This opinion will be unpublished and

may not be cited except as provided by

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








In Re: Judith K. Miller, n/k/a Judith K. Nolte, petitioner,





Robert H. Miller,




Filed December 7, 2004


Robert H. Schumacher, Judge


Hennepin County District Court

File No. DW213393



Lori A. McLaughlin, Wagner, Falconer & Judd, Ltd., 3500 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondent)


Robert H. Miller, W12021 757th Avenue, River Falls, MN 54022 (pro se appellant)



            Considered and decided by Schumacher, Presiding Judge; Minge, Judge; and Crippen, Judge.*

U N P U B L I S H E D   O P I N I O N


            Husband-appellant Robert H. Miller challenges the district court's order requiring him to reimburse wife-respondent Judith K. Miller, n/k/a Judith K. Nolte, for back taxes owed by a corporation jointly owned by the parties.  Husband argues the reimbursement was unwarranted because wife failed to contest her tax liability as calculated by the IRS, the district court impermissibly reopened the judgment and decree, and wife failed to comply with the Minnesota Rules of General Practice.  We affirm.


The parties were married in 1973 and their marriage was dissolved pursuant to a stipulated marital termination agreement incorporated into a judgment and decree entered in August 1996.  At the time of the divorce, the parties co-owned Elasto Cast, Inc.  The marital termination agreement required the parties to sell Elasto Cast by December 31, 1996.  Until the sale, husband was to operate the business and receive all the proceeds.

At all times relevant to this appeal, wife had no involvement in operating the business or preparing its tax returns, and she received no income from the business.  The marital termination agreement made husband responsible for preparing the business's 1996 state and federal income tax returns.  The marital termination agreement did not specifically address tax liability but provided each party was responsible for debts incurred by that party. 

            Husband sold Elasto Cast in January 1997.  From January 1999 through August 2000, the Internal Revenue Service audited Elasto Cast and determined that as a 50% shareholder in Elasto Cast, wife should have reported half of the business's profits on her personal tax returns filed in 1996 and 1997.  The IRS concluded wife owed approximately $10,000 in back federal taxes; the Minnesota Department of Revenue also determined wife owed back state taxes.  Wife unsuccessfully protested the audit results in an October 2000 letter to the IRS.  The IRS issued wife a notice of deficiency informing her of her obligation to pay the taxes; the notice also stated wife had 90 days to challenge the IRS determination of taxes owed in federal tax court.  Wife chose not to bring a challenge in tax court.  Instead, she agreed to a payment schedule to pay the taxes and moved the district court to require husband to reimburse her. 

            By an August 2001 order, the district court ordered the parties to work with the corporate accountant who prepared the 1996 and 1997 Elasto Cast tax returns to attempt to resolve the tax debt issue with the IRS.  The court reasoned it would be unfair for wife to have to pay income taxes on 1996 and 1997 Elasto Cast income received exclusively by husband.  The court reserved a decision on wife's reimbursement request pending the outcome of the attempt to resolve the matter with the IRS.  Acting consistently with the district court's directives, wife and the accountant reached a compromise with the IRS with respect to the 1997 tax return, but the IRS rejected wife's offer of compromise with respect to the 1996 return.  Wife subsequently renewed her motion for reimbursement in district court, stating she owed a total of approximately $13,000, plus interest and penalties, in federal and state taxes for the 1996 tax year. 

The court granted the motion, ordering husband to reimburse wife approximately $7,800 already paid and to reimburse her the approximately $300 per month she is required to pay until her 1996 federal and state taxes on Elasto Cast profits are paid in full.  The court specifically found wife's tax arrears arose out of husband's operation of Elasto Cast and the resulting tax consequences, wife received no income from the business and had no involvement in operating the business or the preparation of the tax returns, and since the arrears were incurred by husband's preparation of the 1996 tax returns, the debt was husband's and – consistent with the judgment and decree – must be borne by husband.  The court rejected husband's argument wife was responsible for aggravating the amount of arrears because she failed to contest the IRS's determination of her liability in tax court. 


