State of Minnesota, Respondent, vs. Steven Dean Adams, Appellant.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1998).

STATE OF MINNESOTA

IN COURT OF APPEALS

C1-00-142

In Re the Marriage of:
Merry J. Cariolano, petitioner,
Appellant,
 
vs.
 
Gregg O. Cariolano,
Respondent.

Filed September 19, 2000

Affirmed in part and reversed in part
Foley, Judge*

Hennepin County District Court

File No. DC202908

John Hugh Gilmore, Gilmore Law Office, 64 West Delos Street, St. Paul, MN 55107-1107 (for appellant)

Elizabeth M. Pierce, Messinger, Ojile & Pierce, PLLP, 405 Flour Exchange Building, 310 Fourth Avenue South, Minneapolis, MN 55415 (for respondent)

Considered and decided by Shumaker, Presiding Judge, Anderson, Judge, and Foley, Judge.

U N P U B L I S H E D   O P I N I O N

FOLEY, Judge

Respondent moved for an interpretation of the parties' 1994 stipulated judgment and decree of dissolution.  The district court concluded that (1) the decree limited respondent's child support obligation to the statutory cap; (2) a one-time payment to respondent in lieu of his participation in a management buyout of his employer did not constitute "bonus income" for purposes of calculating his support obligation; and (3) respondent's obligation to pay maintenance began on the date of the decree rather than on the date of the parties' stipulation.   We affirm in part and reverse in part.

            Before the parties ended their 14-year marriage in 1994, they employed a single attorney to assist them in reaching a stipulation that settled custody of their three minor children, child support, maintenance, and property division.  They signed the stipulation on October 21, 1993, and the district court entered a judgment and decree on June 22, 1994, that incorporated the stipulation in its entirety.

           Consistent with the stipulation, the court awarded sole custody of the children to appellant and ordered respondent to pay child support in the amount of 30 percent of his net income, with reductions of five percent upon the emancipation of each child. The decree contained no mention of the statutory cap under the child support guidelines and did not include express findings in support of the child support award.  The decree also provided that respondent would pay maintenance to appellant in the amount of ten percent of his gross income for five years and five percent of his gross income thereafter until emancipation of the youngest child.

Since entry of the decree, respondent has paid child support and maintenance according to the stipulated formulas.  His income has steadily increased since the dissolution and he has earned significant bonuses in the last few years.  In 1997, a prospective purchaser of respondent's employer, Linden Insurance, offered respondent and other management personnel a large cash payment in exchange for their agreement not to pursue a management buyout.  They accepted, which ultimately resulted in respondent's receipt of a payment of slightly more than $102,000 in 1999.  

            In August 1999, respondent moved the district court for "interpretation" of various aspects of the decree.   Following a hearing on the motion, the district court issued its order dated November 8, 1999, holding: (1) the decree limited respondent's child support obligation to the statutory cap; (2) the $102,000 payment was not "income" for purposes of calculating respondent's support obligations; and (3) respondent's obligation to pay the first five years of maintenance commenced upon entry of the decree, rather than on the parties' signing of their stipulation.   Appellant filed a notice of appeal of the court's order with respect to the child support cap and the exclusion of the $102,000 payment from respondent's income.    Respondent filed a notice of review of the court's determination of the commencement date of his maintenance obligation.

I.

            As a general rule, we give great weight to the district court's construction of its own decree.  Mikoda v. Mikoda, 413 N.W.2d 238, 242 (Minn. App. 1987), review denied (Minn. Dec. 22, 1987).  But the interpretation of a stipulation incorporated into a dissolution decree involves a question of law, which we review de novo.  VanderLeest v. VanderLeest, 352 N.W.2d 54, 56 (Minn. App. 1984).  

            A court may interpret or clarify a divorce decree that is ambiguous or uncertain on its face without amending or invalidating the decree, even though the time for appeal has passed.  Halverson v. Halverson, 381 N.W.2d 69, 71 (Minn. App. 1986).  The court may not, however, alter the parties' substantive rights under the guise of resolving an ambiguity. See Potter v. Potter, 471 N.W.2d 113, 114 (Minn. App. 1991) (noting district court has power to clarify and construe divorce judgment so long as it does not change parties' substantive rights).  Absent an ambiguity, it is not proper for a court to interpret a stipulated judgment.  Starr v. Starr, 312 Minn. 561, 562-63, 251 N.W.2d 341, 342 (1977).

            With respect to child support, this stipulated decree plainly stated, among other things, that (1) respondent was to pay child support at 30 percent of his net salary, with a five percent reduction upon the emancipation of each child; and (2) his net salary was to include bonus income and salary increases, but not investment income or capital gains. This formula was sufficiently clear to allow the parties to adhere it for the five years between entry of the decree and respondent's motion for "interpretation."  We discern no ambiguity in these provisions, and respondent has not attempted to articulate any.

The district court also did not identify any ambiguity that might justify subjecting the child support award to "interpretation."  The court reasoned that the statutory cap must apply because the decree's original award of 30 percent "comes from the statute."  But the statutory cap for three children is actually 35 percent of net income, which was to be calculated on a maximum net monthly income of $4,000 in June 1994.[1]  The court also concluded that the cap must apply because respondent did not expressly waive it.  But respondent did waive the right to any downward adjustment of his support obligation under the formula, and he also agreed that support would never be calculated on a gross income of less than $72,000, regardless of his actual income.  The functional effect of these provisions was to waive application of the statutory cap.  Finally, the court reserved all cost-of-living adjustments because support payments were to rise with respondent's income.  This provision is similarly inconsistent with a guidelines child support award, which ties increases in the statutory maximum support obligation to the supreme court's biannual cost of living adjustment.  See Minn. Stat. § 518.551, subd. 5(k) (Supp. 1999).

