This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2006).
IN COURT OF APPEALS
In re the Marriage of:
Sandra Dawn Schaefer, petitioner,
Michael Paul Schaefer,
Filed April 10, 2007
Affirmed in part, reversed in part, and remanded
Dissenting, Randall, Judge
Dakota County District Court
File No. F7-04-10031
Considered and decided by Lansing, Presiding Judge; Randall, Judge; and Peterson, Judge.
U N P U B L I S H E D O P I N I O N
On appeal in this dissolution matter, appellant-husband challenges the district court’s determination of maintenance, arguing that the court failed to consider the liquid nature of respondent-wife’s property settlement and that notwithstanding wife’s disability, given the short duration of the marriage, the court erred in awarding permanent maintenance. Husband also argues that the district court failed to adequately address the parties’ nonmarital interests in certain assets and erred in awarding attorney fees to wife. We affirm in part, reverse in part, and remand.
At the time of the dissolution, wife was 45 years old, and husband was 46. Husband was employed as an executive director of Catholic Finance Corporation, earning a gross monthly income of $10,439.58 during the first half of 2005. Effective July 1, 2005, husband received a raise of about $25,000 per year. In addition to his salary, husband had the use of a company vehicle, for which the company paid all associated costs, and husband reimbursed the company for personal mileage. On June 30, 2005, husband received a bonus in the gross amount of $25,055 and the net amount of $13,569.64. In addition to his employment with Catholic Finance, since 2000, husband has operated a business called Parking Finance Advisors. Parking Finance’s gross revenues were $24,863 in 2003 and $35,679.53 in 2004. Husband testified that Parking Finance had no income in 2000 and a negative income in 2001. Husband testified that the revenues received in 2003 and 2004 resulted from him serving as an expert witness in a lawsuit; in 2003, Parking Finance performed three feasibility studies for its main client, earning $3,500 per study; and the main client had no work for Parking Finance during the preceding two years.
Wife was self-employed as a court reporter from 1992 through 2000. In August 2000, wife obtained employment as a legal assistant at a law firm, and she advanced to the position of supervisor of a staff of about 12 legal secretaries. After suffering a stress-related panic-and-anxiety attack in October 2002, wife received short-term-disability income through her employment. Wife attempted to return to the law firm early in 2003 but was unable to perform her duties and was asked to leave the law firm. Wife continued receiving short-term-disability income until April 2003, when she qualified for and received long-term-disability income provided through her employment. After coverage under wife’s long-term-disability insurance expired in April 2005, the Social Security Administration approved her application for disability benefits.
The district court found:
That [wife] has been diagnosed with, and continues to suffer from,
anxiety-panic disorder, major depression, post-traumatic stress disorder
(PTSD), and migraine headaches. [Wife]
has been seen consistently by a single treating psychologist, generally twice
weekly, since her discharge from
40. That [wife] continues to suffer from recurring and severe panic attacks in times of stress. [Wife] testified that memory loss accompanies a panic attack, and that she attempts to avoid situations that “trigger” panic attacks. When such attacks occur or are impending, she must treat them with prescription medication to alleviate their effects.
. . . .
44. That because of [wife’s] disability, it is not reasonable to expect her to be able to acquire sufficient education or training to enable her to find employment. [Wife] is suitably educated and trained; she simply is unable to make use of that education and training because of her disability.
The district court awarded wife $3,000 per month in permanent spousal maintenance. Both parties owned homes before the marriage. Wife sold her home, and the parties lived in husband’s home during the marriage. Wife received net proceeds of more than $80,000 from the sale of her home. Of that amount, wife deposited $70,000 into an account held by husband and his father. Both parties contributed to improvements to the marital home during the marriage, and the home was sold before trial for about $470,000, which yielded net proceeds of about $212,000. Before trial, husband claimed a 20% nonmarital interest in his home, which equaled $80,000. At trial, husband claimed a 30% nonmarital interest. The district court awarded wife $100,000 from the proceeds of the sale.
D E C I S I O N
courts review a district court’s maintenance award under an abuse-of-discretion
standard. Dobrin v. Dobrin, 569 N.W.2d 199, 202 (
Spousal maintenance may be granted when the district court finds that the spouse seeking maintenance
(a) lacks sufficient property, including marital property apportioned to the spouse, to provide for reasonable needs of the spouse considering the standard of living established during the marriage, especially, but not limited to, a period of training or education, or
(b) is unable to provide adequate self-support, after considering the standard of living established during the marriage and all relevant circumstances, through appropriate employment[.]
