This opinion will be unpublished and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

A05-1040

A05-1063

 

In re the Marriage of:

Renee L. Jenson, petitioner,

Respondent (A05-1040),

Appellant (A05-1063),

 

vs.

 

Leslie M. Jenson,

Appellant (A05-1040),

Respondent (A05-1063).

 

Filed June 27, 2006

Affirmed in part, reversed in part, and remanded

Willis, Judge

 

Ramsey County District Court

File No. F5-99-2139

 

 

John P. Van Valkenburg, Gerten & Van Valkenburg, P.A., 303 East Little Canada Road, Saint Paul, MN  55117 (for respondent/appellant Renee L. Jenson)

 

John C. Gunderson, Meier, Kennedy & Quinn, Chartered, 2200 Bremer Tower, 445 Minnesota Street, St. Paul, MN  55101 (for appellant/respondent Leslie M. Jenson)

 

            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

WILLIS, Judge

In these consolidated appeals following the vacation of an amended dissolution judgment because of fraud, wife argues that (1) the district court clearly erred by finding that wife committed fraud and (2) the district court abused its discretion by awarding husband conduct-based attorney fees.  Because the record supports the district court’s finding of fraud and the district court did not abuse its discretion by awarding attorney fees, we affirm the vacation of the judgment and the attorney-fees award.  Husband argues in his appeal that the preceding judgment, which was revived as a result of the order of vacation, must be amended because its conclusion of law regarding the marital-property division contains numerous errors.  We agree, and reverse and remand.

FACTS

 

            Husband and wife’s 30-year marriage was dissolved in February 2001.  In the dissolution judgment, husband was ordered to pay wife $2,000 per month in permanent spousal maintenance.  At the time of dissolution, wife was the president and sole stockholder of a corporation formed to operate a consulting business; she received no income from the business, and the corporation had incurred losses since its formation.  The district court found that

[wife] is mentally ill.  Her most recent diagnosis is Bipolar Disorder Type II and Borderline Personality Disorder.

. . . .

It is clear that [wife’s] mental illness is not sufficiently stabilized at this time to allow her to be employed.  Her treating psychiatrist and psychologist do not know if or when this will occur.  Once her illness is stabilized, [wife] can begin vocational rehabilitation.  It is almost certain that her illness will not improve but will instead grow worse.  After stabilization and with vocational rehabilitation, she may be capable of earning part-time income.  If she should ever become capable of full-time employment, her beginning wage might be as high as $10.00 per hour: a gross monthly income of $1,720.00.  It is extremely unlikely that [wife’s] mental illness will improve sufficiently for her to make successful use of her considerable education, ability, and intelligence.

 

Upon motions by both parties, the district court amended various parts of the judgment in December 2001 but did not amend the findings regarding wife’s mental illness or ability to work.

            In February 2002, wife appealed to this court, arguing that the district court abused its discretion by awarding her maintenance in an amount less than that required to meet her needs, by limiting to five years husband’s obligation to provide health insurance for wife, and by inequitably dividing the parties’ marital property.  This court reversed and remanded the case to the district court, determining that (1) there were errors in the property division that needed to be corrected, (2) the maintenance award needed to be recalculated, (3) adequate provision needed to be made for wife’s retirement needs, and (4) appropriate relief needed to be fashioned regarding wife’s health-insurance needs.  Jenson v. Jenson, No. C2-02-235, 2002 WL  1791419, at *3-*5, *7-*9 (Minn. App. July 30, 2002). 

            Upon remand, the district court issued another amended judgment (third judgment).  In the third judgment, wife’s spousal maintenance was increased to $2,300 per month.  The district court also found that wife “is capable of working in some capacity on a part-time basis, such as unskilled or entry-level positions.”  The district court also made new findings regarding the property division and wife’s retirement needs and determined that husband should provide wife with health-insurance coverage until the occurrence of specified events.

