Opinion
No. C1-00-1517.
Filed June 5, 2001.
Appeal from the District Court, Dakota County, File No. FX86519272.
Kerry Lynn Adelmann, (pro se respondent)
Jane E. Brooks, (for appellant)
Considered and decided by Halbrooks, Presiding Judge, Lansing, Judge, and Anderson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
In this post-dissolution judgment proceeding, appellant argues that the district court erred in (1) failing to vacate portions of the dissolution judgment because respondent misrepresented her income and her employment status; (2) setting respondent's income for child support purposes and finding that it is seasonal; (3) determining that the issue of uncovered medical care for the children is barred by res judicata; and (4) failing to make adequate findings of fact to support the order. Because we find that the district court did not err other than in failing to address the issue of unpaid medical expenses, we affirm in part and remand in part.
FACTS
Appellant Dale William Iverson and respondent Kerry Lynn Adelmann have two children who were ages four and six at the time they separated. The dissolution of their marriage was finalized in 1987. Since then, the parties have filed numerous motions in district and appellate courts regarding child support and involved the court system in a protracted battle between themselves. This appeal is from a June 26, 2000 post-dissolution child-support order.
The judgment and decree awarded the parties joint physical and legal custody of the children. After respondent brought a post-decree motion for custody change, an amended judgment and decree was entered November 13, 1989, maintaining the joint-custody arrangement. Appellant then brought a motion for custody change in 1990 and was awarded sole physical custody of the children in an order entered November 6, 1990. In 1992, appellant moved the court to find respondent in contempt of the 1990 amended order, to award him sole legal custody, to limit respondent's visitation with the children, and to order respondent to pay one-half of the children's medical expenses not covered by insurance. The court expressed concerns about the physical and emotional health and development of the children and, among other directives, ordered each party to pay one-half of any medical expenses not covered by insurance.
In October 1996, respondent brought another motion for custody change, and appellant brought a motion to enforce and increase the child-support order of November 1990. Respondent moved to suspend her child-support payments. A December 13, 1996 order suspended respondent's child support and reserved other issues until after an evidentiary hearing.
A hearing was held in February and in April 1997. The court awarded appellant child-support arrearages, denied appellant's motion for uninsured medical costs through December 31, 1996, ordered future uninsured medical expenses to be reported to the court and divided by the parties, and suspended respondent's child-support obligation. The court suspended respondent's child-support obligation because she stopped working in October 1996 due to complications with a pregnancy and remained at home through November 1996 following the birth of her daughter. The court denied the request for reimbursement of the medical expenses prior to December 31, 1996 because appellant had not provided documentation supporting the expenses or previously advised respondent of them. In an apparent attempt to discourage the constant litigation between the parties, the court also prohibited either party from bringing another motion for six months.
Appellant challenged the April 1997 order in this court. We held that the district court did not err in refusing to grant appellant an evidentiary hearing on the issue of child-support contempt. But we remanded to the district court for specific findings concerning respondent's income, which party has the better medical coverage and should provide insurance for the children, and whether respondent was voluntarily unemployed so that income should be imputed to her. Williams v. Iversen, No. C8-97-854, 1997 WL 793293, at *7-9 (Minn.App. Dec. 30, 1997). Appellant did not raise, nor did this court address, the denial of the pre-December 1996 medical expenses.
In July 1998, the district court ordered respondent to pay appellant $349 monthly child support until the couple's younger child "is 18 and graduated from high school, emancipated, dies, enters the military service * * * or reaches age 20 while still pursuing a high school diploma * * * full time." Appellant was ordered to pay $800 to respondent for uncovered medical expenses after respondent provided evidence of the expenses. Respondent appealed this order, but this court dismissed it as premature. Appellant then brought a motion for contempt of the order.
In February 1999, the district court held an evidentiary hearing for the purpose of setting child support for the parties' remaining minor child. At the hearing, respondent testified that in May 1998, she left her part-time employment, and was under the care of a psychologist and unemployed due to a "moderate depression." She provided no medical documentation of her condition. Respondent also testified that she was staying home with her two-year-old daughter and that she was unwilling to put her child in daycare. Appellant argued that respondent was voluntarily unemployed and had an annual earning history of $30,000. Therefore, he argued that the court should impute $30,000 gross annual income to her as a basis for setting child-support payments.
In its March 22, 1999 order, the court imputed a net monthly income of $735 to respondent. Based on that imputed income, the court amended the July 2, 1998 order to require respondent to pay monthly child support of $140. The court based its decision on a letter from respondent's psychologist, her history of unemployment, and a biweekly earnings statement from her former employer. The amount imputed assumed that respondent could work approximately 20 hours a week. The court also ordered appellant to pay respondent $800 for uncovered medical expenses of the children after receiving copies of the bills from respondent. The court found that respondent was in substantial compliance with the stipulation regarding insurance. Finally, the court held that all previous orders would remain in effect.
