Opinion
No. A04-322.
Filed November 16, 2004.
Appeal from the District Court, Mower County, File No. F9-02-162.
Peter D. Plunkett, Plunkett Associates, Inc., (for appellant).
Scott Richardson, Richardson Law Office, (for respondent).
Considered and decided by Klaphake, Presiding Judge; Harten, Judge; and Stoneburner, 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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION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, an obligor parent, moved for a new trial or amended findings, seeking (1) a conclusion that the parties' parenting arrangement is joint physical custody so that the Hortis Valento formula is presumptively applicable to the calculation of child support; (2) a finding that appellant's overtime is not part of his net income for child support purposes; (3) a reduction in his property equalizer payment to respondent; and (4) extension of the time to make that payment. The district court denied the motion as to the application of the Hortis Valento formula, appellant's net income, and the time to make the property equalizer payment, but amended its finding as to the inappropriateness of joint physical custody and the amount of the property equalizer payment. Because we see no abuse of discretion in the findings relevant to the non-application of Hortis Valento and to appellant's net income, we affirm them; because we conclude that the district court abused its discretion by denying appellant's motion for an amended finding giving him two years to make the equalizer payment, we reverse that part of the district court's ruling.
FACTS
Appellant Timothy Anderson and respondent Cindy Anderson are the parents of two daughters, D, born in 1995, and B, born in 2000. When the parties separated, they agreed to a parenting schedule based on appellant's work schedule. The parties agree that the girls spend about 35% of their time with appellant and 65% with respondent. Both parties are involved in the girls' schooling, extra-curricular activities, and medical and dental appointments.
Before the trial, the district court appointed a guardian ad litem (GAL) and ordered a custody evaluation. The GAL and the custody evaluation team recommended that the parties continue using the parenting schedule they established. However, the GAL recommended that the arrangement be labeled "sole physical custody with respondent" while the custody evaluation team recommended that it be labeled "joint physical custody."
At trial, the parties agreed that an appropriate parenting arrangement was in place; the question they presented to the district court was how that arrangement should be labeled, or, more to the point, whether the Hortis Valento formula should be applied to the support of the parties' children.
See Hortis v. Hortis, 367 N.W.2d 633, 635-36 (Minn.App. 1985) and Valento v. Valento, 385 N.W.2d 860, 862-63 (Minn. App 1986), review denied (Minn. 30 June 1986) (setting out the child support formula for joint custody situations whereby each parent pays guideline support reduced by the percentage of time the children spend with that parent); see also Minn. Stat. § 518.54, subd. 8 (2002) (party with sole physical custody is presumed not to be a child support obligor and is not required to make child support payments); Rogers v. Rogers, 622 N.W.2d 813, 821 (Minn. 2001) (" Hortis/Valento is not to be applied in circumstances of sole physical custody").
The district court determined that the Hortis Valento formula should not be applied and accordingly labeled the parties' arrangement "sole physical custody with respondent." The district court found that appellant's net monthly income was $2,429.52 and set his child support obligation at the guideline amount for two children, $728.85. Respondent's monthly income was found to be $1,226. Thus, after child support has been paid, respondent's monthly income is $1,954.85 and appellant's monthly income is $1,700.67. The net result of labeling the parties' parenting arrangement "joint physical custody" and applying the Hortis Valento formula would be that appellant would gain and respondent would lose $383.83 monthly; appellant's after-child-support income would rise to $2,084.50, while respondent's would drop to $1,571.02.
Appellant's $728.85 obligation would be reduced by 35%, for the time the children spend with him, to $473.75. Respondent's obligation would be 30% of her net monthly income, $1,226, which is $367.80, reduced by 65% for the time the children spend with her to $128.73. This amount would then be subtracted from appellant's obligation, leaving him with a monthly payment of $345.02, $383.83 less than his original monthly payment.
Although the district court labeled the parties' arrangement "sole physical custody with respondent," it found that "[s]ince their separation, [appellant] and [r]espondent have demonstrated that they have the ability to cooperate in the raising of their children." The district court also found that appellant owed respondent a property division equalizing payment of $5,828.70.
In denying appellant's motion to amend the findings to award the parties joint physical custody and apply the Hortis Valento formula, the district court deleted its finding that the parties had demonstrated the ability to cooperate in raising their children. The district court also amended the equalizing payment to $4,404.54 but denied appellant's motion to amend its findings to exclude overtime from a calculation of appellant's net income and to give appellant two years to make the property equalizer payment. Appellant challenges the partial denial of his motion to amend.
We note that the issue underlying this appeal is child support, not custody, and accordingly address that issue acknowledging, however, that child support depends on custody, not custody on child support.
DECISION
1. Application of the Hortis Valento Formula
Thedistrict court has broad discretion to provide for the support of the parties' children. Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002). The presumptively applicable child support depends on the label applied to the parties' parenting arrangement. The district court has discretion "to fashion an arrangement that takes into account the parents' financial condition as well as the needs and best interests of the children." Rogers v. Rogers, 622 N.W.2d 813, 820-21 (Minn. 2001). Exercise of this discretion involves the application of the six factors in Minn. Stat. § 518.551, subd. 5(c) (2002). Id. at 821.
