Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
George Linus Wilkie,
Sheryl Anne Wilkie,
Filed March 17, 1998
Hennepin County District Court
File No. DC210059
Shelly D. Rohr, Wolf & Rohr, P.A., 960 Norwest Tower, 55 East Fifth Street, St. Paul, MN 55101 (for appellant)
Gary A. Debele, Tonja J. Rolfson, Walling & Berg, P.A., Suite 1550, 121 South Eighth Street, Minneapolis, MN 55402 (for respondent)
Considered and decided by Davies, Presiding Judge, Kalitowski, Judge, and Foley, Judge.
Appellant George L. Wilkie challenges the district court's decision in this marriage dissolution case, arguing that there was trial irregularity because the judge did not recuse herself from the case despite the fact that her son was employed by the law firm representing respondent Sheryl A. Wilkie. He also argues that the court erred (1) in imputing income to him for child support purposes; (2) in not awarding him spousal maintenance; and (3) in determining the marital equity in the parties' homestead and in not awarding him a nonmarital interest in the homestead.
Appellant based his motion on the fact that the judge did not disclose to the parties that the firm representing respondent employed her son as an associate. Following a hearing by a different judge, the motion was denied based on the fact that disqualification is not automatically mandated because the law firm representing one of the parties appearing before the judge employs a judge's child. The case was then sent back to the original judge. Upon appellant's renewed request for her removal, the judge recused herself from the case, and the case was then assigned to a referee.
After a hearing, the referee issued an order dated March 3, 1997, finding that appellant failed to present any evidence that the judge was biased or that the proceedings were irregular in any way with respect to appellant's rights. The referee also found that the evidence sustained the finding concerning appellant's net monthly income for the purpose of determining guidelines child support. On the issue of the marital equity in the parties' homestead (stipulated value $545,000), the referee agreed with the judge in finding that the marital equity in the homestead was $49,235 after deducting a $377,000 mortgage and $118,765 for a contribution made by respondent's father towards the improvement of the homestead. The court found that respondent's father contributed the money during the parties' marriage, but respondent signed the promissory note after the parties separated. Under the circumstances, the promissory note represented a transaction between respondent and her father for estate planning purposes and is not a debt of the parties. The referee found $118,765 to be either a nonmarital gift or a loan to respondent.
Following the referee's order, appellant filed a motion for review. The referee's decision was affirmed in an order dated July 21, 1997. This appeal followed.
Canon 3(D)(1) of the Code of Judicial Conduct provides that:
A judge shall disqualify himself or herself in a proceeding in which the judge's impartiality might reasonably be questioned, including but not limited to instances where:
* * * *
(c) the judge knows that he or she, individually or as a fiduciary, or the judge's spouse, significant other, parent or child wherever residing, or any other member of judge's family residing in the judge's household, has an economic interest in the subject matter in controversy or in a party to the proceeding, or has any other interest that could be substantially affected by the proceeding.
(d) the judge or the judges' spouse or significant other or a person within the third degree of relationship to any of them, or the spouse of such a person:
(i) is a party to the proceeding, or an officer, director or trustee of a party;
(ii) is acting as a lawyer in the proceeding;
(iii) is known by the judge to have an interest that could be substantially affected by the proceeding;
(Emphasis added.) The question of disqualification focuses on whether an objective assessment of the judge's conduct produces a reasonable question about impartiality. Roatch v. Puera, 534 N.W.2d 560, 563 (Minn. App. 1995) (emphasis added).
Here, the judge's son became employed with the firm representing respondent after the case was assigned to her. She probably should have disclosed the matter to the parties; however, the nondisclosure by itself, without more, does not suggest that the proceeding was irregular, justifying a new trial. In addition, the fact that the firm representing respondent employed her son does not in itself disqualify her from presiding over the case. See Minn. Code Jud. Conduct Canon 3 D (1) (d) cmt. (1996) ("[t]he fact that a lawyer in a proceeding is affiliated with a law firm with which a relative of the judge is affiliated does not of itself disqualify the judge"). As the supreme court stated:
Judges, of course, should be sensitive to the "appearance of impropriety" and should take measures to assure that litigants have no cause to think their case is not being fairly judged. Nevertheless, a judge who feels able to preside fairly over the proceedings should not be required to step down upon allegations of a party which themselves may be unfair or which simply indicate dissatisfaction with the possible outcome of the litigation.
McClelland v. McClelland, 359 N.W.2d 7, 11 (Minn. 1984). We conclude that the facts of this case do not warrant a new trial.
