may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Cynthia M. Arendt,
County of Olmsted,
Magi V. Lanand n/k/a Dave V. Anand,
Filed January 5, 1999
Affirmed; motion granted
Olmsted County District Court
File No. F39151087
Cynthia M. Arendt, P.O. Box 406, Byron, MN 55920 (pro se respondent)
Raymond F. Schmitz, Olmsted County Attorney, Julie S. Voigt, Assistant County Attorney, Government Center, 151 SE 4th Street, Rochester, MN 55904 (for respondent County of Olmsted)
David W. VanDerHeyden, VanDerHeyden and Ruffalo, P.A., Suite 218, Marketplace Center, P.O. Box 6816, Rochester, MN 55903 (for appellant)
Considered and decided by Crippen, Presiding Judge, Willis, Judge, and Foley, Judge.[*]
Appellant Magi V. Lanand, now known as Dave V. Anand, challenges the calculation of his income for purposes of determining his child-support obligation. We affirm.
On December 17, 1997, a district court adjudicated appellant the biological father of respondent Cynthia M. Arendt's minor child and submitted the case to an administrative law judge (ALJ) for determination of child support. Appellant's attorney withdrew from representation approximately 14 days before the date of the administrative hearing. On the day before the hearing, appellant retained another attorney for the limited purpose of requesting a continuance at the hearing. The ALJ denied the request but left the record open for 19 days to allow appellant to file supplemental documents and seven days thereafter for respondent Olmsted County to file responsive documents.
Olmsted County called appellant as an adverse witness at the hearing. Appellant, who works as a computer engineer for Lucent Technologies in Ohio, testified that he had purchased three rental condominiums as tax shelters and that he planned to sell one of them because "[i]t was a bad investment."
The ALJ ordered appellant to pay $867 monthly for ongoing child support and $33,407 for back child support. In calculating appellant's income, the ALJ did not include losses incurred in connection with appellant's purchase of rental properties, finding it was "apparent that these purchases were designed for investment and tax advantages and not for their income-producing ability." This appeal followed.
I. Motion to Strike
Olmsted County moves to strike certain documents and references to them from appellant's submissions on appeal, claiming they were not before the district court or the ALJ. See Minn. R. Civ. App. P. 110.01 (stating record on appeal consists of papers filed in trial court, exhibits, and any transcripts of proceedings). Appellant submitted the documents numbered A.8, A.9, and A.13 to the ALJ as part of a posthearing motion he made after filing this appeal. But because this court denied appellant's motion to stay the appeal pending determination of his posthearing motion, the ALJ dismissed the motion without considering its merits. See Spaeth v. City of Plymouth, 344 N.W.2d 815, 824 (Minn. 1984) (stating that district court's jurisdiction is suspended as to matters "necessarily involved" in pending appeal) (citations omitted). The record therefore does not include the documents numbered A.8, A.9, and A.13 in appellant's appendix. See Donaldson v. YWCA of Duluth, 526 N.W.2d 215, 217 (Minn. App. 1995) (providing record does not include materials submitted in support of posthearing motion), rev'd on other grounds, 539 N.W.2d 789 (Minn. 1995); cf. Safeco Ins. Co. of Am. v. Dain Bosworth, Inc., 531 N.W.2d 867, 874 (Minn. App. 1995) (stating documents submitted in connection with posthearing motion are part of record only if motion is appealed), review denied (Minn. July 20, 1995). Additionally, the facts alleged on pages 7 and 8 of appellant's brief relate exclusively to these documents, and appellant concedes that the documents numbered A.10 and A.12 in his appendix should be stricken. We therefore grant Olmsted County's motion and strike (1) the documents numbered A.8, A.9, A.10, A.12, and A.13 in appellant's appendix; (2) the factual allegations on pages 7 and 8 of appellant's brief; and (3) all other references in appellant's brief to those documents and factual allegations.
II. Denial of Request for Continuance
Appellant argues that the ALJ abused his discretion in denying appellant's motion for a continuance of the child-support hearing. Whether a continuance should be granted is a matter within the district court's discretion, and its ruling will not be reversed absent a clear abuse of discretion. In re Welfare of A.Y.-J., 558 N.W.2d 757, 760 (Minn. App. 1997), review denied (Minn. Apr. 15, 1997). An appeal from a decision of an ALJ is treated in the same manner as an appeal from a decision of the district court. See Minn. Stat. § 518.5511, subd. 4(j) (Supp. 1997) (providing that ALJ's decision is appealable "in the same manner as a decision of the district court"); Lee v. Lee, 459 N.W.2d 365, 368-69 (Minn. App. 1990) (stating that standard of review on appeal from ALJ's decision is traditional abuse-of-discretion standard), review denied (Minn. Oct. 18, 1990).
