Opinion
No. A03-573.
Filed February 10, 2004.
Appeal from the Carver County District Court, File No. F9-00-996.
Steven B. Schmidt, Rider Bennett, Llp, (for respondent)
Melanie A. Flores, Ramsay, DeVore Olson, Pa, (for appellant)
Considered and decided by Willis, Presiding Judge; Klaphake, Judge; and Anderson, 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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION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 moved to modify his stipulated child-support and spousal-maintenance obligations, alleging that there had been a significant reduction in his income. The district court found that appellant failed to show a substantial change in circumstances making the terms of the original awards unfair or unreasonable, and the court denied his motion. Because we conclude that there was a substantial change in circumstances rendering the existing awards unreasonable and unfair, we reverse and remand for further proceedings.
FACTS
On June 8, 2002, Nancy Zilioli Evans (mother) commenced proceedings to dissolve her marriage to Craig Evans (father), and trial was set to begin on June 17, 2002. But because both of the parties learned that their jobs were to be terminated, the district court continued their trial until September 2002 to provide the parties with additional time to become reemployed so that the court could properly determine the disputed child-support, spousal-maintenance, and property issues.
Before the parties' September 2002 trial date, however, the parties signed a marital-termination agreement that addressed the disputed issues. In the agreement, the parties expressly acknowledge that both have been terminated from their employment and that their agreement is "based upon the parties' current financial circumstances." The agreement also acknowledges that father "is seeking gainful similar employment at the similar rate of pay." The agreement provides that father will pay mother $2,250 per month in spousal maintenance through May 30, 2006, at which time it will decrease to $1,250 per month through May 30, 2012. In addition, the agreement provides that father will pay $2,025 in child support for the parties' two children until the older child reaches the age of 18, when father's child-support obligation will be reduced by 16.7 percent. Father's obligation to pay child support will cease when the younger child reaches the age of 18. The agreement further provides that because "of the uncertainty surrounding each party's financial future," the parties understand that the child-support and spousal-maintenance obligations may have to be readdressed in the future under Minn. Stat. § 518.64 if their respective financial circumstances "change significantly."
On December 12, 2002, the district court entered its judgment, incorporating the parties' marital-termination agreement. On December 23, 2002, father brought a motion for modification of his child-support and spousal-maintenance obligations. On March 21, 2003, the district court denied father's motion, finding that father had failed to establish that a substantial change in circumstances occurred and that the existing awards were unfair and unreasonable.
On April 15, 2003, father brought a motion for amended findings or, in the alternative, a new trial. On May 5, 2003, the district court denied father's motion. Father appeals both from the denial of his motion for modification and from the denial of his motion for amended findings or a new trial.
Issues not briefed are waived. Balder v. Haley, 399 N.W.2d 77, 80 (Minn. 1987); see Braith v. Fischer, 632 N.W.2d 716, 724 (Minn. App. 2001) (applying Balder in family-law context). Here, while the introduction to father's brief states that he is challenging the district court's denial of his motion for amended findings or a new trial, these questions were not addressed in the body of his brief. Therefore, we do not address these questions. We note, however, that new-trial motions are not authorized in post-judgment modification proceedings. Huso v. Huso, 465 N.W.2d 719, 721 (Minn. App. 1991); see Erickson v. Erickson, 430 N.W.2d 499, 500 n. 1 (Minn. App. 1988) (noting few post-judgment modification proceedings constitute a trial and that if a trial did not occur, a motion for a new trial is "an anomaly").
