may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
Steven
B. Atwater, petitioner,
Respondent,
vs.
Star M. Anderson,
Appellant.
Affirmed in part, reversed in part, and remanded
Peterson, Judge.
File No. DC154258
Robert J. Hajek, John A. Warchol, Warchol, Berndt & Hajek, P.A., 3433 Broadway Street Northeast, Suite 110, Minneapolis, MN 55413-1782 (for respondent)
Gayle Gaumer, Thomas Bennett Wilson III, Wilson Law Firm, 7101 York Avenue South, Suite 374, Edina, MN 55435 (for appellant)
Considered and decided by Schumacher, Presiding Judge, Klaphake, Judge, and Peterson, Judge.
PETERSON, Judge
In this post-dissolution proceeding, appellant-mother Star M. Anderson argues that the district court (a) erroneously imputed income to her because her underemployment was due to a bona fide career change and was temporary; (b) should have treated the life-insurance premiums that the dissolution judgment requires her to pay as child support payments; (c) miscalculated her net income; (d) incorrectly apportioned child-care expenses; and (e) erred by awarding conduct-based attorney fees for conduct occurring outside the litigation. We affirm in part, reverse in part, and remand.
The marriage of respondent-father Steven B. Atwater and appellant was dissolved on March 20, 1990. The parties have two minor children, a son born in 1984 and a daughter born in 1986. The dissolution judgment awarded the parties joint legal and joint physical custody of the children and reserved the issue of child support. Initially, the children spent about equal time with each party. In September 1999, the children began living with father on a full-time basis.
In December 1999, father filed a motion to establish child support. In March 2000, the parties entered into a stipulation agreeing that mother would pay father $750 per month in temporary child support from December 4, 1999, through March 3, 2000, and $565 in child support from March 4, 2000, to March 26, 2000, at which time child support would be re-evaluated based upon the children’s living arrangement and the parties’ resources. On May 4, 2000, the district court conducted a hearing on father’s motion and issued an order reserving child support and directing the parties to schedule an evidentiary hearing. The evidentiary hearing was conducted on September 13, 2000.
Mother worked as a nurse anesthetist from April 1975 until she quit her employment on May 3, 2000. She was earning a gross income of $80,000 per year when she quit. Mother testified that she quit because, as a result of carpal tunnel syndrome, she was no longer able to perform two essential job functions, CPR and assisting patient respiration using an anesthesia bag. Mother had carpal tunnel release surgery in February 2000, but she testified that the surgery failed to alleviate her symptoms. Mother testified that she attempted to return to work in April 2000, but at the end of every workday, her arm was numb and hurt very badly.
Dr. Jeffrey Husband was mother’s treating physician for the carpal tunnel syndrome. His notes from a May 2000 postoperative examination state, “[Mother’s] subjective symptoms are out of proportion to objective findings. I doubt that she has recurrent carpal tunnel syndrome.”
Mother was 50 years old when she quit her job. In addition to her nurse-anesthetist degree, mother has a master-of-arts degree with double majors in allied health education and curriculum and instructional design. When she quit her job, mother was planning to move to Florida with her fiancé, but the relationship ended, and mother decided to remain in Minnesota.
Mother testified that she began seeking other employment in January 2000 before she quit her job. She applied for positions in an outpatient surgical office, medical-equipment sales, assisted-living administration, medical training for flight attendants, health-claims review/management, real estate, and travel consulting. A list compiled by mother showed that she submitted one job application in June 2000, one on August 4, 2000, and five within two weeks before the September 2000 hearing. Mother testified that she applied for a position with a plastic surgeon in January 2000 and a position in Florida during the spring of 2000. Mother also testified that she had two interviews with an airline company sometime before the hearing but was rejected due to her carpal tunnel syndrome. Mother testified that she had not received any offers of employment and that potential employers had rejected her due to lack of experience or because of the physical limitations resulting from the carpal tunnel syndrome. Mother testified that she also submitted her resume to two employment agencies that specialized in finding positions in the medical field, but she did not receive any response from them. At the time of the hearing, mother was working part time as a retail sales clerk, earning a net monthly income of $400.
