This opinion will be unpublished and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:
Linda Louise Sarvey, petitioner,
Robert Hieu Sarvey,
Filed June 19, 2007
Hennepin County District Court
File No. 27-FA-284048
Linda L. Sarvey,
Robert H. Sarvey,
Considered and decided by Stoneburner, Presiding Judge; Dietzen, Judge; and Worke, Judge.
Appellant challenges the dissolution judgment and decree, arguing that the district court erred in its division of marital property, award of spousal maintenance to respondent, determination of the amount of child support, and award of attorney fees to respondent. Because the district court properly applied the law and did not abuse its discretion, we affirm.
Appellant Robert Sarvey and respondent Linda Sarvey were married in September 1987 and had three children as a result of the marriage. During the marriage, respondent was not employed outside the home. Appellant has been very successful with over 20 years of experience in the new and used car business, and he worked for several different dealerships as a salesman, finance manager, and general manager. The parties lived a lifestyle consistent with a high level of income.
In March 2003, respondent filed a petition for dissolution, and the parties underwent a custody and parenting-time evaluation. Following a recommendation from the court-appointed guardian ad litem, the parties agreed that respondent would have sole physical custody of the two older children and that the parties would share physical custody of the youngest child.
In May 2003, the district court conducted a hearing to consider temporary child support and temporary spousal maintenance. Appellant testified that he was earning $4,000 gross income per month. Based on appellant’s W-2s and other tax forms, the court observed that appellant’s income for 2000, 2001, and 2002 was approximately $239,620, $150,850, and $139,378 respectively. As a result of “contradictory testimony,” the court found that appellant was acting in bad faith by voluntarily self-limiting his income and ordered appellant to pay temporary child support of $2,363 per month and temporary spousal maintenance of $4,800 per month as well as $2,500 toward respondent’s attorney fees.
When appellant refused to make the monthly payments, respondent brought a motion that appellant be held in contempt of court. Following an evidentiary hearing, the court found that appellant’s testimony was contradictory, that he had failed to comply with the temporary order, and that he was in constructive civil contempt of court. The court set conditions to purge the finding of contempt. At the next hearing, the court determined that appellant had not made a good-faith effort to comply with the purge conditions and ordered that appellant be incarcerated for 180 days or until he satisfied the purge conditions.
In January 2004, the district court conducted another evidentiary hearing; subsequently, it revoked appellant’s work release, set new purge conditions, and scheduled a compliance hearing. Appellant failed to appear at that hearing, and the district court issued a bench warrant. Subsequently, the parties agreed to temporarily modify child support and maintenance, and the district court issued an order that adopted those agreements.
The parties’ homestead went into foreclosure in early 2004. The district court appointed appellant’s attorney as respondent’s attorney-in-fact for the sale of the homestead. After the sale, the district court sequestered the proceeds and forwarded them to respondent for support of the family.
At trial, respondent testified regarding her lack of income and expenses, her need for spousal maintenance and child support, and respondent’s past employment history and potential income. Appellant testified that his income was limited because he was depressed and unable to work. But appellant’s employers at Golden Valley Auto Sales and Maryland Auto Sales testified that appellant was very active in both businesses and that he was the highest paid salesman for the months he worked at Maryland Auto Sales.
After trial, the district court filed its dissolution judgment and decree, finding that appellant was limiting his income in bad faith and imputed to appellant net monthly income of $8,420; and it found that respondent had a net monthly income of $2,154 and monthly expenses for herself and the minor children of $5,520, and that “these expenses” were “consistent with the lifestyle and manner of living shared by the parties and their minor children throughout the marriage.” But the judgment also stated that “[a]t the time of the temporary hearing, the combined monthly expenses of [respondent] and the children were $9,879,” and that, among other things, “[respondent] has decreased many of the household expenses, as well as expenses personal to herself, so that she could maintain as normal of a lifestyle for the children as possible” and the “[t]he children’s expenses have been maintained as much as possible for their benefit.”
The district court set appellant’s monthly child support obligation at $2,441 for the three children and, using the Hortis/Valento formula for the youngest child, calculated a net monthly child-support payment by appellant to respondent of $2,171. The district court also ruled that respondent should receive spousal maintenance in the amount of $3,500 per month and that appellant owed respondent $81,956 in child support and maintenance arrearages and $3,133 in unreimbursed medical and dental bills.
