This opinion will be unpublished and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
Dakota County District Court
File No. F39215557
Cathryn C. Schmidt, Swaden Law Offices, Suite 550, 7301 Ohms Lane, Edina, MN 55439 (for respondent)
Kathleen M. Picotte Newman, Joani C. Moberg, Larkin,
Hoffman, Daly & Lindgren, Ltd., 1500
Considered and decided by Stoneburner, Presiding Judge; Willis, Judge; and Crippen, Judge.*
Appellant Morry Newell Rothstein moved for a reduction in or termination of his maintenance obligation to respondent Olivia Adrienne Rothstein, and respondent moved for an increase in maintenance. The district court increased appellant’s obligation, and this appeal followed. Appellant asserts that the district court failed to consider respondent’s full financial resources, overstated her expenses, understated her earning capacity, and overstated his ability to pay. Appellant also challenges the award of attorney fees to respondent. Because the district court failed to make findings regarding appellant’s income and expenses, we are unable to effectively review appellant’s ability to pay the maintenance or attorney fees awarded; therefore, we remand for additional findings.
The parties were married for approximately 31 years. The 1992 dissolution judgment was based on a marital-termination agreement and provided that respondent is entitled to permanent maintenance that will terminate only on the death of either party. The amount of maintenance was reserved, however, based on the fact that appellant had been disbarred from the practice of law and had substantial financial obligations.
When appellant became employed in 1992, he began to make voluntary payments to respondent for her support of $850 per month. By 1995, appellant was earning $86,000 gross annual income, and in 1996, the parties stipulated to the maintenance payments of $850 per month so long as appellant was making $1,000 per month payments on a tax obligation under the judgment, with the provision that respondent could move for an increase in maintenance without having to show changed circumstances.
In 2003, appellant’s position was eliminated when the company he worked for was bought by another company. Appellant received $445,770.99 net for redemption of phantom stock, and he had to sign a five-year non-compete agreement that, appellant asserts, limited his ability to find work in his field. In August 2003, appellant moved to modify or terminate his maintenance obligation based on his decision to retire and his claim that respondent no longer needs maintenance.
Respondent moved to increase maintenance and for attorney fees, asserting that she works two jobs, can barely cover her expenses, and is unable to retire while appellant is choosing not to work and has recovered to a living standard that exceeds the standard the parties enjoyed prior to the dissolution. Both parties claim that health problems limit their earning capacity.
The parties filed numerous affidavits and were deposed. After a hearing on the motions, the district court denied appellant’s motion and granted respondent’s motion, increasing maintenance to $1,000 per month and awarding respondent $3,500 in attorney fees. Appellant moved for amended findings or a new hearing. Respondent moved for attorney fees in connection with the motion and for an order finding appellant in contempt for failing to promptly pay attorney fees previously awarded. The district court characterized appellant’s motion as one for reconsideration and denied it, denied respondent’s motion for contempt, and awarded respondent an additional $500 in attorney fees. Appellant appeals both orders.
Respondent argues that the appeal is untimely because appellant’s motion for amended findings was actually a motion for reconsideration that did not extend the time for appeal under Minn. R. Civ. App. P. 104.01, subd. 2(b) (extending appeal period on filing of proper and timely motion for amended findings). But this argument was rejected by order dated November 2, 2004, when this court denied respondent’s motion to dismiss the appeal as untimely, and will not be addressed again here.
II. Modification of maintenance
court reviews a modification of maintenance under an abuse-of-discretion
standard. Kemp v. Kemp, 608 N.W.2d 916, 921 (
The parties agree that appellant’s motion is governed by Minn. Stat. § 518.64, subd. 2, which requires that appellant establish a change of circumstances that makes the current maintenance award unreasonable and unfair, but, because of the parties’ stipulation that respondent could seek an increase in spousal maintenance without having to demonstrate substantially changed circumstances that make the current award unreasonable and unfair, respondent’s motion for increased maintenance is governed by Minn. Stat. § 518.552 (2004), which sets out the factors to be considered in an initial award of maintenance.
