This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
IN COURT OF APPEALS
Ronald Lee Paehlke, petitioner,
Suzanne Mary Paehlke, n/k/a Suzanne Mary Bielke,
McLeod County District Court
File No. F701000127
Julie Wacker Hanjani, Hanjani Law Office, 235 Hassan Street SE, Hutchinson, MN 55350 (for appellant)
Michael R. Savre, Gavin, Olson, Savre & Winters, Ltd., 1017 Hennepin Avenue, Glencoe, MN 55336 (for respondent)
Considered and decided by Halbrooks, Presiding Judge, Klaphake, Judge, and Hanson, Judge.
Appellant challenges the award of spousal maintenance to respondent, arguing that the trial court abused its discretion by (1) setting the award at $900 per month, (2) ordering appellant’s estate to continue to make the payments after he dies, (3) requiring appellant to maintain respondent’s health insurance, and (4) requiring appellant to maintain life insurance for respondent’s benefit. We affirm as modified.
Appellant Ronald Lee Paehlke and respondent Suzanne Mary Paehlke dissolved their marriage on May 24, 2001, after nearly 20 years. Appellant worked for 3M throughout their marriage while respondent held a variety of jobs, including data entry at Hutchinson Technology, Inc.; bookkeeping at Marquette Bank; stocking shelves for Kmart; and network marketing recruiting out of her home. At the time of their dissolution, respondent’s job with Twin City Global Connections involved “cold-calling” people at their homes to persuade them to tour a resort in northern Minnesota. Appellant and respondent have no children together, and thus their dissolution proceeding dealt primarily with dividing their property and determining spousal maintenance. The parties stipulated to appellant receiving $410,111 of the property and respondent receiving the remaining $408,553.
The trial court projected appellant’s 2001 gross earnings to be $50,818, or $4,235 per month, based on his 2000 earnings and his typical 2.7% cost-of-living increase. The court projected respondent’s 2001 gross earnings to be $14,880, or $1,240 per month, based on her likely earnings at Twin City Global Connections. The court adopted appellant’s submitted monthly expenses of $1,319 and respondent’s submitted monthly expenses of $1,740.
The court found that appellant historically earned three or four times more than respondent and that respondent was unlikely to find a higher-paying job due to her age (50), lack of meaningful post-high-school education, and frequent job changes. The court further found that respondent lacked liquid assets to provide for her reasonable needs because the property she received through the parties’ stipulation either could not be used without tax consequences and penalties or was already earmarked to pay her attorney fees and pay off her credit cards. As a result, the court held:
In view of the limited career options available to [respondent], the disparate earnings of the parties, the length of the parties’ marriage, the middle class standard of living established during the marriage, this court’s determination that [appellant] has the ability to meet his own needs while contributing to the support of [respondent], and having carefully considered the parties’ health and all of the other factors enumerated at Minn. Stat. § 518.552, the Court finds that [respondent] is entitled to an award of spousal maintenance.
The court set respondent’s permanent maintenance at $900 per month. The court based the monthly maintenance amount on respondent’s request and a court-prepared spreadsheet that calculated each party’s discretionary income. After making the necessary additions and deductions, the court calculated that the maintenance award would leave appellant with $953 in discretionary income per month, while still leaving respondent $137 short of meeting her reasonable needs. The decree extends spousal maintenance beyond appellant’s death, stating: “Neither the death or remarriage of the [appellant] shall modify or terminate [appellant’s] or his estate’s obligation to pay spousal maintenance as set forth above.” In addition, the decree requires appellant to name respondent as the beneficiary of his group-sponsored life insurance “until the termination of his spousal maintenance obligation imposed herein.”
The court also ordered appellant to continue to include respondent under his employer-provided health-insurance coverage.
Appellant filed a motion for amended findings of fact, conclusions of law, order for judgment, and judgment and decree. Appellant argued that his 2001 income was down from 2000 due to the economic slowdown and that respondent’s expenses had declined because she bought a mobile home and thus no longer incurred any rent and associated expenses. The trial court denied this motion in all material respects, finding that appellant’s motions lacked merit and simply reiterated the arguments he made at the trial. This appeal follows.
D E C I S I O N
1. The award of $900 per month.
Appellant argues that the court erred in setting his monthly spousal maintenance obligation at $900. In fact, appellant contends that respondent should receive no maintenance at all because her property settlement is sufficient for her to live on and because she overstated her expenses and can earn enough money to support herself. We will not reverse the trial court’s award of spousal maintenance unless there is a clear abuse of discretion. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). The trial court does not abuse its discretion so long as the award “has a reasonable and acceptable basis in fact.” Pettit v. Pettit, 472 N.W.2d 668, 671 (Minn. App. 1991).
