Opinion
No. C7-01-1564.
Filed July 2, 2002.
Appeal from the District Court, Dakota County, File No. F2008274.
Robin Dietz-Mayfield, (for appellant)
John T. Burns, Jr., (for respondent)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
On appeal from the amended dissolution decree, appellant alleges that (1) joint physical custody is not in the children's best interests, (2) the findings are inadequate to support the parenting time schedule, (3) appellant is not voluntarily unemployed and should not have had income imputed to her, (4) an award of permanent spousal maintenance was required, (5) appellant was entitled to the award of a $10,000 nonmarital asset, (6) both parents' names should have been put on the children's accounts, (7) the award of the tax dependency exemptions to respondent for the period appellant is in school is inequitable, (8) the district court's award of the boat to respondent is contrary to the parties' stipulation, (9) respondent should be required to pay interest on the awards to appellant for respondent's dissipation of assets, (10) the amount of dissipated assets was understated, (11) the parties' inability to communicate shows that a parenting consultant is inappropriate, and (12) appellant should have been awarded attorney fees. We affirm in part, reverse in part, and remand.
FACTS
Appellant Jean Baudhuin and respondent David Baudhuin were married in 1983 and have three children, ages 16, 13, and 8, who are very active in various groups, organizations, and activities. Although appellant testified she always had planned to attend law school, she spent the majority of the marriage as a homemaker. Respondent is a reserve airline pilot for Northwest Airlines and previously was a pilot in the United States military. In 2000, he earned a gross income of $143,343. His employment requires that he be "on call" and be able to fly within two and a half hours of being called. Although respondent has some freedom to schedule which days he is on call, he must be on call for 18 days of every month.
In 2000, the parties separated, and a temporary order was issued granting the parties joint legal custody and sole physical custody to appellant, with liberal visitation for respondent. Pursuant to the temporary order, respondent paid $2,000 in monthly spousal maintenance and $2,447 in monthly child support. A restraining order was included preventing the unnecessary dissipation of marital assets. The temporary order required that, each month, respondent was to provide appellant the two days per week on which he would exercise his visitation rights plus one other visitation period from after school until 8:00 p.m. According to appellant, this visitation schedule was difficult because it changed from month to month and, therefore, made it difficult to plan activities and trips with the children. Although the court later modified the schedule to provide for regular hours, this schedule was largely ineffective because of its incompatibility with respondent's schedule.
The court assigned a guardian ad litem, who met with the parties and their children and evaluated the conditions of custody. His final report recommended that appellant be given primary physical custody and stated unequivocally that he did not believe joint physical custody was possible; he believed the parties were unable to communicate effectively.
Immediately prior to the commencement of trial, the court met with counsel in chambers and informed both parties that they would have only 45 minutes each to present evidence and that heavy reliance would be placed on the guardian ad litem's report. At trial, neither party extensively argued the custody issues. Nevertheless, upon conclusion of the trial, the court found that it was in the children's best interests that the parties be awarded joint legal custody and "shared" physical custody, with equal access to both parties, but with the primary residence being that of appellant in the family home. The court ordered that the children would be with respondent on the first and third weekends of every month and, additionally, every Tuesday from 3:00 p.m. to 8:00 p.m. during the summer — specifically finding that there would be no overnights with respondent on weeknights during the school year. The court also ordered a holiday schedule. This schedule was subject to alteration by the parenting advisor appointed by the court or the guardian ad litem. The court ordered that respondent maintain the children's education accounts.
The court found that appellant's employment situation was due to her choice, though appellant had testified that it was a joint decision made, at least in part, because of the demands of respondent's jobs. After a vocational expert evaluated appellant and determined that, with no further training, she should be able to earn $24,000-$26,000 per year, the trial court imputed $1,581.95 per month income to her, on the basis of a $25,000 per year salary.
The vocational expert supported appellant's vocational plan, which would entail attending law school with the hopes of, upon completion, being able to attain employment with the government earning in the range of $41,000. The vocational expert opined that the difficulty with this plan would be in handling this program along with her children's needs. Considering the needs of her children, the vocational expert did not support a work plan in addition to law school and care for the children.
