This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2006).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-1887

 

 

In re the Marriage of:

Jennifer Marie Gran, f/k/a Jennifer Marie-Gran Barkley, petitioner,

Respondent,

 

vs.

 

Craig William Barkley,

Appellant.

 

 

Filed July 31, 2007

Affirmed in part, reversed in part, and remanded

Toussaint, Chief Judge

 

Scott County District Court

File No. 04-20948

 

 

R. Kathleen Morris, Morris & Wolf, 404 First Avenue East, Shakopee, MN 55379 (for respondent)

 

Susan A. McKay, McKay & Perusse, LLC, Lake Calhoun Executive Center, 3033 Excelsior Boulevard, Suite 10, Minneapolis, MN 55416 (for appellant)

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

U N P U B L I S H E D   O P I N I O N

TOUSSAINT, Chief Judge

            In this postdissolution action, appellant Craig William Barkley challenges the award of sole physical custody of the parties’ children to respondent Jennifer Marie Gran, f/k/a Jennifer Marie-Gran Barkley, the calculation of appellant’s income for child-support purposes, and the distribution of marital property.  Because we see no abuse of discretion in the calculation of appellant’s income, we affirm; because the custody award lacks supporting findings, we reverse and remand; and because we see an abuse of discretion in the division of the marital property, we reverse and remand for further proceedings in accord with this opinion.

FACTS

            Appellant and respondent were married from 1983 to 2006.  They are the parents of two children, E., 16, and O., 13.  Appellant is self-employed in his own business; respondent is employed as a human resources representative at a medical center. 

After the parties separated, respondent sought sole legal and physical custody of the children; appellant sought joint legal and physical custody.  The court-ordered custody evaluation recommended joint legal and joint physical custody.  The district court, however, awarded joint legal custody but sole physical custody to respondent.

Respondent and the children lived in the homestead following the separation.  When this proved too expensive, respondent put the homestead up for sale and moved with the children to a town home. 

The parties filed separate tax returns, and respondent’s taxes are current. Appellant’s tax returns for 1999, 2000, 2001, 2003, 2004, and possibly 2002 were not prepared until 2005; he has not paid taxes for those years. The district court found appellant’s monthly income to be $4,582 and respondent’s monthly income to be $3,084 and ordered appellant to pay $1,375 monthly in child support.

            During the dissolution proceeding, the parties litigated custody, child support, property division, retirement benefits, and debt. They each brought posttrial motions for a new trial or amended findings and conclusions; appellant also asked the court to reopen the file to admit additional evidence.  With two minor exceptions, the district court  denied the motions.  Appellant now challenges the custody award, the calculation of his net income, and the property division.[1]

D E C I S I O N

1.         Custody

 

             “Even though the district court is given broad discretion in determining custody matters, it is important that the basis for the court’s decision be set forth with a high degree of particularity.” Durkin v. Hinich, 442 N.W.2d 148, 151 (Minn. 1989).  Discretion is abused when findings in support of a conclusion are lacking.  See, e.g.,  In re Santoro, 594 N.W.2d 174, 179 (Minn. 1999) (“Given the trial court’s lack of findings in support of its conclusion . . . we hold that the trial court abused its discretion.”).

Appellant argues that the district court failed to explain why it awarded sole physical custody of the children to respondent against the recommendation of the custody evaluator.  A district court may refuse to accept a custody evaluator’s recommendation. Rutanen v. Olson, 475 N.W.2d 100, 104 (Minn. App. 1991).  But, when a district court does reject a custody evaluator’s recommendation, it must either explain its reasons for the rejection or provide detailed findings on the statutory factors that support its own conclusion and custody award.  Id.

The district court made findings on the statutory factors, Minn. Stat. § 518.17 (2004), but those findings do not support the conclusion that respondent should have sole physical custody. The district court found that (1) the children are old enough to express a preference and their preference is for joint physical custody; (2) neither party was the primary caretaker; (3) both parties enjoyed a close and loving relationship with the children; (4) neither party had a physical or mental health problem that would impair the ability to care for the children; (5) both parties demonstrated the ability to provide the children with love, affection, and guidance; and (6) the parties are capable of successful co-parenting.[2]  Except for indicating which physical custody arrangement was preferred by each party, by the children, and by the evaluator, the findings do not mention physical custody at all. 

The only explanations for the award of sole physical custody even implied by the district court were that the custody evaluator “recommended . . . joint legal and physical custody . . . largely because that is what the children wanted” and that the children’s preference for joint custody “appeared to be more the product of [appellant’s] desire for joint physical custody than their own.”  But the fact that both the children and appellant wanted the same arrangement that the custody evaluator recommended is not a reason for rejecting that recommendation, and the district court’s findings do not support that rejection.

2.         Appellant’s Net Income

A determination of the amount of an obligor’s income for purposes of child support 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).  A district court has broad discretion to determine the income of a self-employed parent because “the opportunity for a self-employed person to support himself yet report a negligible net income is too well known to require exposition.” Ferguson v. Ferguson, 357 N.W.2d 104, 108 (Minn. App. 1984).  The district court may consider cash flow, particularly when the calculation of income is difficult. Schelmeske v. Veit,390 N.W.2d 309, 312 (Minn. App. 1986).   The district court may also consider the lifestyle of a sole business owner if the figures offered do not comport with the evidence of that person’s lifestyle.  Johnson v. Fritz, 406 N.W.2d 614, 616 (Minn. App. 1987).