DECISION
Whether to modify maintenance or child support is discretionary with the district court and requires the moving party to show both substantially changed circumstances and that the change makes the existing award unreasonable and unfair. Minn. Stat. § 518.64, subd. 2(a) (2002). On appeal from a district court's decision addressing a modification motion, an appellate court reviews the district court's decision for an abuse of discretion. Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997) (applying Minn. Stat. § 518.64 to motion to modify maintenance); Moylan v. Moylan, 384 N.W.2d 859, 864 (Minn. 1986) (applying Minn. Stat. § 518.64 to motion to modify child support). An abuse of discretion occurs when the district court resolves the matter in a manner that is "against logic and the facts on [the] record." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
Minn. Stat. § 518.64, subd. 2(a), provides that maintenance and support orders may be modified upon a showing of "substantially increased or decreased earnings of a party." Here, the district court denied father's motion to modify spousal maintenance and child support, finding that "the marital termination agreement clearly set forth the fact that [father] knew that his position with Best Buy was ending. Nevertheless, he negotiated a settlement of the marital termination agreement which called for specific maintenance and child support payments." The district court further found that father continues to have "significant income" and "significant assets" with which he could pay his obligations and concluded that "given the negotiated settlement and [father's] other assets, [father's] current employment situation does not make the terms of the final decree unfair or unreasonable." In this court, mother seeks an affirmance, making a similar argument. See Ramsay v. Ramsay, 305 Minn. 321, 324, 233 N.W.2d 729, 731 (Minn. 1975) (reversing district court's termination of spousal maintenance, finding that because the wife's decision to work part time was foreseeable by both parties at the time of the divorce it did not constitute a significant change of circumstances).
Father alleges that his net monthly employment income has decreased from $6,750 to $3,848, and mother does not dispute these amounts. The record shows that father also continues to receive $20,000 to $24,000 in gross annual rental income from nonmarital farm property. But we are unable to determine from the record precisely what net monthly income the property produces for father. And noting that he has not obtained employment comparable to the employment he had when the stipulated judgment was entered, father argues that the finding that he failed to show a substantial change in circumstances shows that the district court ignored the "clear language" in the judgment indicating that his obligations could be readdressed in the future in the event of a significant change in financial circumstances.
Maintenance-related stipulations are given significant deference, but child-support-related stipulations are entitled to less deference and cannot take precedence over the best interests of the children to whom such stipulations apply. See Claybaugh v. Claybaugh, 312 N.W.2d 447, 449 (Minn. 1981) (addressing maintenance-related stipulations); Moylan, 384 N.W.2d at 865 (addressing child-support-related stipulations). Here, the entire judgment was stipulated to and is entitled to at least some deference. The order denying father's modification motion, however, shows that, while the district court gave great deference to the judgment provisions reciting father's obligations, it is not clear that any weight was given to the judgment provisions addressing modification of those obligations.
The judgment provides that father's obligations were based on the parties' "current financial circumstances" at that time and that the district court retained "full jurisdiction" to modify father's obligations "based upon a change in [those] financial circumstances." Not only is it undisputed that the parties' financial circumstances had changed, to include a substantial reduction in father's income, by the time father made his motion, but also caselaw is clear that when, as here, a stipulated judgment refers to a possible future modification of its obligations, the weight to be given to the stipulated obligations is reduced. See Ganyo v. Engen, 446 N.W.2d 683, 687 (Minn. App. 1989) (admitting deference to stipulated maintenance but affirming modification of stipulated maintenance, noting the stipulation "anticipated judicial review"); cf. Sand v. Sand, 379 N.W.2d 119, 125 (Minn. App. 1985) (holding that the presence of a stipulation between parties to a dissolution does not prevent a subsequent modification under Minn. Stat. § 518.64), review denied (Minn. Jan. 31, 1986). Moreover, the judgment explicitly indicated that the propriety of any requested modification was to be determined under Minn. Stat. § 518.64. Thus, we conclude both that the district court erred by according father's existing obligations excessive deference and that, in light of the judgment's stipulated modification provisions, the decrease in father's income, as reflected in the record before us, constituted a substantial change in circumstances.
This conclusion is consistent with relevant statutory and caselaw authorities. Regarding child support, "[i]t is presumed that there has been a substantial change in circumstances" if application of the child-support guidelines to the obligor's current income results in a guideline child-support obligation that is at least 20 percent and $50 different from the existing obligation. Minn. Stat. § 518.64, subd. 2(b)(1). Here, application of the guidelines to what father alleges is his current net monthly employment income would produce a child-support obligation that is at least 20 percent and $50 lower than his current obligation and, on the record before us, including his farm rental income would not alter this result.
