This opinion will be unpublished and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:
Matthew Jon Lewis, petitioner,
Jacqueline Lee Lewis,
Filed September 11, 2007
Affirmed in part, reversed in part, and remanded
Carlton County District Court
File No. 09-FA-04-2044
Cheryl M. Prince, Catherine E. Martineau, Hanft Fride, P.A., 130 West Superior Street, Suite 1000, Duluth, MN 55802 (for respondent)
Dennis J. Korman, Nicholas B.
Schutz, Korman Law Office,
Considered and decided by Shumaker, Presiding Judge; Stoneburner, Judge; and Wright, Judge.
U N P U B L I S H E D O P I N I O N
Appellant challenges the district court’s amended dissolution judgment and decree, arguing that the district court abused its discretion by not awarding her permanent spousal maintenance and by ordering an automatic step reduction in the amount of her temporary maintenance. On notice of review, respondent challenges the district court’s findings regarding his income, appellant’s reasonable monthly expenses, and his spousal-maintenance arrearages. Respondent also argues that the district court abused its discretion by apportioning certain debts to him and by making him entirely responsible for the minor children’s uninsured medical expenses. Because the district court abused its discretion by ordering an automatic step reduction in appellant’s spousal maintenance, by finding that respondent’s pension is entirely employer-funded, and by ordering respondent to pay $9,915.21 in maintenance arrearages, but did not abuse its discretion in any other regard, we affirm in part, reverse in part, and remand.
Appellant Jacqueline Lee Lewis and respondent Matthew Jon Lewis married in 1986 and had four children together. The district court dissolved their marriage in 2006, when two of the children were still minors.
Throughout the marriage, Matthew worked as a nurse and nurse anesthetist and earned an average of $198,316 annually from 2001 through 2003. Jacqueline was a homemaker for most of the marriage, and she earned a bachelor’s degree and teaching certificate in May 2001. Jacqueline worked occasionally as a substitute teacher, earning $1,720 in 2005. The parties agreed that during the marriage that Jacqueline would not work full time outside the home until their youngest child finishes high school in 2009. The district court found that it is reasonable for Jacqueline to forgo full-time employment until 2009 and that “it is reasonable to expect that [Jacqueline] would be able to obtain full-time employment by [that] time . . . .”
The parties enjoyed a comfortable lifestyle during marriage; they owned a home, various cars, an airplane, and a lake home. Matthew also has a retirement account valued at more than $100,000. Although Matthew earned substantial income, the district court found that much of the parties’ standard of living “was artificially created through accumulation of excessive debt.” The parties own their home, subject to a mortgage and two home-equity loans, and their cabin is also encumbered. They own four cars subject to loans and also owe substantial credit-card debt. The parties’ total debt exceeded $500,000 at the time of dissolution.
The district court ordered Jacqueline to search for employment during the proceeding, but found that she did not make a reasonable effort to find work. A vocational-assessment expert testified that Jacqueline is employable and has the ability to earn between $28,000 and $42,000 per year. The expert testified that her earnings as a substitute teacher would be between $80 and $100 per day, and the district court imputed $400 in monthly income to Jacqueline based on working as a substitute approximately three days per week during the school year. The district court also imputed $1,700 per month to Jacqueline starting in October 2007 if she has not by then secured full-time employment.
The district court found that Matthew’s net monthly income is $11,923.74, which includes $2,500 per month for “call” pay and does not include a deduction for his pension contributions. The district court calculated Jacqueline’s and Matthew’s monthly living expenses to be $6,301 and $5,177, respectively, after eliminating marital debt. The district court also found that the “division of the parties’ property, after taking into account their outstanding debt, will not provide any meaningful support for [Jacqueline].” The district court stressed the need for the parties to adjust their expenses to “accommodate the financial realities following divorce.”
Because Jacqueline is currently unable to support herself and the parties agreed that she should not work full time until their youngest child finishes high school, the district court ordered temporary spousal maintenance. The court awarded Jacqueline $3,809 per month until October 1, 2007, when the award is reduced to $2,509, and eliminated maintenance entirely in October 2009. The district court recognized the difficulty of securing a teaching position in the area, but found that Jacqueline is expected to obtain full-time employment by the time the parties’ youngest child finishes high school.
