In re the Marriage of: Ann Norton Toussaint, petitioner, Respondent, vs. Michael Ray Pedersen, Appellant.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-90

 

In re the Marriage of:

Ann Norton Toussaint, petitioner,

Respondent,

 

vs.

 

Michael Ray Pedersen,

Appellant.

 

Filed September 7, 2004

Reversed and remanded

Randall, Judge

 

Goodhue County District Court

File No. F4-02-243

 

Lawrence D. Downing, Lawrence Downing & Associates, 330 Wells Fargo Center, 21 First Avenue Southwest, Rochester, MN  55902 (for respondent)

 

Shelly D. Rohr, Wolf, Rohr & Dolan, P.A., 400 North Robert Street, Suite 1860, St. Paul, MN  55101 (for appellant)

 

            Considered and decided by Randall, Presiding Judge, Willis, Judge, and Minge, Judge.

U N P U B L I S H E D  O P I N I O N

RANDALL, Judge

On appeal in this maintenance dispute, appellant argues that (1) the district court erred in ruling that respondent's receipt of social security disability benefits was not a substantial change in circumstances; (2) the combination of respondent's social security disability benefits and her current maintenance award exceeds respondent's reasonable monthly needs, making appellant's current maintenance obligation unreasonable and unfair; (3) the district court failed to make adequate findings on the maintenance factors; and (4) the district court's order is inconsistent with its prior rulings.  We reverse and remand.

FACTS

Appellant Michael Pedersen and respondent Ann Toussaint divorced in 2002.[1]  Appellant is a veterinarian and owns a veterinary business in Cannon Falls.  Prior to the parties' dissolution, respondent worked for appellant as an animal health technician.  In addition to her duties as an animal health technician, respondent assisted with cleaning, renovating, and preparing the building for clients.  She also handled financial transactions for the business. 

            At the time of the dissolution, respondent was not working and applied for social security disability benefits due to complications from multiple sclerosis (MS).  In 1997, respondent's MS symptoms became progressive and chronic, and in early 2002, respondent was no longer capable of working.  Respondent was earning an annual salary of $36,000 at the time her employment ceased. 

            After a five-day dissolution trial, the district court determined that respondent's monthly expenses were $2,936 and that appellant's monthly expenses were $2,308.  Appellant's income was determined by averaging the net income of his business during the past six years.  The district court determined that appellant's average monthly cash draw was $5,659, and then deducted appellant's child support obligation of $721 per month.[2]  The court found that appellant's pre-tax monthly income was $4,938. 

            The district court determined that respondent was unable to support herself and that "[her] prospects of ever again becoming self-supporting through gainful employment are greatly uncertain."  The court awarded respondent $2,500 per month in permanent spousal maintenance.  The district court noted that respondent "shall inform [appellant] within one month of receipt of any [social security] benefits or retroactive benefits."  Respondent began receiving those social security benefits and did not inform appellant of that fact.  After learning on his own that respondent was receiving approximately $1,425 per month in social security disability benefits, appellant filed a motion requesting modification of his permanent spousal maintenance obligation.  In addition to arguing that respondent's circumstances substantially changed, appellant claimed that his monthly expenses had increased to $2,644 and that his income from the business had decreased.  

            Respondent opposed the motion, claiming that her expenses had increased from $2,936 to $3,995.  She also requested attorney fees and costs for having to defend against appellant's motion.

            The district court denied appellant's motion to modify his permanent spousal maintenance obligation.  The court found that there had been no substantial change in the circumstances of the parties.  The district court denied respondent's motion for attorney fees. 

            On appeal, appellant challenges the district court's denial of his motion for modification.  Respondent seeks review of the district court's denial of her motion for attorney fees. 

D E C I S I O N

            1.  Spousal Maintenance

            Whether to modify spousal maintenance is discretionary with the district court.  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  A district court abuses its discretion regarding maintenance if its findings of fact are unsupported by the record or if it improperly applies the law.  Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988).

            A district court may modify spousal maintenance upon a showing that a substantial decrease in a party's earnings makes the terms of the original decree unreasonable and unfair.  Minn. Stat. § 518.64, subd. 2(a) (2002).  The party seeking modification of spousal maintenance has the burden of showing that (1) a substantial change in circumstances has occurred; and (2) the substantial change makes the existing spousal maintenance award unreasonable and unfair.  Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997). 

