State of Minnesota, Respondent, vs. David Lee Eubanks, Appellant.

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C6-97-1890

In Re the Marriage of:

Barbara Jo Hagen, petitioner,

Appellant,

vs.

Lee Welsley Odland,

Respondent.

Filed April 28, 1998

Affirmed

Crippen, Judge

Hennepin County District Court

File No. SP161450

Barbara J. Hagen, 6111 Habitat Court South, Edina, MN 55436 (pro se appellant)

Judy S. Engel, Fredrickson & Byron, P.A., 1110 International Centre, 900 Second Avenue South, Minneapolis, MN 55402 (for respondent)

Considered and decided by Crippen, Presiding Judge, Lansing, Judge, and Peterson, Judge.

U N P U B L I S H E D O P I N I O N

CRIPPEN, Judge

When the parties were divorced in 1992, respondent was ordered to pay spousal maintenance to appellant, an obligation that was increased by a cost-of-living adjustment in 1994. This appeal challenges the trial court's denial of a 1996 cost-of-living adjustment. Appellant contends that the trial court erred in (a) finding that respondent's income had not increased since 1994, and (b) deciding that the cost-of-living adjustment could not be premised on the significant increases in respondent's income before 1994. We affirm.

FACTS

Pursuant to a 1992 divorce decree, respondent Lee Odland was obligated to pay appellant Barbara Hagen $5,250 per month permanent spousal maintenance. The obligation was adjusted upward for cost of living in 1994, based on an increase in respondent's current income in comparison to his average income of $166,820 for the five years prior to the parties' divorce. Two years later, appellant again applied for an adjustment. Finding that respondent's 1995-1996 income was not greater than his 1994 income, the trial court waived the 1996 cost-of-living adjustment.

D E C I S I O N

It is undisputed that appellant's maintenance award was subject to a biennial cost-of-living adjustment under Minn. Stat. § 518.641, subd. 1 (1996) (order for maintenance must provide for biennial adjustment based on change in cost of living). Appellant properly notified respondent of her application for a biennial adjustment. See Minn. Stat. § 518.641, subd. 2(a) (1996) (obligee must notify obligor of application for adjustment). These proceedings arose because respondent acted on provisions in the statute that prevent an automatic adjustment if the obligor requests a hearing before the effective date of the adjustment. Id., subd. 2(b) (1996). In denying the adjustment, the court relied on Minn. Stat. § 518.641, subd. 3 (1996), which provides that a court "may direct that all or part of the adjustment not take effect" in the event that the obligor successfully "establishes an insufficient cost of living or other increase in income that prevents fulfillment of the adjusted maintenance."

A trial court's determinations concerning an obligor's income are findings of fact that should not be set aside unless clearly erroneous. McCulloch v. McCulloch, 435 N.W.2d 564, 566 (Minn. App. 1989). This court need not give deference to a trial court's decision on a purely legal issue. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).

1. Findings of Fact

Appellant first disputes the trial court's finding that respondent's income for 1995 was $209,722, which is less than his 1994 income, contending that this figure inappropriately includes a $3,000 loss and that the correct figure is $212,520, the total of respondent's 1995 income. There is insufficient information in the record to support a conclusion that respondent's total 1995 earnings should be reduced by $3,000 to reflect his actual income. Moreover, as indicated in the discussion that immediately follows, this small adjustment is immaterial to the ultimate conclusion that respondent's 1995 income did not exceed his 1994 income.

Appellant next contends that the trial court erred in finding that respondent's 1994 income was $218,342. She contends that respondent's income was no more than $212,400, his 1994 earnings, and that the $218,342 figure reflects $5,942 that should not have been included as income. The record shows that $1,838 of the increase is attributable to taxable interest and a tax refund, both properly included in respondent's income. See Minn. Stat. § 518.54, subd. 6 (1996) (for purposes of maintenance, income is defined as "any form of periodic payments"); Dinwiddie v. Dinwiddie, 379 N.W.2d 227, 229-30 (Minn. App. 1985) (interest income is considered a periodic payment); Steere v. State, Dep't of Pub. Welfare, 308 Minn. 390, 395-400, 243 N.W.2d 112, 116-18 (1976) (tax refunds are sufficiently uniform sources of income to be deemed available on a regular basis and constitute income in the year received). Accordingly, respondent's 1994 income was no less than $214,238, more than the maximum amount shown for 1995.

Appellant also argues that the court currently should have considered respondent's income increases for the period after 1993 rather than after 1994, contending that the 1994 cost-of-living adjustment was based on an increase in respondent's income for 1992 and 1993. Nothing in the record confirms that respondent's 1994 earnings were not considered when the biennial adjustment was made at the end of 1994. The trial court committed no clear error in finding that there was not an increase in respondent's income since 1994.

Finally, appellant contends she may be entitled to an adjustment on the basis of respondent's 1996 income, which the trial court found would be lower than respondent's income for 1994 and 1995, based on "a reasonable projection." The present record includes no information that refutes the court's projection of respondent's final 1996-income figure. As the trial court observed, if it is subsequently shown that respondent's 1996 income was greater than projected, nothing precludes appellant from reapplying for a cost-of-living adjustment premised on respondent's actual income.

In sum, the present record sustains the trial court's view that there was not an increase in respondent's income for 1995 or 1996.

2. Conclusions of Law

The trial court's decision followed respondent's request for review of an earlier court order that approved a referee's findings and recommendations and granted appellant's 1996 application for a cost-of-living adjustment. The earlier order includes essentially the same factfindings that are found in the order reviewed on this appeal, but the earlier order contained a conclusion, as a matter of law, that an adjustment should take effect because respondent failed to show "that his current income prevents fulfillment of the adjusted maintenance amount." While the earlier order does not elaborate on that conclusion, it is evident that the court was observing that respondent was able to pay the cost-of-living increase because his earnings from 1993 through 1996 were substantially more than his average income of $166,820 from 1987 through 1991.

In her pro se brief, appellant appropriately raises the question of where in Minn. Stat. § 518.641 it is stated that "the obligor's income had to increase since the last [cost-of-living] was instated." Appellant points to the substantial increase in respondent's income since their divorce and also argues that in comparison to her cost of living, respondent has been able to afford a much more significant increase.

The trial court corrected the earlier order by referring to Minn. Stat. § 518.641, subd. 3, which provides that respondent must show an "insufficient increase in income" that prevents an adjustment. There is no doubt that the somewhat confusing language of the statute invites attention to the question of whether the obligor is capable of paying the adjustment. However, as presently worded, the statute does not call for an inquiry beyond the subject of the obligor's "increase in income." It also is evident that section 518.641 is confined to adjustments in maintenance payments based on current changes in income and is to be distinguished from an effort to modify an obligation based on a substantial change in circumstances since the obligation was created or last modified. See Minn. Stat. § 518.64, subd. 2 (1996) (modification determinations require consideration, inter alia, of the earnings of the party and a change in the cost of living for either party). Based on the current record and the evident focus of section 518.461 on income increases, we conclude the trial court appropriately waived the 1996 cost-of-living adjustment. Only in a modification proceeding would there be occasion to more broadly examine whether changed circumstances since 1992 have made the amount of the original award unfair.

Affirmed.