This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-1337

 

In re Olivia Adrienne Rothstein, petitioner,
Respondent,

vs.

Morry Newell Rothstein,
Appellant.

 

Filed June 14, 2005

Remanded

Stoneburner, Judge

 

Dakota County District Court

File No. F39215557

 

Cathryn C. Schmidt, Swaden Law Offices, Suite 550, 7301 Ohms Lane, Edina, MN 55439 (for respondent)

 

Kathleen M. Picotte Newman, Joani C. Moberg, Larkin, Hoffman, Daly & Lindgren, Ltd., 1500 Wells Fargo Financial Center, 7900 Xerxes Avenue South, Minneapolis, MN 55431-1194 (for appellant)

 

            Considered and decided by Stoneburner, Presiding Judge; Willis, Judge; and Crippen, Judge.*

U N P U B L I S H E D  O P I N I O N

 

STONEBURNER, Judge

 

            Appellant Morry Newell Rothstein moved for a reduction in or termination of his maintenance obligation to respondent Olivia Adrienne Rothstein, and respondent moved for an increase in maintenance.  The district court increased appellant’s obligation, and this appeal followed.  Appellant asserts that the district court failed to consider respondent’s full financial resources, overstated her expenses, understated her earning capacity, and overstated his ability to pay.  Appellant also challenges the award of attorney fees to respondent.  Because the district court failed to make findings regarding appellant’s income and expenses, we are unable to effectively review appellant’s ability to pay the maintenance or attorney fees awarded; therefore, we remand for additional findings.

FACTS

 

            The parties were married for approximately 31 years.  The 1992 dissolution judgment was based on a marital-termination agreement and provided that respondent is entitled to permanent maintenance that will terminate only on the death of either party.  The amount of maintenance was reserved, however, based on the fact that appellant had been disbarred from the practice of law and had substantial financial obligations. 

            When appellant became employed in 1992, he began to make voluntary payments to respondent for her support of $850 per month.  By 1995, appellant was earning $86,000 gross annual income, and in 1996, the parties stipulated to the maintenance payments of $850 per month so long as appellant was making $1,000 per month payments on a tax obligation under the judgment, with the provision that respondent could move for an increase in maintenance without having to show changed circumstances.

            In 2003, appellant’s position was eliminated when the company he worked for was bought by another company.  Appellant received $445,770.99 net for redemption of phantom stock, and he had to sign a five-year non-compete agreement that, appellant asserts, limited his ability to find work in his field.  In August 2003, appellant moved to modify or terminate his maintenance obligation based on his decision to retire and his claim that respondent no longer needs maintenance.

            Respondent moved to increase maintenance and for attorney fees, asserting that she works two jobs, can barely cover her expenses, and is unable to retire while appellant is choosing not to work and has recovered to a living standard that exceeds the standard the parties enjoyed prior to the dissolution.  Both parties claim that health problems limit their earning capacity. 

            The parties filed numerous affidavits and were deposed.  After a hearing on the motions, the district court denied appellant’s motion and granted respondent’s motion, increasing maintenance to $1,000 per month and awarding respondent $3,500 in attorney fees.  Appellant moved for amended findings or a new hearing.  Respondent moved for attorney fees in connection with the motion and for an order finding appellant in contempt for failing to promptly pay attorney fees previously awarded.  The district court characterized appellant’s motion as one for reconsideration and denied it, denied respondent’s motion for contempt, and awarded respondent an additional $500 in attorney fees.  Appellant appeals both orders.

D E C I S I O N

 

I.          Timeliness of appeal

 

            Respondent argues that the appeal is untimely because appellant’s motion for amended findings was actually a motion for reconsideration that did not extend the time for appeal under Minn. R. Civ. App. P. 104.01, subd. 2(b) (extending appeal period on filing of proper and timely motion for amended findings).  But this argument was rejected by order dated November 2, 2004, when this court denied respondent’s motion to dismiss the appeal as untimely, and will not be addressed again here.

II.        Modification of maintenance

            This court reviews a modification of maintenance under an abuse-of-discretion standard.  Kemp v. Kemp, 608 N.W.2d 916, 921 (Minn. App. 2002).  “There must be a clearly erroneous conclusion that is against logic and the facts on the record before this court will find that the trial court abused its discretion.”  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  “Findings of fact concerning spousal maintenance must be upheld unless they are clearly erroneous.”  Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn. App. 1992). 

            The parties agree that appellant’s motion is governed by Minn. Stat. § 518.64, subd. 2, which requires that appellant establish a change of circumstances that makes the current maintenance award unreasonable and unfair, but, because of the parties’ stipulation that respondent could seek an increase in spousal maintenance without having to demonstrate substantially changed circumstances that make the current award unreasonable and unfair, respondent’s motion for increased maintenance is governed by Minn. Stat. § 518.552 (2004), which sets out the factors to be considered in an initial award of maintenance. 

