STATE OF MINNESOTA

IN COURT OF APPEALS

A05-13

Tracy Leigh O’Brien, petitioner,
Appellant,

vs.

David John O’Brien,
Respondent.

Filed January 10, 2006

Affirmed in part, reversed in part, and remanded

Wright, Judge

Hennepin County District Court

File No. DC 272 490

A. Larry Katz, Susan A. Daudelin, Katz, Manka, Teplinsky, Due & Sobol, 225 South Sixth Street, Suite 4150, Minneapolis, MN 55402 (for appellant)

Ellen M. Schreder, Carson, Clelland & Schreder, 6300 Shingle Creek Parkway, Suite 305, Minneapolis, MN 55430-2190 (for respondent)

Considered and decided by Klaphake, Presiding Judge; Halbrooks, Judge; and Wright, Judge.

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

WRIGHT, Judge

In this appeal from the district court’s dissolution judgment and decree, appellant-mother argues that the district court (1) misapplied the law when it awarded joint physical custody despite finding that it is not in the children’s best interests; (2) miscalculated the income of each party for child-support purposes; (3) failed to grant appellant a nonmarital interest in the marital homestead; and (4) abused its discretion by ordering her to pay conduct-based attorney fees to respondent-father. We affirm in part, reverse in part, and remand.

FACTS

Appellant Tracy O’Brien and respondent David O’Brien were married on May 11, 1991. Appellant filed a petition for dissolution on December 5, 2001, and the parties separated in January 2002. The district court granted temporary exclusive use of the marital home and temporary physical custody of the parties’ two minor children to respondent.

At a hearing before a family court referee on June 11, 12, and 23, 2003, and September 4 and 5, 2003, the parties litigated issues related to physical custody, child support, property division, and attorney fees and costs. The parties agreed to joint legal custody, but appellant sought sole physical custody of the children. Respondent initially sought sole physical custody but later requested joint physical custody.

The referee issued findings of fact, conclusions of law, order for judgment, and judgment and decree on March 26, 2004, which was countersigned by the district court. The referee made extensive findings related to the children’s best interests, noting that both parents were loving, capable, and dedicated to their children. The referee then made findings specifically relating to joint custody, as required by Minn. Stat. § 518.17, subd. 2 (2002). After finding that the parties could not cooperate well enough to make joint physical custody a feasible arrangement, that joint physical custody would be detrimental to the children, and that granting respondent sole physical custody was in the best interests of the children, the referee nevertheless granted the parties joint physical custody.

The referee also awarded appellant monthly child support of $101.90 pursuant to the Hortis/Valento formula but granted respondent the marital homestead and ordered him to pay appellant for her marital interest in the property. Finally, the referee ordered that appellant pay $5,000 in conduct-based attorney fees under Minn. Stat. § 518.14, subd. 1 (2002).

Appellant filed a notice of review of the judgment, pointing out the contradictory findings of fact and conclusions of law. Specifically, appellant sought review of the physical custody determination, child-support award, property division, and the attorney fees award, among other issues. In an order dated May 27, 2004, the district court directed the referee to correct the contradictory findings. The referee issued a supplemental order confirming the grant of joint physical custody. But the referee did not alter the findings that joint physical custody would be detrimental to the children. The district court issued a final order dated December 8, 2004, that affirmed the referee’s amended findings without addressing the contradictory findings as to physical custody.

This appeal followed.

D E C I S I O N

Our review of custody decisions is limited to determining whether the district court abused its discretion by making findings unsupported by the evidence or by improperly applying the law. Silbaugh v. Silbaugh, 543 N.W.2d 639, 641 (Minn. 1996); Pikula v. Pikula, 374 N.W.2d 705, 710 (Minn. 1985). A district court also abuses its discretion when it makes a custody determination based on findings that are contrary to logic. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). Although we apply a deferential standard of review in custody matters, we require the basis for the district court’s decision to be set forth with a high degree of particularity. Durkin v. Hinich, 442 N.W.2d 148, 151 (Minn. 1989).

