Sara Louise Nelsen, petitioner, Respondent, vs. Roy Owen Nelsen, Appellant.

Sara Louise Nelsen, petitioner, Respondent, vs. Roy Owen Nelsen, Appellant. A04-641, Court of Appeals Unpublished, February 1, 2005.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-641

 

 

Sara Louise Nelsen, petitioner,

Respondent,

 

vs.

 

Roy Owen Nelsen,

Appellant.

 

 

Filed February 1, 2005

Affirmed

Huspeni, Judge*

 

 

Hennepin County District Court

File No. MF 243 237

 

 

Robert W. Due, Katz, Manka, Teplinksky, Due & Sobol, Ltd., Suite 4150, 225 South 6th Street, Minneapolis, MN 55402 (for respondent)

 

William L.H. Lubov, Alex Brusilovsky, Lubov & Associates, LLC, Suite 210, 820 North Lilac Drive, Golden Valley, MN 55422 (for appellant)

 

 

            Considered and decided by Shumaker, Presiding Judge, Halbrooks, Judge, and Huspeni, Judge.

U N P U B L I S H E D   O P I N I O N

HUSPENI, Judge

In challenging an order denying his motion to modify spousal maintenance, appellant argues that the district court (a) failed to make adequate findings regarding the parties' expenses and clearly erred in failing to find a substantial change in appellant's financial circumstances rendering the current order unreasonable and unfair; (b) abused its discretion in finding that appellant did not divulge an employment contract to the court and did not comply with discovery orders; (c) should not have denied appellant's motion to modify spousal maintenance on those bases; and (d) made findings supporting its award of conduct-based attorney fees to respondent that are unsupported by the record.  Because we see no clear error in any of the district court's decisions, we affirm.

FACTS

            The marriage of appellant Roy Nelsen and respondent Sara Nelsen was dissolved February 11, 2000, pursuant to stipulation on all issues.  At the time of the dissolution, appellant was self-employed as a psychologist in private practice earning a stipulated gross annual income of approximately $118,000.  Respondent was primarily a mother and homemaker during the marriage.  At the time of the dissolution, she was employed part-time as a tutor for the Edina Public Schools and was self-employed as a piano teacher giving lessons from her home, with a stipulated gross annual income of approximately $12,000. 

            Pursuant to the dissolution decree, appellant was to pay spousal maintenance of $3,600 per month beginning in November 1999.  This monthly amount was to be reduced incrementally to reach $3,000 per month by June 2001.  Appellant was also to provide health insurance for respondent, and to pay for any unreimbursed health expenses incurred by her.  Appellant was to pay $1,500 per month in child support until the parties' minor daughter reached the age of majority, and was to contribute $1,500 per month to her college expenses when she reached the age of majority. 

            In April 2003, appellant suffered a stroke that resulted in aphasia, memory impairment, and other significant medical and psychological problems that impeded his ability to conduct his practice.  In response to his medical situation, he moved for suspension or reservation of his spousal-maintenance obligation.  He also filed a voluntary petition for conservatorship, and Dr. Nicholas Long was appointed as the conservator of appellant's estate.  

            On May 28, 2003, in response to appellant's motion to suspend or reserve maintenance payments, the district court temporarily suspended payments, but permitted arrears to accumulate until further agreement by the parties or order of the court.  The district court further ordered appellant to apply immediately for disability benefits from Social Security, Unum Provident, and Thrivent, and ordered him to "cooperate fully in complying with [respondent's] discovery requests and [to] supply all information requested in accordance with the Minnesota Rules of Civil Procedure in a timely and efficient manner."  Finally, a hearing was scheduled for November 3, 2003, but counsel for appellant was ordered to initiate a chambers conference earlier in the event appellant realized any income in the meantime.

            In late October 2003, appellant filed two supplemental affidavits, stating that after the May hearing he began to receive disability income from Unum Provident and Thrivent in the amount of $2,000 per month from each provider.  He submitted a revised monthly budget of $4,966[1] and claimed that he had not yet learned whether he would be eligible for disability income from Social Security.  Appellant also stated that he had received approximately $21,000 in income between May 2003 and November 2003, but the income was from accounts receivable that had existed before he had to discontinue his practice. 

            At the November 3 hearing, the district court directed the parties to submit additional information concerning their net worth.  Shortly thereafter, appellant forwarded to the district court a copy of correspondence received from the Social Security Administration, advising appellant that his application for Social Security disability benefits had been denied.  Appellant also provided the court with a copy of an employment contract that he had entered into with the State of Minnesota to provide psychological input in making Social Security disability decisions.  The contract provided that appellant would work 25 hours per week, at an hourly rate of $59.10, for a gross annual income of $76,830. 