During the proceeding, the district court issued a temporary-support order requiring Matthew to pay $7,000 per month for combined child support and spousal maintenance. The order also directed Jacqueline to pay the monthly credit-card bills and the home mortgages starting in December 2004. Matthew did not pay Jacqueline the entire $7,000 for various months “because [Jacqueline] failed to pay bills and I was forced to make those payments.” Matthew offset his support and maintenance obligations with payments he made on Jacqueline’s behalf. The district court found Matthew in contempt for failing to follow the temporary-support order and found that he owes $9,915.21 in arrearages. The district court also credited Matthew for overpaid child support.
The parties’ home fell into foreclosure during the proceeding, and they had to pay $14,646.21 by February 2006 to redeem the property. The district court found that the foreclosure resulted from Matthew’s failure to pay his temporary-support obligation. The district court ordered that the parties’ debts, including the amount to redeem their home, be paid from the sale of the parties’ real estate, boats, and snowmobiles. The district court also ordered that Matthew be solely responsible for his line of credit, from which he paid $19,000 toward the parties’ 2004 income taxes, and that he be responsible for the minor children’s uninsured medical expenses.
Both parties moved to amend the judgment, and the district court ordered an amendment in part. This appeal followed.
D E C I S I O N
1. Spousal maintenance
Appellate courts review a
district court’s maintenance award for an abuse of discretion. Dobrin
v. Dobrin, 569 N.W.2d 199, 202 (
The district court is to
consider the statutory factors set forth in Minn. Stat. § 518.552, subd. 2
(2006), in determining the amount and duration of the award. This process essentially balances the
recipient’s needs against the obligor’s ability to pay. Prahl
v. Prahl, 627 N.W.2d 698, 702 (
An award of temporary maintenance is warranted only if the
district court believes that the recipient can become self-supporting. See
Nardini v. Nardini, 414 N.W.2d 184, 198 (
Jacqueline challenges the temporary-maintenance award, arguing that her maintenance should be permanent because it is uncertain whether she will become self-supporting, and she did not receive substantial amounts of marital property. We disagree.
Although Jacqueline was a homemaker for most of the parties’ 19-year marriage, she has an undergraduate degree and teaching license, and has experience working as a teacher. The vocational expert’s testimony shows that Jacqueline has the ability to secure full-time employment by 2009, when the parties’ youngest child finishes high school. Additionally, Jacqueline’s failure to find work during the pendency of the proceedings does not show uncertainty about her ability to become self-supporting by October 2009 because she did not make a reasonable effort during the marriage to obtain full-time employment. Furthermore, Jacqueline’s ability to find work and become self-supporting by 2009 is not dependent on her receipt of substantial amounts of marital property. On this record, the district court did not abuse its discretion by awarding temporary rather than permanent spousal maintenance. If Jacqueline, through no fault of her own, cannot become self-supporting by October 2009, she may move to extend the duration of the award. See Hecker v. Hecker, 568 N.W.2d 705, 709-10 n.3 (Minn. 1997) (stating that a failure of an assumption underlying a maintenance award can justify modification of maintenance).
Jacqueline also argues that the district court abused its discretion by imposing an automatic step reduction in her spousal maintenance and by imputing full-time income to her starting in 2007. The record shows that the parties agreed that Jacqueline would not work full time until their youngest child finishes high school in 2009, and the district court found that it is reasonable for Jacqueline to forgo full-time employment until that time. But the district court also reduced Jacqueline’s maintenance and imputed full-time income to her starting in October 2007 “in the event that [she] has not obtained full-time employment.” Because the parties agreed that Jacqueline would not work full time until 2009 and the district court found the parties’ agreement reasonable, the district court abused its discretion, and we reverse the automatic step reduction.
a. Jacqueline’s monthly expenses
Matthew argues that the district court abused its discretion by finding that Jacqueline’s reasonable monthly expenses are $6,301. He also contends that the district court improperly included expenses for the parties’ adult children in Jacqueline’s expenses. We disagree.