Using this imputed income figure and respondent's net monthly income of $6,536.89, the court applied the Hortis/Valento formula for equal divisions of parenting time. The net result was to set respondent's child support at $867.12.
The trial court found that appellant had a temporary need for spousal maintenance and awarded $2,000 per month until she was enrolled in law school, at which time the maintenance award would increase to $3,000 per month until the earlier of her graduation or six years. The trial court then divested itself of jurisdiction to award either party any additional maintenance.
The court determined that approximately $245,500 worth of Valspar stock was respondent's nonmarital property and that respondent had dissipated marital assets in contravention of the temporary order by cashing out an IRA at a heavy penalty. Although respondent only received just over $18,000 for the stock, the court awarded appellant half of the original value of the IRA, $19,333.64. The parties' snowmobiles were awarded to appellant, and the parties' boat to respondent. Each was valued at approximately $1,000. The court awarded appellant the homestead, subject to a lien in favor of respondent for $125,000. The court otherwise divided the parties' property equally.
Finally, the court awarded appellant attorney fees of $12,000 due to respondent's greater income.
Upon motions for amended findings or a new trial, an amended decree was entered. The amended decree recognized appellant's recent acceptance into law school, lowered her imputed income to that of part-time work ($1,042 per month), combined this amount with the $3,000 per month spousal maintenance ordered during her attendance at law school, used this combined amount to re-calculate appellant's income, and reduced respondent's child support obligation to $656.10.
Under the court's original order, appellant's maintenance was not included in determining her income for child support purposes.
The access schedule was modified in the amended decree to specifically provide that the children would spend 50% of the their time with each parent. Respondent was ordered to give appellant two schedule choices for him to bid (request at work).
In the amended decree, the court determined that a $10,000 gift to appellant by respondent's father was nonmarital property. The schedule for respondent's payment of amounts dissipated under the IRA was accelerated, but the court did not include interest on those amounts; respondent's lien on the homestead was eliminated and replaced with an additional $125,000 award to him from the marital-property retirement accounts; and the attorney fee award to appellant was reduced to $10,000.
This appeal followed.
DECISION 1. Custody
Appellant first challenges the district court's award of joint legal custody and "shared" physical custody. The district court has broad discretion to provide for the custody of the parties' children. Durkin v. Hinich, 442 N.W.2d 148, 151 (Minn. 1989); Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984). This court reviews custody determinations to establish whether the district court abused its discretion by making findings unsupported by the evidence or by improperly applying the law. Silbaugh v. Silbaugh, 543 N.W.2d 639, 641 (Minn. 1996); Pikula v. Pikula, 374 N.W.2d 705, 710 (Minn. 1985). A district court's findings will be sustained unless they are clearly erroneous. Pikula, 374 N.W.2d at 710.
Despite the phrase "shared physical custody," the custody arrangement here was clearly intended by the court to be "joint physical custody." The amended decree directs that the children spend 50% of their time with each parent, and the court used the Hortis/Valento formula to determine child support obligations. In such cases, it is clear that the court, regardless of language choice, is awarding joint physical custody. See Schlicting v. Paulus, 632 N.W.2d 790, 793 (Minn.App. 2001) (child support guidelines do not contemplate the application of the Hortis/Valento child support formula in a case of sole physical custody).
Minnesota does not favor joint physical custody. Rosenfeld v. Rosenfeld, 529 N.W.2d 724, 726 (Minn.App. 1995). In fact, "[a] grant of joint physical custody will only be appropriate in `exceptional cases.'" Wopata v. Wopata, 498 N.W.2d 478, 483 (Minn.App. 1993) (quoting Brauer v. Brauer, 384 N.W.2d 595, 598 (Minn.App. 1986)). This is because [r]egularity in the daily routine of providing the child with food, sleep, and general care, as well as stability in the human factors affecting the child's emotional life and development, is essential, and it is difficult to attain this regularity and stability where a young child is shunted back and forth between two homes.
Kaehler v. Kaehler, 219 Minn. 536, 539, 18 N.W.2d 312, 314 (1945) (citing State ex rel. Larson v. Larson, 190 Minn. 489, 495, 252 N.W. 329, 331 (1934)) (other citations omitted).
