This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. ' 480A.08, subd. 3 (1994).

STATE OF MINNESOTA

IN COURT OF APPEALS

CX-95-2276

Martha Pauline Peters, n/k/a

Martha Pauline Ashbaugh, petitioner,

Appellant,

vs.

Douglas A. Peters,

Respondent.

Filed June 18, 1996

Affirmed in part, reversed in part, and remanded

Norton, Judge

Hennepin County District Court

File No. DC 195 959

Douglas J. Nill, 1012 Grain Exchange Bldg., 400 South Fourth Street, Minneapolis, MN 55415 (for Appellant)

Thomas A. Roe, 880 Lumber Exchange Building, 10 South Fifth Street, Minneapolis, MN 55402 (for Respondent)

Candace J. Barr, 1100 National City Bank Building, 510 Marquette Avenue, Minneapolis, MN 55402-1107 (Guardian ad litem)

Considered and decided by Norton, Presiding Judge, Peterson, Judge, and Amundson, Judge.

U N P U B L I S H E D O P I N I O N

NORTON, Judge

Appellant Martha Pauline Peters, n/k/a Martha Pauline Ashbaugh (mother), claims that the district court erred in denying her posttrial motion, and in its rulings on maintenance, support, and attorney fees. We affirm in part, reverse in part, and remand.

FACTS

The 1995 judgment dissolving mother's marriage to respondent Douglas A. Peters (father) granted mother custody of the older child and joint physical custody of the younger child, set father's support obligation, awarded father's profit sharing plan to mother "in lieu of" maintenance for five years after entry of the judgment, reserved jurisdiction over maintenance thereafter, and denied mother's motion for attorney fees. After judgment was entered, mother made a motion claiming that father had misrepresented his income to the court; she sought to compel discovery of father's finances, receive an evidentiary hearing, and retroactively increase child support. The district court denied mother's motion.

D E C I S I O N

1. Mother seeks a "new trial" under several provisions of Minn. R. Civ. P. 59.01, but does not make an argument specifically addressing any listed ground. Granting a new trial is discretionary with the district court. 200 Levee Drive Ass'n. v. Scott County, 532 N.W.2d 574, 578 (Minn. 1995). Mother also seeks a new trial based on the "inherent power" of the court to modify a dissolution judgment because of father's alleged fraud on the court, as set forth in Maranda v. Maranda, 449 N.W.2d 158, 164 (Minn. 1989). Mother, however, does not specifically pursue a fraud-on-the-court analysis. She claims that she is entitled to a new trial based on information in her letter to the court. To receive a new trial for newly discovered evidence, the moving party must show, among other things, that the evidence "could not have been discovered through the exercise of due diligence before the trial * * *." Vikse v. Flaby, 316 N.W.2d 276, 284 (Minn. 1982). Mother, however, essentially admits that her trial counsel did not meet Vikse's diligence requirement. Therefore, a new trial was not necessary. [1]

2. Citing alleged anomalies in father's finances, mother claims that father misrepresented his income to the district court. A finding of net income for support purposes "will be affirmed if it has a reasonable basis in fact." Strauch v. Strauch, 401 N.W.2d 444, 448 (Minn. App. 1987). Father addressed each of the concerns mother presented to the district court; the court apparently found father's explanations credible. We defer to the district court's credibility determinations. Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988). Because we conclude that father did not misrepresent his income, we do not address mother's claim that she is entitled to retroactively increased support based on father's alleged misrepresentation.

Mother next challenges the finding of father's expenses, noting that the amount found includes payments on a pension loan, credit card debt allegedly extinguished by the loan from father's profit sharing plan, and rent for a home father shares with his secretary. Father claims that he incurred the credit card debt after the parties took out the loan from the profit sharing plan, but does not address mother's other claims. We remand the finding of father's expenses for explanation or alteration by the district court.

Mother also claims that the district court should have granted her request for father's 1994 records so that her CPA could audit father's income. Mother does not further develop her argument nor does she cite any authority for it. Consequently, she has waived this argument. See Schoepke v. Alexander Smith & Sons Carpet Co., 290 Minn. 518, 519-20, 187 N.W.2d 133, 135 (1971) (assignment of error based on "mere assertion" and not supported by argument or authority in appellant's brief is waived unless prejudicial error is obvious). Error is not obvious and, were we to address the merits of mother's claim, she would not prevail.

The district court found father's gross annual and net monthly incomes to be $40,000 and $2,014, respectively. These figures are inconsistent with father's April 1995 affidavit stating that his actual 1994 gross income was $48,779. We remand the finding of father's income for the district court to explain or amend its finding in light of father's April 1995 affidavit. See Thomas v. Thomas, 407 N.W.2d 124, 127 (Minn. App. 1987) (support must be based on "current net income") (emphasis in original).

