may not be cited except as provided by
Minn. Stat.§ 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
In re the Marriage of:
Susan Veronica Simonsen, petitioner,
Thomas Lawrence Simonsen,
Filed June 15, 1999
Affirmed in part, revered in part, and remanded.
Dakota County District Court
File No. F49712024
Wayne A. Jagow, 260 Skyline Square Building, 12940 Harriet Avenue South, Burnsville, MN 55337 (for respondent)
Thomas L. Steffens, Steffens & Rasmussen, 300 Southdale Place, 3400 West 66th Street, Edina, MN 55435 (for appellant)
Considered and decided by Halbrooks, Presiding Judge, Davies, Judge, and Peterson, Judge.
This appeal is from an amended judgment and decree and from an order denying a motion for a new trial in a marital dissolution proceeding. We affirm in part, reverse in part, and remand.
Wife graduated from the University of Minnesota with a liberal arts degree in 1976. Before the parties' marriage, she worked as a sales coordinator and product distribution analyst and as an officer manager and realtor. After the birth of the parties' child, she worked mainly as a homemaker. When the dissolution proceeding began, she reactivated her real estate license and accepted a real estate sales position. At trial, her supervisor testified that she could be earning $25,000 to $35,000 per year within two years, if she works full time.
Husband graduated from high school in 1972 and attended the University of Minnesota from 1972 to 1977, but did not graduate. In 1974, he began working as a real estate agent. In 1980, he became self-employed.
Before their marriage, both husband and wife owned their own homes. After the marriage, they sold their homes and built a new home. They also owned a rental home in Minneapolis, a vacation home in Florida, and a one-third interest in Lac Lavon Partners, L.L.C.
In 1995, the parties obtained a $30,000 home equity loan from Norwest Bank. Soon after obtaining the loan, husband, without wife's consent, increased the home equity loan to $100,000. At trial, wife admitted that she consented to the original $30,000, but claimed that she never signed the documents increasing the loan to $100,000.
In December 1996, wife served husband with a petition for dissolution. Following a bench trial, the trial court issued a dissolution judgment and decree, and husband moved for amended findings, or alternatively, a new trial. Wife also moved for amended findings. The trial court denied husband's motion for a new trial and granted husband's motion for amended findings. The amended judgment and decree (1) awarded wife sole physical and legal custody of the minor child; (2) ordered husband to pay temporary maintenance for 59 months and child support; (3) determined that wife had contributed $67,304.51 of nonmarital assets to the purchase of the marital homestead and awarded wife the homestead; (4) determined that husband dissipated $70,000 of marital assets; (5) awarded husband the parties' interest in Lac Lavon, subject to husband's repayment of his portion of the home equity loan; (6) ordered husband to pay wife $25,000 for a loan wife made to husband using nonmarital assets; and (7) ordered husband to pay $15,000 of wife's attorney fees.
Husband argues that the trial court erred in determining that the best interests of the parties' child would be served by awarding wife sole legal and physical custody.
"The trial court is afforded broad discretion in making custody decisions." Wopata v. Wopata, 498 N.W.2d 478, 481 (Minn. App. 1993). The ultimate consideration in determining custody is the best interests of the child. Pikula v. Pikula, 374 N.W.2d 705, 711 (Minn. 1985). On appeal, this court's review "is limited to whether the trial court abused its discretion by making findings unsupported by the evidence or by improperly applying the law." Id. at 710. Findings of fact are not set aside unless clearly erroneous. Minn. R. Civ. P. 52.01. To determine the best interests of the child, the court must consider the factors set forth in Minn. Stat. § 518.17, subd. 1(a) (1998). The court must make detailed findings that explain how these factors led to the conclusion that the custody determination would serve the child's best interests. Id.
Where a grant of either joint legal or joint physical custody is contemplated, the court must also consider additional factors that relate to the parties' ability to cooperate in raising their child. Id., subd. 2 (1998). Although joint legal custody is generally presumed to be in the child's best interests, it is not appropriate where the evidence indicates that the parties lack the ability to cooperate and communicate. Wopata, 498 N.W.2d at 482. Joint physical custody is generally not favored. Id.
