This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
Fred E. Jamison, petitioner,
Gwendolyn G. Jamison,
Filed June 24, 2003
Robert H. Schumacher, Judge
Timothy J. McLarnan, McLarnan, Hannaher & Skatvold, P.L.L.P., P.O. Box 8, Moorhead, MN 56560-0008 (for respondent)
U N P U B L I S H E D O P I N I O N
ROBERT H. SCHUMACHER, Judge
On appeal from a dissolution judgment, appellant Gwendolyn G. Jamison (wife) argues (a) the district court should have awarded her permanent maintenance from respondent Fred E. Jamison (husband); (b) the district court misvalued certain property; and (c) she should not be liable for certain amounts she spent during the parties' separation. Because the district court did not make adequate maintenance-related findings, we remand that issue. Because the record does not support aspects of the property division, we reverse and remand regarding property valuation and affirm in part and remand respondent's liability for amounts spent during the parties' separation.
The judgment dissolving the parties' marriage awarded neither party maintenance, valued and divided the parties' property, and reduced wife's property award for amounts she spent during the parties' separation that exceeded what she would have spent if, during each month of the separation, she had spent the amount the district court found to be her monthly expenses. On appeal, wife argues that she is entitled to permanent maintenance, challenges the district court's tax treatment of certain assets, and argues that she should not have to reimburse the marital estate.
We will not set aside a district court's findings of fact unless the findings are clearly erroneous. Minn. R. Civ. P. 52.01. The proper method for challenging findings of fact is explained in Vangsness v. Vangsness, 607 N.W.2d 468, 474 (Minn. App. 2000).
1. Absent an abuse of the district court's "wide discretion" in addressing maintenance, its determination "is final." Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). A district court abuses its discretion if it resolves the matter in a manner that is "against logic and the facts on record." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). While Minn. Stat. § 518.552 (2002) lists factors to be considered in setting the amount and duration of maintenance, no single factor is dispositive; the issue is basically the recipient's need balanced against the obligor's financial condition. Erlandson, 318 N.W.2d at 39-40. Doubts about the duration of a maintenance award are to be resolved in favor of a permanent award. Minn. Stat. § 518.552, subd. 3 (2002); Nardini v. Nardini, 414 N.W.2d 184, 196 (Minn. 1987).
Wife argues that she is entitled to permanent maintenance because she is an older, dependent spouse from a long-term, traditional marriage who has little likelihood of becoming self-sufficient. While it is undisputed that wife is an older spouse from a long-term, traditional marriage, those facts are not independently sufficient to require an award of maintenance. See Lyon v. Lyon, 439 N.W.2d 18, 22 (Minn. 1989) (stating "maintenance depends on a showing of need"). Here, after finding the parties' monthly expenses and their pre-tax incomes, the district court stated that because wife will receive
income producing assets in excess of approximately [$1,000,000] and will receive apparent rental income from her share of jointly owned real estate,  she will have sufficient income to meet her reasonable monthly needs.
The district court did not address (a) either party's net monthly employment income; (b) the fact that wife's property award includes almost $430,000 in retirement assets to which she currently has no access; (c) wife's (projected) net monthly income from investment or how her investment income is calculated; (d) wife's monthly need for maintenance; or (e) husband's ability to pay maintenance. Absent findings on these questions, we cannot review the district court's balancing of wife's need against husband's ability to pay, and a remand is required. Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1988). Moreover, a lack of findings on wife's need and husband's ability to pay will unnecessarily complicate future modification proceedings. Cf. Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997) (noting, in context of stipulated maintenance, that stipulation identifies "baseline circumstances" against which claims of changed circumstances are evaluated).
Wife challenges the district court's assumption that she can work full time. The record shows that her employment expert indicated that while wife might be able to work full time, her 26-year absence from the work place, lack of marketable skills, and various medical ailments, rendered it most likely that she would end up working part time. Because wife's expert admitted wife might be able to work full time, however, there is some support in the record for the district court's determination, and we affirm this aspect of the district court's ruling.