Basing its calculations on information in appellant’s business register, the district court found appellant’s net monthly income was $4,582 and his claimed monthly living expenses were $5,762. The district court noted that, “According to [appellant’s] testimony, he has been able to meet these expenses”; has “admitted receiving cash for some jobs not reported on the register”; and “is apparently paying personal expenses . . . out of the business account . . . [and] not paying taxes thereon.”

Appellant argues that the district court should have based its calculation on his 2005 income tax return.  But appellant’s 2005 tax return was not available to the district court at the time of trial.  “[A] party cannot complain about a district court’s failure to rule in [his] favor when one of the reasons it did not do so is because that party failed to provide the district court with the evidence that would allow the district court to fully address the question.” Eisenschenk v. Eisenshenk, 668 N.W.2d 235, 243 (Minn. App. 2003), review denied (Minn. Nov. 25, 2003).[3] 

Appellant also contends that the district court should have deducted his payments for child support arrearages for another child, for his own medical insurance, and for the children’s medical insurance.  But the district court, confronted with appellant’s record of unpaid taxes and unrecorded cash receipts, had to deduce his monthly income from the best material it had available.  The district court did not abuse its discretion either in basing its calculation of appellant’s net monthly income on his business register or in establishing a net monthly income commensurate with his lifestyle. 

3.         Property Division

 

 “District courts have broad discretion over the division of marital property and appellate courts will not alter a district court’s property division absent a clear abuse of discretion or an erroneous application of the law.”  Sirek v. Sirek, 693 N.W.2d 896, 898 (Minn. App. 2005).  A district court abuses its discretion regarding a property division if its findings of fact are “against logic and the facts on [the] record.”  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  “We defer to the trial court’s findings of fact and will not set them aside unless they are clearly erroneous.”  Antone v. Antone, 645 N.W.2d 96, 100 (Minn. 2002).

A.        Tax Liability

Appellant argues that his tax liability for 1999 through 2004 should have been considered a marital debt and divided with respondent because the debt was incurred during the marriage.  He relies on Chamberlain v. Chamberlain, 615 N.W.2d 405, 414 (Minn. App. 2000) (concluding that “nonpayment of the appellant’s income taxes gave the respondent more discretionary income to spend” and affirming division of one party’s tax liability as marital debt), review denied (Minn. Oct. 25, 2000). But Chamberlain is distinguishable.  There, the parties filed jointly, usually one or two years late; after the dissolution petition but before the dissolution, one party refused to file jointly and thus increased the parties’ tax liability.  Here, respondent filed separately and paid on time, but appellant did not pay taxes at all.  Concluding that appellant’s unpaid taxes were his nonmarital debt was not an abuse of discretion.

            B.        Respondent’s Nonmarital Interest in Parties’ Homestead.

            “Determining whether property is marital or nonmarital . . . is an issue over which we exercise independent review, though deference is given to the district court’s findings of fact.”  Gottsacker v. Gottsacker, 664 N.W.2d 848, 852 (Minn. 2003).

The parties used the net proceeds of the sale of their first house as a down payment on their second house. They agree that respondent contributed nonmarital property to provide 67% of the down payment on the parties’ second house and is entitled to 67% of the net proceeds of its sale.  The district court found that respondent was entitled to an additional 8% because her nonmarital share in the first house was also contributed to the down payment on the second house.

            Appellant argues that respondent had no nonmarital interest in the parties’ first house because the purchase of that house was completely financed.  But the actual cost of the house, including closing costs, was more than the amount obtained through financing, and respondent’s father gave her the amount needed to pay the difference.  Because the contribution was a nonmarital asset used in the acquisition of marital property, it did result in a nonmarital interest. See Antone, 645 N.W.2d at 102 (present value of nonmarital asset used in acquisition of marital property is proportion of value of asset at time of acquisition to value of property acquired at that time, multiplied by value of property at time of separation).  The district court correctly determined that respondent’s nonmarital share of the parties’ first house was the percentage of her contribution to its total cost.

But the district court erred in calculating the amount of respondent’s nonmarital contribution to the down payment on the second house.[4]  The district court should have multiplied her percentage share of the first house by the net proceeds of the sale of the first house; instead, the district court multiplied her percentage share by the total sale price of the first house. We remand for this recalculation.

            Appellant also argues that respondent diminished the net equity of the second house by failing to make payments and failing to pay utilities and workmen, incurring fees totaling $11,412.  Appellant relies on Minn. Stat. § 518.58, subd. 1 (2006), stating, “If there is a substantial change in the value of an asset between the date of valuation and the final distribution, the court may adjust the valuation of that asset as necessary to effect an equitable distribution.” Id.(emphasis added).  “May” is permissive, not mandatory.  Minn. Stat. § 645.44, subds. 15, 15a (2006).  When respondent discovered that she could not afford to live in the second house with the children, she offered it to appellant; when he declined to live in it, she put it up for sale. The district court did not abuse its discretion by finding that respondent’s failure to make payments did not require an adjustment of the parties’ shares in the proceeds of the house.

            We reverse the award of sole physical custody to respondent and remand for additional findings; we affirm the determination of appellant’s net monthly income; we affirm the determinations that appellant’s tax liability is a nonmarital debt and that respondent’s failure to make payments after the parties’ separation is not a factor in the division of the proceeds of the parties’ house; and we reverse and remand for recalculation of the amount of respondent’s share of those proceeds.

Affirmed in part, reversed in part, and remanded.