With regard to the maintenance obligation, when father entered into the stipulation on which the district court entered judgment, he was employed by Best Buy, had been informed that he would lose his job, and was seeking replacement work at a similar rate of pay. At the time of the hearing on father's motion for modification, however, father asserts that he had not been able to secure such a position and was earning a net income of $3,848 per month at a part-time position that was to last approximately six months. Father's failure to obtain the replacement employment that the judgment assumed he would obtain has caused a sizeable decrease in his income and constitutes a substantial change in circumstances. See Hecker v. Hecker, 568 N.W.2d 705, 708-10 (Minn. 1997) (holding that district court did not abuse its discretion by finding that former wife's failure to attain level of self-sufficiency contemplated by parties' stipulation for temporary spousal maintenance was substantial change in circumstances warranting modification of spousal-maintenance award).
Because we reverse the district court's finding of no substantial change in circumstances, we next must determine whether this substantial change rendered father's existing support and maintenance obligations unreasonable or unfair.
Under Minn. Stat. § 518.64, subd. 2(b)(1), an existing child-support obligation is rebuttably presumed to be unreasonable and unfair if application of the child-support guidelines to the obligor's current net monthly income results in a guideline child-support obligation that is at least 20 percent and $50 different from the existing obligation. As noted above, this threshold is undisputedly satisfied here.
Regarding whether father's maintenance obligation is unreasonable and unfair, maintenance is defined as payment from the obligor's "future income or earnings." Minn. Stat. § 518.54, subd. 3 (2002). And because maintenance is a payment from income or earnings, absent a bad-faith reduction in income, maintenance obligors are not generally required to liquidate their property to pay a maintenance obligation. In re Marriage of Richards, 472 N.W.2d 162, 165 (Minn. App. 1991). Here, without addressing the parties' current expenses or identifying the income to which it refers, the district court found that father "continues to have significant income from other sources as well as significant assets from which to continue to pay the agreed upon child support and maintenance." See Stich v. Stich, 435 N.W.2d 52, 53 (Minn. 1989) (noting necessity of adequate findings for review of maintenance questions). But the record shows that at the time of the denial of his modification motion, father's net monthly employment income was $3,848, that he continued to receive farm rental income, and that, his monthly expenses have increased $901 to $6,263 because he now must pay for family health insurance.
Because the district court did not find that father's failure to find replacement employment at a similar rate of pay was in bad faith, the district court should not have determined that, contrary to the general rule, father's assets could be used to pay his maintenance obligation. And because father alleges current monthly expenses of $6,263, considerably more than his net monthly income for child-support and spousal-maintenance purposes, the district court abused its discretion by determining that father's current financial circumstances did not render the existing maintenance award unreasonable or unfair.
We reverse the denial of appellant's motion for modification and remand for a decision based on the parties' current circumstances. We note that in her affidavits opposing father's modification motion, mother alleged that father is "voluntarily underemployed and purposefully trying to limit his income." And we note that father alleged that he has been "extensively and exhaustedly searching for new employment opportunities which would allow [him] to earn the same or similar income to that which [he] earned at Best Buy Company."
Because Minnesota's child-support statute expressly provides for the imputation of income for a voluntarily unemployed or underemployed obligor, we conclude that the district court must determine whether father is voluntarily underemployed in addressing modification of father's child-support obligation. See Minn. Stat. § 518.551, subd. 5b(d) (2002). And we reach the same conclusion regarding maintenance because if a district court finds that a maintenance obligor's income has been decreased in bad faith, or as a result of voluntary underemployment, the district court may impute income and set the maintenance obligation based on the imputed income. See, e.g., Walker v. Walker, 553 N.W.2d 90, 95 n. 1 (Minn. App. 1996); Bourassa v. Bourassa, 481 N.W.2d 113, 116 (Minn. App. 1992).
Thus, on remand, before any modification of father's child-support and spousal-maintenance obligations based on the parties' current circumstances, the district court must (1) determine whether any income should be imputed to father and (2) if income should be imputed, determine how much. On remand, the district court may, in its discretion, reopen the record to receive additional evidence.