Opinion
No. A04-643.
Filed December 7, 2004.
Appeal from the District Court, Hennepin County, File No. Dc-278022.
Jane Binder, Christine Howard, Binder Law Offices, P.A., (for respondent)
Judith M. Rush, Attorney at Law, (for appellant)
Considered and decided by Klaphake, Presiding Judge; Harten, Judge; and Parker, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
On appeal from the default judgment dissolving the parties' marriage, appellant Mikael Soren Thollander challenges the district court's determinations on custody, child support, and property division. We affirm.
DECISION
Appellant filed this appeal without moving to vacate the default judgment. This court recognizes that "[t]he appropriate method to seek review in a marriage dissolution proceeding is to move the trial court for relief under Minn. Stat. § 518.145." Mesenbourg v. Mesenbourg, 538 N.W.2d 489, 493 (Minn.App. 1995). Without the motion, this court's review of the default judgment is limited to whether the evidence on the record supports the findings of fact and whether the findings of fact support the conclusions of law. Nazar v. Nazar, 505 N.W.2d 628, 633 (Minn.App. 1993), review denied (Minn. Oct. 28, 1993), superseded by statute on other grounds, Minn. Stat. § 518.551, subd. 5b(d); see also Thorp Loan Thrift Co. v. Morse, 451 N.W.2d 361, 363 (Minn.App. 1990) (finding that when seeking review of a default judgment, a party may not raise new facts or deny facts alleged in the complaint that were not at issue before the district court), review denied (Minn. Apr. 13, 1990).
1. Custody
The district court has broad discretion when determining custody of children. Durkin v. Hinich, 442 N.W.2d 148, 151 (Minn. 1989). An appellate court's "review of custody determinations is limited to 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) (quotation omitted). The district court's findings of fact will "not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Minn. R. Civ. P. 52.01.
District courts consider and evaluate the relevant "best-interest" factors to determine custody. Minn. Stat. § 518.17 (2002). In making a custody determination, the district court shall use a rebuttable presumption that upon request of either or both parties, joint legal custody is in the best interests of the child. Minn. Stat. § 518.17, subd. 2. However, if there is evidence that the parties are unable to communicate and cooperate, joint legal custody is inappropriate. Wopata v. Wopata, 498 N.W.2d 478, 482 (Minn.App. 1993). Respondent originally petitioned for joint legal and sole physical custody of the children, and appellant originally counter-petitioned for joint legal and sole physical custody. But in her motion for temporary relief, respondent sought and received sole physical and legal custody. Appellant claims that the award of sole legal custody of the parties' two children to respondent exceeds the relief requested in the original petition. He argues that even though he was "silent" in default, he is still entitled to the protections of the law and should not be "punished" by the district court.
This court in Nazar found that default judgment relief should not exceed that demanded in the original petition, even if the proof would justify greater relief. Nazar, 505 N.W.2d at 635. Here, the award of sole legal custody to respondent does exceed the relief requested. However, this case is distinguishable from Nazar in that appellant in this case participated at length at various points in the proceedings, was present in Minnesota at all times throughout the proceedings, and had notice of the potential default judgment along with a copy of the proposed marital termination agreement (MTA).
Following respondent's petition, appellant obtained legal counsel and answered the petition, filed his own motion for temporary relief, appeared at the hearing, responded (insufficiently) to discovery requests, and participated in mediation within four months of the default judgment hearing. Appellant also ignored some mediation appointments and failed to appear at hearings before the referee. When appellant failed to appear at the December 15, 2003, hearing on respondent's motion to compel discovery, the referee's order included the finding that appellant "has a history of not appearing at the required hearings and failure to participate in court-ordered activities to resolve issues of custody and parenting schedules" and "[this matter] needs to be completed whether or not [appellant] elects to participate." The referee went on to say that the matter would be continued "one last time" on February 10, 2004, and failure to comply with the order would result in allowing the respondent to proceed by default, based on the terms in her proposed MTA.
