Opinion
No. C2-01-32.
Filed July 24, 2001.
Appeal from the District Court, Crow Wing County, File No. F293100.
Gary A. Debele, Barbara A. Ohnmacht, (for appellant)
Kim A. Pennington, JoAnn W. Evenson, (for respondent)
Considered and decided by Klaphake, Presiding Judge, Crippen, Judge, and Stoneburner, 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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION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 Michael Owen Musty brought this motion to terminate his obligations to pay respondent Kathryn Louise Musty $3,250 per month in permanent spousal maintenance and to maintain a life insurance policy naming respondent as beneficiary. These obligations are based on a 1994 judgment and decree that dissolved the parties' 25-year marriage. Appellant claimed that modification was warranted due to "substantial changes in the financial circumstances of [r]espondent and myself since the time of trial." In denying appellant's motion, the district court made findings on the parties' incomes and concluded that appellant's "submissions have failed to show that the Court's original spousal maintenance award and order to maintain life insurance with respondent as beneficiary are unreasonable and unfair."
Because the district court's findings are inadequate to allow effective review of the court's decision, we reverse the denial of appellant's motion and remand for the district court to make adequate findings and re-evaluate its modification decision in light of those findings.
DECISION
From time to time, either party may move to modify an award of maintenance. Minn. Stat. § 518.64, subd. 1 (2000). Such a motion must be based on a showing that the prior award is unfair and unreasonable due to any number of factors, including "(1) substantially increased or decreased earnings of a party; [or] (2) substantially increased or decreased need of a party[.]" Minn. Stat. § 518.64, subd. 2(a) (2000).
As the party seeking modification, appellant has the dual burden of demonstrating that circumstances have changed and that these changes make the original award unreasonable and unfair. Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997). Appellant claims that substantial changes have occurred due to his decreased earnings and increased needs, along with respondent's increased earnings. When considering whether modification is warranted, a district court must make findings addressing the party's claims of substantial change under Minn. Stat. § 518.64 (2000). See Dougherty v. Doughterty, 443 N.W.2d 193, 195 (Minn.App. 1989) (reversing and remanding for additional findings where reviewing court unable to determine whether statutory requirements for modification considered).
Appellant first argues that the district court clearly erred in calculating his 2000 gross income at $139,000, because that figure includes earnings received prior to March 2000, when his employer unilaterally reduced his hours. Appellant claims that this reduction in hours will result in a decrease in his 2001 annual gross income, to $107,577. At oral arguments in this case, respondent acknowledged that appellant has experienced a decrease in his income.
In the 1994 judgment and decree, the trial court found that appellant's annual salary was $129,000.
The district court erred in not considering appellant's current income. See Merrick v. Merrick, 440 N.W.2d 142, 146 (Minn.App. 1989) (trial court should have considered husband's most current check stubs in calculating net income); Thomas v. Thomas, 407 N.W.2d 124, 127 (Minn.App. 1987) (trial court erred in calculating current income by using 1985 tax return when financial information for first six months of 1986 was available). We therefore reverse and remand for additional findings on appellant's current income. On remand, the district court may consider income appellant receives from his on-call work.
Appellant next argues that the district court failed to properly consider his increased needs. The court made no specific findings on appellant's reasonable needs or expenses at the time of the divorce or on his current reasonable needs. Although the court found that appellant has remarried and has purchased a new home, it did not specifically indicate how his needs have been affected by these decisions or otherwise reject appellant's claimed increase in needs due to these decisions. Thus, we also remand for findings on appellant's needs. See Rapacke v. Rapacke, 442 N.W.2d 340, 343 (Minn.App. 1989) (remanding maintenance modification for findings).
Appellant further argues that the district court failed to consider respondent's increased income. At the time of the parties' divorce, respondent was in college and working part-time as a librarian. The district court found that respondent has completed her education and is now employed full time, earning approximately $33,000 per year. The district court failed, however, to consider whether this constitutes a substantial change in respondent's earnings. Some change was obviously anticipated at the time of the divorce: in the 1994 judgment and decree, the court expressed its "expectation that any employment position respondent obtains will be at an entry level" and that "it is not probable that respondent will be able to provide adequate self-support through appropriate employment even after she has completed her college degree." In addressing this modification motion, the district court must now determine whether respondent's current income represents a substantial change from the circumstances foreseen at the time of the decree. See Ramsay v. Ramsay, 305 Minn. 321, 322-23, 233 N.W.2d 729, 731 (1975) (courts reluctant to decrease or terminate maintenance, particularly if recipient's subsequent employment was feasible at time of decree); Tuthill v. Tuthill, 399 N.W.2d 230, 231 (Minn.App. 1987) (recipient's employment is not change in circumstances justifying modification if it was foreseeable at time of original award that she would obtain employment). A substantial change occurs only if it is beyond what was anticipated or contemplated by the decree. See Hecker, 568 N.W.2d at 709.
If the district court determines substantial changes have occurred, it must consider whether any such changes make the prior maintenance award unfair and unreasonable. Should the court find that substantial changes have occurred that make the prior maintenance obligation unfair and unreasonable, the court must consider the appropriate amount of any modification of maintenance. See Kemp v. Kemp, 608 N.W.2d 916, 921 (Minn.App. 2000) (needs of maintenance recipient must be balanced against financial condition of payor).
Finally, we leave it to the district court's discretion to make these findings on the present record or to allow the parties an opportunity to submit additional, current evidence on their incomes and expenses.
Reversed and remanded.
I concur in the result because the trial court's findings fail to explain why respondent's increase in income does not justify an alteration of the maintenance award. But this conclusion does not render less significant the fact that the judgment expressly contemplates respondent's success in completing an education program and gaining an "entry level" salary:
Considering the standard of living established during the marriage, respondent's age, and the expectation that any employment position respondent obtains will be at entry level, it is not probable that respondent will be able to provide adequate self-support through appropriate employment even after she has completed her college degree.
On remand, it is appropriate to reexamine appellant's earnings, which he expected would decrease at some time after the current motion was heard in October 2000. In my opinion, the trial court's last findings on this subject were appropriate when made, addressing the question of appellant's earnings at the time the motion was heard. The remand spares appellant the need to renew his motion based on an actual decline in his income.
Little more need be said about appellant's expenses. The trial court addressed the fact that appellant sold the former home of the parties for $135,000 and purchased a new residence costing $384,400. He reported to the court an increase of over $1,700 in mortgage and real estate tax expense. This item is greater than the total increase in expenses appellant reported. It is evident from the trial court's findings that the court did not believe appellant's choice to increase his housing costs rendered his prior maintenance obligation unfair. Even if the subject is more complex than this, the trial court's findings are justified by appellant's failure to more clearly compare his past and current expenses.