may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
Frances Elizabeth Carlson, petitioner,
Dean Lee Carlson,
Filed June 17, 1997
Concurring Specially, Randall, Judge
Kanabec County District Court
File No. F595410
Rita Clare Steinhagen, 730 Elm Street, Post Office Box 200, North Branch, MN 55056 (for Respondent)
Considered and decided by Willis, Presiding Judge, Randall, Judge, and Mulally, Judge.[*]
Dean Lee Carlson (husband) appeals from the district court's order, arguing that the district court erred in (1) calculating his net monthly income, (2) awarding permanent spousal maintenance to respondent Frances Elizabeth Carlson (wife), (3) its findings of fact regarding wife's ability to become self-sufficient, and (4) securing the spousal maintenance award with life insurance. We affirm.
I. Calculation of Husband's Income
To consider properly the financial ability of a party to pay spousal maintenance, the district court must determine the party's net monthly income. Kostelnik v. Kostelnik, 367 N.W.2d 665, 670 (Minn. App. 1985), review denied (Minn. July 26, 1985). This finding of fact will not be reversed unless it is clearly erroneous. McCulloch v. McCulloch, 435 N.W.2d 564, 566 (Minn. App. 1989). A finding is clearly erroneous when it is against logic and facts on the record. Id.
Here, the district court determined husband's net monthly income by reviewing his earning history, finding that
[husband] has a long established pattern of working significant amounts of overtime, and that his gross income has seldom decreased on an annual basis, and, in fact, has shown a tendency to increase steadily throughout the parties' marriage. * * *
The court deems it appropriate to base its findings as to [husband's] income on the same time period it used in calculating [wife's] income, which was from 1992 through 1995. [Husband's] average yearly income for that period is $45,655 ($41,626 + $44,054 + $49,682 + $47,261 = $182,623/4 = $45,655). This is a monthly income of $3804. [Husband's] net income is calculated as follows:
$3804.00 gross monthly income
- $702.00 federal withholding (S-1)
- $252.00 Minnesota withholding (S-1)
- $291.05 7.65 % FICA withholding
$2558.95 Net monthly income.
The district court's net monthly income determination of $2,558.95 accurately reflects husband's earning history and is within a reasonable range of husband's average monthly income amounts. See Fick v. Fick, 375 N.W.2d 870, 873 (Minn. App. 1985) (concluding it was proper for district court to determine husband's current monthly income by averaging his income over three years). Further, the district court properly included husband's bonuses and overtime pay in its calculations because it found them to be dependable sources of income. See Lynch v. Lynch, 411 N.W.2d 263, 266 (Minn. App. 1987) (holding that bonus payments that provide "dependable source of income" may properly be included in court's calculation of income), review denied (Minn. Oct. 30, 1987). The district court's finding that husband's net monthly income is $2,558.95 is supported by the record and is not clearly erroneous.
In setting maintenance, the district court must consider (1) the financial resources and needs of the party seeking maintenance, (2) the probability that the party seeking maintenance will become self-supporting, (3) the standard of living during the marriage, (4) the duration of the marriage, (5) the employment opportunities foregone during the marriage by the party seeking maintenance, (6) the age and physical condition of the party seeking maintenance, (7) the financial ability of spouse from whom maintenance is sought to meet his needs while paying maintenance, (8) the contribution of each party to the marital property. Minn. Stat. § 518.552, subd. 2 (1996). Although the court must consider the statutory factors, the basic issue in setting maintenance is "the financial need of the spouse receiving maintenance, and the ability to meet that need balanced against the financial condition of the spouse providing the maintenance." Novick v. Novick, 366 N.W.2d 330, 334 (Minn. App. 1985).
Husband argues that the district court erred in ordering husband to pay $600 per month in spousal maintenance because the court focused on wife's living expenses without considering his ability to pay. The district court's order, however, shows that it made detailed findings to support its $600 per month maintenance order. In setting maintenance, the district court properly considered the financial needs of wife, as well as husband's ability to pay. The district court noted that
[p]ayment to [wife] by [husband] of $600.00 per month in spousal maintenance would result in monthly disposable income of $1958.95 for [husband] leaving a shortfall of $264.05 per month in meeting his monthly expenses. However, this last calculation has not considered the income tax consequences. The $600.00 per month in maintenance would be tax deductible for [husband], resulting in a reduced tax liability which would offset most of the shortfall. Considering this, and considering [husband's] history of being able to elect to work substantial amounts of overtime, the court finds that [husband] has the ability to pay spousal maintenance of $600.00 per month.
Thus, we find the district court did not abuse its discretion in ordering husband to pay $600 per month in spousal maintenance.
We do not set aside a district court's findings of fact unless a review of the evidence shows they are clearly erroneous. Minn. R. Civ. P. 52.01. The district court found that the wife "lost all opportunities for earnings, seniority, retirement benefits, training, and experience during her twenty years as a homemaker." There is record evidence that wife was not employed from 1971 to 1989. The record also shows that the parties raised two children during that time. Thus, it was not clear error for the district court to conclude that wife was a homemaker and that as a result she lost employment opportunities that affect her ability to become self-supporting.
