Opinion
No. C0-01-45.
Filed September 11, 2001.
Appeal from Hennepin County District Court, Flie No. 179681
Susan M. Lach, (for appellant)
Brian L. Sobol, (for respondent)
Considered and decided by Anderson, Presiding Judge, Randall, Judge, and Schumacher, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant Francis J. Larkin (husband) contends that the district court erred in increasing his spousal-maintenance obligation retroactively to January 1, 1998, and in continuing that obligation beyond the date agreed to in the parties' stipulation. He also alleges the district court abused its discretion in awarding attorney fees to respondent Sandra D. Larkin (wife). Wife claims the district court clearly erred in finding her reasonable monthly expenses and abused its discretion in failing to increase maintenance retroactively to 1995 based on husband's alleged misrepresentations of his income and in awarding insufficient attorney fees. We affirm in part, reverse in part, and remand.
FACTS
The parties were married on December 17, 1966. The marriage was dissolved on January 25, 1993, by judgment incorporating the terms of a marital settlement agreement. Husband was 48 years old, wife was 49 years old, and the parties' three children were emancipated. When the stipulated January 1993 judgment was entered, husband was unemployed, receiving monthly severance pay of $14,020.93, and claimed reasonable monthly expenses of $6,392. Wife was unemployed and claimed reasonable monthly expenses of $6,482.
The judgment awarded wife permanent monthly maintenance of $2,608 and increased that amount to $4,000 after three months. The amount of maintenance was to be redetermined de novo when husband became employed or when his severance pay ended, as well as five years after entry of the judgment. The judgment further provided that maintenance would terminate upon the earliest of husband's involuntary retirement, husband's reaching age 60, wife's remarriage, or either party's death. Finally, the judgment stated that the parties waived claims to additional maintenance and divested the district court of jurisdiction to extend the term of the maintenance award.
A decrease in husband's income prompted a decrease in his monthly maintenance obligation to $2,970. The resulting December 1993 amended judgment did not alter the provisions addressing the duration of the award or the divestiture of jurisdiction. Wife testified that she agreed to the reduced maintenance award, calculated at 33% of husband's $9,000 monthly salary, based on husband's oral promises that the maintenance payments would increase when husband's income increased.
In 1995, wife suspected husband had a new job and sent discovery requests to husband requesting verification of his income. Husband did not respond, and wife's counsel scheduled a motion to compel. Before a hearing on the motion, however, and without a response to wife's discovery requests, the parties agreed to a new monthly maintenance amount of $3,650. Wife proposed $3,750, which was 33% of husband's estimated income of $135,000 per year. Husband countered at $3,650 per month, without disclosing his actual income, and wife agreed. The December 1995 second amended judgment setting maintenance at $3,650 per month did not alter the provisions regarding the duration of the award or the divestiture of jurisdiction.
Husband scheduled a December 4, 1997 hearing for the de novo review contemplated by the judgment, and wife requested a continuance to allow discovery and settlement negotiations. The hearing for the de novo review was continued and a new hearing date was not scheduled until a year and a half later. In July 1999, wife moved the court to (1) order husband to supplement his discovery responses; (2) increase spousal maintenance retroactive to January 1, 1998, based on the stipulated judgment; (3) increase spousal maintenance retroactively to October 1, 1995, based on husband's alleged fraud and misrepresentation regarding his income; and (4) award her attorney fees. In an affidavit submitted in support of the motion, wife's counsel alleged that he agreed to the continuance of the December 1997 hearing based on the oral assurance of husband's counsel that any modification of maintenance would be retroactive to December 1997.
After an evidentiary hearing, the district court issued a November 2000 order stating that the parties' marital spending substantially exceeded their income; wife's reasonable needs, based on a marital standard of living without deficit spending, were $3,500 per month; that for a person in wife's tax situation, a $3,500 net monthly award requires a gross award of $5,350; that due to physical problems, wife could only work part-time and her expected income from that work was $333.33 per month; that wife's assets had decreased since the dissolution and she had no retirement assets or expected social security income; that husband's base salary was $267,000 per year and, while his position had been eliminated on October 1, 1999, his base salary would continue until October 1, 2001; that husband's reasonable monthly expenses were $9,000; and that husband's net worth had increased substantially since the dissolution, including an increase in his retirement assets to $800,000.
The district court set husband's monthly maintenance obligation at $5,020 retroactive to January 1998 and required the increased amounts due for the period of January 1998 through November 2000 to be paid at a monthly rate of $1,004 (20% of the $5,020 monthly obligation), for a total monthly obligation of $6,024. The court also ordered maintenance to continue until wife's remarriage or the death of either party and awarded wife $10,000 in attorney fees. Husband appeals, and wife has filed a notice of review.