1.         Husband challenges the district court's decision that he was responsible for the tax debt arising from the 1996 Elasto Cast tax return.  He is in effect arguing the district court abused its discretion by failing to find wife responsible for the 1996 tax arrears in light of her failure to contest the notice of deficiency in tax court.  He maintains wife's failure to respond diligently to the deficiency notice aggravated the amount of arrears.  But the district court found wife reacted sufficiently when she brought the motion in district court seeking reimbursement.  The court further found husband failed to show that wife could have reduced the amount of the deficiency determination had she brought the challenge in tax court.  These findings are not clearly erroneous.

The record demonstrates during the relevant period wife never had any control of Elasto Cast, never received any profits from the business, and played no role in preparing the business's taxes.  It is both equitable and consistent with the provision of the judgment and decree that each party is responsible for its own debt to hold husband liable for the arrears.  The district court properly concluded that husband's responsibility for the arrears was not reduced due to wife's failure to challenge the IRS in tax court.

2.         Husband argues for the first time on appeal (1) the district court impermissibly reopened the judgment and decree and shifted the burden of proof to him to show how the IRS determined wife had the ability to pay the 1996 tax arrears, and (2) wife could have changed the IRS's calculation of the arrears had she brought the matter before the federal tax court.  Issues not raised before the district court are generally waived on appeal.  Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1982). 

            Husband's argument on this point also lacks substantive merit.  Wife's motion for reimbursement neither requested nor required the district court to reopen the judgment and decree, which did not address the issue of tax liability but did provide that husband would prepare the Elasto Cast 1996 tax return and that each party would be responsible for his or her own debts.  Wife's motion requested the court to hold husband responsible for the Elasto Cast tax debts incurred while husband was operating and deriving income from the business.  By requiring husband to pay the arrears, the district court permissibly clarified and enforced the agreement's terms in a manner consistent with the marital termination agreement's debt-responsibility provision.  See Erickson v. Erickson, 452 N.W.2d 253, 255 (Minn. App. 1990) (stating although the "[district] court may not modify a division of property after the original judgment has been entered . . . [the court] may issue appropriate orders implementing or enforcing specific provisions of the dissolution decree"); Neubauer v. Neubauer, 433 N.W.2d 456, 461 n.1 (Minn. App. 1988) (observing district courts retain jurisdiction to apportion "omitted property" after judgment is entered), review denied (Minn. Mar. 17, 1989). 

            We further observe the district court is authorized to reopen a judgment and decree to correct a mistake of fact due to unforeseen circumstances.  Minn. Stat. § 518.145, subd. 2 (2002).  Here, the marital termination agreement does not contemplate wife will assume responsibility for any tax liability associated with Elasto Cast, and the district court therefore acted appropriately in correcting this unforeseen consequence of the property division.  See Harding v. Harding, 620 N.W.2d 920, 924 (Minn. App. 2001) (stating district court may reopen dissolution judgment where "injustice in the prospective application of a divorce decree is due to the development of circumstances substantially altering the information on a topic that was accepted earlier"), review denied (Minn. Apr. 17, 2001). 

            Husband's arguments with respect to burden-shifting are challenges to findings of fact by the district court that have support in the record and that we will therefore not disturb.  See Vangsness v. Vangsness, 607 N.W.2d 468, 474-75 n.1 (Minn. App. 2000).

3.         Husband argues the district court lacked authority to hear wife's motion because wife did not initiate a conference with him prior to the hearing to attempt to resolve their differences, as required by Minn. R. Gen. Pract. 303.03(c).  Husband did not raise this issue before the district court in any filing or court appearances since wife filed the first motion for reimbursement in March 2001 and has therefore waived it on appeal.  See Thiele, 425 N.W.2d at 582.  We also observe that after wife brought the March 2001 motion, she conferred extensively with  husband and the Elasto Cast accountant in an effort to reach a compromise with the IRS and resolve the tax-arrears issue as it concerned husband.


* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.