In determining child support, the district court must first determine the net monthly income of the parties. Minn. Stat. § 518.551, subd. 5 (b) (1996). When a noncustodial parent's taxable income is negative and fails to reflect the amount of money actually available for the purpose of child support, a district court may estimate the parent's income if that estimate has a basis in the record. Marx v. Marx, 409 N.W.2d 526, 528-29 (Minn. App. 1987). A district court may base net income on earning capacity. Roatch, 534 N.W.2d at 565.
Here, appellant argues that the court erred in determining his net monthly income at $4,000, based on his earning capacity. At trial, appellant presented tax returns that indicate his annual income ranged from $4,211 in 1987 to $1,526 in 1993. Appellant did not introduce statements and receipts, or income tax returns for 1994 and 1995. In the petition for dissolution, appellant claimed his gross annual earnings to be approximately $120,000. Additionally, in a financial statement signed by appellant on November 27, 1996, he stated that his annual income as a self-employed person was $75,000. Because of the lack of information on appellant's income, we conclude that the court acted properly in imputing net income to appellant of $4,000 per month.
A court may award maintenance if it finds that the spouse seeking maintenance
(a) lacks sufficient property, including marital property apportioned to the spouse, to provide for reasonable needs of the spouse considering the standard of living established during the marriage, especially, but not limited to, a period of training or education, or
(b) is unable to provide adequate self-support, after considering the standard of living established during the marriage and all relevant circumstances, through appropriate employment, or is the custodian of a child whose condition or circumstances make it appropriate that the custodian not be required to seek employment outside the home.
Minn. Stat. § 518.552, subd. 1 (1996). The maintenance order shall be in amounts and for periods of time as the district court deems just after considering all the relevant factors. Id., subd. 2. Although there are eight statutory factors, "the issue is basically the financial needs of [respondent] and her ability to meet those needs balanced against the financial condition of [appellant]." Bourassa v. Bourassa, 481 N.W.2d 113, 115 (Minn. App. 1992) (quoting Erlandson v. Erlandson, 318 N.W.2d 36, 39-40 (Minn. 1982)).
Appellant argues the district court erred in denying his request for spousal maintenance given the income disparity between him and respondent and the standard of living established during the marriage. Appellant claims that his monthly expenses will be $2,011 after he obtains a residence for himself. Based on appellant's imputed net income of $4,000 per month, we conclude that appellant has adequate income to support himself and that the district court did not err in denying his request for spousal maintenance. See Zyon v. Zyon, 439 N.W.2d 18, 22 (Minn. 1989) (maintenance depends on showing of need).
Under Minn. Stat. § 518.54, subd. 5 (1996), "all property acquired by either spouse subsequent to the marriage and before the valuation date is presumed to be marital property." Nonmarital property means property "acquired by either spouse before, during, or after the existence of their marriage." A gift made by a third party to one spouse but not to the other spouse is nonmarital property. Id. A party seeking to establish the nonmarital character of an asset must do so by a preponderance of evidence. Wopata v. Wopata, 498 N.W.2d 478, 484 (Minn. App. 1993). When marital property is commingled with nonmarital property, it must be readily traceable for the nonmarital property to retain its character. Id.
Here, respondent's father contributed $118,765 towards the improvement of the parties' homestead during the parties' marriage. After the parties separated, respondent signed a promissory note to her father intending to show that the $118,765 was a loan. The district court concluded that the $118,765 was respondent's nonmarital property and deducted the amount in determining the marital equity in the homestead. The evidence supported the district court's conclusion. Respondent has demonstrated that her father contributed $118,765 towards the improvement of the parties' homestead with the intent to benefit her alone. We therefore conclude that the district court did not err in determining the $118,765 to be respondent's nonmarital contribution.
Appellant also argues that he used his nonmarital money ($32,500) as down payment for the homestead and the district court erred in not awarding him his nonmarital interest in the homestead. He claims that the down payment came from the sale of a Porsche 550 Spyder acquired by him before the marriage. Appellant testified that the automobile needed substantial work. To prove his nonmarital interest, appellant produced a purchase document dated May 20, 1980, and an undated bill of sale. Appellant failed to prove whether the restoration was done before or during marriage or whether the appreciation in value was due to the automobile's inherent value or to the repair work done on it. Because appellant failed to prove the down payment was his nonmarital property, we conclude that the district court was correct in not awarding him a nonmarital interest in the homestead.