Opinion
No. A05-1917.
Filed June 20, 2006.
Appeal from the District Court, Ramsey County, File No. F5-94-1621.
Kevin J. McGrath, Kelly M. McSweeney, Jensen, McGrath, Mullen McSweeney, P.L.L.P., (for respondent)
Carol Grant, Kurzman, Grant Ojala, (for appellant)
Considered and decided by Kalitowski, Presiding Judge; Hudson, Judge; and Worke, 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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION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 Bruce A. Matey challenges a district court order that retroactively modified his child support obligation. Appellant argues that the district court (1) erred in considering appellant's pension as income for child support purposes; (2) abused its discretion by modifying appellant's child support obligation; (3) abused its discretion in setting the effective date of modification; (4) abused its discretion by refusing to deviate downward from the child support guidelines; (5) abused its discretion by failing to forgive child support arrearages; and (6) erred by failing to conclude that the doctrine of laches bars respondent's claim for child support modification. We affirm all issues except that we reverse and remand the issue of the effective date of the child support modification.
DECISION
On appeal from judgment where there has been no motion for new trial, "the only questions for review are whether the evidence sustains the findings of fact and whether such findings sustain the conclusions of law and judgment." Erickson v. Erickson, 434 N.W.2d 284, 286 (Minn.App. 1989). An appellate court will set aside a district court's factual findings only if they are clearly erroneous. McCulloch v. McCulloch, 435 N.W.2d 564, 566 (Minn.App. 1989).
I.
The designation of a particular source of funds as income for child support purposes is a question of law to be reviewed de novo. Sherburne County Soc. Servs. v. Riedle, 481 N.W.2d 111, 112 (Minn.App. 1992).
Here, appellant argues that the district court erred in considering his pension payments as income when calculating child support because the original divorce decree states that the parties retain all right, title, and interest in their respective pension plans. Thus, appellant contends that the court cannot consider appellant's pension both as property for property division purposes and also as income for child support purposes. We disagree.
When setting child support, Minnesota statutes imply an overlap between the categories of marital property and income. Walswick-Boutwell v. Boutwell, 663 N.W.2d 20, 23-24 (Minn.App. 2003). Statutory definitions of marital property and income both include pension plan benefits. Minn. Stat. § 518.54, subd. 5, 6 (2004); Walswick-Boutwell, 663 N.W.2d at 23. Thus, although pension plan benefits are marital property, they are also income or a resource that courts consider in setting child support. See Minn. Stat. § 518.551, subd. 5(c)(1) (2004) (stating that the court shall consider the parents' income when setting or modifying child support).
Furthermore, Minnesota courts have recognized that they may consider property settlement payments when determining child support payments. See, e.g., Tell v. Tell, 383 N.W.2d 678, 685-86 (Minn. 1986) (stating that periodic property settlement payments pursuant to a dissolution decree are properly considered financial resources available in determining child support). And in Swanson v. Swanson, 583 N.W.2d 15, 18 (Minn.App. 1998), review denied (Minn. Oct. 20, 1998), this court determined that the respondent's monthly disability benefits were marital property, directed the district court to divide the benefits between the parties, and ordered the district court to consider respondent's share of the disability benefit when determining his child support obligations. Similarly, in Walswick-Boutwell, this court concluded that the district court did not abuse its discretion by treating part of a disability annuity as marital property and treating the remaining part as income for child support purposes. 663 N.W.2d at 24. The district court had ordered the appellant to pay child support based on his net monthly income, which included his disability benefits and retirement pension, minus the monthly marital property payment from his disability benefits to the respondent. Id. at 22.
Because courts may consider periodic marital property payments when calculating child support, we conclude that the district court did not err by considering appellant's pension as income for child support purposes.
II.
Appellant argues that the district court abused its discretion by modifying his child support obligation. We disagree.
The district court has broad discretion to modify child support. Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002). This court "will reverse a district court's order regarding child support only if . . . the district court abused its broad discretion by reaching a clearly erroneous conclusion that is against logic and the facts on record." Id.
The district court may modify a child support order if the moving party shows (1) a substantial change in circumstances; and (2) that the change makes the existing award unreasonable and unfair. O'Donnell v. O'Donnell, 678 N.W.2d 471, 475 (Minn.App. 2004). A change of circumstances includes, but is not limited to a substantial increase or decrease in a party's earnings or need, or a substantial increase or decrease in existing work-related or education-related child-care expenses. Minn. Stat. § 518.64, subd. 2(a) (2004).