At father’s request, Alyce Faye Hatch, a qualified rehabilitation consultant (QRC), evaluated mother’s employability. For purposes of the evaluation, Hatch assumed that mother’s claims of limitations resulting from carpal tunnel syndrome were true. Based on mother’s educational background and employment history, Hatch opined that mother could find employment as a claims adjuster or case manager for an insurance company, a sales-support person for a medical-equipment company, a medical-claims examiner, or a cardiology technologist. Hatch testified that positions in those fields were available from December 1999 through September 2000. In September 2000, Hatch checked Minnesota Department of Labor and Industry figures and found available in the metropolitan area 1,720 medical/management positions, 830 insurance-claims positions, 350 cardiology-technologist positions, and 1,790 sales-support positions with medical-equipment companies. Hatch concluded that the least mother could be expected to earn in those positions would be between $37,841.60 and $42,861.60.
The district court found:
19. Based on [mother’s] earning history, job skills, education, and the availability of suitable jobs in the Twin Cities metro area, [mother] is voluntarily underemployed.
* * * *
21. [Mother] did not do anything that could be interpreted as a real effort to find suitable employment until just prior to the September 13, 2000 evidentiary hearing when she submitted several job applications.
22. Considering [mother’s] ability to work, opportunity to find gainful employment, disposition and will to earn money to contribute to the children’s support, and her lack of diligence in seeking employment, mother has unjustifiably limited her income in bad faith.
The district court imputed a gross annual income of $37,841.60 to mother. The court imputed net monthly income of $2,235 to mother and, pursuant to the child-support guidelines, ordered mother to pay 30% of that amount, $670.50 per month, for child support. The district court also ordered mother to pay father $40.50 per month for child-care expenses and $1,000 in conduct-based attorney fees.
Mother filed a motion for a new trial or, alternatively, amended findings. The district court amended a finding regarding mother’s sale of her home and use of the sale proceeds but otherwise denied mother’s motion.
1. The district court has broad discretion in establishing child support, and its decision will be affirmed unless the court reached a clearly erroneous conclusion against logic and the facts on record. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
If the court finds that a parent is voluntarily unemployed or underemployed * * *, support shall be calculated based on a determination of imputed income. A parent is not considered voluntarily unemployed or underemployed upon a showing by the parent that the unemployment or underemployment: (1) is 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. 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) (2000).
Mother argues that the district court clearly erred by finding that she was underemployed because she showed that her underemployment was due to a bona fide career change. Mother’s claim of a bona fide career change is based on the evidence that she could no longer work as a nurse anesthetist due to limitations resulting from carpal tunnel syndrome.[1] Even if mother’s physical condition required her to stop working as a nurse anesthetist, that fact alone does not demonstrate that she made a bona fide career change.
Quitting a job is only part of a career change. To make a career change, a person must also pursue training or obtain a job in a new field. For purposes of seeking child support, father did not dispute mother’s claim that she could no longer work as a nurse anesthetist. Rather, he sought child support based on Hatch’s evaluation of mother’s employability, which assumed the truth of mother’s claims of limitations resulting from carpal tunnel syndrome.
Accordingly, the district court did not impute income to mother at the rate she earned as a nurse anesthetist, and its decision, read as a whole, shows that the finding of voluntary underemployment was based on the second aspect of a career change, obtaining new employment. After quitting her job as a nurse anesthetist, mother became employed as a part-time retail sales clerk. She makes no claim that her retail-sales-clerk job is part of her long-term career plan. Rather, she argues that she took that job because she was unable to find other employment. But the district court rejected that argument and found that mother failed to obtain other employment because she was not diligent in conducting her job search until shortly before the September 2000 evidentiary hearing.
The record supports the district court’s finding that mother did not diligently conduct a job search. Mother testified that she began seeking new employment in January 2000. But her testimony and the list she compiled refer to only five positions that she applied for between January 2000 and the first week of August 2000.
