This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).






In re the Marriage of:

Kimberly Macemon, f/k/a Kimberly Ludowese, petitioner,





Nicholas Ludowese,



Filed December 4, 2001


Willis, Judge


McLeod County District Court

File No. F28720827


Mark A. Carrigan, Carrigan Law Office, 227 South Main Street, Hutchinson, MN 55350 (for respondent)


Julie Wacker Hanjani, Hanjani Law Office, 235 Hassan Street S.E., Hutchinson, MN 55350 (for appellant)


Considered and decided by Willis, Presiding Judge, Lansing, Judge, and Harten, Judge.

U N P U B L I S H E D   O P I N I O N


            Appellant Nicholas Ludowese alleges that the child-support magistrate erred by failing to consider farm-related depreciation in determining his income, by failing to make necessary findings to substantiate the child-support order, and by imputing income to him without a finding that he had self-limited his income. We affirm.


The parties’ marriage was dissolved in August 1988.  Respondent Kimberly Macemon received sole physical custody of the parties’ two minor children.  Based on Ludowese’s 1987 reported adjusted gross annual income of $6,085, he was ordered to pay $300 per month in child support.

Macemon moved for a modification of child support in 1997, and the district court increased Ludowese’s child-support obligation to $1,000 a month.  Ludowese challenged the increase, and on appeal this court determined that the district court had failed to make sufficient findings regarding Ludowese’s net monthly income. 

On remand, in an order dated September 15, 2000, the child-support magistrate concluded that Ludowese had been capable of earning a net monthly income of $3,334 since September 1, 1997, and imputed that income to him.  The magistrate also found that, although Ludowese’s adjusted gross annual income as reported on his tax returns from 1997 through 1999 ranged from a negative $2,925, due to a loss carryforward, to $19,746, his net worth had more than doubled during those three years, and she found that he had other sources of income.  Based on these findings, the magistrate re-imposed a child-support order of $1,000 per month.

            Ludowese filed a motion for review in the district court.  The court found that the magistrate had failed to indicate how she treated Ludowese’s claimed farm-related depreciation and that, because the magistrate imputed income to Ludowese for support purposes, she was required to make a determination that Ludowese was voluntarily unemployed or underemployed.  The district court returned the matter to the magistrate with an instruction to make appropriate findings.

            In an order amending her previous findings, the magistrate noted that

[t]he court is not required to use income tax returns and depreciation amounts to calculate income when there is another reasonable basis in fact upon which the income calculation can be based.


The magistrate found that Ludowese’s tax returns did not accurately reflect his earnings and that “[w]hether the depreciation claimed on the tax returns is true depreciation or numbers for tax purposes only is highly speculative.”  The magistrate determined Ludowese’s income for child-support purposes by relying on information compiled by a bank regarding his loan-repayment capacity and by considering the increase in his net worth during the preceding three years.

            Ludowese appeals from the September 15, 2000, order and the January 15, 2001, amendment to that order.


The standard for reviewing a magistrate’s decision is the same as for reviewing a district court’s decision.  Brazinsky v. Brazinsky, 610 N.W.2d 707, 710 (Minn. App. 2000).  A district court’s modification of child support will be reversed only if the court abused its broad discretion and reached a conclusion that is against logic and the facts on the record.  Gully v. Gully, 599 N.W.2d 814, 820 (Minn. 1999).  Findings of fact are upheld unless they are clearly erroneous.  Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn. App. 1992). 


Ludowese argues that, in determining his income for child-support purposes, the child-support magistrate erred by ignoring the farm-related depreciation that Ludowese claimed on his income-tax returns.  Total disregard of claimed depreciation is reversible error.  Freking v. Freking, 479 N.W.2d 736, 740 (Minn. App. 1992).  Courts must evaluate claimed depreciation deductions to determine whether they reflect true depreciation or depreciation for tax purposes only.  Beltz v. Beltz, 466 N.W.2d 765, 767 (Minn. App. 1991), review denied (Minn. Apr. 29, May 23, 1991). 