In January 2003, both parties moved to amend the third judgment or for a new trial; the district court granted wife’s motion for a new trial.  The parties agreed to submit evidence by written affidavits and arguments.  In January2004, wife filed with the district court an affidavit in which she stated that the Social Security Administration had determined that she was “disabled from all work in the United States permanently” and that she has “not worked given [her] extensive mental illness and minimal job experience. . . .  [She has] applied for hundreds of jobs but [has] not received one offer.  [She] want[s] to work but can not.”  In April 2004, the district court issued yet another amended judgment (fourth judgment).  In the fourth judgment, the district court, inter alia, (1) found that wife could not work because of her mental illness and (2) increased her spousal-maintenance award to $4,000 per month. 

In July 2004, husband moved to vacate the fourth judgment and, in support of his motion, submitted an affidavit stating that wife “began employment with Casual Corner on September 20, 2003 and is actively employed as a part-time sales associate.”  Husband also maintained that wife misrepresented her disability status when she claimed in her affidavit that the “Social Security Administration determined [wife was] disabled from all work in the United States permanently.”  In support of her claim that she was permanently disabled, wife had attached her initial disability determination from the Social Security Administration.  Husband noted that the determination provides that because the Social Security Administration expected wife’s health to improve, her case was to be reviewed in May 2002 and that based on that review, her supplemental social-security income would continue if she were still disabled but would be discontinued if she were no longer disabled. 

Wife filed a responsive motion and affidavits in opposition to husband’s motion, including an affidavit dated July 30, 2004, in which she stated,

That I started doing part-time work at a clothing store ten to fifteen hours per week, I do not consider this a real job.  I cannot support myself with the minimal amount I receive.

. . . .

It was my mistake not to disclose this, but to me employment is a real career job where I can use my skills and education.

 

In her July 2004 affidavit, wife also admitted that she did not seek review of her social-security disability status in May 2002. 

In March 2005, the district court vacated the fourth judgment, determining that wife had committed fraud when she represented that she was not working.  The district court’s order further denied all pending motions, thereby denying husband’s motion to amend the third judgment; the third judgment was revived when the district court provided in its order vacating the fourth judgment that “[a]ll prior orders of this Court shall remain in full force and effect unless modified by subsequent orders or specifically modified by this order.”

            Wife appeals from the March 2005 order vacating the fourth judgment.  Husband  also appeals, arguing that the third judgment must be amended so that its conclusion of law regarding property division is consistent with its findings of fact.  This court consolidated the parties’ appeals.           

D E C I S I O N

I.

 

In its March 2005 order, the district court vacated the fourth judgment, determining that wife committed fraud on the court when she represented in her January 2004 affidavit that she was fully disabled and could not work.  The district court found that it had increased wife’s spousal maintenance award “premised on the assumptions that [wife] was not employed and not capable of employment due to her mental illness.”  The district court concluded that the fraud directly affected the terms of the fourth judgment, and, thus, the district court granted husband’s motion to vacate the fourth judgment and awarded husband $2,500 in attorney fees and costs.  

A district court’s decision regarding whether to reopen a judgment will be upheld unless the court abused its discretion.  Harding v. Harding, 620 N.W.2d 920, 922 (Minn. App. 2001), review denied (Minn. Apr. 17, 2001).  A district court’s findings regarding whether a judgment was prompted by mistake or fraud will not be set aside unless they are clearly erroneous.  Hestekin v. Hestekin, 587 N.W.2d 308, 310 (Minn. App. 1998) (citing Kornberg v. Kornberg, 542 N.W.2d 379, 386 (Minn. 1996)).  The grounds for reopening a judgment include both ordinary fraud and fraud on the court.  Minn. Stat. § 518.145, subd. 2(3) (2004) (fraud);id., subd. 2 (noting that the statutory provision relating to ordinary fraud does not limit the power of the court “to set aside a judgment for fraud upon the court”).  Although similar, ordinary fraud and fraud on the court are separate concepts.  See Maranda v. Maranda, 449 N.W.2d 158, 165 (Minn. 1989) (distinguishing ordinary fraud from fraud on the court). The supreme court has indicated that the difference between ordinary fraud and fraud on the court “is primarily a difference of degree rather than kind” and that reopening a judgment for ordinary fraud requires satisfaction of a less-strenuous standard than that for reopening a judgment for fraud on the court.  Id. at 165; see Doering v. Doering, 629 N.W.2d 124, 128-29 (Minn. App. 2001) (contrasting standards for ordinary fraud and fraud on the court), review denied (Minn. Sept. 11, 2001).  Fraud on the court generally involves “an intentional course of material misrepresentation or non-disclosure, having the result of misleading the court and opposing [party] and making the property settlement grossly unfair.”  Maranda, 449 N.W.2d at 165.  By contrast, ordinary fraud, in the dissolution context, does not require an affirmative misrepresentation or an intentional course of concealment; instead “failure of a party to a dissolution to make a full and complete disclosure constitutes sufficient reason to reopen the dissolution judgment.”  Doering, 629 N.W.2d at 129.  A motion to reopen a judgment because of ordinary fraud must be made “within a reasonable time” and “not more than one year after the [entry of the judgment,]” while a motion to reopen for fraud on the court may be made at any time.  See Minn. Stat. § 518.145, subd. 2 (providing one-year limitation for reopening judgment for ordinary fraud but not for fraud on the court). 

