This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
In re the Marriage of:
Lynn S. Levinson, petitioner,
Richard M. Levinson,
Filed July 3, 2000
Hennepin County District Court
File No. 226389
Robert J. Hajek, Warchol, Berndt & Hajek, P.A., Suite 110, 3433 Broadway Street NE, Minneapolis, MN 55413 (for appellant)
Kathleen M. Picotte Newman, M. Shane Swanson, Larkin, Hoffman, Daly & Lindgren, Ltd., 1500 Norwest Financial Center, 7900 Xerxes Avenue South, Bloomington, MN 55431 (for respondent)
Considered and decided by Lansing, Presiding Judge, Willis, Judge, and Poritsky, Judge.*
U N P U B L I S H E D O P I N I O N
On appeal from a dissolution judgment, appellant wife alleges that the district court abused its discretion in (a) determining the amount of maintenance she was awarded; (b) awarding her only temporary maintenance; and (c) not awarding her child support. By notice of review, respondent husband also challenges the amount of maintenance awarded. We affirm in part, reverse in part, and remand.
Appellant Lynn S. Levinson and respondent Richard M. Levinson had been married for 28 years when their marriage was dissolved in June 1999. At the time of the dissolution, appellant was 49 years old and respondent was 51. The parties have one minor child, K.L., who was nine years old when the parties dissolved their marriage.
Respondent is a medical doctor trained as a pediatric ear, nose, and throat specialist. In 1996, respondent was diagnosed with multifocal degenerative arthritis, which is a condition that affects all weight-bearing joints. Due to his condition, respondent receives $12,005.95 per month in untaxable disability compensation from two private insurance policies. In addition, respondent earns approximately $56,681 annually working part-time for a clinic as a physician.
Appellant has a Bachelor of Arts degree in journalism from the University of Minnesota. During the parties’ marriage, appellant held a variety of positions in advertising and marketing. The district court found that she left the workforce in 1989, when the parties decided to have children. At that time appellant was earning a gross salary of approximately $50,000 per year. Although appellant never returned to paid employment, she participated in several skilled-volunteer activities during the marriage, and at the time of the dissolution, appellant was engaged in writing her first book.
The parties stipulated to a custody arrangement in which they would share joint legal and physical custody of K.L., and they also agreed to an equal division of the marital estate. The primary issues for trial were spousal maintenance and child support. Following trial, the district court issued a judgment and decree awarding appellant $6,000 per month in permanent maintenance and $1,000 per month in child support. Both appellant and respondent moved the court for an amended judgment and decree, or, in the alternative, a new trial. The district court issued an amended judgment and decree in which it denied both parties’ motions for a new trial, ordered that neither party be awarded child support, and reduced appellant’s spousal maintenance to $5,000 per month. The district court also reduced appellant’s maintenance award from permanent to temporary maintenance that will terminate on March 20, 2009, when appellant becomes eligible to withdraw funds, without penalty, from the retirement assets awarded to her. This appeal followed.
A. Sufficiency of Appellant’s Award
Appellant argues that the district court erred by not ordering spousal maintenance in an amount sufficient to meet her needs. On appeal from an award of maintenance, we determine only whether the district court abused its broad discretion. Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). Underlying factual findings will be set aside only if clearly erroneous. McCulloch v. McCulloch, 435 N.W.2d 564, 566 (Minn. App. 1989).
A district court may award maintenance if it finds that a spouse is unable to support herself reasonably through appropriate employment in view of the standard of living established during the marriage. Minn. Stat. § 518.552, subd. 1(b) (1998). While Minn. Stat. § 518.552, subd. 2 (1998), lists factors for the court to consider in determining the amount and duration of maintenance, the issue is, in essence, a balancing of the recipient’s need against the obligor’s ability to pay. Erlandson,318 N.W.2d at 39-40.
The district court found that appellant’s reasonable monthly expenses are $8,174. The district court also found that her only income is $800 per month from interest-bearing investments. But the district court awarded appellant only $5,000 per month in maintenance, leaving appellant with a monthly deficit of $2,374, without taking into account the taxes payable on the maintenance she receives.
It appears that the district court relied on the “substantial investment assets” awarded to the parties in determining the amount of the maintenance award. But while courts are required to consider the financial resources of the recipient spouse, which include income generated by liquid assets, courts may not expect a recipient spouse to invade the principal of investments to satisfy monthly financial needs. Fink v. Fink, 366 N.W.2d 340, 342 (Minn. App. 1985); see Minn. Stat. § 518.552, subd. 2(a). Therefore, the district court should consider only the income generated from appellant’s assets and not the value of the underlying assets in arriving at the amount of her maintenance award. To the extent that the district court expected appellant to liquidate assets awarded to her in arriving at a maintenance award, the court abused its discretion.