               Ludowese, a self-employed farmer, had the burden of proving, when challenged, that his claimed depreciation was an ordinary and necessary expenseSee Minn. Stat. § 518.551, subd. 5b(f) (2000) (stating that self-employed person claiming depreciation expense has the burden of establishing that expense).  Ludowese offered no evidence to support his depreciation claim other than his income-tax returns.  It was within the magistrate’s discretion to find that Ludowese failed to meet his burden of establishing that his claimed depreciation was true depreciation rather than depreciation for tax purposes only.  Cf. Taflin v. Taflin, 366 N.W.2d 315, 319 (Minn. App. 1985) (stating that party failing to submit evidence to support claim could not object to district court’s failure to adopt that party’s position).  See generally Freking, 479 N.W.2d at 740 (stating “[t]axable income is not always a reliable indication of net income” for support purposes).  The magistrate did not ignore Ludowese’s claimed depreciation; rather, she considered and rejected Ludowese’s evidence of depreciation by finding it “speculative.”


            Ludowese argues that the magistrate deviated from the guidelines in setting his child-support obligation and erred in not making written findings regarding the reasons for the deviation.  Under Minnesota law,

[i]f the court deviates from the guidelines, the court shall make written findings giving the amount of support calculated under the guidelines [and] the reasons for the deviation.


Minn. Stat. § 518.551, subd. 5(i) (2000).  But here the magistrate did not deviate from the guidelines.  The magistrate imputed to Ludowese a net monthly income of $3,334.  Based on that income, the ordered child-support obligation of $1,000 is not a deviation from the guidelines; the magistrate, therefore, was not obligated to make findings regarding the reasons for deviation.

Ludowese also argues that the child-support magistrate was required, under Minn. Stat. §  518.551, subd. 5(i), to make written findings regarding the statutory criteria that must be considered in deviating from the child-support guidelines and how deviation serves the best interests of the children.  Again, because the child-support magistrate did not deviate from the guidelines in establishing Ludowese’s child-support obligation, she was not required to make such findings.

            Finally, Ludowese argues that the magistrate was required to make written findings regarding the grounds for modification of the previous child-support order.  Ludowese relies on Minn. Stat. § 518.64, subd. 2(a) (2000), which provides:

The terms of an order respecting maintenance or support may be modified upon a showing of one or more of the following:  (1) substantially increased or decreased earnings of a party; (2) substantially increased or decreased need of a party or the child * * * .


            Here, the magistrate reviewed evidence of Ludowese’s financial condition, including information compiled by a bank regarding Ludowese’s repayment capacity, and found that (1) his reported adjusted gross annual income had increased from $6,085 in 1987 to $19,746 in 1999, (2) his net worth had more than doubled between 1997 and 1999, and (3) after payment of his living expenses and his existing child-support payment, Ludowese had “at least $1,823 * * * available to him each month.”  The magistrate then imputed to Ludowese a net monthly income of $3,334 and concluded that “substantial circumstances” made the previous child-support order unreasonable.  We conclude that the magistrate made sufficient findings to support modification of the previous child-support order and that the magistrate’s determination of Ludowese’s income has a reasonable basis in fact.  See Strauch v. Strauch, 401 N.W.2d 444, 448 (Minn. App. 1987) (holding that the determination of obligor’s net income for purpose of child support will be affirmed if it has a reasonable basis in fact).


               Ludowese claims that the magistrate erred in imputing income to him without a specific finding that he self-limited his income.  Ludowese relies on Minn. Stat. § 518.551, which provides that “[i]f the court finds that a parent is voluntarily unemployed or underemployed * * * support shall be calculated based on a determination of imputed income.”  Minn. Stat. § 518.551, subd. 5b(d) (2000).  But income also may be imputed when it is impracticable to determine a party’s actual income.  Roatch v. Puera, 534 N.W.2d 560, 564 (Minn. App. 1995).

               The magistrate found that Ludowese “structured his income-producing energies in a way which increases his net worth, but which does not generate actual income.”  In cases involving self-employed obligors, courts have held that, if it is difficult to determine the obligor’s actual income, the obligor’s earning capacity may be used as a basis for determining income.  See, e.g., LeTendre v. LeTendre, 388 N.W.2d 412, 416 (Minn. App. 1986).  On the facts here, the magistrate did not err by imputing a monthly net income of $3,334 to Ludowese, based on his earning capacity, without a specific finding that Ludowese had self-limited his income.

               Finding no error in the child-support magistrate’s findings, we conclude that the modification of Ludowese’s child-support obligation was not an abuse of the magistrate’s discretion.