Therefore, when joint custody is considered, the court must consider not only the best-interests-of-the-child factors enunciated in Minn. Stat. § 518.17, subd. 1 (2000), but also the factors listed in Minn. Stat. § 518.17, subd. 2 (2000). Those are:
(a) The ability of parents to cooperate in the rearing of their children;
(b) Methods for resolving disputes regarding any major decision concerning the life of the child, and the parents' willingness to use those methods;
(c) Whether it would be detrimental to the child if one parent were to have sole authority over the child's upbringing; and
(d) Whether domestic abuse, as defined in section 518B.01, has occurred between the parents.Id. Where, as here, the court awards joint physical custody over the objection of one of the parents, the court is required to make detailed findings on each of these factors and explain how the factors led to its determination that joint custody would be in the best interests of the child. Id.
Respondent argues that the preference for sole physical custody is limited to cases involving very young children. Although we have previously indicated that the fact that a child was only two years old should have affected how the district court assessed the statutory factors, see Peterson v. Peterson, 393 N.W.2d 503, 506 (Minn.App. 1986) (using age of children as one reason distinguishing the case from previous case where facts relevant to the statutory factors were similar), to construe Peterson as limiting the preference for sole physical custody to cases involving very young children would be an unwarranted extension of the holding of that case. First, it is specious reasoning to conclude that because joint physical custody is inappropriate for a two-year-old it must be appropriate for older children. Furthermore, in Peterson, the age of the child was not, by itself, dispositive. Id. at 507. The more substantial factor in that case was that one parent lived in Nevada and the other in Minnesota. Id. (joint physical custody was not appropriate where court did not believe it was in the child's best interests to "constantly be shunted back and forth between Nevada and Minnesota.").
Furthermore, in this case, the trial court's findings not only fail to support the conclusion that joint custody is appropriate, they actually undermine that conclusion. In discussing the access schedule, the trial court found that "[c]onsistency is important for the stability of the minor children." We agree, but conclude that under the facts of this case, consistency and stability cannot be secured through a joint custody arrangement. See Kaehler, 219 Minn. at 539, 18 N.W.2d at 314 ("Regularity in the daily routine of providing the child with food, sleep, and general care, as well as stability in the human factors affecting the child's emotional life and development, is essential, and it is difficult to attain this regularity and stability where a young child is shunted back and forth between two homes.").
The only factor that appears to support a joint custody arrangement here is the court's finding that, "considering the age of the minor children, it is important that they spend quality time with both parents." While we agree that spending quality time with each parent is important, that commendable goal can be sought by means other than imposition of a joint physical custody arrangement that is otherwise unworkable and not in the best interests of the minor children. An award of joint physical custody over the objection of one of the parents must be accompanied by findings far more substantial, consistent, and comprehensive than those present here. In fact, we conclude that the findings required by Minn. Stat. § 518.17, subd. 2, to support a grant of joint physical custody could not reasonably be made under the facts of this case. Therefore, we remand the issue of custody with directions that the trial court, consistent with its declaration that heavy reliance would be placed on the report of the guardian ad litem, grant sole physical custody to appellant.
Respondent has not sought sole physical custody himself, nor has he preserved this issue on appeal by notice of review.
2. Parenting Schedule
In view of our decision that a grant of joint physical custody is not in the best interests of the minor children, the trial court will need to establish an appropriate parenting schedule on remand. We make the following observations in order to assist in that difficult task.
Under Minn. Stat. § 518.175, subd. 1(a) (2000), parenting time is granted so as to "enable the child and the noncustodial parent to maintain a * * * relationship that will be in the best interests of the child." The trial court commendably found a need for "consistency" in setting the schedule, going as far as recommending a set schedule so that "the children will know ahead of time where they will be staying." Furthermore, the court specifically noted in the original decree that, "[p]er the Guardian's recommendation with acknowledgement by the family therapist, there will be no overnight visits during the school week." The parenting schedule set forth in the amended judgment, however, provided for overnight visits during the school week. Respondent's work schedule was apparently incompatible with the stated goal of no overnight stays during the week. In an effort to accommodate the demands of respondent's work schedule, the trial court ordered that the time spent with respondent would vary from month to month — with respondent offering appellant two work schedule choices and respondent "bidding" appellant's preferred schedule choice. The schedules that would be proposed by respondent were to include three groups of four consecutive days where respondent would not be on call. He would have the children with him during these off periods plus the first day that he was on call. Clearly, the consistency of the children's schedule was sacrificed and weekday exchanges permitted in contravention of the court's own findings, so that respondent's work schedule could be accommodated. The premium that was placed on accommodation of the work schedule was achieved, we conclude, only by compromising the best interests of the minor children.
