may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Julie Terese Davis, petitioner,
Stephen Richard Dannewitz,
Filed July 20, 1999
Affirmed in part, reversed in part, and remanded
Hennepin County District Court
File No. DC188398
Edward L. Winer, Kelly M. McSweeney, Moss & Barnett, P.A., 4800 Norwest Center, 90 South Seventh Street, Minneapolis, MN 55402-4129 (for appellant)
Considered and decided by Short, Presiding Judge, Peterson, Judge, and Shumaker, Judge.
Appellant Stephen Richard Dannewitz challenges the district court's denial of his motion to reduce spousal maintenance and its award of attorney fees to his former wife, respondent Julie Terese Davis. We affirm in part, reverse in part, and remand.
The parties stipulated to the dissolution of their 16-year marriage on December 29, 1993, and agreed to reserve all other issues. On November 14, 1994, they stipulated that Dannewitz would have physical custody of the parties' older minor child, Michael, and Davis would have custody of their younger minor child, Katherine; and that "[c]hild support is reserved until Michael is emancipated at which time child support may be reviewed at the request of either party." They also agreed that Dannewitz would pay Davis monthly spousal maintenance of $3,500, "based on [Dannewitz, a physician] having gross income of $129,000" annually. Davis worked as a part-time retail salesperson and earned about $15,000 in gross annual income.
After Michael's emancipation in 1997, Davis moved for an award of child support for Katherine. An administrative law judge found that Dannewitz's gross annual income was $175,000; his net monthly income was $7,376.67, and his monthly living expenses were $5,133.43. The ALJ found Davis's monthly net income from her sales job to be $1,060.68 and her monthly household expenses for herself and Katherine to be $3,349. The ALJ ordered Dannewitz to pay monthly child support of $1,408.75.
In September 1998, Dannewitz moved to reduce his monthly spousal maintenance obligation to $1,000. He argued that Davis's combined monthly income of $6,169, from spousal maintenance, child support and her own employment, exceeded her monthly living expenses by $2,241. He contended that it was unreasonable and unfair that he should have to pay an amount of maintenance that yielded such a surplus to Davis.
By order dated October 15, 1998, the district court denied Dannewitz's motion, ruling that the parties contemplated a modification in child support, and therefore the modification is not a change in circumstances within the meaning of Minn. Stat. § 518.64, subd. 2 (1998) (requiring a change in circumstances for a modification of spousal maintenance). Relying on Beck v. Kaplan, 566 N.W.2d 723, 726 (Minn. 1997), the court also held that the child support modification did not make the original spousal maintenance order unreasonable or unfair. By order dated December 10, 1998, the court awarded $4,500 in attorney fees to Davis as a result of Dannewitz's modification motion. Dannewitz appealed both rulings.
It is within the district court's discretion to modify child support or spousal maintenance, and this court will not reverse a refusal to modify a support obligation absent an abuse of that discretion. Kuronen v. Kuronen, 499 N.W.2d 51, 53 (Minn. App. 1993), review denied (Minn. June 22, 1993). A reviewing court will find an abuse of discretion only if the district court reaches "a clearly erroneous conclusion that is against logic and the facts on record." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
Under Minn. Stat. § 518.64, subd. 2(a) (1998), a spousal maintenance order may be modified
upon a showing of * * * substantially increased or decreased earnings of a party; * * * substantially increased or decreased need of a party.
A party seeking a modification of spousal maintenance has the burden of showing not only a substantial change in circumstances but also that the change makes the previous maintenance award unreasonable and unfair. See Nardini v. Nardini, 414 N.W.2d 184, 198-99 (Minn. 1987); Rydell v. Rydell, 310 N.W.2d 112, 115 (Minn. 1981).
Dannewitz argues that the district court erred by holding that he is precluded from seeking a spousal maintenance modification because he stipulated to permanent maintenance. We do not read the district court's order as either explicitly or implicitly holding that Dannewitz has waived his right to seek to modify maintenance. Rather, the district court held that, on the basis of Beck v. Kaplan, 566 N.W.2d 723 (Minn. 1997), Dannewitz has failed to show that Davis's increase in income has made the original stipulated maintenance award unreasonable and unfair. We agree with the district court.
In Beck, the parties stipulated to permanent maintenance of $1,800 each month for the wife. Id. at 725. The wife also proposed a cost-of-living adjustment clause for maintenance, but the husband rejected the proposal and the resulting judgment and decree had no adjustment clause. Id. Nineteen years later, the wife moved to modify spousal maintenance, claiming that the cost of living, her expenses, and her former husband's income had all increased substantially since the original award. Id. A referee found that these increases made the original award unreasonable and unfair and ordered an increase in maintenance to $4,000 each month and an automatic biennial cost-of-living adjustment for the maintenance award. Id. The district court affirmed the award.
