Opinion
No. A05-1722.
Filed July 11, 2006.
Appeal from the District Court, Hennepin County, File No. Dc 245334.
Geraldine C. Steen, Elizabeth B. Niemioja, Beckman Steen, (for respondent)
Richard S. Eskola, (for appellant)
Considered and decided by Toussaint, Chief Judge; Dietzen, Judge; and Ross, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
Appellant John Russell Bunce challenges the district court's orders following remand of this child-support dispute. Because we see no abuse of discretion in the orders relating to child support and sequestered property and the record supports the award of attorney fees, we affirm.
DECISION
1. Retroactive child support obligation
When their marriage was dissolved in 2000, appellant and respondent Kim Marie Bunce had two minor sons, N., born in 1984, and K., born in 1986. The judgment awarded respondent custody of both sons and ordered appellant to pay $416 monthly in child support.
In December 2000, N. moved in with appellant and remained with him until N.'s emancipation in June 2003. Appellant moved to modify custody of N. in May 2001; N.'s custody was changed in September 2002.
In November 2002, respondent was ordered to pay retroactive child support for N. beginning in June 2001, the first month after appellant moved for the change in custody. Respondent challenged the June 2001 date, and the district court modified its order to begin her retroactive child support obligation in October 2002, the first month after the change of custody, on the ground that, although N. was living with appellant, respondent was paying many of his expenses. The financial consequence was to reduce respondent's retroactive child support obligation by about $8,000.
Appellant challenged that decision. Bunce v. Bunce, No. A03-1030, 2004 WL 948395, at * 3 (Minn.App. May 4, 2004). This court reversed and remanded after concluding that the district court erred in denying appellant retroactive child support because respondent provided some of N.'s "general expenses" and because appellant had been N.'s primary source of support while N. lived with him from December 2000 until appellant moved for a change of custody in May 2001.
On remand, the district court ordered an evidentiary hearing where both parties could produce affidavits and documentation of and testify to the amounts they actually paid for N.'s support after June 1, 2001, and where N., then 20, could also testify. Following that hearing, the district court ordered that, "Commencing June 1, 2001, and continuing through June 2003, when [N.] was emancipated, the parties' child support obligations to each other [i.e., respondent's obligation for N. and appellant's obligation for K.] are satisfied as mutually offsetting."
The order was based on the district court's 86 comprehensive findings. These included findings that (1) appellant's income was insufficient even to meet appellant's own claimed needs so that it was reasonable to believe respondent's contention that she provided for N.'s needs, (2) appellant claimed he earns $8,000 to $8,500 per year but respondent, who did the parties' taxes, reported that during the marriage he earned $20,000 to $24,000 per year, so appellant "was and continues to be voluntarily underemployed," (3) appellant "originally failed to disclose that he had a second part-time job" but disclosed this at the hearing, although he could not say what he earned from the job, (4) appellant had submitted a budget stating that he paid $300 monthly in rent, but testified at the hearing that he paid no rent; (5) respondent had contributed $4,476 to N.'s support while appellant had contributed $3,310, and "[respondent] furnished well over half of the support for [N.] even after [N.] began to live with [appellant]"; (6) "[N.] was working and paying many of his own expenses during approximately half the time he lived with [appellant]"; and (7) it would be inequitable "to reward [appellant] based on only the income that he chose to disclose" or "to reward [appellant] with a straight guideline, split custody, retroactive award when he has chosen to maintain such modest employment." The district court noted that imposing a retroactive child-support obligation on respondent "would likely cause substantial financial hardship for [her] and would serve no useful purpose for [N.] and would serve only to enrich [appellant], and not to compensate him for child support expenses that he actually incurred."
Appellant claims that the district court abused its discretion in not requiring respondent to pay retroactive child support from June 2001 to October 2002. A district court has broad discretion to modify child support retroactively. Guyer v. Guyer, 587 N.W.2d 856, 859 (Minn.App. 1999), review denied (Minn. Mar. 30, 1999); see also Minn. Stat. § 518.64, subd. 2(d) (2004) ("modification of support . . . may be made retroactive") (emphasis added). A district court's decision "will be reversed only if it abuses that discretion by resolving the question in a manner that is against logic and the facts in the record." Bormann v. Bormann, 644 N.W.2d 478, 481 (Minn.App. 2002).