Mother argues that the district court erred in crediting Hatch’s testimony about the jobs for which mother is qualified and the availability of those jobs in the metropolitan area. Mother cites the facts that she applied for positions in some of the fields Hatch recommended and did not receive any offers and that she did not receive any job leads from the two employment agencies to which she submitted resumes. But the evidence refers to only ten positions for which mother applied. And five of those applications were made during the last two weeks before the evidentiary hearing and mother had not received responses on all of them by the hearing date. Similarly, mother did not submit her resume to the employment agencies until the last two weeks before the hearing. Given the limited number of positions mother applied for and the timing of her submissions to the employment agencies, we cannot conclude that the district court clearly erred in crediting Hatch’s testimony. See Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (stating appellate courts defer to district court credibility determinations).
Hatch’s testimony shows that there were jobs available to mother that paid a starting salary of at least $37,841.60. The district court did not clearly err when it found that mother was voluntarily underemployed and imputed to her a gross annual income of $37,841.60.
2. The dissolution judgment required mother to maintain life insurance naming the children as beneficiaries for so long as the children are minors. Mother argues that the requirement that she maintain life insurance is in the nature of an existing support obligation and that, in determining her net income, the district court should have deducted the $90 premium she pays to maintain the insurance. Minn. Stat. § 518.551, subd. 5(b)(viii) (2000), states that “A Child Support or Maintenance Order that is Currently Being Paid” is deducted from gross income in determining net income for child support purposes. Minn. Stat. § 518.551, subd. 5(b)(viii), applies to support obligations for children from a previous marriage or relationship. See, e.g., Hayes v. Hayes, 473 N.W.2d 364, 365-66 (Minn. App. 1991) (explaining how the law favors an existing child-support obligation over a subsequently assumed one). Mother cites no authority applying Minn. Stat. § 518.551, subd. 5(b)(viii), to an obligation to maintain life insurance for children that are the subject of the current proceeding. We, therefore, conclude that the life-insurance premium is not deductible.
3. Based on an imputed gross annual income of $37,841.50, or $3,153.46 per month, the district court imputed a $2,235 net monthly income to mother. Mother argues that the district court miscalculated her imputed net income by failing to subtract from her imputed gross income the deductions permitted under Minn. Stat. § 518.551, subd. 5(b) (2000). Although the district court did not explain its calculation or specify the deductions that it allowed from gross income, mother has the burden of showing that the district court erred when it determined her imputed net income. See Bloom v. Hydrotherm, Inc., 499 N.W.2d 842, 845 (Minn. App. 1993) (party seeking reversal has burden of demonstrating error), review denied (Minn. June 28, 1993).
Mother has not directed us to any evidence that shows that the district court should have deducted from gross income a greater amount than it did when calculating her net income. The difference between the gross and net monthly income amounts determined by the district court shows that the court allowed $918.46 in deductions from gross monthly income when it calculated net monthly income. Mother submitted a list of her monthly expenses, which included a $225 payment for individual health insurance, a $65 payment for professional dues (in her reply brief, mother also identifies this payment as a license fee), and a $90 life-insurance premium. In addition, in her reply brief, mother estimates the federal income tax on her imputed gross monthly income to be $626, state income tax to be $197, and social security deductions to be $241.
As we have already discussed, the $90 life-insurance premium is not deductible when determining net income for purposes of child support. Also, because mother is no longer working as a nurse anesthetist and has no plans to resume that career in the future, the $65 license fee is not deductible. Mother does not explain how she calculated her state and federal tax liability. Minn. Stat. § 518.551, subd. 5(b), recommends using the standard deductions set forth in the tax tables to calculate federal and state income tax withholdings for child-support purposes. Using that approach, allowing mother one withholding allowance, her monthly federal tax liability is $479, and her monthly state tax liability is $171. Mother’s monthly tax obligation for social security and medicare totals $241. 26 U.S.C. § 3101(a), (b). These monthly deductions for state and federal tax liability, including social security and medicare, total $891. Mother, however, testified that her income tax liability is offset by home ownership advantages, although she did not estimate the amount of that offset. Mother presented no evidence documenting her claimed $225 monthly health-insurance premium, and the district court was not required to credit her testimony, which it generally found to be incredible, as to that amount.