A request for a continuance of a child-support hearing must be made as provided in Minnesota Rules, part 1400.7500. Minn. Stat. § 518.5511, subd. 3(a) (Supp. 1997). The rule states:
Requests for a continuance of a hearing shall be granted upon a showing of good cause. * * * In determining whether good cause exits, due regard shall be given to the ability of the party requesting a continuance to effectively proceed without a continuance. A request for a continuance filed within five business days of the hearing shall be denied unless the reason for the request could not have been earlier ascertained.
Minn. R. 1400.7500 (1997).
Here, appellant requested a continuance on the day of the hearing, arguing that he did not have time to prepare and that his attorney had not yet reviewed the case. Appellant's first attorney withdrew approximately two weeks before the hearing. While appellant argues that the withdrawal was "last minute," the reason for the continuance request was known more than five days before the date of the hearing. See id. (requiring ALJ to deny request for continuance made under these circumstances). Additionally, appellant had more than two months' notice of the subject of the hearing, and the ALJ minimized any prejudice to appellant by granting him leave to supplement the record after the hearing. We conclude that the ALJ did not abuse his discretion in denying appellant's request for a continuance.
III. Determination of Appellant's Income
An ALJ has broad discretion in determining child support, and this court will not reverse the decision unless it is "clearly erroneous" and "against logic and the facts on record." County of Washington v. Johnson, 568 N.W.2d 459, 462 (Minn. App. 1997) (citation omitted). This court will affirm a determination of net income for the purpose of calculating child support if it has a reasonable basis in fact. Justis v. Justis, 384 N.W.2d 885, 890 (Minn. App. 1986), review denied (Minn. May 29, 1986).
Appellant argues that the ALJ abused his discretion in failing to deduct from appellant's income the expenses associated with his rental properties. An income calculation should reflect property depreciation and capital expenditures if a person operates the property as "a longstanding, legitimate business" and income from other sources is supplementary. Larson v. Larson, 370 N.W.2d 40, 43 (Minn. App. 1985). But if a person operates property as a hobby and uses it only to shelter income from other sources, then "the trial court in its discretion could completely disregard the shelter effect of the [property] and compute net income" based on the person's income from the other sources. Id. at 42.
Here, appellant argues that there is no evidence to support a finding that he purchased the rental properties as tax shelters. But at the child-support hearing, appellant testified that he bought the rental properties "more for a tax shelter." Based on appellant's testimony, it was not against logic and the facts on record for the ALJ to conclude that appellant maintained the properties as tax shelters. It was within the ALJ's discretion to disregard the expenses and depreciation of the properties in calculating appellant's net income. See id. (stating that disregard of tax shelters for income computations is within court's discretion).
Appellant also claims that respondents presented no evidence to show that the expenses associated with appellant's rental properties were not ordinary and necessary, that the expenses were inappropriate, or that the properties were purchased as tax shelters. "The person seeking to deduct an expense, including depreciation, has the burden of proving, if challenged, that the expense is ordinary and necessary." Minn. Stat. § 518.551, subd. 5b(e) (Supp. 1997). Appellant misapprehends the burden of proof. Based on the evidence, the ALJ determined that appellant "failed to establish that the depreciation is actual depreciation as opposed to a tax loss depreciation." We conclude that the ALJ did not abuse his discretion in finding that appellant did not satisfy his burden of proof to show that the properties were not tax shelters and in disregarding the expenses associated with the properties and their depreciation in calculating appellant's net income.
IV. Moving Expenses and Unreimbursed Employee Business Expenses
Appellant also claims that the ALJ abused his discretion in considering a moving-expense reimbursement to be income to appellant and in failing to deduct from appellant's income moving expenses and unreimbursed employee business expenses. We do not consider these arguments because they rely entirely on documents A.8 and A.9 in appellant's appendix, which we have stricken. Also, because these issues were not before the ALJ, they are not properly before this court. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).
Affirmed; motion granted.
[*] Retired judge of the Minnesota Court of Appeals, serving by apointment pursuant to Minn. Const. art. VI, § 10.