may not be cited except as provided by
Minn. Stat. ß 480A.08, subd. 3 (2000).
IN COURT OF APPEALS
In re:† Elizabeth Mary Kellogg,
Frederick William Kellogg,
Olmsted County District Court
File No. F395438
Suzanne M. Remington, Hellmuth & Johnson, PLLC, 10400 Viking Drive, Suite 560, Eden Prairie, MN† 55344 (for appellant)
Judith L. Oakes, J. Oakes & Associates, 2589C Hamline Avenue North, Roseville, MN† 55113 (for respondent)
††††††††††† Considered and decided by Peterson, Presiding Judge, Schumacher, Judge, and Minge, Judge.
U N P U B L I S H E D†† O P I N I O N
In this appeal from an order denying appellant-motherís motion to modify child support, mother argues that the district court erred (a) by applying the terms of the partiesí stipulated judgment, which provides for a modification of support upon a substantial adverse change in motherís financial circumstances, rather than applying Minn. Stat. ß 518.64, subd. 2, which requires consideration of both partiesí financial circumstances and the childrenís best interests; and (b) in finding that no substantial adverse change in motherís financial circumstances had occurred.† We affirm.
††††††††††† The parties were married in 1980.† They are the parents of three minor children.† The marriage was dissolved on November 18, 1996.† The dissolution judgment awarded sole physical custody of the children to appellant-mother Elizabeth Mary Kellogg subject to reasonable visitation by respondent-father Frederick William Kellogg.
††††††††††† The dissolution judgment contains the following findings on the partiesí incomes:† Mother was employed as an orthodontist earning a gross annual income of about $313,308 with a net annual income of about $181,236 after an SEP retirement contribution of $22,292.† Father was employed by Elf Autochem North America, Inc., earning a gross annual income of $90,000 with a net annual income of about $45,511 after a 401K contribution of $9,900.† The record contains evidence that during the marriage, fatherís income was reduced when the parties moved from Pennsylvania to Minnesota to further motherís career.† The dissolution judgment does not contain findings on the partiesí expenses, but mother submitted an itemized budget claiming monthly expenses of $19,383 for her and the three children.
††††††††††† Both parties waived spousal maintenance, and mother waived child support. †The dissolution judgment contains the following findings of fact regarding the waivers:
††††††††††† 10.† [Father] waives any right he may have to spousal maintenance based upon the disparity between the income of the parties, the earnings and other employment benefits he alleges he has lost, and his contribution to [motherís] education and business.† [Mother] waives her right to child support based upon the present financial circumstances of the parties, [fatherís] waiver of spousal maintenance, and [fatherís] withdrawal and subsequent relocation to the East Coast.† Therefore, the consideration for this waiver is the partiesí agreement that child support from [father] is waived except in the extraordinary event of an adverse substantial change in [motherís] financial circumstances, which consideration the Court finds to be adequate by approval of this agreement.
††††††††††† 11.† The parties have agreed under the unique circumstances existing here to request the Court to approve a downward deviation from the child support guidelines, and by approving the agreement, the Court so approves the downward deviation as being in the best interests of the children.
††††††††††† The dissolution judgment contains the following conclusions of law regarding the waivers:
††††††††††† IV.† Based upon presently existing circumstances and [fatherís] agreement to waive spousal maintenance, [father] shall pay no child support to [mother] for the minor children of the parties.† At such time in the future that a substantial change in regard to the financial circumstances of [mother] occurs, the Court upon motion of either party may review the existing child support arrangement under the provisions of Minn. Stat. ß 518.64, subd. 2.
††††††††††† * * * *
††††††††††† VI. A.† [Father] shall pay no temporary or permanent maintenance to [mother], and [mother] does hereby waive any right to have [father] pay temporary or permanent maintenance.
††††††††††† B.† [Mother] shall pay no temporary or permanent maintenance to [father], and [father] does hereby waive any right to have [mother] pay temporary or permanent maintenance.† The consideration for this waiver, the agreement of [mother] to waive child support from [father], is reasonable.
††††††††††† C.† By presently waiving their right to receive maintenance, the parties intend to divest the court of jurisdiction to modify maintenance in the future.