The record shows that the parties amassed excessive debt and that the district court found that their standard of living “cannot be maintained post-separation and both parties must make adjustments to their expenses to accommodate the financial realities following divorce.” The parties submitted exhibits detailing their monthly expenses, with Jacqueline claiming more than $7,500 and Matthew claiming more than $8,200. Each included debt payments in their calculations. The district court found Jacqueline’s reasonable monthly expenses to be $6,301 “after the elimination of the majority of the marital debts and the selling of the major assets.”
Ordering the sale of the parties’ major assets eliminated a significant amount of the marital debt and the need to include the debt payments in their reasonable monthly expenses. The forced sale reflects the district court’s recognition that the parties lived beyond their means and eliminates the major expenses that led to their artificially created standard of living. The items included in Jacqueline’s reasonable monthly expenses did not substantially contribute to the parties’ debt, much of which arose from property and car loans. On this record, the district court did not clearly err by finding Jacqueline’s reasonable monthly expenses to be $6,301.
Next, Matthew argues that
the district court improperly included expenses for the parties’ adult children
in Jacqueline’s reasonable monthly expenses.
“The [district] court must fairly determine maintenance without considering
the needs of the adult children in setting the amount of maintenance.” Musielewicz
v. Musielewicz, 400 N.W.2d 100, 103 (
Jacqueline testified that her monthly expenses include some expenses for the parties’ adult children, namely two cell phones at an individual cost of $10 per month, car insurance that includes one adult-son driver, and part of her $100 monthly vacation allotment to assist an adult son’s visit home. Jacqueline also admitted spending thousands of dollars on the parties’ adult children in the past, but was not certain how much she will spend on them in the future.
Although it is not definite
how much Jacqueline spends on the parties’ adult children, the amount for
cell-phone use, part of the car-insurance expense, and part of her $100
traveling expense are de minimis in light of her reasonable monthly expenses
and do not require reversal. See Wibbens v. Wibbens, 379 N.W.2d 225,
b. Matthew’s income
Matthew also argues that the district court overstated his income by including $2,500 per month for “call” pay and by failing to credit him with a reasonable pension deduction.
In order to determine an
obligor’s ability to pay spousal maintenance, the district court must determine
the obligor’s net income. Kostelnik v. Kostelnik, 367 N.W.2d 665,
First, Matthew contends that his call pay is not a periodic or a dependable source of income and, therefore, it should not be included in his income. Alternatively, he argues that the district court’s finding that he earns $2,500 in monthly call pay is not supported by the record. Our review of the record shows that Matthew’s call pay is regular and dependable because he gets called in approximately two to three times per call-week, which occurs once every three-week rotation. The amount of call pay found by the district court is also supported by the record, which includes pay stubs in which Matthew received between no call pay and $3,000 in call pay. Thus, the district court’s finding that Matthew receives $2,500 per month in call pay is not “manifestly contrary to the weight of the evidence” and is not clearly erroneous. Tonka Tours, Inc.,372 N.W.2d at 726.
Matthew also argues that the district court clearly erred by finding that he “will have an employer-funded pension plan . . . and therefore it is not appropriate to allow him an additional 401(k) deduction when calculating his income.”
Our review of the record shows that Matthew is eligible to participate in an employee retirement plan according to the provisions of the plan and that the terms of that plan are not a part of the record. The district court concluded that the plan is entirely employer-funded, but the record does not support such a conclusion. We reverse and remand to determine the provisions of the retirement plan and whether, given the marital standard of living, Matthew’s income and ability to pay maintenance should be reduced by a reasonable pension deduction. See Minn. Stat. § 518.552, subd. 2(c), (g) (2006) (requiring consideration of marital standard of living and payor’s ability to pay when setting maintenance obligation); c.f. Minn. Stat. § 518.551, subd. 5(b) (2004) (requiring net income for child support to be calculated after allowing a reasonable retirement contribution).
Matthew also argues that the district court abused its discretion by finding him in arrears of $9,915.21 for his spousal-maintenance obligation.