3. Under the judgment, mother is not entitled to maintenance for five years; after five years, spousal maintenance is reserved. Mother claims that this provision deprives the district court of jurisdiction to consider requests for maintenance until five years after the entry of judgment and deprives her of due process of law. Father concedes that mother may move to modify maintenance before the expiration of five years if circumstances change. In addition, even though we will not address mother's constitutional argument, because she did not raise it below, we note that father's concession undermines her claim.

4. The judgment states that the award to mother of father's profit sharing plan, subject to the loan against it, is equal to five years of spousal maintenance at $1,000 per month. Noting that the award is worth $39,280 after deducting the loan balance and accounting for taxes, mother argues that the district court erred in not considering the tax impact of awarding her the profit sharing plan. The district court awarded mother the profit sharing plan "in lieu of" maintenance. Generally, maintenance is taxable to the recipient. 26 U.S.C.A. ' 71 (1988). Therefore, the district court implicitly apportioned the tax consequences along with the award made "in lieu of" maintenance. The district court removed any doubt about its intention to apportion the tax consequences of the award to mother when it received arguments on the tax issue and refused to alter the judgment. A similar result occurs if we view the profit sharing plan as a property award rather than a maintenance award. See Salstrom v. Salstrom, 404 N.W.2d 848, 853 (Minn.App. 1987) (trial court need only consider tax consequences arising from property distribution itself, not possible tax consequences arising from possible future dealings with the property). We have considered the cases mother cites to support her argument that the district court must consider tax consequences, and find them distinguishable from this case.

5. Mother claims that the district court erred by not awarding her support for the second child when that child is in her custody. Hortis v. Hortis, 367 N.W.2d 633, 636 (Minn. App. 1985) and its progeny require joint physical custodians to pay support during the period the other custodian has physical custody of the child. The Hortis rule "should be used in all joint [physical] custody situations, unless there are specific reasons for a departure." Valento v. Valento, 385 N.W.2d 860, 862 (Minn. App. 1986), review denied (Minn. June 30, 1986). Failure to apply Hortis and Valento requires a remand. Veit v. Veit, 413 N.W.2d 601, 606-07 (Minn. App. 1987). [2] Father claims that the district court did not abuse its discretion in not awarding mother support for the second child when in mother's custody because, when judgment was entered, it was not clear how much time the younger child would spend with each parent. The judgment states that absent an agreement on a custody and visitation schedule, the matter would be resubmitted to the court for decision. Thus, the judgment contemplated a definite custody schedule and hence application of Hortis.

6. The court "shall" award attorney fees if it finds that the recipient needs the fees for a good faith assertion of rights and the payor can pay the fees, but the recipient cannot. Minn. Stat. ' 518.14, subd. 1 (1994). Because we remand the issue of father's income, we also remand the issue of need-based attorney fees. The district court may award conduct-based attorney fees against a party who unreasonably contributes to the length or expense of a proceeding or acts in bad faith. Minn. Stat. '' 518.14, subd. 1; 549.21, subd. 2 (1994). Because we reject the claim that father concealed his income, we deny mother's request for conduct-based attorney fees. The authority mother cites to argue for an award of attorney fees based on liquidation of assets is distinguishable.

7. On remand and in light of any change in the finding of father's income based on his April 1995 affidavit, the district court shall (a) reevaluate the amount of father's support obligation and set support pursuant to Hortis or explain why Hortis should not be applied and (b) address the propriety of an award of need-based attorney fees. The district court shall also reexamine the finding of father's expenses. On remand, the district court shall have the discretion to decide whether to reopen the record. Nothing in this opinion is an indication of how the remanded issues should be decided by the district court.

Affirmed in part, reversed in part, and remanded.


Footnotes

[1] Three of mother's grounds for a new trial are implicit in her claim that father misrepresented his income. She failed to argue another ground on appeal. See Melina v. Chaplin, 327 N.W.2d 19, 20 (Minn. 1982) (issues not briefed on appeal "must be deemed waived"). Therefore, of the rule 59.01 grounds for a new trial that mother asserted in the district court, only her claim that a new trial was required for newly discovered evidence required separate analysis.

[2]Father cites cases to argue that Hortis need not be applied if a support award fairly reflects the parties' financial circumstances. Those cases, however, predate this court's restatement of the Hortis rule in Broas v. Broas, 472 N.W.2d 671, 673 (Minn. App. 1991).