We have not previously considered a case in which the parties agree on their parenting arrangement and dispute only the label given to the arrangement. In numerous cases, however, one party has challenged on appeal the label to which the parties previously stipulated. See, e.g., Nolte v. Mehrens, 648 N.W.2d 727, 731 (Minn.App. 2002) (remanding for district court to determine whether the "primary physical custody" with one parent to which parties had stipulated was joint physical custody or sole physical custody with that parent); Blonigen v. Blonigen, 621 N.W.2d 276, 281 (Minn.App. 2001), review denied (Minn. 13 Mar. 2001) (affirming the district court's decision that parties whose marital termination agreement provided joint physical custody did in fact have joint physical custody); Rosenfeld v. Rosenfeld, 529 N.W.2d 724, 727 (Minn.App. 1995), review denied (Minn. 20 July 1995) (declining to change the label to which parties had stipulated because the party seeking the change had not raised a justiciable controversy); Lutzi v. Lutzi, 485 N.W.2d 311, 314 (Minn.App. 1992) (reversing the district court's amendment of judgment from sole physical custody to joint physical custody because the parties had stipulated to one party having sole physical custody even though the children's time was divided equally between them).
The first four of these factors are relevant here. They are:
(1) all earnings, income, and resources of the parents, including real and personal property . . .;
(2) the financial needs and resources, physical and emotional condition, and educational needs of the child or children to be supported;
(3) the standard of living the child would have enjoyed had the marriage not been dissolved, but recognizing that the parents now have separate households;
(4) which parent receives the income taxation dependency exemption and what financial benefit the parent receives from it[.]
Minn. Stat. § 518.551, subd. 5(c). The district court considered these factors, finding that:
Prior to the parties' separation, [respondent] was a stay-at-home mother with the parties' two young children. [Appellant] worked excessive overtime hours, resulting in significant income for the family in the preceding two years before the parties' separation and the filing of the Petition herein. As a result of the separation, the parties arranged a parenting schedule with the children, resulting in [appellant] working less discretionary overtime hours in the year 2002. To assist in caring for her children, [respondent] obtained part-time employment and looked to [appellant] for financial support for the two children. Said arrangement has attempted to cause minimal disruption in the parent-child relationship of both parents, as well as to maintain a standard of living for the children comparable to that they would have enjoyed had the marriage not been dissolved. The parties have further attempted to accommodate each other as far as the tax dependency exemption with each parent getting one child for that purpose.
The district court did not abuse its discretion in declining to apply the Hortis Valento formula and accordingly declining to label the arrangement "joint physical custody."
2. Appellant's Net Income
A determination of the amount of an obligor's net income for purposes of child support is a finding of fact and will not be altered on appeal unless clearly erroneous. Ludwigson v. Ludwigson, 642 N.W.2d 441, 446 (Minn.App. 2002). Appellant argues that the district court erred in considering his voluntary overtime earnings to be part of his net income for child support purposes. But Minn. Stat. § 518.551, subd. 5(b) provides that compensation for employment in excess of 40 hours per week is not part of net income only if an obligor can show that it "reflects an increase in the work schedule or hours worked over that of the two years immediately preceding the filing of the petition[.]" Appellant testified that his earnings, with overtime, for 1998-2002 were $37,437, $40,547, $45,265, $46,240, and $41,361 and that the fluctuation was due to the amount of overtime he worked. The district court used his 2002 earnings, which were more than 1998 and 1999 but less than 2000 and 2001, as the basis for setting child support. Because appellant did not show that his overtime was "an increase in the work schedule or hours worked over that of the two years immediately preceding the filing of the petition," his overtime pay is part of his net income for child support purposes. The district court's finding as to appellant's net income is not clearly erroneous.
3. Timing of the Equalizer Payment
A district court has discretion to defer payment of property settlement. See, e.g., Kennedy v. Kennedy, 376 N.W.2d 702, 705 (Minn.App. 1985) (noting that payments over time are generally favored and finding no abuse of discretion where the district court deferred payment of a property settlement over five years). A district court abuses its discretion regarding a property division if its findings of fact are "against logic and the facts on [the] record." Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).
Appellant's net monthly income, after paying child support and childcare, is $1,625.67. In August 2003, he was ordered to pay respondent $4,404.54 within six months. These payments would come to $734.09 monthly and leave appellant with $891.58 per month to meet his other needs, which include providing for the children during the 35% of the time they spend with him. Appellant cannot pay his debts, including $3,650 to Mower County for child support arrearages and past childcare assistance, with that amount. We conclude that the denial of appellant's motion to extend to two years his time for making the equalizer payment was an abuse of discretion; we reverse that denial and remand appellant's motion to the district court with instructions to grant the motion in relevant part.