††††††††††† In October 2001, mother filed a motion seeking an order requiring father to pay child support.† Initially, mother conceded that her income had not decreased.† She asserted as the basis for her motion a belief that fatherís income had substantially increased.† Mother later changed her position.† Based on her 2000 federal and state income tax returns, mother claimed that her gross annual income had decreased to $270,150 and that her net annual income had decreased to $146,270.† Mother also submitted an itemized list claiming monthly family living expenses of $17,651.
††††††††††† The district court conducted a hearing on motherís motion.† The parties did not provide a transcript of the hearing.† By order filed December 11, 2001, the district court denied motherís motion.† The court explained:
[Motherís] request that [father] pay to her reasonable sums of money for the support of the minor children of the parties is denied on the grounds that [mother] has failed to meet her burden to prove the extraordinary event of an adverse substantial change in her financial circumstances, pursuant to Minn. Stat. ß 518.64, subd. 2, and paragraph 10 of the partiesí judgment and decree.
††††††††††† This appeal is from the December 11, 2001, order.
††††††††††† The district court has discretion to modify a child-support order, and its decision will be upheld unless the court reaches a decision that is against logic and the facts in the record .† Moylan v. Moylan, 384 N.W.2d 859, 864 (Minn. 1986).
1.†††††††† Waivers of child support are contrary to public policy.† Aumock v. Aumock, 410 N.W.2d 420, 421-22 (Minn. App. 1987).† ďChild support relates to nonbargainable interests of children and is less subject to restraint by stipulation than other dissolution matters.Ē† Swanson v. Swanson, 372 N.W.2d 420, 423 (Minn. App. 1985).† Accordingly, this court has held that less evidence of a substantial change in circumstances is necessary to support a modification of a stipulated child-support agreement when the stipulated support was well below the guidelines amount.† Murray v. Murray, 425 N.W.2d 315, 317 (Minn. App. 1988) (noting a relaxed standard for reviewing whether a substantial change in circumstances supporting modification had occurred where the original stipulated child-support agreement was well below statutory guidelines); Compart v. Compart, 417 N.W.2d 658, 662 (Minn. App. 1988) (stating that when obligee had met the needs of the partiesí children on less than one-half the recommended guidelines support ďalmost any change in circumstances would have been substantialĒ and supported a modification).†† In deciding whether to modify a stipulated child-support provision, the childrenís welfare is the paramount consideration.† Tammen v. Tammen, 289 Minn. 28, 30, 182 N.W.2d 840, 842 (1970).
Under Minn. Stat. ß 518.64, subd. 2 (2000), a child-support order may be modified upon a showing of a substantial change in a partyís earnings or a substantial change in a partyís or the childrenís needs, either of which makes the existing order unreasonable and unfair.† In this case, the parties stipulated that child support could only be increased upon a showing of a substantial adverse change in motherís financial circumstances.† In deciding whether to modify child support, the court shall consider the partiesí incomes, the childrenís financial and educational needs and physical and emotional health, the standard of living the children would have enjoyed had the parties not divorced, which party receives the income-tax dependency exemption and the resulting financial benefit to that party, and the partiesí debts.† Minn. Stat. ß 518.551, subd. 5(c) (2000); see also Minn. Stat. ß 518.64, subd. 2(c)(1) (on a motion to modify support, court shall apply Minn. Stat. ß 518.551, subd. 5).† Although a stipulated child-support provision is not binding on the court, ďa stipulation is an important consideration in determining child support because it often results Ďfrom barter concerning child support, spousal maintenance, and property settlement.Ēí† McNattin v. McNattin, 450 N.W.2d 169, 171 (Minn. App. 1990).
Mother argues that caselaw requires the district court to apply Minn. Stat. ß 518.64, subd. 2, notwithstanding the partiesí stipulation that child support can only be modified upon a showing of a substantial adverse change in motherís financial circumstances.† Mother relies on two cases in which this court affirmed a district court decision to increase child support to the guidelines level based on a substantial increase in the obligorís income and the childís right to benefit from that increase and on one case in which this court reversed the district courtís denial of a motion to increase child support to the guidelines amount, notwithstanding stipulations to waive child support or set it below the guidelines level.† The cases on which mother relies are distinguishable from this case in that the partiesí incomes in the cited cases are considerably lower than the partiesí incomes in this case.† See Miller v. Miller, 415 N.W.2d 920, 922-23 (Minn. App. 1987) (obligorís gross annual income increased from $43,000 to $74,700 and obligeeís income decreased from $5.40 per hour to zero); Martin v. Martin, 401 N.W.2d 107, 109-10 (Minn. App. 1987) (obligorís annual income increased from $2,500 to a net income of $18,560.88 and obligeeís net annual income increased only slightly from $20,000 to $20,045); Quaderer v. Forrest, 387 N.W.2d 453, 455-56 (Minn. App. 1986) (obligorís net annual income increased from $12,480 to $19,920 and obligeeís net monthly income increased from between $500 and $600 to $817).
