This opinion will be unpublished and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
Robyn Joan Erickson, petitioner,
Jeffrey Dean Erickson,
Hennepin County District Court
File No. DC-295343
William F. Forsyth, Timothy Mulrooney, Henson & Efron, P.A., 220 South Sixth Street, Suite 1800, Minneapolis, MN 55402-4503 (for respondent)
Leslie A. Gelhar, Donna
and Daly, P.C.,
Considered and decided by Hudson, Presiding Judge; Dietzen, Judge; and Collins, Judge.
U N P U B L I S H E D O P I N I O N
On appeal in this spousal-maintenance dispute, appellant-husband argues that his maintenance obligation is excessive because the district court (a) overstated respondent-wife’s reasonable monthly expenses; (b) understated respondent’s employment-related ability to support herself; (c) understated respondent’s ability to use her assets and associated income to support herself; (d) overstated respondent’s expected tax burden; and (e) apparently used respondent’s maintenance award as a way to supplement her stipulated property award. Appellant also argues that the record does not support the district court’s award to respondent of permanent maintenance. Because the district court did not in any respect abuse its discretion in setting appellant’s spousal maintenance obligation, we affirm.
Appellant Jeffrey Erickson and respondent Robyn Erickson were married in March 1976. The parties had four children during the marriage, three of whom are adults. The fourth child, a son, is 15 years old and resides primarily with respondent. During the parties’ marriage, appellant established and grew a very successful private practice as an endodontist and assumed the role of breadwinner and financial manager. Although respondent is a licensed dental hygienist, she assumed the role of homemaker and primary caretaker of the parties’ children during the marriage.
The parties separated in December 2004. Prior to trial on this matter, the issues of
property division, custody, and child support were settled. Under the property settlement, each party received
approximately $2,868,000 in liquid and illiquid assets. The parties agreed that appellant would pay
$1,744 per month, the maximum guideline amount, in child support for the
parties’ remaining unemancipated child.
As part of the property division, appellant was awarded recreational
hunting property in
The sole issue for trial was spousal maintenance. Testimony was presented that during the marriage, respondent occasionally filled-in at appellant’s dental practice, doing a variety of administrative duties such as purchasing supplies, paying bills or payroll, and assisting when other employees were unable to work. Respondent also testified that for a “hobby,” she worked about four hours a week at Bachman’s. Although appellant’s vocational expert testified that respondent could readily find work assisting in a dental office, respondent testified that she did not want to work because, as she had done for each of the older children, she wanted to be available to the parties’ minor son when he is not in school.
The family court referee found that based on the vocational expert’s report, respondent could earn between $12,000 and $13,000 per year in a part-time receptionist/coordinator position. But the referee found that a “receptionist or coordinator job is inappropriate employment under the circumstances” because that type of work is “essentially an entry level and minimal skill level position in which [respondent] has no interest” and would operate to merely reduce appellant’s maintenance obligation even though he is not hampered by an inability to pay support. The referee found that based on the standard of living during the marriage, where respondent’s role was to devote herself to the children, the home, and appellant’s career, it is inappropriate to force respondent to acquire unsatisfying work now that the marriage is ending.
The referee also made detailed findings on appellant’s income and the parties’ monthly expenses. The referee found that appellant has monthly living expenses of $7,591 and a net monthly income of $36,323 after paying child support. The referee found that “[f]rom this amount, [appellant] can easily meet his own living expenses and pay spousal maintenance.” The referee also noted that respondent proposed a monthly budget of $12,577. But the referee found that some of the items on the budget included suspect items and speculative amounts. Consequently, the referee found that it “is fair and equitable for [appellant] to pay [respondent] $11,500 per month in permanent spousal maintenance.”
Appellant requested district court review of the referee’s findings of fact, conclusions of law, and order. On April 24, 2006, the district court filed an order and detailed memorandum sustaining the referee’s maintenance decision in its entirety. An amended judgment and decree incorporating the referee’s spousal maintenance determination was subsequently entered on May 19, 2006. This appeal followed.
D E C I S I O N
This court reviews a
district court’s maintenance award for abuse of discretion. Dobrin v. Dobrin, 569 N.W.2d 199, 202 (
determining maintenance, a district court is to consider (1) the ability of the
party seeking maintenance “to meet needs independently;” (2) the probability of
that party “becoming fully or partially self-supporting;” (3) the marital
standard of living; (4) the length of the marriage and the degree to which the
party’s skills “have become outmoded and earning capacity has been permanently
diminished;” (5) whether that party lost earnings or opportunities; (6) that
party’s age and physical and emotional condition; and (7) the ability of the
party from whom maintenance is sought to meet needs while meeting the needs of
the party seeking maintenance. Minn.