The district court found that respondent’s reasonable monthly expenses are $8,502, not including his $5,000 maintenance payment. The district court also found that respondent’s total net monthly income was $14,643.95 in 1998 and would remain the same in 1999. The district court thereby found that respondent had a monthly surplus of $1,141.95 ($14,643.95 - $8,502 - $5,000 = $1,141.95).
Appellant argues that respondent’s monthly surplus is even greater than that found by the district court because the court erred in calculating respondent’s net monthly income. The district court found that respondent’s gross annual employment income is $56,681, or $4,723 per month. The court then applied a tax factor to that amount to arrive at net monthly employment income of $2,638. Adding $2,638 to respondent’s $12,095 in non-taxable disability income, the court concluded that respondent’s net monthly income was $14,643.95. But appellant argues that in applying the tax factor to respondent’s gross monthly employment income, the district court disregarded the fact that the payment of spousal maintenance is deductible to the payor, and that deduction will eliminate almost all of respondent’s income-tax liability. See 26 U.S.C. § 215 (1998). We agree that the district court’s finding of respondent’s net monthly income is clearly erroneous because the district court erred in its application of the tax factor without consideration of the deductibility to respondent of his payment of maintenance.
We therefore remand for a recalculation of respondent’s net monthly income and a recomputation of maintenance.
B. Respondent’s Challenges to Appellant’s Maintenance Award
Respondent challenges the district court’s award of maintenance to appellant on three grounds.
1. Appellant’s Ability to Contribute to Self-Support
First, respondent argues that the district court erred in not attributing employment income to appellant. In support of his argument, respondent relies on the testimony of his expert, Lynn Arbogast, a certified vocational evaluator, who testified that appellant could enter the job market earning up to $35,000 per year and could expect to earn as much as $60,000 per year after three to five years. But the district court found that “Ms. Arbogast’s assessment of [appellant’s] ability to re-enter the workforce is exaggerated” and that appellant “would have great difficulty re-establishing herself in [the advertising] market.” The district court also found that writing a book was an appropriate venture for appellant, based on her educational and employment background. But because the amount of income appellant might earn from her writing could not be determined as of the date of its order, the district court declined to make a finding on what appellant is capable of earning. The district court’s findings on appellant’s ability to re-enter the workforce are not clearly erroneous. There is no question that re-entering the workforce at age 49, after a ten-year hiatus, would be difficult. And the question is not what appellant could earn in any employment but what she could earn in appropriate employment. Minn. Stat. § 518.552, subd. 1(b) (1998); see Nardini v. Nardini, 414 N.W.2d 184, 197 (Minn. 1987) (stating that being capable of employment should not be equated with appropriate employment). Thus, the district court’s finding that writing a book is an appropriate venture for appellant is not clearly erroneous, and the district court did not abuse its discretion by not attributing employment income to appellant. As appellant’s earnings from this endeavor become less speculative, respondent can bring a motion to modify maintenance based on a change of circumstances.
2. Appellant’s Investment Income
Second, respondent argues the district court clearly erred in finding that appellant’s monthly investment income is only $800. Specifically, respondent contends that it is illogical to conclude that appellant could earn gross investment income of only $9,750 per year on $916,906 in assets available for investment. But the district court based its finding of appellant’s monthly investment income on the historical rate of return generated by the parties’ investments. The record reflects that the parties’ total annual income from their investment account was $19,765 in 1998. One-half of that amount is $9,882.50 per year or $823.54 per month.
The parties’ portfolio appraisal and respondent’s testimony at trial show that, during the marriage, the parties’ investment strategy was not to maximize income but rather to invest in assets with growth potential. Respondent argues that appellant has an obligation to change her investment strategy to maximize her income in order to reduce respondent’s maintenance obligation. But the parties stipulated to an equal division of their marital property. Thus, requiring appellant to sell stocks and pay capital gains taxes on the sales to make the funds available for investments that produce more income would result in an inequitable distribution of property. And there was no evidence before the district court regarding what the tax effects of such sales would be. In the absence of evidence that would have given the district court a basis on which to adjust the property distribution, the district court did not abuse its discretion in declining to force appellant to incur a tax liability to lower respondent’s maintenance obligation.
3. Appellant’s Reasonable Monthly Expenses
Finally, respondent argues that the district court abused its discretion in finding that appellant’s reasonable monthly expenses were $8,174 per month. Specifically, respondent challenges the finding that appellant will have a monthly mortgage payment of $2,000. Appellant testified that she intended to purchase a $350,000 home after the sale of the parties’ marital home. Respondent calculates that appellant’s monthly mortgage payment should only be $1,320 on a mortgage of $200,000. Respondent bases this figure on his assertion that the district court’s order contemplated that appellant would apply the entire $162,500 she would receive from the sale of the marital home toward the purchase of her new home. But the district court found only that appellant’s assertion “that she will not contribute any funds towards the down payment on her new home is not only unreasonable but also unlikely to be acceptable to a mortgage lender.” This finding, at most, suggests that appellant should put some unspecified amount of the proceeds from the sale of the marital home toward her new home. The district court’s finding that appellant is likely to have a mortgage payment of $2,000 per month on a home valued at $350,000 is not clearly erroneous.
