STATE OF MINNESOTA

IN COURT OF APPEALS

C8-99-1135

Theresa Marie Groe,

Respondent,

Hennepin County,

Respondent,

vs.

Ralph David Forsgren,

Appellant.

Filed April 25, 2000

Affirmed in part, reversed in part, and remanded

Anderson, Judge

Hennepin County District Court

File No. 38523

Theresa Marie Groe, 8517 Columbus Avenue South, Bloomington, Minnesota 55420 (pro se respondent)

Amy Klobuchar, Hennepin County Attorney, Robert Gyurci, Assistant Hennepin County Attorney, 110 South Fourth Street, Minneapolis, MN 55401-2280 (for respondent Hennepin County)

Ronald B. Sieloff, Sieloff and Associates, P.A., Suite 938 Minnesota Building, 46 East Fourth Street, St. Paul, MN 55101 (for appellant)

Considered and decided by Anderson, Presiding Judge, Schumacher, Judge, and Peterson, Judge.

U N P U B L I S H E D O P I N I O N

ANDERSON, Judge

Appellant Ralph David Forsgren challenges the district court’s order awarding child support. Because the district court correctly found that appellant was voluntarily underemployed for the purpose of imputing income to him, we affirm in part. But we reverse in part and remand because the district court did not apply all of the statutory criteria when calculating imputed income and did not conduct a de novo review of the family court referee’s recommendation.

FACTS

In July 1998, a family court referee adjudicated Forsgren the father of N.A.G., respondent Theresa Marie Groe’s child. On December 21, 1998, another family court referee found that appellant was voluntarily unemployed, imputed income to him, and ordered monthly child support of $419.

Forsgren is a 45-year-old mechanical engineer with a four-year engineering degree and 20 years of engineering experience. In 1994 and 1995, Forsgren worked as an engineer, earning $43,682 and $51,595 respectively. His employment terminated in 1995. In November 1997, Forsgren began a new job as an engineer, with a monthly income of up to $2,995. On July 21, 1998, his employer placed Forsgren on unpaid administrative leave and ultimately terminated his employment.

Forsgren told the referee that since July 1998 he has been self-employed as a consulting engineer. He said he had “zero” consulting income, but provided no accounts, books, records, or tax returns to verify this assertion. As evidence of his past income, Forsgren submitted a Social Security record of his reported earnings from 1970 to 1998. Based on these earnings records, the family court referee selected the eight-year period of 1988 through 1995 and computed Forsgren’s average net income to be $38,780, or $2,276 per month. The referee imputed this monthly income to Forsgren and, crediting child support from his first marriage, calculated his obligation to N.A.G. to be $419 per month.

Forsgren sought review of the family court referee’s findings and recommended order. Affirming the order, the district court only modified one finding and one order, replacing the term “unemployed” with “underemployed.” Forsgren appealed, arguing that the district court abused its discretion by imputing income to him based on the finding that he is voluntarily underemployed. He further claimed that the district court did not give the referee’s recommendation the required de novo review.

D E C I S I O N

District courts have broad discretion in setting child support, and we will not reverse an exercise of that discretion absent a “clearly erroneous conclusion that is against logic and the facts on record.” Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).

A. Voluntary Underemployment

Generally, the obligation to pay child support is premised on the obligor’s ability to pay. Schneider v. Schneider, 473 N.W.2d 329, 332 (Minn. App. 1991). The district court, however, must impute income when calculating child support if it finds that the obligor is voluntarily unemployed or underemployed. Minn. Stat. § 518.551, subd. 5b(d) (1998).

A parent is not considered voluntarily unemployed or underemployed if he shows that his unemployment or underemployment is

(1) temporary and will ultimately lead to an increase in income; or (2) represents a bona fide career change that outweighs the adverse effect of that parent’s diminished income on the child.

Id. The imputation of income to a parent is appropriate if the parent chose to be unemployed or underemployed and neither statutory condition applies Franzen v. Borders, 521 N.W.2d 626, 629 (Minn. App. 1994).