Because the marital homestead had been sold during the dissolution proceedings, the district court awarded each party half of the $36,368 in net proceeds. But the district court found that the net proceeds had been reduced due to appellant’s conduct in allowing the house to go into foreclosure without notice to respondent. The district court awarded respondent approximately $40,000 in attorney fees on the ground that appellant’s conduct had unreasonably contributed to the expense of the proceedings. And the court allocated appellant’s share of the house proceeds to pay respondent’s attorney fees and ordered appellant to pay the outstanding balance.
Appellant moved to modify the judgment and decree, and the district court held an additional hearing in January 2006. Following the hearing, the district court assigned a new referee, who reviewed the file and proposed several amendments to the findings and conclusions. The district court adopted the referee’s proposed changes and filed an amended judgment and decree. This appeal followed.
D E C I S I O N
Because respondent did not file a brief in this appeal, we address the merits of the appeal under Minn. R. Civ. App. P. 142.03.
Appellant argues that the
district court abused its discretion in its division of the marital property and
debt. Debt apportionment is part of
property division. Berenberg v. Berenberg, 474 N.W.2d 843, 848 (Minn. App. 1991), review denied (Minn. Nov. 13,
1991). Marital property must be divided
equitably, but it need not be divided equally.
Minn. Stat. § 518.58, subd. 1 (2006); Riley v. Riley, 369 N.W.2d 40, 43 (
Appellant argues that he was entitled to a portion of the proceeds from respondent’s sale of personal property. Minn. Stat. § 518.58, subd. 1a (2006) requires a district court to compensate a party for a spouse’s unilateral sale of property during the dissolution unless the sale was “in the usual course of business or for the necessities of life.” Respondent testified that she sold much of the property to pay bills and to buy clothing for the children, and she produced receipts supporting this assertion. Because the district court’s finding that respondent sold the property for the necessities of life is not clearly erroneous, appellant was not entitled to a portion of the proceeds of its sale.
Appellant also argues that
the district court should not have ordered him to pay both a portion of the
debt respondent incurred during the separation and arrearages for maintenance
he did not pay during that period. But this
argument was not presented to or considered by the district court, and is not
properly before this court. Thiele v. Stich, 425 N.W.2d 580, 582 (
But even if we consider appellant’s argument, prejudice is not obvious on this record. The record shows that respondent necessarily incurred the post-separation debt. The district court, nonetheless, ordered respondent to repay most of the post-separation debt, and it apportioned debt to appellant that the parties incurred before the separation. Appellant has not specifically cited any portion of the debt apportioned to him that was incurred during the separation, and we affirm the apportionment of the parties’ debt.
Appellant challenges the
district court’s award of spousal maintenance to respondent. We review a district court’s maintenance award
for an abuse of discretion. Erlandson v. Erlandson, 318 N.W.2d 36,
A district court may award
spousal maintenance if it finds that the party seeking maintenance lacks
sufficient property or ability to provide adequate self-support at the marital
standard of living. Minn. Stat. § 518.552,
subd. 1 (2006). While Minn. Stat. § 518.552,
subd. 2 (2006) lists factors to be considered in setting the amount and
duration of maintenance, the issue is basically the recipient’s need balanced
against the obligor’s ability to pay. Erlandson, 318 N.W.2d at 39-40. A district court’s maintenance-related
findings of fact will not be set aside unless they are clearly erroneous. Reif v. Reif, 426 N.W.2d 227, 230 (
A. Respondent’s Need for Spousal Maintenance
Appellant argues that the district court abused its discretion by determining that respondent needs spousal maintenance. The district court found that respondent (1) spent 16 years as a stay-at-home mother, (2) lacked education and employment skills, and (3) had limited means and ability to provide for her needs. The district court also found that the family enjoyed a lifestyle that was consistent with high income during the 16-year marriage. The record supports these findings, and appellant does not contest them.
Appellant nonetheless argues that the district court made contradictory findings regarding respondent’s income. The district court found that at the time of the initial hearing in early 2005, respondent’s net monthly income was $600 and her monthly expenses, including those attributable to the children, were $9,879. But in the amended judgment and decree, issued in June 2006, the district court found that respondent’s net monthly income had increased to $2,154.37 and that her net monthly expenses, including the children, had decreased to $5,520. Based on these figures, the district court determined that respondent had a reasonable monthly need of $3,500.