We are not insensitive to the very real difficulties presented in this case in attempting to establish a visitation schedule that serves the best interests of the minor children, in assuring that they spend quality time with each parent, and also in accommodating, to the greatest extent possible, the schedules of respondent, appellant, and the children themselves. We urge the trial court on remand to enlist the good-faith efforts of both parents, and the additional assistance, if required, of the guardian ad litem and family therapist, in establishing an appropriate visitation schedule.
3. Income Imputation
Appellant next argues that the trial court erred in imputing income to her for child support and maintenance purposes. A physical custodian is presumptively not a child support obligor. Minn. Stat. § 518.54, subd. 8 (2000); Rogers v. Rogers, 622 N.W.2d 813, 819-20 (Minn. 2001). In view of our remand of the custody issue with directions for the trial court to grant sole physical custody of the parties' minor children to appellant, we do not address appellant's claims regarding the imputation to her of income for support purposes.
With regard to imputation of income to appellant for purposes of a maintenance award, we note initially that the trial court's findings indicate only that appellant is capable of earning $25,000 a year working full-time. The court goes on to acknowledge and impliedly approve of appellant's plan to attend law school by imputing only half-time income to her while she does so. The court noted that appellant "has chosen to stay home and raise the children during the marriage of the parties." Appellant's testimony, however, was that the decision for her to remain a homemaker was one made by the parties jointly, and this testimony was unrefuted. Also unrefuted was appellant's testimony that the need for her to be a full-time homemaker and caregiver to the minor children was dictated by respondent's inconsistent work schedules as a military and airline reserve pilot.
Whether to impute income to a maintenance recipient is discretionary with the trial court. Carrick v. Carrick, 560 N.W.2d 407, 410 (Minn.App. 1997) (applying abuse-of-discretion standard to review imputation of income to maintenance recipient). To impute income in the maintenance context, however, the trial court must find bad faith on the part of the individual to whom the income is imputed. See Walker v. Walker, 553 N.W.2d 90, 95 n. 1 (Minn.App. 1996) (stating trial court must find bad faith before imputing income to maintenance obligor). Additionally, in Carrick, we held that, in determining spousal maintenance at the time of a dissolution, a trial court may not find bad faith and impute income to a maintenance recipient where the maintenance recipient has continued to work the same number of hours as she did at the time of separation and has been employed in the same kind of position as she was during the marriage, and where there is no evidence of any intent to reduce her income. 560 N.W.2d at 410.
Respondent suggests that Carrick is inapt because, in that case, the children had already left the home. Maintenance and child support are separate concepts with related prerequisites. The statutory considerations for awarding maintenance, however, require consideration of whether the maintenance recipient is receiving child support. Minn. Stat. § 518.552, subd. 2(a) (2000). Because maintenance awards are to be adjusted as necessary to account for any existing support award, the presence of children in the home of a maintenance recipient cannot be fatal to a maintenance award. Therefore, we reject respondent's attempt to distinguish Carrick.
Moreover, here appellant presented a plan for her to return to law school with the hopes of attaining a higher paying job upon graduation. While respondent's vocational expert met with appellant and concluded that, with no further education, she could earn between $24,000 and $26,000 per year, that expert supported appellant's vocational plan with the proviso that the expert [would] not support a work plan in addition to law school with her children of such ages where she must be active and support their extra-curricular activities and caring for their day to day needs.
(Emphasis added.) The guardian ad litem likewise expressed reservations about appellant's ability to balance law school with both work and parenting.