Minnesota law presumes a substantial change in circumstances and rebuttably presumes that an existing support order is unreasonable and unfair if "application of the child support guidelines . . ., to the current circumstances of the parties results in a calculated court order that is at least 20 percent and at least $50 per month higher or lower than the current support order." Minn. Stat. § 518.64, subd. 2(b)(1) (2004). To calculate a specific dollar amount for child support, the court shall multiply the obligor's net income by the percentage indicated in the child support guidelines. Minn. Stat. § 518.551, subd. 5(b) (2004).
Here, the district court awarded respondent a retroactive increase in child support payments after concluding that appellant's income significantly increased in 2000 when he began to collect on his pension, and that the increase resulted in "a substantial change in circumstances which makes the original Order unreasonable and unfair." Before appellant began collecting pension payments, appellant was paying $518 a month in child support. Once appellant began collecting pension payments, appellant's net annual income increased to over $54,000. Based on that increase, the child support guidelines indicate that appellant's child support payments would be over $1,100, which is more than 20% and at least $50 per month higher than $518. See Minn. Stat. § 518.551, subd. 5(b) (stating that when the obligor's net monthly income is $1,001 to $5,000, the appropriate child support payment for one child is 25% of the obligor's net income). The court therefore correctly determined that Minnesota law presumes a substantial change in circumstances and rebuttably presumes that the terms of the existing order are unreasonable and unfair. See Minn. Stat. § 518.64, subd. 2(b)(1). Thus, we conclude that the district court did not abuse its discretion in ordering modification of appellant's child support obligation.
III.
Appellant asserts that the district court abused its discretion by awarding an increase in child support retroactive from October 2000 through June 2003. We agree.
District courts have discretion to set the effective date of a support modification. See Kemp v. Kemp, 608 N.W.2d 916, 920 (Minn.App. 2000) (determining that abuse of discretion standard applies under Minn. Stat. § 518.64, subd. 2(d), which controls modification of support and maintenance obligations). "[M]odification of support is generally retroactive to the date the moving party served notice of the motion on the responding party." Bormann v. Bormann, 644 N.W.2d 478, 482 (Minn.App. 2002); see also Minn. Stat. § 518.64, subd. 2(d) (2004) (stating that modification of support "may be made retroactive only with respect to any period during which the petitioning party has pending a motion for modification but only from the date of service of notice of the motion"). But the district court may apply modification to an earlier period under the circumstances listed in Minn. Stat. § 518.64, subd. 2(d)(1).
Here, the district court granted respondent a retroactive increase in child support for October 2000 through June 2003 after determining that respondent brought her action to modify child support on October 11, 2002. The court concluded that under Minn. Stat. § 256.87, subd. 5 (2000), retroactive child support should apply for the two years immediately preceding the commencement of the child support action. But Minn. Stat. § 256.87, subd. 5, does not apply to cases involving a motion to modify a child support order. See State ex rel. Hendrickson v. Hendrickson, 403 N.W.2d 872, 874 (Minn.App. 1987) (stating that "[s]ection 256.87 has been identified as a cause of action totally separate from child support orders . . ., and it is not a modification of a child support award under § 518").
The district court should have applied Minn. Stat. § 518.64, subd. 2(d), when determining whether respondent was entitled to a retroactive increase in child support payments. Under that statute, the district court may apply modification to a period before the motion for modification was filed if the party seeking modification was unable to serve the motion because of "a material misrepresentation of another party." Minn. Stat. § 518.64, subd. 2(d)(1). Misrepresentation involves concealing or not disclosing facts that one has a duty to disclose. See Johnson v. Johnson, 533 N.W.2d 859, 866 (Minn.App. 1995). A party materially misrepresents financial information when a court orders disclosure and the party fails to comply. Id.
Here, the original divorce decree did not order appellant to continually disclose his financial information. Thus, appellant did not initially have a duty to disclose changes in his financial situation. But on December 24, 2002, the parties filed a stipulation and order whereby appellant agreed to provide his financial information to respondent. The stipulation, which was approved by the court, did not provide a deadline for appellant to disclose the information. When appellant did not provide his financial information by June 2, 2003, the district court ordered appellant to bring his financial information to a hearing on June 18, 2003. The record shows that appellant eventually produced his tax returns on September 18, 2003.
