This opinion will be unpublished and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 Marriage of:
Mary Jane Chaignot, petitioner,
Edward Barton Chapin, Jr.,
Filed August 15, 2006
Affirmed in part, reversed in part, and remanded
Hennepin County District Court
File No. DC 280008
Denis E. Grande, Mackall, Crounse & Moore, PLC, 1400 AT&T Tower, 901 Marquette Avenue, Minneapolis, MN 55402 (for respondent)
Linda R. Allen, Sarah Westcott Bashiri, Butler, Huson & Allen, P.A., 2330 U.S. Bank Center, 101 Fifth Street East, St. Paul, MN 55101 (for appellant)
Considered and decided by Wright, Presiding Judge; Shumaker, Judge; and Ross, Judge.
U N P U B L I S H E D O P I N I O N
In this marriage-dissolution matter, appellant challenges several conclusions of the district court. We affirm the district court’s orders regarding the joint legal and physical custody of the parties’ minor child, the federal child-dependency tax exemption, the deferred sale and valuation of the marital homestead, and the division of rental income. We reverse its order for reimbursement of property taxes. We also reverse its calculation of appellant’s income, appellant’s nonmarital interest in the marital homestead, and its decision to exclude one debt from the division of marital property and remand for reconsideration of these three issues and, if necessary, a recalculation of the parties’ child-support obligations.
Appellant Edward Chapin, a self-employed consultant, and respondent Mary Jane Chaignot, the owner and operator of a senior-care facility, were married in May 1979 and have three children. In 2002, Chaignot petitioned for dissolution of the marriage. At that time, the parties’ youngest child was 13 years old; the older children were emancipated. Chapin and the child remained in the marital homestead, a duplex, of which one unit is rented to others. Chaignot moved into the basement of her senior-care facility.
In August 2003, after Chapin
expressed concern about the child staying with Chaignot at the facility because
of its patients, the district court permitted Chaignot to obtain financing of
$60,000 for the purchase of another home, using the marital homestead as
collateral. She then bought a home in
In October 2003, an evaluator completed a custody and parenting-time evaluation. The evaluation stated that the parties had reached agreements for joint legal and physical custody of the minor child and holiday and vacation parenting-time schedules. It also reported that the parties would rely on religious counselors to improve their communication and interaction. The evaluator recommended a parenting-time schedule for Chaignot during the school year, when the child resided with Chapin, and a schedule for Chapin during the summer.
The parties went to trial in July 2004 before a family-court referee, who then issued findings and an order in November 2004. Both parties moved the district court for amended findings, and the court ordered the motions to be heard by the original referee. In April 2005, the referee denied the parties’ requests with two exceptions irrelevant to the issues on appeal. Chaignot again requested review of the referee’s findings, and the district court issued amended findings and an order in August 2005, then issued revised amended findings and an order two days later. Chapin now appeals from the revised amended findings and order.
D E C I S I O N
As a preliminary matter, Chapin
argues that the district court, in reviewing the referee’s findings, should
have deferred to the referee’s credibility determinations. But “[p]arties in family court matters are
entitled to independent review by a family court judge,” and the district court
can adopt, modify, or reject the referee’s findings. Thompson
v. Thompson, 385 N.W.2d 55, 57 (
1. Joint Physical Custody
Chapin argues that the parties are
unable to cooperate and that the district court abused its discretion by awarding
joint physical custody of their minor child.
The district court has broad discretion to determine child custody. Durkin
v. Hinich, 442 N.W.2d 148, 151 (
“Joint physical custody . . . is
not a preferred arrangement.” Wopata v. Wopata, 498 N.W.2d 478, 482 (
The district court made findings regarding the best-interests and joint-custody factors required by section 518.17. It found that the child preferred to live with both parents, that the parties have “equally intimate” relationships with the child, that both parents have stable residences, that each parent provides “ample and nearly equivalent love and affection,” and that no reason exists “to believe that the parents cannot cooperate and ensure that they each will continue to have frequent and continuing contact with the child.” Additionally, the district court found that the parents are “capable and willing to abide by court orders in their child’s best interests”; that their desire to mediate disputes through a religious counselor is not “too cumbersome”; that the parties bring different but equally important skills, viewpoints, and values to their minor child; and that they have been cooperating on a parenting-time schedule.
