Opinion
No. C2-02-1286.
Filed April 1, 2003.
Appeal from the District Court, Hennepin County, File No. DC261958.
J. Peter Wolf, Shelly D. Rohr, Wolf Rohr, P.A., (for respondent)
Richard S. Eskola, (for appellant)
Considered and decided by Klaphake, Presiding Judge, Lansing, 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This opinion will be unpublished and may not be cited except as provided by Minn.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UNPUBLISHED OPINION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 Darlene D. Steinmetz challenges the district court's decision to set respondent Mark S. Steinmetz's spousal maintenance obligation at $3,000 per month, claiming that this amount is inadequate to meet her needs. Appellant also challenges the district court's denial of her request for $5,000 in need-based attorney fees.
Because the district court's decision is reasonably supported by the record, which includes the reports and testimony of two certified financial planners regarding the amount of income appellant can expect to generate from the more than $1.2 million in marital assets awarded her, and because the district court's denial of appellant's request for need-based attorney fees was not an abuse of discretion, we affirm.
DECISION I.
Issues involving spousal maintenance are discretionary with the district court. Erlandson v. Erlandson, 318 N.W.2d 36, 38 (Minn. 1982). A maintenance award will not be disturbed on appeal if it has a "reasonable basis in fact and principle." DuBois v. DuBois, 335 N.W.2d 503, 507 (Minn. 1983).
The parties agreed that an award of maintenance was appropriate, given their high standard of living and appellant's role as a traditional homemaker during their 25-year marriage. In addition, respondent, who currently earns about $200,000 per year and also received over $1.2 million in marital assets, does not dispute that he has the ability to pay $3,000 per month in spousal maintenance. Nor does respondent challenge the district court's decision to award appellant permanent maintenance. Rather, the issue here involves the appropriate amount of maintenance, which requires consideration of appellant's needs and ability to meet those needs. See Lyon v. Lyon, 439 N.W.2d 18, 22 (Minn. 1989) (maintenance awarded to meet recipient's need and depends on showing of need, regardless of obligor's ability to pay).
Appellant claimed that her monthly needs or expenses total $9,029. The district court reduced her claimed monthly expenses to $8,507, as follows:
Wife's car payment is a three-year obligation and should be pro-rated over 4 years in order to reduce the expense to about $675 per month. The $732.80 "Target K-mart" seems very high at first blush. In order to spend this much, wife would need to average a trip per day to the discount store at $25 per trip. Since this need was not adequately explained, it should be reduced by $300.
The district court's reduction of these two expenses was reasonable, and its analysis supports the court's findings regarding appellant's expenses. See Bliss v. Bliss, 493 N.W.2d 583, 587 (Minn.App. 1992) (remanding for required findings where district court failed to either accept maintenance recipient's claimed expenses as reasonable or perform analyses and modifications necessary to reach figure that court deems reasonable), review denied (Minn. Feb. 12, 1993).
Appellant's ability to meet her needs depends on, among other things, consideration of the marital property apportioned to her in the divorce. See Minn. Stat. § 518.552, subd. 1(a) (2002) (entitlement to maintenance depends, in part, on whether spouse seeking maintenance "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"); Minn. Stat. § 518.552, subd. 2 (2002) (one factor to consider when determining amount and duration of maintenance is "financial resources of the party seeking maintenance, including marital property apportioned to the party, and the party's ability to meet needs independently"). Although "[c]ourts normally do not expect spouses to invade the principal of their investments to satisfy their monthly financial needs," a court must consider income generated by those investments as available to meet the spouse's needs. Fink v. Fink, 366 N.W.2d 340, 342 (Minn.App. 1985) (citation omitted); see Rask v. Rask, 445 N.W.2d 849, 853 (Minn.App. 1989) (reversing maintenance award when court failed to consider recipient's financial resources in light of marital property division).
