This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. ß 480A.08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C3-02-1815

 

In re the Marriage of:

Kathleen Sue Schmidt, petitioner,
Appellant,

vs.

Wayne Thomas Schmidt,
Respondent.

 

Filed May 13, 2003

Reversed and remanded

Peterson, Judge

 

Stearns County District Court

File No. F585762

 

David W. Buchin, Buchin Law Office, 16 North Ninth Avenue, St. Cloud, MN† 56303 (for appellant)

 

Karla A. Krueger, St. Cloud Area Legal Services, 830 West St. Germain Street, Suite 300, PO Box 886, St. Cloud, MN† 56302 (for respondent)

 

††††††††††† Considered and decided by Harten, Presiding Judge, Peterson, Judge, and Halbrooks, Judge.

U N P U B L I S H E D†† O P I N I O N

PETERSON, Judge

††††††††††† In this appeal from a judgment modifying spousal maintenance appellant-wife Kathleen Sue Schmidt argues that the district courtís findings are not sufficient to support the reduction of respondent-husband Wayne Thomas Schmidtís maintenance obligation, and husband argues that the district courtís findings are not sufficient to permit the court to award maintenance based on imputed income.† Because the district courtís findings are insufficient, we reverse and remand.

FACTS

The partiesí 23-year marriage was dissolved in January 1988.† The original judgment required husband to pay wife maintenance of $500 per month for five years based on a $20,500 annual salary ($1,708 per month) that husband earned through self-employment as the sole proprietor of a business called Lemco Machine Works.

In September 1990, the district court made the maintenance award permanent and increased the amount to $600 per month based on wifeís increased needs.† The district court found that husbandís monthly income was approximately $1,200 and that husband also received fringe benefits that included some type of automobile lease, expense allowances, and travel allowances.† But the court stated that the $600 maintenance amount was ďspecifically based upon [husbandís] stated monthly income of $1,200.00.Ē†

On May 22, 2001, wife brought a motion to hold husband in contempt because he was paying maintenance in two payments each month instead of one.† The district court found husband in contempt and ordered him to pay the full maintenance amount by the fifteenth day of each month.

In February 2002, husband moved to reduce or terminate his maintenance obligation because his income had substantially decreased.† At a May 28, 2002, evidentiary hearing, husband testified that he stopped operating Lemco because it was not profitable, and the bank took Lemcoís assets and sold them to OEM Machine Company (OEM) to satisfy debts.† Husband entered into a consulting contract with OEM, which was to pay him $2,750 per month for three years, but OEM stopped paying him in August 2001.[1]

Husband testified that since August 2001, he has worked part time loading trucks, delivering newspapers, and as a postal worker.† Husband testified that he has been applying for jobs that pay approximately $33,000 per year, and he named 22 different employers to whom he submitted 31 employment applications between January and May 2002.† At the time of the evidentiary hearing, husband was receiving $247 per week in unemployment benefits, and he testified that when these benefits stop, he is going to apply for social security benefits.† Husband is 62 years old, and he testified that his social security benefits will be approximately $1,103 per month.† Husband also testified that he receives a $150 monthly payment under a contract for deed.

The district court reduced husbandís maintenance obligation to $300 per month.†

D E C I S I O N

Wife argues that the district courtís findings are not sufficient to support a reduction of husbandís maintenance obligation.

[T]he standard of review on appeal from a trial courtís determination of maintenance is whether that court abused the broad discretion accorded it.† Effective appellate review of the exercise of that discretion is possible only when the trial court has issued sufficiently detailed findings of fact to demonstrate its consideration of all factors relevant to an award of permanent spousal maintenance.

 

Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989) (citation omitted).

††††††††††† In considering a motion to modify maintenance, the district court shall apply the factors for an award of maintenance that exist ďat the time of the motion.Ē† Minn. Stat.
ß 518.64, subd. 2(c) (Supp. 2001).† An order for maintenance 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 * * *; (3) receipt of assistance * * *; (4) a change in the cost of living for either party * * *, any of which makes the terms unreasonable or unfair * * *.†

 

Minn. Stat. ß 518.64, subd. 2(a) (Supp. 2001).†

[A]n award is to be modified only upon clear proof of facts showing a substantial change of circumstances from those existing at the time of the dissolution or, as in the instant case, at the time the award was last modified.