A spousal maintenance award is appropriate when one spouse demonstrates that he or she lacks sufficient property to provide for his or her reasonable needs or is otherwise unable to reasonably provide adequate self-support. Minn. Stat. § 518.552, subd. 1 (2000). Factors to consider when determining the amount and duration of a maintenance award include: (1) the financial resources of the party seeking maintenance, (2) the likelihood of the party seeking maintenance becoming fully or partially self-supporting given the party’s age and skills or ability to learn new skills, (3) the standard of living established during the marriage, (4) the duration of the marriage, (5) the loss of earnings, seniority, retirement benefits, and other employment opportunities forgone by the spouse seeking spousal maintenance, (6) the age and the physical and emotional condition of the party seeking maintenance, (7) the ability of the other spouse to meet his or her needs while also meeting those of the spouse seeking maintenance, and (8) the contribution of each party to the marital property and to the furtherance of the other’s employment or business. Minn. Stat. § 518.552, subd. 2 (2000). But in considering a party’s ability to meet his or her reasonable needs, “[c]ourts normally do not expect spouses to invade the principal of their investments to satisfy their monthly financial needs.” Fink v. Fink, 366 N.W.2d 340, 342 (Minn. App. 1985). When reviewing the evidence regarding spousal maintenance, we leave credibility determinations to the fact-finders because they are in the best position to make such assessments. Prahl v. Prahl, 627 N.W.2d 698, 702 (Minn. App. 2001).
We find no abuse of discretion in the trial court’s award of $900 per month. The court’s thorough orders reflect careful consideration of all the factors listed in Minn. Stat. § 518.552, subd. 2, and the award “has a reasonable and acceptable basis in fact.” Pettit, 472 N.W.2d at 671. Appellant’s larger income places him in a superior financial position, and respondent is unlikely to close this gap due to her age and relative lack of marketable skills. Appellant claims that his 2001 income is much less than the court projected, but his pay stub from August 12, 2001, shows that he was on pace to earn approximately $45,000 that year. Thus, the record supports the court’s findings on appellant’s likely earnings. See Minn. R. Civ. P. 52.01 (stating that courts should not reverse findings of fact unless they are clearly erroneous). The award reflects the parties’ standard of living and the duration of their marriage, along with appellant’s current ability to help respondent meet her needs. The award also reflects respondent’s poor economic prospects and, in fact, it still leaves respondent $137 short of meeting her reasonable monthly needs.
Respondent’s property settlement does not preclude her from receiving spousal maintenance because most of that property consists of retirement accounts and other investments that, under Fink, are not normally expected to be used to meet monthly needs. Appellant relies on Rask v. Rask, 445 N.W.2d 849 (Minn. App. 1989), for the proposition that a large property settlement renders spousal maintenance inappropriate. But Rask held that the wife’s maintenance award was unreasonably high because the trial court failed to even consider her property settlement, erroneously calculated her expenses, and overestimated the husband’s ability to meet the monthly payment given that it represented more than one-half of his net monthly income. Id. at 854-55. Here, the trial court considered the property settlement and found that it could not reasonably be used for respondent’s monthly expenses. Unlike in Rask, nothing here indicates the court erroneously adopted respondent’s list of expenses. Rask is also distinguishable because appellant’s obligation represents less than one-third of his net monthly income.
Appellant’s claim that respondent misstated her expenses and can earn more than she suggested at trial is merely an attack on respondent’s credibility. As this court defers to the trial court on credibility determinations, this argument, too, presents no grounds for reversal. Prahl, 627 N.W.2d at 702. Because the record reasonably supports the trial court’s findings, we find no error in the award of spousal maintenance.
2. Extending maintenance beyond appellant’s death.
Appellant next argues that the trial court erred by requiring appellant’s estate to continue to pay respondent’s spousal maintenance after appellant dies because the trial court’s findings do not support it and it would conflict with the property division by requiring payment of spousal maintenance out of property awarded to appellant. The extension of spousal maintenance obligations beyond the life of the obligor raises several concerns, both conceptual and practical.
First, the general rule is that maintenance terminates on the death of the obligor. Minn. Stat. § 518.64, subd. 3 (2000) (“Unless otherwise agreed in writing, or expressly provided in the decree, the obligation to pay future maintenance is terminated upon the death of either party.”). In addition, we have said:
In order for a [dissolution] decree to expressly provide for maintenance subsequent to [the] obligor’s death, the decree must provide funding for the maintenance such as an insurance policy or a lien on property.