In husband’s motion to vacate, he asked the court to reopen the fourth judgment under Minn. Stat. § 518.145, subd. 2(3), the provision relating to ordinary fraud.  Although the district court’s order determines that wife committed fraud on the court, the order did not invoke Maranda’s discussion of fraud on the court.  Instead, it provided that the “failure to fully and fairly disclose all income may constitute fraud” and in support cited Clark v. Clark, No. C0-02-2016, 2003 WL 21152517 (Minn. App. May 20, 2003).[1]  In Clark  v. Clark, this court determined that wife was entitled to an evidentiary hearing on the issue of whether husband committed ordinary fraud by failing to fully and accurately disclose income.  2003 WL 21152517, at *2-*3.  Applying the law to the district court’s findings of fact, we conclude that the findings support a determination of ordinary fraud, not fraud on the court.  But because both types of fraud were grounds for reopening the fourth judgment, we further conclude that our determination does not affect the district court’s vacation of the fourth judgment.

Wife maintains that she did not commit fraud that would warrant vacating the fourth judgment.  In January 2004, the referee sent a letter to the parties stating that “[i]n the new trial on this matter, the facts presented shall be only those facts existing at the time of the original trial.”  Wife contends that, based on this letter, her “misrepresentation” regarding her employment status in January 2004 was not material because it was not relevant to the district court’s determination of her employability at the time of the dissolution in October 2000.  Wife further contends that her affidavit did not mislead the district court and opposing counsel because when the district court issued the fourth judgment, it “focused on the parties’ situation in 2000” and did “not rely or even consider [wife’s] employment status in 2003.” 

It is clear that wife’s January 2004 affidavit, which contained (1) statements regarding her financial situation at the time of the first trial, i.e., statements regarding her disability status and lack of employment and (2) statements regarding her financial situation since the time of trial, i.e., statements regarding her depletion of retirement assets and increased debts, failed to make a complete disclosure of her financial situation.  And it is also clear that the district court relied on wife’s affidavit.  The judge who vacated the fourth judgment was the same judge who issued that judgment, and in the vacation order, he found that wife’s “fraud directly impacts” the provisions of the fourth judgment.  In the third judgment, the district court found that wife had the ability to work part time; in the fourth judgment, the court found that wife did not have the ability to work.  In the third judgment, the district court found that wife was temporarily disabled and was an excellent candidate for rehabilitative training; in the fourth judgment, the district court found that wife was “truly disabled.”  In the fourth judgment, the district court made a new finding that wife’s “marital property has been used to meet her immediate living expenses.”  In the third judgment, the district court awarded wife spousal maintenance of $2,300 per month; in the fourth judgment, the district court awarded wife spousal maintenance of $4,000 per month.  Thus, because it is clear that wife’s “misrepresentation” affected the fourth judgment, we conclude that the district court did not abuse its discretion by vacating that judgment.

II.

