Opinion
No. C4-00-1382.
Filed April 24, 2001.
Appeal from the District Court, Dakota County, File No. F4997135.
Robin Dietz-Mayfield, (for respondent)
Mark Nygaard, (for appellant)
Considered and decided by Lansing, Presiding Judge, G. Barry Anderson, Judge, and Halbrooks, 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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION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 dissolution proceeding, appellant-husband challenges the district court's (1) findings of fact on numerous subjects; (2) division of marital property; (3) award of permanent maintenance to respondent-wife; (4) failure to hear additional testimony regarding respondent's alleged secreting of assets; and (5) award of attorney fees to respondent. We affirm in part, reverse in part, and remand.
FACTS
Respondent Marilou Borja Endermuhle and appellant Gary Eugene Endermuhle were married on February 25, 1982, while living in the Philippines. Appellant worked for the Department of Veterans Affairs in Manila. The parties have one emancipated son.
In 1985, the Department of Veterans Affairs transferred appellant and his family to Hawaii in March, and then to Virginia in October. In 1991 the Department of Veterans Affairs transferred appellant and his family back to the Philippines. Respondent worked for the Department of Veterans Affairs prior to the parties' marriage. In 1992, respondent obtained employment in the economic section of the U.S. Embassy in Manila. In 1996, respondent began work as an administrative assistant with the United States Secret Service in Manila.
In September 1998, the Department of Veterans Affairs reassigned appellant back to the United States. The parties moved to Minnesota, and on March 24, 1999, respondent filed a petition for marriage dissolution. The Dakota County District Court held an evidentiary hearing on December 2, 1999, and the court issued its findings, conclusions, and order on February 3, 2000. The court, among other things, found or concluded that appellant: (1) admitted to having an extramarital affair with a prostitute while in the Philippines; (2) dissipated $61,543 in marital assets; and (3) received approximately $12,000 of a $20,000 judgment against tenants who rented the parties' Virginia property. The district court (1) ordered appellant pay respondent $1,000 per month in permanent spousal maintenance; (2) ordered appellant pay one-half of respondent's health insurance until she had comparable coverage from future employment; (3) rejected appellant's submitted monthly expenses of $3,652 in favor of $2,800; (4) ordered appellant pay $5,000 in attorney fees and costs to respondent; and (5) ordered appellant pay $7,350.62 to respondent to "equalize" the distribution of the marital estate. Both parties filed motions for amended findings. Appellant also requested that the court hear additional testimony about respondent's failure to disclose two marital accounts totaling approximately $1,500, while respondent asked the court to award her surviving-spouse benefits from appellant's civil-service pension. The district court awarded appellant one-half of the monies from respondent's previously undisclosed accounts, denied appellant's request to hear additional testimony, and denied all other requests for amended findings and a new trial. This appeal followed.
In July 1998, appellant filed for marriage dissolution in Missouri, but the case was dismissed for lack of jurisdiction.
DECISION I. Findings
Appellant argues that the district court erred because the evidence did not support several of its findings concerning the property division. The district court has broad discretion when determining the division of marital property. Rutten v. Rutten, 347 N.W.2d 47, 50 (1984). This court will not set aside a district court's factual findings unless clearly erroneous. Minn.R.Civ.P. 52.01; In re Estate of Serbus v. Serbus, 324 N.W.2d 381, 384-85 (Minn. 1982). This court considers evidence in the light most favorable to findings and defers to the district court's credibility decisions. Vangsness v. Vangsness, 607 N.W.2d 468, 472-73 (Minn.App. 2000).
A. Extramarital Relationship
Appellant first argues that the district court clearly erred by finding that appellant admitted to having a long-term extramarital relationship with a prostitute while the parties resided in the Philippines. Appellant admitted that an extramarital relationship occurred. In addition, respondent offered uncontroverted testimony that the extramarital affair was with a prostitute. Furthermore, appellant failed to show prejudicial error. See Minn. Stat. §§ 518.552, subd. 2, 518.58, subd. 1 (1998) (stating district courts should not consider marital misconduct when dividing marital property or awarding spousal maintenance); Toughill v. Toughill, 609 N.W.2d 634, 639 (Minn.App. 2000) (stating that to prevail on appeal, appellant must show both error and that error caused prejudice). Therefore, we conclude that any error is harmless. See Minn.R.Civ.P. 61 (harmless error to be ignored).