Following the court order, respondent sent a copy of her proposed MTA to appellant, and waited for either a signed MTA, or answers to discovery and a written response to the MTA. Appellant did not respond or attend the February 10 hearing. Appellant does not argue that he failed to receive the MTA, and the record includes the affidavit of mailing for the December order and notice of filing.
The referee explained at the February 10 hearing that because appellant had notice of the issues relating to custody, parenting time, division of marital property, and debts, his failure to respond resulted in the acceptance by the court of the proposed decree. It is within the discretion of the district court to render a default judgment if a party fails to respond to discovery orders or fails to appear at a prehearing conference. State by Humphrey v. Ri-Mel, Inc., 417 N.W.2d 102, 108 (Minn.App. 1987), review denied (Minn. Feb. 17, 1988) (discovery orders); Minn. R. Gen. Pract. 305.02(b) (prehearing conferences). Here, appellant had the opportunity to avoid default and propose his own MTA. His attempt to utilize a default judgment as a convenient tool for his own benefit abuses the process.
Though respondent originally requested joint legal custody, the award of sole legal custody is appropriate in this case. Respondent testified at the February 10 hearing that she was seeking sole physical and legal custody now because appellant was never involved with the children's home life, culture, and schooling, and he had "disappeared" for an extended period of time. The court had sufficient evidence through affidavits of both of the parties and the testimony of respondent to show the lack of cooperation and communication between the parties, and appellant had more than sufficient notice that without action, an award of sole legal custody to respondent would follow.
Regarding the physical custody award, respondent requested sole physical custody in her original petition, so the issue of exceeding the relief requested is not applicable here. "[C]urrent law leaves scant if any room for an appellate court to question the trial court's balancing of best-interests considerations" when it awards custody. Vangsness v. Vangsness, 607 N.W.2d 468, 477 (Minn.App. 2000). The court made findings on relevant best-interest factors, including the age of the children, the children's adjustment to their home and community, the intimacy of each of the parents with the children, and the children's primary caretaker. The findings are supported by the affidavits of both appellant and respondent, and the referee perceived respondent's affidavits to be more credible than appellant's affidavit. This court will defer to the district court's credibility determinations. Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988). The record supports the court's grant of sole physical custody to respondent.
2. Child support and medical expenses
Child support is determined per the guidelines set forth in Minn. Stat. § 518.551 subd. 5(b) (2002). A district court has broad discretion to provide for the support of the parties' children. Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002). A determination of the amount of an obligor's income for the 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). Income may be imputed to the obligor "because the obligor is voluntarily unemployed or underemployed, or because it is impracticable to determine the obligor's actual income." Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 240 (Minn.App. 2003), review denied (Minn. Nov. 25, 2003).
In a dissolution proceeding, the district court must determine child support based on income documentation provided by the parties to the dissolution, but without such documentation, the district court must rely on "credible evidence." Minn. Stat. § 518.551, subd. 5b(a), (c) (2002). "Credible evidence" includes documentation of recent income, testimony of the other parent, and wage reports filed with the Department of Economic Security. Id. A district court then may consider an appellant's prior income and the totality of the circumstances to determine his current ability to pay support. Darcy v. Darcy, 455 N.W.2d 518, 522 (Minn.App. 1990).
Appellant argues that the referee did not establish his or respondent's income by credible evidence, and because of this, the child support award, including paying half of the medical expenses for the children, is unsupported by evidence and erroneous. The referee relied on what evidence she had available — respondent's testimony, the parties' affidavits, and appellant's last available W-2 forms (2001). The referee found that appellant had the capability of making $100,000 per year. This finding does not clearly go against all logic and the facts in the record.