Minn. Stat. § 518.552, subd. 1 (2006).
establish the amount and duration of a spousal-maintenance award the district
court must consider and make findings on the statutory factors set forth in
Minn. Stat. § 518.552, subd. 2 (2006). Reinke
v. Reinke, 464 N.W.2d 513, 514-15 (
The district court found that wife “lacks sufficient property, including marital property apportioned to her in this proceeding, to provide for her reasonable needs considering the standard of living established during the marriage. None of the property to be apportioned her is income-producing property.” Husband argues that the district court ignored the liquid nature of the property settlement awarded to wife and that with her cash award exceeding $140,000, wife could have paid off significant debt and reduced her monthly expenses.
setting maintenance, the district court should consider financial resources,
including income from assets that are received in the property distribution; but
it should not expect a spouse to invade principal to meet monthly living
expenses. Fink v. Fink, 366 N.W.2d 340, 342 (
Regarding the duration of the maintenance award, the district court found that due to wife’s disability, “it is not reasonable to expect her to be able to acquire sufficient education or training to enable her to find employment. [Wife] is suitably educated and trained; she simply is unable to make use of that education and training because of her disability.” Husband argues that because the evidence does not show how long wife’s disability will continue, the district court erred in awarding permanent maintenance. See Dobrin, 569 N.W.2d at 202 (stating that “[i]mplicit in Minn. Stat. § 518.552 is that the spouse seeking maintenance demonstrate the need therefor”).
The record does not contain evidence that wife can be expected to recover, she has been unable to work since 2002, and the Social Security Administration determined that she is disabled. The district court found:
That it is unknown whether [wife] will ever recover from her disability. The Social Security Administration has found her disabled, that is, not capable of maintaining any employment available in the economy. The uncertainty of [wife’s] condition mandates a permanent award of maintenance.
“Poor health is a proper reason
for awarding permanent maintenance.” McConnell v. McConnell, 710 N.W.2d 583,
significant distinction between this case and McConnell is that McConnell
involved a 17-year marriage, whereas this case involves a seven-year
marriage. In Gales v. Gales, the supreme court stated that an exceptional
circumstance must exist to support a permanent maintenance award and used the
example “of a long-term traditional marriage in which there is an older,
dependent spouse who has little likelihood of achieving self-sufficiency
because of an absence from the labor market for a long period of time.” 553 N.W.2d 416, 421 (
Citing Dobrin, husband argues that notwithstanding wife’s disability, it was error to award permanent maintenance due to the short length of the marriage. 569 N.W.2d at 203. But in Dobrin, wife’s own trial testimony indicated that she was feeling “pretty good” and that her health did not prevent her from working. 569 N.W.2d at 202. Husband also argues that a permanent maintenance award cannot be based on emotional distress related to the break-up of a relationship. See, e.g., Gales, 553 N.W.2d at 422. But the record does not indicate that wife’s mental-health disability is related to the break-up of her relationship with husband. Applying the McConnell analysis and the statutory presumption favoring a permanent maintenance award when uncertainty exists, we conclude that the district court did not abuse its discretion in awarding wife permanent maintenance.
Husband argues that the district court overstated his income because it included income earned by Parking Finance for expert-witness fees in a lawsuit, which was a one-time occurrence. But it is not apparent that the district court relied on any amount earned by Parking Finance when determining husband’s ability to pay maintenance. The district court found:
That [husband] has the ability to provide for his own needs while contributing to the needs of [wife]. [Husband] is now earning $150,000.00 per year from his salaried employment and has additional income from Parking Finance Agency. In addition to his monthly salary through Catholic Finance Corporation, he receives bonuses.
Husband argues that wife’s minor child from a previous marriage could not be a factor in the district court’s maintenance analysis. The district court did not consider wife’s minor child in determining maintenance. The district court found that wife has reasonable monthly living expenses of $4,920, “exclusive of the individual expenses of [wife’s] son who resides with her and for whom [husband] bears no liability for support.”
Husband argues that the district court did not consider wife’s excessive spending pattern. There is evidence that wife is a compulsive spender. But the evidence regarding the parties’ lifestyle during the marriage and wife’s monthly expenses following the marriage did not include evidence of compulsive spending by wife.
Citing March v. March, 435 N.W.2d 569 (
Husband has failed to show that the district court abused its discretion in awarding maintenance.
courts have broad discretion over the division of marital property, and a
property division will not be overturned on appeal except for a clear abuse of
discretion. Antone v. Antone, 645 N.W.2d 96, 100 (
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 (
Husband argues that wife produced insufficient evidence to show her nonmarital interest in the parties’ homestead. Wife received more than $80,000 in proceeds from the sale of the home she owned before the marriage. Of that amount, wife deposited $70,000 into an account held by husband. The document cited by the district court in determining wife’s nonmarital interest in the homestead shows that the $70,000 was deposited into the account, but it does not show what happened to that money after it was deposited into the account. To support an award of a nonmarital interest in the homestead based on the proceeds of the sale of the home wife owned before the marriage, a tracing of how the proceeds were used is required.