B. Dissipation of Assets
The district court found that appellant dissipated approximately $61,534 from the marital estate in contemplation of marriage dissolution. Appellant asserts that the record does not support this finding. Minn. Stat. § 518.58, subd. 1(a) provides that district courts shall compensate a party if the other dissipates assets in contemplation of dissolution. Id. The burden of proof is on the party claiming that the other party dissipated asserts. Id.
Appellant first asserts that there is no evidence showing that he dissipated income in contemplation of commencement of dissolution, and therefore respondent cannot meet her burden of proof.
To meet her burden, respondent testified that appellant began dissipating the parties' assets in 1996, prior to appellant's admitted extramarital relationship. Respondent produced documentary evidence showing that the parties had been saving an average of $23,852.5 per year from 1994-96, but beginning in 1997, instead of saving approximately $2,000 per month, appellant saved nothing and spent about $4,500 per month, writing a total of $92,969 in checks for cash from 1997 to August 1998. Respondent testified that appellant opened investment accounts in his name without her knowledge, cashed the parties' stocks without her knowledge, and cashed $61,689.60 of the parties' savings bonds without her knowledge between August 1998 and October 1999.
Appellant denied dissipating marital assets. Appellant testified that he did not have a detailed record of his purchases while living in the Philippines because the country operates as a cash economy. Appellant testified that various factors, viewed together, accounted for the increased spending. But when asked about concealing the parties' savings bonds and bond proceeds, appellant stated, "I wasn't trying to hide them. Well kind of. . . I felt that if I brought them home and said, here are the bonds, I would never get to use the bonds * * * ."
Because appellant and respondent both testified at the hearing, the court had ample opportunity to judge their credibility and did so. The district court expressly made a credibility determination in favor of respondent and against appellant. The district court stated, "[q]uite candidly, Mr. Endermuhle, I didn't believe you. You sat on this witness stand and you gave testimony here that was just incredible." We conclude that respondent met her burden of proving that appellant dissipated marital assets in contemplation of marriage dissolution. See Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (we defer to district court credibility determinations).
C. Dissipation Amounts
Appellant next argues that the district court abused its discretion by arbitrarily selecting dissipation amounts without evidentiary support.
1. $14,500
The district court found that appellant dissipated $14,500 while the parties resided in the Philippines. Appellant argues that this finding is "arbitrary." Appellant contends that nothing in the record supports this number and points out that respondent, in her brief, admits it is unclear exactly how the court arrived at this number.
While the district court has broad discretion to make property division awards, its decision must be supported by either clear documentary or testimonial evidence or by comprehensive findings issued by the court. Otte v. Otte, 368 N.W.2d 293, 298 (Minn.App. 1985). The district court reviewed evidence of appellant's significant cash withdrawals while in the Philippines, listened to testimony from respondent about the parties' expenses, and heard respondent's explanation of where the money went. The district court's findings take into account the closing of the military base, which increased the parties' costs.
Given the nature of the Philippine economy, it would have been nearly impossible for the district court to itemize how it arrived at the $14,500 figure because of the absence of documentation of the parties' expenses and spending. But the district court specifically stated that it did not believe appellant's testimony. See Vangsness, 607 N.W.2d at 472-73 (stating this court considers evidence in the light most favorable to findings and defers to the district court's credibility decisions). Moreover, appellant's numerous checks written to cash combined with the reversal of the parties' saving habits circumstantially support the court's finding. See Baker v. Citizens State Bank of St. Louis Park, 349 N.W.2d 552, 558 (Minn. 1984) (stating district courts may draw inferences from circumstantial evidence). Viewing the evidence in the light most favorable to the district court's findings, as we must, we conclude that the district court did not clearly err when finding that appellant dissipated approximately $14,500 while living in the Philippines.
2. $10,084 Bond Proceeds
After the parties returned to the United States in September 1998, appellant cashed savings bonds worth $61,689.60. The district court found that appellant deposited only $51,605.20 into his bank account and dissipated the difference of $10,084. Appellant now argues that a review of credit union statements that appellant could not locate prior to trial shows that appellant deposited almost all of the unaccounted for money in his bank account.
The district court appears to have reached the $51,605.20 figure by adding all of the savings deposits reflected in the bank statements, although the court did not explain how it arrived at this number.