The trial court made detailed findings on each of the applicable "best interests" factors in Minn. Stat. § 518.17, subd. 1(a). The record, including the testimony of the neutral custody evaluator, supports the trial court's findings that (1) wife was the child's primary caretaker since birth; (2) wife provides a predictable schedule for the child and is more sensitive to the child's emotional needs; (3) the child has always lived in the marital home and has friends in the neighborhood; and (4) wife has a history of scheduling the child's medical and dental appointments and arranging her participation in school and other activities. The trial court did not abuse its discretion in concluding that granting wife sole physical custody is in the child's best interests.
Joint legal custody requires consideration of the parents' ability to cooperate, their dispute resolution methods, and any detriment to the child if legal custody is not awarded jointly. See Minn. Stat. 518.17, subd. 2 (factors to consider when joint custody is sought). Although the neutral custody evaluator recommended joint legal custody, the trial court was not bound to follow that recommendation, so long as it made sufficient findings to support its conclusion. See Roehrdanz v. Roehrdanz, 410 N.W.2d 359, 362 (Minn. App. 1987) (trial court acted within its discretion when it rejected recommendation of custody study but explained its rationale in findings), review denied (Minn. Oct. 28, 1987). The trial court considered the factors in Minn. Stat. § 518.17, subd. 2, and found that (1) the parties had great difficulty resolving disputes due to their mutual dislike and mistrust of each other; (2) the parties were unable to resolve disputes without outside intervention; and (3) it would be detrimental for the child to be exposed to the parties' bitter battles over visitation and other issues. The record contains evidence that the parties cannot cooperate and communicate, cannot put aside their control issues, cannot trust or respect each other, and have little hope for improving their relationship in the future. The trial court did not abuse its discretion by granting wife sole legal custody of the child.
2. Determination of Net Income
Husband argues that the trial court abused its discretion by determining that his net monthly income is $9,000. He contends that the trial court incorrectly used his expenditures during an 18-month period to determine his net income, rather than using his net receipts. He also contends that the trial court erred by (1) not allowing deductions for state and federal income taxes, medical insurance, and ordinary and necessary business expenses; (2) failing to recognize that $13,500 of his gross receipts during the 18-month period were from loans; and (3) incorrectly computing the amount of his expenditures.
To determine a party's ability to pay spousal maintenance, the trial 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). An appellate court will not reverse a trial court's determination of net income if the determination has a reasonable basis in fact. Strauch v. Strauch, 401 N.W.2d 444, 448 (Minn. App. 1987). "When it is impracticable to determine actual income, a trial court may impute income." Roatch v. Puera, 534 N.W.2d 560, 564 (Minn. App. 1995).
At trial, husband testified that the information he had presented to the court, which consisted of his 1995, 1996, and 1997 Quicken financial reports, was essentially meaningless and did not truly reflect his earnings, because he routinely transferred funds between his business and personal bank accounts. As a result, his business and personal income and expenses were entirely intermingled. Consequently, the trial court determined husband's income based on his testimony concerning his expenditures during an 18-month period. Husband's failure to provide the trial court with meaningful evidence of his income made it necessary for the court to examine his expenses to determine his income. An appellant cannot complain where his failure to provide adequate documentation leads to an unfavorable determination regarding earnings. See Taflin v. Taflin, 366 N.W.2d 315, 319 (Minn. App. 1985) (this court will not speculate, and an appellant cannot complain where inadequate documentation leads at least in part to the trial court's refusal to modify a decree).
Husband's testimony indicated that during the 18-month period, he spent $156,440, or $8,691.11 per month, on attorney fees, living expenses, temporary maintenance, house payments, loan payments, his daughter's school tuition, and a country-club membership. Based on the determination that husband spent this amount on just these purposes, the trial court determined that his net monthly income was $9,000. Because the trial court's finding that husband's net monthly income is $9,000 is supported by husband's testimony regarding payments he made during the 18-month period, the finding has a reasonable basis in fact and was not clearly erroneous.
