This opinion will be unpublished and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 the Matter of:
Kathy Ann Murphy,
f/k/a Kathy Ann Miller, petitioner,
Daniel J. Miller,
Filed August 2, 2005
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.
D E C I S I O N
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
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 (
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.
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
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,
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,
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.