These missing statements, however, do not qualify as newly discovered evidence because they were available before trial. See Lewin v. Proehl, 211 Minn. 256, 262, 300 N.W. 814, 817 (1941) (holding new trial for newly discovered evidence properly denied when counsel failed to conduct personal search and inspection of files). Appellant argues that his check ledger, introduced at trial, referenced the deposits in question. Appellant, however, did not argue at trial that certain deposits listed in the ledger accounted for the missing monies.
Appellant next argues that respondent's Exhibit 14 proves that appellant deposited $5,060.40 in the parties' Commerce Bank account and $56,629.20 into the Federal Credit Union account. But Exhibit 14, which contains photocopies of the redeemed U.S. Savings Bonds, shows only that appellant cashed these numerous savings bonds and does not indicate whether the funds were deposited. We conclude that the district court did not err when finding that appellant dissipated $10,084 in bond proceeds.
3. Federal Credit Union Account
Appellant next challenges as arbitrary the district court's finding that he dissipated $26,450 from his credit union account.
Appellant testified that he spent the withdrawn cash for family expenses. Respondent produced evidence showing that the cash withdrawals departed from the parties' historical saving pattern. A review of the bank statements shows numerous cash withdrawals, sometimes daily, from the Federal Credit Union account from August 1998 to October 1999.
The district court could not have made itemized findings regarding dissipation of this account because, again, the cash withdrawals precluded any documentation of where the money was spent. The court relied on its credibility determinations and the circumstantial evidence to find that appellant dissipated approximately $26,450 from the federal credit union account. See Baker, 349 N.W.2d at 558 (stating district courts may draw inferences from circumstantial evidence); Vangsness, 607 N.W.2d at 472-73 (stating appellate courts consider evidence in the light most favorable to findings and defers to the district court's credibility decisions). We conclude that the district court did not clearly err when finding that appellant dissipated approximately $26,450 from the federal credit union account.
4. $10,000 Savings Bond
Appellant claims the evidence does not support the district court's finding that he did not account for a redeemed $10,000 savings bond.
Appellant first challenges whether or not the court found that appellant dissipated the proceeds from this bond. But the district court's finding states that appellant redeemed this specific bond without the knowledge or consent of respondent, and this bond amount, when added to the court's additional findings of dissipation, totals approximately $61,000, the amount the district court found to have been dissipated. Although the court did not specifically state that this redeemed bond was dissipated, this conclusion is apparent when reading the court's findings as a whole.
Appellant also argues that the evidence supports a finding that the proceeds from this redeemed bond were used to pay the parties' expenses as well as dissolution attorney fees. But appellant does not provide sufficient supporting evidence for this assertion. We conclude that the district court did not clearly err when finding that appellant dissipated the proceeds from the $10,000 bond.
C. Judgment
Appellant next challenges the district court's finding that he received $12,000 of a $20,000 judgment against the tenants of the parties' Virginia property. But to prevail on appeal, appellant must show both error and that error caused prejudice. Toughill, 609 N.W.2d at 639. The district court's division of the marital estate does not show that the court credited appellant with this amount when distributing the marital property. Therefore, we conclude that any error is harmless. See Minn.R.Civ.P. 61 (harmless error to be ignored).
II. Division of Marital Property
Appellant asserts that the district court abused its discretion when ordering appellant to pay respondent $7,350.62 to "equalize" the marital estate and when giving respondent a one-half interest in his civil-service pension.
In a marital dissolution, "the court shall make a just and equitable division of the martial property." Minn. Stat. § 518.58, subd. 1 (1998). A district court has broad discretion when dividing property, and its decision will not be overturned if it has a reasonable and acceptable basis in fact and principle. March v. March, 435 N.W.2d 569, 571 (Minn.App. 1989). The division of property need not be mathematically equal; it need only be just and equitable. Lynch v. Lynch, 411 N.W.2d 263, 266 (Minn.App. 1987), review denied (Minn. Oct. 30, 1987).
A. Equalization Payment
Appellant argues that the $7,350.62 payment was meant to equalize the marital estate such that each party would receive $180,183.07 plus 50% each of certain marital accounts. Appendix B to the district court's order shows both parties received $180,183.07, but the appendix to the order credited respondent with the equalization payment without subtracting that amount from appellant's marital assets. Thus, appellant was effectively awarded $172,832.45 (plus 50% of certain marital accounts), while respondent received the intended amount of $180,183.07 (plus 50% of certain marital accounts). It is clear from the court's finding and from Appendix B that the court intended each party to receive an equal share of the marital property. Accordingly, we remand this issue to the district court for clarification and, if necessary, correction.
