenance before the 1985 statutory amendments, which
eliminated the exceptional-case requirement for awarding permanent spousal
maintenance. See Chamberlain v. Chamberlain, 615 N.W.2d 405, 411 (
Additionally, the circumstances in this case compel us to conclude that the district court abused its discretion by refusing to require Kampf to carry life insurance as security. Coryell’s age, education, work experience, and employment prospects weigh heavily in favor of securing the maintenance award with life insurance. Maeder, 480 N.W.2d at 680. After a 28-year marriage, Coryell is now 52 years of age with a high-school equivalency degree, limited work experience, and an ability to earn $14,872 per year after training. Under these circumstances, the district court abused its discretion by denying Coryell’s request to require Kampf to maintain life insurance to secure the maintenance.
D E C I S I O N
The district court acted within its discretion by including amounts for savings and retirement in the spousal-maintenance award when the savings were an integral part of the marital standard of living and when the amounts included are not clearly erroneous on this record. Similarly, on this record, the district court did not abuse its discretion by applying the marginal tax rates when the tax figure is supported by the record. Finally, the district court abused its discretion by applying the exceptional-case test when deciding whether to secure the maintenance award with life insurance and by not requiring life insurance under the facts in this case.
Affirmed in part, reversed in part, and remanded.