may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1994).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
Susan Gay, petitioner,
Filed November 19, 1996
Affirmed in Part and Reversed in Part
Anoka County District Court
File No. F4907885
Elizabeth A. Schading, Barna, Guzy & Steffen, Ltd., 400 Northtown Financial Plaza, 200 Coon Rapids Boulevard, Coon Rapids, MN 55433 (for respondent)
Maureen M. O'Phelan, Lawrence D. Olson & Associates, P.A., 2860 Snelling Avenue North, St. Paul, MN 55113 (for appellant)
Considered and decided by Parker, Presiding Judge, Kalitowski, Judge, and Forsberg, Judge.[*]
The marriage of the parties was dissolved in 1991. Richard Gay appeals the district court's second amended judgment and decree of May 3, 1996. He contends it was an abuse of discretion for the trial court to (1) award permanent maintenance of $166.66 per month to respondent Susan Gay; (2) order him to provide health insurance coverage to the parties' son; and (3) award $1,000 in attorney fees to his former wife. He also asks that this court award attorney fees to him for this appeal. Susan Gay raises an additional issue, arguing that the district court abused discretion in not finding voluntary underemployment by her former husband. She also seeks attorney fees for this appeal. We affirm in part and reverse in part.
(a) the financial resources of the party seeking maintenance, including marital property apportioned to the party, and the party's ability to meet needs independently, including the extent to which a provision for support of a child living with the party includes a sum for that party as custodian;
(b) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, and the probability, given the party's age and skills, of completing education or training and becoming fully or partially self-supporting;
(c) the standard of living established during the marriage;
(d) the duration of the marriage and, in the case of a homemaker, the length of absence from employment and the extent to which any education, skills, or experience have become outmoded and earning capacity has become permanently diminished;
(e) the loss of earnings, seniority, retirement benefits, and other employment opportunities foregone by the spouse seeking spousal maintenance;
(f) the age, and the physical and emotional condition of the spouse seeking maintenance;
(g) the ability of the spouse from whom maintenance is sought to meet needs while meeting those of the spouse seeking maintenance; and
(h) the contribution of each party in the acquisition, preservation, depreciation, or appreciation in the amount or value of the marital property, as well as the contribution of a spouse as a homemaker or in furtherance of the other party's employment or business.
Minn. Stat. § 518.552, subd. 2 (1994). Where uncertainty exists as to whether the award should be permanent or temporary, the court shall order a permanent award and leave the order open for subsequent modification. Minn. Stat. § 518.552, subd. 3 (1994). A court may modify a maintenance order upon a showing of substantially increased or decreased need of a party or the child. Minn. Stat. § 518.64, subd. 2(a) (Supp. 1995). On a motion for modification of maintenance, including a motion for the extension of the duration of maintenance, the court shall apply the factors contained in Minn. Stat. § 518.552. Minn. Stat. § 518.64, subd. 2(b) (Supp. 1995).
Maintenance was initially ordered at $200 per month, subject to the court's review after five years. The court and the parties apparently treated the last hearing as being upon the expiration of the five-year period specified. The court determined that "substantial change in the parties' circumstances" had occurred, warranting the award of $166.66 per month permanent maintenance. On appeal, Richard Gay argues that the court improperly penalized him for filing bankruptcy and that Susan Gay has established no need for permanent maintenance.
A district court may not circumvent a federal bankruptcy discharge of a marital dissolution property settlement. Coakley v. Coakley, 400 N.W.2d 436, 440 (Minn. App. 1987), review denied (Minn. Apr. 23, 1987) (finding that where husband's bankruptcy caused wife to suffer the loss of property settlement and to incur substantially increased debt liability, this constituted a change of wife's circumstances, supporting an increase in maintenance and child support). Despite the prohibition against re-opening property settlements, the bankruptcy of one former spouse can result in a change of circumstances to the other former spouse. See Ganyo v. Engen, 446 N.W.2d 683, 686 (Minn. App. 1989) (maintenance increased where husband's bankruptcy reduced his debts, increased his income, and materially improved his ability to pay); Foster v. Childers, 416 N.W.2d 781, 785-86 (Minn. App. 1987) (husband's bankruptcy discharged part of property settlement to wife, requiring remand for consideration of whether the bankruptcy constituted a change of circumstances).
The district court indicates that Richard Gay's bankruptcy resulted in a substantial change of Susan Gay's circumstances. The property settlement between the parties obligated him to pay the $10,000 second mortgage on her home. He discharged this debt in bankruptcy, costing her $12,652.60 in payments he would otherwise have made. In light of Susan Gay's limited means, the loss of this income can certainly be termed "substantial." Further, her failure to rehabilitate can itself constitute a change of circumstances warranting permanent maintenance. See Gessner v. Gessner, 487 N.W.2d 921, 924 (Minn. App. 1992) (wife's failure to rehabilitate constituted a substantial change of circumstances supporting permanent maintenance).