DECISION
1. Husband contends that the district court abused its discretion by modifying his maintenance obligation retroactively to January 1998. While maintenance modifications are generally retroactive to the date they are served, the district court has discretion to set the effective date of a modification at another date. See Minn. Stat. § 518.64, subd. 2(d) (2000) (articulating general rules for effective date of maintenance modification); Kemp v. Kemp, 608 N.W.2d 916, 920-21 (Minn.App. 2000) (noting district court's discretion in setting effective date).
Here, on or about July 21, 1999, wife served her request to alter her maintenance award, and the district court acknowledged the general rule that maintenance modifications are effective as of the date of service. The district court held, however, that this proceeding was not a modification proceeding but the de novo review of the award as scheduled in the stipulated judgment. This ruling is consistent with the stipulated judgment and with case law. See Bednarek v. Bednarek, 430 N.W.2d 9, 12 (Minn.App. 1988) (giving effect to provision in order is not modification under Minn. Stat. § 518.64, subd. 2(d)). Therefore, we decline to alter the district court's ruling.
Because the district court's analysis is consistent with both the explicit terms of the stipulated judgment and with case law, the parties' disputes about whether they reached a separate, unrecorded agreement about the effective date of the change in husband's maintenance obligation need not be addressed. See Starr v. Starr, 312 Minn. 561, 562-63, 251 N.W.2d 341, 342 (1977) (stating that absent ambiguity, courts are not to construe stipulated judgment).
We reject husband's allegation that the district court failed to make the specific findings required by Minn. Stat. § 518.552 (2000) regarding the parties' circumstances in 1998. While the district court did not make specific findings regarding husband's income, his ability to pay maintenance was not in question. Also, while the district court did not specifically find wife's 1998 expenses because it lacked the information to do so, the peculiarities of this record, including what the district court found to be wife's "copious" record-keeping, allow estimation of her 1998 expenses. The court estimated wife's 1998 expenses by subtracting from the finding of her 2000 expenses two years of the inflation analysis used to find her 2000 expenses. The result is an estimate of her expenses that is only $40 less than the maintenance awarded to her.
Thus, given the peculiarities of this record and the de minimis (if any) alteration of maintenance that would be suggested by a specific finding of wife's 1998 expenses, we cannot say that the district court's failure to specifically find husband's income or wife's 1998 expenses render the maintenance award defective. Cf. Minn.R.Civ.P. 61 (stating harmless error is to be ignored); Wibbens v. Wibbens, 379 N.W.2d 225, 227 (Minn.App. 1985) (declining to remand for de minimis effect error).
2. Wife challenges the district court's refusal to make spousal maintenance retroactive to the period of October 1995 through December 1997, alleging husband intentionally misrepresented his income. Cf. Minn. Stat. § 518.64, subd. 2(d)(1) (stating modification of maintenance may be made retroactive to period before service of motion if motion was delayed by party's material misrepresentation). She claims the parties agreed husband would pay her a set percentage of his income as maintenance and would advise her whenever he got a raise. While husband wrote a letter to wife in August 1993 proposing such an agreement, the record lacks evidence confirming that the parties agreed to husband's proposal.
The district court found that wife's testimony lacked credibility on this point and that the parties never reached a meeting of the minds regarding husband's proposal. Because wife's argument is based on husband's apparently unaccepted proposal, we must reject her argument on this record. See Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988) (stating appellate court defers to district court credibility determinations).
We also affirm the district court's rejection of wife's attempt to invoke equitable estoppel. After entry of the initial stipulated judgment, husband made no representations regarding his income. Although he did not affirmatively disclose his income during discovery, wife abandoned pursuit of that information when she negotiated immediate increases in maintenance rather then verifying husband's income through discovery.
Parties to dissolution-related matters have an obligation to make a full and fair disclosure of all information relevant to questions at issue. Solon v. Solon, 255 N.W.2d 395, 396 (Minn. 1977); Sanborn v. Sanborn, 503 N.W.2d 499, 502-03 (Minn.App. 1993), review denied (Minn. Sept. 21, 1993). We will not, however, make a party liable on appeal for undisclosed information that was not pursued in any more than a nominal sense. The intentional-misrepresentation and equitable-estoppel arguments are without merit, and the court did not err in refusing to modify maintenance retroactively to October 1995. See McNattin v. McNattin, 450 N.W.2d 169, 172 (Minn.App. 1990) (requiring party to prove representations or inducements were made upon which party reasonably relied and party will be harmed if claim of estoppel is not invoked).
