may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Willard Oliver Peterson, petitioner,
Lynn Ann Peterson,
Filed January 20, 1998
Affirmed in part, reversed in part, and remanded
Hennepin County District Court
File No. 105838
Ronald D. Ousky, Gelhar & Ousky, P.A., Suite 580, 5001 West 80th Street, Bloomington, MN 55437 (for respondent)
Considered and decided by Lansing, Presiding Judge, Huspeni, Judge, and Willis, Judge.
Appellant Willard Peterson challenges the method by which the district court decided his claim to enforce a lien on his former marital homestead. We affirm in part, reverse in part, and remand.
Based on the parties' stipulation, conclusion of law VI of the dissolution decree provides for Johnson to receive title to the family's south Minneapolis home, subject to Peterson's lien in the amount of $14,315.39, bearing interest at the rate of 8 percent per annum. Absent sale of the property or Johnson's death, the lien was to become enforceable when the younger child reached her majority. Conclusion of law VI also provides:
That any child support arrearages that accrue pursuant to this Court's finding, shall be accumulated and deducted from the petitioner's lien interest. Should the petitioner's arrearages total more than the lien amount of $14,315.39, running at 8 percent per annum, then the petitioner shall have no further lien against said homestead.
Conclusion of law III provides for Peterson to pay one-half of all medical insurance premiums for the children and half of all uninsured medical expenses "[a]s an additional child support obligation." The parties agreed in later negotiations to set Peterson's medical support obligation at a flat rate of $50 per month.
Almost from the beginning, Peterson, a freelance jazz and rock bass player, fell behind in his child support payments. The first of numerous arrearages judgments was entered in 1986 and was not satisfied until 1989. In early 1990, Peterson paid a judgment only after being ordered incarcerated for contempt. On one occasion, Peterson moved to reduce support payments, but discovery revealed that he was touring with the Steve Miller Band and earning $3,000 per week, with hotel expenses paid and a $45 per diem. In 1992, the court found that Peterson displayed "a pattern of not complying with Orders, delaying proceedings, and causing [Johnson] to spend significant amounts of attorney's fees * * * ." Beginning in 1989, the court on numerous occasions ordered Peterson to pay Johnson's attorney fees, and on many of those occasions he failed to pay.
The couple's younger child reached her majority in 1994. In 1995, Peterson brought the instant action to enforce his lien. He argued that he was entitled to the full amount of the lien, plus 8% interest through the date of collection, less any arrearages he still owed, claiming the result was that Johnson owed him approximately $25,000. Johnson, in turn, submitted a calculation that reduced the lien by the amount of unpaid child support as it came due, thereby reducing the amount of interest, and that included unpaid medical support obligations and judgments for attorney fees in the arrearages. By her calculation, Peterson's arrearages exceeded the lien principal in 1988, thereby extinguishing the lien by the terms of conclusion of law VI of the dissolution decree.
The family court referee accepted Johnson's calculation as to the amount of arrearages and the date the lien was extinguished, subtracted the amount of the lien, plus interest as of 1988, from the total arrearages of $22,595.46 and entered judgment against Peterson for $6,056.13, plus $2,000 in attorney fees. Peterson filed a notice of review before a district court judge, who affirmed, stating that "[t]his Court has carefully examined the record and finds that [Peterson's] total shortfall is indeed $22,595.46." Peterson appeals, challenging numerous aspects of the calculation process. Johnson concedes that the district court's award overstated attorney fees by $1,900 because it considered a judgment for outstanding fees as a separate award.
I. Factual Issues
Peterson notes that the district court's judgment includes $1,000 in retroactive child support and $1,500 in attorney fees, both awarded pursuant to an order dated August 1, 1990. There is no order dated August 1, 1990, in the court file, and at oral argument Johnson's counsel conceded that the purported order does not exist. The inclusion of this $2,500 in the award was clearly erroneous.