            By order dated February 13, 2004, the district court denied appellant's motion to suspend or reserve spousal maintenance, except that this obligation was reduced to $1,500 per month for the period May 1, 2003, to September 18, 2003.  The court found that appellant signed the contract with the State of Minnesota on September 18, 2003, and that the contract became effective on September 29, 2003, when the Commissioner of Administration signed it.  The court noted that pursuant to the contract, appellant would be working only 25 hours per week for the state and, therefore, could earn additional income from continuing his private practice.  The court also found that

[a]lthough [appellant's] counsel did advise the Court at the November 3, 2003 hearing of [appellant's] intent to possibly take a job with the State of Minnesota doing work related to Social Security disability assessments, it was not represented that [appellant] had already entered into an employment contract for that work, and the existence of the contract stands in stark contrast to the implicit representations in [appellant's] affidavits and that [appellant] was not able to work at all as of October 2003, and to representations at the hearing that suggested that [appellant's] employment possibilities with the Social Security Administration remained uncertain.

 

The court determined that appellant's failure to bring the existence of the contract to the attention of respondent and the court was a significant misrepresentation to the court, and provided a basis for the denial of appellant's motion to suspend or reserve his maintenance obligation.  In light of appellant's conduct concerning the employment contract, the district court awarded conduct-based attorney fees to respondent in the amount of $1,000.  This appeal followed.         

D E C I S I O N

I.

            On appeal from a district court's decision addressing a motion to modify maintenance, an appellate court reviews the district court's decision for an abuse of discretion.  Dobrin v. Dobrin, 569 N.W.2d 199, 202 (Minn. 1997).  An abuse of discretion occurs when the district court resolves the matter in a manner that is "against logic and the facts on [the] record."  Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).  When a stipulation fixing the respective rights and obligations of the parties is central to the award, it represents the parties' voluntary acquiescence in an equitable settlement, and trial courts should "carefully and only reluctantly" alter its terms.  Claybaugh v. Claybaugh, 312 N.W.2d 447, 449 (Minn. 1981).  Nevertheless, a stipulation "does not operate as a bar to later consideration of whether a change in circumstances warrants a modification."  Hecker v. Hecker, 568 N.W.2d 705, 709 (Minn. 1997).

            Minn. Stat. § 518.64, subd. 2(a) (2004), provides that maintenance and support orders may be modified upon a showing of substantially changed circumstances rendering the existing support obligation unreasonable and unfair.  In determining whether a "substantial change" has actually occurred, a court must follow the guidelines provided by statute:

The terms of an order respecting maintenance or support may be modified upon a showing of one or more of the following: (1) substantially increased or decreased earnings of a party; (2) substantially increased or decreased need of a party . . .; (3) receipt of assistance . . .; (4) a change in the cost of living for either party . . . any of which makes the terms unreasonable and unfair. . . .

 

Minn. Stat. § 518.64, subd. 2(a).

            Appellant argues that because he demonstrated a substantial change in circumstances, the district court abused its discretion in denying his request for a modification of his spousal-maintenance obligation.  We note initially, however, that in denying appellant's motion, the district court did not address the issue of whether there has been a substantial change in circumstances rendering the current order unreasonable and unfair.  The court found, instead, that

[appellant's] failure to bring the existence of [appellant's contract with the State of Minnesota] to the attention of [respondent] and the Court, and [appellant's] failure to be more forthcoming about his apparent employment plan, is a significant misrepresentation to the Court and provides a basis for the denial of [appellant's] motion to terminate or suspend his spousal maintenance obligation.

 

(Emphasis added.)  The court also expressed concern about appellant's failure to inform the court when the petition for termination of conservatorship was filed and about appellant's failure to follow the court's order to communicate with respondent and the court regarding income received after the May hearing.  Thus, rather than making findings concerning the parties' financial situations, the district court concluded that appellant was not forthright about his employment situation and denied appellant's motion on that basis.

            Appellant contends that the district court's finding that he was not forthcoming about his employment situation is not supported by the record because the court was advised at the November 3 hearing that:

I suspect, as I told the Court already, that whatever income he has right now is going to be severely impacted as soon as he attempts to start doing Social Security work, which he's attempting to try to do.  Within the next few days, he's going to try to start doing some of that work.

 

            This assertion, however, is but a vague reference to appellant's actual employment situation.  The record reveals that on September 18, 2003, appellant signed a contract with the State of Minnesota to provide psychological input in making social security disability decisions, and that the contract became effective when the Commissioner of Administration signed it on September 29, 2003.  The district court was not informed of the contract until November 17, 2003, however, nor was the effect of the contract disclosed at the November 3 hearing, when the court was told:

Now, we have an entirely new dilemma that is staring us in the face that the Court need be aware of.  As indicated both in Dr. Fuhrman's report as well as in [appellant's] Affidavits, he wants to try to work.  And the venue for this work seems to be what work might be available for him through the Social Security Administration by doing certain type of intake forms and certain type of testing that does not require the sort of intense physical or intellectual involvement that his forensic work was before.       