Stat. § 518.552, subd. 2 (2006). No single statutory factor is dispositive in
determining the amount and duration of spousal maintenance. Elwell v. Elwell, 372 N.W.2d 67, 69 (
Appellant argues that the district court abused its discretion in ordering appellant to pay $11,500 per month to respondent in spousal maintenance because (a) respondent’s proposed $12,500 monthly budget exceeds the amount necessary to maintain the marital standard of living by at least $5,000; (b) respondent’s admitted part-time earnings and earnings history are resources that must be included when determining her financial need; (c) respondent’s real estate assets are resources that must be considered when determining her financial need; (d) the district court’s assumption of a 41% tax rate for respondent is not supported by the evidence; and (e) setting maintenance in an amount which permits respondent to enhance her property settlement is contrary to law. Thus, appellant argues that the matter must be reversed and remanded to reduce the award of spousal maintenance to approximately $7,000 per month.
A. Monthly budget
Appellant argues that the amount of spousal maintenance awarded to respondent is unreasonably high because the amount necessary to maintain the marital standard of living is approximately $7,000 per month. To support his claim, appellant asserts that his own monthly living expenses are $7,591, an amount that includes a monthly mortgage payment of $2,000. Appellant contends that because respondent does not have a mortgage payment, and many of the items listed in respondent’s monthly budget are inflated or no longer necessary in light of the marriage dissolution, the spousal maintenance award should be substantially reduced.
The record reflects that respondent’s claimed reasonable living expenses were $12,577 per month. In assessing respondent’s claimed living expenses, the district court found that respondent’s proposed budget
includes suspect items and speculative amounts: about $668.00 in direct expenditures for the child (Children’s School Activities) while she already is receiving $1,766 per month in child support, a somewhat inflated $900 for food/groceries, $344 for a physical therapist/trainer for her back that could be covered by insurance, $125 for counseling (a life coach to help her on how to cope in living with a narcissistic person which because of the divorce may no longer be necessary), $1,500 for savings when there was no particular showing that this was a part of [respondent’s] marital standard of living, $125 for Continuing Education when she has no desire to go back to work, and $500 for a transportation loan payment that is not documented.
By setting the maintenance award at $11,500 per month, $1,000 less than respondent’s proposed living expenses, the district court considered appellant’s assertion that respondent’s proposed living expenses were inflated. Moreover, one of the factors that must be considered in setting maintenance is the standard of living during the marriage. See Minn. Stat. § 518.552, subd. 2(c). The record reflects that appellant’s substantial income allowed the parties to live an affluent lifestyle. Respondent’s proposed monthly expenses reflect that lifestyle.
The district court’s findings also note that “[i]n some respects, [respondent’s] budget may be lower than the marital standard of living (e.g., she no longer has a country club membership, she has moved into less expensive housing, thereby reducing all of her housing-related expenses such as mortgage and lesser expenses for utilities, taxes, maintenance, and insurance).” This finding indicates that the district court considered most of respondent’s expenses to be reasonable based on the parties’ standard of living. Although appellant claimed to have monthly expenses of only $7,591, it is not unreasonable for the parties to maintain disparate lifestyles. In fact, the district court specifically contemplated this possibility. Based on the parties’ standard of living during their 29 years of marriage, the district court did not abuse its discretion in determining respondent’s reasonable monthly expenses.
B. Respondent’s employment history
Appellant also contends that his spousal-maintenance obligation should be reduced because the district court failed to adequately consider respondent’s work history when setting his maintenance obligation. Appellant asserts that throughout the marriage, respondent worked about 12-20 hours per week, earning approximately $12,000-$13,000 per year. Although appellant is not claiming that respondent should become fully self-supporting through an increase in her work hours, appellant argues that respondent’s work history requires a finding that she earns at least $1,000 per month, and any maintenance award should be reduced accordingly.
appropriate upon a showing that a party “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(b) (2006)
(emphasis added). “Being capable of
employment and being appropriately employed are not synonymous.” Nardini v. Nardini, 414 N.W.2d 184, 197 (
Here, the record reflects that respondent worked part-time during the marriage at appellant’s endodontist practice earning approximately $12,000-$13,000 per year. But when the parties separated, her occasional employment at appellant’s practice was no longer feasible. The fact that respondent is capable of earning $12,000-$13,000 per year doing menial work does not mandate that respondent obtain this type of employment. See id. The district court specifically contemplated respondent’s employment history and noted that during the parties’ 29 years of marriage, respondent functioned primarily as a homemaker, assuming the role of primary caretaker of the parties’ children and supporting appellant’s professional career. Thus, the district court concluded that it was inappropriate to force respondent to obtain unsatisfying employment simply to reduce appellant’s maintenance obligation. In light of the lengthy duration of the marriage and appellant’s ability to pay maintenance, the district court’s refusal to reduce appellant’s spousal maintenance obligation based on respondent’s work history was not an abuse of discretion.
