This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).








In re the Matter of:

Kathy Ann Murphy,

f/k/a Kathy Ann Miller, petitioner,





Daniel J. Miller,




Filed August 2, 2005


Parker, Judge*



Crow Wing County District Court

File No. FX-01-778



Thomas C. Pearson, Erickson, Pearson & Aanes, 319 South Sixth Street, P.O. Box 525, Brainerd, MN 56401 (for respondent)


Virginia J. Knudson, Borden, Steinbauer & Krueger, P.A., 302 South Sixth Street, P.O. Box 411, Brainerd, MN 56401 (for appellant)


            Considered and decided by Halbrooks, Presiding Judge; Minge, Judge; and Parker, Judge.

U N P U B L I S H E D   O P I N I O N


            Appellant-father Daniel Miller is a self-employed business owner who moved to decrease his child support obligation.  A child support magistrate (CSM) denied father’s motion, stating he had not shown a substantial change in circumstances making his existing support obligation unreasonable and unfair.  Father sought district court review of the CSM’s ruling, and the district court affirmed the CSM.  Father appeals, arguing that the CSM failed to make adequate findings of fact, made findings unsupported by the record, and should have reapportioned medical support based on changes in the relative incomes of father and respondent-mother Kathy Murphy.  We affirm. 


            When a district court affirms a CSM’s ruling, the CSM’s ruling becomes the ruling of the district court, and an appellate court reviews the district court’s ruling.  Kilpatrick v. Kilpatrick, 673 N.W.2d 528, 530 n.2 (Minn. App. 2004).  Generally, support may be modified if the moving party shows a substantial change in circumstances that renders the existing obligation unreasonable and unfair.  Minn. Stat. § 518.64, subd. 2 (2004) (changed circumstances and unfairness); Johnson v. Johnson, 304 Minn. 583, 584, 232 N.W.2d 204, 205 (1975) (burden of proof).  Whether to modify support is discretionary with the district court.  Moylan v. Moylan, 384 N.W.2d 859, 864 (Minn. 1986).  On appeal, a district court’s findings of fact are not set aside unless clearly erroneous, and a finding of net monthly income is affirmed if it has a reasonable basis in fact.  Minn. R. Civ. P. 52.01 (findings of fact); Strauch v. Strauch, 401 N.W.2d 444, 448 (Minn. App. 1987) (finding of net income).

            When, as here, a district court addresses the income of a self-employed support obligor, the district court may consider the obligor’s earning capacity and earnings history to determine his ability to comply with the support order.  LeTendre v. LeTendre, 388 N.W.2d 412, 416 (Minn. App. 1986).  Generally, use of earning capacity is appropriate if it is impracticable to determine the obligor’s actual income or if his actual income is unjustifiably self-limited.  Beede v. Law, 400 N.W.2d 831, 835 (Minn. App. 1987). 


            If applying the child-support guidelines to the parties’ current circumstances generates a support obligation at least 20% and $50 different from the existing obligation, it is presumed that there has been a substantial change in circumstances, and there is a rebuttable presumption that an existing support obligation is unreasonable and unfair.  Minn. Stat. § 518.64, subd. 2(b)(1).  To the extent father argues that his support obligation should have been modified because the district court found that the 20%/$50 differences existed here, we reject this argument.  The creation of presumptions under Minn. Stat. § 518.64, subd. 2(b)(1), requires application of the guidelines to the parties’ current financial circumstances to calculate a current guidelines support obligation.  Id. And a calculation of a guidelines support obligation requires a finding of net monthly income.  Minn. Stat. § 518.551, subd. 5(b) (2004).  Here, however, the district court concluded that it could not find father’s current net monthly income.  Therefore, his current guidelines support obligation could not be calculated, and the statutory presumptions could not be evaluated.

