This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
In re Carol Mary Olson, petitioner,
Kermit Lee Olson,
Filed April 19, 2005
Anoka County District Court
File No. F1-02-7124
Jeffrey J. Storey, Storey Law Office, 277 Coon Rapids Boulevard, #310, Coon Rapids, MN 55433 (for respondent)
John A. Warchol, Warchol, Berndt & Hajek, P.A., 3433 Broadway Street NE, Suite 110, Minneapolis, MN 55413 (for appellant)
Considered and decided by Willis, Presiding Judge; Stoneburner, Judge; and Poritsky, Judge.*
U N P U B L I S H E D O P I N I O N
Appellant challenges (1) the district court’s determination of the amount of monthly spousal maintenance awarded to respondent, (2) the district court’s order denying appellant’s motion to modify spousal maintenance, and (3) the district court’s award of attorney fees to respondent. We conclude that the district court abused its discretion in determining spousal maintenance because it placed on appellant all of the risk of not being able to maintain the parties’ marital standard of living. We find no abuse of the district court’s discretion in the award of attorney fees to respondent in the dissolution action, but we conclude that the district court abused its discretion by awarding attorney fees to respondent for responding to appellant’s motion for modification. Therefore, we affirm in part, reverse in part, and remand.
Appellant Kermit Olson and respondent Carol Olson were married on August 22, 1970, and were separated in July 2002. They have three emancipated children.
On August 1, 2002, respondent petitioned for the dissolution of her marriage to appellant. Before trial, appellant agreed that respondent should receive permanent spousal maintenance. The only issues for resolution at trial were the amount of spousal maintenance, respondent’s request for attorney fees, and an issue relating to taxes on appellant’s 2002 bonus.
At the time of the trial, appellant was employed as a mechanical engineer at an architectural firm, and his net monthly income was $6,219.82, based on gross monthly income of $9,453.60. The district court determined that appellant’s reasonable monthly living expenses were $4,158.45. Appellant also receives an annual bonus that varies in amount from year to year. The district court calculated that the average bonus received by appellant for the seven years preceding trial was $70,000. In 2003, appellant received a bonus of $27,437.
At the time of trial, respondent was employed as a personal-care attendant, working approximately 18 hours per week and earning a net monthly income of $619.12. During the marriage, respondent was the primary caretaker for the parties’ children and did not have regular full-time employment. The district court determined that respondent’s reasonable monthly expenses were $4,856.37, and the parties agreed that she was incapable of meeting these expenses on her own.
The district court awarded respondent monthly spousal maintenance of $4,237.25. The district court acknowledged that appellant would experience a monthly shortfall of approximately $2,175.88 after paying maintenance and after paying his own expenses. But the district court concluded that appellant would be able to finance the shortfall “by continuing the parties’ practice of using credit cards to cover the shortfall and then paying these debts in full upon receipt of his annual bonus.” The district court reasoned that “[b]ased on [appellant’s] seven year average of $70,000 in bonus income, [he] will have excess annual income of over $43,000 after covering the shortfall.”
The district court also concluded that respondent had incurred $44,153 in attorney fees, that she had paid nearly half of that amount, and that “it is fair and equitable that [appellant] pay [respondent’s] remaining attorney’s fee in the amount of $22,620.73.” The district court concluded that respondent had incurred the fees in good faith, that she had no liquid assets from which to pay the attorney fees, and that appellant’s monthly income and his annual bonuses gave him the ability to contribute to respondent’s attorney fees.
In November 2003, appellant moved for amended findings of facts and conclusions of law or, in the alternative, a new trial. And in January 2004, appellant moved for modification of the spousal-maintenance award.
In March 2004, the district court issued an amended judgment. In May 2004, the district court denied the motion for modification of spousal maintenance and awarded respondent $2,250 in attorney fees for responding to the motion. This appeal follows.
Appellant argues that the district court abused its discretion in determining the amount of the spousal-maintenance award because the district court (1) failed to properly consider respondent’s ability to contribute to her own needs; (2) overstated respondent’s reasonable monthly expenses; and (3) exaggerated appellant’s ability to meet the spousal-maintenance award when it averaged his bonus income.
courts review a district court’s award of spousal maintenance for a clear abuse
of discretion. Dobrin v. Dobrin,
569 N.W.2d 199, 202 (
When determining the amount of a spousal-maintenance award, a district court must consider the following factors:
(a) the financial resources of the party seeking maintenance, including marital property apportioned to the party, and the party’s ability to meet needs independently . . . ;
(b) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, and the probability, given the party’s age and skills, of completing education or training and becoming fully or partially self-supporting;
(c) the standard of living established during the marriage;
(d) the duration of the marriage and, in the case of a homemaker, the length of absence from employment and the extent to which any education, skills, or experience have become outmoded and earning capacity has become permanently diminished;
(e) the loss of earnings, seniority, retirement benefits, and other employment opportunities forgone by the spouse seeking spousal maintenance;
(f) the age, and the physical and emotional condition of the spouse seeking maintenance;
(g) the ability of the spouse from whom maintenance is sought to meet needs while meeting those of the spouse seeking maintenance; and
(h) the contribution of each party in the acquisition, preservation, depreciation, or appreciation in the amount or value of the marital property, as well as the contribution of a spouse as a homemaker or in furtherance of the other party’s employment or business.