Appellant first argues that the district court failed to consider all of respondent’s financial resources and her ability to meet her needs without maintenance. We disagree. The district court found that respondent’s net monthly income from both jobs is $1,777 and her necessary monthly living expenses are $2,626, not including rent and utilities, which are currently paid by the person with whom she lives. Respondent has a monthly shortfall of $849 per month. The record supports the district court’s finding that respondent’s monthly expenses are reasonable considering the lifestyle of the parties during the marriage and the demands of respondent’s jobs that she dress well, and the district court appropriately excluded expenses for items that are paid by respondent’s significant other.
next argues that the district court understated respondent’s earning
capacity. The district court must
consider whether a spouse seeking maintenance is unable to provide adequate
self-support through appropriate employment.
Appellant asserts that the district court erroneously concluded that he is able to meet his own needs and pay spousal maintenance of $1,000 per month to respondent. Appellant argues that the district court wrongly imputed income to him, made a retroactive maintenance modification, and wrongly considered his assets.
The district court found that appellant’s income averaged $91,849.40 in the five-year period between 1998 and 2002 and he received $458,951 net as a settlement when his job was eliminated, plus an additional $78,237 gross, plus interest. The district court also found that appellant has a retirement account with a balance of $8,705.64, an IRA with a balance of $94,535.73, and appellant’s accountant projected that appellant would have monthly investment income of $1,783, plus $1,668 per month in social-security
benefits. At oral argument, the parties agreed that
appellant’s current income is the sum of his investment and social-security
income, but the district court did not make a finding on appellant’s net
monthly income. In its conclusions of
law, the district court referred to appellant’s investment income, social
security income, $500,000 in assets, and the $782,368 gross lump-sum payment
from his former employer to conclude that appellant is able to pay increased
maintenance of $1,000 per month. But the
principal that yields investment income cannot be also counted as income, and
it is not clear how appellant’s assets relate to income. The district court found that appellant,
despite his claimed health problems, is not disabled and is able to work, but
the district court did not find that appellant has retired in bad faith and did
not explicitly impute income to him. And
the district court failed to find appellant’s reasonable monthly expenses, only
noting that appellant “claims” $3,440 in monthly expenses and these expenses
are “unverified.” Without a finding on
net income and reasonable expenses, the district court’s finding that appellant
has the ability to pay maintenance of $1,000 per month is not supported by the
evidence, and we are unable to meaningfully review the issue of appellant’s ability
to pay existing or increased maintenance.
See Stich v. Stich, 435 N.W.2d
52, 53 (
III. Award of attorney fees to respondent
The district court appears to have made an award of both need-based and conduct-based attorney fees under Minn. Stat. § 518.14 (2004) without delineating the amount attributed to each factor. Although an award of attorney fees “rests almost entirely within the discretion of the trial court and will not be disturbed absent a clear abuse of discretion,” need-based fees can only be awarded when the party ordered to pay the fees has the ability to pay the fees, and the party to whom fees are to be paid does not have the means to pay them. Minn. Stat. § 518.14, subd. 1(2) and (3) (2004). The failure to make findings on appellant’s income and expenses also prevents our meaningful review of appellant’s ability to pay need-based attorney fees. And because the district court did not segregate the amount of conduct-based fees from need-based fees, we are unable to separately review the propriety of the award of conduct-based fees. On remand, the district court must make findings on appellant’s ability to pay need-based fees and specify the amount of need-based and conduct-based fees.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
 We find no merit to the assertion that the district court made a retroactive award of maintenance. The district court merely noted that respondent had not previously moved for an increase in maintenance despite appellant’s apparent ability to pay increased maintenance prior to her current motion.
 Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn. App. 1998) (quotation omitted), review denied (Minn. Feb. 18, 1999).