This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C0-96-1826

In Re the Matter of:

Suzanne Marie Hussey, on behalf of

Michelle and Natalie Reynolds, petitioner,

Appellant,

vs.

Douglas Reynolds,

Respondent.

Filed February 25, 1997

Affirmed in part, reversed in part, and remanded.

Parker, Judge

Hennepin County District Court

File No. 211810

Geraldine Carlen Steen, Beckman, Steen & Troesch, 14550 Excelsior Boulevard, Suite 206, Minnetonka, MN 55345 (for appellant)

Rhonda Simpson Brown, 5101 Thimsen Avenue, Suite 200, Minnetonka, MN 55345 (for respondent)

Karen Ives, 333 South Seventh Street, Suite 2890, Minneapolis, MN 55402 (guardian ad litem)

Considered and decided by Parker, Presiding Judge, Huspeni, Judge, and Schumacher, Judge.

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

PARKER, Judge

Suzanne Hussey, as sole physical custodian of her two nieces, Michelle and Natalie Reynolds, appeals a district court order that (1) set the children's father's child support obligation at an amount below the child support guidelines, but (2) did not make the support obligation retroactive, and (3) allowed the father to report the children as his dependents for the purpose of claiming exemptions on his tax returns. We affirm in part, reverse in part, and remand for the district court to review evidence of the children's share of Hussey's fixed household expenses, to address Hussey's request for retroactivity, and to reconsider the tax exemption issue in light of any relevant amendments made to the court's original order. On remand, the district court should also reopen the record to make updated findings on the father's net income and the children's financial needs.

D E C I S I O N

1. Douglas Reynolds, the children's father, first argues that this court lacks jurisdiction to review the district court's child support order because it is not a "final order * * * in [a] * * * special proceeding" under Minn. R. Civ. App. P. 103.03(g).

Citing Angelos v. Angelos, 367 N.W.2d 518 (Minn. 1985), and Huso v. Huso, 465 N.W.2d 719 (Minn. App. 1991), Reynolds asserts that an order making an initial child support determination is not a final order in a "special proceeding" from which Hussey should be allowed to appeal. Those cases stand for the proposition that orders granting or denying motions to modify initial determinations in family law contexts are appealable as final orders in a "special proceeding." Angelos, 367 N.W.2d at 520; Huso, 465 N.W.2d at 720. They do not hold that orders setting, rather than modifying, child support are nonappealable. Although this initial child support order was not made in the context of a marital dissolution, it was brought as arising out of a proceeding authorized under Minn. Stat. § 518.156. Consequently, we consider it to be an "appeal from a final order * * * affecting a substantial right made in [a] * * * special proceeding." Minn. R. Civ. P. 103.03(g).

Reynolds also contends that Hussey should have filed a motion for a new trial before taking this appeal, yet he concedes that there was no trial held in this case. As we observed in Huso, "a motion for a new trial is an anomaly where there has been no trial." 465 N.W.2d at 721. Because there has been no trial here, the lack of a motion for new trial does not render the district court's order nonappealable or alter our scope of review.

2. The district court has broad discretion to determine child support, and a decision will not be reversed absent an abuse of that discretion. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). "Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous * * *." Minn. R. Civ. P. 52.01.

When setting a child support obligation, the district court is required to use the child support guidelines as a rebuttable presumption. Minn. Stat. § 518.551, subd. 5(i) (1996). The calculation for determining the presumptive amount of support is based initially on the obligor's net income. Minn. Stat. § 518.551, subd. 5(b) (1996). In addition, the district court must consider the following factors: (1) all earnings, income, and resources of the parents; (2) the financial needs and resources, physical and emotional condition, and educational needs of the children; (3) the standard of living the children would have enjoyed had the marriage not been dissolved; (4) who receives the income taxation dependency exemptions for the children; (5) the parents' debts under certain circumstances; and (6) the obligor's receipt of public assistance. Minn. Stat. § 518.551, subd. 5(c) (1996).