C. Real estate assets
that the district court erred in setting his maintenance obligation because
respondent’s unencumbered $925,000 log home, located near the base of a ski area
appellant asserts that the district court’s refusal to consider the real estate asset as a financial resource when setting the maintenance obligation was an abuse of discretion.
disagree. As noted previously, when
deciding to award spousal maintenance, the standard of living established
during the marriage is a factor to be considered. Chamberlain v. Chamberlain, 615 N.W.2d 405, 410 (
D. Tax rate
Appellant argues that the district court overstated respondent’s tax burden by incorrectly concluding that spousal maintenance received by respondent would be subject to a 41% tax rate. Appellant contends that assuming taxable interest, maintenance income, and employment income totaling $130,000 or more, the financial experts’ analyses show that respondent’s effective tax rate is approximately 26%.
The finding at issue provides as follows:
[Respondent] retained Steve Dennis, a certified public accountant and litigation consultant, as her financial expert. Mr. Dennis opined as to the tax impact on the parties’ respective incomes. He determined, for example, that if [appellant] pays $12,809 per month to [respondent] in spousal maintenance, [respondent], when combining this spousal maintenance with her child support and investment income, will have after-tax cash flow of $12,457 per month . . . . Under this example, [appellant], after paying to [respondent] $1,744 per month in child support and $12,809 per month in spousal maintenance, would have after-tax cash flow of $28,800 per month. [Appellant] would easily be able to meet his reasonable expenses of $7,591 per month and still have a cash flow surplus. In summary, for every dollar of spousal maintenance paid by [appellant], the after-tax cost to him is about 59 cents. Similarly, for every dollar of spousal maintenance received by [respondent], the after-tax benefit to her is about the same.
But this finding merely indicates that respondent and appellant’s after-tax benefit are comparable. Moreover, appellant fails to provide any credible evidence that the $11,500 per month in spousal maintenance that respondent receives from appellant would be subject to a tax rate of 26%. The district court is not shown to have overstated respondent’s expected tax burden.
E. Alleged property settlement enhancement
In setting appellant’s maintenance obligation, the district court found that:
It is fair and equitable for [appellant] to pay [respondent] $11,500 per month in permanent spousal maintenance. This will allow her to meet her reasonable monthly expenses and allow her to dedicate her investments for savings and to generate wealth in a manner similar to [appellant] and consistent with her marital standard of living.
Citing this finding, appellant argues that his maintenance obligation is clearly erroneous because it allows respondent to enhance her property settlement. We disagree. The maintenance award was established to allow respondent to meet her reasonable living expenses without invading her retirement assets.
In setting the maintenance obligation, the district court contemplated the factors set forth in Minn. Stat. § 518.552, subd. 2, including the parties’ standard of living during the marriage, respondent’s need, and appellant’s ability to pay. Because the record supports the findings of fact, we conclude that the district court did not abuse its discretion in setting appellant’s maintenance obligation.
Appellant argues that the district court abused its discretion in ordering him to pay permanent spousal maintenance. “Where 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). Doubts about the duration of a maintenance award are to be resolved in favor of a permanent award. Nardini, 414 N.W.2d at 196.
Appellant argues that permanent spousal maintenance is inappropriate because the evidence in the record demonstrates that by the time respondent reaches the age of 60, respondent will have sufficient income from her investments to satisfy her monthly expenses. To support his claim, appellant asserts that by the time respondent turns 60, her IRA assets will be valued at about $1.5 million and will produce an investment return of about $7,500 per month. Appellant claims that when the income from respondent’s IRA is combined with her current cash assets, respondent will have total monthly interest income of about $9,500 per month, which, according to appellant, is sufficient to satisfy her monthly expenses.
In ordering permanent spousal maintenance, the district court found as follows:
[Respondent] lacks the financial resources necessary to meet her reasonable budget, and [appellant] has the ability to provide support to her, meet his own reasonable budget and still have a very substantial cash flow surplus for himself. There is no question that [respondent] will never become fully self-supporting. The parties’ had a 29 year marriage during which [respondent] functioned as the homemaker, assumed the role of primary caretaker for the parties’ children and actively supported [appellant’s] financially successful professional practice. [Appellant’s] time was devoted primarily to his employment. An award of permanent spousal maintenance is appropriate in this case.
This finding is supported by the record. Although there is an indication that respondent could eventually become self-supporting through her investment assets, that determination is speculative at this point. If, at some point, either party’s circumstances substantially change, appellant can then move for modification of maintenance. Where one party’s ability to ever become self-supporting remains in doubt, an award of permanent spousal maintenance is preferred because the obligor always has the right to later make a motion for modification. See Minn. Stat. § 518.552, subd. 3; Nardini, 414 N.W.2d at 196. Therefore, the district court did not abuse its discretion in awarding respondent permanent spousal maintenance.
Retired judge of the district court, serving as judge of the Court of Appeals
by appointment pursuant to