After respondent failed to comply with the March 22, 1999 child-support order, the court entered a constructive civil-contempt order against her. Appellant brought a motion to vacate and amend portions of the March 22, 1999 order. Appellant alleged that at the February 4, 1999 hearing, respondent misrepresented her employment status and income. Paul Erickson, respondent's former employer, provided an affidavit that stated that respondent worked for him from September 1998 to May 1999, earning $325 per week as a nanny. In addition, in her final two months of employment, she earned an extra $300 for cleaning. Appellant asked the court to find that respondent's gross income be based on Erickson's affidavit rather than her false testimony of February 1999.
In response to appellant's March 15, 2000 motion, respondent filed an affidavit, admitting her employment and $1,110 in additional income. She estimated her gross monthly income during 1999 to be $686, an amount less than the $735 net monthly income the court imputed to her. She also included two letters dated February 5 and February 18, 1999 from her therapists. The letters indicated that respondent's symptoms were consistent with moderate depression, and her symptoms made it difficult for her to hold down a full-time job and handle "homemaker duties."
On May 4, 2000, a hearing was held on appellant's motion to vacate the March 22, 1999 order. The district court issued its findings of fact that the parties' son was over 18 and not attending high school full-time, respondent's actual income did not exceed the amount imputed to her in the March 22, 1999 order, medical costs had previously been litigated, and appellant had failed to pay $800 for uncovered medical expenses to respondent. Based on these findings, the court held that appellant had not suffered any damages as a result of respondent's misstatements, and res judicata barred the "controversy" regarding uninsured and uncovered medical expenses for the parties' then-minor children. The court also ordered respondent to be credited $800 on her child-support arrearages and terminated respondent's child-support obligation as of April 21, 2000. Again, the court held that all previous orders remain in effect.
This appeal follows.
DECISION I.
Appellant argues that because the record supports a finding of fraud by respondent, the district court erred in failing to vacate and amend portions of the March 22, 1999 order. Appellant argues that the court should have remanded the issue of child support to order respondent to pay child support in accordance with her "actual earnings."
A district court's decision not to reopen the judgment and decree will not be disturbed absent an abuse of discretion. Maranda v. Maranda, 449 N.W.2d 158, 164 (Minn. 1989). Unless clearly erroneous, this court will affirm the district court's findings of fact on the question of whether the judgment was prompted by fraud, duress, or mistake. Kornberg v. Kornberg, 542 N.W.2d 379, 386 (Minn. 1996). The district court has broad discretion when deciding whether to vacate. See Minn. Stat. § 518.145, subd. 2 (2000) (stating that a court may vacate an order for fraud or other misconduct by a party); Minn. Stat. § 645.44, subd. 15 (2000) (stating that "may" is permissive). This court has explained that "[c]ourts have used these standards [of Minn. Stat. § 518.145, subd. 2(3) (2000)] to vacate judgments due to improper advantage taken by one party over another * * * ." Hestekin v. Hestekin, 587 N.W.2d 308, 310 (Minn.App. 1998) (citations omitted).
Here, the district court determined that the misrepresentations made by respondent did not change the amount of child support that she owed or create an unfair result. Instead, the court found that respondent's "actual average monthly income in 1998 and 1999 did not exceed the income the Court imputed to her in its March 22, 1999 Order." Moreover, in its conclusions of law, the court stated that appellant "suffered no damages as a result of any misstatement petitioner made concerning her income in 1998 and 1999."
After a thorough review of the record, we find no error in this statement. The district court imputed a net monthly income of $735 to appellant. The affidavit of her former employer stated that respondent grossed $325 weekly as an independent contractor from September 1998 to May 1999. But she only worked for Erickson for 9 months, resulting in a gross income of approximately $13,000. Applying a 20% tax rate results in an annual net income of $10,800. The $735 monthly income imputed by the court results in an annual net income of $8,820. We find that even though respondent lied about her employment — conduct this court will not condone — the difference in the resulting child-support award was minimal. See Wibbens v. Wibbens, 379 N.W.2d 225, 227 (Minn.App. 1985) (holding that a technical error that would provide party with additional $120 was de minimus and thus did not require remand). The district court, finding no damage to appellant from respondent's misrepresentations, decided not to vacate the order. This decision falls within the district court's broad discretion. See Mesenbourg v. Mesenbourg, 538 N.W.2d 489, 494 (Minn.App. 1995) (the standard of review for decisions on whether to reopen a void judgment is abuse of discretion).
II.
Appellant next argues that respondent's misrepresentations caused the court to err and treat her income as seasonal. Relying on Minn. Stat. § 518.57, subd. 2 (2000), the court held that monthly child support may be determined by averaging respondent's income over the entire year. Minn. Stat. § 518.57, subd. 2, reads as follows:
The court shall establish the annual support of an obligor with a seasonal income so that the obligor makes either the same monthly payments throughout the year or monthly payments that reflect variations in income.