Clearly, this record does not show the bad faith on appellant's part that is necessary to impute income to her as a maintenance recipient. We remand to enable the trial court to establish a maintenance award that does not include consideration of any income imputed to appellant.
4. Spousal Maintenance
Appellant next challenges the district court's failure to award permanent spousal maintenance. This court reviews a district court's maintenance award under an abuse-of-discretion standard. Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997); Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). For this court to conclude the district court abused its broad discretion with respect to an award of spousal maintenance, the district court's findings of fact must be "against logic and the facts on [the] record," Rutten, 347 N.W.2d at 50 (citation omitted), or "clearly erroneous." Gessner v. Gessner, 487 N.W.2d 921, 923 (Minn.App. 1992) (citation omitted).
Appellant claims that the nature and extent of her employment possibilities in the legal field are speculative. She also notes that she will be seeking employment after a long-term marriage when she did not work outside of the home. Maintenance may be granted if the spouse seeking maintenance either:
(a) lacks sufficient property, including marital property apportioned to the spouse, to provide for reasonable needs of the spouse considering the standard of living established during the marriage, especially, but not limited to, a period of training or education, or
(b) is unable to provide adequate self-support, after considering the standard of living established during the marriage and all relevant circumstances, through appropriate employment, or is the custodian of a child whose condition or circumstances make it appropriate that the custodian not be required to seek employment outside the home.
Minn. Stat. § 518.552, subd. 1 (2000).
Here, the trial court found, with much support in the record, that appellant is bright, articulate, and well-educated, without regard to any proposed legal education. Although appellant argues that the benefits of her law school education are uncertain, she argued, and the trial court agreed, that her career change was a bona fide one. Furthermore, uncertainties regarding the financial advantages of a legal education are somewhat ameliorated by the fact that, even with no further education, appellant might be expected to earn $25,000 per year. Although Minn. Stat. § 518.552, subd. 3 (2000), provides for a preference for permanent maintenance when, after considering the factors listed in Minn. Stat. § 518.552, subd. 2, the propriety of a temporary maintenance award is in doubt, here, we can find no abuse of discretion in the decision of the trial court to award only temporary maintenance.
Respondent's vocational expert suggested that, with government employment as an attorney, appellant could expect to earn more than $40,000 per year.
While the trial court did not abuse its discretion in its decision to award temporary maintenance, and it clearly considered how appellant's education would affect her income, it failed to similarly consider how the costs of going to law school would affect her reasonable monthly expenses. The cost of her law school education is an expense that should be considered when awarding maintenance. We remand the issue of maintenance for consideration of those expenses and any necessary adjustment of the maintenance award. See Minn. Stat. § 518.552, subd. 1(a) (court may grant maintenance if it finds that spouse lacks sufficient property "to provide for reasonable needs of the spouse * * * especially * * * a period of training or education").
The district court reduced appellant's imputed income by approximately $1,000 per month to reflect half-time work instead of full-time work during law school and roughly offset this diminution of her income by temporarily increasing respondent's maintenance obligations by a similar amount.
5. Jurisdiction
In addressing the issue of spousal maintenance, the trial court, sua sponte, ordered that the court "is hereby divested of jurisdiction to award either party any further or additional maintenance." Absent the parties' stipulation regarding such a divestiture, however, the court retains authority to consider whether changed circumstances warrant modification of maintenance. Kemp v. Kemp, 608 N.W.2d 916, 921 (Minn.App. 2000). We construe the trial court's language to state that it will be divested of jurisdiction at the completion of the maintenance payment period and that, during the period of time that payments are being made, either party retains the right to request modification of the maintenance award under Minn. Stat. § 518.64 (2000).
6. Appellant's $10,000 Nonmarital Asset
The amended decree included a finding that appellant "was given a $10,000 nonmarital gift from [respondent's father] and she is entitled to that gift after the marriage dissolution," and ordered that she be awarded all right, title, interest and equity, free and clear of any claim on the part of [r]espondent, in and to any cash, savings or checking accounts in [appellant]'s name or under her control, including a $10,000 non-marital award of the gift from [respondent's father].