The record supports these findings. The evaluator reported that the parties “reached many agreements including a holiday schedule, vacations and sharing legal and physical custody.” Both parties indicated that they can cooperatively make major decisions regarding the child’s religion and assured that the other party would have “frequent and continuing contact” with the child. The evaluator did not observe that either party interfered in the other’s parenting time. Although the evaluator was concerned that Chaignot’s “bitterness” towards Chapin might lead to a refusal to cooperate, the evaluator determined that the parties have the ability to cooperate and recommended a highly specific parenting-time schedule to overcome this potential for conflict. The evaluator further determined that the parties can cooperatively make major decisions about the child because of their shared religious and medical beliefs and that the parties have no conflict regarding the child’s schooling and culture. The evaluator concluded that Chapin and Chaignot have “an ability to cooperate that supports sharing legal and physical custody.”
The minor child also prefers to live with both parents. According to the evaluator, the child wants to live with Chapin during the school year but also wants to “spend lots of time” with Chaignot. In an in-camera proceeding before the referee, the child testified that he prefers to live with each of his parents. He also testified that each of the parties’ homes is “good” and that he has adjusted to living in both places. Chaignot testified that she and Chapin have a contentious relationship and, at times, have difficulties in communicating but also testified that the relationship is not “that bad if you take away all the hassling phone calls of the pick up and drop off times.” Because the record supports a finding that the parents have the ability to cooperate if they choose to do so regarding the child, and because the child prefers to live with both parents, the district court did not abuse its discretion by ordering joint physical custody. It is apparent that the parties’ contentiousness is a matter of choice and reflects their unwillingness to set aside their differences for the benefit of raising a healthy and happy child.
Chapin contends that the evaluator’s report should be ignored because the district court “mistakenly” relies on it. He contends that the parties “no longer support” the parenting-time agreement identified in the report because Chaignot requested deviations from the agreement for visitation. But this argument ignores the evaluator’s overall impression that the parties could cooperatively raise the child despite their differences, evidence that supports the district court’s award of joint physical custody.
Chapin also argues that awarding joint physical custody is an abuse of discretion because the evaluator believes that Chaignot will focus more on her “emotional connection with [the child] than on what is in [the child’s] best interest in this area.” But Chapin takes the evaluator’s statement out of context. The evaluator’s conclusion relates to the child’s likely desire to spend less time with both parents as he grows older, not, as Chapin asserts, to Chaignot’s intent to “maintain a selfish emotional tie to the minor child.” The evaluator qualifies his belief with the term “in this area,” which indicates that Chaignot will focus more on the mother-child relationship than on the child’s desire for increasing independence. This opinion is not a reflection of an inability to parent, and it does not disqualify the evaluator’s finding that the parties are able to cooperate regarding the child’s best interests.
2. Child Support
a. Hortis/Valento Calculation
Chapin argues that the district
court abused its discretion by awarding child support according to the Hortis/Valento formula. The district court calculated each parent’s
child-support obligation according to the statutory guidelines, reduced each
obligation for the time that the child was with the other parent, offset the
respective obligations, and ordered Chaignot to pay Chapin monthly
support. Chapin’s argument, however, is incorrectly
premised on the conclusion that the district court abused its discretion by
ordering joint physical custody. The
district court did not abuse its discretion, and its use of the Hortis/Valento formula is correct. See
Schlichting v. Paulus, 632 N.W.2d 790, 792-93 (
b. Chapin’s Income
Chapin next argues that the district
court erred by using his gross business receipts rather than his individual
income-tax filings to determine his income.
A determination of the amount of an obligor’s income for purposes of
child support is a finding of fact and will not be altered on appeal unless
clearly erroneous. Ludwigson v. Ludwigson, 642 N.W.2d 441, 446 (
The district court calculated
Chapin’s income from deposits made into the checking account of his business,
The district court found that gross
deposits into the
Chapin also complains that the district court did not account for self-employment taxes when it calculated his net income. The district court reduced Chapin’s gross monthly income by 28%, which it found to be the proper tax deduction. In his prehearing statement, Chapin estimated his gross monthly income to be $3,230, and he deducted $858 for tax withholdings and FICA. This calculates to an overall tax deduction of 26.5%. The district court did not abuse its discretion using a 28% tax deduction.
