Opinion
No. C2-02-980.
Filed December 31, 2002.
Appeal from the District Court, Goodhue County, File No. F497209.
Mary A. Richardson, Richardson Law Office, (for respondent)
Thomas E. Gorman, Thomas E. Gorman Law Office, (for appellant)
Considered and decided by Toussaint, Chief Judge, Peterson, Judge, and Willis, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant Michael Dennis Anderson appeals from the district court's order modifying child support and spousal maintenance. Appellant argues that (1) the parties' marital termination agreement deprived the district court of jurisdiction to alter the maintenance award; (2) respondent failed to show that there was a substantial change in circumstances and that this change made the previous maintenance and support order unfair and unreasonable; and (3) the district court's findings regarding maintenance and child support were inadequate. Because the district court had jurisdiction to modify the maintenance award, but because it did not make all the required statutory findings for modifying spousal maintenance and child support, we affirm in part, reverse in part, and remand.
FACTS
Appellant Michael Dennis Anderson and respondent Rebecca Shear were married on November 9, 1974. During their marriage, they had six children, five of whom were minors at the time of their divorce in 1997. Currently, three of the children are minors.
The parties entered into a marital termination agreement (MTA) that was incorporated, by reference, into the judgment and decree. In the MTA, the parties stipulated to many issues, including spousal maintenance and child support payments and the manner in which they would be received and modified. Specifically, the parties agreed to joint legal and physical custody of the five minor children. Anderson's gross annual income was found to be $200,000, and he agreed to pay $500 per month in child support for each of the five minor children. Anderson also agreed to pay respondent $1,500 in spousal maintenance for one year and $800 per month until March 1, 2007. The MTA provided that "[s]hould Respondent suffer a reduction in income which is involuntary * * * he shall receive a corresponding reduction in child support and/or maintenance." It also included a provision, titled "Full and Final Settlement," which in part precluded either party from having "any further claims of any kind or character against the other party arising out of the marital relationship of the parties."
In 1999, Anderson moved the court to decrease his spousal maintenance and child support obligations because his income had decreased to $152,568. On September 14, 1999, the district court found that Anderson's income had decreased by 9%, and accordingly, decreased the spousal maintenance from $800 per month to $728 and the child support from $1,500 per month to $1,365.
On August 2, 1999, Shear brought a motion to move to Mondovi, Wisconsin with the three minor children because she had accepted employment in Mondovi and intended to begin classes at the University of Wisconsin-Eau Claire. In response, Anderson brought a motion to deny the move and asked for full custody of E.S., the oldest of the remaining three minor children. The district court granted Shear's motion to move, but gave Anderson custody of E.S.
On November 29, 2001, Shear brought a motion to increase spousal maintenance to $4,000 per month and to increase child support to comport with the child-support guidelines. An evidentiary hearing was held March 2002, and on April 19, 2002, the court issued an order granting respondent's motion. The court found that (1) Shear's yearly income was $5,000; (2) Shear's monthly expenses were $5,028.91; (3) Anderson's earnings have increased by 60%, from $152,563 to $244,450 per year; and (4) Shear "demonstrated that the substantial increase in [Anderson's] earnings make the current spousal maintenance amount of $782 per month unreasonable and unfair."
Anderson brought a motion for amended findings on May 15, 2002, but the motion was denied. This appeal follows.
DECISION I.
Jurisdiction to Modify Spousal Maintenance
Anderson claims that the parties' MTA deprived the district court of jurisdiction to modify the spousal maintenance award. Whether a district court has jurisdiction over a matter, is a question of law, which this court reviews de novo. McLain v. McLain, N.W.2d 219, 222 (Minn.App. 1997), review denied (Minn. Nov. 18, 1997).
When a stipulation fixing the respective rights and obligations of the parties is central to the original judgment and decree, the district court considering the spousal maintenance modification "should view [the original judgment and decree] as an important element because it represents the parties' voluntary acquiescence in an equitable settlement." Claybaugh v. Claybaugh, 312 N.W.2d 447, 449 (Minn. 1981). The existence of a stipulation, however, does not prevent a subsequent modification. Sand v. Sand, 379 N.W.2d 119, 125 (Minn.App. 1985), review denied (Minn. Jan. 31, 1986).
While that stipulation represents the parties' voluntary acquiescence in an equitable settlement, once it has been merged into the judgment and decree, it does not operate as a bar to later consideration of whether a change in circumstances warrants a modification. Instead, its relevance in a modification context is in the identification of the baseline circumstances against which claims of substantial change are evaluated.
Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997) (internal citations omitted). Absent language in the judgment and decree divesting the district court of jurisdiction, the court retains the authority to determine whether changed circumstances warrant modification. Kemp v. Kemp, 608 N.W.2d 916, 921 (Minn.App. 2000).