The district court "has discretion to determine whether the circumstances justifying an award of maintenance also justify securing it with life insurance." Laumann v. Laumann, 400 N.W.2d 355, 360 (Minn. App. 1987), review denied (Minn. Nov. 24, 1987). The court may secure spousal maintenance awards that would otherwise terminate upon the obligor's death with life insurance "in exceptional cases where the [obligee] needs some security so that her maintenance payments will not suddenly cease because of an event beyond her control." Frederiksen v. Frederiksen, 368 N.W.2d 769, 777 (Minn. App. 1985); see also Arundel v. Arundel, 281 N.W.2d 663, 667 (Minn. 1979) (recognizing that requiring security for spousal maintenance is generally limited to exceptional cases where justified by long duration of marriage and dependent spouse's age and lack of marketable skills).
Because of the circumstances of this case, we conclude that the district court did not abuse its discretion in directing that wife be maintained as the beneficiary of husband's $20,000 term life insurance policy.
RANDALL, Judge (concurring specially).
I concur in the result, but write just on issue IV, "Securing Award with Life Insurance."
I have no problem with parties to a dissolution negotiating an additional property settlement contingent on the obligor predeceasing the obligee. I also have no problem with the trial court upholding an additional property settlement after a contested hearing in which all issues are open. But it is not honest to call mandated life insurance a method of "securing maintenance." To require life insurance on the obligor to secure maintenance is the classic legal oxymoron. The payment of life insurance never develops until the insured dies - and an obligor's requirement to pay maintenance dies with him or her unless specifically read into the decree. Minn. Stat. § 518.64, subd. 3 (1996), states in pertinent part:
Unless otherwise agreed in writing or expressly provided in the decree, the obligation to pay future maintenance is terminated upon the death of either party or the remarriage of the party receiving maintenance.
You could theoretically use the requirement of life insurance to cover the possibility of arrearages when an obligor dies, but then the trial court would have to spell that out. As a for instance, "the obligor shall be required to maintain a $25,000 life insurance policy on his own life payable to his estate. At the time the obligor dies, maintenance arrearages, if any, owed to the obligee shall be satisfied out of the life insurance proceeds, with the remainder of the life insurance proceeds to stay with the obligor's estate." The point is, if you are going to tie life insurance to arrearages, the decree has to be fashioned in such a way that if there aren't any arrearages, the obligee has no claim on the life insurance proceeds, and if there are any arrearages, once they are satisfied, the remainder of the life insurance stays with the obligor's estate.
The way we do it now has nothing to do with maintenance. The life insurance requirement usually goes on indefinitely, and if the obligor predeceases the obligee, the obligee gets a lump sum payment in addition to all the previously collected maintenance payments. While the obligor is living, the life insurance is no "security" for monthly payments and/or arrearages, as while the obligor is living, the life insurance is uncollectible. While the obligor is alive, the general security for the obligee is his or her right to go back to the district court and maintain a legal action for any accumulated arrearages. Any judgment obtained could attach to the obligor's real or personal property, but the judgment could not be used against the face amount of the life insurance policy, as the policy won't pay out with the insured still living.
The possibility that an obligor might live only an unexpectedly short time after the dissolution cannot be used as an excuse to artificially change the accepted common sense and legal definition of words. The maintenance obligation of an obligor dies with him. The life insurance payable to the obligee "secured" nothing. It simply represents a contingent future property division, in addition to all other property awarded, which is now given to the obligee because the obligor died, and, thus, fulfilled the contingency.
The requirement of life insurance that we have in this case was not specifically detailed nor referenced to Minn. Stat. § 518.64, subd. 3. The term was used generically "to secure maintenance" which, as I have pointed out, is a legal impossibility with life insurance when the triggering factor for life insurance is the death of the obligor, and death of the obligor terminates his responsibility, as it did in this case, to pay maintenance.
In pertinent part, the amended dissolution decree stated:
7. Spousal Maintenance (Alimony). a. Spousal Maintenance to be Paid to Former Spouse. Commencing on the first day of July, 1996, as and for spousal maintenance, Respondent shall pay to Petitioner the sum of $600.00 per month, payable in two equal installments on the 1st and 15th days of each month, until the earliest of the following events:
(1) Death of the Petitioner;
(2) Death of the Respondent;
(3) Remarriage of Petitioner; or
(4) Further order of the Court.
* * * *
e. Life Insurance as Security for Spousal Maintenance. As and for security for spousal maintenance, Respondent shall name Petitioner as the sole and irrevocable beneficiary on the $20,000.00 term life insurance policy available to him through his employment. Respondent's obligation to maintain said policies as security for spousal maintenance will continue until the termination of Respondent's spousal maintenance obligation as set forth herein.
Further, within 10 days following entry of the Judgment and Decree, Respondent will sign an insurance authorization permitting Petitioner or her attorney to verify from time to time that the terms of this paragraph are in full force and effect.
Thus, the amended divorce decree, without ambiguity, without argument, states that respondent's death (if earlier than petitioner's) unequivocally terminates his obligation to pay any more maintenance. Then paragraph e. sets out that respondent only has the obligation to maintain the policy as security for maintenance as long as he is alive. We know that because paragraph e. sets out that respondent only has the obligation to maintain the policies until his spousal maintenance obligation terminates "as set forth herein" (see paragraph 7).
It is only possible to concur in the result by implicitly reading into the dissolution decree Minn. Stat. § 518.64, subd. 3. This is close because subdivision 3 states "expressly provided in the decree." Thus, attorneys negotiating dissolution stipulations and trial judges providing for property settlements and/or maintenance obligations should consider specifically referencing Minn. Stat. § 518.64, subd. 3 or the anomaly will continue of securing a "nonobligation" with life insurance that is useless while the obligor is alive.
[ ]* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.