Minn. Stat. § 518.552, subd. 2 (2004). No single factor is dispositive, and a district court must weigh the facts of each case to determine whether the award of maintenance is appropriate. Weikle v. Weikle, 403 N.W.2d 682, 687 (Minn. App. 1987), review denied (Minn. June 30, 1987).
Appellant first argues that the district court failed to properly consider respondent’s ability to contribute to her own needs. The district court found that respondent was reasonably employed and that she had presented credible evidence from her expert vocational-rehabilitation counselor that she was earning a reasonable market wage considering her present education, work history, and skill level. Appellant argues that the district court should have taken into account respondent’s ability to work 35 hours per week, rather than the 18 hours that she was working at the time of trial.
order to impute income to a party for the purpose of setting maintenance, the
court must find that the party was voluntarily under employed in bad
faith.” Maurer v. Maurer, 607
N.W.2d 176, 180 (Minn. App. 2000), rev’d on other grounds, 623 N.W.2d 604
As a matter of law, however, a court may not find bad faith underemployment where . . . a homemaker has continued to work the same part-time hours at the time of dissolution as she did during the marriage, has been employed in the same type of position as she was during the marriage, and where there is no evidence of any intent to reduce income for the purposes of obtaining maintenance.
Carrick, 560 N.W.2d 407, 410 (
Appellant argues that because respondent earned more than $15,000 in 2000 and in 1999 and because both vocational-rehabilitation specialists testified that respondent is capable of working 35 hours per week, the district court should have considered the income that she was capable of earning, rather than the income that she was earning at the time of trial. But in Maurer, this court determined that the district court abused its discretion by imputing income to the appellant when it found that she was capable of working full-time and was only working 75% of full-time but did not make a finding that she was voluntarily underemployed in bad faith. 607 N.W.2d at 180-82.
Appellant does not allege that respondent is voluntarily underemployed in bad faith. There is no evidence that she intentionally remained in part-time employment to limit her income for the purpose of obtaining spousal maintenance. Because there is no allegation that respondent is underemployed in bad faith, we conclude that the district court did not abuse its discretion when it determined the amount of respondent’s income or when it refused to impute a 35-hour-per-week income to her.
Next, appellant argues that the district court overstated respondent’s need for spousal maintenance when it “inequitably and erroneously” determined her reasonable monthly living expenses. This court may not disturb the district court’s factual findings regarding the parties’ monthly expenses unless those findings are clearly erroneous. Gessner, 487 N.W.2d at 923. Here, appellant points out that the district court found disparate amounts to be reasonable expenses in certain similar categories in the parties’ respective monthly budgets. Although we might have decided the issues differently, we conclude that the district court’s findings regarding those expenses are not clearly erroneous.
Finally, appellant challenges the district court’s conclusion that he had the ability to pay $4,237.25 in monthly spousal maintenance. “In ordering maintenance, a court must consider not only one spouse’s needs, but also the other spouse’s ability to pay.” Kostelnik v. Kostelnik, 367 N.W.2d 665, 670 (Minn. App. 1985), review denied (Minn. July 26, 1985). The district court acknowledged that, based on appellant’s monthly income, he would experience a monthly shortfall of more than $2,000 after paying spousal maintenance and meeting his own monthly expenses. But the district court determined that appellant could make up for this shortfall by using credit cards, as was the family’s previous practice, and then paying the credit-card debt with his annual bonus.
mere fact that appellant faces a monthly deficit does not mean that the
district court abused its discretion. In
Ganyo v. Engen, this court determined that the amount of the
spousal-maintenance award was not an abuse of the district court’s discretion
although the appellant had a $201 shortfall each month after covering his
monthly personal expenses, the maintenance payment, and debt. 446 N.W.2d 683, 687 (
Neither does a district court necessarily abuse its discretion by averaging a party’s annual bonuses when calculating his or her income for spousal-maintenance purposes. This court has noted that “[b]onuses which provide a dependable source of income may properly be included in calculation of future income.” Lynch v. Lynch, 411 N.W.2d 263, 266 (Minn. App. 1987), review denied (Minn. Oct. 30, 1987).