II. Award of Temporary Maintenance
Appellant argues that the district court erred in awarding only temporary maintenance. This court reviews a district court’s maintenance award under an abuse- of-discretion standard. Erlandson, 318 N.W.2d at 38. “There must be a clearly erroneous conclusion that is against logic and the facts on record before this court will find that the trial court abused it discretion.” Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984) (citation omitted).
Section 518.552, subdivision 2, sets forth factors to be considered in determining the amount and duration of spousal maintenance. Where there is uncertainty as to whether an award of permanent maintenance is necessary, the district court must order permanent maintenance but retain jurisdiction for later modification. Minn. Stat. § 518.552, subd. 3 (1998). There is no bright-line rule for determining when permanent maintenance is appropriate; rather, each case must be determined on its facts. See Dobrin v. Dobrin, 569 N.W.2d 199, 203 (Minn. 1997); Erlandson, 318 N.W.2d at 39.
The statutory factors include consideration of the “financial resources of the party seeking maintenance, including marital property apportioned to the party.” Minn. Stat. § 518.552 subd. 2(a) (1998). The district court found that appellant will receive more than $1,800,000 upon equal division of the marital estate. Appellant was awarded $821,448 in retirement assets, not including her one-half share of the parties’ investment portfolio. The district court found that appellant’s share of the parties’ retirement assets will continue to grow over the next nine years until she is eligible to withdraw from them without penalty. The district court also found that upon reaching “the age of retirement,” appellant will have adequate retirement assets to meet her monthly expenses.
Because appellant was awarded substantial retirement assets, there is no uncertainty about her need for permanent maintenance. The district court did not abuse its discretion in ordering only temporary maintenance.
Appellant argues that the district court erred in failing to award child support. A district court has broad discretion to provide for the support of a child. Rutten v. Rutten, 347 N.W.2d at 50. This court will not reverse the district court’s decision on child support unless that decision is clearly erroneous. Id. at 51.
The district court did not order that either party pay child support but did order that respondent continue to pay the child’s private-school tuition, bus-transportation costs, and synagogue dues, totaling $1,290 per month. This court has held that the proper method of determining child support in a joint-physical-custody case is to require each parent to pay the guideline-support amount when the other parent has custody. Valento v. Valento, 385 N.W.2d 860, 862 (Minn. App. 1986), review denied (June 30, 1986); Hortis v. Hortis, 367 N.W.2d 633, 636 (Minn. App. 1985). Because the Hortis/Valento formula is an application of the guidelines, the district court cannot deviate from the formula unless it makes appropriate written findings. Rogers v. Rogers, 606 N.W.2d 724, 727 (Minn. App. 2000), review granted (May 16, 2000). Section 518.551 requires that the findings include the amount of support calculated under the guidelines, the reasons for a deviation, and consideration of the child-support factors. Minn. Stat. § 518.551, subd. 5(i) (1998). The court also must explain how the deviation serves the best interests of the child. Id.
Here, the district court stated that the Hortis/Valento formula is inapplicable because appellant is not employed. The district court also found that “both parties will have sufficient income to pay for the expenses of the minor child while she is in their respective custody, without an award of child support to either.” But the district court did not make the other findings required by the statute, and there is no authority for the proposition that the Hortis/Valento formula is inapplicable because one party has no employment income. The district court could have used appellant’s monthly investment income of $800 per month to calculate her child-support obligation.
Respondent argues that in addition to meeting K.L.’s expenses when she is in his care, he also pays $1,290 per month for the child’s educational expenses, transportation costs, and synagogue dues. But the fact that respondent pays significant educational, transportation, and religious expenses for K.L. does not eliminate his statutory obligation to pay child support to provide for K.L.’s basic needs while she is in her mother’s care. See McNulty v. McNulty, 495 N.W.2d 471, 472-73 (Minn. App. 1993) (upholding upward departure from presumptive child-support ceiling where custodial parent was unable to sustain child’s accustomed standard of living involving significant educational and extracurricular expenses that were within means of obligor parent), review denied (Minn. Apr. 12, 1993). The district court’s downward deviation from the child-support guidelines is not supported by adequate findings.
Because the district court clearly erred in calculating respondent’s net monthly income, we remand for a recalculation of respondent’s income and a recomputation of maintenance in light of the new finding on respondent’s income. On remand, the district court shall also reevaluate its child support award. In doing so, the district court shall consider appellant’s income, the recalculation of respondent’s income, and the relevant law, and shall make any findings necessary to support its support award.
Affirmed in part, reversed in part, and remanded.
* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
 It is unclear how respondent arrived at this figure. The total market value of the parties’ investment assets as stated in their portfolio was $1,361,909.34. Appellant’s share is $680,954.65.