            In its order vacating the fourth judgment, the district court awarded husband “conduct-based fees in the amount of $2,500.”  An award of conduct-based attorney fees is discretionary and will not be disturbed absent an abuse of that discretion.  Dabrowski v. Dabrowski, 477 N.W.2d 761, 766 (Minn. App. 1991).   Wife argues that she did not commit fraud, and, thus, she should not “be penalized” and ordered to pay attorney fees.  Wife further contends that the district court abused its discretion by awarding attorney fees without evidentiary support and argues that the court needed to make findings that (1) the fees are necessary for husband to assert his rights, (2) wife has the means to pay them, and (3) the husband has the need for them.  See Minn. Stat. § 518.14, subd. 1 (2004) (providing for need-based attorney fees).  While wife correctly describes the standard for an award of need-based attorney fees, the district court awarded husband conduct-based attorney fees.  When awarding conduct-based attorney fees, a district court must make findings regarding their basis “to permit meaningful appellate review” of the award.  Kronick v. Kronick, 482 N.W.2d 533, 536 (Minn. App. 1992).  The district court must identify the offending conduct, the conduct must have occurred during litigation, and it must be found to have unreasonably contributed to the length or expense of the proceeding.  Minn. Stat. § 518.14, subd. 1 (2004); Geske v. Marcolina, 624 N.W.2d 813, 818-19 (Minn. App. 2001).

            Here, the district court found that wife’s “fraud and her failure to truthfully disclose her employment status and earnings has unreasonably frustrated and prolonged this proceeding.”  Because the district court identified the “offending conduct,” the conduct occurred during litigation, and the district court found that the conduct “unreasonably frustrated and prolonged [the] proceeding,” we determine that the district court did not abuse its discretion by awarding husband conduct-based attorney fees.

III.

            The effect of the order vacating the fourth judgment was to revive the third judgment.  Husband asserts, however, that the third judgment must be amended, maintaining that although the district court followed the remand instructions when it issued the third judgment, the conclusion of law regarding the property division is not consistent with the findings of fact.  Wife agrees that the third judgment contains errors; she asserts, however, that the district court failed to follow this court’s mandate on remand regarding the property division and “exceeded its authority on remand by changing numerous findings that had not been under review nor a part of the remand.”

“[D]istrict courts are given broad discretion to determine how to proceed on remand, as they may act in any way not inconsistent with the remand instructions provided.”  Janssen v. Best & Flanagan, LLP, 704 N.W.2d 759, 763 (Minn. 2005).  We review a district court’s “compliance with remand instructions under the deferential abuse of discretion standard.”  Id. When no specific instructions are given, the district court has discretion to proceed in any manner not inconsistent with the remand order.  Duffey v. Duffey, 432 N.W.2d 473, 476 (Minn. App. 1988). 

We conclude that on remand, the district court generally complied with this court’s instruction.  It is clear, however, that there are errors in the third judgment’s conclusion of law relating to division of the parties’ property; many were corrected in the fourth judgment, but that judgment has been vacated.  The errors include (1) omitting a credit to wife of $4,200 for her business’s telephone system; (2) omitting a credit to wife of $2,646 for new office equipment; (3) omitting a credit to wife of $2,900 for new furnishings for her apartment and business; (4) crediting each of the parties with $122,000 for their shares of husband’s 401(k) retirement plan rather than the correct amount of $144,776 each; (5) omitting an assignment of $41,166 in marital debt to husband to reflect a loan from husband’s 401(k) plan; (6) omitting a credit to each party of $44,481 for the proceeds from the sale of the Grand Avenue property; (7) omitting a credit to wife of $5,619 for a payment that husband made to her as directed by the original judgment; (8) omitting a credit to husband of $3,245 for the balance remaining in the Firstar Account after payment of marital debts; (9) omitting a credit to husband of $11,486 for an IRA; and (10) omitting a credit to wife of $2,783 for husband’s payment of excess spousal maintenance.  The district court also erred by failing to reduce wife’s assets by $2,000 to reflect husband’s failure to pay spousal maintenance in September 2000; we note that the district court made this correction in the fourth judgment. 

The third judgment also omitted a credit to husband for a computer in his possession.  In the second judgment, the district court found that husband had a computer valued at $2,000 but did not credit this amount to husband.  On appeal, this court determined that husband should have been credited with $2,000 for the computer.  Jenson, 2002 WL 1791419, at *4.  We note that in the third judgment, the district court found that the parties had three computers that were valued in total at $10,393; although the district court credited wife with $6,000 for computers, it did not credit husband for the computer in his possession.  In the fourth judgment, the district court awarded wife two computers valued together at $6,000 and awarded husband the remaining computer, valued at $2,000.  It is unclear why the value of the computers changed; on remand, the court should clarify the value of husband’s computer and wife’s two computers and award credits to each party accordingly.