Because the December 24, 2002 stipulation and order did not specify when appellant had a duty to disclose his information, we conclude that appellant had a duty to perform within a reasonable period after December 24, 2002. Cf. State ex rel. Laurisch v. Pohl, 214 Minn. 221, 228, 8 N.W.2d 227, 231 (1943) (determining that when a statute requires a public officer to perform a duty but does not set a time for performance, the duty must be performed within a reasonable time); Tingue v. Patch, 93 Minn. 437, 441, 101 N.W. 792, 794 (1904) (stating that where a contract is silent as to time of performance, performance must generally occur within a reasonable time after the parties enter into the contract). And we further conclude that appellant breached his duty if he did not provide his financial information within that period. We therefore reverse and remand to the district court for findings regarding what constitutes a reasonable period and when appellant breached his duty to disclose his financial information. The district court may then order a retroactive increase in child support payments from the date that appellant breached his duty to disclose until the date that the parties' youngest child was emancipated.
IV.
Appellant argues that the district court abused its discretion by not making any findings regarding appellant's request for a downward departure from the child support guidelines. We disagree.
The child support guidelines provide a rebuttable presumption for the district court to use when establishing or modifying child support. Minn. Stat. § 518.551, subd. 5(i) (2004). But a district court has discretion to apply or deviate from the child support guidelines. See State ex rel. Rimolde v. Tinker, 601 N.W.2d 468, 471-72 (Minn.App. 1999) (applying abuse of discretion standard).
If the court deviates from the guidelines, the court shall make written findings of the amount of support calculated, the reasons for the deviation, and how the deviation serves the best interests of the child. Id. The court shall also address criteria listed in Minn. Stat. § 518.551, subd. 5(c). Minn. Stat. § 518.551, subd. 5(i).
If the court follows the guidelines, the court does not need to make written findings explaining its refusal to deviate. Id.; Rimolde, 601 N.W.2d at 471. Instead, the court shall make written findings regarding the amount of the obligor's income and any other significant factors affecting the child support determination. Minn. Stat. § 518.551, subd. 5(i). But where the obligor submits evidence to show his inability to pay, the district court must make findings to show that it has considered whether deviation is necessary. County of Anoka ex rel. Hassan v. Roba, 690 N.W.2d 322, 325 (Minn.App. 2004) (remanding for additional findings on the obligor's ability to pay where the difference between the obligor's income and necessary monthly expenses was substantially less than the amounts the child support magistrate ordered her to pay).
Here, appellant has not shown that he is unable to make child support payments. In his December 21, 2004 affidavit, appellant asserted that he had $3,111 in monthly expenses and that his net pension income was only $2,531. But the district court found that appellant's net monthly income in 2002 was $4,545. Thus, appellant's net income exceeded his monthly expenses, and appellant has not shown an inability to pay child support. We therefore conclude that the district court did not abuse its discretion by following the child support guidelines without making findings regarding its refusal to deviate.
V.
The district court has broad discretion in deciding whether to forgive child support arrearages and "will not be reversed but for an abuse of discretion in the sense that the order is arbitrary or unreasonable or without evidentiary support." Stangel v. Stangel, 366 N.W.2d 747, 749 (Minn.App. 1985) (quotation omitted).
Here, appellant argues that because he has already spent his money and his children are now adults, the district court abused its discretion by not forgiving any of his child support arrearages. But the district court did not address appellant's motion for forgiveness of child support arrearages in the court's July 2005 order. Because this court generally does not review matters that the district court did not consider and decide, we decline to review the arrearages issue here. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).
VI.
Finally, appellant argues that the doctrine of laches precludes respondent's claim for child support modification. We disagree.
Laches is a question to be determined in the discretion of the district court, dependent upon particular facts. Elsen v. State Farmers Mut. Ins. Co., 219 Minn. 315, 321, 17 N.W.2d 652, 656 (1945). The doctrine of laches "provides that, when one sits on one's rights for too long a time, that person's claim should be estopped from continuing because it would be inequitable to require the defendant to fight the suit." Gully v. Gully, 599 N.W.2d 814, 825 (Minn. 1999).
Here, appellant did not have a duty to disclose his financial information prior to December 24, 2002. And respondent requested a retroactive increase in child support on October 2, 2003, only two weeks after appellant finally disclosed the financial information to her. Thus, we conclude that the doctrine of laches does not bar respondent's claim.