We observe that $3,500 in
monthly maintenance, when combined with appellant’s net child support payment
($2,171) and respondent’s net monthly income ($2,154.37), appears to produce a
monthly surplus for respondent over respondent’s “reduced monthly expenses” of
$5,520 found by the district court. See Lyon v. Lyon, 439 N.W.2d 18, 22 (
While we could remand for
the district court to clarify its findings regarding spousal maintenance, we
decline to do so for two reasons. First,
review of the record, the dissolution judgment, and the district court’s other
rulings, indicates that, on remand, the district court would undoubtedly make
the findings necessary to support the $3,500 in monthly maintenance. See
Grein v. Grein, 364 N.W.2d 383, 387 (
Appellant also argues that
he should not be obligated to provide respondent’s medical insurance. But the district court may order a maintenance
obligor to provide medical insurance
as a form of spousal maintenance. Hughes v. Hughley, 569 N.W.2d 534, 536
B. Appellant’s Ability to Pay Spousal Maintenance
Appellant argues that the
district court abused its discretion by determining that he has the ability to
pay spousal maintenance. But the
district court has discretion to impute income to the obligor if the obligor is
underemployed in bad faith. Carrick v. Carrick, 560 N.W.2d 407, 410
The district court found
that appellant “consistently” gave the court “contradictory evidence regarding
his employment status and earned income and [appellant] has lacked credibility
regarding these issues.” We defer to a district
court’s credibility determinations. Sefkow
v. Sefkow, 427 N.W.2d 203, 210 (
Here, appellant failed to provide credible evidence regarding his income. Based on appellant’s earning history and abilities, the district court imputed to appellant a net monthly income of $8,420. The record shows that, historically, appellant has had a gross annual income exceeding $100,000, sometimes exceeding $12,000 per month. The district court also found that appellant is a talented salesman, quit a high paying job when respondent petitioned to dissolve the marriage, and admitted that he could earn much more than he currently earns. On this record, the district court did not abuse its discretion.
Appellant argues that the
district court erred in determining child support based on his imputed
income. We review the district court’s
determinations regarding child support for an abuse of discretion, i.e., setting
support in a manner that is contrary to logic or the facts on record. Putz v. Putz, 645 N.W.2d 343, 347 (
We previously affirmed the imputation of income to appellant for maintenance purposes. Bad faith is not required to impute income to a support obligor. Walker v. Walker, 553 N.W.2d 90, 95 n.1 (Minn. App. 1996); see Minn. Stat. § 518.551, subd. 5b(d) (2004)  (allowing imputation to support obligor if he is voluntarily unemployed or underemployed). Therefore, we also affirm the imputation of income to appellant for support purposes.
Appellant next argues that
his child support obligation should have been suspended while he was
Appellant argues that the district court abused its discretion by requiring him to secure his maintenance and support obligations by obtaining a life insurance policy. The district court has discretion to require security for maintenance and support obligations. See Minn. Stat. § 518A.71 (2006); Laumann v. Laumann, 400 N.W.2d 355, 360 (Minn. App. 1987) (spousal maintenance), review denied (Minn. Nov. 24, 1987); Riley, 369 N.W.2d at 44 (child support). Because the record shows that appellant repeatedly failed to pay his obligations, even after being held in contempt, we reject appellant’s argument.
argues that the district court abused its discretion by awarding respondent
$42,138.96 in attorney fees that it classified as both need- and conduct-based. We review an award of conduct-based attorney
fees for an abuse of that discretion. Sharp
v. Bilbro, 614 N.W.2d 260, 264 (Minn. App. 2000), review denied (
Appellant also argues that the district court erred by allocating the proceeds from the sale of the home to respondent’s attorney fees and not appellant’s arrearages. But a district court may order the sale of marital assets during the pendency of a proceeding as the circumstances require, and it has discretion to “further provide for the disposition of the funds received from the sale.” Minn. Stat. § 518.58, subd 3 (2006). The record shows that, but for appellant’s bad faith in removing respondent’s name from the mortgage during refinancing, the foreclosure proceedings would not have occurred. Thus, the district court did not abuse its discretion in allocating the proceeds.
Christopher J. Dietzen, Judge
 “‘Marital property’ means property, real or personal, . . . acquired by the parties, . . . during the existence of the marriage relation between them . . . .” Minn. Stat. § 518.003, subd. 3b (2006). Because appellant is arguing that he is entitled to half of the value of this personal property, it is apparent that he considers it to be marital property.
 Generally, courts apply the law in effect
when they make their decision unless doing so will alter vested rights or
result in manifest injustice. Interstate Power Co., Inc. v.
 The record also supports the fee award as a
need-based award. The findings required
to support a need-based fee award may be inferred where, as here, the record
shows that the district court was familiar with the parties’ finances. Gully
v. Gully, 599 N.W.2d 814, 826 (