This opinion will be unpublished and
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:
Mary Knox Sayer, petitioner,
Robert Burr Sayer,
Filed November 30, 1999
Sherburne County District Court
File No. F397845
Anne M. Honsa, Honsa & Michales, P.A., 5500 Wayzata Blvd, Suite 520, Minneapolis, MN 55416 (for respondent)
William L. H. Lubov, Lubov & Associates, 2445 Park Ave., Minneapolis, MN 55404 (for appellant)
Considered and decided by Shumaker, Presiding Judge, Davies, Judge, and Willis, Judge.
U N P U B L I S H E D O P I N I O N
Appellant Robert Burr Sayer appeals from a marriage dissolution judgment, challenging: (1) the amount of awarded child support; (2) the amount and duration of, and security for, spousal maintenance; (3) the division of marital assets; and (4) the award of attorney fees. Respondent Mary Knox Sayer seeks attorney fees on appeal. We affirm and award to respondent attorney fees on appeal.
Appellant father and respondent mother were married in 1980. Respondent has sole physical custody of their three minor children (ages 9, 10, and 13).
Appellant is the sole owner of Datasite Incorporated, a subchapter S corporation. Datasite, which is in the business of environmental monitoring for mainframe computers, pays appellant an annual salary of $60,000. Datasite also pays some of appellant’s personal expenses.
Respondent stayed home raising children for 11 years of the 18-year marriage. In 1997, she received a florist certificate and now works as a florist 35 hours per week.
D E C I S I O N
When appeal from a judgment of dissolution is taken without a new trial motion, the standard of review is whether the evidence supports the findings of fact and whether the findings of fact justify the conclusions of law. Kahn v. Tronnier, 547 N.W.2d 425, 428 (Minn. App. 1996), review denied (Minn. July 10, 1996).
I. Calculation of Child Support
Appellant challenges the level of child support based on a finding that his net monthly income is approximately $8,193. The trial court has broad discretion in setting child support and its decision will not be altered on appeal absent a clearly erroneous conclusion that is against logic and the facts in the record. Id.
The child support statute provides the method for calculating the net monthly income of a self-employed obligor. At the time of this judgment in 1998, it read:
Income from self-employment is equal to gross receipts minus ordinary and necessary business expenses. Ordinary and necessary expenses do not include amounts allowed by the Internal Revenue Service for accelerated depreciation expenses or investment tax credits or any other business expenses determined by the court to be inappropriate for determining income for purposes of child support. 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(f) (1998) (emphasis added). This provision imputes the "gross receipts" of the wholly owned corporation to the self-employed person; the self-employed person then has the burden of proving what "ordinary and necessary" business expenses should be deducted from the gross receipts. Id. While the statute does not define "ordinary and necessary" business expenses, they necessarily include the cost of goods sold, salaries, business deductions allowed by law, and, when appropriate, at least some depreciation.
The statute further provides that net income includes "in-kind payments received by the obligor in the course of employment, self-employment, or operation of a business if the payments reduce the obligor’s living expenses." Minn. Stat. § 518.551, subd. 5(b)(1) (1998); County of Nicollet v. Haakenson, 497 N.W.2d 611, 614 (Minn. App. 1993) (value of employer-furnished truck included in net income when use of truck reduced living expenses); Roth v. Roth, 406 N.W.2d 77, 79 (Minn. App. 1987) (when calculating net income, trial court must include personal expenses paid on behalf of obligor by his wholly owned subchapter S company, where evidence showed appellant charged numerous personal expenses to it).
In this case, the trial court determined that in 1997 Datasite used its gross receipts to pay almost $50,000 in personal expenses on behalf of appellant (in addition to his $60,000 salary); such in-kind payments must be imputed to appellant as income. A careful review of the record supports the trial court findings. In 1997, the gross receipts of Datasite were $282,015. The accounting expert who reviewed the Datasite records found the Datasite records were poor and incomplete. Further, he found that Datasite used its gross receipts to pay certain expenses that either: (1) were for the personal benefit of appellant or his family (i.e., payment of health club fees, apartment rent, attorney fees for personal matters); or (2) lacked proper support to classify them as an ordinary and necessary business expense (i.e., expenses claimed as travel that lack proper receipts). The expert testified that these Datasite payments were essentially "income" to appellant. Appellant later claimed these personal payments were loans, but had no documentation for that claim.
Because there is support for the factual finding of appellant’s net monthly income, we will not disturb the resulting child support calculation.