Peterson alleges that the district court awarded Johnson a double recovery when it reduced the lien principal by amounts that had been reduced to judgment in separate actions brought by Johnson to collect arrearages. Peterson is correct that a double recovery is impermissible. See Alvord v. Alvord, 365 N.W.2d 360, 363 (Minn. App. 1985) (holding denial of attorney fees proper where payments to attorney were included in mother's expenses in calculating child support increase). But Johnson's calculation shows several years in which Peterson paid amounts in excess of his support obligation, beginning with 1989. These figures appear to reflect satisfactions of judgment, and Johnson's calculation adds the amount of these payments to Peterson's net equity in the lien. Peterson's double recovery argument would have merit only if the court, in calculating the lien amount, had failed to credit Peterson for judgments actually paid, and we find no evidence in the record to indicate this occurred.
II. Interpretation of Decree Language
Peterson argues that the district court impermissibly modified a final property settlement by (1) reducing the principal of the lien by the amount of child support arrearages, (2) making the $50 per month medical support award retroactive to the date of the dissolution, (3) reducing retroactively the principal amount of the lien for purposes of determining interest, and (4) counting unpaid court-ordered attorney fees as child support arrearages. The first three issues involve interpretation of the decree language.
A. Deduction of arrearages from principal
The decree language establishing the terms of the lien comes verbatim from the parties' stipulation and contains no direction regarding how deductions from the lien are to be calculated. A dissolution decree is interpreted in the same manner as a contract. See, e.g., Landwehr v. Landwehr, 380 N.W.2d 136, 138-40 (Minn. App. 1985). If a contract is ambiguous, a district court's resolution of the ambiguity is treated as a finding of fact. Trondson v. Janikula, 458 N.W.2d 679, 682 (Minn. 1990). Whether a writing is ambiguous is a question of law. Untiedt v. Grand Laboratories, Inc., 552 N.W.2d 571, 574 (Minn. App. 1996), review denied (Minn. Oct. 15, 1996).
"A writing is ambiguous if, judged by its language alone and without resort to parol evidence, it is reasonably susceptible of more than one meaning." Landwehr, 380 N.W.2d at 138. Peterson argues that the reference in conclusion of law VI of the decree to deducting child support arrearages from "the petitioner's lien interest" refers to interest on the lien, i.e., interest earnings, and that the lien could therefore be extinguished only if the amount of arrearages exceeded the total lien, plus accumulated interest, in a given year. Johnson interprets the same passage to mean that arrearages are deducted from Peterson's interest in the lien, i.e., the amount of the principal. Both interpretations are reasonable.
The referee accepted Johnson's interpretation, and we do not find this determination to be clearly erroneous. Conclusion of law III of the decree provides:
That any non-payment of child support shall accrue, and arrearages shall be accumulated and totaled, and said arrearages shall be deducted off the petitioner's share of the equity, that shall be described specifically in the following paragraph of these Conclusions of Law.
But the "following paragraph," conclusion of law IV, deals with tax issues. Logically, the language in conclusion of law III can refer only to Peterson's interest in the homestead equity, as described in conclusion of law VI. We therefore affirm the district court's implicit determination that the referee properly deducted the amount of Peterson's arrearages from the principal of the lien for purposes of calculating interest and the date of extinguishment.
B. Retroactivity of medical support agreement
Peterson argues that he owed no medical support until ordered by the court and that the referee therefore erred in deducting $50 per month from the principal retroactively to 1984. But the dissolution decree explicitly provided for medical support "[a]s an additional child support obligation," and Peterson was on notice as of 1984 that he bore responsibility for half the medical expenses of his children. "The fundamental approach to construing contracts is to allow the intent of the parties to prevail." Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979). The stipulation on which the decree is based unambiguously provides for Peterson to pay half his daughters' medical expenses, and a subsequent agreement between the parties unambiguously set Peterson's medical payments at $50 per month, with the intent of ensuring regularity of payment and avoiding fluctuations in the amount Peterson owed. We conclude that the district court did not err in determining that the referee properly made the $50 monthly obligation retroactive to the date of the dissolution.
C. Retroactive reduction of principal
Peterson argues that the decree language regarding arrearages that accrue "pursuant to this Court's finding" bars retroactive reduction of the principal because arrearages only exist legally after the date that a court finds them to exist. But the same passage could be read merely to require that a court determine the amount of any arrearages to be deducted retroactively. We conclude that the district court did not clearly err in affirming the referee's application of the latter interpretation.
