A06-1255

Trudy A. Kawlewski, petitioner,

Respondent,

vs.

Dennis J. Arvig,

Appellant,

Wadena County, intervenor,

Respondent.

Filed June 26, 2007

Affirmed in part, reversed in part, and remanded

Willis, Judge

Wadena County District Court

File No. F9-05-25

Janel C. Wallace, 305 Pleasant Avenue, Park Rapids, MN 56470 (for respondent Trudy A. Kawlewski)

Paul B. Hunt, Svingen, Hagstrom, Karkela, Cline & Dirks, P.L.L.P., 450 West Main Street, P.O. Box 160, Perham, MN 56573 (for appellant)

Kyra L. Ladd, Wadena County Attorney, 415 South Jefferson, Wadena, MN 56482 (for respondent Wadena County)

Considered and decided by Shumaker, Presiding Judge; Kalitowski, Judge; and Willis, Judge.

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

WILLIS, Judge

Appellant father challenges the district court’s affirmance of a child-support magistrate’s order setting appellant’s past and permanent child-support obligations. We conclude that the district court’s affirmance of appellant’s past child-support obligation was not an abuse of discretion. But we also conclude that the district court abused its discretion by affirming the child-support magistrate’s clearly erroneous determination of appellant’s net income. We therefore affirm in part, reverse in part, and remand.

FACTS

Appellant father Dennis Arvig and respondent mother Trudy Kawlewski had a child on September 24, 2004. Father was at one time a salaried employee of his family’s business. He stopped working full time at the business in September 2003 and became self-employed but continued to work for the family business as an independent contractor. Just before the birth of his child in September 2004, father purchased a second house.

In a matter related to this appeal, father petitioned to establish custody and visitation. The parties reached an agreement regarding custody, visitation, and related issues. That agreement is reflected in a December 12, 2005 order of the district court, which noted that “[t]he issue of permanent child support shall be submitted and determined by the Expedited Magistrate Process of Wadena County.”

On February 3, 2005, in the matter at issue here, Wadena County and mother filed a complaint against father, seeking an adjudication of paternity as well as determinations of custody and child support. Father did not dispute paternity. The child-support magistrate (CSM) ordered father to pay $733 per month in temporary child-support payments beginning May 1, 2005.

Following a hearing, the CSM issued an order on February 16, 2006, directing father to pay $635 per month in permanent child support and $79 per month for child-care expenses, beginning February 1, 2006. The February 16 order also determined that father owed $5,131 ($733 per month) in past child support for the period October 1, 2004, to April 30, 2005—the period beginning just after the child’s birth and ending with the commencement of father’s temporary child-support payments. The order deducted the $1,800 that father voluntarily paid to mother for child support during that time and directed father to pay $1,659 of the remaining amount to the state as reimbursement for public-assistance cash payments and $1,672 to mother for past support.

Both mother and father moved the district court for review of the CSM’s February 16 order, and the district court affirmed the CSM’s order. Father appeals.

D E C I S I O N

The district court has broad discretion to provide for support of the parties’ children. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). The district court reviews the CSM’s decision de novo, and this court reviews the district court’s decision regarding the CSM’s order under an abuse-of-discretion standard. Davis v. Davis, 631 N.W.2d 822, 825-26 (Minn. App. 2001). This court will reverse a child-support determination only if it is clearly erroneous and is against logic and the facts in the record. Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002). Findings of fact are clearly erroneous when, viewing the record in the light most favorable to the findings and considering our deference to the district court’s credibility determinations, we are left with “the definite and firm conviction that a mistake was made.” Vangsness v. Vangsness, 607 N.W.2d 468, 474 (Minn. App. 2000).

Father argues that the CSM erred by imputing to him, for the purpose of calculating his child-support obligation, $500 per month in rental income that father “has the ability” to collect by renting his second house. Father has never rented that house, which is located approximately one mile from the house in which he lives. Father testified that he purchased the second house at about the time his child was born and that he intends to sell one of his houses to pay off debt.

To determine child support, a district court must determine an obligor’s current net income. Thomas v. Thomas, 407 N.W.2d 124, 127 (Minn. App. 1987). A determination of the amount of an obligor’s income is a finding of fact and will not be altered on appeal unless 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.” Minn. Stat. § 518.54, subd. 6 (2004). Income may be imputed or estimated either because the obligor is voluntarily unemployed or underemployed under Minn. Stat. § 518.551, subd. 5b(d) (2004), or because it is impracticable to determine the obligor’s actual income. Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 240 (Minn. App. 2003), review denied (Minn. Nov. 23, 2003). This court reviews a decision to impute income for an abuse of discretion. Putz, 645 N.W.2d at 353.