(Emphasis added.) The effect of this award is unclear. Appellant argues that this money should have been subtracted from the marital estate. Respondent responds by saying that it already was subtracted and was part of the cash already in appellant's control. We see no evidence that this asset was taken into account in the property division. We remand this issue to permit the trial court to provide a mechanism for the payment of this asset.
7. Children's Investment Accounts
The trial court gave to respondent the right and obligation to maintain the children's educational accounts. Appellant argues that this was error because joint legal custody was ordered, and, therefore, both parties' names should be on the accounts. Appellant has provided no evidence that shows an abuse of discretion here.
8. Income Tax Exemptions
Appellant argues that the award of all three income tax exemptions to respondent while appellant is in law school was inequitable. We see no abuse of discretion. Although respondent receives the exemptions while appellant is in law school, the amended decree provides that when appellant is no longer in school the exemptions will be more equitably divided.
9. The Boat
Appellant next argues that the trial court erred by awarding the parties' boat to respondent, despite the fact that appellant had the capacity to tow the boat, that she and respondent had agreed that she would receive the boat, and that respondent should receive some offset in exchange. What appellant calls the parties' "stipulation," however, consisted only of (1) appellant's trial testimony that she would pay half the value of the boat for the boat outright, (2) respondent's trial testimony that he would give up his interest in the boat for $750, and (3) respondent's suggestion that the boat be awarded outright to appellant in his proposed decree. This is not an agreement, much less a stipulation.
A property division must be viewed in its entirety. Rutten, 347 N.W.2d at 50. Awarding the boat to respondent effectuated an equitable property division overall. There is no abuse of discretion.
10. Dissipated Assets
Appellant makes two arguments relating to respondent's sale of marital property. There is no merit to either argument. As to her first argument, appellant failed to provide evidence supporting her contention that whatever tax savings were created by the sale of marital stock at a loss did not benefit the marital estate. Therefore, she did not meet her burden of proof to show that such sale constituted a dissipation of marital assets. See Minn. Stat. § 518.58, subd. 1a (2000) (burden of proof regarding dissipation is on claimant). As to appellant's second argument, the trial court was within its broad discretion in refusing to award appellant interest on the pre-dissipation value of her one half of the IRA, or to require the payment of assets any sooner than 18 months.
11. Parenting Consultant
Appellant's challenge to the court's decision to order the parties to pay a parenting consultant is moot. The trial court has subsequently appointed the guardian ad litem to perform this function.
12. Attorney Fees
The trial court initially awarded appellant $12,000 in attorney fees. In the amended decree, however, that amount was reduced to $10,000. Appellant argues that the court's award of attorney fees was insufficient because her fees were more than $22,000, she does not have the means to pay them, and has proceeded in good faith. Furthermore, she contends that the reduction was unsupported by findings.
Awards of attorney fees under Minn. Stat. § 518.14, subd. 1 (2000), rest "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); see also Katz v. Katz, 408 N.W.2d 835, 840 (Minn. 1987); Geske v. Marcolina, 624 N.W.2d 813 (Minn.App. 2001). Here, the trial court found that [b]oth parties have incurred substantial attorney fees in this matter due to the complexity and extent of the parties' marital and non-marital estate. Due to the disparity of the parties' present financial situations, [r]espondent shall contribute to the cost of [appellant's] attorney fees.
The court clearly contemplated the parties' relative financial situation. We find no abuse of discretion. Considering that the trial court increased the amount of maintenance in the amended decree, the reduction of the fee award there was not inappropriate.
In conclusion, we reverse and remand on the issues of joint physical custody, the parenting schedule, the level of the spousal maintenance award, and the award of a $10,000 asset to appellant. We reverse on the issue of imputation of income to appellant for maintenance purposes and do not address appellant's imputation arguments regarding child support. We affirm the trial court's decision that spousal maintenance is to be temporary, and the decisions as to dissipation of marital assets, the ownership of the parties' boat, the allocation of income tax exemptions, and the award of attorney fees to appellant. The issue regarding a parenting consultant is moot. On remand, the trial court shall have discretion regarding whether to reopen the record to address the remanded issues.
Affirmed in part, reversed in part, and remanded.