The district court's order addresses the statutory factors and demonstrates the need for maintenance. Susan Gay is 46 years old. She has a high school diploma and no training or experience qualifying her for skilled employment. Although she has had five years to rehabilitate, she has foregone schooling and training in order to work two jobs to provide, as custodial parent, for the parties' children. During 12 of the 19 years of the marriage, she did not work outside the home. Further, Richard Gay's bankruptcy deprived her of a substantial portion of the property settlement. Ultimately, she is not able independently to meet her needs. Accordingly, we conclude that the district court did not abuse discretion in awarding her $166.66 per month permanent maintenance. The effect of Richard Gay's bankruptcy and Susan Gay's failure to rehabilitate fully provide sufficient grounds to support the award.
We are aware of Gales v. Gales, ___ N.W.2d ___ (Minn. Sept. 19, 1996), in which the supreme court reversed a $350 per month award of permanent maintenance to a 32-year-old employed wife upon dissolution of an 11-year, childless marriage. The supreme court distinguished Gales from cases where permanent maintenance is more appropriate, namely, cases of older, dependent spouses in lengthy, traditional marriages. Id. at ___. In the present case, Susan Gay can be considered an older, dependent spouse in a traditional, longer-term marriage.
2. The district court has broad discretion to provide for the support of the parties' children. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). Minnesota law provides that
[t]he court shall order the party with the better group dependent health and dental insurance coverage or health insurance plan to name the minor child as beneficiary on any health and dental insurance plan that is available to the party * * *.
Minn. Stat. § 518.171, subd. 1(a)(2) (Supp. 1995).
Richard Gay does not challenge the basic award of child support but, rather, the requirement that he carry health insurance for his son (the cost of coverage for Richard Gay and one dependent is $218). He contends that it is unreasonable to require him to provide health insurance in light of his limited means. Because there is no evidence that Susan Gay is better able to pay for insurance coverage or that she has available "better" coverage, we conclude the district court did not abuse discretion in ordering him to continue to provide health insurance to their son.
3. An award of attorney fees lies within the discretion of the district court and will not be reversed absent an abuse of discretion. Katz v. Katz, 408 N.W.2d 835, 840 (Minn. 1987). The court shall award need-based attorney fees in a marital dissolution proceeding provided the court finds:
(1) that the fees are necessary for the good-faith assertion of the party's rights in the proceeding and will not contribute unnecessarily to the length and expense of the proceeding;
(2) that the party from whom fees, costs and disbursements are sought has the means to pay them; and
(3) that the party to whom fees, costs, and disbursements are awarded does not have the means to pay them.
Minn. Stat. § 518.14, subd. 1(1)-(3) (1994); see also In re Marriage of Richards, 472 N.W.2d 162, 166 (Minn. App. 1991) (expressing the "need for findings on the specific factors set forth in the statute"). A court may also order conduct-based attorney fees where a party unreasonably contributes to the length or expense of the proceeding. Minn. Stat. § 518.14, subd. 1.
We reverse the district court's award of $1,000 in attorney fees to Susan Gay. It is unclear whether the court awarded need-based or conduct-based attorney fees. If the attorney fee award was need-based, then the court's order lacks the required statutory finding that Richard Gay has the means to pay. We observe that each party has expenses vastly exceeding net monthly income. Thus, because the record cannot support need-based attorney fees, there is no need to remand. If the attorney fee award was conduct-based, the record would not support an inference that Richard Gay unreasonably contributed to the length or expense of the proceeding. Accordingly, the court abused discretion in awarding attorney fees.
4. Attorney fees on appeal may be awarded in dissolution cases where the appeal was frivolous or in bad faith. Dabrowski v. Dabrowski, 477 N.W.2d 761, 766 (Minn. App. 1991); see also Gales, ___ N.W.2d at ___ (need-based attorney fees are also available under Minn. Stat. § 518.14 on appeal). We conclude that neither party is entitled to attorney fees on appeal.
5. If an obligor is voluntarily underemployed, child support shall be based on a determination of imputed income. Minn. Stat. § 518.551, subd. 5b(d) (1994). A parent is not voluntarily underemployed if the underemployment is (1) temporary and will ultimately lead to an increase in income; or (2) represents a bona fide career change outweighing the adverse effects of diminished income on the child. Id. In addition, a parent is not voluntarily underemployed unless such parent chooses to be underemployed. Franzen v. Borders, 521 N.W.2d 626, 629 (Minn. App. 1994).
The district court did not address Susan Gay's request that income be imputed to her former husband. Richard Gay worked for 19 years as an over-the-road (OTR) truck driver. In 1995, he was terminated from his employment through no fault of his own. At the time of termination, he earned $19.54 per hour. Two of his subsequent job search inquiries indicate he declined to pursue OTR trucking jobs even though he listed his regular employment as an OTR driver. He has since taken a janitorial position at $8 per hour.
We conclude that the district court did not abuse discretion in declining, at this time, to impute income. The district court was in the best position to weigh the evidence. While the record might have permitted a finding that Richard Gay chooses to be voluntarily underemployed, the record does not compel such a finding.
Affirmed in part and reversed in part.
[ ]* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.