Payments Made by Husband

Husband also asserts that wife should receive a credit of $11,273.52 for a payment that he made on her mortgage arrears and a $5,000 credit for a payment that he made to her attorney.  But the $11,273.52 payment of mortgage arrears was credited to wife in the third judgment.  We further determine that the $5,000 payment should not be credited to wife because in the previous appeal, we determined that the “attorney fee payment was considered in the valuation of the [Grand Avenue] property” and that the “proceeds from the Grand Avenue property were divided equally.”  Jenson, 2002 WL 1791419, at *3.

Tax-Loss Carryover

Husband also asserts that a tax-loss carryover valued at $8,100 should be credited to wife.  In the third judgment, the district court found that wife’s business had a tax-loss carryover of $8,100.  The district court then made two inconsistent findings: it stated that the tax loss “may not be used to reduce the parties’ personal tax liability but must remain with the corporation” but also found that wife should be credited with the value of the tax-loss carryover.  It was not credited to wife, however, in the conclusion of law regarding property distribution.  In the previous appeal, this court noted that the district court had specifically found in the first judgment that the “tax loss, as a corporate loss, could not reduce [wife’s] taxes.”  Id.  On remand, the district court should determine whether this asset should be allocated to the corporation or to wife and explain its decision.

Home-Equity Loan Proceeds

Husband also asserts that wife should have received a credit of $30,000 for the unaccounted-for portion remaining of a $42,000 home-equity loan secured by the parties’ homestead.  In the third judgment, the district court found that $3,000 of the loan proceeds was spent for repairs on the homestead and $9,000 was spent on repairs to the parties’ rental property.  The district court further found that the “remaining $30,000.00 has not been accounted for by [wife] and was presumably spent by [wife] on her business.  [Wife] has not provided any records showing how the remaining $30,000 was spent.  This amount shall be imputed to [wife] under [Minn. Stat. § 518.58, subd. 1a] when dividing the marital assets of the parties.”  But wife was not credited with this amount in the conclusion of law dividing the parties’ property.  We note that in the fourth judgment, the district court made a contrary finding that the $30,000 had “not been accounted for by either party and was deposited into the parties’ joint accounts to which each party had full access.”  On remand, the district court should determine whether the $30,000 is an asset that should be imputed to either or both of the parties and explain its decision.

Wife also makes an argument regarding the $30,000 in home-equity loan proceeds.  In the previous appeal, this court determined that the $30,000 from the home-equity loan seems “especially unlikely to produce income” for wife because the district court presumed that it had been spent on wife’s business.  Id., at *7, n.2.  But on the first remand, in its consideration of spousal maintenance, the district court found that wife could use the $30,000 to purchase an annuity that would provide her with extra income.  Wife is correct in asserting that the district court abused its discretion by including new findings regarding the income-producing potential of the $30,000.  We conclude that on remand, the district court should not consider the income-producing potential of the $30,000 in its consideration of spousal maintenance; we note that the district court in fact made this correction in the fourth judgment.

Additional New Findings

Wife argues that the findings in the third judgment regarding her employability were not supported by the record and were outside of the scope of the remand instructions.  The district court found that, after stabilization of her mental illness and rehabilitation, wife “may be capable of earning part-time income.”  The district court based this finding on the testimony of a psychologist who stated that wife could work if her mental health improved; and the testimony of a vocational consultant who stated that wife would benefit from vocational rehabilitation and could work to help support herself in an entry-level position.  Based on the record, the district court’s finding was not clearly erroneous.