The district court's decision is not against logic or the facts in the record. Particularly in light of appellant's repeated failure to make full financial disclosure to the court, using actual expenditures as a basis for deciding whether he is entitled to retroactive child support is not against logic. The district court's finding that, while N. lived with appellant, respondent paid over half of N.'s expenses, is not against the facts in the record: it is supported by the record.
Appellant's reliance on Tuma v. Tuma, 389 N.W.2d 529, 531 (Minn.App. 1986), for the proposition that contributions to a child's activities and household expenses do not satisfy a child-support obligation is misplaced. Tuma concerned a challenge to an existing support obligation made by an obligor who made "monetary contributions to the child's activities." Id. at 531. For the time at issue here, from June 2001 until October 2002, when N. lived with appellant and respondent provided over half of his support, respondent had no child-support obligation. Thus, the issue here is not whether her contributions to N. relieved her of an existing child-support obligation, in opposition to Tuma; the issue is whether her contributions to N. were relevant to the setting of retroactive child support.
2. Authority to amend child-support award
Appellant argues that, because the district court had already awarded retroactive child support from October 2002 to June 2003 and this award was not challenged in the prior appeal, the district court lacked authority to alter it on remand. But when this court "require[s] the trial court to recalculate child support, the trial court has the authority on remand, pursuant to Minn. Stat. § 518.552, subd. 2(a), to review the overall package of support and maintenance." Driscoll v. Driscoll, 414 N.W.2d 441, 446 (Minn.App. 1987). Moreover, this court remanded "for an equitable determination with respect to respondent's retroactive child support obligation." Bunce, 2004 WL 948395, at * 4. It did not restrict the district court to considering only the commencement date of that obligation. New evidence was produced at the hearing on remand. Appellant presents no support for his implied argument that the district court was obliged to ignore that evidence in making "an equitable determination with respect to respondent's retroactive child support obligation."
The amount at issue is $4,497.57.
3. Medical Insurance
Appellant argues that the district court lacked authority to require him to pay half of K.'s medical insurance ($30.75 monthly) because the original judgment required respondent to pay it and she did not move to amend that requirement. The district court concluded that "when child support is reconsidered, all of the financial aspects of the package ought to be eligible for reconsideration as part of the substantial change of circumstances." See also id. (noting that, on remand of child support decision, district court has authority to consider "the overall package").
Appellant offers no legal support for his view that the district court was not entitled to reconsider "all the financial aspects of the package" when it reconsidered the matter on remand. Moreover, equity does not support appellant's view. The judgment provided that he would pay $416 in child support; appellant testified that he chose instead to pay $114. Requiring respondent to comply with the judgment when appellant failed to meet its terms would be inequitable.
4. Sequestration
A district court has discretion to sequester the parties' funds. Peterson v. Peterson, 304 Minn. 578, 580-81, 231 N.W.2d 85, 87 (1975). Appellant's funds were sequestered because of his child support arrearages. See Minn. Stat. § 518.24 (2004) (permitting sequestration for failure to pay child support). This court instructed the district court on remand "to consider what is a fair amount, if any, to sequester for the protection of appellant's child support obligation. . . ." Bunce, 2004 WL 948395, at * 9.
In its June 29, 2005 amended order, the district court found that $9,424.67 of appellant's funds had been sequestered, that his child-support arrearages totaled $4,105.20, and that, if K. were emancipated in June 2005 and appellant's child-support obligation had no further increase, appellant would be owed $5,409.47. This amount was reduced by the cost of K.'s medical insurance, $30.75 per month for 23 months or $707.25, to $4,702.22. The district court ordered respondent to pay appellant that amount within 30 days of K.'s emancipation.
K. was expected to graduate from high school in June 2005. While the record does not reveal for certain that he did graduate, we note that he will turn 20 on June 26, 2006. For purposes of child support, a child is "under 18 years of age, . . . under age 20 . . . [and] still attending secondary school, or . . . is incapable of self-support." Minn. Stat. § 518.54, subd.2 (2004).