Witt v. Witt, 350 N.W.2d 380, 382 (Minn. App. 1984). Thus, for maintenance to continue beyond the obligor’s death, the “express provision” required to be in the dissolution judgment must both state that maintenance will continue beyond the obligor’s death and provide a mechanism to fund the maintenance that will be paid after the obligor’s death. Witt’srationale for requiring a judgment to include a mechanism to fund a post-death maintenance obligation is based on the assumption that, without a funding mechanism, post-death maintenance will have to be paid from the obligor’s property and therefore “the property division made by the court in the original dissolution decree [will] lack the necessary finality.” Id.
Second, “maintenance” is
an award made in a dissolution or legal separation proceeding of payments from the future income or earnings of one spouse for the support and maintenance of the other.
Minn. Stat. § 518.54, subd. 3 (2000) (emphasis added). “Income” is “any form of periodic payment to an individual[.]” Minn. Stat. § 518.54, subd. 6 (2000) (emphasis added). An individual’s income will terminate when the individual dies. While “earnings” is not statutorily defined, barring peculiar circumstances, it is unclear how a deceased spouse could have earnings. Therefore, when a maintenance obligor dies, the deceased obligor will lack the “income” or “earnings” from which maintenance is to be paid.
Third, requiring the obligor’s estate to continue to pay support would mean that the estate must remain open, conceivably for many years, until the obligee’s death.
These concerns convince us that the trial court must support such an extraordinary remedy with express findings that explain its necessity and provide a clear funding mechanism. The trial court’s findings here do neither. We conclude that the trial court abused its discretion in ordering that appellant’s death will not terminate appellant’s maintenance obligation and that his estate must continue to make the payments. Accordingly, we modify the decree to eliminate that requirement.
3. The award of health insurance.
Appellant also argues that the trial court abused its discretion in requiring appellant to pay respondent’s health insurance because the court made no findings as to how long the coverage must continue and did not address the costs of coverage at trial.
Courts have discretion to include the payment of health-insurance premiums as a part of a maintenance award. Minn. Stat. § 62A.21, subd. 2a (2000); Hughes v. Hughley, 569 N.W.2d 534, 536 (Minn. App. 1997). The trial court included health-insurance coverage in its spousal maintenance award and, as we stated earlier, the record supports the award of spousal maintenance. An award of health insurance is particularly appropriate here given that respondent receives no benefits from her current employer and is unlikely to find a job with health benefits in the future.
Appellant cites no cases that support his argument. Appellant contends that the court erred by not stating how long the health-insurance coverage must continue, but the court included the health coverage in the maintenance award, which explicitly extends beyond appellant’s death. Appellant also argues the court erred by not making findings as to the cost of the health insurance, but appellant presented no evidence of those costs from which the court could make such findings. Thus, we find no abuse of discretion in the trial court’s award of health insurance coverage as a part of the spousal maintenance award.
4. The award of life insurance.
Appellant argues that the trial court abused its discretion by ordering appellant to name respondent the beneficiary of his life insurance “until the termination of his spousal maintenance obligation imposed herein.” Appellant incorrectly relies on the pre-1985 legislative “exceptional case” test for securing maintenance with life insurance. See Chamberlain v. Chamberlain, 615 N.W.2d 405, 410-11 (Minn. App. 2000) (discussing the pre- and post-1985 tests), review denied (Minn. Oct. 25, 2000). Because the statute no longer contains a negative presumption against permanent maintenance, and the “exceptional case” test is no longer required to justify such an award, appellant’s argument lacks merit. See id. at 411 (finding that the 1985 amendments did away with the “exceptional case” requirement). Cf. Arundel v. Arundel, 281 N.W.2d 663, 667 (Minn. 1979) (stating pre-1985 exceptional case requirement for securing alimony with life insurance), and Katter v. Katter, 457 N.W.2d 750, 754-55 (Minn. App. 1990) (confirming that post-1985 test rests within the district court’s discretion).
Courts can secure spousal maintenance awards by requiring the obligor to maintain life insurance for the other spouse’s benefit. Maeder v. Maeder, 480 N.W.2d 677, 680 (Minn. App. 1992), review denied (Minn. Mar. 19, 1992). Appropriate factors to consider include the spouse’s weak employment prospects, age, education, and vocational experience. Id. These considerations weigh in respondent’s favor here, and, thus, the trial court did not abuse its discretion in ordering appellant to maintain life insurance for respondent’s benefit.
Affirmed as modified.