Chapin further argues that the
district court erred by not accounting for his business expenses when it
determined his net monthly income. We
agree. Self-employment income equals “gross
receipts minus ordinary and necessary expenses.” Minn. Stat. § 518.551, subd. 5b(f). The district court made no finding regarding
Chapin’s ordinary and necessary self-employment expenses, even though (1) his
tax documents claimed business expenses and (2) the court reduced Chaignot’s
gross income by 75% for her claimed business expenses. The district court properly determined that
the parties’ individual tax filings were not reflective of their true
incomes. And although the district court
can, in its discretion, ignore expenses claimed on tax filings, its failure to
make any finding regarding Chapin’s
business expenses prevents us from meaningfully reviewing this issue and results
in a failure of factual support for the decision. See
c. Child-Dependency Tax Exemption
Chapin next argues that the federal
child-dependency tax exemption, which the district court ordered that the
parties alternate, should have been exclusively awarded to him because the
child resides with Chapin more than Chaignot.
Allocation of the exemption is within the district court’s discretion. Ludwigson,
642 N.W.2d at 449. The Internal Revenue
Code provides that the parent with primary custody of the minor child is
entitled to claim the child as a dependent for tax purposes.
3. Division of Marital Property
Chapin makes several arguments that
the district court abused its discretion when it divided the marital property. “District courts have broad discretion over
the division of marital property and appellate courts will not alter a district
court’s property division absent a clear abuse of discretion or an erroneous
application of the law.” Sirek v. Sirek, 693 N.W.2d 896, 898 (
Rather than determining the value of
the homestead, the district court ordered that it be sold after the minor child
graduated from high school and the proceeds split between the parties. Chapin contends that this is an abuse of
b. Rental Property
Chapin next argues that awarding Chaignot rental income derived from the marital homestead is an abuse of discretion. The district court determined that one-third of the gross rental income be reserved for expenses related to the rental unit and awarded each party one-half of the net rental income. Under its order, Chapin could request that Chaignot pay one-half of any additional expense, provided that it was documented and subject to an accounting. Because sale of the homestead was deferred until the emancipation of the parties’ youngest child, the district court concluded that “the homestead and the rental income from the homestead remain marital property pursuant to Minn. Stat. § 518.54, subd. 5 – the future sale date being the valuation date of the property.”
Rent collected from the homestead
after dissolution proceedings commence is marital property under Minn. Stat.
§ 518.54, subd. 5. Wanglie v. Wanglie, 356 N.W.2d 850,
Chapin also claims that the district court “arbitrarily decid[ed] that one-third of the rent received each month would cover normal expenses.” But the district court’s order requires that Chaignot pay one-half of additional expenses related to the rental property. Therefore, the order covers all expenses related to the rental property and is not as static as Chapin argues.
Chapin further contends that he should receive all of the rental income because he was awarded “all right, title, and interest” in the marital homestead, as well as “sole responsibility for maintaining the property,” and because rental income is the primary means of maintaining the homestead’s mortgage. The district court, however, determined that rental income from the homestead remained marital property until the homestead was sold. The district court can select any date for valuation of marital property, provided it makes specific findings that the date is fair and equitable. Minn. Stat. § 518.58, subd. 1 (2004). Here, because of the disparity between the value estimates submitted by the parties, the district court found that the date of the sale of the homestead would accurately reveal its value. It also ordered that Chaignot, while receiving a portion of the rental income, would also be responsible for a portion of the expenses. From these facts we cannot conclude that this distribution was unfair and inequitable, and the district court did not abuse its discretion by awarding Chaignot one-half of the net rental income.
c. Chaignot’s Residence
Chapin next argues that the district
court abused its discretion by awarding Chaignot the equity in her Brooklyn
Park residence, asserting that it was acquired while the parties were still
married using the marital homestead as collateral and while he paid Chaignot
maintenance. In August 2003, a referee
granted Chaignot’s request to obtain $60,000 from her portion of the marital
homestead’s equity to purchase her own home.