But here, the amount of appellant’s annual bonus varies from year to year, sometimes significantly. Between 1996 and 2002, the seven-year period that the district court used to arrive at an average bonus for appellant, appellant’s largest bonus was 576% larger than his smallest bonus. And his pretax bonus for 2003, the first year after the period for which the average was calculated, was $42,563 below what the court determined was an “average” bonus and quite clearly would not produce enough net income to cover a year of monthly shortfalls as contemplated by the district court’s analysis. We conclude that using the average amount of appellant’s bonuses exaggerates his ability to pay both the monthly spousal-maintenance award and his own monthly expenses.
court has reversed spousal-maintenance awards when, “based on an analysis of
the obligor’s net income, we concluded the amount of the award was unreasonably
high.” Rask v. Rask, 445
N.W.2d 849, 854 (
Both parties should be
able to live at the standard of living that they were accustomed to during
their marriage, as far as it is possible.
“The purpose of a maintenance award is to
allow the recipient and the obligor to have a standard
of living that approximates the marital standard of living, as
closely as is equitable under the circumstances.” Peterka v. Peterka, 675 N.W.2d 353,
We conclude that the district court abused its discretion in determining how the amount of the spousal-maintenance award is to be paid. In cases such as this, when an obligor’s ability to pay a spousal-maintenance award rests on his receipt of annual bonuses and the amount of the bonuses fluctuates greatly, the maintenance award should be contingent on the actual annual income of the obligor. The issue is not necessarily the total annual amount of maintenance that the district court awarded to respondent; rather, it is the method of payment that the district court ordered. We conclude that it is not reasonable to expect appellant to pay the entire maintenance award out of his monthly earnings, finance his shortfalls by using credit cards, and pay the credit-card bill with his annual bonus, which may or may not be sufficient for the purpose.
Because we conclude that the district court abused its discretion in establishing maintenance, we remand for the district court to determine a spousal-maintenance award and manner of payment that is reasonable in light of appellant’s monthly income and that places on both parties a portion of the risk of having to sacrifice to some extent their marital standard of living by making part of the maintenance award contingent on the amount of appellant’s annual bonus. The district court may, in its discretion, reopen the record to receive additional evidence to assist it in making this determination.
Because of our decision on this issue, we do not separately address appellant’s motion to modify the amount of the maintenance award.
Appellant also challenges the attorney fees awarded to respondent in the amended judgment and the fees awarded for responding to his motion to modify the spousal-maintenance award. An award of attorney fees under Minn. Stat. § 518.14, subd. 1, “rests almost entirely within the discretion of the trial court and will not be disturbed absent a clear abuse of discretion.” Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn. App. 1998) (quotation omitted), review denied (Minn. Feb. 18, 1999).
The district court shall award attorney fees
in an amount necessary to enable a party to carry on or contest the proceeding, provided it finds: (1) that the fees are necessary for the good-faith assertion of the party’s rights in the proceeding and will not contribute unnecessarily to the length and expense of the proceeding; (2) that the party from whom fees, costs, and disbursements are sought has the means to pay them; and (3) that the party to whom fees, costs, and disbursements are awarded does not have the means to pay them.
Minn. Stat. § 518.14, subd. 1 (2004).
Here, the district court considered the statutory requirements in awarding attorney fees in the dissolution action. It determined that respondent had incurred $44,153 in attorney fees in a good-faith assertion of her rights in the dissolution action. She paid $19,979.27 of those fees and still owed $24,173.73. The district court also concluded that respondent had no liquid assets from which to pay her attorney fees and that her monthly income was insufficient to pay them. The district court concluded that, in light of appellant’s net monthly income of $6,219.82 and annual bonus payment, he had the ability to pay respondent’s attorney fees. The district court did not abuse its discretion by ordering appellant to pay respondent $22,620.73 for attorney fees.
The district court also awarded attorney fees to respondent for responding to appellant’s motion to modify the spousal-maintenance award based on the disparities of the parties’ incomes and because appellant had the ability to pay respondent’s fees. The district court did not consider respondent’s ability to pay these fees nor did it consider whether the attorney fees were necessary for respondent to contest the motion. We conclude that, without such findings, the attorney-fee award was an abuse of discretion. Therefore, we affirm the attorney-fee award for the underlying action, but we reverse the award of attorney fees to respondent with regard to the modification motion.
Affirmed in part, reversed in part, and remanded.
* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
 The gross annual bonuses received by appellant during the period from 1996 to 2002 were: (1) $23,772 in 1996; (2) $48,790 in 1997; (3) $43,967 in 1998; (4) $102,753 in 1999;(5) $136,952 in 2000; (6) $125,861 in 2001; and (7) $56,887 in 2002.