Anderson claims that the "Full and Final Settlement" provision of the MTA explicitly precludes the district court from modifying the spousal maintenance. We disagree. A court is precluded from modifying stipulated spousal maintenance only if there is "a contractual waiver and express language divesting the court of jurisdiction." Loo v. Loo, 520 N.W.2d 740, 745 n. 5 (Minn. 1994). The "Full and Final Settlement" provision of the MTA states:
It is a further agreed by the parties that the provisions in this marital termination agreement constitute the full and complete disposition and settlement of all questions and issues of property division and support (subject to further review of the Court upon changed circumstances of the parties and/or the minor child), attorney fees and costs existing between the parties. Except as set forth in this document, neither party shall have any further claims of any kind or character against the other party arising out of the marital relationship of the parties.
This provision contains no language divesting the court of jurisdiction to modify spousal maintenance. In fact, there is no language anywhere in the judgment and decree, or the MTA, which was incorporated into the judgment, divesting the court of its right to modify maintenance.
Anderson also argues that because the original draft of the MTA included a clause permitting either party to revisit the issue of maintenance, but the final draft does not, it can be inferred that the parties intended to deprive the court of jurisdiction to modify the maintenance award. This claim is without merit. Absent explicit language divesting the court of jurisdiction to modify spousal maintenance, this court will not infer that parties agreed to waive their right to future modification. See Loo, 520 N.W.2d at 745 (stating that "courts should not assume that parties specifically bargained to supplant the statutory modification procedure without a clear or express statement divesting the court of jurisdiction").
Because the district court is precluded from modifying a stipulation only where there is a contractual waiver and express language divesting the court of its jurisdiction to modify, and here, neither the judgment nor the MTA contains such language, the court did not abuse its discretion when it considered respondent's motion for modification.
II.
Spousal Maintenance
Anderson claims that the district court abused its discretion when it increased the spousal maintenance from $782 to $4,000. The district court has broad discretion in determining whether to modify a spousal maintenance award. Rutten v. Rutten , 347 N.W.2d 47, 50 (1984). Maintenance awards are not altered on appeal unless the district court abused its wide discretion. Prange v. Prange, 437 N.W.2d 69, 70 (Minn.App. 1989), review denied (Minn. May 12, 1989). However, "[e]ffective appellate review of the exercise of that discretion is possible only when the trial court has issued sufficiently detailed findings of fact to demonstrate its consideration of all [relevant] factors * * *." Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989). If the district court's findings are insufficient to determine whether it addressed the relevant factors, the matter should be reversed and remanded for further findings. Tuthill v. Tuthill, 399 N.W.2d 230, 232 (Minn.App. 1987).
A district court may modify spousal maintenance upon a showing of any of the factors listed in Minn. Stat. § 518.64, subd. 2(a) (2002). Minn. Stat. § 518.64, subd. 2(a) (2002). A party seeking modification of spousal maintenance has the burden of showing not only that a substantial change in circumstances occurred, but also that the substantial change made the previous spousal maintenance decree unreasonable and unfair. Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997). In determining whether appellant has met the burden of showing a substantial change in circumstances, the district court must consider, "in addition to all other relevant factors, the factors for an award of maintenance under section 518.552 that exist at the time of the motion." Minn. Stat. § 518.64, subd. 2(c).
Anderson claims that the district court erred in increasing the spousal maintenance because (1) it relied on the incorrect baseline income in determining whether there had been a substantial change in circumstances; (2) Shear failed to show that there was a substantial change in circumstances and that this change made the existing order unreasonable and unfair; and (3) the district court's findings were inadequate.
Anderson first argues that the district court used the wrong baseline income when determining whether there was a substantial change in circumstances. He argues that instead of finding that his baseline income was $152,563, the district court should have used his income at the time of the initial order, which was $200,000. We disagree. It is well established that when modifying child support, the court is to determine the baseline income by going back to when the obligation was set or last modified. Wiese v. Wiese, 295 N.W.2d 371, 372 (Minn. 1980); Blomgren v. Blomgren, 386 N.W.2d 378, 380 (Minn.App. 1986). Here, the order for spousal maintenance and child support was last modified in 1999, when Anderson's income was $152,563. Therefore, the district court did not err in using that figure as the base-line income.
Next, Anderson argues that the district court's findings were inadequate because they failed to address all the required statutory factors. In determining whether to modify spousal maintenance, the district court must consider the factors for an award of maintenance under section 518.552 that exist at the time of the motion. Minn. Stat. § 518.64, subd. 2(c). Among these factors is the ability of the spouse from whom maintenance is sought to meet his own needs while meeting those of the spouse seeking maintenance. Minn. Stat. § 518.552, subd. 2(g) (2000). Here, the district court failed to issue any findings regarding appellant's needs; therefore, this court cannot determine whether this factor was considered.