In contending that the trial court erred by not allowing deductions for income taxes, medical insurance, and business expenses, husband fails to recognize that the trial court reached its income determination by examining expenditures, not income. There was no need to deduct these expenses because they were not included in the expenses the court recognized to determine income.
Husband's claim that the trial court failed to recognize that $13,500 of his gross receipts during the 18-month period came from loans also fails to recognize that the court considered expenditures, not income. The trial court found that the payments it considered were not made with borrowed money because husband's credit card and loan balances grew by only $4,000 during the period. Husband's loan balances grew by less than the amount he borrowed during the period because he also made loan payments.
Husband argues that the trial court incorrectly computed the amount of his expenditures because amounts the trial court used for certain expenditures were not the amounts he testified he spent. For example, husband contends that he testified his living expenses for 1997 were $5,000, and the trial court found that his monthly living expenses were $2,300. Although at one point during the trial, husband testified that his living expenses were $5,000 per year, at another point, he testified that they were $2,300 per month. It was necessary for the trial court to draw some conclusions from this conflicting testimony. After examining the transcript, we conclude that there is evidentiary support for the trial court's individual conclusions.
3. Spousal Maintenance
The standard of review on appeal from a trial court's determination of a maintenance award is whether the trial court abused the wide discretion accorded to it.
Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). There must be a clearly erroneous conclusion against logic and the facts on record before a reviewing court will find that the trial court abused its discretion. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
A trial court may award maintenance if it finds that the spouse seeking maintenance lacks sufficient property to provide for her reasonable needs, especially during a period of training or education, or is unable to provide adequate self-support through appropriate employment. Minn. Stat. § 518.552, subd. 1 (1998). When determining the amount and duration of maintenance, the court must consider the factors in Minn. Stat. § 518.552, subd. 2 (1998), but 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). Generally, an award of temporary maintenance contemplates the recipient retraining and becoming self-supporting. Sand v. Sand, 379 N.W.2d 119, 124 (Minn. App. 1985), review denied (Minn. Jan. 31, 1986).
Husband claims that the trial court erred in awarding wife temporary spousal maintenance of $2,500 per month for 59 months. Husband asserts that he should not have to pay temporary spousal maintenance because (1) he has already paid spousal maintenance for 19 months; (2) wife has significant real estate experience and should be earning $30,000 to $35,000 within two years; and (3) even assuming that his net monthly income is $9,000, he is not able to pay $2,500 monthly spousal maintenance without having a negative monthly income.
The trial court found and the record demonstrates that (1) the parties had an 11-year marriage and enjoyed an upper-middle-class standard of living; (2) wife is 44 years old and was a homemaker for ten of the 11 years the parties were married; (3) wife's marital assets are locked up in the marital homestead; (4) wife needs temporary spousal maintenance to re-establish her career; and (5) husband's net income exceeds $100,000 per year. The record demonstrates that wife lacks sufficient monthly income to provide for her reasonable monthly needs, and after considering the income tax consequences of the maintenance award, husband has the ability to pay maintenance, while still meeting his monthly needs. The trial court did not abuse its broad discretion in awarding wife temporary spousal maintenance.
4. Nonmarital Property
Husband argues that the evidence introduced at trial was insufficient to support the trial court's determination that wife had a $67,304.51 nonmarital interest in the marital homestead. Husband contends that even if wife used the money she received from the sale of her premarital home ($40,802.48) and the money in her bank account on the date of the parties' marriage ($8,478.28) to pay for the homestead, there is insufficient evidence to demonstrate the remaining portion of the nonmarital interest found by the trial court.
Whether property is marital or nonmarital is a question of law upon which this court may exercise independent judgment. Campion v. Campion, 385 N.W.2d 1, 4 (Minn. App. 1986). This court, however, will affirm the trial court's findings of fact unless they are clearly erroneous. Freking v. Freking, 479 N.W.2d 736, 739 (Minn. App. 1992).