Respondent argues that because the original decree did not include the factual findings necessary to support an upward deviation, the district court simply construed the child support award in accordance with the statutory presumption that the guidelines apply absent findings that justify deviation.   See Minn. Stat. § 518.551, subd. 5(i) (Supp. 1999). We disagree.  Although the district court failed to make the required findings, the proper method of challenging that deficiency was to appeal from the original judgment. Expiration of the time for appeal precludes a party "from seeking to modify or vacate the judgment because of judicial error."   Erickson v. Erickson, 506 N.W.2d 679, 680 (Minn. App. 1993) (citation omitted).  Because the time for appealing the original judgment has long expired, respondent's sole remaining means of challenging the validity of the original judgment is by meeting the requirements of Minn. Stat. § 518.145, subd. 2 (1998).  See Shirk v. Shirk, 561 N.W.2d 519, 522 (Minn. 1997) (where decree is based upon parties' stipulation, relief is only available under section 518.145); see also Minn. Stat. § 518.551, subd. 11 (1998) (applying 518.145, subd. 2, to child support awards). 

Appellant contends that the district court's order resulted in a modification of the unambiguous terms of the child support award in a manner that affected the parties' substantive rights, without the required statutory findings.  We agree, and reverse the court's order insofar as it applies the statutory cap to respondent's child support obligation.  A court may only modify child support if the moving party shows a substantial change in circumstances rendering the existing support award unreasonable and unfair.  Minn. Stat. § 518.64, subd. 2(a) (Supp. 1999).  The court must make specific findings to support the modification.  Id., subds. 1, 2 (1998 & Supp. 1999).  There is no dispute that the court did not make the necessary findings in this case; in fact, respondent agrees that his motion was for interpretation of the decree, not modification. 

Finally, we note that our reversal does not foreclose respondent from seeking relief from the child support award by making an appropriate motion for modification under Minn. Stat. § 518.64.   We express no opinion on the probable success or failure of such a motion.

II.

Appellant argues that the district court erred by determining that the $102,000 payment to respondent did not constitute "income for purposes of his support obligations." We disagree. 

Whether a source of funds is income for purposes of determining an individual's support obligation is a question of law.  Sherburne County Soc. Servs. v. Riedle, 481 N.W.2d 111, 112 (Minn. App. 1992).  For both maintenance and child support purposes, income includes "any form of periodic payment to an individual * * *."  Minn. Stat. § 518.54, subds. 1, 6 (1998 & Supp. 1999).  A bonus may be considered income if it provides a regular or dependable source of payments.  Desrosier v. Desrosier, 551 N.W.2d 507, 509 (Minn.  App. 1996) (reversing child support order based on erroneous exclusion of regular, dependable bonus income).

Here, because the decree provided that respondent's income was to include his regular annual bonuses but not investment income or capital gains, it was ambiguous concerning the proper treatment of this one-time bonus.  After acknowledging the absence of definitive guidance, the district court determined that the payment was less like income because it was "personal" to appellant.  This conclusion was reasonable given that respondent's yearly bonuses are different in character than this one-time payment made in lieu of a buyout, which is neither "periodic" nor "dependable."  Minn. Stat. § 518.54, subds. 1, 6; Desrosier, 551 N.W.2d at 509.  Because it was made in lieu of expected returns from his participation in the purchase of a company, the payment at least arguably falls within the category of "investment income."

Appellant also argues that the court erred by failing to make adequate supporting findings and by improperly placing the burden of proof on her.  We disagree.  Because the action was for enforcement, rather than modification, of the decree, the lack of substantial factual findings is not fatal.  See, e.g., Erickson v. Erickson, 452 N.W.2d 253, 255 (Minn. App. 1990) (noting district court may issue appropriate orders enforcing specific provisions of dissolution decree).  And while the court's order mistakenly identifies appellant as the source of the motion to characterize the nature of the buyout payment, this error was harmless.  See Minn. R. Civ. P. 61 (harmless error to be ignored).  Nothing in the decision suggests that it hinged upon appellant's failure to meet an evidentiary burden. The record reflects that respondent submitted evidence in support of his claim that the bonus was not "income," including his own testimony and a letter from his employer confirming that the $102,000 payment was a payment made "to compensate management to approximate the returns from a management buyout." 

The court did not err by determining that the $102,000 buyout payment was not "income" for purposes of calculating respondent's support obligations.

III.

The decree provided that respondent's maintenance obligation consisted of ten percent of his gross income "for the first five (5) years, and five percent (5%) thereafter." Respondent argues that the court erred by determining that the first five years of his maintenance obligation began on the date of the decree, rather than the date of the stipulation.   We disagree.    Neither the decree nor the stipulation specifically identifies the commencement date of the maintenance payments.  If the parties wished to stipulate to a precise date for commencement of maintenance, they could easily have done so.  The court did not err by holding that respondent's obligation to pay maintenance began when the decree was signed.

            Affirmed in part and reversed in part.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[1] This amount increased to $5,935 for the period of July 1, 1998, to June 30, 2000, and to $6,280 for the period of July 1, 2000 to June 30, 2002.  See Cost of Living Adjustment to Child Support Guidelines, No. C9-85-1134 (Minn. Mar. 12, 1998 & Apr. 19, 2000).