Inclusion of Attorney Fees in Child Support Arrearages
Under Minnesota law, attorney fees and collection costs incurred in enforcing child support judgments "are considered child support and entitled to the applicable remedies for collection and enforcement of child support." Minn. Stat. § 518.14, subd. 2(b) (Supp. 1997). This section became effective in 1994, ten years after dissolution of the Petersons' marriage. But this court earlier adopted the common law rule that such fees are not dischargeable in bankruptcy because they are analogous to child support. Coakley v. Coakley, 400 N.W.2d 436, 442 (Minn. App. 1987), review denied (Minn. Apr. 23, 1987); see also Foster v. Childers, 416 N.W.2d 781, 785 (Minn. App. 1987) (concluding that award of attorney fees in initial dissolution constituted "a debt to a former spouse for maintenance or support of that spouse" for bankruptcy purposes). Thus, under applicable common law, the district court did not err in upholding the referee's classification of the attorney fees awarded to Johnson as "child support" for purposes of calculating arrearages to be deducted from Peterson's lien.
Calculation of Lien Extinguishment Date
The referee concluded that the lien was extinguished in 1988, when, according to Johnson's calculation, the total child support and medical support arrearages reached $15,775.11, which exceeded the lien amount of $14,315.39. But the amount of the lien plus interest accrued to that time was $16,539.33, which was more than the amount of arrearages. The decree provides for the lien to be extinguished when "the petitioner's arrearages total more than the lien amount of $14,315.39, running at 8 percent per annum." Peterson correctly argues that the referee's interpretation writes the words "running at 8 percent per annum" out of the applicable provision of the decree.
Although we determine that it was not clear error for the referee to use Johnson's basic calculation, we conclude that the lien actually was extinguished in 1991. In that year, the value of the lien, plus accumulated interest, was $16,638.65, while Peterson's arrearages for child support, medical support, and attorney fees totaled $17,819.27. This calculation grants Peterson full credit for judgments satisfied before 1991 and assumes that a negative principal accrues zero interest. Johnson's calculation assumes that a negative principal accrues negative interest, but we need not decide that issue of mathematical esoterica because Johnson calculated the value of the lien on an annual basis and the date when the arrearages exceeded the lien plus accumulated interest falls in 1991 under either method.
Award of Attorney Fees
"The award of attorney fees rests almost entirely in the discretion of the court and will not be disturbed absent a clear abuse of discretion." Orman v. Orman, 364 N.W.2d 836, 838 (Minn. App. 1985), review denied (Minn. May 31, 1985). The referee here made plain that she intended to award fees under the provision of the Minnesota statute that allows a grant of fees "against a party who unreasonably contributes to the length or expense of the proceeding." Minn. Stat. § 518.14, subd. 1 (1996). To facilitate appellate review, a district court must make findings in support of a decision to grant or deny a motion under this provision. Kronick v. Kronick, 482 N.W.2d 533, 536 (Minn. App. 1992). The referee noted that Peterson had been ordered to pay attorney fees to Johnson several times since 1989, that the court had found that he had the ability to pay, that he had failed to comply with most of these orders, forcing Johnson to initiate further court proceedings for collection. This court has sustained an award of fees based on a party's course of conduct over an entire dissolution process. Tollefson v. Tollefson, 403 N.W.2d 857, 861 (Minn. App. 1987) (affirming grant of fees based on husband's refusal to comply fully with initial court order, resulting in protracted proceedings and increased costs to wife). We therefore conclude that the court's award of fees to Johnson and denial of fees to Peterson was not an abuse of discretion.
In summary, we affirm the district court's judgment reducing retroactively the principal of the lien by the amount of child support arrearages, $50 per month in medical arrearages, and attorney fees incurred in seeking to enforce child support judgments. We reverse the district court's judgment with regard to the date the lien was extinguished and its inclusion of obligations based on a nonexistent August 1, 1990, order and on double-counting $1,900 in attorney fees. We remand for final determination of the amount that Peterson owes to Johnson.
Affirmed in part, reversed in part, and remanded.
Judge Bruce D. Willis
[ ]1 But Johnson is incorrect in asserting that the court failed to note $500 in additional attorney fees granted the same day. A $500 award from that date appears in the list of fee awards from which the court worked.
[ ] 2 Johnson's calculation includes a value for the total lien principal for all years through 1994, even though she argues that the lien was in fact extinguished in 1988.