This opinion will be unpublished and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

A04-2074

 

In re the Marriage of:
Cecilia Smoot, petitioner,
Appellant,

vs.

Charles Head Smoot, III,
Respondent.

 

Filed October 4, 2005

Affirmed

Peterson, Judge

 

Hennepin County District Court

File No. DC285997

 

 

John M. Jerabek, Jade K. Johnson, Niemi, Barr & Jerabek, P.A., 510 Marquette Avenue, Suite 200, Minneapolis, MN  55402 (for appellant)

 

Charles H. Smoot, 4782 Vine Hill Road, Excelsior, MN 55331 (pro se respondent)

 

            Considered and decided by Peterson, Presiding Judge; Wright, Judge; and Forsberg, Judge.*

 

 

U N P U B L I S H E D   O P I N I O N

PETERSON, Judge

            In this appeal from the judgment in a marital-dissolution action, appellant wife argues that the district court erred by (1) not entering a default judgment against respondent husband; (2) determining that it is fair and equitable to reserve the issue of the amount of spousal maintenance; (3) not making findings regarding her nonmarital interest in the parties’ homestead; and (4) awarding her only $12,500 for attorney fees.  We affirm.

D E C I S I O N

I.

Appellant-wife Cecilia Smoot filed her petition for dissolution on July 18, 2003, and on August 25, 2003, wife filed a motion for default along with her counsel’s affidavit stating that no response to the petition had been received from respondent-husband Charles Head Smoot III.  Husband appeared pro se at the September 25, 2003 initial case-management conference, and following the conference, the district court issued an order that scheduled a pretrial conference for January 12, 2004, and stated that the parties’ attendance at the conference was mandatory, that a continuance would not be granted except for the most extraordinary and unforeseeable events, and that failing to comply with the order could result in sanctions, including a default hearing or dismissal of the petition. 

Husband retained counsel, who represented him at a hearing in November 2003, but he did not maintain contact with his attorney after December 3, 2003, and he did not attend the January 12, 2004 pretrial conference.  Husband’s counsel appeared at the pretrial conference and requested permission to withdraw from representation due to lack of cooperation and inability to contact husband since December 3, 2003.  The court granted the request.  The court then conducted a default hearing and took testimony from wife.

On January 14, 2004, husband hand delivered to the court a letter in which he requested that the court not enter a default judgment and, instead, continue the matter for further proceedings.  Husband represented that he did not know the date of the pretrial conference and that he had not been able to communicate with his attorney since December 3, 2003, because he was totally disabled by injuries suffered in a traffic accident and his telephone equipment was destroyed.  After receiving wife’s written response to husband’s letter and conducting a telephone conference on the matter, the district court granted husband’s request for a continuance, and the parties proceeded to trial.

Following the trial, the district court found:

[Husband’s] claimed post-accident limitation of range of motion of his neck is not credible.  First the accident at most resulted in temporary exacerbation of a football injury.  Second, the Court noticed and specifically and carefully observed [husband’s] cervical range of motion at his first court appearance, at the September 25, 2003 Initial Case Management Conference.  To the Court’s observation, the post-accident range of motion at trial was the same as the pre-accident range of motion.  Third, [wife] provided credible testimony that, after the collision, [husband] moved large pieces of furniture, including file cabinets, from the homestead.  [Wife] also testified credibly that approximately one month before trial [husband] came to the homestead and removed his bicycle for his own use. 

 

Wife argues that upon finding after trial that the reasons husband gave for not attending the January 12, 2004 pretrial conference were not true, the district court erred by not entering a default judgment against husband. 

Minn. R. Civ. P. 16.06 provides:

            If a party or party’s attorney fails to obey a scheduling or pretrial order, or if no appearance is made on behalf of a party at a scheduling or pretrial conference, . . . the court, upon motion or upon its own initiative, may make such orders with regard thereto as are just, including any of the orders provided in Rule 37.02(b)(2), (3), (4).  In lieu of or in addition to any other sanction, the court shall require the party or the attorney representing the party or both to pay the reasonable expenses incurred because of any noncompliance with this rule, including attorney fees, unless the court finds that the noncompliance was substantially justified or that other circumstances make an award of expenses unjust.