            Wife also maintains that the district court improperly made new findings on the rental income from the parties’ Grand Avenue property.  In the previous appeal, this court determined that the fact that wife “retained rental income” from the parties’ Grand Avenue rental property was “not relevant” because, although wife was supposed to use the rental income to help pay the mortgage on the rental property and she did not, the amount that husband was forced to pay for the arrears was “specifically deducted from [wife’s] property award.”  Id., at *3.  In the third judgment, however, the district court found, for example, that husband was entitled to the full amount of his bonus because wife “received substantial rental income.”  Wife is correct in asserting that the district court abused its discretion by including new findings on the rental income in its consideration of the property division.  We conclude that on remand, the district court should not consider the rental income when dividing the parties’ marital property; we note that the district court made this correction in the fourth judgment.

            We conclude, however, that all of the additional findings that wife challenges were within the district court’s discretion in light of this court’s directive in the previous appeal that the district court on remand “may review the entire property division if consideration of the above-discussed issues requires modification of other portions of the award to effect an equitable division, making specific and thorough findings to ensure a complete and equitable division of assets.”  Id., at *5.

May Bonus

            In this court’s previous opinion, we determined that the district court’s findings reflected its intent to fashion an equal property division and that, thus, wife should be awarded with one-half of husband’s May 2000 bonus.  Id., at *3.  On remand, the district court credited the bonus solely to husband in the third judgment, reasoning that it was “fair and equitable” to do so because wife received “substantial rental income.”  In the fourth judgment, the district court determined that the bonus was marital property and “shall be divided equally between the parties.”  On remand, the district court should credit each party with one-half of the bonus, consistent with our prior directive that the bonus be divided equally. 

            Parties’ Joint Bank Accounts

            Wife asserts that the third judgment should be amended to include an equal division of two of the parties’ joint bank accounts.  In our previous opinion, we noted that the joint bank accounts were not included in the property division in either the first or second judgment and, thus, were effectively converted into husband’s assets because the temporary award ordered wife to “transfer these accounts into the sole name of [husband].”  Id., at *5.  This court also noted that the district court failed to mention these accounts in dividing the property and that this error should be addressed on remand.  Id.  On remand, the district court found in the third judgment that husband had accounted for all marital funds in the parties’ joint accounts at the time of the temporary hearing and that these funds were used to pay marital debt, including credit-card debt incurred by wife.  The district court further found that the amount of the marital debt exceeded the total amount of marital funds in the accounts at the time of the temporary hearing.  Thus, the district court properly addressed the issue on remand.

Stock-Purchase Plan

Wife argues that in the third judgment the district court should have “equally divided” payments that husband received from a stock-purchase plan.  In the original judgment, the district court found that “[a]s of the temporary hearing on September 14, 1999, the parties owned a stock purchase plan account through [husband’s] employer valued at $424.00.”  By the time of the prehearing conference, husband had cashed the plan out and received payments of $978 and $2,402.  On remand, this court directed the district court to use the prehearing-conference date for valuation or “explain why another date is fair and equitable.”  Id.  On remand, in the third judgment, the district court found that it was appropriate to value the account using the temporary-hearing date of September 14, 1999, “because any amounts deposited into this account after that date were from [husband’s] earnings” and because wife “received all rental income from the Grand Avenue property.”  The district court further found that the proceeds of the plan should be credited to husband.  But in its conclusion of law, the district court used the prehearing-conference date for valuation of the account and credited husband $978 and $2,402.  We conclude that the district court did not abuse its discretion by awarding husband the proceeds of the stock-purchase plan.  But although the district court explained why it was fair and equitable to use the temporary-hearing date for valuation of the plan, we conclude that in light of this court’s determination in the previous appeal that the rental income was “not relevant,” the district court should not have considered wife’s receipt of rental income from the Grand Avenue property when crediting the proceeds of the stock-purchase plan to husband.  On remand, the district court should either explain why it is fair and equitable to use the temporary-hearing date for valuation of the plan, excluding any consideration of wife’s receipt of rental income, or use the prehearing-conference date for valuation.

Wife’s Retirement Savings

            Wife argues that in the third judgment, the district court failed to make adequate provisions for her retirement needs.  This court directed the district court on remand to “make adequate provisions for [wife’s] retirement needs by either making additional findings regarding the source of her retirement income, or recalculating her reasonable monthly expenses in consideration of her need for reasonable retirement savings.”  Id., at *8.  Wife notes that the third judgment allows husband retirement savings of 10% of his salary but does not provide wife with any monthly retirement savings.  Thus, wife contends, to meet this court’s previous directive, her monthly expenses should be calculated to include retirement contributions equivalent to 5% of husband’s salary, and her spousal maintenance should be calculated to include this expense.  

