Opinion
No. C1-02-1375.
Filed April 15, 2003.
Appeal from the District Court, Washington County, File No. F5012126.
Steven A. Sicheneder, Sicheneder Law Office, (for appellant)
Suzanne M. Remington, Hellmuth Johnson, PLLC, (for respondent)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant argues that the district court abused its discretion by (1) ordering appellant to pay $1,250 a month in permanent spousal maintenance, (2) assigning $41,415 in marital debt to appellant, and (3) awarding respondent $5,000 in attorney fees based on appellant's misconduct during the litigation. We affirm.
FACTS
Appellant Terrence David Carlson and respondent Jane Catherine Carlson were married on May 20, 1978, and have three children, two of whom are emancipated.
Both parties worked during the marriage, although respondent did take some time off from work in order to care for the parties' children. Respondent currently works at HealthEast as a secretary and surgery scheduler, and her gross monthly income is $2,520. Appellant is currently employed by W.T. Carlson Manufacturing Company, Inc. Appellant was president of the company until 1999 when he sold his one-half interest to his brother. While president, appellant had a gross monthly income of approximately $7,000. Appellant's current gross monthly income is $5,000.
On June 28, 2000, the parties separated, and on March 29, 2001, appellant served respondent with a summons and petition for dissolution of marriage.
The parties were able to settle some of the issues in a partial marital termination agreement. In that agreement, signed on August 29, 2001, the parties agreed to joint legal and physical custody of the children.
The parties could not agree on the issues of spousal maintenance and the division of marital debt, and those issues were heard before the district court on March 12 and March 22, 2002. On June 3 the district court issued its amended findings of fact and conclusions of law (1) ordering appellant to pay $1,250 a month in permanent spousal maintenance, (2) assigning approximately $40,000 of marital debt to appellant, (3) assigning approximately $7,000 of marital debt to respondent, and (4) awarding respondent $5,000 in attorney fees for appellant's misconduct during the litigation. This appeal followed.
DECISION I.
The standard of review of a district court's award of spousal maintenance is abuse of discretion. Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989). A district court abuses its broad discretion with respect to an award of spousal maintenance if its factual findings are "against logic and the facts on [the] record." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984) (citation omitted). "Findings of fact concerning spousal maintenance must be upheld unless they are clearly erroneous." Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn.App. 1992) (citation omitted).
A district court may award maintenance if it finds that the party seeking maintenance lacks sufficient property or that party is not able to provide adequate support. Minn. Stat. § 518.552, subd. 1 (2002). In determining whether a maintenance award is appropriate, the court considers several factors, including (1) the financial resources of the spouse seeking maintenance; (2) the probability that the spouse will be able to become fully or partially self-supporting, given the party's age and skills; (3) the standard of living established during the marriage; (4) the duration of the marriage; (5) the loss of earnings by the spouse seeking maintenance; (6) the age, physical and emotional condition of the spouse seeking maintenance; (7) the ability of the spouse not seeking maintenance to meet needs while supporting the spouse seeking maintenance; and (8) the contribution of each spouse in the acquisition of marital property, as well as the contribution of a spouse as a homemaker. Minn. Stat. § 518.552, subd. 2 (2002).
Although there are eight statutory factors listed in Minn. Stat. § 518.552, subd. 2, "the issue is basically the financial needs of [respondent] and her ability to meet those needs balanced against the financial condition of [appellant]." Bourassa v. Bourassa, 481 N.W.2d 113, 115 (Minn.App. 1992) (quotation omitted). Appellant contends that he does not have the ability to pay spousal maintenance to respondent in the amount of $1,250 a month. See Minn. Stat. § 518.552, subd. 2(g). We disagree.
Without the maintenance, respondent's own financial resources are insufficient to meet her monthly expenses. Appellant does not dispute the district court's finding that respondent's gross monthly income is $2,520 and that her claimed monthly living expense is $3,621. Despite appellant's monthly contribution of $192 for child support, respondent requires spousal maintenance in order to meet her monthly expenses. See Minn. Stat. § 518.552, subd. 2(a), (c).