On appeal, the supreme court held that the district court abused its discretion by increasing spousal maintenance and by adding an automatic cost-of-living adjustment. Id. at 726-27. Noting that a stipulation for permanent maintenance does not, without an affirmative waiver, preclude a modification, the supreme court cautioned courts to give considerable deference to the parties' express agreement:
When a stipulation fixing the respective rights and obligations of the parties is central to the original judgment and decree, the district court considering the modification motion must appreciate that the stipulation represents the parties' voluntary acquiescence in an equitable settlement. Claybaugh v. Claybaugh, 312 N.W.2d 447, 449 (Minn. 1981). In that regard, we have cautioned the district court to exercise its considerable discretion carefully and only reluctantly when it is faced with a request to alter the terms of an agreement which was negotiated by the parties. Claybaugh, 312 N.W.2d at 449 (citing Sieber v. Sieber, 258 N.W.2d 754 (Minn. 1977)); Kaiser v. Kaiser, 290 Minn. 173, 179, 186 N.W.2d 678, 683 (1971).
Id. at 726.
The supreme court accepted the referee's finding that there had been a substantial change in circumstances since the original maintenance award. However, this substantial change did not compel the conclusion that the original award had thereby become unreasonable and unfair. In reaching its decision, the supreme court explained that the parties had thoroughly negotiated their stipulation with the help of counsel and that the wife offered no evidence to show that she could not anticipate inevitable increases in her former husband's earning capacity and the cost of living. The court said:
It is neither unreasonable nor unfair to hold the parties to their original negotiated agreement which at the time it was made undoubtedly balanced their compromised interests.
Here, even if we accept Dannewitz's argument that Davis's income has increased substantially because of the child support to Katherine, the Beck principles persuade us that the increase has not made the original spousal maintenance award unreasonable and unfair. That award was the product of a negotiated stipulation which addressed both monetary and non-monetary concerns of the parties. Both parties were represented by counsel. Because the parties expressly agreed to reserve child support for later review, they necessarily anticipated the possibility of an award of support that would change Davis's income. As in Beck, it is likely that the parties also anticipated an increase in Dannewitz's earnings through his employment as a physician. Davis contends that Dannewitz's agreement to permanent maintenance of $3,500 reflected his recognition that Davis had consented to stay at home and raise the children rather than to continue her education and thereby increase her earning potential. This is possible and is the sort of balancing and compromising of monetary and non-monetary interests typical of marital dissolution stipulations. See id.
Finally, Dannewitz contends that the unfairness of the original maintenance award is attested by the degree to which Davis's income now exceeds her needs. See, e.g., Plath v. Plath, 393 N.W.2d 401, 403 (Minn. App. 1986) (parties may stipulate to a level of performance court cannot order). He argues that Davis now has a "windfall." We are aware of no authority that ties stipulated maintenance awards strictly to the recipients' needs. As acknowledged by Beck, parties to marriage dissolutions might well use such awards to balance various interests. That such is the case here is suggested by the absence of any reference to Davis's needs in the parties' stipulation.
The district court made only two findings on Davis's attorney fees:
Petitioner's attorneys seek $8,900.10 in fees for responding to respondent's motion to modify spousal maintenance.
Given the disparity in the parties' incomes it would be appropriate for respondent to contribute to petitioner's attorney's fees in the amount of $4,500.
Dannewitz challenges the award of attorney fees.
An award of attorney fees under Minn. Stat. § 518.14, subd. 1 (1998), "rests almost entirely within the discretion of the trial court and will not be disturbed absent a clear abuse of discretion." Jensen v. Jensen, 409 N.W.2d 60, 63 (Minn. App. 1987). The court shall award attorney fees if (1) the fees are necessary for a good-faith assertion of the party's rights in the proceeding; (2) the party from whom fees are sought can afford to pay; and (3) the party who seeks an award of fees cannot afford to pay attorney fees. Minn. Stat. § 518.14, subd. 1. Here, the court awarded one-half of Davis's attorney fees based solely on its determination of an income disparity.
Although the disparity in the parties' incomes suggests that Dannewitz is able to pay the fee award, the district court failed to determine whether or not Davis is able to pay her own fees. Davis submitted to the district court financial evidence from which the court will be able to determine Davis's ability to pay her own attorney fees, and we reverse and remand for the appropriate determination. See Courey v. Courey, 524 N.W.2d 469, 473 (Minn. App. 1994) (district court made no specific findings that father or grandparents had ability to pay, or that mother was unable to pay; award of attorney fees therefore reversed and remanded for reconsideration); see also Moylan v. Moylan, 384 N.W.2d 859, 863 (Minn. 1986) (findings necessary to provide clear understanding of basis and grounds for trial court's decision); Richards v. Richards, 472 N.W.2d 162, 166 (Minn. App. 1991) (remand necessary where district court failed to make findings on specific factors set forth in statute).
Affirmed in part, reversed in part and remanded.