Mother cites no authority holding that when a stipulation sets forth criteria for modifying child support, the district court must disregard the stipulation and apply Minn. Stat. ß 518.64, subd. 2.† The upper income limit on which a child-support award can be based under the child-support guidelines is currently a net monthly income of $6,751.† Even accepting motherís claim that her net annual income has decreased to $146,270, it is still more than twice the upper income limit for a guidelines award.† Given motherís high income and the district courtís finding in the dissolution judgment that adequate consideration existed for motherís waiver of child support except in the event of a substantial adverse change in her financial circumstances, the district courtís decision to enforce the stipulation is not against logic and the facts in the record.
2.†††††††† A party seeking modification of a child-support order has the burden of proving a substantial change in circumstances.† Gorz v. Gorz, 552 N.W.2d 566, 569 (Minn. App. 1996).
††††††††††† In her affidavit, mother cites two exhibits that she argues demonstrate that her net income decreased from $181,236 at the time of the dissolution to $146,270 in 2000.† The first exhibit shows that in 1995, mother had a federal adjusted gross income of $335,088 and a federal taxable income of $314,118.† The exhibit also shows that in 1995, mother paid $27,582 in state taxes and $104,528 in federal taxes.† In her affidavit, mother subtracts the state and federal taxes she paid in 1995 from her 1995 federal taxable income to determine that her net income in 1995 was $182,078 ($314,118-$27,582= $286,536-$104,528=$182,008).† The second exhibit shows that in 2000, mother had a federal adjusted gross income of $347,423 and a federal taxable income of $270,151.† The exhibit also shows that in 2000, mother paid $22,466 in state taxes and $101,415 in federal taxes.† In her affidavit, mother subtracts the state and federal taxes she paid in 2000 from her 2000 federal taxable income to determine that her net income in 2000 was $146,270.† ($270,151-$22,466=$247,685-$101,415=$146,270).†
††††††††††† The method mother used in her affidavit to calculate her net income in 1995 and 2000 is not the method used to calculate net income for determining child support.† Mother subtracted state and federal taxes paid from federal taxable income.† But Minn. Stat. ß 518.551, subd. 5(b) (2000), defines net income for child-support purposes as total monthly income less federal and state income taxes and other specific deductions that are not addressed in motherís affidavit.† Federal taxable income is not the same thing as total monthly income.† In fact, motherís affidavit specifically shows that to calculate her federal taxable income for 1995 and 2000, mother subtracted state taxes paid in each year from her federal adjusted gross income for that year.† This demonstrates that in each year, motherís total income was greater than her federal taxable income.† Motherís affidavit also demonstrates that to determine net income for child-support purposes, mother first subtracted state taxes from federal adjusted gross income to determine federal taxable income and then subtracted state taxes from federal taxable income to determine net income, which means that for each year, mother subtracted state taxes from total income twice.
The exhibits mother cites in her affidavit also show that in 1995, mother had income tax deductions totaling $20,970 and in 2000, mother had income tax deductions totaling $77,272.† This increase in deductions reduced motherís federal taxable income.† But permitted federal tax deductions do not necessarily reduce income for child-support purposes.† For example, motherís 2000 tax return shows a deduction for charitable contributions of $24,433, which included $21,730 for non-cash contributions of clothing, furniture, and other household items.† Motherís decision to make these contributions in 2000 reduced her taxable income, but it did not reduce her total income.
Finally, mother claims that her current monthly family expenses are $17,651 and that that amount represents an increase of more than $3,500 since the divorce.† But in connection with the initial divorce proceeding, mother submitted an itemized budget claiming monthly expenses of $19,383 for her and the three children.†
We find no error in the district courtís conclusion that mother failed to meet her burden of proving an adverse substantial change in her financial circumstances.
 Motherís affidavit contains an arithmetic or a typographical error.† Subtracting federal and state taxes paid from federal taxable income yields $182,008, not $182,078 as mother states.