may not be cited except as provided by
Minn. Stat. SS 480A.08, subd. 3 (1994).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
Rhonda Lee Peterson, petitioner,
Lynn Russel Peterson,
Filed October 1, 1996
Affirmed in part, Reversed in part, and Remanded
Anoka County District Court
File No. F2-94-6744
Michael C. Black, Michael C. Black Law Office, Ltd., 265 W. Seventh St., Ste. 201, St. Paul, MN 55102 (for Appellant)
Elizabeth A. Schading, Barna, Guzy & Steffen, Ltd., 400 Northtown Financial Plaza, 200 Coon Rapids Blvd., Minneapolis, MN 55433 (for Respondent)
Considered and decided by Schumacher, Presiding Judge, Norton, Judge, and Harten, Judge.
In post-judgment motion proceedings, the district court denied appellant-wife's alternative claims that either her maintenance award or her marital property award is inadequate, and that her attorney fees award is inadequate. This appeal followed, including a claim for attorney fees on appeal. We affirm in part, reverse in part, and remand.
Wife petitioned for marriage dissolution in April 1994. In July 1994, the parties stipulated to a temporary order that established, among other things, husband's temporary monthly maintenance obligation at $882 per month and entitled wife to supplement her monthly income with the proceeds of her IRA account. Wife's sole source of income other than maintenance is $458 per month in Social Security benefits. Wife claimed monthly expenses of $1,911, but the district court found $1,280 to be a reasonable amount. During the pendency of the dissolution proceeding, wife became obliged to liquidate one of the IRAs that the district court awarded her as part of her marital property distribution.
Husband is employed by Batesville Casket Company and, in 1994, had a gross income of $84,739. Husband's income is based solely on commissions and he is responsible for paying all of his business expenses. The amount of these business expenses is at issue in this appeal.
In September 1995, the district court ordered judgment which, among other things, awarded wife $300 per month permanent spousal maintenance, about one-half of the parties' marital property, and $3,000 in attorney fees. In November 1995, wife moved for amended findings, requesting an increase of maintenance to $900, or, alternatively, a greater share of the marital property, or a new trial and an increased attorney fees award. In January 1996, the district court denied wife's post-trial motions. Wife argues that the district court abused its discretion by awarding her insufficient spousal maintenance, or, in the alternative, by failing to award her an appropriate division of marital property, and by failing to make an adequate award of attorney fees. Wife also requests attorney fees for this appeal.
The district court found husband's net monthly income and reasonable monthly expenses to be $2,880 and $3,553.68, respectively. Wife argues that the district court incorrectly calculated husband's net income and expenses. We review the evidence to determine whether the court's findings are clearly erroneous. Minn. R. Civ. P. 52.01. The underlying findings upon which the district court bases its award must be affirmed unless clearly erroneous. Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn. App. 1992); Garcia v. Garcia, 415 N.W.2d 702, 704 (Minn. App. 1987). The award will not be disturbed if it has an acceptable basis in fact and principle. DuBois v. DuBois, 335 N.W.2d 503, 507 (Minn. 1983).
a. Husband's business expenses
The ability of a spouse to pay maintenance depends upon a determination of the spouse's net income. Kostelnik v. Kostelnik, 367 N.W.2d 665, 670 (Minn. App. 1985), review denied (Minn. July 26, 1985). Wife claims that the district court overstated husband's business expenses, thereby understating his net monthly income, the amount from which maintenance is determined.
The district court had the opportunity to observe and assess the credibility of husband's expert witness who testified concerning husband's business expenses. The evidence indicates that husband's business expenses in relation to his gross income were consistent over the years and reasonable, considering all the evidence. The district court's findings of fact as to business expenses in relation to husband's gross income are supported by the evidence and are not clearly erroneous. See Minn. R. Civ. P. 52.01 (findings of fact not set aside unless clearly erroneous).
Wife challenges the court's allowing husband to deduct as a business expense the full $2,588 purchase price for a business computer purchased by husband in 1994. We see no error in this one-time allowance, provided it is understood that husband's net income in future years must be calculated without deducting any part of this 1994 computer expenditure.
b. Husband's personal expenses
Wife asserts that the district court erred by allowing as a deduction from husband's gross income a monthly marital debt service expense of $799. This deduction affects husband's net income: the greater the allowed deduction, the lesser husband's net income on which maintenance is determined. Here, a problem arises because the indebtedness that husband must pay was considered in the property division, to-wit, the district court allocated to husband additional marital property to offset the amount of marital debts that were assigned to him. Wife asserts that this arrangement forces her to pay for those debts twice, once by reducing her share of the property division by one-half the unpaid balance on the marital indebtedness, and again by charging the full monthly debt payments against husband's future income, thereby reducing husband's net income on which maintenance is calculated. We agree. In its property division, the district court assigned all of the marital debts ($20,272) to husband, and awarded him $43,606.81 in marital assets. Husband thereby received a net award of $23,334.81, or about one-half the total marital property. Wife received the remainder. Thus, in addition to awarding husband sufficient property to compensate him for the award of the marital debt, the district court also recognized husband's ongoing deduction of $799 per month from his gross income for repayment of the same marital debt. Due to this double-counting, the district court's finding of husband's personal expenses is clearly erroneous.