            Appellant argues that respondent's receipt of social security disability benefits constitutes a substantial change in circumstances.  We agree.

            In June 2002, respondent began receiving social security disability benefits in the amount of $1,425 per month.  In August 2003, she received a lump sum of $16,658.25 for retroactive benefits.  After learning of this, appellant moved for modification of his permanent spousal maintenance obligation.  In its November 26, 2003 order denying appellant's motion to modify, the district court stated:

In issuing the May 23, 2003 Judgment and Decree, the Court anticipated that Social Security benefits (retroactive and ongoing) would be commencing and took into consideration all the circumstances of both parties in determining spousal maintenance.  There has not been a substantial change in circumstances for [respondent] or for [appellant] that would warrant a modification. 

 

            The district court concluded that respondent's receipt of social security disability benefits did not constitute a substantial change in circumstances without considering respondent's receipt of $1,425 in additional income.  We conclude that respondent's current receipt of $1,425 per month in social security benefits is a substantial change in circumstances.  Although not controlling, but just by way of an example, we note that in child support modification cases, motions to modify get a rebuttable inference when they deviate a modest 20% and $50 from the guidelines.  See Minn. Stat. § 518.64, subd. 2(b)(1) (2002)(stating that a child support obligation is presumptively unreasonable and unfair if the application of the child support guidelines to the current circumstances of the parties "is at least 20 percent and at least $50 per month higher or lower than the current support order").  Here, by contrast, respondent was receiving $2,500 per month in spousal maintenance, and then the additional $1,425 income yields an approximate 60% increase.  We easily conclude that respondent's receipt of social security disability benefits constitutes a substantial change in circumstances.  That is the first prong.           The second prong, just as important, is whether the additional change now makes the original decree "unreasonable and unfair."  Hecker, 568 N.W.2d at 709.

            Appellant argues that respondent's receipt of social security disability benefits renders the current permanent spousal maintenance award unreasonable and unfair.  Appellant argues that his monthly expenses have increased to $2,644, and his income has decreased.  Respondent claims that her expenses have increased from $2,936 to $3,995, and, therefore, her increase in income from social security benefits does not make the original maintenance award of $2,500 unfair.  This second prong, of "fairness," was not specifically addressed by the district court because of its initial ruling that there had not been a substantial change of circumstances.  Thus, we remand to the district court for determination of whether the current permanent spousal maintenance obligation is unreasonable and unfair in light of a substantial change in circumstances, meaning respondent's receipt of $1,425 a month in income from social security.   

Appellant next argues that the district court erred by failing to address the factors under Minn. Stat. § 518.552 (2002).  Once the district court determines that modification is appropriate, it must determine the appropriate amount and duration of the award by applying the factors set out in Minn. Stat. § 518.552; Rapacke v. Rapacke, 442 N.W.2d 340, 343 (Minn. App. 1989).  Because we find that respondent's receipt of social security benefits constitutes a substantial change in circumstances, on remand the district court must address the factors under Minn. Stat. § 518.552. 

            Finally, appellant argues that the district court's order denying his motion for modification contradicts its previous orders.  The district court must resolve the matter in a manner that is "against logic and the facts on record before this court will find that the trial court abused its discretion."  Rutten, 347 N.W.2d at 50.  We agree with appellant.

            In the initial dissolution decree in May, the district court stated in relevant part:

[Respondent] is not currently working and has applied for social security disability benefits.  At the present time, there is no assurance whether she might receive benefits, in what level the benefits might be, when the benefits might begin, and if any amounts might be retroactive. . . .

 

If [respondent] receives Social Security Disability, [respondent] shall inform [appellant] within one month of receipt of any benefits or retroactive benefits.

