Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
Karen Lee Selleck, petitioner,
Daniel Wilcox Selleck,
Filed April 14, 1998
Dakota County District Court
File No. F2-90-15464
Eric W. Ingvaldson, Donald R. McNeil, Bennett, Brown, Ingvaldson & McNeil, 8500 Normandale Lake Boulevard, Suite 1640, Minneapolis, MN 55437 (for respondent)
Considered and decided by Amundson, Presiding Judge, Short, Judge, and Foley, Judge.
*Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
Karen Lee Selleck appeals the district court's order construing the original judgment and decree as providing for payment of appellant's maintenance award only from the principal of certain insurance proceeds. Because the language of the stipulated decree supports the district court's interpretation, we affirm.
Appellant's 21-year marriage to respondent Daniel Selleck was dissolved by judgment and decree entered December 7, 1992. The parties had two children, one of whom was emancipated at the time of the dissolution.
The 1992 judgment and decree incorporated a marital termination agreement. Appellant was awarded permanent spousal maintenance initially in the amount of $2,000 per month, to be reduced in a series of step reductions to a final award of $1,500 per month. The decree provides that permanent spousal maintenance shall terminate upon appellant's death or remarriage, and specifies that appellant waives her right to seek a cost of living increase in spousal maintenance. The decree also states that respondent waives any right to claim maintenance from appellant.
The decree directs respondent to continue to name appellant as beneficiary on life insurance policies "in an amount sufficient to fund" his child support and spousal maintenance obligations. The decree further provides:
The required insurance shall be $200,000 for five years from the date hereof; $150,000 until respondent reaches age 60; and $75,000 thereafter. The beneficiary designation of said insurance shall indicate that [appellant] is the beneficiary only to the extent of respondent's obligation under the Judgment and Decree in Dakota County District Court, File No. F2-90-15464. In the event of [respondent's] death, a sufficient amount of insurance proceeds shall be set aside with a trustee to invest and to continue to make the payments hereunder. All additional insurance proceeds and any excess amounts deposited with the trustee or amounts remaining with the trustee when the obligations hereunder have been discharged shall be payable as indicated by the other insurance beneficiary designations in effect at the time of [respondent's] death.
Respondent died on February 11, 1997. Insurance proceeds in the amount of $200,000 were paid into a trust created by respondent before his death. The trustee has paid appellant's spousal maintenance award out of the $200,000 principal and has distributed the income of the trust to the parties' children in accordance with other trust provisions.
Appellant brought post-decree motions for modification of maintenance and to require the trustee to disburse income first and then invade trust principal as necessary to provide appellant with spousal maintenance. The district court denied both motions, but appellant only seeks review of the district court's ruling that maintenance shall be paid from the principal of the insurance proceeds. The personal representative of respondent's estate opposed appellant's motion in district court and has filed a responsive brief on this appeal.
In this case, the 1992 judgment and decree incorporates the parties' agreement that respondent is to carry $200,000 in life insurance to fund his support obligation in the event of his death. The district court reasoned that the word "fund" indicates that the monthly payments should come from the principal of the trust, rather than income proceeds.
Appellant argues the district court erred in its construction of the decree because to "fund" means to set aside money with the purpose of producing income. See Black's Law Dictionary 673 (6th ed. 1990) (defining "fund" as to "capitalize with a view to the production of interest"). But "fund" is also defined as an "asset or group of assets set aside for a specific purpose." Id.
In this case, the parties stipulated to specific amounts of insurance to secure the maintenance obligation, with a maximum amount of $200,000 for five years from the date of the decree. The stipulation incorporated in the judgment provides that in the event of respondent's death, a sufficient amount of insurance proceeds shall be set aside with the trustee to invest and to continue to make the payments, but the stipulation does not provide that maintenance is to be paid from the income of the trust. Instead, the stipulated judgment provides that all additional insurance proceeds and any excess amounts deposited with the trustee shall be payable as indicated by the other insurance beneficiary designations in effect at the time of respondent's death.
A stipulation fixing the respective rights and obligations of the parties represents the parties' voluntary acquiescence in an equitable settlement. Claybaugh v. Claybaugh, 312 N.W.2d 447, 449 (Minn. 1981). Because the maintenance provision addresses a number of contingencies and both parties waived certain rights, it is apparent that the maintenance stipulation resulted from extensive negotiations between the parties. In view of the provision establishing a specific amount to fund the maintenance award, and the absence of an express provision that maintenance is to be paid from the income of the trust, we hold that the district court correctly construed the judgment as providing for the payment of maintenance from the principal only.
Appellant also argues that the district court's construction of the judgment is inconsistent with the trustee's duty of undivided loyalty to her as the trust beneficiary. But the parties' children are also trust beneficiaries. Because the district court did not err in determining that the stipulated judgment provides for payment of maintenance out of the principal of the insurance proceeds only, the payment of the income of the trust to the parties' children does not violate the trustee's duty to appellant.