Additionally, wife argues that the district court erred by counting husband's car and household expenses as both personal expense and business expense, once again reducing the amount of money available for maintenance. The district court found that husband's reasonable monthly personal expenses are $3,553.68, a figure that appears to be unsupported by the evidence; husband's expert witness testified that husband's reasonable monthly expenses are $2,477. The district court gave no explanation for allowing husband's monthly expenses beyond those supported by husband's expert witness.
Specifically, the district court allowed husband to claim $14,385 for business-related automobile expenses including gasoline, depreciation, insurance, and repair costs; but the district court also included the full amount of husband's monthly car payment ($376), car insurance premium ($100), fuel ($75), and car repairs ($75) as personal expenses. The district court's findings of fact as to personal automobile expenses is clearly erroneous due to this partial double-counting.
Additionally, it appears that the district court partially double-counted husband's monthly utility and home mortgage expenses, a portion of which he claimed as business expenses. There is evidence that husband included interest and real estate taxes ($709) and utilities and insurance for his homestead ($317) as part of his 1994 business expenses. In addition, the district court recognized husband's personal expense claim for his full monthly house payment ($988.68) and utilities ($215). The district court's finding of fact, therefore, is clearly erroneous due to this partial double-counting.
Finally, wife asserts that the district court erred by including husband's food expenses, including meals out, as both a business expense and personal expense, thereby reducing the amount of money available to pay maintenance. Wife points to no substantial evidence to support this assertion. We find no clear error in the district court's determination as to this item.
c. Wife's personal expenses
Wife argues that the district court erred by finding that her monthly personal expenses were $1,280 rather than $1,911 as per her testimony. Trial testimony, however, implied that wife was spending more than necessary for her monthly living expenses by paying an excessive amount for rent, clothing, laundry, and children's expenses. The district court's determination of wife's necessary monthly expenses is not clearly erroneous.
2. Marital property division
Minn. Stat. SS 518.58 (1994) requires that property division be just and equitable. Debts and assets are both apportionable in a dissolution proceeding. Filkins v. Filkins, 347 N.W.2d 526, 529 (Minn. App. 1984). A district court has broad discretion in dividing property and, absent an abuse of discretion, the court's decision will stand. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
Alternative to her claim asserting inadequate maintenance, wife argues that the district court abused its discretion in not awarding her additional property to provide for her needs. As set forth in the preceding section, wife argues that husband received double credit by being awarded additional property to cover the marital debt apportioned to him and, at the same time, benefitted from a maintenance obligation that was reduced to allow for his substantial debt liability. This claim is intermeshed with wife's preceding claims relating to maintenance determination and we need not address it separately.
3. Attorney fees
Awarding attorney fees lies within the broad discretion of the district court. Katz v. Katz, 408 N.W.2d 835, 840 (Minn. 1987); Moberg v. Moberg, 350 N.W.2d 421, 423 (Minn. App. 1984), review denied (Minn. Oct. 16, 1984). A district court's decision regarding attorney fees "will not be disturbed absent a clear abuse of discretion." Jensen v. Jensen, 409 N.W.2d 60, 63 (Minn. App. 1987). A district court may award attorney fees when (1) they are necessary for a party to assert his or her rights, (2) the party seeking the award does not have the means to pay the fees, and (3) the other party has the ability to pay. Minn. Stat. SS 518.14, subd. 1 (1994). When a party requests attorney fees based on need, section 518.14 mandates that the district court make appropriate findings. In re Marriage of Richards, 472 N.W.2d 162, 166 (Minn. App. 1991).
The district court made the following findings regarding attorney fees: (1) husband had incurred approximately $9,327 in attorney fees, (2) husband had the ability to pay his own fees, and (3) husband had
some limited ability to contribute to payment of the [wife's] attorneys' fees. However, he does not have the ability to fully pay the [wife's] attorneys' fees.
Although there is an obvious disparity in the earning power of the parties, both have limited assets from which attorney fees may be paid. Considering the financial circumstances of both parties, we conclude that the district court did not abuse its discretion in awarding wife $3,000 for attorney fees.
Wife argues that the district court abused its discretion by failing to make the attorney fees award reasonably enforceable. In awarding attorney fees, the district court stated that the fees should be paid "pursuant to a payment schedule to be worked out between the [husband] and the [wife's] attorney, Michael Black." Under Minn. Stat. SS 518.14, subd. 1, the court is entitled to authorize the collection of attorney fees in "[any] manner within the power of the court." The statute does not require that the court make the award reasonably enforceable. Nonetheless, under the circumstances of this case, we conclude that the best interests of all participants require that the attorney fees award be amended to make the terms of payment precise and thus reasonably enforceable.
4. Attorney fees on appeal
Section 518.14 authorizes appellate attorney fees to enable a party to participate in the proceeding. We award wife $500 for attorney fees on appeal.
In summary, we affirm the amount of the attorney fees award, but remand with directions that the district court make that award reasonably enforceable. We reverse and remand the maintenance award and marital property division with direction that one or the other, or both, be redetermined in a manner that will avoid double-counting. The district court may, or may not, in its sole discretion, receive further evidence or briefing upon remand.
Affirmed in part, reversed in part, and remanded.