            Father asserts that his net monthly income is $1,288, notes that the guidelines support obligation for a support obligor with a $1,288 net monthly income and three children is $451, and argues that because the district court left his $1,100 monthly obligation in place, his current support obligation improperly deviates from the guidelines amount without the findings required by Minn. Stat. § 518.551, subd. 5(i) (2004).  The district court admitted that if support were based solely on the income father reported for tax purposes in 2003, his support obligation “would be reduced.”  The district court also stated, however, that father has “more than sufficient resources to pay the current support obligation[,] given the fact that almost all of his living expenses are paid by his business before determining his adjusted gross monthly income.”  Thus, the district court did not find father’s tax-related documentation and evidence to be an accurate representation of his financial circumstances for support purposes.  The rejection of father’s financial assertions is consistent with the challenges to the accuracy of many of those assertions made by mother, who, as former bookkeeper for father’s business, is thoroughly familiar with the business’s operations.  Cf. Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (stating that appellate courts defer to district court credibility determinations).

            The rejection of father’s financial assertions is also consistent with the law.  By statute, the income of a self-employed individual “is equal to gross receipts minus ordinary and necessary expenses” and includes in-kind payments received by the obligor in the course of self-employment if the payments reduce the obligor’s living expenses.  Minn. Stat. § 518.551, subd. 5b(f), 5(b)(1) (2004).  As a result, a self-employed support obligor’s income for tax purposes is not necessarily the same as his net monthly income for support purposes.  See Minn. Stat. § 518.551, subd. 5b(f) (stating “[n]et income under [the calculation used for self-employed support obligors] may be different from taxable income”); see also Minn. Stat. § 518.551, subd. 5(b) (defining “net income” for child-support purposes as total monthly income less amounts including, but not limited to, taxes).  Here, the district court found that father pays “almost all” of his household expenses except “food and clothing[,]” from his business account and that while father’s accountant makes “an 18% adjustment to account for personal use of these expense items, the fact remains that [father] has very little actual out-of-pocket living expenses other than his food expenses, attorney’s fees, and clothing.” To the extent father paid personal expenses from the business account “before determining his gross . . . monthly income[,]” father understated his income because those amounts should not have been considered as expenses in determining income for support purposes.

            Father argues that the record does not support the finding that he has limited out-of-pocket expenses and that the district court failed to consider some of his expenses.  But the relationship between father’s income and the expenses father alleges that the district court failed to consider, as well as father’s financial condition generally, is not well explained; the district court did not calculate or find father’s net monthly income, and did not otherwise make comprehensive findings regarding father’s financial circumstances.  Generally, inadequate findings require a remand of a support ruling.  Erickson v. Erickson, 385 N.W.2d 301, 303 (Minn. 1986).  On this record, however, the lack of a finding of father’s net monthly income, as well as much of the lack of clarity regarding father’s finances generally, is the result of financial evidence submitted by father that was incomplete or functionally deemed insufficient for child-support purposes.  And “[a] trial court is not required to make findings where the interested party fails to meet his burden to produce evidence on the issue.”  Farrar v. Farrar, 383 N.W.2d 436, 440 (Minn. App. 1986), review denied (Minn. May 22, 1996).  Therefore, the district court’s failure explicitly to find father’s net monthly income or make other findings does not require a remand here.  See Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 243 (Minn. App. 2003) (noting record evidence for amount of income attributed to party in child-support-modification context was “not conclusive, [but] a major reason for the limited support was [the party’s] failure to provide any credible evidence regarding her financial status” and that “[o]n appeal, a party cannot complain about a district court’s failure to rule in her favor when one of the reasons it did not do so [was] because that party failed to provide the district court with the evidence that would allow the district court to fully address the question”), review denied (Minn. Nov. 25, 2003).  

            Absent clear financial information, we affirm what is essentially a determination by the district court that father failed to carry his burden to show a substantial change in his ability to pay child support rendering his existing support obligation unreasonable and unfair.  Cf. Ferguson v. Ferguson, 357 N.W.2d 104, 108 (Minn. App. 1984) (stating “the opportunity for a self-employed person to support himself yet report a negligible income is too well known to require exposition”). 


            Generally, medical expenses for children are to be apportioned to the children’s parents in proportion to their net income.  Minn. Stat. § 518.171, subd. 1(d) (2004).  Here, father alleges that the district court should have revised the apportionment of the children’s medical expenses based on the changes in their relative incomes.  Because we affirm the district court’s determination that father has not shown a substantial change in his income rendering his support obligation unreasonable and unfair, we need not address this aspect of his argument. 


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