II. Division of Marital Assets
Appellant challenges the findings on the valuation of Datasite and the JBS Partnership, and denial of a nonmarital claim to the homestead. Property valuation is a fact question addressed in the first instance by the trial court. Hertz v. Hertz, 304 Minn. 144, 147, 229 N.W.2d 42, 45 (1976). The trial court’s discretion is broad and will be overturned only upon a clear showing that discretion was abused. Id. Valuation is necessarily an approximation and it is only required that values fall within a reasonable range. Id.
The trial court found that, based on the testimony of respondent’s accounting expert, the fair market value of Datasite was approximately $116,000. The expert acknowledged that he first attempted to set value by analyzing the reported income and bank deposits from Datasite. But missing documents, inconsistent billing records, and understated accounts receivable made it necessary for him to base his valuation primarily on a transaction between appellant and a former shareholder. Because this transaction provides support for the trial court’s valuation, we will not disturb the finding.
There is also support for the findings: (1) that appellant has an interest in JBS Partnership; and (2) that appellant does not have a nonmarital interest in the homestead. With respect to JBS Partnership, respondent saw a file labeled "JBS Partnership" that contained information about real property titled in JBS Partnership. Respondent testified that "JBS" stood for the first letters of appellant’s and his brothers’ names. This JBS file was removed from the home by appellant shortly after the petition was filed and was not subsequently produced by appellant. The trial court could reasonably deduce that appellant was hiding an interest in the partnership. With respect to nonmarital gifts used to purchase the homestead, the record supports the finding that the funds claimed as nonmarital were given to both respondent and appellant. There is support in the record for the trial court findings.
III. Other Issues: Spousal Maintenance and Day Care
An appeals court should not disturb a spousal maintenance award absent a trial court’s abuse of discretion. Maeder v. Maeder, 480 N.W.2d 677, 679 (Minn. App. 1992), review denied (Minn. Mar. 19, 1992). A court may order maintenance if it finds that, in view of the standard of living during the marriage, a spouse is without adequate support through employment or marital property. Minn. Stat. § 518.552 subd. 1 (1998); Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn. App. 1998) (recipient’s need balanced against obligor’s financial condition), review denied (Minn. Feb. 18, 1999). A permanent award is favored if the specific statutory criteria are met. Minn. Stat. § 518.552, subd. 3 (1998); Gales v. Gales, 553 N.W.2d 416, 419 (1996). A court may require sufficient security to be given for payment of maintenance. Minn. Stat. § 518.24 (1998).
The trial court based its permanent spousal maintenance award of $1,800 monthly on the following: (1) for 11 years of the 18-year marriage respondent was solely a homemaker; (2) she has and expects no training beyond her florist certificate; (3) she has no other financial resources to meet her monthly needs; (4) her current net monthly income is inadequate to maintain her marital standard of living; (5) appellant has the ability to assist her based on his net monthly income; and (6) respondent stayed home with the children to allow appellant to travel and thus enhance income.
The evidence supports the factual findings and the trial court did not abuse its discretion. There is support for the permanent, secured maintenance. With respect to day-care expenses, the issue was properly considered by the trial court.
IV. Attorney Fees
The standard of review for an appellate court examining an award of attorney fees is whether the trial court abused its discretion. Gully v. Gully, 599 N.W.2d 814, 820 (Minn. 1999). The court shall award attorney fees if fees are necessary for the good-faith assertion of rights, and one party does not have the means to pay, and the other party does have the means to pay. Minn. Stat. § 518.14, subd. 1 (1998). The statute further provides:
Nothing in this section precludes the court from awarding, in its discretion, additional fees, costs, and disbursements against a party who unreasonably contributes to the length or expense of the proceeding.
While the attorney fees award is substantial, the record supports such an award. The trial judge concluded that appellant had contributed to the length and costs of the proceedings by his failure to produce business records. The court had to issue two separate orders requiring appellant to produce requested business records, yet not all were produced before trial. Respondent also served subpoenas on four accountants because appellant had not produced documents in his possession. The child support statutes require the disclosure of financial information, including documentation of earnings and income. See Minn. Stat. § 518.551, subd. 5b(a) (1998). It should not be necessary for a party to use motions, subpoenas, and repeated requests to obtain basic financial information.
The trial judge also made findings that respondent lacked sufficient income and assets to pay her attorney, while appellant had funds from Datasite and a nonmarital asset. The needs of respondent, the resources of appellant, and appellant’s lack of candor support the award of attorney fees.
Because this appeal is simply an attempt to have this appellate court retry the facts, we award to respondent attorney fees on appeal in the amount of $1,500.
Affirmed. It is implicit that these payments, if added to income, are also deducted from gross receipts as "ordinary and necessary" business expenses under the statutory method of calculation. This avoids double counting.