Forsgren claims that he did not choose to be underemployed, and that his self-employment is involuntary because his two most recent employers terminated his employment. There is no evidence in the record, however, showing why Forsgren is unable to earn income. He claims to be a self-employed consulting engineer with zero income, but no records or accounts show that he is engaged in an active but not-yet-successful business. There is no evidence showing that Forsgren is seeking employment as an engineer. The district court could reasonably conclude that Forsgren has chosen to remain underemployed.

Under these circumstances, a district court has particularly broad discretion in imputing income. See Bollenbach v. Bollenbach, 285 Minn. 418, 428, 175 N.W.2d 148, 155 (Minn. 1970) (a party’s failure to disclose financial information justifies inferences against that party); Resch v. Resch, 381 N.W.2d 460, 462 (Minn. App. 1986) (a district court may direct child support payments commensurate with a wage the parent “could earn if he sought employment in an occupation for which he is trained and has the present ability to perform”). As Forsgren has not shown that his underemployment is temporary and will lead to increased income or represents a bona fide career change, the district court did not abuse its discretion by finding that he is voluntarily underemployed.

B. Imputed Income

Forsgren also asserts that the district court used an “arbitrary” eight-year average net salary figure to calculate his imputed income. Appellant argues that the district court should have considered his most recent years of employment. This argument has merit and compels us to reverse and remand.

“Imputed income” means the estimated earning ability of a parent based on the parent’s “prior earnings history, education, and job skills, and on availability of jobs within the community for an individual with the parent’s qualifications.” Minn. Stat. § 518.551, subd. 5b(d). A district court imputing income is required to consider all of these factors. Kuchinski v. Kuchinski, 551 N.W.2d 727, 729 (Minn. App. 1996).

Here, the family court referee selected the most productive eight-year segment of Forsgren’s earning history (1988-1995), but disregarded years of markedly lower income (1986-1987; 1996-1998). Forsgren furnished Social Security records showing his reported earnings through 1998, and the record contains employment verifications prepared by his prior employer showing his 1998 earnings ($28,560). The district court affirmed the family court referee’s partial use of appellant’s earnings history.

The family court referee and the district court may have believed that some years of Forsgren’s reported earnings lacked credibility. See Ferguson v. Ferguson, 357 N.W.2d 104, 108 (Minn. App. 1984) (“[T]he opportunity for a self-employed person to support himself yet report a negligible income is too well known to require exposition.”). But neither the referee’s recommendation, nor the district court’s order, adequately explains why they did not consider all the available evidence even if, ultimately, some of the evidence deserves little weight. Moreover, neither the referee nor the district court made the statutorily required findings concerning the availability of local mechanical engineering jobs. We thus reverse and remand for consideration of all of the statutory criteria. Cf. Murphy v. Murphy, 574 N.W.2d 77, 83 (Minn. App. 1998) (reversing and remanding where district court’s child support obligation order was based on one employment survey without regard to other criteria).

II.

Forsgren also contends that the district court failed to use the proper standard when reviewing the referee’s recommendation. We agree.

Rulings by family court referees are entitled to an independent, de novo review by a family court judge. Thompson v. Thompson, 385 N.W.2d 55, 57 (Minn. App. 1986); Peterson v. Peterson, 308 Minn. 297, 303-06, 242 N.W.2d 88, 92-94 (1976). The district court used incorrect standards in its order reviewing the referee’s decision, citing “sufficient evidence” and “abuse [of] discretion.” These errors alone, however, do not support a reversal if the order establishes that the district court conducted an informed and independent review of the referee’s order. See Minn. R. Civ. P. 61 (harmless error rule).

The district court’s three-page order makes it difficult for us to determine the depth of the district court’s review. Cf. Fulmer v. Fulmer, 594 N.W.2d 210, 212 (Minn. App. 1999) (explaining that a 20-page order, together with a lengthy memorandum, allowed the this court to assess the district court’s use of its discretion). Although it is clear from the findings and conclusions that the district court carefully reviewed the record, there is no memorandum setting out the legal analysis. Additionally, the district court did not explain why it affirmed the referee’s imputed income calculations, which were based on only a part of Forsgren’s employment history. In light of the remand for the purpose of considering all of the evidence and because we are not able to establish on the record that the district court conducted an independent review of the referee’s order, we also reverse and remand to allow the district court to ensure that a de novo review occurs as required by law.

Affirmed in part, reversed in part, and remanded.