The best interests of the child is the controlling principle in every custody determination. To assure proper consideration of the child’s best interests, the legislature has identified best-interests factors that a district court must consider when making a custody determination. Minn. Stat. § 518.17, subd. 3 (2002); see Minn. Stat. § 518.17, subd. 1 (2002) (reciting nonexclusive list of best-interests considerations). When parties seek joint physical custody, the district court is required to consider the parents’ ability to cooperate, their methods of resolving disputes, and whether it would be detrimental to the child for one parent to have sole authority over the child’s upbringing. Minn. Stat. § 518.17, subd. 2 (2002). If a parent objects to joint physical custody, the district court “shall make detailed findings on each of the factors in this subdivision and explain how the factors led to its determination that joint custody would be in the best interests of the child.” Id.

Although it appears that the referee intended to award joint physical custody, the findings in the referee’s amended order and in the district court’s postreview order are against logic. In finding XV, the referee determined that “[t]he children would benefit from, and it is in their best interest, that the parties share joint legal and joint physical custody.” In finding XXVII the referee found that “joint physical custody would, in the Court’s opinion, be detrimental” to the children. The referee later concluded that the “parties are awarded joint legal custody and joint physical custody of their minor children.”

Custody determinations are critically important to everyone involved. The contradictory findings at issue here neither set forth the basis for the custody decision with a high degree of particularity nor satisfy the statutory requirement that a district court explain how its custody decision is in the best interests of the children. See Minn. Stat. § 518.17, subd. 2; Durkin, 442 N.W.2d at 151. When presented with an order granting joint physical custody that is contradictory on its most critical findings, we must reverse.

Appellant urges us to correct the district court’s errors by awarding her sole physical custody after conducting an independent review of the record. We are mindful of the length of the proceedings below and the expense that the parties have already incurred. But it is not our role to find facts in support of a different custody determination. See In re Welfare of M.M., 452 N.W.2d 236, 239 (Minn. 1990) (allowing independent review of the record only under extraordinary circumstances); Moylan v. Moylan, 384 N.W.2d 859, 865 (Minn. 1986) (noting that independent review of record by an appellate court is improper when it is unclear whether district court considered statutory factors); Kucera v. Kucera, 275 Minn. 252, 254, 146 N.W.2d 181, 183 (1966) (“It is not within the province of [appellate courts] to determine issues of fact on appeal.”). We, therefore, remand to the district court for reconsideration of the custody award. In doing so, we note that the decision whether to reopen the record on this issue rests within the district court’s discretion.

II.

Appellant next argues that the district court erred in its calculation of her net income for the purpose of setting child support because it included in her income the payment she receives from her employer for her car loan.

The district court’s determination of a party’s income for the purpose of child support is an issue of fact, which we will not disturb unless it is clearly erroneous. Ludwigson v. Ludwigson, 642 N.W.2d 441, 446 (Minn. App. 2002). Income is defined as “any form of periodic payment to an individual including, but not limited to, wages, salaries, payments to an independent contractor, workers’ compensation, unemployment benefits, annuity, military and naval retirement, pension and disability payments.” Minn. Stat. § 518.54, subd. 6 (2002) (emphasis added). Appellant argues that, because her employer is her father, the monthly car payment is a gift, not income. The district court found that the car payment was a monthly benefit received from her employer, and the record clearly supports that determination. Whether the payments were intended as a gift or not, they nevertheless were a form of periodic payment to appellant. See Barnier v. Wells, 476 N.W.2d 795, 797 (Minn. App. 1991) (holding that a gift may constitute income for child-support purposes if it is regularly received from a dependable source). The district court properly included this payment in appellant’s gross income.

Appellant asserts other errors in the income calculation, but even if we adopt her arguments, the resulting change in the support obligation would be only nominal. Therefore, those arguments are not sufficient grounds for reversal. See Wibbens v. Wibbens, 379 N.W.2d 225, 227 (Minn. App. 1985) (declining to remand for technical oversight that resulted in de minimis error).