Although the district court addressed each of the statutory factors in its decision, we conclude that the decision was based on an erroneous view of the evidence. Specifically, in support of the findings regarding the children's financial needs, the district court stated that Hussey had "presented no evidence" in regard to the "children's share of monthly household expenses." However, the record reflects that, while the case was pending in the district court, Hussey did submit an itemized list that contained her estimate of the children's share of the general monthly household expenses. We therefore remand for the district court to review this evidence and to make any necessary amendments to the order.

As the district court reconsiders the children's needs, it will probably be necessary to reevaluate the findings regarding the amount of the children's therapy expenses. In the initial order, the district court found that the children's therapy expenses varied between $200 and $500 per month and used the higher amount in calculating the children's total monthly expenses. On remand, the district court should reopen the record on this issue in order to determine an amount representing the children's average monthly therapy costs in the light of subsequent experience.

Hussey also challenges the district court's adoption of a figure submitted by the father as his monthly net income. The figure represented 1/12 of the amount of one year's net severance pay indicated on a pay stub issued to Reynolds after his termination from employment in May 1996, less his monthly medical and dental insurance premiums. Hussey contends that the district court erred by calculating Reynolds' net income based on taxes withheld from his severance check, rather than on standard deductions from the applicable tax tables. See Minn. Stat. § 518.551, subd. 5(b) (1996) (recommending use of tax tables). It is, however, "proper to compute net income by deducting amounts withheld and [later] adding amounts refunded during a particular year." Lenz v. Wergin, 408 N.W.2d 873, 876 (Minn. App. 1987) (citing Dinwiddie v. Dinwiddie, 379 N.W.2d 227, 229 (Minn. App. 1985) (noting that parties may subsequently seek modification of support amounts to reflect actual tax liability)). Therefore, the district court did not clearly err in calculating net income based on figures stated on the severance pay stub. We further direct, however, that on remand the district court should allow the parties to update the record with information regarding the father's current employment status and income. The district court may then amend the order as necessary to reflect any additional findings in regard to the father's current net income. See Thomas v. Thomas, 407 N.W.2d 124, 127 (Minn. App. 1987) ("The court must determine current net monthly income for the purpose of setting child support.")

3. In her motion for child support, Hussey requested that the district court make Reynolds' obligation retroactive to February 7, 1996, the date that she served the motion on his attorney. Without explicitly addressing this request, the district court ordered Reynolds to begin making child support payments on August 1, 1996, the date of the court's order.

The decision to set the effective date of a child support obligation is one that is within the discretion of the district court. See Minn. Stat. § 518.17, subd. 3(a)(3) (1996) (providing that district court in child custody proceeding "shall make such further order as it deems just and proper" concerning child support); cf. Finch v. Marusich, 457 N.W.2d 767, 770 (Minn. App. 1990) (noting use of permissive word "may" in modification statute, Minn. Stat. § 518.64, subd. 2 (1988)).

It is undisputed that, during the period between the service of Hussey's motion and the district court's order, the children's living expenses, even excluding their share of the Hussey household's expenses, exceeded their Social Security payments (their sole independent financial resource). By not addressing Hussey's request for a retroactive child support obligation, the district court shifted the burden for the shortfall onto the Hussey household; yet, unlike their father, Hussey and her husband, as the children's aunt and uncle, had no legal duty to provide financial support for them. We therefore hold that on remand the district court must directly address Hussey's request to extend Reynolds' obligation retroactively to the date of service of her motion for support.

4. Finally, Hussey argues that the district court erred by ruling that Reynolds should be allowed to report the two children as his dependents for the purpose of claiming them as exemptions on his income tax returns. Because we remand for the district court to reconsider its findings regarding the children's needs, the father's current net income, and Hussey's request for retroactive payments, the district court should also reexamine the tax exemption award in light of any relevant amendments to its original order.

Affirmed in part, reversed in part, and remanded.