Property acquired during marriage is presumed to be marital property. Minn. Stat. § 518.54, subd. 5 (1998). Property owned by a spouse prior to marriage is nonmarital property. Id., subd. 5(b). To maintain its nonmarital character, nonmarital property must be either kept separate from marital property or readily traceable to nonmarital property, and a party seeking to prove that commingled property is nonmarital must show by a preponderance of the evidence that the property can be readily traced to a nonmarital source. Wopata, 498 N.W.2d at 484.
The trial court found that wife contributed $67,304.51 of her nonmarital assets to the purchase of the parties' homestead. But the trial court did not make findings that explain the basis for its conclusion that wife had $67,304.51 in nonmarital assets. Because we cannot determine from wife's testimony and from copies of checks in the record how the trial court reached its conclusion that wife's contributions to the homestead were made with nonmarital funds, we remand this issue for further findings. See Stiff v. Associated Sewing Supply Co., 436 N.W.2d 777, 779 (Minn. 1989) (where additional findings are necessary to support a trial court's conclusion on a disputed issue, this court may remand for additional findings).
Husband also contends that the trial court erred in determining that he owed wife $25,000 for a loan wife made to him from her nonmarital property.
The trial court found that when wife became aware that husband had increased their home equity loan from $30,000 to $100,000, she had husband sign a $25,000 promissory note to memorialize a prior loan she had made to him from her nonmarital funds. The trial court found that husband admitted he borrowed money from wife to help finance his real estate development business and concluded that because wife had been a homemaker, the only possible source of the $25,000 loan was nonmarital property.
The fact that the $25,000 loan was made during the marriage demonstrates that wife possessed the money during the marriage, but it does not demonstrate that she acquired the money before the marriage or from a nonmarital source. By relying on an absence of evidence that the $25,000 was marital property to conclude that it was nonmarital property, the trial court shifted the burden of proof to husband. However, wife had the burden of demonstrating by a preponderance of the evidence that the $25,000 was nonmarital property. We, therefore, reverse and remand this issue for a determination whether wife acquired the $25,000 before the marriage or from a nonmarital source.
5. Dissipation of Marital Assets
Husband argues that the trial court erred in determining that he dissipated $70,000 of martial assets. We disagree.
"The division of marital debts is treated in the same manner as division of assets." Justis v. Justis, 384 N.W.2d 885, 889 (Minn. App. 1986) (citing Dahlberg v. Dahlberg, 358 N.W.2d 76, 80 (Minn. App. 1984)), review denied (Minn. May 29, 1986). The trial court has broad discretion in dividing property, and this court will affirm the division if it has an acceptable basis in fact and principle. Rohling v. Rohling, 379 N.W.2d 519, 522 (Minn. 1986). In dividing property, a court must base its finding on all relevant factors, including the contribution of each spouse to the depreciation of marital property. Minn. Stat. § 518.58, subd. 1 (1998).
The trial court found that husband, without wife's knowledge, forged wife's signature and obtained an increase in the parties' home equity loan, from $30,000 to $100,000. Husband admitted that he forged wife's signature on documents needed to increase the home equity loan. Wife testified that she never signed any documents authorizing an increase in the loan. Husband produced no documents to demonstrate how the additional $70,000 was spent, but testified that he used the money to pay business debts, himself, and a margin call on stock investments he made without wife's knowledge. The trial court's determination that husband dissipated the $70,000, and therefore should be held responsible for repaying it, has an acceptable basis in fact and principle.
6. Valuation of Lac Lavon Partnership
Husband contends that the trial court's finding that the current value of the parties' one-third interest in Lac Lavon is $63,333.33 is not supported by the evidence and is contrary to law.
The trial court is afforded broad discretion in valuating assets. Letsch v. Letsch, 409 N.W.2d 239, 242 (Minn. App. 1987). The valuation of an asset is a finding of fact that will not be set aside unless clearly erroneous. Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975).
Asset values must be determined
as of the day of the initially scheduled prehearing settlement conference, unless a different date is agreed upon by the parties, or unless the court makes specific findings that another date of valuation is fair and equitable.