Chaignot then obtained financing with that money, using her new home and
the parties’ marital homestead to secure the loan. The district court found that Chaignot
“Whether property is marital or
nonmarital is a question of law, but a reviewing court must defer to the trial
court’s underlying findings of fact.” Olsen v. Olsen, 562 N.W.2d 797, 800 (
The record does not show that there
was a prehearing settlement conference. Chaignot
Interests in Marital
The district court found that Chaignot provided $10,000 for the purchase of the homestead, which occurred before the parties married, and Chapin provided $3,300 in cash and a contract for deed worth $8,700. It determined that Chapin’s $3,300 was a nonmarital contribution but that the contract for deed was paid off during the marriage and, therefore, was marital. Chapin argues that this determination of his nonmarital interest is unsupported by the evidence. We will affirm the district court’s finding unless it is clearly erroneous. Thompson, 385 N.W.2d at 57.
At trial, Chaignot first testified that she could not remember how much money Chapin put down for the purchase of the homestead. When asked again, she responded that it was $12,000. On cross-examination, she testified that part of Chapin’s down payment was a contract for deed but that she did not know whether the contract for deed was “part of the [$12,000] or outside the [$12,000].” In a deposition before trial, Chaignot stated that she did not know if Chapin’s $12,000 contribution included a contract for deed. But she also said that she knew that Chapin was “short for the down payment” and that “there was also a contract for deed at the last minute” for either $6,700 or $8,700. Chapin argues that his entire $12,000 contribution is nonmarital. The 1977 purchase agreement for the marital homestead indicates that $22,000 was provided at closing, which included “$8,700.00 . . . by a contract for deed payable in monthly installments of $100.00 commencing on the 1st day of June 1977.”
While the parties’ testimony is conflicting,
we review the record in the light most favorable to the district court’s
findings. Lossing, 403 N.W.2d at 690.
We do not reweigh conflicting evidence on appeal. Vangsness,
607 N.W.2d at 475. Chaignot’s testimony
and the purchase agreement provide sufficient evidence to support the district
court’s finding that the contract for deed was worth $8,700. But the district court made no finding
regarding the payments made on the contract for deed. Real or personal property acquired before
marriage is nonmarital.
e. Present Dollar Value of Nonmarital Interests
Chapin further contends that the
district court erred by failing to calculate the present dollar value of each party’s
nonmarital contribution to the homestead, a consequence of its decision to
order a deferred sale. The district
court determined that Chaignot’s nonmarital contribution was 11.78% of the
home’s value and that Chapin’s nonmarital contribution was 3.8%. The district court then ordered that a
“credit to each party for an amount equal to their respective non-marital
interests in the homestead” be subtracted from the gross proceeds of the
homestead after its future sale. “The
present value of a nonmarital asset used in the acquisition of marital property
is the proportion the net equity or contribution at the time of acquisition
bore to the value of the property at the time of purchase multiplied by the
value of the property at the time of separation.” Brown
v. Brown, 316 N.W.2d 552, 553 (
f. Real-Estate Taxes
Chapin also argues that the district
court abused its discretion by reimbursing Chaignot $6,500 paid during the
marriage for real-estate taxes on Chapin’s nonmarital property in northern
conclusion is supported by three features of our dissolution laws. First, the property-division statute requires
“a just and equitable division of the marital property of the parties.”
even though the district court has discretion to divide the marital estate,
to permit reimbursements for ordinary expenses would circumvent the method our
courts have adopted regarding increases to the value of nonmarital
property. “Passive” appreciation of
nonmarital property, which arises from something other than the effort of the
parties, retains its character as nonmarital property.
g. Retirement Assets
Chapin’s final argument regarding marital property is that the district court abused its discretion by “improperly accounting” for Chaignot’s retirement assets. He appears to argue that the district court abused its discretion by ordering Chaignot to pay him one-half of the net value of her IRA account rather than subtracting this amount from money Chapin already owed Chaignot. Given the district court’s broad discretion to divide the marital estate, Chapin’s argument is unpersuasive and without legal authority, and the court did not abuse its discretion.
At trial, Chapin presented a “debt fact sheet” purportedly showing that between 1983 and 1995, he and Chaignot borrowed money from friends for education and personal expenses and owed money to various attorneys for legal expenses. With interest, Chapin calculated that the parties’ debt exceeded $380,000. The district court determined that the debts were legally unenforceable because they are barred by various statutes of limitations and refused to include them in its property division. Chapin now argues that every debt, with one exception, is enforceable and that the district court abused its discretion by not dividing them.
apportionment of debt in a dissolution proceeding is treated as part of the
property division. Korf v. Korf, 553 N.W.2d 706, 712 (
a six-year statute of limitations applies to contract actions.