Appellant's affidavit revealed that appellant has several advanced college and professional degrees and is pursuing a business in the wine importing and distributing business, the overhead for which he is able to support in the amount of at least $2,400 a month. The W-2 forms indicated appellant made over $100,000 per year at a previous job. Even though appellant decided to pursue a new career, his multiple opportunities to supplement the discovery requested of him, or even to dispute that he was capable of making $100,000 a year, do not result in an erroneous finding by the referee. Moreover, because this court has long held that it is difficult to calculate income for self-employed persons, relying on earning capacity and earnings history is not clearly erroneous. LeTendre v. LeTendre, 388 N.W.2d 412, 416 (Minn.App. 1986). Respondent's testimony, and the documents the referee had available, provide a sufficient basis for the support determination.
Additionally, appellant failed to move posttrial for amended findings regarding medical expenses for the children and respondent's income. Because he contests the findings by the referee of the income of respondent, and the amount of medical expenses he should pay for the children, without a motion for amended findings, the only question for this court is whether the evidence supports the district court's findings and whether the findings support the conclusions of law. Comstock Davis, Inc. v. G.D.S. Assocs., 481 N.W.2d 82, 84 (Minn.App. 1992). Respondent provided extensive documentation regarding her own income, and the judgment and decree specifies that respondent will provide appellant with written verification for each medical expense. The referee's award regarding medical expenses is supported.
3. The homestead and property division
The district court must make a "just and equitable division of the marital property." Minn. Stat. § 518.58, subd. 1 (2002). The property division need not be mathematically equal to be just and equitable. Johns v. Johns, 354 N.W.2d 564, 566 (Minn.App. 1984). Appellate courts must simply arrive at values within a reasonable range of figures. Johnson v. Johnson, 277 N.W.2d 208, 211 (Minn. 1979). The parties are presumptively competent to testify to the value of their assets. Bury v. Bury, 416 N.W.2d 133, 136 (Minn.App. 1987).
Appellant argues that the district court's findings regarding marital property, and its value, are not supported by the evidence and are therefore neither just nor equitable. The district court adopted the proposed findings and conclusions of respondent. Normally, this is not reversible error, but raises the question of whether the district court "independently evaluated each party's testimony and evidence." Bliss v. Bliss, 493 N.W.2d 583, 590 (Minn.App. 1992), review denied (Minn. Feb. 12, 1993). Here, however, there is no question — appellant intentionally failed to participate in the proceedings or submit evidence, even though he was given repeated opportunities to do so. Though appellant argues that even in a default situation, a property division unsupported by the evidence cannot stand, his argument in this case fails.
Appellant cites Kuchenmeister v. Kuchenmeister, 414 N.W.2d 538 (Minn.App. 1987), where this court found that an award of "virtually all" assets to the respondent following a default judgment to be a "disparate award . . . not offset by an award of other property, and . . . not supported by the findings or record." Id. at 542. Here, appellant did receive a substantial amount of assets, including his two vehicles, his own stocks, bonds, pensions and retirement interests, all of the personal property he took with him to his new residence under the temporary relief order, his insurance policies, and his business.
The property division is further supported in the record because of the substantial debt appellant owed to respondent. At the February 10 hearing, the referee asked if respondent wanted anything more than a "fifty-fifty division of marital assets." Counsel for respondent explained that the property division in the MTA was equitableas appellant had amassed a great deal of debt against the home and against respondent. Indeed, appellant had taken out a home equity loan on the homestead, and a reserve line of credit (totaling $51,000). The decree specified that respondent would assume these debts in order to "buy out" appellant's interest in the homestead. As the court found that equity in the home to be $50,863.77, and the mortgage to be $387,237.36, with the $40,998.87 home equity loan (a debt appellant does not deny he owes), the award of the homestead to respondent is equitable.
Respondent set forth property values in her prehearing statement and in her affidavits, and appellant acknowledged his debt in his own affidavit, all of which provide support in the record for the findings. Appellant's disagreement with the property division could have been addressed upon his receipt of the MTA, though he chose not to respond. His disagreement with the award now, without any evidence offered by him prior to the decree, unavoidably results in a failure to show that the district court erred in the property division.