Relying on an unpublished opinion by this court, father asserts that because his actual income is measurable and he has not unjustifiably self-limited his income, the CSM erred by imputing income to him. He also notes that the CSM did not make a finding that father was voluntarily unemployed or underemployed or that father has unjustifiably self-limited his income.

Mother argues that father’s decision to “maintain[] two homes for at least one year and not choose[] to utilize one of the homes for rental income clearly limited [father’s] income without justification for at least that one year period.”

Father is correct that the CSM failed to make a finding of unjustifiable self-limitation to support his imputation of rental income. In reviewing the CSM’s decision, the district court explained that “if rental property . . . stands vacant, the Magistrate may impute income based on a fair rental value during the vacancy period.” But father’s second house is not “rental property.” Father has never rented the house.

Both of father’s houses should be considered assets for the purpose of determining father’s child-support obligation. See Strandberg v. Strandberg, 664 N.W.2d 887, 890 (Minn. App. 2003) (noting that in setting a child-support obligation, the district court “shall” consider all “resources of the parents, including real and personal property”). But the second house is not income-generating. And we conclude that, on this record, father’s decision to not rent his second house is not an unjustifiable self-limitation of his income. Further, we agree with father that the determination that he could rent his second house for $500 is clearly erroneous because there is no support in the record for such a finding. Although father testified that the fair-market value of the second house is $70,000, we find no record evidence of the rental value of the house.

Although father does not raise this issue on appeal, the CSM appears also to have imputed income from father’s self-employment. Father testified that he is self-employed; that he makes $18.39 per hour doing contract work for his family’s business but that he does not work full time for the business and is not guaranteed 40 hours of work per week; that at the time of the hearing, he had not been able to secure other contract work; and that he expected to make “about $15,000” in 2006. The CSM found that father “earns $18.49 per hour and works 40 hours per week.”

Given the fact that father is self-employed and the evidence that he chose to end his full-time employment with his family’s business, the district court’s decision to affirm this imputation was not an abuse of discretion. But the hourly pay rate that the CSM used to calculate father’s income appears to be a clerical error. All evidence shows that father’s hourly pay rate is $18.39. The CSM used a pay rate of $18.49, which is not supported by the record and therefore is clearly erroneous.

Further, father’s net monthly income and the resulting child-support obligation appear to have been miscalculated. Even using the incorrect pay rate of $18.49 per hour, we are unable to determine how the CSM arrived at his determination of father’s net income. We conclude that the district court abused its discretion by affirming the CSM’s imputation of rental income to father and by affirming the calculation of father’s net income and, therefore, his permanent child-support obligation. We reverse and remand for recalculation of that obligation.

II.

Father argues next that the CSM improperly used the temporary child-support rate of $733 per month, rather than the permanent support rate of $635 per month, to calculate his obligation for the period beginning just after the child’s birth and ending at the commencement of his temporary child-support payments. Determinations of past child support are reviewed for an abuse of discretion. LaChapelle v. Mitten, 607 N.W.2d 151, 166 (Minn. App. 2000), review denied (Minn. May 16, 2000). A district court “shall limit the parent’s liability for past support of the child to the proportion of the expenses that the court deems just, which were incurred in the two years immediately preceding the commencement of the action.” Minn. Stat. § 257.66, subd. 4 (2004). To determine a “just” amount, the court should consider the current and past income of the obligor, as well as the past needs of the child. Id.

Here, the period covered by the past-support award is entirely within the two-year statutory time limit. Further, the district court, in affirming the CSM’s decision, noted that “[s]ignificantly, this was the period when [father] had his highest adjusted gross income.” The CSM also reduced the past-support award by the amount that father voluntarily paid to mother during that period. We conclude that using the temporary child-support rate of $733 per month, rather than the permanent child-support rate of $635 per month, to calculate father’s past child-support obligation was not an abuse of discretion.

In any event, we note that the temporary child-support award did not separately allow for child-care expenses, while the permanent award of $635 added $79 per month for child-care expenses. Father’s total monthly child-support obligation is therefore only $19 less under the permanent support award. See Minn. Stat. § 518.551, subd. 5 (2004) (“The amount allocated for child care expenses is considered child support . . . .”).

Affirmed in part, reversed in part, and remanded.