Minn. Stat. § 518.58 (1998). The trial court may adjust the valuation of an asset if there is a substantial change in value between the date of valuation and the date of final distribution. Id.
A business valuation for Lac Lavon that was prepared in September 1997, using a valuation date of December 1996, indicated that the partnership had no value. However, at that time, the partnership owned raw land in Burnsville. After the valuation date, an office building was built on the land. A construction loan appraisal set the value of the office building at $1,100,000.00.
The trial court found that it would be "inequitable to value the Lac Lavon Partners L.L.C. as the owner of only raw land" because "[t]his asset has substantially changed in nature and value during the pendency of this proceeding." After subtracting encumbrances from the valuation established by the construction loan appraisal, the trial court determined that the equity in the property was $190,000, and the value of the parties' one-third interest was $63,333.33.
Because the record supports the trial court's determination that the value of the Lac Lavon Partnership substantially changed between the date of valuation and the final distribution, the trial court did not abuse its discretion by finding that the value of the parties' interest in the partnership was $63,333.33.
7. Attorney Fees
Husband argues that the trial court erred in requiring him to pay $15,000 towards wife's attorney fees when it did not find that he has the means to pay the fees and that wife does not have the means to pay them.
The decision to award attorney fees in dissolution cases rests almost entirely within the discretion of the trial court. Maeder v. Maeder, 480 N.W.2d 677, 680 (Minn. App. 1992), review denied (Minn. Mar. 19, 1992). An award of attorney fees is proper when the court finds the fees are necessary for the good-faith assertion of the party's rights in the proceeding, the party from whom fees are sought has the means to pay them, and the party to whom fees are awarded does not have the means to pay them. Minn. Stat. § 518.14, subd. 1 (1998). "If attorney fees are warranted, the court's order must be accompanied by appropriate findings." Courey v. Courey, 524 N.W.2d 469, 473 (Minn. App. 1994) (citing Richards v. Richards, 472 N.W.2d 162, 166 (Minn. App. 1991)).
Although the trial court found that wife has no independent earnings and is unable to pay her attorney fees, it did not find that husband is able to pay wife's attorney fees. The court found only that husband "has substantial net income, and has paid most, if not all, of his attorney's fees and costs incurred up to trial." Consequently, we reverse the award of attorney fees and remand for reconsideration. See Richards, 472 N.W.2d at 166 (mandatory language in Minn. Stat. § 518.14 and need for findings on specific factors requires specific findings).
8. Motion for New Trial
Husband argues that the trial court erred in denying his motion for a new trial because the trial judge failed to remain impartial and should have disqualified herself. Under Minn. R. Civ. P. 63.02, a judge may not sit in any case "if that judge might be excluded for bias from acting therein as a juror." Husband claims that the fact that the judge dwelled on certain incidents and used language that characterized him as a bad person demonstrates that the judge was biased.
Motions for a new trial should be cautiously and sparingly granted by a trial court. Leuba v. Bailey, 251 Minn. 193, 207-08, 88 N.W.2d 73, 83 (1957). The decision whether to grant a new trial on the ground of judicial bias or prejudice rests within the sound discretion of the trial court and will not be reversed absent a clear abuse of that discretion. Uselman v. Uselman, 464 N.W.2d 130, 139 (Minn. 1990). A primary consideration is whether any claimed misconduct is so serious that it denies the litigant a fair trial. Id.
Upon review of the record, we are not persuaded that the trial judge's comments demonstrated bias or prejudice or deprived husband of a fair trial. We can find no evidence that the trial judge did not meet her obligation of impartiality. Husband did not assert that the trial judge was biased, or claim that she should have disqualified herself, until after the judge rendered her decision. Under these circumstances, the trial court did not abuse its discretion by denying husband's motion for a new trial.
We express no opinion on how to resolve the remanded issues. On remand, whether to reopen the record shall be discretionary with the district court.
Affirmed in part, reversed in part, and remanded.