While it would have been preferable for the district court to specify how it calculated mother’s net income, mother has provided no basis for this court to conclude that the district court’s calculation was contrary to the evidence in the record. Mother has failed to satisfy her burden of showing that the district court erred when it calculated her imputed net income.
4.
The court shall review the work-related and education-related child care costs paid and shall allocate the costs to each parent in proportion to each parent’s net income, as determined under this subdivision, after the transfer of child support and spousal maintenance, unless the allocation would be substantially unfair to either parent. There is a presumption of substantial unfairness if after the sum total of child support, spousal maintenance, and child care costs is subtracted from the noncustodial parent’s income, the income is at or below 100 percent of the federal poverty guidelines. The cost of child care for purposes of this paragraph is 75 percent of the actual cost paid for child care, to reflect the approximate value of state and federal tax credits available to the custodial parent. The actual cost paid for child care is the total amount received by the child care provider for the child or children of the obligor from the obligee or any public agency. The court shall require verification of employment or school attendance and documentation of child care expenses from the obligee and the public agency, if applicable.
Minn. Stat. § 518.551, subd. 5(b) (emphasis added).
Mother argues that it is unreasonable to incur child-care expenses for children ages 14 and 16. The district court found:
[Father] is an emergency room physician and regularly has to work overnight shifts. [Father] pays his niece $300.00 per month to live in the home and watch the children when he is absent. [Father] testified that all of the $300.00 expense is work related.
The evidence supports this finding, and it is not unreasonable to require overnight supervision for teenaged children.
Mother also argues that the district court erred in requiring her to contribute to child-care expenses because father failed to provide documentation of the expenses. We agree. Minn. Stat. § 518.551, subd. 5(b), mandates documentation of child-care expenses, and the record does not contain such evidence. The district court also erred by allocating child-care expenses based on gross income. We, therefore, reverse the allocation of child-care expenses and remand that issue to the district court.
5. A court, “in its discretion,” may award “additional fees, costs, and disbursements against a party who unreasonably contributes to the length or expense of the proceeding.” Minn. Stat. § 518.14, subd. 1 (2000).
Fee awards under Minn. Stat. § 518.14 may be based on the impact a party’s behavior has had on the costs of the litigation regardless of the relative financial resources of the parties. * * * [A]n award of attorney fees is discretionary and will not be disturbed absent a clear abuse of discretion.
Dabrowski v. Dabrowski, 477 N.W.2d 761, 766 (Minn. App. 1991) (citations omitted).
In the order denying mother’s new-trial motion, the district court found that “conduct based fees were warranted due to [mother’s] calculated efforts to avoid paying child support.” And in the order that awarded father attorney fees, the district court found that, “[mother] terminated her employment in the same time frame her child support was to be reviewed.” The evidence supports these findings, and together, the findings indicate that the district court concluded that mother quit her job to influence the outcome of the imminent child-support review.
Mother quit her job as a nurse anesthetist the day before a scheduled hearing on her child-support obligation. By quitting her job, mother dramatically reduced her income, which would be a significant issue in the child-support hearing the next day. The district court could reasonably infer from the timing of mother’s decision to quit her job the day before the child-support hearing that her decision was intended to influence the outcome of the hearing. This conduct created the underemployment issue, which made it necessary for father to incur the expenses of addressing the issue. The district court did not abuse its discretion by awarding $1,000 in attorney fees to father.
Affirmed in part, reversed in part, and remanded.
[1] Mother incorrectly contends that she presented undisputed evidence that she could no longer work as a nurse anesthetist. Father submitted notes prepared by mother’s treating physician, which questioned whether mother continued to suffer from carpal tunnel syndrome after surgery, and the district court specifically found that the treating physicians conclusions were more credible than mother’s subjective reporting.