Appellant's gross monthly income is $5,000 per month, and his claimed monthly living expenses total $4,720.63. Based on these figures, appellant argues that he cannot afford to pay another expense of $1,250 a month in spousal maintenance. But appellant testified on cross-examination that he either does not pay or is under no obligation to pay many of his claimed monthly expenses. He lives in his parents' home and has made no utility payments. Additionally, the parties' oldest daughter is a student at the University of Minnesota and, with no obligation to do so, appellant pays her cellular phone bill of $50 per month, her car loan payment of $414 per month, and her gas and other car expense payments of $150 per month. Furthermore, appellant listed a $167 per month car payment for the parties' son, but appellant admitted that he has yet to make such a car payment. Appellant also admitted that he has not written a check to pay for his life insurance even though he listed that as an expense of $184.63 a month. Additionally, appellant listed monthly car insurance payments of $198 for the two oldest children, but has not made such payments since the parties separated. Finally, appellant listed monthly gas and other car expenses of $300 even though his employer pays for his car insurance, gas, oil changes, and repairs.
Although the district court failed to make an explicit finding of appellant's reasonable monthly expenses, implicit in the decision is a finding that appellant's claimed expenses were not reasonable. By his own admissions, appellant either does not pay or is under no obligation to pay $1,903.63 of his claimed monthly expenses so there is evidence in the record to support the district court's implicit finding. Admittedly, the district court could have gone into more detail concerning appellant's ability to pay spousal maintenance, but based on the record, we find without difficulty the factual basis for the district court's conclusions and order. Subtracting $1,903.63 from appellant's claimed monthly living expenses, shows he is capable of paying $1,250 per month in spousal maintenance.
II.
The apportionment of marital debt by the district court "is treated as a property division and reviewed under an abuse of discretion standard." Berenberg v. Berenberg, 474 N.W.2d 843, 848 (Minn.App. 1991) (citation omitted), review denied (Nov. 13, 1991). The district court is not required to apportion debt, "but is only required to meet the just and equitable standard of property divisions." Id. (citation omitted).
The district court ordered that respondent be responsible for the debts accumulated on the parties' Capital One, Visa, Target, and joint Target/Dayton's accounts, and the overdraft from the joint Wells Fargo Bank account, totaling $7,834. The district court ordered that appellant be responsible for the accumulated debts on the parties' U.S. Bank Visa gold card, the U.S. Bank line of credit account, the Citibank Preferred Visa card, the Discover card, and the Discover platinum gold card. The district court found that at the time of the parties' separation, the debts on these accounts totaled $7,463.
The district court properly assigned the U.S. Bank, Citibank, and Discover accounts to appellant. The testimony at trial revealed that since the parties separated, respondent did not use any of those credit cards or incur any debt on the U.S. Bank line of credit. At trial, appellant admitted that all of those accounts were personal accounts and that he was responsible for the balances.
But appellant disputes the district court's finding that during the period leading up to the date of trial, the debts on appellant's accounts rose to $41,415. Appellant also argues that there is no factual basis for the court's finding that he dissipated a $35,000 note owed by the W.T. Carlson Company. Because appellant believes that these findings are erroneous, he contends that the district court abused its discretion in assigning him $41,415 in marital debt.
Evidence presented at trial supports the district court's findings. The court assigned credit card debts listed in Exhibits 5 and 15 to appellant. An examination of those exhibits shows that in June 2000, when the parties separated, the amount of debt accumulated on appellant's five accounts totaled approximately $7,000. The exhibits also indicate that during the time leading up to trial, the amount of debt on those cards increased to over $40,000. Therefore, the record supports the district court's findings in regard to the amount of debt accumulated on those accounts both at the time of the parties' separation and at the time leading up to trial.
Moreover, a court may adjust the valuation of an asset as necessary to effect an equitable distribution "[i]f there is a substantial change in value of an asset between the date of valuation and the final distribution * * *." Minn. Stat. § 518.58, subd. 1 (2002). Here the court adjusted the value of appellant's debt because the debt increased dramatically after the parties separated and also because appellant had sole control over the debt accumulation during that time.