Wife testified that, after the parties separated, husband kept the information relating to the account and receipts and information relating to the home improvements. To the extent that husband’s acts caused wife’s inability to trace the proceeds from the sale of her home, husband should not benefit. See Federated Mut. Ins. Co. v. Litchfield Precision Components, Inc., 456 N.W.2d 434, 436 (Minn. 1990) (stating that unfavorable inferences may be drawn from a party’s failure to produce evidence in its possession); Bollenbach v. Bollenbach, 285 Minn. 418, 428, 175 N.W.2d 148, 155 (1970) (stating that a party’s failure to produce full account of debts and assets justifies adverse inferences); Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 243 (Minn. App. 2003) (noting that a party may not complain about district court’s failure to rule in his favor when “one . . . reason [ ] it did not do so is 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). But the district court made no findings on this issue. Accordingly, we reverse the district court’s determination of wife’s nonmarital interest in the homestead and remand for additional findings about withdrawals from the account into which wife deposited the $70,000. On remand, the district court may open the record to receive additional evidence.
also argues that the district court erred in failing to award him a nonmarital
interest in life-insurance policies and retirement funds. The district court found that the life-insurance
policies had cash values at the time of marriage but that, because premiums
continued to be paid during the marriage, a nonmarital interest no longer
existed. But continuing to pay premiums
during the marriage increased the cash values of the policies and did not cause
the cash values at the time of marriage to lose their nonmarital
character. The cash values at the time
of marriage remained nonmarital property.
See Schmitz v. Schmitz, 309 N.W.2d 748, 750 (
district court shall award need-based attorney fees to enable a party to carry
on the proceeding provided that it finds “that the fees are necessary for the
good-faith assertion of the party’s rights . . ., the party from whom fees . .
. are sought has the means to pay them; and the party to whom fees . . . are
awarded does not have the means to pay them.
The district court awarded wife $9,400 in attorney fees, finding:
55. That [husband] has the ability to pay both his own attorney’s fees and costs and [wife’s] attorney’s fees and costs. [Wife] does not have the ability to pay her own attorney’s fees and costs. Moreover, [husband] has unreasonably contributed to the length and expense of the proceeding. Although [husband] is the executive director of Catholic Finance Corporation, the agency that employs him, [husband] failed to produce any paycheck stubs, any information concerning his salary, or any information concerning his bonus or amounts he was charged by his employer. To obtain this information, [wife’s] counsel was forced to subpoena [husband’s] employer at a cost of $603.22. In addition, [wife] was required to subpoena [husband] to bring records to court. [Husband] has engaged in a course of conduct that has unreasonably contributed to the length and expense of this proceeding, that has exacerbated [wife’s] condition, and that has exponentially increased attorney fees.
Husband argues that subpoenas to his employer were unnecessary because he testified regarding his salary and bonuses. The fact that husband testified on the issue does not mean that wife was not entitled to pretrial discovery. Husband also argues that the district court erred in considering the effect of his conduct on wife’s mental health. The authority cited by husband does not support the position that the effect of uncooperative conduct by husband during the divorce proceeding may not be considered by the district court in awarding attorney fees.
We affirm the district court’s award of need- and conduct-based attorney fees to wife.
Affirmed in part, reversed in part, and remanded.
RANDALL, Judge (dissenting).
I respectfully dissent. The marriage here does not give rise to an
award of “permanent maintenance.” Focusing
on language in Gales v. Gales, which
states that “permanent awards are to be restricted to certain exceptional cases
where there is little likelihood of the once-dependent spouse’s attaining
self-sufficiency,” appellant argues that permanent maintenance is inappropriate
here. 553 N.W.2d 416, 419 (
Gales did not change the law, but instead applied the criteria of
569 N.W.2d 199, 201 (
An independent spouse in a lengthy, traditional marriage presents a reasonable case on the issue of permanent maintenance, although I acknowledge there can be others. I do not find that these facts establish a case for permanent maintenance. Here, the parties were married in July 1998. Both were in their mid-forties. There were no children of this marriage. Respondent has a minor child from a prior marriage, who, by the time this opinion is released, will be an adult. The parties only lived together for a few years before respondent’s emotional state led them to separate households. The district court’s findings reflect that they separated after six years, in October 2004. Appellant’s recollection is that they did not even live together for six years, but closer to four years, because of a 15-month separation, before the final separation.