“An arrearage is money overdue and unpaid.” County
of Nicollet v. Haakenson, 497 N.W.2d 611, 616 (
The record shows that Matthew began making full maintenance and support payments, but also paid several bills, including mortgage payments for the marital home, on Jacqueline’s behalf, totaling $4,470.78. Matthew deducted those payments from his maintenance payments and requested that the district court modify his support obligation so that he could continue paying the bills in order to preserve marital property. The district court never addressed the request and did not credit Matthew for his payments. Matthew also overpaid child support in the amount of $4,182. Nevertheless, the district court found Matthew in arrears of $9,915.21; a value supported by the record, had Matthew not made payments on Jacqueline’s behalf or overpaid child support.
Although we do not condone parties ignoring or modifying court orders without court approval, under these facts we are compelled to hold that Matthew is entitled to credit for his bill payments against his arrearages. Matthew made a good-faith effort to preserve marital property by making payments that Jacqueline failed to make, and he attempted to resolve the issue in court but did not receive a direct ruling on the matter. Crediting Matthew with his bill payments and his overpaid child support brings his arrearages to $1,262.43.
3. Debt apportionment
Matthew also argues that the district court abused its discretion by not dividing the parties’ debts equitably.
Debt apportionment is part
of property division, and district courts are “not required to apportion
marital debts but [are] only required to meet the just and equitable standard
of property divisions.” 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 (
First, Matthew argues that the district court improperly divided the foreclosure-redemption expenses equally between the parties because Jacqueline was entirely responsible for the debt. We disagree.
The record shows that Jacqueline’s mortgage payments depended on Matthew paying maintenance and support of $7,000 each month. Although Jacqueline failed to make timely mortgage payments on several occasions, ultimately ending in foreclosure, Matthew did not make regular, full maintenance payments to Jacqueline as discussed above. It would be an arduous task to quantify each party’s responsibility for the redemption expenses based on their actions and to divide the debt accordingly, but the law does not require such precision. Rather, the record is clear that both parties contributed to their home falling into foreclosure, and, therefore, we conclude that the district court did not abuse its discretion by dividing the redemption costs equally between the parties.
Next, Matthew argues that the district court abused its discretion by assigning the debt incurred to pay a 2004 tax liability entirely to him. He contends that the parties lived together for most of 2004 and thus the debt should be divided equally. The district court found, and we agree, that Matthew is responsible for debt for the parties’ 2004 tax liability. The parties separated in August 2004, and the tax liability for that year arose because Matthew failed to withhold taxes from certain income. After the parties separated, Matthew opened a line of credit to pay $19,000 of the tax liability. Because the parties lived together during only part of 2004 and because Matthew has the ability to pay the debt, while Jacqueline does not, the district court did not abuse its discretion by apportioning the debt incurred for the tax liability entirely to Matthew.
4. Medical costs
Finally, Matthew challenges the district court’s finding that Jacqueline does not have the financial ability to contribute to any uninsured medical expenses for the parties’ minor children. He contends that Jacqueline is able to contribute to such costs because he pays child support and spousal maintenance.
The record shows that the district court calculated Matthew’s spousal-maintenance and child-support obligations to meet the minor children’s and Jacqueline’s needs. The reasonable monthly expenses found by the district court do not contemplate medical expenses except for $40 per month in unreimbursed medical and dental expenses, which is de minimis. Because the spousal-maintenance and child-support obligations combine to meet Jacqueline’s and the minor children’s needs but do not include uninsured medical costs, the district court properly found that Jacqueline does not have the resources to contribute to such expenses.
On remand, the district court shall have discretion regarding whether to reopen the record.
Affirmed in part, reversed in part, and remanded.
 Generally, courts apply the law in effect when they make their decision. Interstate Power Co., Inc. v. Nobles County Bd. of Comm’rs, 617 N.W.2d 566, 575 (Minn. 2000). Here, as part of amendment and renumeration of child-support statutes, the definition of “income” in Minn. Stat. § 518.54, subd. 6 (2004), that, under Minn. Stat. § 518.54, subd. 1 (2004), was applicable in both support and maintenance contexts, was repealed. 2006 Minn. Laws ch. 280, § 47. Because this appeal involves maintenance rather than child support, we apply the 2004 version of this statute and the 2004 version of the support statutes that we cite.