Here, respondent's income as a nanny does not appear to be "seasonal employment" in the traditional sense. Instead, due to her depression, respondent testified that she worked for only part of the year in 1998 and 1999. A trial court may properly consider a party's earning capacity and earning history to determine that party's ability to comply with child-support orders. Ronay v. Ronay, 369 N.W.2d 6, 10 (Minn.App. 1985). Although not seasonal, it was appropriate for the court to take the income respondent earned during part of a year and spread it across an entire year to determine her child-support obligation. A court can properly consider the fluctuating income of the obligor spouse when determining child-support payments. See Veit v. Veit, 413 N.W.2d 601, 606 (Minn.App. 1987) (finding the trial court properly relied on respondent's average cash flow and additional available funds in averaging income to calculate [obligor] net monthly income); Justis v. Justis, 384 N.W.2d 885, 890 (Minn.App. 1986) (finding that the trial court took appropriate notice of appellant's variable income in setting child support), review denied (Minn. May 29, 1986).
Appellant argues that the district court misused the statute because it is not intended to provide a "reduced level of support for an obligor who merely decides to voluntarily cease employment." But the court did not find that respondent was voluntarily unemployed or underemployed. Instead, by finding that respondent's actual and imputed income are similar, the court implicitly found that respondent is unable to work full-time due to her depression. In addition, appellant's motion did not ask the court to find that respondent was capable of earning a greater amount, only that she had the "nanny" income during 1998 and 1999. The court held that the income respondent earned was the same as the income imputed to her, thereby attributing the nanny income to respondent. We conclude that the court's incorrect use of the statute in no way affects the result. Any characterization of respondent's income as seasonal was harmless error and is not a basis to reverse. See Minn.R.Civ.P. 61 ("The court at every stage of the proceeding must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties.").
III.
Next, appellant contends that the district court erred in finding that res judicata bars the issue of uninsured medical costs because the "history of this case" proves that the expenses for which he seeks reimbursement have not been litigated.
On February 21, 1997, appellant moved for, among other things, reimbursement of medical insurance premiums and uninsured medical and dental costs through December 31, 1996. Appellant claimed over $2,000 in insurance costs and over $4,000 in unreimbursed medical, health, and dental expenses for the children, but provided no supporting documentation. The court denied his motion for reimbursement. The court then ordered respondent to make written reports four times a year of all evidence of medical insurance premiums and uninsured medical and dental costs. The court also ordered respondent to pay her share "according to the current order." On appeal from this order, this court remanded part of the case to allow the district court to make appropriate findings regarding whether appellant or respondent had the better medical insurance coverage for the children. Williams v. Iversen, No. C8-97-854, 1997 WL 793293, at *10-11 (Minn.App. Dec. 30, 1997). But appellant did not contest the denial of the reimbursement of medical costs that occurred prior to December 31, 1996.
In family law, "the underlying principle that an adjudication on the merits of an issue is conclusive, and should not be relitigated, clearly applies." Loo v. Loo, 520 N.W.2d 740, 744 (Minn. 1994). "The failure to raise and preserve an issue before the court of appeals constitutes a waiver in a subsequent appeal to this court." In re Welfare of M.D.O., 462 N.W.2d 370, 379 (Minn. 1990) (citing L H Transport, Inc. v. Drew Agency, Inc., 403 N.W.2d 223, 226 (Minn. 1987)).
Here, the expenses for which appellant is seeking reimbursement were submitted January 15, 1999, and date back to 1988. But because the district court denied appellant's request to recover medical expenses predating December 31, 1996 was not challenged in the 1997 appeal, appellant has waived his right to these expenses. S ee Loo, 520 N.W.2d at 744 (stating that generally an adjudication on the merits of an issue is conclusive and should not be relitigated); see also Kiesow v. Kiesow, 270 Minn. 374, 382, 133 N.W.2d 652, 659 (1965) (stating if no appeal is taken from child-support modification order, the order is res judicata in later modification proceedings absent a material change in circumstances).
The amount of the uncovered medical expenses from January 1, 1997 to the present has not been litigated and, therefore, must be remanded. But the only appropriate expenses are those incurred when the children were unemancipated minors. The parties' older child turned 18 on October 12, 1997, and the court adjudicated the younger child emancipated as of April 21, 2000.
IV.
Finally, appellant argues that the district court's findings are not supported by the record and are inadequate to sustain the order. Basically, appellant is rearguing that the evidence presented at the May 4, 2000 hearing proves that respondent made misrepresentations about her income at the February 1999 evidentiary hearing.
This court will not set aside a district court's findings of fact unless such findings are clearly erroneous. Minn.R.Civ.P. 52.01. Here, the court found that respondent's income in 1998 and 1999 did not exceed her imputed income and that the issue of the uninsured medical costs was or could have been litigated. As discussed above, the record supports the findings regarding respondent's income. Based upon all the files and records before the district court, we hold that the court made findings necessary to support the conclusions of law.