3. Wife also alleges that the finding of her reasonable monthly expenses is clearly erroneous. See McCulloch v. McCulloch, 435 N.W.2d 564, 566 (Minn.App. 1989) (stating maintenance-related findings of fact are not set aside unless clearly erroneous). The district court calculated wife's reasonable monthly expenses by starting with her claimed 1990 monthly expenses of $11,405.10. It then subtracted $6,275.44 as related to the children or otherwise excessive, further reduced wife's claimed expenses to $4,000 to recognize that the parties' marital standard of living had been financed by debt, and subtracted the $1,400 monthly mortgage payment because it was not affected by inflation. The district court then adjusted the remaining $2,600 for inflation and found wife's reasonable monthly expenses to be $3,500. The district court also found that, given wife's tax status, meeting monthly expenses of $3,500 would require her to have gross monthly income of $5,350. The court then apparently subtracted wife's monthly income of $330 to arrive at a monthly maintenance award of $5,020.
Wife claims the district court's finding of her reasonable monthly expenses is defective because it does not re-add the $1,400 mortgage payment back to her inflation-adjusted expense figure. Wife is correct. Despite the fact that husband's ability to pay maintenance was not at issue in this case, we decline to simply set a maintenance obligation for husband at the appellate level. See Miller v. Miller, 458 N.W.2d 105, 106-07 (Minn. 1990) (reversing this court's setting of maintenance amount on appeal and remanding for district court to address question).
On remand, the district court shall correct its finding of wife's reasonable monthly expenses, readdress husband's maintenance obligation in light of that corrected finding, and make any necessary adjustment to the rate at which husband is required to pay the maintenance amount which became due because his maintenance obligation was increased retroactively to January 1998.
4. Husband claims the district court lacked jurisdiction to extend the duration of his maintenance obligation beyond that agreed to by the parties in the judgment. The judgment, amended judgment, and second amended judgment all contain identical language stating that maintenance would terminate at the earliest of husband's involuntary retirement, husband's reaching age 60, wife's remarriage, or either party's death. Additionally, each judgment contained a provision stating that the parties waived any further claim to maintenance and that the "court is divested of jurisdiction to extend the term of spousal maintenance." In the modification proceeding, however, the district court ruled that "maintenance shall continue until [wife's] remarriage, or the death of either party."
When the stipulated dissolution judgment was entered in January 1992, the law allowed parties to expressly preclude or limit modification of maintenance through a stipulation, if the court makes specific findings that the stipulation is fair and equitable, is supported by consideration described in the findings, and that full disclosure of each party's financial circumstances has occurred.
Minn. Stat. § 518.552, subd. 5 (1992); see also Minn. Stat. § 518.552, subd. 5 (2000) (same). While the 1993 judgment did not explicitly approve of the portion of the stipulation terminating the parties' abilities to modify maintenance, it did expressly indicate its approval of the entire stipulation, and hence the limitation on modification contained therein.
The statutory consideration and disclosure requirements are addressed by the portions of the 1993 judgment stating that the amount of the maintenance payments was "based on the asset and liability division herein" and that "[e]ach party represented that the extent, nature and amount of all property, income and indebtedness had been disclosed to each other." The 1993 judgment also states that the stipulation was "received in evidence, is on file herein, and is hereby in all things approved." The stipulation that was "in all things approved" stated, among other things, that the "[a]greement is fair, just and equitable, under the circumstances[,]" that the "amount of maintenance payments is based on the asset and liability division herein[,]" and that "[e]ach party represents that the extent, nature and amount of all property, income and indebtedness has been disclosed to each other."
It is clear that the maintenance-termination portions of the stipulation expressed the intent of the parties because those provisions were agreed to in the stipulation, were repeated in each of the three judgments, and the parties were represented by counsel at each stage of these proceedings. Moreover, the state has a strong policy favoring stipulations. See Karon v. Karon, 435 N.W.2d 501, 504 (Minn. 1989); see also Beck v. Kaplan , 566 N.W.2d 723, 726 (Minn. 1997) (finding it neither unreasonable nor unfair to hold parties to original negotiated agreement that balanced compromised interests); Shirk v. Shirk, 561 N.W.2d 519, 521 (Minn. 1997) (stating that stipulations serve to simplify and expedite what is often acrimonious litigation). We therefore reverse the district court's order regarding the duration of maintenance and reinstate the provision to which the parties agreed in the 1993 judgment.
5. Husband claims that the district court erred in awarding attorney fees, and wife claims the district court failed to award sufficient attorney fees. In family-law matters, the district court shall award need-based attorney fees if it finds that (1) the fees are necessary for the good-faith assertion of the recipient's rights and will not unnecessarily contribute to the length and expense of the proceeding; (2) the payor has the ability to pay the fees; and (3) and the recipient does not. Minn. Stat. § 518.14, subd. 1 (2000).
Here, wife incurred more than $27,000 in attorney fees. The district court considered the statutory factors and found that husband's income and resources were considerably greater than wife's and that wife lacked the resources to pay the fees. The district court also found that wife's conduct may have caused unnecessary delay and partially increased the cost of the litigation. The district court did not abuse its discretion in awarding wife $10,000 in attorney fees.
6. On remand, whether to reopen the record shall be discretionary with the district court.