Because the district court did not consider all the required statutory factors before modifying spousal maintenance, we cannot adequately review whether the district court abused its discretion in modifying maintenance. Thus, we reverse and remand to the district court with instruction that it make findings as to all the required statutory findings and conduct any other proceedings it deems necessary, including consideration of additional testimony, as needed.
Further, because we reverse and remand on the grounds that the district court's findings were inadequate, we need not reach the issue of whether Shear showed a substantial change in circumstances that made the existing order unreasonable or unfair.
III.
Child Support Modification
Anderson claims that the district court abused its discretion in modifying his monthly child support from $1,365 to $1,888. This court will reverse a district court's order regarding the modification of child support "only if we are convinced that the court abused its broad discretion" by reaching a "clearly erroneous conclusion that is against the logic and the facts on [the] record." Gully v. Gully, 599 N.W.2d 814, 820 (Minn. 1999) (alteration in original) (quotation omitted).
The burden rests with the party seeking modification to (1) demonstrate that a substantial change in circumstances has occurred; and (2) show that the substantial change renders the original award unreasonable and unfair. Williams v. Williams, 635 N.W.2d 99, 104 (Minn.App. 2001).
Anderson argues that the district court failed to make the required statutory findings in modifying child support. We agree. When determining whether to modify child support, the court shall consider the following factors among others: (1) the parties' incomes; (2) the children's financial and educational needs and physical and emotional health; (3) the standard of living the children would have enjoyed had the parties not divorced; (4) which party receives the income-tax dependency exemption and the resulting financial benefit to that party; and (5) the parties' debts. Minn. Stat. § 518.551, subd. 5(c) (2002); see also Minn. Stat. § 518.64, subd. 2(c)(1) (2002) (on a motion to modify support, court shall apply Minn. Stat. § 518.51, subd. 5).
The district court must note the required statutory factors in its findings of fact, and it is insufficient to merely state that the record contains such evidence. Erickson v. Erickson, 385 N.W.2d 301, 303 (Minn. 1986). The issuance of "particularized findings * * * offers children and both parents the benefit of a careful, complete judicial analysis of support obligation." Bormann v. Bormann, 644 N.W.2d 478, 482 (Minn.App. 2002) (quotation omitted). Absent such finding, this court cannot effectively review the order. Id. (stating that the issuance of particularized findings ensures effective appellate review); Martin v. Martin, 382 N.W.2d 920, 922 (Minn.App. 1986) (explaining that the district court's failure to make findings on the present net income of the parties and the needs of the children precludes proper review of a motion to modify support).
Here, the only finding the district court made in calculating an increase in child support was the following:
Respondent's earning have substantially increased from $152,563 to $244,450 per [year]. Given this sixty-percent (60%) increase in income, it is unreasonable and unfair to maintain child support at the reduced amount of $1365 per month.
While the district court made a finding regarding Anderson's increased income when deciding whether to modify the child support, it did not make a similar finding regarding Shear's income or resources in the context of the child support motion. The court also made no finding regarding the children's needs or resources.
Anderson, however, claims that the district court was not required to make a finding regarding the needs of the children because the increase in his income was such that it is presumed that the existing child support order was unreasonable and unfair. Where the moving party shows that a change in earnings would result in a new order that is at least 20% and $50 per month higher or lower than the current order, it is presumed that the existing child support is "unreasonable and unfair." Minn. Stat. § 518.64, subd. 2(b)(1). When this rebuttable presumption is established, "the court is not required to make findings regarding the child's needs unless the party who requests departure from guideline support seeks a departure based upon the child's needs." Rouland v. Thorson, 542 N.W.2d 681, 682 (Minn.App. 1996).
When determining whether the facts create a rebuttable presumption, the district court must rely on the net income of the obligor. See Minn. Stat. § 518.551, subd. 5(b) (stating that child support shall be derived "by multiplying the obligor's net income by the percentage indicated by the guidelines"). Minn. Stat. § 518.64, subd. 2(b)(1) (2000) (stating that in determining the existence of a rebuttable presumption, the child support guidelines of section 518.551, subdivision 5, must be applied). Here, however, the court did not make a finding regarding Anderson's net income, and in fact, never considered the possible existence of the rebuttable presumption. Thus, we cannot reach this issue on appeal . See In re Welfare of M.D.O., 462 N.W.2d 370, 374-75 (Minn. 1990) (stating that the role of the court of appeals is to correct errors, not to make findings of fact).
Because the district court's determination regarding child support is lacking necessary findings, we reverse and remand. On remand, the district court must first make a finding regarding Anderson's net income in order to determine if there is a rebuttable presumption that his increase in income makes the current child support obligation unfair and unreasonable. If the court concludes that there is no rebuttable presumption, then it must make findings regarding the children's needs and resources before determining whether to modify child support. As to the issue of spousal maintenance, the district court may conduct any proceedings it deems necessary, including the consideration of additional testimony.