Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
Dennis Paul Hoffman, petitioner,
Judith Marie Hoffman,
Filed October 21, 1997
File No. F895991
John A. Warchol, Warchol, Berndt & Hajek, P.A., 110 Broadway Place East, 3433 Broadway Street Northeast, Minneapolis, MN 55413 (for appellant)
Todd Stedtfeld, Suite 203, 2353 Rice Street, Roseville, MN 55113 (for respondent)
Considered and decided by Harten, Presiding Judge, Lansing, Judge, and Randall, Judge.
In an appeal from judgment in a marital dissolution action, Dennis Hoffman challenges the district court's basis for determining the amount of spousal maintenance. The record supports the findings and conclusions relating to Dennis Hoffman's income, but it is unclear whether the district court took into account Judith Hoffman's interest income in computing the maintenance amount. We affirm in part, reverse in part, and remand.
The district court determined that Judith Hoffman was currently incapable of securing employment because of her poor health, but with sufficient treatment she would be able to obtain employment that would contribute at least $500.00 per month to her living expenses. The court determined that Dennis Hoffman has a net monthly income of at least $4,500.00 plus rental income from Jerden and that his necessary living expenses are $2,800.00 per month. The court ordered permanent maintenance for Judith Hoffman in the amount of $2,500.00 per month for one year, $2,250.00 per month the following year, and $2,000.00 per month thereafter.
Both Dennis and Judith Hoffman moved for amended findings. The district court adopted additional findings but did not amend the amount of permanent spousal maintenance. On appeal Dennis Hoffman contends that the district court improperly calculated his income and set maintenance at an excessive amount.
Dennis Hoffman specifically challenges three findings relating to computation of his income. First, he asserts that the district court abused its discretion by imputing income to him from the Jerden partnership. His 1994 tax return states that Jerden income equaled $4,661.00, but his 1995 return indicates a substantial loss. The district court found that he had self-limited his income from this source and imputed $4,661.00 annual income to him. The court relied on testimony of Judith Hoffman's financial expert in imputing the income, finding the expert's testimony more credible than Dennis Hoffman's evidence.
A district court may consider past earnings and earning capacity to estimate an obligor's future income. Warwick v. Warwick, 438 N.W.2d 673, 677 (Minn. App. 1989) (extending earning capacity and earnings history analysis to spousal maintenance obligations). Estimates of earning capacity are necessary when obligors are self-employed or have improperly reduced their income. LeTendre v. LeTendre, 388 N.W.2d 412, 416 (Minn. App. 1986). "[T]he opportunity for a self-employed person to support himself yet report a negligible net income is too well known to require exposition * * *." Ferguson v. Ferguson, 357 N.W.2d 104, 108 (Minn. App. 1984). Earning capacity is an appropriate measure of income when a determination of actual income is impractical. Beede v. Law, 400 N.W.2d 831, 835 (Minn. App. 1987).
Imputing the 1994 Jerden partnership income to Dennis Hoffman is not against logic or the facts on the record. Although the district court characterized the Jerden income as self-limited, the court's analysis demonstrates that the imputation was necessary because Dennis Hoffman's missing or incomplete financial records did not allow an actual computation. Dennis Hoffman concedes that the 1995 general ledger is missing and unavailable for review by Judith Hoffman's accountant. The accountant testified that because Jerden and Standard Electric had the same ownership, Jerden income could be easily manipulated through non-payment of rent by Standard Electric or the use of Jerden funds for the payment of personal expenses. The district court has discretion in determining credibility, and it was not an abuse of discretion to estimate Dennis Hoffman's rental income from Jerden to be at least $4,661.00. See Sheeran v. Sheeran, 401 N.W.2d 111, 114 (Minn. App. 1987) (district court has discretion to determine credibility of witnesses and documents).
Dennis Hoffman's second contention is that the district court improperly calculated his monthly expenses because it underestimated his medical, automobile, and homeowner's insurance expenses, which previously had been paid by Standard Electric. The district court initially determined that Dennis Hoffman "has monthly living expenses of approximately $2,331.00, not including those items paid directly by his employer." (emphasis added). The amended order determined that he "has monthly living expenses of approximately $2,800.00, including those items paid by his employer which are part of his income." (emphasis added). The district court did not make a specific finding on the value of employer-provided expenses. Dennis Hoffman now argues that the district court should have increased the amount of his necessary living expenses by $950.00 per month rather than by $469.00.
But Dennis Hoffman concedes that he did not testify or submit evidence documenting his employer-paid medical, automobile, and homeowner's insurance expenses, and the record does not contain any other evidence that would help determine the exact value of these expenses, other than Judith Hoffman's accountant estimating that his homeowner's insurance might cost between $500.00 to $570.00 per year. When an appellant fails to present evidence to support claims, "this court will not speculate, and the appellant cannot complain" when inadequate documentation prevented the district court from ruling in appellant's favor. Tuthill v. Tuthill, 399 N.W.2d 230, 232 (Minn. App. 1987) (affirming district court's refusal to modify maintenance when appellant provided inadequate documentation). Given the inadequate record, the district court did not abuse its discretion when it determined Dennis Hoffman's necessary monthly expenses.
Dennis Hoffman's third contention is that the district court erred in finding that he would receive $6,717.00 in interest income in 1996 from a $100,000.00 loan that he made to Standard Electric. Dennis Hoffman argues that this finding is not supported by the evidence. But the record contains a loan amortization schedule stating that 1996 interest income equaled $6,717.00. The district court's decision was supported by the evidence. We find no reversible error in the district court's calculation of income.
Setting the amount of maintenance requires the court to fully consider the financial resources of the party seeking maintenance, including income generated by liquid assets. Lyon v. Lyon, 439 N.W.2d 18, 22-23 (Minn. 1989) (reversing spousal maintenance award when wife's extensive estate would generate income sufficient to exceed her living expenses). But courts normally do not expect spouses to invade the principal of their investments to satisfy their monthly financial needs. Broms v. Broms, 353 N.W.2d 135, 137-38 (Minn. 1984). Given that the record does not indicate whether the district court considered Judith Hoffman's potential interest income in setting the maintenance amount, we reverse and remand for further consideration, or for a specific finding indicating the court's disposition on that issue.
Affirmed in part, reversed in part, and remanded.