Opinion
No. C6-00-86.
Filed August 22, 2000.
Appeal from the District Court, Lake County, File No. F286353.
Bruce L. Anderson, Lake County Attorney, (for respondent)
Russell H. Conrow, (for appellant)
Considered and decided by Halbrooks, Presiding Judge, Davies, Judge, and Peterson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
UNPUBLISHED OPINION
Appellant challenges the district court's modification of his child-support obligation. Because we hold that the district court failed to make sufficient findings, we reverse the child-support modification and remand for additional findings.
FACTS
Appellant Arlen Burt and respondent Theresa Cone-Burt are the parents of two children. The parties' marriage was dissolved on January 28, 1988. The decree provided, pursuant to the parties' stipulation, that the parties would share legal custody of the children but that respondent would have primary physical custody. Appellant was awarded visitation and ordered to pay $185 per month for child support.
In 1995, respondent filed a motion to modify appellant's child-support obligation. At the time of the dissolution, appellant was a draftsman, but he decided to change careers and began selling insurance. Appellant became affiliated with American National Insurance Company as an independent agent and arranged to sell its products and receive financial backing from American National. Appellant's agreement with American National called for him to receive commissions based on his sales and renewals of policies. In lieu of only receiving commissions while appellant established his business, he arranged to receive an $1,800 per month advance on future commissions. The agreement provided that appellant would not receive more than $1,800 per month until his monthly commissions exceeded that amount and the amount he had received in excess of the commissions he actually earned was repaid in full.
In light of these circumstances, the district court modified appellant's child-support obligation to $289 per month in 1995. This figure was based on a finding that appellant's net income at the time of the motion was $963 per month — $1,800 per month minus business expenses and taxes. The district court found that appellant's income was expected to increase in the near future and that respondent would be entitled to 30% of any increase.
In 1996, appellant filed a motion seeking a reduction in his child-support obligation. The district court denied the motion on the ground that appellant had failed to demonstrate that his income had substantially decreased. A second modification motion, filed by appellant in November 1996, was granted on the basis of the parties' older child's emancipation. Appellant's child-support obligation was then reduced to $230 per month.
On September 10, 1999, respondent again filed a motion to increase appellant's child-support obligation. Her motion was accompanied by an affidavit that alleged her monthly expenses had increased approximately $480 and that appellant's income had substantially increased. Appellant, however, testified at the hearing that he had received the $1,800 per month from American National for three years and that he was then paid straight commission for a period of time. According to appellant, he had since been placed back on the company-financing program and is again receiving $1,800 per month. He has accrued a debt of approximately $23,000 to American National, based on the unearned commissions he has been paid pursuant to the company-financing program. This amount will have to be paid back before he will earn more than $1,800 per month.
The district court concluded that appellant was voluntarily underemployed and decided to impute income to him for the purpose of calculating his child-support obligation. The district court concluded that appellant had the ability to earn at least $1,800 per month and used that figure to calculate appellant's obligation. This appeal follows.
DECISION
A party seeking the modification of a child-support order has the burden of proving a substantial change in circumstances under Minn. Stat. § 518.64 (1998 Supp. 1999). Gorz v. Gorz, 552 N.W.2d 566, 569 (Minn.App. 1996). The district court has broad discretion in deciding whether to modify an existing child-support order. Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
Appellant contends that respondent did not establish that a change in circumstances occurred. Respondent's motion papers include an affidavit prepared by respondent that alleges that appellant's income has substantially increased. But all of the evidence, other than this affidavit, indicates that appellant's gross income is currently the same as it was when the last order issued. Appellant was receiving an $1,800 advance on commissions per month beginning in 1995 and is currently receiving the same amount.
The district court appears to have focused solely on whether appellant's income was unjustifiably self-limited and not on whether a change in circumstances had occurred. See Gilbertson v. Graff, 477 N.W.2d 771, 774 (Minn.App. 1991) (child-support obligation can be based on obligor's earning capacity if the obligor's income is unjustifiably self-limited). The district court can impute income if it finds that the obligor is voluntarily unemployed or if it is impracticable to determine the obligor's income. See Minn. Stat. § 518.551, subd. 5b(d) (Supp. 1999) (providing for income imputation when obligor is voluntarily underemployed); see also Gorz, 552 N.W.2d at 569 (holding that income can be imputed when it is "impracticable to determine").
But having imputed income, the district court then failed to make an express finding on whether there had been a substantial change in circumstances. We hold that this omission in the district court's order requires a reversal of the modification and a remand for additional findings. See Allan v. Allan, 509 N.W.2d 593, 596 (Minn.App. 1993) (reversing and remanding a child-support modification when the district court failed to make a finding on whether a substantial change in circumstances had occurred).