 

The district court correctly noted that respondent was presently applying for benefits, that it was unknown if respondent would receive any social security disability benefits, and that it was unknown what the amount of the benefits would be if she received them.  Because it was indefinite, the court wanted respondent to inform appellant within one month of any benefits coming in so that everyone would know.  Now, in its November 2003 order denying appellant's motion for modification, the district court changed from its May recognition that benefits and amounts were speculative.  The district court now indicated that it had fully anticipated the commencement of social security benefits for respondent and, therefore, because it had taken these benefits into account when it initially determined spousal maintenance, the actual receipt now of those benefits was not a substantial change.  We cannot agree.  We simply conclude that the November statement of the district court is inconsistent with its specific statements in the dissolution judgment and decree wherein the court acknowledged it did not have any specific information regarding the likelihood of receipt of benefits, or the amount, if benefits were to be awarded.

            The district court's orders contain inconsistent language, given the statements of the district court in the May 2003 dissolution decree, and the statements in the November 2003 order denying modification.   

2.      Respondent's Trial Court Attorney Fees

            Respondent argues that the district court abused its discretion by denying her request for attorney fees during the dissolution proceedings and for defending against appellant's motion for modification.  In his reply brief, appellant argues that the record does not support an award of attorney fees.  This issue is moot.  Prior to this case, as we noted in footnote one of this opinion, the parties had previously appealed issues from the dissolution, including the district court's refusal to award attorney fees to respondent.  That case was decided on June 14, 2004, and stands as the law of the case regarding respondent's request for trial attorney fees.  As discussed below, based on the parties' circumstances, we deny respondent's request for attorney fees for defining appellant's motion.

3.  Respondent's Attorney Fees on Appeal

            Respondent now seeks attorney fees on appeal under Minn. Stat. § 518.14, subd. 1 (2002).  Appellant argues that his motion for modification was made in good faith and that there is no basis in the record supporting an award for attorney fees on appeal. 

            It is within this court's discretion to award attorney fees on appeal.  See Roehrdanz v. Roehrdanz, 438 N.W.2d 687, 691 (Minn. App. 1989), review denied (Minn. June 21, 1989).  An appellate court may award attorney fees if it finds that "the fees are necessary for the good-faith assertion of the party's rights," that the party requesting fees does not have the means to pay, and "that the party from whom fees . . . are sought has the means to pay them."  Minn. Stat. § 518.14, subd. 1 (2002).  Appellate courts may also award fees based on conduct when a party unreasonably contributes to the length of the proceeding.  Id. 

            Respondent filed a motion for need-based and conduct-based fees under Minn. Stat. § 518.14, subd. 1 (2002).  She seeks $6,277.78 for 39.20 hours spent responding to the appeal.  Respondent also requested $1,250 in connection with her attorney's oral argument.  We reject the request.  As appellant points out, in addition to her spousal maintenance and social security disability income, respondent received a substantial amount of funds allowing her to pay her own attorney fees.  Appellant points out that respondent received a property settlement in excess of $290,000 and had an initial cash payment of $115,526.  Appellant notes that respondent received an additional $20,800 payment in January 2004 and received a $16,658.25 lump-sum social security payment for retroactive disability benefits.  The record supports appellant's assertions.  This court previously declined to grant respondent her trial attorney fees based on different factors, including the amount respondent received in the property settlement.  See Toussaint v. Pedersen, No. F4-02-243, 2004 WL 1326826, *2 (Minn. App. June 14, 2004).  We decline to award respondent attorney fees on appeal with similar reasoning.  Respondent provided no support for her claim that appellant brought this appeal in bad faith.  In the original decree, the district court specifically allowed for appellant to bring a modification motion upon learning of respondent's receipt of social security disability benefits.  We find nothing frivolous about his motion.

We deny respondent's motion for need-based and/or conduct-based attorney fees.  This case is remanded to the district court to consider the issue of whether the present permanent spousal maintenance award is unreasonable and unfair in light of the substantial change upward in respondent's financial circumstances.

            Reversed and remanded.

[1]  The parties recently appealed the district court's property division and refusal to award attorney fees.  See Toussaint v. Pedersen, No. F4-02-243, 2004 WL 1326826 (Minn. App. June 14, 2004). This court affirmed in part, reversed in part, and remanded the case to the district court.  Id.  The district court determined that the property award lacked "clarity" and reversed and remanded for further findings.  Id. at 2.  This court affirmed the district court's denial of respondent's motion for attorney fees.  Id. 

[2]  Appellant has one minor child from a previous relationship.