Wife alleges the district court understated husband's income by including a bad crop year when averaging his income over five years and by omitting husband's investment income. But five-year income averaging has been used in the past. Swick v. Swick, 467 N.W.2d 328, 332 (Minn. App. 1991), review denied (Minn. May 16, 1991). While the award to husband of the farm and farm machinery resulted in him receiving a smaller pool of investable assets, the district court did not explain why investment income was used to find wife's need for maintenance but not husband's ability to pay maintenance. On remand, the district court shall address husband's investment income.
2. Wife alleges that the district court improperly reduced the value of farm machinery awarded to husband for tax consequences that would occur if husband sold the machinery. Asset valuations are findings of fact and will not be set aside unless clearly erroneous. Maurer v. Maurer, 623 N.W.2d 604, 606 (Minn. 2001). Whether to consider the future tax consequences of a property award is discretionary with the district court. Id. at 607. To consider future tax consequences of a property award, the district court must have a sound basis for making an informed judgment regarding the probable liability. Id. at 608.
Here, wife's accountant and husband both testified that liquidating the farm machinery awarded to husband would have tax consequences. Also, while husband testified that he hopes to farm for "five or six years anyway" and asked that the tax consequences of selling the machinery be considered in its valuation, no precise termination date for his farming was identified. Moreover, what tax consequences the tax code will impose when, at some unknown future time, husband stops farming and sells his machinery, is also unknown. Because the record shows uncertainty regarding when any tax consequences will be incurred, as well as what those consequences will be, we cannot say that this record shows the requisite degree of certainty necessary to allow the tax consequences of a potential future sale of the farm machinery to be considered here. Therefore, we reverse the district court on this point and remand for the district court to make any necessary adjustment to the property division.
Wife also argues the district court failed to account for the tax consequences of transferring the cash value of an insurance policy to her. Transferring the cash value of the life insurance policy will create a taxable gain of $6,681.31. Because we remand the maintenance question and for any necessary adjustment of the property award required by our decision regarding the tax consequences of selling the farm machinery, we also remand this issue.
3. The district court found that, during the parties' separation, wife spent $18,550 more than she would have spent if, each month during the separation, she spent the amount the judgment found to be her monthly expenses. The district court then reduced wife's property award by $18,550, including $11,500 for attorney fees she spent during the separation. Wife challenges the reduction, noting there was no finding that, under Minn. Stat. § 518.58, subd. 1a (2002), she wrongfully transferred, encumbered, concealed, or disposed of assets. Under that statute, the district court "shall" compensate a party if the district court finds that, during or in contemplation of a dissolution, the party's spouse "transferred, encumbered, concealed, or disposed of marital assets except in the usual course of business or for the necessities of life[.]" (Emphasis added).
Here, wife does not have a business and the finding that she spent more than suggested by her monthly expenses indicates that she did not spend the disputed amounts for "necessities of life." This inference is consistent with the allegations that wife's spending included certain questionable "medical" expenses. Moreover, to the extent wife alleges that, under Minn. Stat. § 518.091 (a) (2002), the district court should have considered her spending on attorney fees to be legitimate and hence not required her to reimburse the marital estate for amounts she spent on the dissolution, her argument is inconsistent with the district court's finding that each party should pay their own attorney fees and with case law. See Thomas v. Thomas, 407 N.W.2d 124, 128 (Minn. App. 1987) (stating it was error to allow party to deplete marital funds to pay attorney fees without compensating other party in property distribution). Lastly, to the extent wife claims that she explained the reasons for her expenditures, the district court apparently rejected those explanations. See Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (stating appellate courts defer to district court credibility determinations). We affirm the district court's determination that wife is liable for what was found to be her overspending.
We note, however, that in adjusting the property division for the amount wife overspent during the separation, the district court reduced wife's property award by the amount of her overspending. Had wife not overspent, the amounts in question would have been part of the marital estate and wife would have (apparently) received about half of those amounts. Therefore, by reducing wife's property award by the entire amount of the overspending, the district court overstated the appropriate reduction of wife's property award. On remand, the district court should make any adjustment to the property award that is necessary to equitably account for wife's overspending.
Whether to reopen the record on remand shall be discretionary with the district court.
Affirmed in part, reversed in part, and remanded.