Here, the district court determined that appellant's share of the marital assets "can be expected to generate at least $7,000 per month in income." The court based its determination on the testimony and report of respondent's expert, a certified financial planner, who opined that appellant could reasonably realize an annual distribution of 7% or $84,000 per year, from her $1.2 million portfolio of regular investments, which did not include retirement plan balances. On rebuttal, appellant submitted the report of another financial planner who stated that he found it "very difficult to assure [appellant] of an expected rate of return of 7% for the short as well as long-term."
Similar to the valuation of an asset, a determination regarding the generation of income from investments should be considered an approximation that "need only fall within a reasonable range of figures." Mauer v. Mauer, 623 N.W.2d 604, 606 (Minn. 2001) (quotation omitted). Although appellant may criticize the analysis, methods, and assumptions used by respondent's expert, we cannot conclude that the district court's acceptance of the opinion of respondent's expert was an abuse of the court's discretion. The court considered the reports and testimony of both parties' experts and chose to accept the opinion of respondent's expert. See State ex rel. Trimble v. Hedman, 291 Minn. 442, 456, 192 N.W.2d 432, 440 (1971) (stating "[t]he weight and credibility to be given to the opinion of an expert lies with the factfinder").
Appellant argues that the court's acceptance of the conclusions of respondent's expert penalizes her by assuming that this investment income is guaranteed. She asserts that if her rates of return do not reach the anticipated levels, she will be forced to invade her principal to meet her monthly needs. But, because respondent has calculated his ability to pay based partially on his income and partially on the investment income he expects to earn from his share of the marital property, the risks are born by both parties. In addition, respondent's expert based her analysis on historical rate of return, which is an entirely reasonable assumption to make over the long term, even though the rates of return in the last few years have failed to rise to historical levels. Moreover, the failure of an assumption underlying a maintenance award may justify later modification of that award. See Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997).
Appellant further asserts that the analysis of respondent's expert factored in her share of the retirement assets, which are qualified and not liquid, as well as her projected, future receipt of social security benefits. But respondent's expert applied the 7% rate of return to only the $1.2 million pool of cash investments. If all of the marital property apportioned to appellant is considered, appellant would only need to realize a return of 4.68% in order to produce $84,000 per year in investment income. On cross-examination, even appellant's expert agreed that 4.68% is a reasonable rate of return.
Because the amount of maintenance is dependent on the particular facts of each case, this court generally defers to the district court's decision regarding amount necessary to reasonably provide for the needs of the recipient spouse. We therefore affirm the district court's decision that $3,000 maintenance per month will reasonably provide for appellant's needs.
II.
The district court denied appellant's request for $5,000 in need-based attorney fees, reasoning that because appellant will have "positive cash flow," she has the ability to "pay her own fees without jeopardizing her financial future." Appellant argues that the district court abused its discretion and insists that an award of fees is appropriate here, given the vast disparity in income between the parties.
The court determined that when the $7,000 in investment income and the $3,000 in spousal maintenance are taxed at an effective rate of 25%, appellant will have $7,500 per month available to meet her needs. The court further determined that when this amount is combined with the amount of child support received by appellant, $1,570, the resulting $9,070 will be adequate to meet appellant's and the child's reasonable monthly needs of $8,507.
A disparity in the parties' incomes alone does not provide an adequate basis for a fee award. Geske v. Marcolina, 624 N.W.2d 813, 817 n. 2 (Minn.App. 2001). Rather, Minn. Stat. § 518.14, subd. 1 (2002) requires an award of fees if those fees are necessary for a good-faith assertion of rights, the payor has the ability to pay the award, and the recipient does not have the means to pay. Because the district court found that appellant has the ability to pay her own fees and because the record supports that finding, the district court did not abuse its discretion in denying her fee request. See Haefele v. Haefele, 621 N.W.2d 758, 767 (Minn.App. 2001) (stating that attorney fee award will only be reversed for an abuse of discretion), review denied (Minn. Feb. 21, 2001).
The district court's decision is affirmed.