At trial, Chapin produced notes related to four of the alleged debts. The first note, dated September 20, 1991, evidences a $4,000 loan from “Direct Steel Inc.” The term of the loan is “[d]emand,” and the note does not otherwise indicate a definite date for repayment. Chapin testified that he is not currently paying his debts and that on most of them he has never paid any money. The record contains no evidence that Chapin has ever paid principal or interest on this loan from Direct Steel or that Direct Steel has demanded payment. Because he has not paid principle or interest for a period of ten continuous years, Direct Steel is barred from enforcing this note under section 336.3-118(b), and the district court did not abuse its discretion.
second note represents a $17,000 loan that Chapin obtained from Robert
Pratt. The note is dated August 23,
1994, states that annual interest of 10% will be charged, and that “interest
only” is payable annually. The note also
states that it is due on August 23, 1997.
This debt provides for a specific time at which it is due, and enforcement
is barred six years after this due date.
The third note shows that Chapin borrowed $10,000 from Mary Ed Bol on May 18, 1992. The term of the note is six months. Chapin promised to pay Bol, beginning on May 18, 1992, and “continuing until the Promissory note is fully paid, interest on the outstanding balance at the rate of ten percent (10%) per annum, with an interest payment due on . . . August 18, 1992.” The record indicates that Chapin made an interest payment of $250 in August 1992 but made no other payments. In August 2001, Bol’s attorney sent Chapin a letter “to collect on a Promissory Note.” But the note states that it was due six months after its making in November 1992. The note is unenforceable because Bol did not bring an action within six years after its due date, and the district court did not abuse its discretion.
final note was signed and notarized on April 8, 1998, in which Chapin promises
to pay attorney Frank Mabley a principal balance of approximately $77,000 “due and
payable on or before August 2002 together with interest at 7%.” The note states that it “replaces the earlier
note dated September 24, 1990, and is given in exchange for it.” Because the 1998 note required payment by
August 2002, Mabley has until August 2008 to commence an action to enforce this
argues that when Chapin signed the 1998 note to Frank Mabley, enforcement of
the original 1990 note was barred by the statute of limitations and that,
therefore, the 1998 note is an unenforceable contract because it was signed
without consideration. Chaignot is
incorrect. “[T]he running of a statute
of limitations on a debt does not extinguish the debt but merely bars the
remedy for the recovery of the debt.”
Jay M. Zitter, Annotation, Necessity
and Sufficiency, In Order to Toll Statute of Limitations as to Debt, of
Statement of Amount of Debt in Acknowledgment or New Promise to Pay, 21
A.L.R. 4th 1121, 1124 (1983). An
acknowledgment of a debt tolls the statute of limitations and starts it running
anew on the date of the acknowledgment. Reconstruction Fin. Corp. v. Osven, 207
Chapin provides no promissory notes for the remaining debts that he claims. These purported debts are controlled by the general six-year statute of limitation. See Minn. Stat. § 541.05, subd. 1(1). Chapin testified that the debts were not incurred within the last six years, that he is not currently paying the debts, and that on most of them he has never paid any money. Enforcement of these debts is now barred by the general statute, and the district court did not abuse its discretion by excluding them from the marital-property division.
Affirmed in part, reversed in part, and remanded.
It appears that the district court, when calculating the 2003 deposits into the
Chapin’s view of the case law regarding the ordering of the sale of a homestead
is misguided. Citing Goar, he argues that a deferred sale is appropriate
when the homestead is the only substantial asset of the parties, neither party
can afford to maintain it, and neither can pay the other party his or her share
of the marital equity. Chapin contends
that the district court abused its discretion because the decision to sell the
homestead “was not based upon extraordinary circumstances.” But Goar
involved the immediate sale of a homestead.
Goar, 368 N.W.2d at 351. This court concluded that the district court
abused its discretion in Goar because
it made no finding regarding the impact that an immediate sale would have on
the parties and on the best interests of the minor children.