B. Pension Plan
Appellant also contends that the district court erred when finding that appellant failed to establish a nonmarital interest in his civil-service pension. A party asserting that current assets are traceable to nonmarital property has the burden of proof. Minn. Stat. § 518.54, subd. 5 (1998) (stating that the party making a nonmarital claim must that the property is nonmarital); Olsen v. Olsen, 462 N.W.2d 797, 800 (Minn. 1997) (applying a preponderance of the evidence burden of proof).
It is apparent from the record that appellant worked for the federal government for 28 years, while the parties were only married for 17 of those 28 years. Appellant's counsel offered no documentary evidence or testimony, beyond pretrial pleadings, regarding any nonmarital interest in his pension. See Janssen v. Janssen, 331 N.W.2d 752, 756 (Minn. 1983) (explaining that the apportionment of the marital interest in future benefits, such as a pension plan, may be expressed as a fraction of benefits accumulated during marriage divided by total benefits accumulated to the valuation date). Even so, it is the responsibility of this court to decide cases in accordance with the law and that responsibility is not to be diluted by counsel's oversights. Greenbush State Bank v. Stephens, 463 N.W.2d 303, 306 n. 1 (Minn.App. 1990), review denied (Minn. Feb. 4, 1991). Therefore, in the interests of justice, we remand this issue to the district court. See Minn. R. Civ.App. P. 103.04 (appellate court may "review any other matter as the interest of justice may require"). The district court may, in its discretion, decide to take additional evidence on this issue.
Appellant also asserts that because his pension will be based on his top three earning years, presumably occurring in the future, respondent is not entitled to share in this increase of his pension benefits. We find appellant's argument unclear in light of the district court's award of pension benefits to respondent based on a specific valuation date. In light of our remand on the pension issue, however, we decline to address appellant's argument.
III. Spousal Maintenance
Appellant next contends the district court abused its discretion in granting respondent permanent spousal maintenance by (1) finding that respondent could not independently provide for herself; (2) reducing his proposed monthly expenses without any supporting rationale; and (3) requiring that appellant pay a portion of respondent's health insurance.
The standard of review on appeal from a district court's determination of a maintenance award is whether the district court abused the wide discretion accorded to it . Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). We examine the district court's discretion in light of the controlling statutory guidelines contained in Minn. Stat. § 518.552 (1998). An abuse of discretion occurs if the district court reaches a resolution of the issue that "is against logic and the facts on record." Rutten, 347 N.W.2d at 50 (citation omitted).
A spouse seeking maintenance must make a showing of both insufficient property and financial need. Lyon v. Lyon, 439 N.W.2d 18, 22 (Minn. 1989). A district court may award spousal maintenance if it finds the spouse seeking maintenance is otherwise unable to provide for his or her needs, considering the standard of living established during the marriage. Minn. Stat. § 518.552, subd. 1 (1998). Although there are eight statutory factors, "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) (citation and quotation omitted).
The district court made findings of fact addressing many of the required statutory factors, including respondent's inability to support herself. Appellant challenges that finding. Appellant's expert, however, acknowledged that respondent has neck pain and a degenerative disc in the cervical area of her back that would make her return to work difficult. The expert also agreed that respondent had problems with commuting to and from work without a vehicle, lacked communication skills, and noted that her discrimination complaint against the federal government would negatively affect her ability to obtain employment. We conclude that the district court did not clearly err in finding respondent could not independently support herself. See Sefkow, 427 N.W.2d at 210 (explaining that reviewing courts generally affirm a district court's credibility determinations; the district court is in the best position to assess the witness).
The district court also addressed appellant's reasonable and necessary expenses when awarding respondent permanent spousal maintenance. Appellant claimed reasonable monthly expenses of $3,652, but the district court found appellant's reasonable monthly expenses to be $2,800 without explaining why it rejected appellant's claim. We find this unexplained $852 disparity to be troubling. The district court, in analyzing appellant's expenses, did not make an express finding as to appellant's credibility on this issue. Further, documenting the present living expenses should be a task easily undertaken and completed. Under these circumstances, and given the necessity for findings concerning the amount of monthly expenses presently incurred by the parties, we remand this issue to the district court because we are unable to assess the district court's use of its discretion over the amount of spousal maintenance. See Videen v. Peters, 438 N.W.2d 721, 723-24 (Minn.App. 1989) (holding that even where the record supports the district court's decision, the failure to make specific findings compels a remand), review denied (Minn. June 21, 1989). We remand the issue of maintenance to allow the district court to fully address appellant's ability to pay maintenance. See Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989) (remanding maintenance where dissolution court found parties' incomes but not their expenses or obligor's ability to provide maintenance).