But in the third judgment, the court found that wife “has sufficient retirement assets to meet her needs” based on assets that wife received.  The district court found (1) that wife was awarded a PERA retirement account with a value of approximately $3,100 and that if the account were invested at the rate of 10% per year for the next 14 years, wife would have $11,722 for retirement; (2) wife is defined as a “divorced wife” by the Social Security Act and, thus, will be eligible to receive an amount that is equal to one-half of the amount that husband will receive in social-security benefits, with her benefits estimated at $913.50 per month; and (3) the 401(k) account awarded to wife can continue to grow for the next 14 years until wife reaches the age at which she can begin to draw social-security benefits and that, assuming an annual return of 5%, wife would have retirement income of $41,664 per year.  Thus, we conclude that the district court followed this court’s directive on remand by making “additional findings regarding the source of her retirement income.”  See id.

Tax Consequences

            Wife argues that the third judgment failed to properly consider the tax consequences of the payment and the receipt of spousal maintenance.  In its original judgment, the court did not consider the tax consequences of either the payment or the receipt of spousal maintenance.  But in the third judgment, the court found that

[t]he spousal maintenance payments received by [wife] are included in [wife’s] gross income.  Assuming [wife’s] filing status is single with one exemption and she has no other deductions, her anticipated Federal tax liability on income of $24,000 per year is $2,149 or $179 per month.  [Wife’s] anticipated state tax liability is $88.00 per month.  [Wife’s] total tax liability is $267.00 per month.  These figures are based upon Internal Revenue Service and State of Minnesota publications.

 

            Wife maintains that according to the affidavit of her certified public accountant, the “correct amount” for federal taxes is $252.16 per month, or $3,026 annually, and for state taxes is $92.66 per month, or $1,012 annually.  On remand, the district court should evaluate the tax consequences to the parties of the payment and of the receipt of spousal maintenance based on their current financial circumstances. 

            Medical Insurance

            Wife argues that the district court failed to “fashion appropriate relief” to protect her in the “area of medical insurance.”  In the original judgment, the district court ordered husband to provide wife with medical insurance for five years after the date of the judgment.  In the first appeal, this court determined that the district court had found that it was “highly unlikely” that wife would be able to secure employment in the future and, thus, wife’s prospects for future employment were “not certain enough to warrant placing the burden of proving a change of circumstances on [wife] in five years, when her health care coverage runs out.”  Id.  Thus, this court directed the district court to “fashion appropriate relief to protect [wife].”  Id., at *9.  On remand, the district court determined that, as additional spousal maintenance, husband “shall continue to provide family medical insurance coverage for [wife] through [husband’s] employer . . . or any subsequent employer commencing from the date of the Judgment and Decree including COBRA coverage if [husband] retires or changes jobs, until [husband] terminates his employment, coverage is no longer available, or medical insurance coverage is made available to [wife] through [wife’s] employer, whichever occurs first.” 

Wife argues that the medical-insurance provision does not follow this court’s directive in that it puts her coverage within husband’s control because he can terminate his employment at any time.  Instead, wife maintains that the district court’s determination in the fourth judgment correctly followed this court’s directive; in the fourth judgment, the district court determined that as additional spousal maintenance, husband shall continue to provide family medical insurance for wife through his employer or any subsequent employer until husband “no longer has a spousal maintenance obligation.”  But we conclude that in the third judgment, the district court properly followed this court’s directive by removing the arbitrary selection of five years and, instead, providing wife with medical coverage until husband terminates his employment, coverage is no longer available, or medical insurance is available to wife through her employer. 

To facilitate a final resolution of this matter, the district court on remand shall reopen the record to accept evidence regarding the parties’ current financial circumstances.  The district court may also review the spousal-maintenance award and the entire property division if consideration of the parties’ current circumstances requires modification of other portions of the award to effect an equitable division, making findings to support its decision.

            Affirmed in part, reversed in part, and remanded.