The essence of permanent maintenance (formerly called alimony) is that, traditionally, the woman in the marriage often gave up, or at least short-circuited, her own career to take care of the home while the male bread winner was outside the home working. That scenario is changing rapidly, but still represents the majority of all marriage dissolutions. The male continues on with his job, usually at a higher rate of earning than his ex-wife’s expectations because she has experienced a downturn in her job skills and educational opportunities. An interpretation of Gales and Dobrin, and their progeny, discuss dependent spouses, their reasonable needs, and the unique facts of each case.
Respondent is not the classic dependent spouse who gave up a career and job skills to get married. She was trained and worked as a court reporter and/or a paralegal from 1992 to 2000 (two years into the marriage). Because of her emotional disability, she left her last job. In other words, she gave up nothing to get married, and during marriage continued her full-time professional career.
Respondent does receive social-security disability of $1,300 a month and her emotional and physical health is documented in the file and the majority covers it. My argument is that despite the catch phrase, “[w]here there is some uncertainty as to the necessity of a permanent award, the court shall order a permanent award leaving its order open for later modification,” Minn. Stat. § 518.552, subd. 3 (2006), does not end the discussion on brief marriages.
equitable solution would have been for the district court to order maintenance
for a set number of years, no less than one but no more than three, with an
automatic order that the issue of maintenance be reviewed de novo at that
time. During that time, of course,
either party would be free under the controlling statutes to make motions for a
modification upward or downward of maintenance.
Right now, with lifetime permanent maintenance, appellant has the heavy
burden of showing a substantial change of circumstances that make the original
order unreasonable and unfair. Beck v. Kaplan, 566 N.W.2d 723, 726 (
Although respondent’s medical file indicates some physical ailments, its roots are in emotional distress. Even the social-security-disability award held open the possibility that she could re-enter gainful employment in the future.
Essentially, we have a two-pronged argument in respondent’s case. First, she alleges that she is too sick to support herself and, thus, she needs her ex-husband to support her full time. Second, she argues that her ex-husband is well off, has lots of money, and can afford it. That same logic would apply to a marriage, with no children, of five years, three years, one year, six months, or six days. Marriage was never meant to be a disability-insurance/medical-insurance annuity for life regardless of the length of time, or the lack thereof, that the couple actually lived together as man and wife.
From the record, respondent does need a certain amount of money now from appellant to live comfortably. The court found her requested living expenses of $4,900 a month to be reasonable. That seems high to me from the record, but respondent is quick to argue “the lifestyle” of the marriage. The history of the phrase, “the lifestyle enjoyed during the marriage” is an old phrase rooted in an articulable argument that dissolution and two separate households should not interfere with all the disposable income a couple had while they were maintaining only one household.
I strongly suggest that this is not the case for permanent maintenance. Absent death or remarriage, respondent has an approximate life span of maintenance of 35 years. Just at 30 years times $36,000 a year, we have a possible award of $1,080,000 plus the property settlement.
I suggest that the issue of maintenance, along with the other issues, be reversed and remanded for a short-term award of maintenance, with an automatic de novo review (if no party moves for a modification sooner) to re-examine the medical reports, the status of respondent’s social security, and her employment capabilities. It is entirely possible that the present award would again be continued, but that we do not know.
I suggest this case, even though unpublished, is a questionable result for a short marriage, no minor children, and an illness that developed eroding the obligee’s job skills for an indefinite period of time, but with literally decades ahead of her for recovery to a possible return to the job market.
 It is unclear what husband includes in the $140,000 figure. Wife received $100,000 from the proceeds of the sale of the homestead, $6,308.80 for one-half of the joint escrow refund, the homeowner’s refund of $784.60, husband’s 2004 SIMPLE in the amount of $6,100, and the joint tax refunds exceeding the $4,503 award to husband.
 One year following release of the Gales decision, apparently fearing misinterpretation of the “exceptional-case” language of Gales, the supreme court made clear that the holding in Gales should not be taken out of context because
Gales did not change the law, but instead applied the criteria of Minn. Stat. § 518.552, subd. 2 to the record. We take this opportunity to remind counsel that each marital dissolution proceeding is unique and centers upon the individualized facts and circumstances of the parties and that, accordingly, it is unwise to view any marital dissolution decision as enunciating an immutable rule of law applicable in any other proceeding.
Dobrin, 569 N.W.2d at 201. Thus, Dobrin makes clear that permanent maintenance awards are considered in light of the factors set forth in Minn. Stat. § 518.552, subd. 2.