Appellant next challenges the district court's conclusion holding appellant responsible for one-half of respondent's health insurance coverage until she becomes employed and has comparable coverage. This alleged error is a challenge to the district court's equitable powers, rather than its factfinding. Because the court's mandate that appellant provide health insurance for respondent is not an order to make a direct payment to her, it is not clear that it qualifies as maintenance. See Minn. Stat. § 518.54, subd. 3 (1998) (maintenance defined as a "payment" from one spouse to the other). Nevertheless, the district court has broad equitable powers in dissolution actions. DeLa Rosa v. DeLa Rosa, 309 N.W.2d 755, 757-58 (Minn. 1981).
The district court found respondent unable to provide for herself independently and that appellant has earning capacity in excess of his needs. Although a district court has the discretion to order a party to provide health insurance to a former spouse, whether appellant has the ability to pay this cost turns on the district court's findings regarding appellant's expenses. Given our remand of this issue, we accordingly remand to the district court the issue of health insurance.
Because the absence of findings regarding appellant's reasonable expenses prevents us from determining whether the district court abused its discretion in granting permanent maintenance, we remand this issue for the limited purpose of allowing the district court to make adequate findings of fact and make any necessary adjustment of the permanent spousal maintenance award.
IV. Additional Testimony
In his motion for a new trial, appellant argued that respondent committed fraud on the court by failing to disclose assets. The district court denied the motion. In reviewing the denial of a motion for a new trial, the court must determine not whether the district court might properly have granted a new trial, but whether it violated clear legal rights or manifestly abused its discretion by refusing to grant a new trial. Hertz v. Hertz, 304 Minn. 144, 146, 229 N.W.2d 42, 44 (1975).
We conclude that the district court did not abuse its discretion because the previously undisclosed accounts, are, on this record, negligible . See Wibbens v. Wibbens, 379 N.W.2d 225, 227 (Minn.App. 1985) (declining to remand for error with de minimis effect).
Appellant also suggests that further testimony would negatively impact respondent's credibility. But the district court rejected this argument when denying appellant's request for additional testimony and implicitly accepted respondent's claim that she was unaware of the evidence at the hearing.
V. Attorney Fees
Appellant argues that the district court abused its discretion by awarding attorney fees to respondent.
An award of attorney fees rests almost entirely in the discretion of the district court. Solon v. Solon, 255 N.W.2d 395, 397 (Minn. 1977). Need-based attorney fee awards require the district court to find that (1) the fees are needed for a good-faith assertion of rights; (2) the payor can pay the fees; and (3) the recipient cannot. Minn. Stat. § 518.14, subd. 1 (1998). The statute also provides the court with the discretion to award fees against a party "who unreasonably contributes to the length or expense of the proceeding." Id.
Appellant argues that the issue of attorney fees was not properly before the district court. We disagree. Although the district court noted that the issue of awarding respondent attorney fees from the Missouri dissolution proceeding was not properly before the court, respondent requested attorney fees in her petition for dissolution of marriage filed in Dakota County District Court.
Nonetheless, because the district court found that appellant had the ability to meet his needs while assisting respondent in meeting her needs, and because we have remanded to the district court the issues of appellant's ability to meet those needs, it is appropriate to remand the issue of attorney fees as well.
VI. Surviving Spouse Benefits
Respondent, in her motion for amended findings, requested that the district court award her the surviving-spouse benefit to appellant's pension plan. The district court denied the request. Respondent challenges the ruling by notice of review.
The district court has discretion in deciding whether to award a former spouse all or part of a survivor benefit, unless the pension plan does not allow the payment of a surviving-spouse benefit. See Minn. Stat. § 518.581, subd. 1 (1998).
The district court granted respondent permanent spousal maintenance and health insurance benefits until similar benefits would be available to her. The district court's refusal to require a survivorship designation was not an abuse of discretion.