 

One of the orders that the district court may make under Minn. R. Civ. P. 37.02(b)(3) is an order “rendering a judgment by default against the disobedient party.”  Enforcement of the district court’s scheduling order is a matter within the district court’s discretion.  Maudsley v. Pederson, 676 N.W.2d 8, 12 (Minn. App. 2004).

Minnesota courts have long recognized the principle that justice is furthered by adopting a liberal policy conducive to the trial of causes on their merits.  Hinz v. Northland Milk & Ice Cream Co., 237 Minn. 28, 30, 53 N.W.2d 454, 455-56 (1952).  In light of this principle, the district court did not abuse its discretion by not rendering a default judgment against husband after a trial on the merits was completed.  To compensate wife for unnecessary expenses caused by husband’s lack of cooperation, the district court awarded wife $12,500 in attorney fees, which is a significant sanction. 

II.

Wife argues that the district court erred in determining that it is fair and equitable to reserve the issue of the amount of spousal maintenance.  The district court “may reserve jurisdiction of the issue of maintenance for determination at a later date.”   Minn. Stat. § 518.55, subd. 1 (2004).  Reservation of maintenance allows the court to later assess and address future changes in one party’s situation as those changes arise, without prematurely burdening the other party.  Van de Loo v. Van de Loo, 346 N.W.2d 173, 178 (Minn. App. 1984).  The district court has broad discretion regarding spousal maintenance.  Id. Appellate courts review a district court’s maintenance award under an abuse-of-discretion standard.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997).

The district court found:

            As of the end of the trial, [wife] was not employed.  [Wife] completed two years of college at Normandale Community College prior to the birth of the parties’ children, over twenty years ago.  [Husband] did not want [wife] to work outside the home, so, for most of their nearly 22 year marriage she was a traditional homemaker and mother.  [Wife] began working outside the home on a consistent basis only about five years ago when she began working at Bloomingdale’s in the cosmetics department.  She was recently terminated from her employment as a result of Bloomingdale’s desire to “make over” their image.  Her gross annual income in 2003 was approximately $36,000.  She is capable of earning at least that amount. 

. . . .

 

            [Husband] was unemployed at the time of trial.  Like [wife], however, he has realistic potential to earn income, in his case, significant income.  He has been an entrepreneur.  The success of his business career has been cyclical.  In his words he has been “rich and poor at least three times.” 

 

 The district court concluded:

The length of the parties’ marriage, [husband’s] income potential, the parties’ marital standard of living and [wife’s] income and expenses all support an award of permanent spousal maintenance to [wife].  [Wife’s] reasonable expenses are $4,150 to meet her expenses at a level comparable to the parties’ standard of living during the marriage.  Give[n] the parties’ current unemployment, however, the issue of the amount of maintenance payable to [wife] is reserved.  [Husband] is awarded no spousal maintenance.

 

Wife argues that because the district court failed to make findings regarding whether the parties’ were voluntarily unemployed or underemployed in bad faith, what husband’s expenses are, and whether offshore investment accounts that once existed still exist, the district court erred by determining that it is fair and equitable to reserve the issue of the amount of maintenance.  Each of these items could affect the amount of a maintenance award.  But when determining the amount of maintenance, the issue is basically the financial needs of wife and her ability to meet those needs balanced against the financial condition of husband.  Erlandson v. Erlandson, 318 N.W.2d 36, 39-40 (Minn. 1982).  This balance depends upon the incomes of both parties, and wife’s income changed significantly when she was terminated from her employment just two weeks before the trial.  It is apparent that the district court considered the parties’ current unemployed status to be temporary because both parties have the ability to earn income.  Also, wife became unemployed only a short time before trial and had not had a meaningful opportunity to obtain new employment.  Even if husband is unemployed in bad faith, as wife suggests, wife’s ability to meet her financial needs could change significantly if she finds a new job, which would affect the amount of maintenance.  It was not an abuse of the court’s discretion to reserve the amount of maintenance, rather than setting maintenance based on circumstances that are expected to be temporary.

III.

Wife argues that the district court erred by not making findings regarding her nonmarital interest in the parties’ homestead.  Wife contends that proceeds from the sale of a house that she owned before the parties married were used to purchase the parties’ first home and that proceeds from the sale of the first home were used to buy the parties’ homestead.  Wife also contends that she received $100,000 in gifts from her mother over a five-year period and used the money to pay for improvements to the homestead.