In addition, the record supports the district court's finding that respondent did not receive her share of the amount owed by the W.T. Carlson Company to both her and appellant. Appellant testified that while he was president of the company, he loaned W.T. Carlson $35,000 in August 1995, together with an 8% interest rate compounded annually. That loan was made with marital assets. On January 31, 1998, W.T. Carlson made a cash payment to appellant of $7,287.11. But that was the only cash payment the company made on the debt because appellant decided on his own to use W.T. Carlson business credit cards for personal use, and then have those charges offset against the money W.T. Carlson owed the parties. Appellant testified that as a result of his conduct, respondent received no money from the payback of the loan. Respondent did not use any of these business credit cards and did not receive any benefit from the charges appellant made on those cards. Therefore, the record supports the district court's finding that respondent lost her share of the amount owed by W.T. Carlson.
Thus, even though the district court assigned over $40,000 of marital debt to appellant and only $7,834 to respondent, the court's division of debt was just and equitable. The record shows that the court properly assigned appellant the debts that he incurred since the parties' separation. The division of martial debt is further justified by the fact that respondent did not receive her share of the amount the W.T. Carlson company owed to the parties. For these reasons, the district court did not abuse its discretion in its apportionment of marital debt.
III.
A reviewing court will rarely reverse a district court's decision to grant attorney fees. Reinke v. Reinke, 464 N.W.2d 513, 516 (Minn.App. 1990). An award of attorney fees "rests almost entirely within the discretion of the trial court and will not be disturbed absent a clear abuse of discretion." Crosby v. Crosby, 587 N.W.2d 292, 298 (Minn.App. 1998) (quotation omitted), review denied (Minn. Feb. 18, 1999).
An award of conduct-based attorney fees is allowed in dissolution cases.
Nothing in this section precludes the court from awarding, in its discretion, additional fees, costs, and disbursements against a party who unreasonably contributes to the length or expense of the proceeding.
Minn. Stat. § 518,14, subd. 1 (2002). Thus, an award of conduct-based attorney fees pursuant to Minn. Stat. § 518.14 may be based on "the impact a party's behavior * * * had on the costs of the litigation regardless of the relative financial resources of the parties." Dabrowski v. Dabrowski, 477 N.W.2d 761, 766 (Minn.App. 1991). Bad faith is not required for an award of conduct-based fees, but the conduct must have occurred during litigation. Geske v. Marcolina, 624 N.W.2d 813, 818 (Minn.App. 2001).
The district court must make findings regarding conduct-based fees "to permit meaningful appellate review" of the award. Kronick v. Kronick, 482 N.W.2d 533, 536 (Minn.App. 1992). Here the district court's findings state that
[o]ver the course of most of this litigation, [appellant] had sole access to the parties' financial documents. * * * [T]he issue of financial asset and debt division was highly contentious and was greatly responsible for causing the length and cost of this proceeding. [Appellant's] conduct regarding the financial documents is a large reason that this matter was stretched out for an unnecessary length of time.
Based on appellant's conduct, the district court ordered appellant to pay $5,000 of respondent's attorney fees in order to equalize the amount of attorney fees incurred due to appellant's behavior.
Appellant argues that he engaged in no misconduct and that there are no facts in the record that support an award of conduct-based attorney fees. But the record does support a finding of misconduct. The testimony at trial revealed that appellant managed the parties' finances during the marriage and that he had access to most of the relevant financial information during the dissolution proceedings. Shortly before the trial date of January 30, 2002, respondent was granted a continuance because appellant presented her with large volumes of financial documents. Appellant's failure to deliver the documents to respondent in a timely manner resulted in over a month's delay, adding to the cost of litigation.
Finally, appellant contends that he is in no financial position to pay attorney rees. But conduct-based fees may be awarded regardless of the recipient's need for fees and regardless of the payor's ability to contribute to the fee award. Geske, 624 N.W.2d at 818. Thus, the district court did not abuse its discretion by awarding attorney fees to respondent.