 

(Emphasis added.)  We conclude that the record supports the district court's findings that appellant misrepresented his employment situation.  See Doering v. Doering, 629 N.W.2d 124, 132 (Minn. App. 2001) (discussing affirmative duty of parties to dissolution to disclose relevant information, even absent request for that information), review denied (Minn. Sept. 11, 2001); see also Kielley v. Kielley, 674 N.W.2d 770, 778 (Minn. App. 2004) (involving Doering in context of attempted extra-judicial modification of maintenance); Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 243 (Minn. App. 2003) (involving Doering in context of child-support modification), review denied (Minn. Nov. 25, 2003).

            Next, we address whether the district court abused its discretion when it denied appellant's motion to modify his spousal-maintenance obligation on the bases that appellant was not forthright about his employment plan and did not comply with discovery requirements regarding income received.  If a party fails to provide or permit discovery, the district court has authority to impose sanctions.  Minn. R. Civ. P. 37.02(b).  Some of these sanctions may operate as a final judgment on the merits, including default judgment or dismissal with prejudice.  See Minn. R. Civ. P. 37.02(b)(3).  It is within the district court's discretion to deny a motion to modify a support or maintenance obligation because of a party's failure to timely comply with a discovery order.  See Peters v. Peters, 374 N.W.2d 335, 337 (Minn. App. 1985) (affirming district court's denial of motion to modify where moving party failed to provide adequate information but explicitly refusing to address whether there was a substantial change in circumstances).  Absent an abuse of that discretion, this court will not substitute its judgment for the judgment of the district court.  In re Conservatorship of Smith, 655 N.W.2d 814, 821 (Minn. App. 2003).

            Here, the May 28, 2003 order required appellant to cooperate fully with respondent's discovery requests and supply all information requested in accordance with the Minnesota Rules of Civil Procedure in a timely and efficient manner.  But the district court found, and the record amply supports, that appellant failed to inform counsel and the district court until late October 2003 of the $21,000 in income received beginning in May or June of that year.  In addition, the district court specifically found that appellant was not forthright about his employment situation, even though the May 28 order directed that he disclose to respondent any income that he might receive from his psychology practice.  Therefore, a reasonable inference may be drawn that the denial of appellant's motion to modify his spousal-maintenance obligation was a sanction imposed due to his conduct during the pendency of that motion.

            There is ample indication in the record that appellant misrepresented his employment situation and violated the order of the court regarding reporting of income.  While we are not unsympathetic to the health problems suffered by appellant during the time his motion was before the court, problems that may have existed to some extent despite the presence of legal counsel and a conservator, we nonetheless recognize the authority of the district court to impose appropriate sanctions under circumstances such as those present in this case.  See Peters, 374 N.W.2d at 337 (stating that it is within the district court's discretion to deny a motion to modify a support or maintenance obligation because of a party's failure to timely comply with a discovery order but not addressing whether there was a substantial change in circumstances).  We conclude that the district court did not abuse its discretion by, in effect, sanctioning appellant's failure to be forthright and his failure to comply with discovery orders by denying the motion to suspend or reserve spousal maintenance.[2]

II.

            Appellant also challenges the district court's award of attorney fees to respondent.  Under Minn. Stat. § 518.14, subd. 1 (2004), a court, "in its discretion," may award "additional fees, costs and disbursements against a party who unreasonably contributes to the length or expense of the proceeding."  Attorney-fee awards rest in the district court's discretion and normally will not be disturbed absent a clear abuse of that discretion.  Holder v. Holder, 403 N.W.2d 269, 271 (Minn. App. 1987). 

            Here, the district court awarded respondent $1,000 in conduct-based attorney fees on the basis that appellant failed "to inform the Court and opposing counsel of the existence of the employment contract and the petition for termination of conservatorship, and to communicate with counsel about the $21,000 of income received between the May and November hearings as ordered at the May hearing."  Again, the record supports these findings.  Accordingly, the award of conduct-based attorney fees was not an abuse of discretion.

            Affirmed. 

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

[1] Appellant's revised budget reflected a $1,719 increase in monthly living expenses over those claimed at the time of the dissolution.

[2]  Having in effect sanctioned appellant's lack of forthrightness and failure to comply with discovery orders by denial of the motion to modify spousal maintenance, the district court did not address the merits of the parties' claims about their financial circumstances or whether there had been a substantial change of circumstances rendering the current maintenance order unreasonable and unfair.  See Minn. Stat. § 518.64, subd. 2(a) (2004); Peters, 374 N.W.2d at 337.  The district court did not err in failing to address these questions.  If future motions are deemed necessary, forthrightness regarding employment circumstances and compensation, and compliance with discovery orders, will assure that the statutory factors are addressed by the district court without prejudice resulting from appellant's conduct in this proceeding.  Cf. Loo v. Loo, 520 N.W.2d 740, 743-44 (Minn. 1994) (noting that the principle that once an issue has been resolved on its merits it should not be relitigated "clearly applies" in family law cases).  As we have already clearly stated, the merits of the claims brought here were not addressed by the district court.