The district court found: “Both parties have claimed a non-marital interest in the homestead.  Neither party carried the burden of tracing non-marital assets allegedly infused into the homestead.  The homestead is therefore entirely marital.” 

The characterization of a type of property as marital or nonmarital is a question of law upon which an appellate court may exercise independent judgment.  The trial court, however, has broad discretion in the determination of underlying facts, and those findings of fact will be affirmed unless they are manifestly and palpably contrary to the evidence as a whole.

 

Campion v. Campion, 385 N.W.2d 1, 4 (Minn. App. 1986) (citation omitted).  “[D]ue regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.”  Minn. R. Civ. P. 52.01.

All property acquired during the marriage is presumed to be marital.  Minn. Stat. § 518.54, subd. 5 (2004).  “The presumption of marital property is overcome by a showing that the property is nonmarital property.”  Id.  Nonmarital property includes property that is acquired as a gift by one, but not the other, spouse, property that is acquired before the marriage, and property that is acquired in exchange for, or is the increase in value of, nonmarital property.  Id., subd. 5(a)-(c).  “A spouse seeking to trace an asset to a nonmarital source is not held to a ‘strict tracing’ standard, but need only show by a preponderance of the evidence that the asset was ‘acquired in exchange for’ nonmarital property.”  Doering v. Doering, 385 N.W.2d 387, 390 (Minn. App. 1986)

Wife testified at trial that she sold the house that she owned before the parties married and gave the proceeds from the sale to husband, and it was her understanding that husband was going to use the proceeds to purchase the parties’ first home.  The first home was sold four years later, and the parties bought the homestead that they owned at the time of trial.  Wife also testified that after her grandfather died in 1992, her mother received an inheritance and, from the inheritance, gave wife $20,000 a year for five years, which wife used to make improvements to the parties’ homestead.

Wife has not cited any document in the record that demonstrates that the proceeds she received from the sale of the home she owned before the marriage were used to pay for the parties’ first home or that the money she received as a gift from her mother was used to pay for improvements to the parties’ homestead.  The district court found that wife did not overcome the presumption that the homestead is marital property.  Giving due regard to the district court’s opportunity to judge the credibility of wife’s testimony, wife has not shown that the district court’s finding is manifestly and palpably contrary to the evidence as a whole. 

IV.

            Wife argues that the improper actions of husband caused significant attorney fees beyond the $12,500 the court awarded to her.  She requests that this award be increased to $36,879, which is the amount of fees she claims she incurred for all activities other than preparing for the temporary hearing, attending the temporary hearing, preparing for trial, and attending trial.  Wife contends that every other action that her attorney took was “unnecessary or based upon an untoward delay by [husband].”

A district court may, in its discretion, award attorney fees against a party who unreasonably contributes to the length or expense of a marital-dissolution proceeding.  Minn. Stat. § 518.14, subd. 1 (2004).  An award of attorney fees under Minn. Stat. § 518.14, subd. 1, “rests almost entirely within the discretion of the trial court and will not be disturbed absent a clear abuse of discretion.”  Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn. App. 1998) (quotation omitted), review denied (Minn. Feb. 18, 1999).

The district court found:

Some of [wife’s attorney] fees were caused by [husband’s] conduct with respect to discovery.  Specifically, he provided inconsistent financial information and was less than cooperative in providing financial discovery, requiring [wife] to undertake investigation of assets and income that would not have been necessary had he provided complete, accurate and consistent responses to interrogatories and document requests.  (It should be noted in this regard, however, that some of [wife’s] investigation costs could likely have been avoided had she taken [husband’s] deposition, which she did not do.)  

The district court then recited a detailed chronology of events throughout the case to describe how husband interfered with and prolonged the progress of the case.  Based on the events described in this chronology, the district court determined that “it is fair and reasonable to require [husband] to pay [wife] $12,500 toward her attorney fees.”

The district court was in a far better position than this court to judge the impact that husband’s conduct had on the length and expense of proceedings in the district court.  The district court’s detailed findings about the chronology of activity in the district court demonstrate that the district court considered the impact of husband’s conduct throughout the proceeding.  Wife has not shown that the district court’s attorney-fee award was a clear abuse of the district court’s discretion.

            Affirmed.