Appellant does not deny that he owes child-support arrearages. The district court's denial of appellant's motion to release the sequestered funds before K.'s emancipation was not an abuse of discretion.
5. Attorney Fees
The district court awarded respondent 25% of her attorney fees incurred after October 2002, or $2,228.56, noting that the fees "are in the nature of conduct-based fees, not need-based fees." Three alternative bases were provided for the award: Minn. Stat. § 518.14, subd. 1 (2004), Minn. R. Civ. P. 11, and Minn. Stat. § 549.211 (2004). Because the award was identified as conduct-based and this is a child-support matter, the award is most appropriately considered under Minn. Stat. § 518.14, subd. 1, providing that a court may award attorney fees "against a party who unreasonably contributes to the length or expense of the proceeding." Such an award rests almost entirely within the discretion of the trial court and will not be reversed without a clear abuse of that discretion. Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn.App. 1998), review denied (Minn. Feb. 18, 1999).
Minn. Stat. § 518.14, subd. 1, provides that a court may award, "in its discretion, additional fees, costs, and disbursements against a party who unreasonably contributes to the length or expense of the proceeding." The district court found that "[appellant's] misrepresentations have played a part in the determinations made by the Courts to the prejudice of [respondent] and have unnecessarily contributed to the length and expense of those proceedings" and noted in a footnote that this court
might not have concluded that [appellant] was `basically the primary support' for [N.] if it had known that [appellant] paid no housing costs. Furthermore, his income would have been greater and his child support obligation would be higher. In addition, the expense numbers involved in the equitable analysis would have changed.
Appellant raises several arguments in opposition to the award of attorney fees. None of these arguments has merit. Most significantly, we see no merit to appellant's claim that the district court was biased against him. As evidence of bias, he offers the matters already raised as issues in this appeal and the district court's questioning of witnesses at about 30 points in the transcript. A reading of the entire transcript indicates that the district court was diligent in its efforts to clarify and understand all the testimony offered by both parties and by their son, regardless of whose position the testimony favored. Appellant objects particularly to the district court's "three plus page cross-examination of the minor child involving his father's extra, part-time, supplemental employment." The "minor child" was the parties' son N., then age 20. Both the existence of appellant's second job, done while N. was living with him, and appellant's failure to disclose that job had just been revealed. The district court's effort to learn all it could from N. about appellant's second job was not evidence of bias against appellant.
Appellant also argues that, because respondent did not move for attorney fees until May 2005, she should not have been allowed to move for them. But appellant offers no support for his view that a motion for attorney fees must be made at any particular point in litigation, and the misrepresentations that were the basis for the award did not come to light until appellant testified at the December 2004 hearing, just months before respondent first sought attorney fees.
Appellant claims that attorney fees were inappropriate because the district court's June 2005 order amending its April 2005 order in appellant's favor showed that appellant's motion for a new trial or amended findings was partially justified. But the district court explained that attorney fees were awarded because of appellant's previous misrepresentations to the court, not because he moved for a new trial or amended findings.
Appellant attempts a "tu quoque" argument when he relies on the district court's May 2003 finding that respondent had "no reasonable basis . . . to have believed that the change of custody was unnecessary." But, as the district court noted in refuting this argument, "[T]here is still a qualitative difference between [respondent's] hope for that result [i.e., that she and N. would reconcile and he would return to her home] and [appellant's] intentional misrepresentations." Appellant relies on Minn. Stat. § 518.551, subd. 5(b)(2) (2004), providing that net income does not include "compensation received . . . for employment in excess of a 40-hour work week[,]" to argue that his undisclosed income from a part-time job was not an issue and should not have been considered in awarding attorney fees. But the district court noted that appellant failed to meet his obligation to disclose this income and the reasons why it was excluded from the child support calculation.
Finally, appellant argues that the amount of the attorney-fee award is "purely speculative." The district court found that it was not reasonable to expect respondent to differentiate fees incurred because of appellant's financial misrepresentations from fees otherwise incurred, but concluded that appellant should not benefit from this fact.
We see no abuse of discretion in the district court's decision to award respondent 25% of the attorney fees incurred after appellant made misrepresentations to the district court.