We recognize that the parties’ child-support obligations were calculated based on the Hortis/Valento formula, which is presumptively appropriate when parties have been awarded joint physical custody. Kammueller v. Kammueller, 672 N.W.2d 594, 597 (Minn. App. 2003), review denied (Minn. Mar. 16, 2004). Our holding addresses only the underlying net income calculations, not the formula calculating child support. We note that if there is a change in the type of custody ordered on remand, the appropriate formula for calculating child support also would change.

III.

The district court awarded respondent the marital homestead and ordered him to pay appellant for her marital interest in the property. Appellant argues that the district court failed to award her a nonmarital interest in the homestead because it failed to recognize a payment made by her parents as her nonmarital interest in the property.

Property acquired during a marriage is presumptively marital. Minn. Stat. § 518.54, subd. 5 (2002); Fitzgerald v. Fitzgerald, 629 N.W.2d 115, 119 (Minn. App. 2001). A spouse claiming a nonmarital interest must prove that interest by a preponderance of the evidence. Fitzgerald, 629 N.W.2d at 119. Nonmarital property includes “property real or personal, acquired by either spouse before, during, or after the existence of their marriage, which is acquired as a gift, bequest, devise or inheritance made by a third party to one but not to the other spouse[.]” Minn. Stat. § 518.54, subd. 5(a) (2002). We will affirm the district court’s division of property if it has an acceptable basis in fact and principle even if we might have taken a different approach. Antone v. Antone, 645 N.W.2d 96, 100 (Minn. 2002).

Appellant testified that when the parties bought their second home, her parents paid $20,000 to have the basement finished. Appellant testified that her parents paid the money directly to the contractors, but the payment was intended as a gift to her alone. There is no other evidence in the record to support her nonmarital interest. It is the province of the district court as fact-finder to determine issues of the weight and credibility of the evidence because “it has the advantage of hearing the testimony, assessing relative credibility of witnesses and acquiring a thorough understanding of the circumstances unique to the matter before it.” Hasnudeen v. Onan Corp., 552 N.W.2d 555, 557 (Minn. 1996); see also Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (stating that appellate courts defer to district court credibility determinations). Because appellant did not meet her burden to prove a nonmarital interest in the homestead, we affirm the district court’s property division. See Varner v. Varner, 400 N.W.2d 117, 121 (Minn. App. 1981) (“The finder of fact is not required to accept even uncontradicted testimony if the surrounding facts and circumstances afford reasonable grounds for doubting its credibility.”).

IV.

Finally, appellant argues that the district court abused its discretion by awarding $5,000 in conduct-based attorney fees to respondent. An award of attorney fees under Minn. Stat. § 518.14, subd. 1 (2002), “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). Conduct-based attorney fees may be awarded only for conduct during the litigation. Geske v. Marcolina, 624 N.W.2d 813, 819 (Minn. App. 2001). A showing of bad faith is not required for an award of conduct-based attorney fees. Id. at 818.

Here, the district court found appellant’s repeated motions requesting changes in the temporary custody order and her request for and use of a private custody evaluator led to delay and increased litigation expenses. Appellant admits to the conduct but argues that she did not act in bad faith or for the purpose of delay. As noted above, bad faith is not required for an award of conduct-based attorney fees; the conduct must simply be unreasonable. The district court is best situated to assess the reasonableness of the parties’ conduct during litigation, such as this, which has continued for several years. See Romain v. Pebble Creek Partners, 310 N.W.2d 118, 124 (Minn. 1981) (discussing deposition costs and stating that district court is “familiar with the needs of the case, its importance and the strategies involved and is in the best position to judge what is truly necessary and what is only useful”). Based on this record, the award of conduct-based attorney fees is not a clear abuse of discretion.

Affirmed in part, reversed in part, and remanded.