            Appellant first argues that the district court failed to consider all of respondent’s financial resources and her ability to meet her needs without maintenance.  We disagree.  The district court found that respondent’s net monthly income from both jobs is $1,777 and her necessary monthly living expenses are $2,626, not including rent and utilities, which are currently paid by the person with whom she lives.  Respondent has a monthly shortfall of $849 per month.  The record supports the district court’s finding that respondent’s monthly expenses are reasonable considering the lifestyle of the parties during the marriage and the demands of respondent’s jobs that she dress well, and the district court appropriately excluded expenses for items that are paid by respondent’s significant other.

            Appellant next argues that the district court understated respondent’s earning capacity.  The district court must consider whether a spouse seeking maintenance is unable to provide adequate self-support through appropriate employment.  Minn. Stat.     § 518.552, subd. 2(b) (2004).  The district court found that respondent was primarily a homemaker, wife, and mother during the parties’ marriage and worked both part time and full time, mainly in lower-paying retail positions, and this finding is supported by respondent’s affidavit.  To the extent that appellant’s and respondent’s affidavits differ, this court gives deference to the district court’s ability to make credibility determinations.  Vangsness v. Vangsness, 607 N.W.2d 468, 474 (Minn. App. 2000).  The district court also considered respondent’s age (she is now 65 years old) and her health problems.  The district court did not abuse its discretion by concluding that respondent is working and earning at her capacity and is not able to provide adequate self-support.

            Appellant asserts that the district court erroneously concluded that he is able to meet his own needs and pay spousal maintenance of $1,000 per month to respondent.  Appellant argues that the district court wrongly imputed income to him, made a retroactive maintenance modification,[1] and wrongly considered his assets. 

            The district court found that appellant’s income averaged $91,849.40 in the five-year period between 1998 and 2002 and he received $458,951 net as a settlement when his job was eliminated, plus an additional $78,237 gross, plus interest.  The district court also found that appellant has a retirement account with a balance of $8,705.64, an IRA with a balance of $94,535.73, and appellant’s accountant projected that appellant would have monthly investment income of $1,783, plus $1,668 per month in social-security

benefits.  At oral argument, the parties agreed that appellant’s current income is the sum of his investment and social-security income, but the district court did not make a finding on appellant’s net monthly income.  In its conclusions of law, the district court referred to appellant’s investment income, social security income, $500,000 in assets, and the $782,368 gross lump-sum payment from his former employer to conclude that appellant is able to pay increased maintenance of $1,000 per month.  But the principal that yields investment income cannot be also counted as income, and it is not clear how appellant’s assets relate to income.  The district court found that appellant, despite his claimed health problems, is not disabled and is able to work, but the district court did not find that appellant has retired in bad faith and did not explicitly impute income to him.  And the district court failed to find appellant’s reasonable monthly expenses, only noting that appellant “claims” $3,440 in monthly expenses and these expenses are “unverified.”  Without a finding on net income and reasonable expenses, the district court’s finding that appellant has the ability to pay maintenance of $1,000 per month is not supported by the evidence, and we are unable to meaningfully review the issue of appellant’s ability to pay existing or increased maintenance.  See Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989) (holding that failure to make findings on expenses precluded appellate review).  We therefore remand to the district court for a determination of appellant’s net monthly income and reasonable expenses and consideration of appellant’s ability to pay maintenance or increased maintenance based on those findings.  If the district court imputes income to appellant, the district court must make appropriate findings to support imputation of income.  The district court may exercise its discretion to reopen the record to consider additional evidence of appellant’s income and expenses.

III.       Award of attorney fees to respondent

            The district court appears to have made an award of both need-based and conduct-based attorney fees under Minn. Stat. § 518.14 (2004) without delineating the amount attributed to each factor.  Although an award of attorney fees “rests almost entirely within the discretion of the trial court and will not be disturbed absent a clear abuse of discretion,”[2] need-based fees can only be awarded when the party ordered to pay the fees has the ability to pay the fees, and the party to whom fees are to be paid does not have the means to pay them.  Minn. Stat. § 518.14, subd. 1(2) and (3) (2004).  The failure to make findings on appellant’s income and expenses also prevents our meaningful review of appellant’s ability to pay need-based attorney fees.  And because the district court did not segregate the amount of conduct-based fees from need-based fees, we are unable to separately review the propriety of the award of conduct-based fees.  On remand, the district court must make findings on appellant’s ability to pay need-based fees and specify the amount of need-based and conduct-based fees.

      Remanded.