This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
Michael William Mullins, petitioner,
Debra Lynn Mullins,
Filed July 2, 2002
Reversed and remanded
Carver County District Court
File No. F5-99-1006
Todd R. Haugan, Haugan Law Office, Ltd., 204 Marquee Place, 641 East Lake Street, Wayzata, MN 55391 (for appellant)
Debra L. Mullins, 2547 Bridle Creek Trail, Chanhassen, MN 55317 (respondent pro se)
Considered and decided by Harten, Presiding Judge, Shumaker, Judge, and Parker, Judge.*
Appellant, an obligor spouse, moved to modify his child support and spousal maintenance obligations alleging that there had been a significant reduction in his income. The district court found no substantial change in appellant’s circumstances and denied his motion. Because we conclude that there was a substantial change in circumstances, we reverse and remand for further proceedings.
In 2000, the marriage of appellant Michael Mullins and respondent Debra Mullins was dissolved. Respondent received custody of the parties’ twins, who were then age 14. Appellant, an investment executive, earned $175,960 in 1999 and $79,237 between 1 January and 15 July 2000. Based on these earnings, the district court awarded respondent $1,884 per month in child support and $4,350 per month in spousal maintenance.
About the time the judgment was entered, appellant lost his job. Approximately two weeks later, he began working for a new employer. His employment agreement provided a monthly salary of $21,600 for five months: September 2000 through January 2001. The employment agreement also provided that, if appellant brought in a sufficient number of accounts and assets, he could receive loans from his employer. Each loan, plus interest, would be forgiven at the rate of 25% per year beginning on the first anniversary of that loan, provided appellant was still an employee then. Appellant received two loans: $110,000 on 4 January 2001 (to be forgiven at the rate of 25% on 4 January 2002, 2003, 2004, and 2005), and $43,917 on 16 August 2001 (to be forgiven at the rate of 25% on 16 August 2002, 2003, 2004, and 2005).
In August 2001, appellant moved the district court for a modification of his child support and spousal maintenance obligations, contending that there had been a significant reduction in his income. The district court denied his motion, finding that there had been no substantial change of circumstances. This appeal followed.
We will reverse a district court’s order regarding modification of child support only if shown that the district 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).
The district court based its the original child support and maintenance awards on appellant’s earnings of $175,960 in 1999 and $79,237 between 1 January and 15 July 2000. Because the district court found that appellant’s earnings for 2001 were $177,864.50, it concluded that there had not been the substantial change in circumstances required for modification of child support and maintenance under Minn. Stat. § 518.64, subd. 2 (2000). That conclusion is against logic and the facts on the record.
The district court stated:
6. [T]he [$110,000] loan was to be forgiven by [appellant’s employer] at the rate of 25% of the loan for each year [appellant] remained employed with [the employer.]
* * * *
11. [Appellant’s employer] would have forgiven the amount of $27,500 (25% of the $110,000 loan) during the 2001 calendar year.
These statements are inconsistent. Appellant will not have remained with his employer for a year after the $110,000 loan until January 2002. Therefore, finding that 25% of the loan would be forgiven during 2001 and imputing that amount as 2001 income was against logic and the facts in the record.
The district court also stated:
12. There was no information provided to the Court regarding the forgiveness of the $43,917 loan, however, the Court will conclude that this money is income to [appellant]. Therefore, the Court concluded that [appellant’s] total earnings for 2001 are $177,864.50, consisting of an annual salary of $106,447.50 plus $43,917 plus $27,500.
The record shows that the district court was provided with the loan agreements for both loans. It therefore had evidence that the $43,917 loan would be forgiven in four segments, respectively, on 16 August 2002, 2003, 2004, and 2005. Imputing the entire loan as income in 2001 was also against logic and the facts on the record.
If the loans are not imputed as 2001 income, there clearly was a significant change between appellant’s 1999 income, used to set his child support and spousal maintenance obligations, and his 2001 income, when he moved for modification of child support and maintenance. Because we conclude that denying appellant’s motion was an abuse of discretion, we reverse and remand for further proceedings. On remand, the district court has discretion to reopen and supplement the record to receive additional evidence in a manner set by the district court.
Reversed and remanded.