 

Wiese v. Wiese, 295 N.W.2d 371, 372 (Minn. 1980).

A movant for maintenance modification must not only demonstrate the existence of a substantial change of circumstances, but is also required to show that the change has the effect of rendering the original maintenance award both unreasonable and unfair.

 

Beck v. Kaplan, 566 N.W.2d 723, 726 (Minn. 1997).

If a substantial change is shown, the court must then consider the standards for determining maintenance found in Minn. Stat. ß 518.552 (2000).† A district courtís order in family court proceedings ďshall contain particularized findings of fact sufficient to support the determination of maintenance.Ē†† Stich, 435 N.W.2d at 53.

The district court found that husband ďwas employed by OEM Machine Company through August of 2001, earning $2,750.00 per month.Ē† The court also found:

††††††††††† 5.†††††††† [Husband] has been working part-time and intermittently since August of 2001.† [Husband] has health problems that would prevent him from working at some jobs, but he is generally employable.

††††††††††† 6.†††††††† [Husband] has been searching for work, but his job search has included multiple applications at the same location.† Although some effort is being expended to find work, it appears that [husband] could have expanded his job search.

7.†††††††† It appears that [husband] could be employed making approximately $12,000 to $20,000 per year, based upon full-time employment at between $6.00 and $10.00 per hour.

 

Based on these findings, the court imputed income to husband at $6 to $10 per hour, concluded that this was substantially less than husband made previously, and reduced husbandís maintenance to $300 per month.

It appears that the courtís conclusion that husbandís income decreased substantially was based on a reduction of income from the $2,750 per month that husband made under his consulting contract with OEM to the $12,000 to $20,000 per year that the court imputed to husband.† But husbandís income at the time the maintenance award was last modified in September 1990 was not $2,750 per month.† The $600 per month maintenance amount awarded in September 1990 was specifically based on a $1,200 monthly income.† A $1,200 monthly income produces annual income of $14,400, which is within the range of incomes the court imputed to husband.† The district courtís findings do not demonstrate that when determining whether husbandís income has changed substantially, the court considered husbandís income when maintenance was last modified, and the findings do not address at all whether the change in husbandís income makes the terms of the existing maintenance order unreasonable and unfair.

††††††††††† Husband argues that the district court could not impute income to him without finding that he was underemployed in bad faith.†

A finding of bad faith is a prerequisite to considering an obligorís earning capacity when awarding maintenance.† Walker v. Walker, 553 N.W.2d 90, 95 n. 1 (Minn. App. 1996).† The district court did not explicitly find bad faith.

In Warwick v. Warwick, 438 N.W.2d 673, 677-78 (Minn. App. 1989), this court concluded that although the district court did not explicitly find a reduction of income to be in bad faith, it was evident from the record that the district court believed that the obligor unjustifiably limited his income, and therefore, the district court effectively found bad faith on the obligorís part.† But here, it is not evident from the record that the district court believed that husband acted in bad faith.† The district courtís findings describe the efforts husband made to remain employed and state only that husband could have expanded his job search.† These findings are not sufficient to permit us to conclude that the district court considered whether husband acted in bad faith and determined that he did.†

Because the district courtís findings are not sufficient to demonstrate how the court determined that husbandís income changed substantially or how the change in income makes the terms of the existing maintenance order unreasonable and unfair and because the district court did not find that husband limited his income in bad faith, we reverse and remand to permit the district court to specifically address these issues.† The district court may, in its discretion, open the record to receive additional evidence.

Reversed and remanded.



[1]† OEM owes husband approximately $77,000 under the contract, but the company is out of business and has no assets.† The district court found that husband probably cannot collect the money OEM owes him.